Recently, the Macau General Association of Real Estate has expressed concerns over the government's assessment of the economic impact resulting from the impending closure of the city's 11 satellite casinos by year-end. According to the association, such closures could have severe repercussions for local investors and the nearby small and medium-sized enterprises (SMEs) reliant on casino foot traffic. The association emphasized the significant financial risk tied to outstanding loans raised by satellite property investors. They estimated that over MOP50 billion (approximately US$6.19 billion) in loans are directly connected to satellite properties and their investors, with an additional MOP20 billion concerning loans to satellite-hinterland shops and service providers.
This observation was highlighted by Ip Kin Wa, the association’s director, and reported by Macao Daily News. Chong Sio Kin, President of the association, acquired the majority stake in the downtown-Macau hotel housing Casino Landmark, one of the satellites facing closure. The association detailed that out of the MOP50 billion linked to the satellite sector, roughly MOP10 billion is directly tied to the properties, and MOP40 billion involves loans by investors, who might have relied on casino earnings as collateral.
Government's Stance Versus Real Estate Association's Warning
In contrast, Tai Kin Yip, Macau's Secretary for Economy and Finance, has assessed that loans related to these satellite establishments constitute “less than 1 percent” of the city’s overall bank loans, signifying limited risk to Macau's banking system where liquidity remains robust. However, the Real Estate Association challenges this viewpoint, citing overlooked significant inputs from satellite property shareholders who have mortgaged their properties to sustain operations since the Covid-19 downturn. Secretary Tai acknowledged during a recent announcement that around 320 shops are located near satellite casinos, predicting that half may feel a "direct impact" due to the shutdowns.
Association director Mr. Ip contended that the Macau government has "underestimated" the potential increase in non-performing loans, which stood at 5.4 percent as of April, referring to data from the city's Monetary Authority. Furthermore, the association highlighted potential personal financial distress among workers from these closures, which would impede their ability to service household loans. Secretary Tai had earlier detailed that among the affected workforce, there are 5,600 local residents, with 4,800 under concessionaires and 800 directly employed by satellite venue owners, alongside 400 non-resident workers.
Impact Mitigation Efforts and Future Outlook
In response to employee concerns, the Macau government has approached concessionaires to reintegrate workers previously assigned to these satellite establishments into their core business operations. Secretary Tai confirmed the concessionaires are expected to absorb these employees, which could alleviate some employment-related anxieties. The shadow of economic uncertainty looms over Macau as stakeholders brace for the aftershocks of these closures. The Real Estate Association continues to urge for a reassessment of potential risks tied to these satellite casinos to better prepare and manage the economic ripple effects.
Addressing the ambiguity surrounding loan defaults and sustaining employment levels remain crucial for Macau's economic stability. It remains to be seen how substantial the economic effect will be, but the discourse between the government's reassurances and the Real Estate Association's warnings depict a complex situation demanding careful navigation and policy consideration.
Source: Macau govt underestimates economic pain of satellite casino closures: real estate association, GGRAsia, June 12, 2025.
Posted by Wizard
Jun 16 2025
Jun 16 2025
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