Despite being handed a 24-year extension in February to continue its horse racing monopoly, the Macau Jockey Club has significantly delayed its investment proposals.
Now, after a fractious week for the club and a scandalous few years of tax dodging claims, the documents are in, and the future of the club will soon be decided.
Proposals
Earlier this week, the chairman of the Follow-Up Committee of the Legislative Assembly (AL) for Land and Public Concessions, Ella Lei Cheng I, continued to hound Macau’s SAR Government about the long extension.
Lei, also a legislator, said the government has only disclosed the investment concepts proposed by Macau Horse Race Co. Ltd. (MHR), operators of the Macau Jockey Club, arguing that this is not enough to allow the public to monitor investment progress made by the company.
She said: “Why would [the government] take so long and still can’t provide more information? That is our biggest question. It seems the government actually doesn’t have this information, otherwise it could’ve provided us with it already.”
Her committee is also concerned about whether the proposed investments will indeed ever happen. Lei pointed out that, in previous contracts, the government had not specified any mandated investment for the company to make.
She said: “Even if [the company] has a certain amount of registered capital, it doesn’t mean it will be the actual amount that will be invested. Also, without a timetable for the investment, we are worried that this investment, in the end, will not be fulfilled despite the contract being extended.”
Promises
The government has told the committee that MJC will inject MOP1.5bn ($185.7m; ￡145.8m) in three stages to improve facilities and provide more non-gaming elements on the premises. This seems to be backed up in this latest proposal, which lists investment in non-gaming elements, such as improving facilities, smart tables, a horse theme park, and a riding school.
Paulo Martins Chan, who heads Macau’s Gaming Inspection and Coordination Bureau (DICJ in Portuguese), said that the new concession contract with MHR includes a schedule for the company to fulfill the investment.
But it is perhaps worth considering that only last year, horse racing accounted for just a fraction of Macau’s gross gaming revenue?– just 0.04%.
Perhaps more tellingly, MHR hasn’t made a profit since 2014, so perhaps the need for an expansion is premature, especially with such negative press over recent years.
No taxes for jockey club
Indeed, the extension has caused a bit of a rift in Macau offices. It was revealed in March that the company owed a minimum of $18.9m to the government in back dues and that this fact had been public knowledge in the government since the error was discovered in 2005. This was due to missed payments between the years 1997 and 2005, but no effort has been made to make them pay up, despite promises to pay within a decade.
Macau’s secretary for economy and finance, Lionel Leong Vai Tac, who uncovered the outstanding debt, said: “After we discovered this amount, I asked them in 2015, when we were dealing with the [horse racing] concession, to repay the government in 10 years.” It’s something that still angers a lot of citizens.
Not to mention that the government is still offering an exemption on taxes payable by the race track. Since 2002, the Macau Jockey Club has been exempt from having to pay a fixed annual tax of just over $3 million.
With all this to consider, Macau’s leaders have some serious questions to answer about the validity of the extension. It’s expected that more concerns will be raised before a decision is made.
