On January 2, 2023, six Macau concessionaires reported that they would individually pay the Macau government a base sum of MOP750 USD per square meter of gaming space for the first 3 years of their latest 10-year concession contracts and MOP2,500. dollars per square meter. subway for the remaining seven so they can “rent the casinos as their respective integrated resorts.”
During the second and third base years, the required payment of MOP750 dollars will be raised according to the Macao average price index and during the fifth to tenth base years the required payment of MOP1,500 dollars will be indexed to it.
“The utilization fee comes after the casino areas of the concessionaires’ properties were returned to the Macao SAR government at the expiration of its previous 20-year concessions on December 31, 2022.” according to SJM Resorts officials.
Last 10-year concessions:
The latest 10-year concession contracts started on January 1, 2023, and five of the six concessionaires, except Galaxy Entertainment Group, publicly announced in a Hong Kong Stock Exchange press release that they had agreed with the government. “to re-let the casino areas within the integrated resorts that operate for the next 10 years.”
In addition, Galaxy Entertainment Group has sent confirmation directly to IAG that its pay rates are the same as 5 other licensees.
The fees will be paid annually in the month of March of each year.
Different usage rates for each dealer:
At a press conference on Friday, SJM Resorts officials said: “Our annual utilization fee, which represents the use of the casino areas at Casino Grand Lisboa, Casino Grand Lisboa Palace, Casino Lisboa and Casino Oceanus in Jai-Alai, will amount to MOP$69 million (US$8.6 million) in year 1 (2023). ), amounting to MOP$229.3 million (US$28.7 million) in year 4 (2026). ” However, the second, third and fifth to tenth year will be indexed as previously explained.
Melco Chairman and CEO Lawrence Ho added: “We reversed and agreed to re-lease casino areas totaling 31,227.3 square meters at City of Dreams Macau, 28,784.3 square meters at Studio City and 17,128.8 square meters at Altira, implying an annual fee of MOP $57.9 million (US$7.2 million) for the first time. year of its new concession, amounting to MOP$192.9 million (US$24.1 million) as of the fourth year.
“We are honored and grateful to be awarded a 10-year gaming concession by the Macao SAR government.
“The company is grateful for the central government’s leadership and guidance in supporting Macao’s continued integration with mainland China. We pledge our full support for the sustainable and diversified development of the tourism and leisure industry in Macao, and we will continue to work with the government, community, and stakeholders to benefit and contribute to the development of the city as a key global tourism destination.”
However, the second, third, and fifth through tenth years will also be indexed as explained above.
New revenue for the Macao government:
This user fee will be another important source of revenue for the government and will form part of other payments that concessionaires are legally required to pay to the government under the terms of their new concession contracts.
Concessionaires are required to pay a 35% GGR gaming excise tax and an additional 5% GGR in contributions for different forms of Macau CSR.
For example, if Macau’s GGR totaled MOP$130 billion in 2023, as the government predicts, the total GGR taxes and fees to be paid by the six Macau concessionaires this year would be MOP$52 million, which is about US$6. ,5 billion.
In addition, the concessionaires are required to pay a fixed annual premium of MOP$30 million and a variable premium from year to year of MOP$300,000 per VIP table, MOP$150,000 per massive table and MOP$1,000 per slot machine.
Assuming only 10% remains for VIP gaming, the total annual premium to be paid by the six Macau concessionaires to the government would be MOP$1.182 billion, which is approximately US$148 million.
Macau dealers casino usage fees:
|Year 1 (2023)||MOP$750 per square meter|
|Year 2 (2024)||MOP$750 per square meter*|
|Year 3 (2025)||MOP$750 per square meter*|
|Year 4 (2026)||MOP$2,500 per square meter|
|Years 5 to 10 (2027 to 2032)||MOP$2,500 per square meter*|
* adjusted by average price index