You can bet on tax increases, Macau casino investors warned INVESTORS in Macau casinos, including James Packer's Melco Crown Entertainment, have been warned the Macau government could seek to increase its share of earnings when their licences come up for renewal from 2020. The first of Macau's six casino licences falls due for renewal in March 2020, with Melco Crown's licence due to expire in 2022. Commentators at a conference in Macau last week warned that investors should expect the Macau government would increase its demands for tax revenue from the casinos or impose tougher conditions as the licences are renewed. "Universally, it's normal for governments to get greedy" when negotiating gaming licenses, US expert Nelson Rose, of the Whittier Law School, told the Global Gaming Expo Asia conference last week. Professor Rose said he did not expect the Macau government to seek to take back the land it had granted casino licensees, but it would have "huge power" in the negotiations given the billions of dollars invested by the licence holders in their Macau casinos. Professor Rose, a visiting scholar at the University of Macau, said the government could demand that the licenceholders invest in more infrastructure, or it could seek to raise taxes. James Packer's Crown Limited has a 33.4 per cent interest in the Nasdaq-listed Melco Crown Entertainment, one of the six casino licenceholders in Macau. Melco Crown this month celebrates the two years of operating its City of Dreams casino complex on Macau's Cotai strip. It also operates a smaller casino, called Altira Macau. Crown this year reported an equity accounted gain of $11.8 million from Melco Crown for the six months to the end of December, but said the "normalised result" for the period was a loss of $6.8m, "after adjusting for an above-theoretical win rate and pre-opening expenses." The government of Macau now taxes casino earnings at 39 per cent, a rate that allows the main operators to make healthy profits. "No one knows how the rules of the game will change at the end of the concessions," Macquarie Securities gaming analyst Gary Pinge said yesterday. But I do think that investors need to think about it. The Macau government could seek to "regulate down" the returns for casino operators, Mr Pinge said. But the government was still considering how to handle the issue. Macau has six casino licences covering 33 casinos in the former Portuguese territory, the official casino gambling outlet for China.