Incentive scheme draws criticism over lottery design as residents call system ‘absurd’

[Photo: Ricaela Diputado]

As the latest 10-week “Community Consumption Grand Rewards Scheme” campaign entered its second week, public opinion remains divided, with some residents calling the lottery mechanism “absurd” and arguing that direct “consumption cards” and merchant subsidies would be fairer, while an economics scholar noted that such concerns, while valid, overlook the fundamentally different policy objectives and resource requirements between the rewards program and consumption cards.

Seeking to boost consumer confidence, revitalize local spending, stimulate the economy and enhance the consumption atmosphere in residential areas, Macau authorities launched a new consumer promotion campaign on April 10. The initiative adopts a “weekend lottery, weekday redemption” model, aiming to inject approximately MOP400 million in consumption incentives to drive the local circular economy.

However, the campaign has sparked controversy. Recent social media comments have criticized the lottery mechanism as “absurd,” with critics claiming the benefit distribution ratio is roughly “30% for residents and 70% for businesses.”

They argue that the requirement to spend at least MOP50 to enter the lottery distorts consumer behavior, noting that “residents are not consuming out of actual need, but rather to enter the lottery and receive subsidies.” The comments further satirize the initiative as akin to gambling, stating: “It truly is the ‘Las Vegas of the East.’”

Critics also questioned whether businesses are the true beneficiaries, alleging under-the-table dealings and claiming that “business owners, relatives and friends were cashing out directly.” They cited examples from the Chinese social media platform Xiaohongshu (Red Note), where users reportedly “entered eight e-wallets within half an hour at midnight.”

The critics argued that a fairer approach would be to directly distribute consumption vouchers – an electronic consumption benefits plan first launched by the government in 2022 as a provisional measure to spur domestic demand and ease financial pressure on local residents and businesses during the Covid-19 pandemic – while also providing direct operational subsidies to businesses.

In response to the concerns, an economist told the Times that while some worries are indeed valid, the public needs to understand that the policy objectives and resource requirements of the ongoing consumption incentive scheme are fundamentally different from those of consumption vouchers, and the two should not be directly compared.

Henry Lei, associate professor of business economics at the University of Macau’s Faculty of Business Administration, acknowledged public concerns over the low winning rate of the consumption incentive scheme and suggested that authorities consider optimizing the program. “Reducing the MOP200 voucher and splitting it into a large number of MOP10 vouchers would enhance residents’ sense of benefit,” he stated in a text message to the Times on Tuesday, adding that the move “may also effectively reduce the likelihood of residents using the MOP200 voucher for prepaid spending.”

Amid public debate comparing the “Community Consumption Grand Rewards Scheme” to pandemic-era vouchers, Lei emphasized that the two initiatives have entirely different policy objectives and require vastly different levels of resources.

He noted that if the government were to issue consumption vouchers again based on the 2022 scale, the expenditure could exceed MOP5 billion – a substantial amount requiring careful management. Regarding the rewards scheme launched last year and this year, Lei said the government’s goal is to stimulate private consumption while offering discounts. Citing last year’s data, he pointed out that the program’s multiplier effect exceeded four times the investment, meaning a budget of MOP400 million could potentially generate over MOP1.6 billion in consumption – yielding even greater benefits than the pandemic-era consumption vouchers.

Addressing the claim that some consumers can use a method to maximize spending benefits across eight available payment platforms, the scholar noted that other members of the public are equally entitled to apply for benefits from all eight platforms to “increase their chances of winning and the total amount of discounts,” though he acknowledged that this “would certainly require a significant time investment.”

Lei emphasized that the process as a whole “does not involve any illegal activity” and added that he believes the relevant authorities “will not intervene excessively.”

Meanwhile, the Times probed further, noting that many small- and medium-sized enterprises (SMEs) have begun offering in-store cash vouchers following the launch of the program. Although authorities have urged against the practice, from the first phase to the current fourth phase, an increasing number of stores – including supermarkets – have been encouraging consumers to “buy vouchers.”

Lei responded that these arrangements stem primarily from SMEs’ desire to capture as much new demand generated by the redemption of discount vouchers as possible. Since this demand includes contributions from both the government and the public, it fully demonstrates the multiplier effect – which, he noted, is precisely the objective of the government in launching the scheme.

However, he also pointed out that this involves resource allocation issues.

Some SMEs, due to various reasons, including cost and staffing constraints, may not be able to offer prepaid consumption in the form of cash vouchers and thus fail to benefit from the new demand created by the rewards scheme – affecting the fairness of the initiative. He cautioned that cash vouchers, being a form of prepaid consumption, also carry certain risks.