"How would you spend a trillion patacas? "

 nov23

In other words, the government will make a massive sum from concessionaires in the next 10 years: 1,120 billion patacas (US$139 billion) in gaming taxes which is not often talked about, plus the much talked about 130 billion patacas in non-gaming spending commitment, for a combined total of 1.250 trillion patacas (US$152 billion).

Let’s put that in numbers: 1,250,000,000,000. That’s 1.83 million patacas for every person in Macao. It’s more than the amount spent on 1,800 projects under China’s signature Belt and Road Initiative. It’s bigger than the size of the entire global food delivery market.

As a statistician, I’m used to dealing with large numbers – especially when working in the gaming industry. In Vegas, millions were usually the largest units when it came to describing monthly revenues or visitors. When I came to Macao in 2006, using billions became commonplace, for talking about rolling volumes in VIP gaming, or monthly casino revenues. But the coming years will take it to another level, as I find myself working in trillions for the first time in my career.

The questions are: What are we going to do with all this money? Who gets to decide? 

‘Shocked, shocked’

Right now, there is no central committee to coordinate how such fantastical sums can best be spent, and one is urgently needed. It should comprise officials, legislators, academics, gaming industry representatives, NGOs, and others. Its deliberations and recommendations should be transparent and it should be open to receiving pitches from residents and any organisation with a stake in Macao. 

The committee should work to avoid duplication: Macao does not need six film festivals or six hospitals or six arenas. Above all, the committee must try and get the biggest bang for the buck. Is spending 20 million patacas (US$2.5 million) on a sporting tournament or art gallery really the same as spending 20 million patacas on a healthcare facility? 

The government’s stance towards gaming operators has been hardening despite the latter bending over backwards to meet the former’s demands. 

Listening to official rhetoric over the last few years, I’m constantly being reminded of Captain Renault’s infamous line in Casablanca: “I am shocked – shocked! – to find out that gambling is going on in here!” The remark is immediately followed by a clerk handing him a sheaf of banknotes, while telling him “Your winnings, sir.” 

As Macao economist Jose Duarte said in a 2022 panel discussion, “Gaming is like a very rich uncle that nobody loves too much, but everybody loves the money he brings. Gaming is blamed for several ills, but at the same time, it’s the source that will allow us to solve those ills.”

It’s time for us to figure out how the government, aided by gaming companies, is going to do that.

Alidad Tash is the managing director of 2nt8 Limited, a consultancy specialising in international casinos and integrated resorts. This is the first in a series of articles that will offer suggestions on how Macao can best spend its expected gaming revenues.

The views and opinions expressed on this piece are those of the author and do not necessarily reflect the official policy or position of Macao News.

UPDATED: 05 Jan 2024, 7:01 pm

https://macaonews.org/features/macau-casinos-revenue-gaming-tax-government-spending-macao/

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