Macau government considering extension to "satellite casino" transition period

The Macau SAR government is exploring the possibility of increasing the transition grace period to be given to “satellite casinos” -venues operating under a license attached to one of the concessionaires, but which are run by third parties in individually owned premises- to resolve ownership issues and regularize their situation.

A three-year transitional period was first proposed so concessionaires could resolve the situation, and would be granted under amendments to the city’s gambling law. But according to the second standing committee of the Legislative Assembly (AL), authorities are evaluating extending that timeframe.

“Legislators asked if the period could be increased to five years. The government did not say if it would do so, just consider,” said Chan Chak Mo, head of the assembly’s second standing committee, according to Macau Business. The three-year period was initially unveiled in January, as part of the draft bill on new gambling regulations.

Amendments to the city gaming law propose any casino must be established in the assets owned by gaming concessionaires. Given “satellite casinos” are run by third parties in individually owned premises, this would put an end to this business model: the grace period would permit concessionaires to regularize venues in assets owned by other parties. The draft law proposes concessionaires acquire the ownerships of casino areas within this timeframe.

Macau Secretary for Economy and Finance Lei Wai Nong 

The issue has been one of the most discussed among legislators, as sector representatives believe it could lead to loss of employment should this sector be closed. However, Chan Chak Mo told media that Secretary for Economy and Finance Lei Wai Nong has assured the second standing committee that it is not the bill’s intention to shut down these operations.

“The government does not want to see satellite casinos shut down, they want to reduce the impact to those casinos. The Secretary said they want all satellite casinos to continue operations,” Chan Chak Mo said, according to the cited source. “Of course for this to happen, new concessionaires will have to acquire these assets.”

Questions have also been raised over the proposed ownership of the assets concessionaires will have to prove, with legislators asking for a definition on whether full ownership or majority will be required, but the situation still remains unclear.

The three-year period is being provided to reduce the impact these changes could potentially introduce, the legislator said. Government representatives said it would be initiated after new gaming concession contracts come into effect, reports Macau Daily Times. This implies a change from an earlier proposal, which made the buffer period dependent on the promulgation date of the future law.

Macau Legislative Assembly

The government announced earlier this month concessionaires would be permitted to apply for a temporary license extension valid until December 31, 2022. Licenses were originally set to expire by June 26: an extension would provide gambling licensees with six additional months as the world’s largest gaming hub works on amendments to its gambling law. Operators have confirmed they will be applying for the extensions.

Weeks ago, Macau officials told legislators that the government has conducted a site check on satellite casinos. Officials investigated and inspected the scale of all properties of the six current gaming concessionaires from July to November. The government intends to differentiate between sections identified as satellite casinos and those that are not, with results from the study expected to be made available “by the end of this year.”

It is believed there are currently 18 operation satellite casinos, most of them third-party venues run under the license of operator SJM Holdings Ltd. By clarifying the areas of each satellite casino through its new study, officials intend to identify how large are the areas concessionaires would have to acquire; while also identifying non-casino areas, such as shopping malls and restaurants, which may continue operations.

The second standing committee has now finished its first phase of review on the draft law, further reports Macau Daily Times. The government will now consider the comments and suggestions made by lawmakers before updating the bill into a second draft for the committee's further analysis: it is estimated officials may need three weeks to refine the draft and provide the second one.