SJM’s satellite casino closures to have limited credit impact, says Fitch

SJM Resorts’ plan to close seven of its nine satellite casinos by the end of 2025, while potentially acquiring two others, is expected to have limited impact on the company’s credit profile, according to Fitch Ratings.

The closures come amid regulatory changes requiring satellite casinos to be directly owned by concessionaires or operated under non-revenue-sharing management agreements starting in 2026.

Fitch noted that while acquiring Ponte 16 and L’Arc Macau could moderately increase SJM’s leverage due to debt funding, this would be offset by additional earnings from operating these properties directly.

“We expect the impact to be manageable and for SJM’s EBITDA net leverage to decline to below 5 times by 2027,” Fitch said in a recent memo.

The ratings agency highlighted that the financial outcome will depend heavily on SJM’s ability to capture market share with the gaming tables freed up by the satellite closures.

Fitch estimates the reallocation of about 300 gaming tables and 4,000 staff from the satellites to SJM’s self-operated casinos, assuming the EBITDA impact will be “broadly neutral” if market share is maintained.

SJM’s continuation of Ponte 16 and L’Arc Macau hinges on successful acquisitions and government approval.

In a note last week, Morgan Stanley stated, “Gross gaming revenue from SJM satellite casinos of HKD2.8 billion [USD 356.7 million] in the first quarter of 2025 (5% of the industry) could leak to other [Macau] peninsula casinos,” creating competitive challenges for SJM.

Other Macau peninsula casinos include MGM Macau, operated by MGM China Holdings Ltd; StarWorld Hotel, managed by Galaxy Entertainment; Wynn Macau; and SJM Holdings’ downtown properties, Grand Lisboa and Lisboa.