U Io Hung, president of the Macau Professional Association of Gaming Promoters, has stated that not all 11 satellite casinos are expected to remain operational after the transition period, which is set to conclude at the end of this year.
In an interview with AGB, U explained that satellite casinos with strong profitability, such as Landmark and Fortuna, have a better chance of remaining in the market. In contrast, casinos with weaker financial performance may face closure, as gaming concessionaires might choose to reclaim the gaming tables and relocate them to their own properties.
Despite the new government being in place for nearly three months, authorities have yet to discuss the future of satellite casinos. With less than 10 months remaining in the transition period, U Io Hung described the negotiation between gaming concessionaires and satellite casino operators as a “commercial decision.” The details of these deals remain largely unknown to the public until they are finalized.
U also pointed out that the outcomes of these negotiations will likely be performance-driven, as concessionaires are unlikely to invest additional resources into maintaining underperforming satellite casinos.
Currently, there are 11 satellite casinos operating under the new 10-year gaming concessions, which began in January 2023. Nine of these casinos are licensed under SJM Holdings, one under Galaxy Entertainment Group, and another under Melco Resorts & Entertainment.
U’s views were echoed by CLSA in a recent investment memo. The memo noted that the continuation of these casinos will depend more on their performance rather than any legal requirements.
Under current law, satellite casinos may continue to operate after 2025 if their operators transition into management companies.
A key change will be in the remuneration system: casino managers will be allowed to collect only a “management fee” without any revenue-sharing agreements with concessionaires. Once a satellite casino closes, it will not be allowed to reopen.
The 2022 amendments to the gaming law clarify that satellite casinos can remain in business post-2025 as long as they are operated by casino managers. These casinos are exempt from the requirement to be located on concessionaire-owned properties, making acquisitions of such premises by concessionaires unlikely.
CLSA also noted that while the specifics of the “management fee” remain unclear, it is likely to be tied to the satellite casinos’ performance in 2025, with potential adjustments for inflation. This approach could offer a balanced solution for both concessionaires and casino managers.
Employee placement
Macau has about 10,000 employees working in its 11 satellite casinos. Earlier this month, the Federation of Trade Unions (FAOM) mentioned that it had received inquiries from satellite casino employees regarding the future of their jobs. While no formal requests for assistance have been made, the Federation noted that, based on previous experience, gaming companies are likely to absorb and reallocate employees involved in gaming operations. For non-gaming staff, the Federation will assist in finding alternative employment.
According to local media, Choi Kam Fu, Director of the Federation’s Rights Committee, explained that whether satellite casinos continue to operate or shut down, licensed companies would likely provide better solutions for retaining employees.
He emphasized the need for effective job transition measures for non-licensed employees, ensuring their legal rights and proper termination procedures are followed.
The Human Resources Association also expressed concern about the lack of consensus between gaming companies and satellite casino operators regarding employee placement.
The association urged the government to take a more active role in addressing these issues.
Choi Chin Man, President of the Human Resources Association, suggested that the government could facilitate meetings between both parties and ensure timely communication regarding employee rights, especially if satellite casinos close.
He also noted that the closure of satellite casinos would likely impact surrounding small and medium-sized businesses, further reinforcing the need for government assistance in employee transitions.
