Macau gov't underestimated GGR that's poised to surge

Government gaming forecast of MOP240b too high and too low for lawmakers

Renato Marques, MDT Friday, November 22, 2024 - 14 hours ago 
macaudailytimes.com.mo/government-gaming-forecast-of-mop240b-too-high-and-too-low-for-lawmakers.html

Lei Wai Nong

Lawmakers are confused about the government’s prediction that gross revenue from casinos will be MOP240 billion in 2025, as expressed yesterday during a Legislative Assembly (AL) session where next year’s budget proposal was debated and voted on.

While some considered the amount “a very conservative” forecast, others expressed fears that the government could be overestimating receipts and underestimating regional competition and other external factors.

The Secretary for Economy and Finance, Lei Wai Nong, was at the AL to present the bill and, as usual, did not elaborate much on how the government arrived at this forecast.

Leong Sun Iok

The first concerns were expressed by lawmaker Leong Sun Iok, who noted that the estimate of MOP240 billion represents an average of MOP20 billion a month over the next year, a figure that has only been reached in two months this year so far (May and October), with the current average for the first 10 months of the year being MOP19 billion.

The same lawmaker also noted that there are increasing challenges to this industry as other areas in the region are legalizing gaming activities.

Lawmaker Ngan Iek Hang agreed, noting that the figure reached in October this year (MOP20.8 billion) was already very high and surpassed the highest amount obtained in any month in 2023.

Lo Choi In

Ngan expressed concerns about whether it would be possible to ensure that every month in 2025 will be as profitable as October this year.

Ron Lam took the opposite view, noting that the government systematically chooses to present very conservative forecasts for gaming industry results, hinting that there are potential other interests on the line. Lam said that by presenting a conservative forecast, the government easily dismisses the idea of increasing social benefits, subsidies and other governmental support to the population and businesses.

Also commenting on the topic was Lo Choi In, who did not take a side but said only that the “government needs to have a more global perspective of the gaming numbers and should not base the annual budget on just this factor but on others too.”

Ngan Iek Hang

Jose Pereira Coutinho also shared fears of increased competition from neighboring regions, noting that Macau has seen a very large number of visitors, but these visitors are spending a lot less and in an imbalanced manner which is mostly benefiting big companies and not small businesses.

Leong also noted that claiming that tourists’ spending does not equally benefit everyone in society, with most people earning less than before. He called on the government to “correct this imbalance.”

In response, Secretary Lei excused himself from answering most of the questions, arguing that “this budget is not for the current government but for the next. It’s a basic budget to ensure the payment of contracted expenses and the normal functioning of services,” he remarked, deferring the majority of the questions and skepticism from the lawmakers to March or April next year when it is expected the new government will present its policy address for the year.

Trying to explain how the government reached its figure of MOP240 billion, Lei said only that it was based on the previous results and the results obtained over the past 10 months, together with the forecast increase in the number of visitors expected this year to “36 million or more,” an increase of 9% when compared to this year.

“With the increase of patrons [to the casinos], the tax collected over the gaming revenues will also increase, and that is the calculation we have made,” the Secretary said, adding that the government also expects better performance from the non-gaming sectors next year.

“I believe that the next government will discuss with you your questions. We can’t do this. We are not in a position to do so. This should be a discussion to have at the Policy Address for 2025,” he concluded.

Ron Lam unhappy with budget priorities

During the brief discussion over the 2025 budget proposal, lawmaker Ron Lam expressed his dissatisfaction with the government’s budgetary priorities.

“The benefits stay the same, the pensions for the elderly are unchanged, but the budget of TDM [public broadcaster] is going to grow over 35%,” he said, adding, “I fail to understand the priorities of this government.”

Also unhappy with the cash handouts system being kept “as it was” was lawmaker Leong Hong Sai, linked with the Macau General Union of Neighborhood Associations (commonly referred to as Kai Fong). The lawmaker said that society is not happy with the mechanism and asked if the government is expecting “to change the criteria mechanism to prevent people that do not reside in Macau and that have left for a long period receiving this subsidy.”