An industry source who has seen the VIP gaming areas on levels 25, 26 and 27 of Crown Towers at City of Dreams reckons they’re a carbon copy of what’s on offer at Altira (formerly Crown Macau), Melco Crown Entertainment’s debut Macau property at Taipa.
That raises the interesting question of who exactly is Crown Towers’ target customer? Greg Hawkins, President of CoD told our sister publication Inside Asian Gaming the plan was to bring more direct VIP players to CoD. By ‘direct’ he meant players with whom the operator has a direct business relationship (presumably via Crown Ltd’s existing operations in Australia and North America) rather than those brought in by third party agents.
By definition that’s likely to mean players from outside Mainland China who have access to funds in internationally convertible currencies. All the overseas-based Macau operators say they want to bring in a greater number of direct players. But as aspirations go it’s a bit like world peace—everyone believes in it but making it happen is a lot harder than it sounds. CoD, LVS, Wynn and company have an even harder sell on their hands in attracting VIP players from outside Mainland China when one considers Macau’s tax on gross gaming revenue (GGR) is set at nearly 40 percent. States in Australia, as well as Singapore, the soon-to-be new kid on the Asian casino block, have on paper at least much more attractive tax deals for high rollers.
In Victoria in Australia, casino high rollers are given special tax perks. According to data from the Australian federal government, commission-based players (i.e., high rollers) start with a base rate of only 9 percent tax on GGR. There’s a ‘Super Tax’ of 1 percent for each AUD20 million of gross gaming revenue above AUD160 million, but that’s capped at a maximum tax rate on GGR of 21.25 percent. By comparison, non-commission (i.e., main floor players) face a starting rate of 21.25 percent on GGR, with a 1 percent Super Tax for each AUD20 million of GGR above AUD880 million, up to a maximum tax on GGR of 41.25 percent.
In Singapore the deal for VIPs is even more competitive, with a tax on the VIP gross of 5 percent, plus 7 percent Goods and Services Tax (GST). The casinos themselves will also pay corporate tax on their earnings, unlike in Macau, although whether they will pass that tax burden on to their high rollers isn’t clear at this stage.
With that kind of competition, CoD’s player relationship management team are likely to have some winning of hearts and minds to do before MPEL’s dream of filling Crown Towers etc up with direct VIP players can be realised.
We await developments with interest.
