A segment of Macau’s gamblers, including some Hong Kongers and some locals, that normally steer clear of the big mainstream casinos in downtown Macau, will in likelihood migrate to them once satellite casinos in that district – the location of most of the city’s 11 satellites – shutter by year end.
That will give an opportunity for the five out of six Macau concessionaires that have at least one core property on the city’s peninsula to address players they have not welcomed before.
Such is the view of several industry observers spoken to by GGRAsia.
“The market serviced by the satellite casinos appears to be quite different to the one captured by the large resorts,” remarked Ben Lee, managing partner at casino industry adviser IGamiX Management and Consulting Ltd.
He added: “Free snacks and drinks have been the mainstay of the satellite casinos until the larger resorts finally got into the act last year.
“The satellite casinos also appear to have captured more of the local and Hong Kong market, which is regular, repeat business.”
A senior casino executive from one of Macau’s concessionaires, who asked not to be identified by name, told GGRAsia: “It is possible that some very low-end customers that are used to being served by the satellite casinos will be priced out from the market” after these satellite venues close.
Though the person added: “Potentially some other [former satellite] customers can be directed to the electronic gaming areas of the directly-run casinos,” rather than their live-dealer tables, “which have, in general, higher table limits” than such players might be able to afford.
An executive from the satellite gaming sector, also speaking on condition of anonymity, shared a similar view. Though the person remarked to GGRAsia: “The satellite casinos’ clientele are not entirely low tier. There are also some mid-tier [players] that could be a fit for the offerings of the likes of MGM Macau and Wynn Macau.”
The person added: “These two casinos are not only servicing the high-end gaming segment. They also have electronic gaming elements or the live multi-game [machines].” That was a reference to electronic table games that have a live dealer but electronic bet placement and bet settlement.
Such mainstream casinos downtown “could potentially attract the mid- and low-tier customers [from the satellite casinos] to their premises,” noted the satellite-sector executive.
GGRAsia observed during a recent site visit to downtown casinos that those satellite venues that do offer traditional live-dealer baccarat tables had minimum bets far lower than nearby casinos directly run by the city’s gaming concessionaires.
Industry consultant Mr Lee stated mainstream casinos could capture former satellite business, provided they offer “the same customer services” satellite clients are used to, i.e., “free local snacks and drinks, and more importantly, customer-friendly low minimum bets”.
Risk to SJM market share
Brokerage Morgan Stanley Asia Ltd said in a June 10 memo, after the announcement of the satellites’ impending closure, that it estimated first-quarter gross gaming revenue (GGR) from SJM Holdings Ltd’s satellite casinos – i.e., nine of the 11 satellites currently in the market – stood at HKD2.8 billion (US$356.7 million). The institution added it was 5 percent of the industry’s GGR in the period.
That GGR could “leak to other peninsula casinos”, namely venues of respectively MGM China Holdings Ltd, Galaxy Entertainment Group Ltd, and SJM Holdings’ core properties, Morgan Stanley suggested at the time.
The satellite gaming executive spoken to by GGRAsia suggested habitual clients of downtown satellite casinos would in likelihood prefer to continue playing in that district, even after the satellites go.
Though the person also suggested that could be a threat to SJM Holdings’ GGR market share, despite its nearby core properties Grand Lisboa and the original Lisboa casino hotel.
The satellite-sector insider said that once ex-satellite players “migrate to other places, they have choices other than the properties of SJM, considering StarWorld Hotel [run by Galaxy Entertainment], MGM Macau and Wynn Macau,” were nearby on the peninsula.
In terms of the career outlook for exiting satellite staff, the senior casino concessionaire executive told GGRAsia: “They would need to adapt to the work dynamics, rules and the [player] rebate programmes of the directly-run casinos.”
Following the news of the Macau satellite casinos’ closure by this year-end, Sands China Ltd, SJM Holdings and Galaxy Entertainment have been hosting job-matching sessions aimed at staff working at the satellite venues.
Macau’s 11 satellites operate under the city’s 10-year gaming concession setup that began in January 2023. Nine of the 11 are run via SJM Holdings’ licence; one under Galaxy Entertainment’s permit; and one via Melco Resorts & Entertainment Ltd’s gaming rights.
Nine of the 11 satellites are in either the ZAPE or NAPE district of Macau peninsula. One is in the Inner Harbour district of the penisula, and the other is in Taipa, a mainly residential area next door to Cotai.
