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Utilization fee payable by concessionaires to Macau government for use of reverted casinos to be determined by end of December

Andrew W Scott by Andrew W Scott
Wed 21 Dec 2022 at 09:43
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The amount to be paid to the Macau government by the concessionaires to “rent” the casinos back from the government under the new concessions – referred to as a “utilization fee” by SJM – should be known by the end of December.

The interesting tidbit of information was revealed in a Sunday evening SJM Holdings filing on the Hong Kong exchange, which read in part:

Since the casino premises, which were owned and operated by the Group, will revert to the Macau Government at the end of the Current Concession [ending 31 December 2022], SJM Resorts will pay an annual utilization fee for use of casino space owned by the Macau Government. The quantum of the utilization fee is expected to be determined by the Macau Government at the end of this month.

Precisely what areas of Macau’s integrated resorts should revert to the government at the end of the concessions was a highly contentious item over the past 12 months as the Gaming Inspection and Coordination Bureau (DICJ) and the concessionaires haggled over square footage.

At one stage it was not even known if the operators would have to buy back the reverted areas or instead pay an annual fee for their use, but ultimately the latter option has prevailed.

The utilization fee will be yet another substantial new revenue stream for the government, to be added to other payments to the government the concessionaires are liable for under their concession contracts.

Concessionaires must pay a special gaming tax of 35% of gross gaming revenue and a further 5% of gross gaming revenue in contributions for various forms of Macau CSR. If Macau GGR was to total MOP$130 billion in 2023, as is estimate by the government, the total GGR based taxes and charges payable next year by Macau’s six concessionaires would be MOP$52 billion (US$6.5 billion).

Additionally, concessionaires must pay an annual fixed premium of MOP$30 million and annual variable premiums of MOP$300,000 per VIP table, MOP$150,000 per mass table and MOP$1,000 per slot machine. Assuming only 10% of gaming tables are set aside for VIP play, the total annual premium payable by Macau’s six concessionaires to the government would be MOP$1.182 billion (US$148 million).

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Andrew W Scott

Andrew W Scott

Born in Australia, Andrew is a gaming industry expert and media publisher, commentator and journalist who moved to Hong Kong in 2005 and then Macau in 2009, when he founded O MEDIA, one of Macau’s largest media companies, former and parent company of Inside Asian Gaming (IAG). Both O MEDIA and IAG were merged with US-based gaming media brand CDC Gaming on 1 January 2025, under new corporate parent Complete Media Group (CMG).

Andrew was appointed CEO of Complete Media Group upon the merger. CMG is now the parent of three gaming media brands: Inside Asian Gaming (focusing on land-based gaming in the Asia-Pacific region), CDC Gaming (focusing on land-based gaming in the Americas), and Complete iGaming (focusing on online gaming in the Americas and APAC).

Andrew continues to be Vice Chairman and CEO of IAG and now-sister company O MEDIA.

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