Macau Satellite Casinos for SJM Holdings, Melco Shutting Down

Posted on: March 28, 2022, 05:57h. 

Last updated on: March 29, 2022, 01:11h.

Erik Gibbs Read More
Expertise: Asia Pacific Gaming, Gaming Business, Global Gaming.

Ahead of a massive change to Macau’s gambling regime this year, a number of satellite casinos are already shutting their doors. Seven satellites will soon close, of which four have ties to SJM Holdings and Melco Resorts International.

Royal Dragon Casino
The Royal Dragon Hotel in Macau, home of the Royal Dragon Casino. The satellite gambling venue is one of several that will close this year as the city changes its gambling laws. (Image: Hotel.com)

Macau is in the process of revamping its gambling laws, with the new framework coming by June. One of the many changes involves the operation of satellite casinos. There are 18 of these operating in the Chinese SAR. But not for long.

The new Macau is going to look a lot different than what visitors see now. Even though city lawmakers haven’t yet approved the final gambling laws, there is enough information circulating to draw certain conclusions. As Macau works closely with China on its future, economic diversification and adherence to Chinese laws are driving change.

One of the changes focuses on satellite casinos, gaming venues operated by third parties under “borrowed” licenses from one of Macau’s six concessionaires. The practice was never part of gaming regulations but was mostly ignored by authorities.

End of an Era

That is changing with the gambling reform, and satellite casinos will no longer be part of the gaming landscape. All gaming activity must be under the direct control of the six concessionaires. Even though the satellite operators could have several years to make the transition, a number of them are going to shut down this year.

Allin Media reports that Golden Dragon Group is closing four satellite properties before this December. The company is owned by Chan Meng Kam, a former Macau legislator, and has agreements in place with two concessionaires in the city.

Golden Dragon Casino, Royal Dragon Casino, and Million Dragon Casino, which operate under the license of SJM Holdings, are closing. The Grand Dragon Casino, operating through Golden Dragon’s arrangement with Melco Resorts, is also shutting down. The media outlet didn’t specify exactly when the operations would end.

In addition, according to the media outlet, Casino Waldo, Rio, and President Casino will close this year. All three operate through agreements with Galaxy Entertainment Group. Other satellites will shut down in 2022 as well.

The Impact on Employment

Macau’s government has indicated that satellites could receive a three-year grace period to transition their gaming operations. There has also been a suggestion that five years may be suitable. However, the satellite operators apparently don’t see any benefit in delaying the inevitable.

Employees of those venues might strongly disagree. The satellites collectively provide work to hundreds of people and account for around 15% of the gambling industry’s workforce. Soon out of their jobs, the sudden influx of more workers to the unemployed segment lowers the chances of quickly finding a new position.

That’s an issue for a city already dealing with an increase in unemployment. The general unemployment rate has increased by 0.1% since last December, according to data from Macau’s Statistics and Census Service. Even without the addition of the satellite segment, analysts already expected the figure to rise.

As a result, employment groups are beginning to lobby for change. Some would like to see Macau reduce or eliminate all non-resident quotas.

This likely won’t happen, especially as the city works to expand its attractiveness as a global tourism destination. Macau will need to leave its doors open to draw in the best talent. In addition, as the economy expands, it will create new positions to support the local working community.