Less than a month after the Macau Horse Racing Company Limited won the right to continue operating the Macau Jockey Club until 2042 and it has reportedly been revealed that the firm owes the government of Macau approximately $18.5 million in unpaid taxes.
According to a Wednesday report from the Macau News Agency, the disclosure was made by Lionel Leong Vai Tac, Economy and Finance Secretary for Macau, with the shortfall purportedly covering a nine-year period that began in 1997.
The news service reported that the Macau Horse Racing Company Limited will now be required to make annual payments of almost $6.2 million in order to honor the outstanding debt, which includes payments to a pension fund for civil servants as well as obligations to the city’s Social Welfare Bureau, or risk losing its exclusive license to operate horseracing in Macau.
“Since [the Macau Horse Racing Company Limited] has showed willingness to continue working, we have established that it can pay the expenses in three years,” Leong reportedly told the Macau News Agency. “In the contract it is pretty clear that if [the Macau Horse Racing Company Limited] cannot pay the amount in three years the concession contract will be revoked.”
Macau Horse Racing Company Limited has held a horseracing monopoly in the former Portuguese enclave since 1978, but its Macau Jockey Club facility reportedly last turned a profit in 2005 and declared accumulated annual losses in December of 2016 of around $503.6 million.
To help keep the facility in the city’s Taipa district from going under, 2005 reportedly saw the government agree to exempt the Macau Horse Racing Company Limited from a requirement that it pay a 1% betting duty while moreover reducing its annual horseracing license fee by about $1.2 million a year to just over $1.8 million.
However, Leong reportedly told the news service that the Macau Horse Racing Company Limited had never been excused from other levy obligations and that these had not been collected simply due to the operator’s declining financial situation.
“In 2018, [the Macau Horse Racing Company Limited] proposed an increase in investment and expressed the wish to continue operation,” Leong reportedly told GGRAsia on Wednesday. “As a result, we told it to first repay the remaining overdue amount within three years. This means that it has to pay [circa] $6.2 million each year for three years.”