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Chinese Rank US as Top Road Trip Destination

Refund Management Services - Article - 300115_imageWeakness in Asia’s two largest casino markets is sending gamers to offshore destinations amid a clampdown. The Chinese government has a campaign against official corruption that is deterring many Chinese high rollers from gambling in Macau.

Macau’s casinos recorded their worst year in 2014, ending a decade of expansion, as gaming revenue fell 2.6% year-over-year to $44.0 billion. Gaming revenue in Singapore, valued at roughly $6.0 billion, has also seen VIP gambling volume slip.

While this creates opportunities for secondary markets in Asia, the fact remains that the United States is the top road trip destination for roughly half of Chinese tourists. More than 46% of Chinese tourists say the U.S. is their destination of choice, followed by Germany (7.89%), Australia (7.6%), France (6.23%), and Thailand (4.94%).

Chinese-Themed Casino Planned for Vegas

Part of the reason the U.S. remains a top travel spot for Chinese tourists is the recently announced extension for travel visas. In November, President Obama announced plans to extend Chinese student visas to five years and business and tourist visas to 10 years. The more open agreement is considered a milestone in advancing America’s ability to attract Chinese tourists.

Chinese tourists also spend a lot of money when they travel abroad, averaging more than US$1,000 a day (excluding accommodation). Some of that money is being funnelled into gambling; in the last six years, the number of tourists from mainland China and Hong Kong traveling to gambling hotspots like Las Vegas has increased 80%.

To accommodate the influx of tourists, companies are beginning to market their resorts to gaming tourists. Plans for the $4.0-billion Asian-themed Resorts World Las Vegas will cover an eventual 21 million square feet. The new resort will include a cluster of hotels, 175,000 square feet of gaming space, 210,000 square feet of restaurants, 250,000 square feet of retail, a 500,000+-square-foot convention center, and 300,000 square feet of pools and waterslides. Developers plan to build a replica of the Great Wall of China, terracotta warriors, and an enclosure for pandas.

Chinese Tourists Subject to 30% Withholding Tax

What many tourists to Las Vegas don’t realize is that their gaming and gambling winnings can be subject to a 30% withholding tax. In the United States, any gaming winnings over $1,200 are considered taxable income by the IRS.

The U.S. is not just one of the top destinations for Chinese tourists; it is also one of the top countries for having its winnings taxed 30% by the IRS.

If you win $2,000 playing the slots, the casino will only pay out $1,400, and if you win $5,000 betting on horses, you will receive $3,500; the rest goes to the IRS. These rules apply for non-U.S. visitors from China, Indonesia, Malaysia, Singapore, South Korea, Taiwan, and Thailand. These same rules also apply to those visiting the U.S. from Australia, Bahrain, Canada, India, Mexico, New Zealand, Norway, Saudi Arabia, and the United Arab Emirates.

If you’ve had 30% of your gaming winnings withheld by the IRS, Refund Management Services (RMS) can help you get it back; all it takes is just a five-minute call with one of our gaming tax experts. Call RMS toll-free from the United States or Canada at 1-888-272-5559 or contact us by e-mail at [email protected] You can also contact RMS at our Hong Kong offices at (852) 6690 1071.

Sources:
Xin, Z., “Chinese rank US No 1 road trip destination,” ChinaDaily.com, January 26, 2015; http://usa.chinadaily.com.cn/world/2015-01/26/content_19405612.htm.

Holliday, K., “Hey big spenders! Chinese travelers spend over $1,000 a day,” CNBC web site, July 17, 2014; www.cnbc.com/id/101843609.

Martin, B., “First Peek: Resorts World Las Vegas Dining and Nightclub,” Las Vegas Eater web site, October 10, 2014; http://vegas.eater.com/2014/10/10/6958683/first-peek-resorts-world-las-vegas-dining-and-nightclub.