With the closure of most if not all of Macao’s satellite casinos looming, industry observers say more local and Hong Kong gamblers will likely head for the core casinos of downtown Macao peninsula. This segment has tended to avoid higher stakes properties operated directly by concessionaires, casino industry website GGR Asia reports.
The transition could be an opportunity for five of Macao’s six concessionaires with core properties on the peninsula to capture players they’ve traditionally missed: low- to mid-tier punters who preferred the satellite model for its accessibility, low stakes and free amenities.
Ben Lee, managing partner at casino industry adviser IGamiX Management and Consulting, told GGR Asia that satellite casinos attracted “more of the local and Hong Kong market.” He noted that integrated resorts would have to offer similar services to capture this audience – namely “free local snacks and drinks, and more importantly, customer-friendly low minimum bets.”
[See more: Satellite casinos in Macao: what their closure means for the future]
GGR Asia also spoke to one unnamed senior gaming executive who said that the “very low-end customers” who frequented satellite casinos could be priced out of the market once they shut down. The source noted that some mid-tier satellite players could be directed to mainstream casinos’ electronic gaming areas, which typically have lower minimum bets than live-dealer tables.
Nine of Macao’s 11 satellite casinos are licensed by SJM, generating HK$2.8 billion (US$356.7 million) of the concessionaire’s first quarter gross gaming revenue. Brokerage Morgan Stanley has suggested those earnings could “leak to other peninsula casinos,” posing a threat to SJM’s market share.
Another anonymous executive pointed specifically to StarWorld Hotel (run by Galaxy Entertainment), MGM Macau and Wynn Macau as suitable places for the satellites’ mid-tier gamblers, who were unlikely to venture into Cotai – along with SJM’s Grand Lisboa and the original Lisboa casino, also located downtown. Sands Macau is also nearby, leaving Melco as the only concessionaire without a presence on the peninsula.
[See more: Macao’s gross gaming revenue exceeds 20 billion patacas for the second consecutive month]
The term “satellite casinos” refers to gambling businesses run under the licence of one of Macao’s six gaming concessionaires but operated by third parties within premises not owned by the concessionaire. These casinos have historically functioned under a partnership model, where revenue is shared between the concessionaire and the third-party operator.
The call to close them was not unexpected: amendments to Macao’s gaming law implemented at the start of the new 10-year concessions on 1 January 2023 mandated that all casinos must operate from premises owned by their respective concessionaires, and gave them a three-year transition period to achieve this.
SJM has said it is considering acquiring the hotels housing Ponte 16 and Le Royal Arc and converting them into directly-operated casinos in compliance with the revised gaming law.
