Chinese president urges Macau to diversify its economy away from gaming

Xi Jinping said efforts should be made “to promote moderate economic diversification.”

Macau.- Chinese president Xi Jinping has stressed the importance of reducing Macau’s reliance on gaming as a primary economic driver and has urged the city to continue diversifying its economy. Visiting Macau to commemorate the 25th anniversary of its return to China, Xi attended Sam Hou Fai’s swearing-in ceremony as the new chief executive of the city.

During his speech, Xi said that while Macau has made progress in recovering from the economic downturn caused by the Covid-19 pandemic, it still relies heavily on the casino sector. He said, “Efforts should be made to promote moderate economic diversification[…] and focus on cultivating new industries with international competitiveness.”

As reported by Asia Gaming Brief, Sam Hou Fai supported Xi’s view and proposed a “1+4” strategy to promote new industries in areas like meetings, incentives, conventions and exhibitions (MICE), technology, health, and finance. He also emphasized the importance of supporting traditional sectors and small to medium-sized enterprises (SMEs) for a more balanced economy.

Under current gaming concessions, the six Macau casino operators collectively pledged to invest a minimum of MOP108.7bn (US$13.48bn) in non-gaming initiatives. A week ago, the Financial Services Bureau reported that Macau collected MOP81.04bn (US$10.12bn) in taxes from casino operations in the first 11 months of the year. That represents 80.64 per cent of all government revenue during the period.

Macau government expects to collect US$12.48m in taxes on junket commissions for 2025

The Macau government expects to collect MOP100m (US$12.48m) in taxes on junket commissions in 2025. That’s a 233.3 per cent rise in year-on-year terms from the MOP30m expected for fiscal year 2024.

The forecast comes from a report on Macau’s financial year 2025 budget released by the city’s Legislative Assembly. No reasoning was given. In 2023, the government collected MOP62.58m, surpassing the estimate for the year by 526 per cent.

Junkets, or gaming promoters, are licensed by the Macau government to promote high-stakes gaming in casinos. A 5 per cent withholding tax is charged on commissions. Junket operators earn a commission of up to 1.25 per cent on the money players put into casinos.

In August, a bill on casino credit and junket contracts entered force, prohibiting junkets from issuing credit to gamblers entered force. As of September 23, there are 24 licensed junkets in Macau, according to the Gaming Inspection and Coordination Bureau. For 2025, the government will keep the cap at 50, with the same limits on junket partners for each casino operator as in 2024. Sands China and SJM Holdings will each have the largest allowance, with 12 junkets allowed.

The 2025 budget plan, which the Legislative Assembly approved on Monday (December 16), estimates that Macau’s GGR will reach MOP240bn (US$29.7bn).

Xi Jinping said efforts should be made “to promote moderate economic diversification.” Macau.- Chinese president Xi Jinping has stressed the importance of reducing Macau’s reliance on gaming as a primary…