Downtown Macau

Macau's "satellite casino" in Grand Emperor Hotel to close by June 26

Grand Emperor Hotel, in downtown Macau.
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The casino located in the Grand Emperor Hotel, in downtown Macau, is set to cease its operations on June 26, Emperor Entertainment Hotel Limited announced in a stock filing last Friday. The venue will not be renewing the service agreement currently in place with gaming concessionaire SJM Holdings Ltd.

“The group’s casino in Grand Emperor Hotel is operated under the gaming concession held by SJM,” Emperor Entertainment Hotel Ltd explained in a filing to the Hong Kong Stock Exchange, retrieved by Macau Business. “The group has been facing a tough business operating environment arising from the Covid-19 pandemic over the past two years.”

Emperor Entertainment Hotel Chairperson Semon Luk Siu Man says that due to “the gloomy outlook of the high-end gaming segment” and “after careful and due consideration,” the group has resolved not to renew the service agreements in place with SJM.

The casino in the Grand Emperor Hotel operates as what is commonly referred to as a “satellite casino”: facilities running under a license attached to one of the city’s six concessionaires, but operated by third parties on individually owned premises. There are currently 18 such casinos operating in the city, most of them under the license of SJM Holdings.

According to an interim report from last year, retrieved by Macau Daily Times, the casino in Grand Emperor Hotel has a mid-court of 67 tables, a 10 table VIP lounge, and slot machines. The gaming operation will now be ceasing “on the expiry date,” while the hospitality business will remain operational, which is considered “to be in the best interests of the group.”

In addition to its gaming and hospitality operations in the Grand Emperor Hotel, the group also owns the Inn Hotel in Macau. It is also present in the hotel segment in Hong Kong through the Emperor Hotel Wan Chai.

The group will look for suitable opportunities to make good use of its financial resources with the aim to expand its hotel business. Given the strategic position of Hong Kong and Macau in the Greater Bay Area, the long-term outlook for the hotel industry is positive following the relaxation of anti-epidemic measures and the re-opening of the border,” the group stated, according to Daily Times.

The closure announcement comes amid the debate on the city’s proposed amendments to its gambling law. Under new provisions currently being discussed at Macau’s Legislative Assembly (AL), “satellite casinos” would be required to be established in the assets owned by the concessionaires.

The government has proposed a three-year period 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. However, it has been described as “unlikely” that concessionaires will acquire all of these venues, which would lead to their closure.

Last month, local media reported at least seven satellite casinos would allegedly stop operating by mid-year, four of them linked to the Golden Dragon Group, a company owned by Macau businessman and former legislator Chan Meng Kam.

However, Allin Media reports that, according to some industry insiders, even more satellite casinos plan to stop operations due to the proposed rules. Many venues are “hopeless towards the future” due to uncertainties around their operations, along with factors such as the tightening of visa applications to Macau, lack of cash flow, and the ongoing impact of the pandemic.

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