As the 11 satellite casinos in Macau are expected to close completely by the end of this year, the gambling industry is facing a "redistribution of customers." A group of gamblers, especially those from Hong Kong and local regulars who are accustomed to betting discreetly, will be forced to switch to large integrated resort casinos on the peninsula. This change has created opportunities for five of the six licensed major operators to attract new customer groups.
For a long time, satellite casinos have attracted a stable customer base with free tea, snacks, and other hospitable services, winning the favor of locals and Hong Kong visitors. Mr. Li, a partner at IGamiX gaming consultancy, pointed out that such grounded services have only been emulated by some large casinos in recent years. However, some industry executives are concerned that some "grassroots players" who prefer low-stakes environments may exit the market due to the higher thresholds of mainstream casinos. They also noted that electronic gaming areas could potentially capture this traffic.
A senior executive at a satellite casino stated that, in fact, some mid-level players are fully capable of adapting to the diverse gaming options at mainstream casinos like Wynn and MGM, such as electronic table games and multi-table systems. As long as large casinos flexibly adjust their bets and service experiences, such as retaining free tea and setting up low-stake tables, they can effectively attract these "migrating" customer groups.
However, this round of structural reorganization will also hit SJM Holdings hard. Its nine satellite casinos generated a gambling revenue of HK$2.8 billion in the first quarter of 2024, accounting for about 5% of the industry. With the impending closures, this revenue is likely to flow to competitors like Galaxy and Wynn Macau. Even though SJM still has major venues like Grand Lisboa and Lisboa, its original customer base may be difficult to retain from surrounding "interceptions."
Meanwhile, SJM, Galaxy Entertainment, and Sands China have all initiated a "job matching" mechanism to find new positions for the soon-to-be-unemployed staff of satellite casinos. However, industry insiders point out that employees need to quickly adapt to the operational mechanisms and rebate systems of mainstream casinos, and the transition still poses challenges.
Currently, most satellite casinos are concentrated in the ZAPE and NAPE areas of the Macau Peninsula, with others located in the Inner Harbor and Taipa. Since 2023, these casinos have been operated in cooperation with three major license holders—SJM holds nine, with the rest belonging to Galaxy Entertainment and Melco International.
By the end of the year, this affiliation system will come to an end, ushering in a new round of reshuffling in the Macau gambling industry. Those who were accustomed to "quietly betting" in small venues will also be repositioned in this change.
