SJM and Melco Resorts to Shut Down Satellite Casinos in Macau

SJM and Melco Resorts to Shut Down Satellite Casinos in Macau

Macau is rapidly changing its gambling laws which means that any remaining concessionaire would have to comply with what is expected to be the biggest overhaul of gambling regulation in the special administrative region. Among those are SJM Holdings and Melco Resorts International which are shutting down several of their satellite casinos in a bid to keep it all on the straight and narrow with regulators.

Satellite Properties to Shut Down over Coming Months

There is a total of 18 such satellite properties up and running in the jurisdiction but their days are now numbered as the new rules would not favor such establishments. While no definitive gambling laws have been passed, economic diversification is at the very heart of China’s plans for Macau.

This means less gambling through secondary establishments and more family-friendly tourism which should spur a positive change – economically and in terms of Macau’s reputation. Satellite casinos have never been exactly legal, but they weren’t illegal either. Essentially, a Macau concessionaire had a right to lend their license to a third party that would, in turn, operate a much smaller gambling venue.

However, the new laws would not allow such establishments to operate and their gambling licenses would be wrapping up. Macau and China want casino concessionaires to be directly responsible for anything that transpires in the gambling industry whether it’s a third party or a concessionaire conducting business.

This is also part of the reason why junket operators have been disappearing from Macau with the number of licenses falling in half over the last year. Most of this was prompted by the arrest of former Suncity Group chief executive Alvin Chau who had to relinquish his duties as the group’s boss from a prison cell.

Meanwhile, several SJM Holdings licensed satellites, to name the Royal Dragon Casino, Million Dragon Casino, and Golden Dragon Casino, are all winding down operations. Another one, operated as part of a licensing partnership with Melco Resorts – The Grand Dragon Casino – is also closing.

More Satellites Closing, But Some Employment Guarantees in Place

More casinos may be closing as well, including the President Casino and Casino Waldo, as well as Rio. Those are operated as part of existing partnerships with Galaxy Entertainment Group. More properties would most likely be looking for ways out in the coming months with more closures expected to close down by the end of 2022.

Not all satellite casinos will be closing immediately, though, as the government is still debating whether a three or five-year grace period allowing these companies to transition their operations would be best. There are other considerations as well. For example, satellite casinos employ a good deal of people and this means that employees could take a hit if the new measures are not coordinated.

There are hundreds of people who are currently employed by satellites casinos and they would not be happy if their jobs are lost overnight. In fact, satellites contribute to 15% of the entire industry workforce. Macau, though, is aware of these challenges and is planning to address the issues in a fitting manner.