*By Therese Tu
Seven satellite casinos are planning to stop operations by mid-year, due to the tightening of visa applications to Macau, lack of cash flow, and the negative impact of the repeated pandemic outbreaks, gaming industry insiders indicated to Chinese-language newspaper Macao Daily.
Currently, there are 18 operational satellite casinos among a total of 40 casinos in the territory, and 14 of these third-party promoted casinos are run under the license of gaming operator SJM Holdings Ltd while the other four are linked to Galaxy Entertainment Group (GEG) and Melco Resorts and Entertainment Ltd.
However, some industry insiders said that at least seven satellite casinos located in NAPE and Taipa, are planning to stop operation in the middle of the year, due to the negative impact brought by restrictions on mainland residents’ visas application to Macau and pandemic policy.
In February, The Chinese Ministry of Public Security conducted an official meeting of combating cross-border gambling, and authorities pledge to advance the blacklist of customs entry and exit of persons involved in gambling and strive to completely destroy overseas gambling networks.
As reported by online gaming news platform Allin Media, some tourists who would enter Macau frequently have revealed that they were rejected by the mainland Customs to leave the Chinese mainland after the meeting, as they were suspected of engaging in cross-border gambling, even if they hold a multi-entrance visa.
Some tourists who hold a business visa also reported that they were asked to resubmit the information to explain the reason for visiting Macau.
Meanwhile, the gaming industry insiders stressed to the newspaper that the special premium “put pressure on gaming concessionaires”, as most satellite casinos have been losing money for the last two years under the impact of the pandemic, and the cash flow accumulated in the past has been depleted.
Earlier this month, Secretary for Economy and Finance Lei Wai Nong announced that authorities intend to extend the current gaming concessions for an extra six months, taking the expected deadline of June 26 to December 31.
TDM Radio reported that the gaming operators will have to pay a special premium between MOP50 million and MOP80 million (US$10 million) for the six-month extension of their gaming license contracts.
Gaming industry insiders stressed that gaming concessionaires need sufficient cash flow in order to maintain operations until the pandemic is over and the Custom entry and exit policies are relaxed.
Due to the six-month gaming concessions extension, the gaming concessionaires have to review their cooperation with the satellite casinos.
Therefore, the satellite casinos are planning to stop operation earlier to reduce further losses, as the economic prospect is highly uncertain.
Moreover, if the satellite casinos made their decision to leave, a new round of pressure will be put on the licensed gaming concessionaires, as the dealers in the satellite casinos receive salaries from the licensed gaming concessionaires instead of the satellite casinos, the industry insiders expressed their worries.
The situation in the next six months will still be very difficult for the local gaming industry, with the business environment and employment environment continuing to deteriorate, the insiders indicated.