Analysts concerned over how SJM Holdings will absorb staff and tables from satellite casinos
Analysts are fearing for Macau operator SJM Holdings, who announced it would close seven of Macau’s 11 satellite casinos by the end of the year, whilst buying another two, saying it would ‘bring likely thousands of staff under direct payroll.’
The satellite casinos make up around four per cent of SJM’s revenue. With the government stipulating that all current employees at the satellites must be retained, JP Morgan said: “This could even result in losses from wage burdens unless SJM successfully gains meaningful market share with these additional tables.”
Citigroup highlighted that simply relocating tables would automatically retain market share. “There is a possibility that more tables could lead to a dilution in table utilisation,” it warned.
“We are currently unsure if SJM is acquiring the entire properties of Casino L’Arc and Casino Ponte 16 or the gaming areas only. It is premature to gauge the impact from the potential acquisition of Casino L’Arc and Casino Ponte 16 without knowing the details of the transaction.”
CLSA added: “We are surprised that discontinued operations included profitable casinos. We expect SJM’s plans to relocate tables from these satellite casinos to Grand Lisboa Palace will accelerate the ramp-up, but it will take time.”
CLSA’s Jeffrey Kiang said the satellite operations had provne their ‘operational excellence’ with ‘no compelling reasons to disrupt them.’
SJM will close Grandview, Legend Palace, Fortuna, Landmark, Emperor Palace, Kam Pek Paradise, and Casa Real whilst buying Ponte 16 and Le Royal Arc.
The move to close satellite casinos was not unexpected following changes to Macau’s casino legislation at the start of the new 10-year concessions on 1 January 2023 that stated all casinos must operate from venues owned by the concessionaires. There was a three-year transition period for this to happen.
Caption: Casino Kam Pek Paradise
