SJM’s satellite casino closures will not impact credit rating: Fitch
Fitch Ratings Inc. has stated that SJM Holdings Ltd’s plan to shut down seven satellite casinos and acquire the properties housing Casino Ponte 16 and Casino L’Arc Macau is unlikely to significantly affect the operator’s credit profile. Despite the move involving debt-funded acquisitions, Fitch expects the financial impact to remain manageable, with SJM’s leverage projected to stay within acceptable limits.
Shift towards self-operated casinos
SJM Holdings, which operates nine of the 11 satellite casinos in Macau under its licence, announced its decision on June 9 to exit the satellite casino model. Only two properties — Ponte 16 and L’Arc Macau — will continue operations beyond 2025. The company plans to acquire the real estate for both properties, converting them into self-promoted casinos.
Casino Ponte 16 is a joint venture between SJM Holdings (51 percent) and Hong Kong-listed Success Universe Group Ltd (49 percent). L’Arc Macau, meanwhile, is linked to Angela Leong On Kei, co-chairman and executive director of SJM Holdings. Both properties are located on the Macau peninsula.
The planned acquisitions still require approval from the Macau government.
Impact on credit profile and operations
Fitch Ratings stated that the acquisitions, expected to be funded by debt, could moderately affect SJM’s leverage. However, the added earnings before interest, taxes, depreciation, and amortisation (EBITDA) from the two casinos would partly offset the new debt. Fitch expects SJM’s EBITDA net leverage to fall below five times by 2027, keeping it within manageable levels.
In December 2023, Fitch affirmed SJM’s long-term foreign-currency issuer default rating at ‘BB-’ with a stable outlook.
Regulatory changes prompt shift
The move comes in response to new gaming regulations introduced in 2023 under Macau’s updated legal framework. From 2026, third-party investors in satellite casinos will be limited to earning a “management fee” through a registered “management company,” ending the previous revenue-sharing model.
Macau currently has 11 satellite casinos: nine under SJM’s licence, and one each under Galaxy Entertainment Group and Melco Resorts & Entertainment.
Reallocation of tables and staff
To optimise operations, SJM plans to reallocate around 300 gaming tables and 4,000 employees from the closing satellite casinos to its own properties, including Grand Lisboa Palace. The Grand Lisboa Palace has capacity for over 300 tables, although only 210 are currently active.
Fitch added that the EBITDA effect from the closures would depend on SJM’s ability to attract market share with the reallocated tables. Their forecast assumes that any revenue loss from closing satellite casinos will be balanced out by gains at self-promoted venues.
Possible market shifts
Morgan Stanley noted that satellite casinos under SJM generated HKD2.8 billion (approx. US$356.7 million) in gross gaming revenue in Q1 2025, contributing 5 percent of Macau’s total. The bank suggested this revenue could shift to other peninsula casinos such as MGM Macau, StarWorld Hotel, and SJM’s downtown venues — Grand Lisboa and Lisboa.
