The closure of all 11 of Macau’s satellite casinos by the end of 2025 has sent ripples through the city’s gaming industry, with analysts highlighting a disproportionate impact on SJM Holdings, compared to its peers, Galaxy Entertainment Group and Melco Resorts & Entertainment.
The closures affect casinos operating under Macau’s current 10-year concession regime that began in January 2023. Nine of the satellites are tied to SJM Holdings, with one each operated under the gaming licenses of Galaxy Entertainment and Melco Resorts.
According to JP Morgan Securities, the exit of these venues will have little financial impact on Galaxy or Melco, whose satellite-linked operations contribute just up to 2 percent of their earnings before interest, tax, depreciation and amortization (EBITDA).
In contrast, SJM derives around 4 percent of its EBITDA from satellite operations — a manageable figure in isolation, but one that brings broader complications.
‘The situation is much more complex for SJM’, JP Morgan noted, citing the reassignment of approximately 440 gaming tables and the likely transfer of thousands of staff onto SJM’s direct payroll. The brokerage warned this could lead to higher operating costs, unless SJM significantly boosts market share at its core casinos.
SJM has indicated that it only intends to keep open two satellite venues — Ponte 16 and L’Arc Macau — beyond 2025.
To facilitate this, the company has to acquire the respective casino properties, converting them from satellite operations into directly managed assets. However, no binding agreements have been announced, and government approval is still pending.
Staffing is a major concern amid the closures. Macau’s government estimates that around 5,600 workers — the majority of them local residents — will be affected. Of these, 4,800 are under the purview of the concessionaires, with another 800 employed by the satellite property owners. An additional 400 non-resident workers are also employed in the sector.
Citigroup analysts emphasized that the bulk of the affected workforce are linked to SJM’s satellite network. The company is expected to absorb most of these employees into its own operations, including both existing SJM staff and eligible workers hired by satellite property owners.
While Citi welcomed the retention and reassignment of local employees, it warned of the potential return of ‘excess costs from satellites’ — referring to additional wage and operational expenses that SJM experienced between 2Q23 and 4Q24. These costs could re-emerge as early as 1Q26, the bank said.
Citi also flagged uncertainty over SJM’s plans to acquire Ponte 16 and L’Arc Macau, questioning whether the deals would cover the entire properties or only the gaming areas. According to industry insiders consulted by AGB, the acquisition needs only encompass the casino floor and relevant support facilities.
The bank noted SJM’s net debt stood at HK$23.5 billion ($2.99 billion) as of the first quarter of 2025, representing a net debt-to-EBITDA ratio of around six times — above the industry average.
Reallocating tables to self-operated venues such as Grand Lisboa Palace and Grand Lisboa may help SJM maintain some of its gaming capacity, but analysts cautioned that more tables do not guarantee the same level of utilization or revenue. ‘There is a possibility that more tables could lead to a dilution in table utilization,’ Citi noted.
Despite the structural upheaval, Macau’s overall gaming market remains resilient. JP Morgan reported gross gaming revenue (GGR) averaged MOP5.2 billion ($643.8 million) in the first eight days of June, slightly below May’s average, but strong by historical standards for a typically slower month.
The solid performance has been buoyed by local events including K-pop concerts and the Dragon Boat Festival.
Analysts DS Kim and Selina Li forecast June GGR to grow by 4 percent to 7 percent year-on-year, supporting a 3 percent to 4 percent gain in second-quarter revenue. If achieved, it would mark the first quarter in recent memory without a revenue miss.
As the dust settles, it’s clear that while the closure of satellite casinos represents a strategic pivot for Macau’s gaming sector, the road ahead will be smoother for some concessionaires than for others.
For SJM Holdings, in particular, the next year may prove critical as it navigates a complex operational transition and strives to reshape its cost base and market position.
