MGEMA calls for Macau´s satellite casinos to be licensed by law

The future of Macau’s satellites – casinos run by third party operators under the license of a Macau concessionaire – has long been a point of contention after they were essentially “grandfathered” in when Law 16/2001 was introduced some 20 years ago.

However, their status was a notable omission from proposed amendments to the gaming law outlined by the government in September and their future was not raised during any of four public consultation sessions hosted by the Gaming Inspection and Coordination Bureau (DICJ) last week.

There are currently 18 satellite casinos in Macau of which 14 are under the license of SJM, three of Galaxy Entertainment Group and one of Melco Resorts & Entertainment.

In a submission to the government obtained by Inside Asian Gaming, the MGEMA said satellite casinos “should be granted legal status” as a unique model in the development of Macau’s gaming industry.

“The assets of the 18 satellite casinos currently exceed MOP$50 billion (US$6.2 billion) and they have made a significant contribution to Macau’s economic development and job creation in the past 20 years,” the submission reads.

“The overall scale of the satellite casinos combined is by no means inferior to any current gambling concession holder. The number of local employees employed by the satellite casinos accounts for about 15% of the local gambling workforce. At the same time, it has also cultivated the surrounding catering and retail industries.

“Satellite casinos are an existing fact and the government cannot turn a blind eye and ignore it. This industry must have room for survival and development. We (the MGEMA) recommended issuing multiple franchise licenses and giving them legal status so as to stabilize the social environment of Macau and promote the diversified development of the gaming industry.”

The MGEMA, organizer of the Macao Gaming Show, is headed by Paradise Entertainment Ltd Chairman and Managing Director Jay Chun. Paradise operates one of Macau’s satellite casinos, Casino Kam Pek Paradise, under SJM’s license and until March 2020 had operated Casino Waldo under the license of Galaxy.

The MGEMA’s submission also calls for new casino licenses to run for at least 15 years rather than the shorter 10-year period some have predicted, pointing to the withdrawal of major global operators from the race to develop an IR in Japan as evidence.

“With reference to Japan’s strict 10-year period, the world’s mainstream gaming companies have already stopped, and many have given up their investment in Japan,” it says.

“To develop, it is necessary to invest. If the investment cannot be recovered within the approved period, no enterprise will be willing to invest or increase the investment quota. We can learn from the past, so the grant period under the revised Gaming Law should be long rather than short and must be at least 15 years or more.”

The submission also proposes setting a minimum percentage for the local production of gaming equipment in order to boost Macau’s manufacturing industries.