Concerns Raised Over Potential Shutdown of Satellite Casinos in Macau Amid New Gaming Law

September 27, 2024 Macau iGaming & Gambling Industry Updates

As Macau navigates the complexities of its gaming industry, representatives have voiced serious concerns about the potential shutdown of satellite casinos. This worry stems from the new gaming law, which requires satellite venues to transition to a management company model within three years, with a deadline set for the end of 2025. The implications of this law could be massive, especially for local employment.

Under the revised framework, management companies will not benefit from shared gaming revenues. Instead, they will receive only a management fee from the main concessionaires. This change raises questions about the financial viability of maintaining satellite casinos, as concessionaires will likely assess the costs involved and consider their return on investment (ROI). Such evaluations may lead to the closure of certain satellite casinos if they determine that continuing operations is not profitable.

The situation is already precarious; in 2022, seven satellite casinos shut down operations, a decision made prior to the legislative assembly’s approval of the new gaming law. The ongoing scrutiny and potential changes could further strain an already delicate sector.

On September 19, 2024, representatives from the gaming industry met with Sam Hou Fai, a candidate for Macau’s Chief Executive. During this meeting, members of the Macao Gaming Industry Employees Home and the Macao Gaming Practitioners Volunteers Association highlighted the essential role satellite casinos play in providing employment to thousands of local workers. According to a report published by AGBrief, these representatives stressed the need to protect the employment rights of these workers, particularly in light of the industry’s evolving landscape.

The representatives also called for paid training programs, arguing that such initiatives are vital for the sustainable development of the gaming sector. They pointed out that middle-aged and older workers face unique challenges, emphasizing the need for targeted employment protection measures for this demographic. In addition, there was a consensus on the importance of enhancing responsible gaming practices to ensure the well-being of both employees and patrons.

In a related development, Sam Hou Fai reaffirmed his commitment to the “healthy, orderly, and sustainable” growth of the gaming industry during a separate meeting with representatives from the six main casino concessionaires. Present at this meeting were key figures from major operators, including MGM, Sands China, and Galaxy Entertainment Group.

While acknowledging the significant contributions of these operators to Macau’s economic development, Sam urged that the gaming sector must evolve responsibly. He stated that maintaining orderly development is crucial for promoting appropriate diversification in the local economy. His comments come on the heels of previous statements where he noted the “very large negative impact” gambling has had on the community, particularly among youth.

The Chief Executive candidate’s tone appears to have softened in recent discussions, reflecting a more conciliatory approach toward the casino industry. During the meeting with concessionaires, representatives emphasized their efforts to expand non-gaming offerings, promote performing arts, and support local job creation and training initiatives. They also highlighted their commitment to assisting small and medium-sized enterprises within Macau.

The current climate of uncertainty regarding satellite casinos has raised alarm bells among industry stakeholders and workers alike. The looming deadline for compliance with the new gaming law adds urgency to the situation. As operators prepare for potential changes, the focus will likely remain on ensuring job security for local workers and maintaining a balanced approach to growth.