Even though Macau will need a lot of time to return to its pre-COVID state, there are already some of the things that show a slight improvement in the area. In fact, it seems that Macau is heading in the right direction on its road to recovery.
After several months of very low activity, there’s been a sudden burst of positive news, and August was the month when Macau finally saw a positive outcome. Compared to previous years, this might be like a drop in the ocean, but it’s still much better than what had been reported before August.
The Financial Services Bureau in Macau issued a report,3 stating that the city collected a total of $76.8 million in tax revenue for August, which means there was a 52.4% increase in comparison to July. However, there’s a slight difference between the time that the taxes are collected, and the report is published, meaning some of the taxes might have been collected in the second part of July (not just in August).
Even though casinos in Macau were finally able to see some sunshine between dark clouds, the storm is still underway, as the reported gross gaming revenue (GGR) is down by 94.5% compared to the same period last year. Even though border restrictions were relaxed, there’s still a huge gap, as many people choose not to go to Macau.
The cumulative total GGR for all casinos that are located in Macau was $4.552 billion by the end of August 2020. Compared to last year’s figures, its easy to spot an 81.6% decrease. Therefore, the city of Macau only got $2.85 billion in tax from the gaming properties in the area. That’s basically less than a third of what the city received in tax revenue during the period of January – August 2019.
Macau’s Economy Depending on Tax Revenue from Casinos
Judging by the current state of affairs, it doesn’t seem that Macau will be able to meet its annual goal to be able to recover losses. Therefore, the industry has been stuck hard in the city, which relied on gaming revenue tax for its economy to operate properly.
During the first eight months of this year, the tax from gaming properties was 75.3% of the total tax revenue, which is $3.788 billion. When all things are taken into account, it seems that Macau will have a huge deficit in 2020, as it will fall short of $4.87 billion.
Las Vegas, just like Macau, has been hit hard by the ongoing pandemic, and the two gambling capitals in the world were perhaps hit the hardest by shutdowns, as they’re home to casinos, which aren’t really essential businesses. What’s important is that operators are doing their best to provide all health and safety measures inside casinos to allow their guests a safe gaming experience. Despite all that, there’s still an increased risk of virus transmission in land-based casinos, so many people decide not to visit until the coronavirus crisis is over.
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