Macau: Six to eight "satellite casinos" could close by mid-year, gaming promoters boss warns

Six to eight satellite casinos operating in Macau could close by June, according to comments Kwok Chi Chung, the President of the Macau Association of Gaming and Entertainment Promoters, has made to Exmoo News. Satellite facilities run under a license attached to one of the city’s concessionaires, but are operated by third parties on individually owned premises.

These satellite venues expected to cease operations would reportedly include the casino at the Grand Emperor Hotel, reports Macau Business. The gaming facility, which runs under SJM Holdings Ltd’s gaming license, announced in April it would be shutting down by June 26, the date on which all gaming concessions are set to expire.

A total of 18 satellite casinos out of 40 gaming venues in the territory are currently operational, with most of them -14- running under the license of SJM. The remaining four venues are linked to Galaxy Entertainment Group and Melco Resorts and Entertainment Ltd.

The cited source indicates Kwok has said that, although the six gaming concessionaires are set to see their gaming licenses expire by six months to December 31 this year, he believed some satellite venues will stop operations earlier in order to “cut losses.”

Grand Emperor Hotel

This new development is in line with a report in March by Macao Daily News that seven satellite casinos were planning to stop operations by mid-year. Four of the casinos reportedly exploring a closure are linked to the Golden Dragon Group, a company owned by Macau businessman and former legislator Chan Meng Kam.

Other venues which could face a closure have not yet been named. Macao Daily News’ report alleged venues cited as decisive factors for ceasing operations the tightening of visa applications to Macau, lack of cash flow, and the ongoing impact of pandemic outbreaks.

The reports come as Macau works on a gambling law amendment. A new version of the bill seeks to allow for satellite casinos to continue operating even in the case the property where they are located is not completely owned by a gaming concessionaire.

This new provision implied a marked change from a previous version of the law, which stated concessionaires would have to buy satellite venues from third-party partners, a move many doubted would occur. The former version hinted satellite venues would be closed if unable to resolve their situation following a three-year transitional period after the law is enforced. 

A new gambling law is currently being discussed at the Legislative Assembly

Under the new regulations, managing entities will only be able to charge managing expenses, and are prohibited to share a commission of gaming revenues, a move still seen as likely to hurt future business prospects. Macau Business points out that last week it was reported that Rio Hotel in NAPE was placed for sale for MOP2 billion (US$247.5 million), together with its casino, by a local consultancy agency.

While Kwok’s new remarks and some of the latest developments signal a complex new landscape for satellite venues, Macau Chief Executive Ho Iat Seng said this week that, according to the latest information available, a majority of the city’s satellite casinos should be able to remain operational.

Ho pointed out as exceptions those cases of termination of the contract by the relevant gaming concessionaire or sub-concessionaire. He further said that he believed only a few satellite venues would eventually cease operations, which would cause no significant impact on local employment.

Closures could potentially deal a further blow to an employment market already hit by the pandemic: the number of non-resident workers employed by all six gaming operators by the end of 2021 was 32% lower when compared to pre-Covid outbreak figures, according to a Labour Affairs Bureau (DSAL) report cited by the aforementioned news source.