Macau GGR will exceed $22 billion in 2027, triggering a 20% operator tax.

Morgan Stanley analysts forecast that Macau’s gross gaming revenue will surpass $22 billion by 2027. The forecasts are based on the signing of new gaming concession contracts by Macau’s six operators and our most recent forecasts of their annual income for the upcoming term.

Last week’s deal requires the six concessionaires to spend 20% more on non-gaming if their five-year cumulative revenue exceeds the threshold.

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This would cost concessionaires who received gambling facilities for 2023. The government’s tax tools and allocations could change operators’ unfair tax burden.

The six corporations’ projected investments are similar. Due to 2023’s rebound, Morgan Stanley anticipates operators to invest in 2024. (rather than normalization).

Macau pledges:

The concession agreements require operators to guarantee $14.79 billion for new investments over a decade: Sands pledged $3.76 billion, Galaxy $3.53 billion, Wynn $2.21 billion, MGM China $2.08 billion, SJM $1.75 billion, and Melco $1.50 billion.

Concessionaires must pay MOP30 million ($3.7 million) year per contract. VIP tables cost MOP300,000 and slot machines MOP1,000. Operators can run 500 gaming tables and 1,000 slot machines under the current allocation rule.

Macau – Corporations must support company-related or public-interest projects if they don’t spend. The government authorized and selected both types of initiatives.

Macau-funded projects:

Melco’s House of Dancing Water, a cinema complex, indoor waterparks, Galaxy Arena, and a high-tech amusement park, Sands’ Le Jardin, and MGM’s unique performing arts and entertainment area are examples. Wynn will develop a theater and gallery, while SJM will open three themed museums.

All six concessionaires have also committed to investing in their meetings, incentives, conventions, and exhibitions (MICE) sector to boost tourism and demonstrate their corporate social responsibility.

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