Macau Casinos Get Special Gaming Zones to Boost Foreigners

Macau’s casinos will establish designated gaming zones and issue special gambling chips for foreigners, the special administrative region’s (SAR) chief regulator said Friday.

Macau
The crowded gaming floor at the Venetian Macao, pre-pandemic. It could soon have its own foreigner-only zone. But currently, very few non-Chinese visit Macau. (Image: Corbis)

The move is part of an effort by Macau’s government to increase the number of foreign tourists in the gambling hub, as opposed to visitors from the Chinese mainland, Hong Kong, and Taiwan.

Tax Breaks for Foreign Footfall

The recent retendering process for gaming concessions has allowed Macau to overhaul its licensing regulations for the first time in 20 years.

The gaming zones will enable the implementation of a new tax system, where operators will receive a waiver of up to 5% of the 40% the government collects on gross gaming revenues. It’s not yet clear what the quota of foreign visitors will be to trigger the tax breaks.

The special gaming chips will allow auditors to track the amount of money being gambled by foreign visitors. But it will not be compulsory for these visitors to gamble in the zones, as Spokesperson Cheong Weng Chon explained as a press briefing Friday.

“The gaming companies know which zone they should send their gamblers to if they are brought in by the companies themselves, such as through promotion offices they set up abroad,” said Cheong, as reported by Macau Business.

It’s like a VIP parlor, but one just for foreign players. Identification documents such as passports have to be presented before entry. However, if the foreign gamblers come on their own, it doesn’t matter which zone they go, it’s up to them to decide themselves,” he added.

The central government in Beijing, which Macau is eager to please, has long demanded that the gambling hub diversify its tourism sector. The are requested to do so both by attracting visitors from other countries and building more non-gambling amenities.

Beijing has blamed Macau’s gaming industry for encouraging capital flight and money laundering. As a result, it  has imposed strict controls on the amount of currency that can be moved into the gambling hub from the mainland. All forms of gambling are prohibited in mainland China, apart from state-controlled lotteries.

Big Challenge Ahead

In pre-pandemic 2019, 91% of visitors to Macau were from mainland China, Hong Kong, and Taiwan. A mere 3.58% of its gaming revenues were estimated to have been generated by foreign customers.

Attracting more of these customers is a condition of the new gaming permits, and Macau’s six concessionaires will likely have had to demonstrate how they intend to do this as part of the retendering process.

Nevertheless, pivoting an entire tourism sector will be a huge challenge. That’s especially true in the current climate when most direct flights from outside China are suspended because of strict COVID-19 controls.