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Macau’s Satellite Casinos Losing Appeal Among Players

May 5, 2023 Macau Casino & Hotel

The Macau satellite casinos, which were once thought of as tourist attractions, are now closing down or altogether disappearing from the gaming tables since they can no longer draw in players.

Issues on several fronts:

According to industry insiders, a large portion of Macau’s satellite casinos are struggling on a number of fronts, including with obsolete infrastructure, decreased spending, lower wagering quantities, and a challenge recruiting young players.

Given that most satellite casinos are located on the Macau Peninsula, particularly in residential areas as opposed to other, larger entertainment venues, local communities are the ones who frequent these casinos the most.
According to Billy Song, head of the Macau Responsible Gaming Association, “the satellite casinos are not attractive for investment anymore, as the casino’s operators are not planning to inject more into renewing these facilities during the three-year transition period.”

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“Different outcomes will occur in other properties, but the industry’s demise is a fact. In an effort to counteract this, some satellite casino operators have introduced marketing campaigns to increase business; even while they do not employ several methods to draw in customers, some of their tactics may still yield large returns, in Song’s upbeat opinion.

But the hardware is their weakness, so they must improve their service quality to attract some traffic, he emphasized.

The owners of satellite casinos don’t want to update their current spaces:

In retrospect, Song noted that “existing satellite casino operators are not willing to renew their facilities, as the contract to share the profit is short.”

There are 30 local casinos in Macau, of which 11 are satellite casinos that will continue to operate at the start of 2023 under the new 10-year gaming concessions. In addition, SJM Holdings Ltd., Galaxy Entertainment Group Ltd., and Melco Resorts and Entertainment all have licenses for one of the 11 satellite casinos each.

The new gaming law in Macau further states that “satellite venues have three years to transition to a management company, where such an entity will not be allowed to share in the gaming revenue, but only receive a management fee from a concessionaire.”

Seven satellite casinos in Macau, though, stopped operating in 2022. That was before the Legislative Assembly approved the legislation enacting the new gaming law.

Despite the fact that the government has revised its initial plan, which gave operators three years to maintain the former satellite casino system, it still happens frequently that some operators just abandon up.

Another example is the China Dragon Hotel, which was converted into a dorm in August 2022 and is owned by the same person, Chan Meng Kam, as reported by AGB.

Nevertheless, experts have long advocated for the formal closure of Macau’s satellite casinos, which are much less extravagant and lavish in scale than the multibillion dollar integrated resorts. Satellite casinos, like junkets, are, according to all indications, going to become yet another element of the Macau gaming saga that few will forget.

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