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Macau: seven 'satellite casinos' reportedly to close by mid-year amid gaming law amendments

Satellite gaming venue Casino Golden Dragon in Macau.
2022-03-28
Reading time 2:32 min

Seven “satellite casinos” operating in Macau are allegedly slated to stop operating in the world’s largest gaming hub by mid-year. The news comes as the city moves forward with the process of amending its gambling laws, with a number of provisions targeting these venues.

“Satellite casinos” are facilities operating under a license attached to one of the city’s six concessionaires, but which are run by third parties on individually owned premises. There are currently 18 such casinos, most of them under the license of operator SJM Holdings Ltd

Amendments to the city gaming law propose any casino must be established in the assets owned by gaming concessionaires. Given satellite venues are run by third parties, this would put an end to this business model under its current form.

Thus, a three-year grace period has been proposed so concessionaires can regularize venues in assets owned by other entities: this suggests companies would need to acquire satellite casinos if the properties are to continue operating. The time frame is set to start from the first effective day of operations under the new concessions.

Local media now reveals that, amid the changes and debate, seven satellite casinos are set to close, four of them linked to the Golden Dragon Group, a company owned by Macau businessman and former legislator Chan Meng Kam.

Macau Business reports that the group operates Casino Golden Dragon, Royal Dragon and Casino Million Dragon under the license of SJM Holdings, and the Grand Dragon Casino in Taipa under Melco Resorts’ license. The casinos currently operate about 200 tables, accounting for 21% of around 920 tables in the city’s satellite casinos.

But last week, insiders revealed to the cited source that a total of seven satellite casinos planned to stop operations by mid-year, although the other three venues have not yet been named. These venues cite as decisive factors the tightening of visa applications to Macau, lack of cash flow, and the ongoing impact of pandemic outbreaks.

However, Allin Media reports that, according to industry insiders, even more satellite casinos plan to stop operations due to the proposed rule that they must be established in assets owned by gaming concessionaires. It has been described as “unlikely” that concessionaires will acquire all of these venues.

A gaming industry insider has also told Macau sources that many satellite casinos are “hopeless towards the future,” due to uncertainties around their operations, further reports Macau Business. Many stakeholders have also raised concerns about a potential impact on local employment resulting from amendments.

The draft bill of amendments to Macau’s gaming law is now being reviewed in the second standing committee of the Legislative Assembly (AL). Legislators heavily discussed the issue of satellite casinos, and have asked authorities to extend the proposed three-year grace period.


Macau Legislative Assembly

Last week, Chan Chak Mo, head of the assembly’s second standing committee, said the government would consider the possibility of extending the transition period. “Legislators asked if the period could be increased to five years. The government did not say if it would do so, just consider,” he said.

In early March, Macau officials told legislators that the government has conducted a site check on satellite casinos. Officials investigated and inspected the scale of all properties of the six current gaming concessionaires from July to November. The government intends to differentiate between sections identified as satellite casinos and those that are not, with results from the study expected to be made available “by the end of this year.”

By clarifying the areas of each satellite casino through its new study, officials intend to identify how large are the areas concessionaires would have to acquire; while also identifying non-casino areas, such as shopping malls and restaurants, which may continue operations.

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