The impending closure of 11 satellite casinos in Macau is poised to reshape the local gaming landscape, delivering both strategic opportunities and operational challenges, especially for SJM Holdings, according to an academic at the University of Macau.
“The impact on the gaming operator operations will be focused on SJM,” said Ricardo Siu, Associate Professor in Business Economics at UM’s Faculty of Business Administration. “Nine of the 11 satellite casinos are operated under its license”, he noted, with the remaining two tied to Galaxy Entertainment Group and Melco Resorts & Entertainment.
Siu explained that the shift could ultimately boost profitability for SJM. “On average, profit margin (net GGR) of a gaming device like a gaming table to a gaming license holder is much higher if the device is operated by itself instead of by a satellite casino”, he said.
“As competition in the mass market is getting higher in the foreseeable future, reallocation of the gaming tables by SJM from the satellite casinos back to its own properties can be helpful to improve its overall business performance.”
Still, the transition will not come without cost. “The labor cost will also increase under its promise or responsibility to retain the gaming and some related staff from the satellite casinos,” Siu added.
Worker transition and economic fallout
Currently, some 5,600 local workers are employed at satellite casino operations—venues owned by third-party investors but operating under official gaming concessions. Of these, around 4,800 work under the umbrellas of Galaxy, Melco, and SJM, while the remaining 800 are employed directly by the satellite operators themselves.
The three concessionaires involved in the satellite arrangements have pledged to reassign all affected employees to new positions within their core properties, ensuring workforce stability as satellite venues shutter.
At least nine of the 11 satellite casinos are expected to cease operations by December 31st 2025, coinciding with the end of a three-year grace period granted under transitional agreements between the operators and their licensed partners.
Under Macau’s revised gaming law and the new 10-year concessions that took effect in 2023, satellite casino operators must transition to a “management company” model.
The framework requires that all gaming operations fall under the direct control of one of the city’s six licensed concessionaires, effectively ending the decades-old satellite model in its current form.
Macau Chief Executive Sam Hou Fai has downplayed the closures’ macroeconomic effects.
In a press conference last Sunday, he emphasized that satellite casinos contributed just over MOP10 billion ($1.2 billion) in gross gaming revenue (GGR) out of a full-year industry total exceeding MOP200 billion ($24.7 billion), suggesting a limited impact on the city’s gross domestic product.
Nevertheless, authorities are preparing support measures for neighborhoods hit hardest by the closures.
“It is reasonable to foresee that consumer flow and absolute value of spending in those areas will slow down”, Siu said of the NAPE and ZAPE districts, where many satellite casinos are located. “Thus, business vitality, turnover and employment opportunity in those areas will be affected negatively.”
The government, he added, along with local business groups, is exploring revitalization strategies such as transforming affected districts into pedestrian-friendly commercial zones and promoting new tourism incentives. But Siu remains cautious: “The ultimate effect of these efforts may still be subject to uncertainty.”
