Paradise Entertainment will pivot its business strategy to concentrate on gaming equipment operations following the mandated closure of Macau’s satellite casinos by year-end, company chairman and managing director Jay Chun told AGB.
The Hong Kong-listed company, which operates Casino Kam Pek Paradise under SJM Holdings’ gaming licence, is set to face a significant revenue impact, as casino operations account for more than half of its total income. The satellite casino is one of 11 such venues scheduled to cease operations by December 31st under the current gaming law.
According to Paradise Entertainment’s latest financial results, the company recorded HK$718.3 million ($91.6 million) in casino revenue during 2024, representing approximately 66 percent of its total revenue of HK$1.085 billion ($138.4 million). In terms of adjusted EBITDA, casino operations generated HK$310.4 million ($39.6 million) compared to HK$187.8 million ($23.9 million) from the gaming equipment business.
“The casino revenue occupies half of the company’s revenue,” Chun told AGB, explaining that the shutdown of the Kam Pek Paradise casino will sharply reduce the company’s income. According to checks by AGB, the closure will result in adjusted EBITDA losing 68.5 percent of the company’s current earnings from satellite casino operations.
Workforce implications and job transfers
The transition will significantly impact Paradise Entertainment’s workforce. Approximately 400 employees from Kam Pek Paradise will be transferred to SJM, the primary gaming licence holder, while around 300 additional staff members, including cleaning personnel, face uncertainty.
Chun estimates that roughly half of these 300 positions—classified as self-recruited employees—may be eliminated, potentially resulting in 150 job losses. However, a final decision will not be made until the end of the year, as there is still half a year remaining to ensure a smooth transition process.
As mentioned by Macau authorities, the broader satellite casino closure affects approximately 5,600 workers across all 11 venues. According to Secretary for Economy and Finance Tai Kin Ip, job protections are in place for local employees. Of the total workforce, 4,800 were hired directly by the three gaming companies involved, with the remaining 800 employed by satellite operators themselves. An additional 400 non-local employees are also affected.
SJM has committed to reassigning affected local employees, whether hired directly or through third parties, whilst Melco has stated that its employees would be transferred to other properties within Macau.
Enhanced focus on gaming equipment business
Speaking about the strategic shift, Chun indicated that the gaming equipment business would be “enhanced,” though he did not specify particular measures for the expansion.
The company has already taken steps to strengthen this segment, with subsidiary LT Game Ltd opening a local assembly facility in April. The 20,000 square foot facility, located in an industrial building in northern Macau peninsula, covers 1,858 square metres and enables local production of gaming equipment.
Meanwhile, the company has established a Philippines office for global expansion in 2024. As per a previous interview with AGB in December 2023, the company’s focus is on the Philippines market. The Philippines already holds the title of the largest EGM market in Asia, offering great flexibility with numerous casinos and a variety of gaming types. Chun believes that the slot machine count in the Philippines will “double” in the foreseeable future.
Stock drops over 55%
The announcement of the satellite casino closure had a significant impact on Paradise Entertainment’s stock performance. Following the 9th June government announcement, the company’s shares fell from HK$1.83 at opening to a low of HK$0.65 on 10th June. As of 26th June, after market close, the company’s shares stood at HK$0.82, falling over 55 percent since the casino closure announcement.
In response to the stock decline, Jay Chun purchased additional shares worth approximately HK$323,880 ($41,263) across two transactions, increasing his stake from 59.96 percent to 60 percent of the company.
