UM  > Faculty of Business Administration
Casino Taxation in Macao: An Economic Perspective
Gu, Xinhua; Tam, Pui Sun
2011-12
Source PublicationJOURNAL OF GAMBLING STUDIES
ISSN1050-5350
Volume27Issue:4Pages:587-605
Abstract

Macao's gaming industry has experienced dramatic growth for 8 years, yet with certain social costs due to compulsive gambling. The government has come under pressure for tax cuts even though its gaming receipts are falling relatively to the casino retained revenue. The request for tax relief is triggered by a recent decline in net profit despite fast growing gross gaming revenue under favorable market conditions. This is very likely caused by a substantial hike incasino operating costs due to increased competition and might also signal the presence of the principal-agent problem. Given the regressivity of gaming tax with respect to net profit, it is no surprise that casinos with lower profitability are more prone to seek tax cuts. The source of Macao gaming profit hinges on three distinct factors: rising demand from China, monopoly location for casinos, and market structure of oligopoly. These factors provide economicjustifications for the current tax regime of Macao with a strong ability to pass tax burdens on to massive visitors. The government relies on casino tax revenue to deal with gambling related problems and promote local diversified development. Pushing for tax variability may create policy instability, business uncertainty, and unpredictable prosperity in the long term.

KeywordCasino Taxation Economic Efficiency Industrial Diversification
DOIhttp://doi.org/10.1007/s10899-010-9235-8
Indexed BySSCI
Language英语
WOS Research AreaSubstance Abuse ; Psychology
WOS SubjectSubstance Abuse ; Psychology, Multidisciplinary
WOS IDWOS:000297146700004
PublisherSPRINGER, 233 SPRING ST, NEW YORK, NY 10013 USA
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Citation statistics
Cited Times [WOS]:14   [WOS Record]     [Related Records in WOS]
Document TypeJournal article
CollectionFaculty of Business Administration
DEPARTMENT OF FINANCE AND BUSINESS ECONOMICS
AffiliationUniv Macau, Fac Business Adm, Av Padre Tomas Pereira, Taipa, Macau, Peoples R China.
First Author AffilicationUniversity of Macau
Recommended Citation
GB/T 7714
Gu, Xinhua,Tam, Pui Sun. Casino Taxation in Macao: An Economic Perspective[J]. JOURNAL OF GAMBLING STUDIES,2011,27(4):587-605.
APA Gu, Xinhua,&Tam, Pui Sun.(2011).Casino Taxation in Macao: An Economic Perspective.JOURNAL OF GAMBLING STUDIES,27(4),587-605.
MLA Gu, Xinhua,et al."Casino Taxation in Macao: An Economic Perspective".JOURNAL OF GAMBLING STUDIES 27.4(2011):587-605.
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