Macau’s most profitable satellite casinos—including Casino Kam Pek Paradise, Fortuna Casino, and Ponte 16—are likely to continue operations beyond 2025 under a restructured compensation model, according to CLSA.
In a recent sector report, analyst Jeffrey Kiang stated that these properties have shown ‘operational excellence’ and that there are ‘no compelling reasons to disrupt them.’
The outlook comes as Macau’s transition period for satellite casinos—set under the 2022 gaming law—draws to a close on December 31st, 2025. Starting in 2026, satellite operators will only be allowed to act as ‘casino managers’ and will be prohibited from receiving revenue share. Instead, remuneration will likely shift to a ‘management fee’ model, potentially variable and indexed to inflation or performance metrics.
‘For profitable sites such as Casino Kam Pek Paradise, we expect them to maintain the substance of their operations. There’s simply no strong justification for them to shut down,’ Kiang wrote.
Casino Kam Pek Paradise, managed by Paradise Entertainment, reported HK$310 million ($39.7 million) in property EBITDA in 2024, vastly outperforming the combined HK$42 million ($5.4 million) from SJM’s eight other satellite casinos. Fortuna and Ponte 16 delivered net profits of HK$62 million ($7.9 million) and HK$228 million ($29.2 million), respectively, reinforcing their financial viability.
Kiang emphasized that ‘commercial viability remains paramount’ and suggested that only ‘loss-making casinos will likely cease operations.’ Should that occur, he added, ‘concessionaires will likely absorb the employees and possibly the tables, which should still be earnings-accretive.’
Strategic table reallocation offers upside
CLSA highlights a compelling opportunity for concessionaires to boost profitability by reallocating gaming tables from underperforming satellite casinos to more productive in-house properties, particularly in Cotai. Assuming the Macau government allows such reallocation, the upside could be material.
According to CLSA, the difference between the highest and lowest gross table yields in Macau in 2024 was HK$76,318 ($9,782) per table per day. After accounting for gaming tax, player reinvestments, and estimated rebates, the net incremental yield comes to HK$34,343 ($4,404) per table per day.
Operational costs are also factored into the equation. If each table requires one dealer per shift across three shifts daily, the total incremental monthly salary cost would be approximately HK$78,222 ($10,028) per table. This implies a remarkably short payback period of just 2.3 days, after which the table begins to generate net positive returns.
CLSA describes the economics of this strategy as ‘sound,’ assuming that concessionaires can successfully elevate table performance by operating them directly.
Government balancing legal compliance and employment
The Macau SAR government’s top priorities include ensuring legal compliance under the revised gaming laws and maintaining a stable labor market. The unemployment rate rose from 1.6 percent in January to 1.9 percent in April 2025, and while still low by historical standards, Kiang observed that ‘minimizing disruption remains a sensible objective.’
In the event of closures, employee transfers to concessionaires are expected to ease any short-term impact.
Market undervalues Paradise’s management business
CLSA also argues that Paradise Entertainment’s share price does not yet reflect the value of its casino management business. According to Kiang, ‘almost no value is priced in’ for the segment. He values the company’s gaming equipment, head office, and net cash alone at HK$1.88 ($0.24) per share—nearly equivalent to its recent closing price of HK$1.90 ($0.24).
‘Our base case assumes Paradise will continue managing Casino Kam Pek Paradise under viable commercial terms,’ he wrote. CLSA maintains a 12-month target price of HK$4.20 and expects a dividend yield of 9.5 to 11.6 percent from 2025 to 2027.
While the path forward is still subject to regulatory finalization—particularly regarding compensation structures—CLSA sees a ‘clear path’ for profitable satellite operators to transition smoothly. Kiang reaffirmed that Paradise Entertainment offers a unique advantage by using Kam Pek Paradise to trial gaming equipment, adding further strategic value.
‘Given its profitability, synergy with the equipment business, and low market expectations, the threshold for Paradise to outperform is low,’ Kiang concluded.
