Macau operators to shutter satellite casinos
Major Changes Ahead: Macau’s Leading Gaming Operators Set to Close Satellite Casinos by 2025
The landscape of Macau’s gaming industry is witnessing significant transformations as major operators, including Melco Resorts, Galaxy Entertainment, and SJM Holdings, have officially confirmed the closure of several satellite casinos. These closures are expected to be completed by the end of 2025.
Currently, the majority of satellite casinos in Macau are anticipated to shut down before the year’s end, signaling a pivotal shift in the market.
In a recent announcement, Melco Resorts & Entertainment declared the impending closure of its Grand Dragon Casino alongside three slot lounges affiliated with the Mocha Club brand. This strategic move aligns with the company’s overarching development strategy and complies with local regulations. Melco intends to retain three of its Mocha brand locations—Mocha Inner Harbour, Mocha Hotel Sintra, and Mocha Golden Dragon—pending government approval.
Simultaneously, Galaxy Entertainment Group has reported that it will close the Waldo Casino, citing “commercial considerations” as the primary reason. The company has committed to reallocating affected employees to its other properties across Macau.
SJM Holdings is making the most substantial cuts, planning to shut down seven of its nine satellite operations this year. Furthermore, SJM is strategizing to acquire the remaining two—Ponte 16 and L’Arc Macau—transitioning them to a direct management model. This initiative is part of SJM’s broader strategy aimed at enhancing its long-term objectives and overall market competitiveness. The properties slated for closure include Casa Real, Emperor Palace, Fortuna, Grandview, Kam Pek Paradise, Landmark, and Legend Palace, with their current service agreements set to expire on December 31.
To mitigate the impact of these closures on employees, SJM has assured that all affected staff will have access to job opportunities within its portfolio of properties.
Emerging Industry Template: Transition to Management Fees
In a significant shift in regulatory policy, the Macau government revised its gaming laws in 2022 prior to awarding six new ten-year casino concessions. This legislative change mandated that satellite casinos transition from a profit-sharing model to one where they are directly owned by licensees over the next three years. Consequently, surviving establishments will generate revenue primarily through management fees rather than through shared profits.
Industry expert Chan Chi Leong explains that satellite casinos have historically borne all operational costs, including salaries, while concessionaires are responsible for gaming taxes, which comprise about 40% of gross revenue. Traditionally, satellites have accumulated between 55% and 57% of gross gaming revenue (GGR), with concessionaires retaining the remaining share.
Despite these closures, satellite casinos are expected to remain an integral aspect of Macau’s gaming ecosystem, with management fees likely adjusted in accordance with inflationary pressures.
Citywide, the impending changes may jeopardize up to 6,000 jobs across eleven satellite casinos. The Macau Labour Affairs Bureau is poised to closely monitor developments to ensure operators fulfill their pledges to reassign affected employees effectively.
As the industry adapts to these changes, stakeholders will need to navigate the evolving landscape while remaining committed to sustaining employment and enhancing operational efficiency.
