MACAU SAR, CHINA Law and Practice Contributed by: Pedro Cortés, Lektou
Contractual Sanctions Casino gaming concession contracts include penalty clauses that impose sanctions in cases of assignment, transfer, disposal, or encumbrance of the operation of a casino or gaming area. These penalties range from MOP600 million to MOP2 billion. Further sanctions may include sequestration, redemp- tion, or termination of the concession. • Sequestration – this allows the government to temporarily assume control of a concession if there are serious operational issues, such as unjustified interruptions or severe organisational deficiencies. • Redemption – Macau reserves the unilateral right to reclaim a concession through redemption, with compensation to the concessionaire, as deter- mined by the government. • Termination (stated in the concession contracts) – the government can also terminate a concession based on public interest or non-compliance. In cases of termination for public interest, the con- cessionaire is entitled to fair compensation, reflect- ing investments made and the remaining duration of the concession. 11.3 Financial Penalties See 11.2 Sanctions .
tors are required to contribute 2% of their GGR to public funds for cultural, scientific, social, economic, and educational development, as well as an additional 3% for urban development, tourism promotion, and social security initiatives. A 5% tax is also applied to commissions paid to gaming promoters. See also 4.9 Ongoing Annual Fees regarding annual premium and special premium. Despite this taxation structure, the Macau Gaming Law grants the Chief Executive the authority to par- tially or fully exempt operators from the Income Com- plementary Tax if deemed in the public interest. Operations Offered to the Public (Lotteries, Including Sports Lotteries) The operator for instant lotteries, including the sports lottery, must pay a minimum annual rent of MOP1 mil- lion. The rent is determined based on sales revenue thresholds as follows: • for sales revenue from MOP0 to MOP10 million, a rent of MOP1 million is due; • for revenue between MOP10,000,001 and MOP30 million, 12% of the excess is due as rent; • for revenue between MOP30,000,001 and MOP45 million, 13% of the excess is due; • for revenue between MOP45,000,001 and MOP60 million, 14% of the excess is due; and • for revenue between MOP60,000,001 and MOP80 million, 16% of the excess is due. Pari-Mutuel This is not in operation and it is not foreseeable that it will be in the future.
12. Tax 12.1 Tax Rate by Sector Games of Chance
Under Article 27 of the Macau Gaming Law, casino gaming concessionaires must pay a special gaming tax of 35% on gross gaming revenue, payable by the 10th day of each month. In addition, gaming opera-
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