Galaxy closes Rio and President "satellite casinos" despite new relaxed requirements in gaming bill
Galaxy Entertainment Group (GEG) announced the closure of two of its satellite casinos in Macau —Rio Casino and President Casino— as of today, June 16. According to an announcement by GEG, group employees working in these two casinos will be transferred to other venues under the concessionaire with "all terms of employment remaining the same".
"They will also be provided with a series of vocational training to help them adapt to the new working environment," the group noted. "GEG would like to thank the public, customers, and people from all walks of life for their love and support of Rio Casino and President Casino over the years and will continue to contribute to the development of leisure tourism in Macau."
Prior to the announcement, a total of 18 satellite casinos out of 40 gaming venues in the territory were operational, with most of them -14- running under the license of concessionaire SJM. The remaining four venues are linked to Galaxy Entertainment Group and Melco Resorts and Entertainment Ltd. Satellite casino Waldo, which also operates under GEG’s license, has also reportedly applied to close operations.
According to a report released in March by Macao Daily News, seven satellite casinos were planning to stop operations by mid-year. The venues cited as decisive factors for ceasing operations the tightening of visa applications to Macau, lack of cash flow, and the ongoing impact of pandemic outbreaks. Four of the casinos reportedly to be closed were said to be linked to the Golden Dragon Group, a company owned by Macau businessman and former legislator Chan Meng Kam.
Furthermore, comments made by Kwok Chi Chung, the President of the Macau Association of Gaming and Entertainment Promoters, also indicated that six to eight satellite casinos operating in Macau would close by the end of June.
Under a new version of the gaming law amendment bill currently in discussion at the Legislative Assembly (AL), authorities would allow for satellite casinos to continue operating even in the case a gaming concessionaire does not completely own the property where they are located.
This new "relaxed" provision implied a marked change from a previous version of the law, which stated concessionaires would have to buy satellite venues from third-party partners, a move many doubted would occur. The former version hinted satellite venues would be closed if unable to resolve their situation following a three-year transitional period after the law is enforced.
Under the new regulations, managing entities will only be able to charge managing expenses, and are prohibited to share a commission of gaming revenues, a move still seen as likely to hurt future business prospects
The changes were introduced by authorities after several reports and announcements that local satellite casinos could close –including that at the Grand Emperor Hotel–, increasing the levels of unemployment in the city.
Macau's government is now set to formally sign a six-month license extension for casino operators on June 23, an expected move ahead of license expirations due this month. The extension, to December 31, allows more time for a highly anticipated rebidding process in the Chinese special administrative region, the only place in China where gambling in casinos is legal.
The Grand Emperor Hotel satellite casino was previously set to close on June 26 but after an agreement between the hotel owner Emperor Entertainment Hotel Limited and concessionaire SJM, the casino will continue operating until December 31.
Two satellite casinos at Macau Fisherman’s Wharf will also continue their operations at least until December 31, as the agreement with gaming concessionaire SJM has also been extended for six months, Macau Legend CEO Melinda Cha has revealed.
The president of Macau’s second standing committee, Chan Chak Mo, said on Wednesday that the committee was "confident" that the gaming law amendment would "get enough votes to pass," with a final version expected to be sent to the plenary for voting on June 21.
In the latest draft of Macau's new gaming law, forwarded out of the second standing committee of the Legislative Assembly (AL) on Wednesday, the effective tax rate on gross gaming receipts, already Asia's highest, would edge up to 40% from 39%. In comparison, in Singapore, Asia's second-largest casino market, gaming tax rates top out at 22%.
The tax base rate of 35% would not change, but two additional levies to support cultural activities, infrastructure and other programs of the government and Macao Foundation would rise to a combined 5% from 4%. Macau's chief executive will be able to waive the levies based "on public interest," without going into detail.
However, according to the new gaming law draft submitted by authorities to the commission, gaming operators could see these two extra levies reduced or exempted if they can prove they have attracted gamblers from other jurisdictions to the SAR, as reported by NikkeiAsia.