Macau Warns of Deficit Risk Amid Gaming Revenue Dependence
Added on 16 April, 2025
Macau Chief Executive Ho Iat Seng has issued a stark warning over the region’s financial sustainability, cautioning that a sustained drop in monthly gaming tax revenue below MOP15 billion (US$1.86 billion) could push the government into fiscal deficit.
His remarks, delivered during a recent policy address, underscore the mounting pressure on Macau’s narrow tax base, which remains overwhelmingly reliant on casino-related income.
Gaming taxes are expected to contribute over 80% of Macau’s total revenue this year, with MOP93.1 billion out of the MOP115 billion in projected recurrent government expenditure sourced from this single sector. Ho highlighted that such overreliance on the casino industry leaves the government financially exposed, particularly in the face of potential economic shocks or fluctuations in gaming performance. He noted that if monthly revenue from gaming dips to the MOP12–15 billion range, the government may face difficulties meeting fixed obligations such as public sector salaries and social welfare spending.
Public servant wages alone amount to approximately MOP30 billion, while social welfare commitments continue to rise. In this context, the Chief Executive emphasized the need for structural reform and fiscal prudence, calling for collaborative efforts to broaden Macau’s tax base and reduce vulnerability to gaming revenue volatility.
He also reiterated the government’s commitment to economic diversification, pointing to ongoing initiatives in partnership with Hengqin to expand into sectors such as healthcare, high technology, and finance. One such initiative includes plans to reintroduce legislation resembling the previously repealed offshore fund law, which could help attract international financial institutions to Macau.
When questioned by legislator José Maria Pereira Coutinho about the possibility of issuing consumer vouchers to stimulate spending, Ho responded that such stimulus measures were better suited to a different economic environment and would require a thorough cost-benefit analysis. On the topic of civil servant salaries, he stressed the importance of balancing staff welfare with the broader goal of fiscal sustainability, suggesting that future adjustments must be carefully weighed against the government's financial capacity.