The eventual shutdown 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 Franco Liu, managing director of Savills Macau.
The real estate services provider’s projections, based on a worst-case scenario involving the closure of a satellite casino’s operations and its subsequent impact on commercial activity in the surrounding area, were shared with the local media outlet Macau Daily News.
Macau’s 11 satellite casinos operate under the 10-year gaming concessions implemented in January 2023. Nine of these are licensed under SJM Holdings, with one each under Galaxy Entertainment Group and Melco Resorts.
Starting in 2026, under Macau’s revised gaming rules, third-party satellite casino investors will only be able to earn a “management fee” through a “management company” and will no longer share in gaming revenue. This practice is allowed during the current grace period, which ends this year.
The lack of publicly declared detailed solutions for sustaining satellite casino operations beyond the grace period presents potential challenges for banks and property surveyors in assessing the post-grace period value of associated real estate, Liu noted.
He explained that in the past, satellite casino investors’ involvement in gaming operations had positively influenced their ability to secure loans. Without the backing of a casino business, some investors may face situations where their bank loans exceed the updated valuation of the associated property, putting their financial leverage at risk.
Savills Macau estimates that total loans tied to Macau’s satellite casinos and nearby commercial properties reliant on their foot traffic range between HK$25 billion ($3.2 billion) and HK$39 billion ($5 billion).
Additionally, Savills Macau estimates that approximately 13,500 employees currently work in gaming, hotel services, and surrounding businesses linked to these 11 satellite casinos.
As reported by AGB, U Io Hung, president of the Macau Professional Association of Gaming Promoters, 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.
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.
