Secretary for Economy and Finance Lionel Leong Vai Tac said Wednesday that the Macau Jockey Club (MJC) will need to pay 153 million patacas in unpaid fees that it owes the government within three years or face having its concession withdrawn.
Leong also said that while the government initially required the company to repay the debt within 10 years in 2015, the government shortened the period to three years when it extended the company’s horse-racing concession late last month.
Leong made the remarks while speaking to reporters on the sidelines of a ceremony marking the 15th anniversary of the establishment of the Forum for Economic and Trade Cooperation between China and Portuguese-speaking Countries (PSCs), at the Four Seasons Hotel in Cotai.
The government extended the Macau Jockey Club’s horse-racing concession, which initially expired late last month, for 24 years and six months to August 31, 2042, six months short of the maximum concession period of 25 years.
Speaking to reporters late last month about the government’s decision to extend the company’s horse-racing concession, Leong said that the MJC had pledged to invest 1.5 billion patacas phase by phase to improve the facilities at its Taipa racecourse and to increase non-gaming elements there.
When the company’s horse-racing concession expired in late August last year, the government extended it for six months until February 28. Leong told reporters earlier that month that the six-month extension would allow the government to study a development plan for the Taipa racetrack that had been submitted by the company.
The government has said that the large-scale investment plan submitted by the company would help Macau develop into a world tourism and leisure centre.
In 2015, the government extended the company’s horse-racing concession for two years to August 31 last year. Previously, its concession was extended for 10 years, from 2005 to August 31, 2015.
Speaking to reporters, Leong said that the company was required to pay the government a fixed annual rent of 25 million patacas when the government extended its horse-racing concession in 1997. The government lowered the amount of the annual rent to 15 million patacas when it extended the concession in 2005.
According to Leong, the company has informed the government every year by letter since 2002 that it could not afford to pay the fixed annual rent due to its accumulated losses. Leong said that in response the government had waived a part or all of the fixed annual rent every year since 2002.
According to Leong, the 10-year concession extension agreement signed in 2005 required the company to pay a certain percentage levy if its betting volume exceeded 2.5 billion patacas per year. Leong said that the company has never needed to pay that kind of tax as it incurred losses every year.
In 2016 the company reported an accumulated loss of about 4 billion patacas.
Leong also said that the concession extension agreement signed in 2005 abolished a requirement for the company to pay the government’s Pension Fund (FP) one percent of its annual betting turnover.
According to Leong, the government confirmed in 2015 that the MJC owed it over 200 million patacas in unpaid fees, including the outstanding payments to the Pension Fund, an mandatory annual contribution to the Social Welfare Bureau (IAS), as well as the payment of unclaimed winnings to the government.
Leong said that therefore the government required the company to pay all the outstanding fees within 10 years when it extended the company’s horse-racing concession in 2015, or 20 million patacas every year.
According to Leong, the company now owes the government 153 million patacas.
Leong said that when the government extended the MJC’s horse-racing concession late last month, it shortened the initial repayment period of 10 years and now requires the company to repay its outstanding fees within three years.