Macau CE: satellite casinos’ future lies with concessionaires, not gov’t

Macau Chief Executive Sam Hou Fai has made it clear that the future of the city’s satellite casinos is now in the hands of the gaming concessionaires, reiterating that the government has already fulfilled its role by enshrining the relevant regulations in the amended gaming law.

This statement contrasts with the stance of satellite casino operators and gaming concessionaires, who have repeatedly stated that they are awaiting the government to initiate discussions.

During the Q&A session following the 2025 Policy Address on Monday, the official emphasized that concessionaires must assume their social responsibilities in addressing the issues surrounding satellite casinos, including the preparation of contingency plans.

Sam dismissed suggestions of further government intervention, stating that the legal framework is already well established and that any remaining uncertainties must be resolved by the gaming operators themselves. “Satellite casinos are not a new issue,” he said.

“Everything was addressed clearly in the law three years ago, point by point.” Under the new legal regime, all casinos must be located within properties owned by the gaming concessionaires. This provision effectively excludes the traditional satellite casino model, in which independent property owners operated casinos under the license of one of the six gaming concessionaires.

Meanwhile, the law also stipulates that satellite casino operators can no longer share in gaming revenue. Instead, they must shift their role to that of a management company, receiving only a management fee.

The law includes a three-year transition period, ending on December 31st, 2025, allowing existing satellite casinos to continue operating temporarily. However, it clearly stipulates that this buffer period is intended for concessionaires and satellite operators to determine the future of these venues.

The gaming law outlines several potential paths forward for satellite casinos. One option is for the gaming concessionaire to acquire the property or equity, converting the satellite casino into a self-operated venue under its own management. Another possibility is that, following the acquisition or merger, the original operator may continue running the venue, but must do so under a management company model in accordance with the new gaming law. In some cases, satellite casinos may need to shut down and transition into entirely different industries.

Macau’s top official also acknowledged growing concerns about satellite casino employees. He admitted that public opinion on the issue has been diverse and, at times, conflicting. Nevertheless, he stressed that existing regulations provide sufficient guidance for managing employee allocations and transitions.

“We are willing to further evaluate how to better apply these guidelines to the employment issues being raised,” Sam said. Nonetheless, he reiterated that it is up to the concessionaires to proactively manage the situation and ensure social stability.

Currently, Macau has 11 operating satellite casinos, the majority of which—nine—are affiliated with SJM Holdings. The remaining two fall under Galaxy Entertainment Group and Melco Resorts, respectively. All are operating under the 10-year gaming concessions that commenced in January 2023.

As previously reported by AGB, the eventual closure of Macau’s satellite casinos could lead to a significant decline in property values, with valuations potentially dropping by more than 60 percent in severe cases. This could also affect the debt and credit positions of the investors involved, according to Savills Macau.

Economic headwinds threaten significant impact on gaming sector

During the media conference following the policy address, the Chief Executive voiced concern over the potential impact of the escalating US-China tariff conflict on Macau’s economy.

“The rapid changes in internal and external environments are unexpected,” Sam said. He admitted that these changes could have a significant impact on Macau, citing the spending power of tourists.

“No one can say with certainty what the impact will be next week, but we know it will be significant—both directly and indirectly.” Critically, the city’s leader mentioned that Macau’s economy is highly dependent on tourism and gaming. Mainland Chinese tourists constitute the overwhelming majority of tourist arrivals.

The official noted that if the renminbi continues to weaken against the Hong Kong dollar, the currency used for gambling in Macau, the spending power of mainland Chinese tourists may decline, making Macau more expensive and less attractive as a destination.

Sam pointed out that the city’s gross gaming revenue for the first quarter of 2025 has already missed projections. With an annual gaming tax revenue target of MOP93.1 billion ($11.6 billion)—based on an assumed monthly gross gaming revenue (GGR) of around MOP20 billion—any sustained shortfall could impact the city’s fiscal health. Macau’s fixed annual expenditures stand at approximately MOP115 billion ($14.4 billion), making gaming tax revenue a critical pillar of the local budget.

“We may have to adjust our budget plan depending on the extent of this external impact,” Sam stated, underscoring the city’s vulnerability to global economic shifts.