The Macau Horse Racing Company, operator of Macau Jockey Club, has been given three years to repay MOP$150 million in overdue fees or have its horse racing license terminated.
The ultimatum, revealed by Secretary for Economy and Finance Lionel Leong on Wednesday, forms part of the company’s recent 24-year license extension. According to Leong, the owed fees include an annuity set by the concession contract, a share of the value of aggregate amounts bet – which will be directed to the government’s Pension Fund – and unclaimed prizes.
The government had requested, starting in 2015, that the company pay a certain portion of the due amounts on a yearly basis with all the money to be settled within a 10-year period.
Under the terms of a concession extension granted in 2005, the company had been required to pay, among other dues, a fixed annuity of MOP$15 million, but the company had informed the government that because it had been run at a loss between 2002 and today it could not afford to pay. The government has subsequently granted an exemption from the payment, either in part or in whole, in certain years.
A previous concession condition requiring the company to give 1% of the value of aggregate amounts bet to the Pension Fund no longer applies under the terms of the 2005 concession extension.
The 2005 concession extension terms also stipulated that a certain percentage levy be imposed on the concessionaire should the value of aggregate amounts bet reach an amount of MOP$2.5 billion annually or above. That levy has not been imposed on the company either due to its ongoing annual deficit.
The Macau Horse Racing Company’s concession was last month extended by 24 years and six months until 31 August 2042 after it pledged to invest MOP$1.5 billion to upgrade existing facilities. Those upgrades would include a number of non-gaming elements such as multiple hotels and restaurants.
Leong said on Wednesday that the planned investment would have to be in place according to an agreed schedule or the concession would be terminated.
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