No discussions yet with government: Macau satellite casino operator
In a recent statement, an executive from Macau’s satellite casinos told media that despite the impending legal shift, discussions with the government and concessionaires have not yet taken place.
The new gaming law, which took effect in 2022, introduced significant changes to the operation of satellite casinos. Under the law, these casinos will no longer be allowed to share gaming revenue with concessionaires. They will be receiving a management fee instead. The law provided a three-year transitional period to satellite casinos to adapt to the new management company model. This grace period expires this year.
According to the executive, there has been no communication from either the government or the concessionaires on the specifics of the transition process. “It’s almost March now,” he said. “Satellite casinos work with a lot of other companies, including some outsourcing contracts which are now beginning to be discussed.
“For example, for cleaning and other services we have to start discussions now with the outsourcing companies.”
The law and operators’ response
Under the new law, satellite operators can rent out the property and establish casino operations much and establish casino operations much like a tenant would any other business. However, the casino will still run under the concessionaire’s gaming concession.
The executive also noted that most satellite players want that the rent should be determined flexibly, possibly on a monthly basis based on gaming volume. Last month, some operators made a suggestion in the comments to Macau Daily News that proposed tying future management fees to their average win rate over the past six months as the end of a three-year transitional period nears.
Currently, satellite casinos in Macau operate under the license of a larger gaming concessionaire but are independently managed and promoted by third-party entities. They rely on their larger counterparts for operational and regulatory support while running their day-to-day business.
The operators deemed the uniform management fee structure unfeasible, citing diverse financial circumstances of such operators. They said these include varying monthly win rates, personnel costs, operating expenses and loan obligations.
Need for government intervention
Legislative councilor Lei Leong Wong has been vocal about the need for government intervention to address the challenges facing satellite casinos. In a recent statement, he emphasised the importance of protecting jobs and ensuring the continued operation of these casinos. He also pointed out the need for a timely government response to mitigate the potential negative effects on employees and surrounding businesses.
“When the Government intervenes, it should deal with the matter in the direction of the continued operation of the satellite casino, so as to protect the employment of the employees of the satellite casino,” Lei said.
