Macau have been hit by a surprise due to how the year panned out. For several months, there were reports of a reduction in revenue, but it hasn’t been bad news all the way for the city. The tax revenue gotten from betting activities has helped cushion the effect of the reduction in GDP.
Gambling tax rose to about 0.33% higher than its previous sum for the month of September when compared to the city’s revenue from gambling last year. This would go a long way for Macau as GDP is projected to fall this year, and in the coming year as well.
Through the month of September, Macau generated an estimated $10.6 billion in gambling tax revenue. The sum is fair considering the fall in revenue that casinos in the city have reported so far. The GGR (gross gaming revenue) was estimated to be about $27.34 million over a 9 month period, a year-on-year fall of 1.7%.
However, it should be noted that the two sums don’t always match on a month-to-month basis since associated tax revenue and GGR are oftentimes not recorded at the same period.
When the budget was being prepared for the current fiscal year, revenue from gambling was projected to be in the region of $12.19 billion. As of September this year, about 87.2% of that projected revenue have been achieved.
With all things being equal, Macau should be able to surpass the projected sum. Gaming revenue earned by the city of Macau over the first 9 months of the year stood at 87.63% of the total sum of $12.25 billion as anticipated from all sources of revenue.
That should go a long way for Macau’s operations as regards planning. According to the IMF (International Monetary Fund), this year, Macau’s GDP will fall by 1.3%. This fall is not limited to this year alone as it would also extend to next year as the GDP is projected to fall by 1.1%. The predictions were published last week in a World Economic Outlook by the IMF. This is different from what was anticipated in May when the IMF projected that Macau’s GDP would rise by 4.3%.
The IMF did not provide an explanation for the projected fall next year. However, it pointed out that Macau’s economic growth started falling at an alarming rate during the Q3 last year. This happened due to less spending and weaker investments. The situation worsened thanks to the U.S.-China trade war that’s been playing out for the major part of 2019, as well as a fall in domestic consumer confidence in PR China.