Macau CE downplays impact of satellite casino closures on Gross Domestic Product

According to estimates by property services firm Savills (Macau) Ltd, the city’s 11 satellite casinos generated MOP11 billion in gross gaming revenue last year, accounting for roughly 4.85 per cent of the industry’s total, which stood at MOP226.78 billion.

Considering this, “the impact [of the closure of satellite casinos] on our GDP should not be very significant,” the Chief Executive Sam Hou Fai told journalists.

At least nine satellite casinos are set to cease operations by 31 December, following the end of the three-year grace period provided for agreements between the gaming venue operators and the concessionaires under which they operated.

Under the city’s revamped gaming regulatory framework and the new 10-year gaming concessions that began in 2023, satellite casino firms were given until 2025 to transition to a “management company” model.

SJM is considering acquiring the properties housing two satellite casinos – Ponte 16 and Casino Le Royal Arc – and intends to seek permission from the authorities to operate them directly. The remaining seven satellite casinos operating under SJM – Casino Casa Real, Casino Emperor Palace, Casino Fortuna, Casino Grandview, Casino Kam Pek Paradise, Casino Landmark, and Casino Legend Palace – are expected to cease operations by the end of the year.

Melco Resorts & Entertainment has also announced the closure of the Grand Dragon Casino and three Mocha Clubs. Similarly, Galaxy Entertainment Group (GEG) has stated it will be shuttering its Waldo Casino by the deadline.

The three gaming concessionaires in question – SJM, Melco and Galaxy – have pledged to reallocate all affected satellite casino local employees to their own properties.

Some 5,600 local employees are currently on the payrolls of gaming operations owned by third-party investors but reliant on an official gaming concession.

About 4,800 were hired by Galaxy Entertainment Group, Melco Resorts & Entertainment, and SJM Holdings—the three gaming companies involved with satellite operations. The remaining 800 were brought on board by satellite operators themselves

Members of Macau’s Legislative Assembly (AL) expressed concerns last week over the reassignment of the roughly 5,600 workers set to lose their jobs with the closure of at least nine casinos in the city, urging government intervention

Sam Hou Fai also stated that, regarding the placement of around 800 local satellite casino workers directly hired by the operators, the principle of “the contracting entity shall be responsible,” as established in labour law, will be strictly applied. The Chief executive added that, in order to ensure the continued employment of the workers, the owners of the satellite casinos must first convert their affiliated companies into employment units. 

However, he said that the gaming concessionaires have guaranteed that, should the satellite casino owners face difficulties in placing the workers, the concessionaires will provide support to the respective employees.

Meanwhile, property consultancy Jones Lang LaSalle (JLL) estimated that shop valuations in Macau’s ZAPE district, where several satellite casinos are located, could fall by as much as 40 per cent following the closure of these venues at the end of this year.

The Chief Executive added that the Economic and Technological Development Bureau (DSEDT) will closely and continuously monitor the operational status of commercial establishments near satellite casinos. He said the government will plan and implement “joint policies to support community development in the ZAPE area and its surroundings, while working in coordination with all sectors to enhance a comprehensive business environment.”