The deal with casino operator SJM Holdings Ltd allowing the promoters of Grand Emperor Hotel in downtown Macau to conduct casino operations at the property, has been extended for two years.
Gaming at the hotel (pictured) is done under a so-called service agreement whereby Macau licensees are able to make arrangements to supply their gaming rights – subject to Macau government approval – to satellite properties with other ownership.
The new arrangement, announced to the Hong Kong Stock Exchange on Wednesday, runs from April 1 this year, until June 26, 2022, the latter date being the end of the current Macau concession of SJM Holdings.
Under it, Tin Hou Ltd, a Macau firm indirectly wholly-owned by a Hong Kong-listed entity called Emperor Entertainment Hotel Ltd, and indirectly non-wholly-owned by Emperor International Holdings Ltd, will be able to use the SJM Holdings licence.
The filing from Emperor Entertainment Hotel and Emperor International Holdings clarified that the deal amounted to a continuing connected transaction under Hong Kong bourse rules.
This is because a SJM Holdings subsidiary has a 19.99-percent equity interest in Luck United Holdings Ltd, a British Virgin Islands firm that is indirectly owned – in the amount of 80 percent – by Emperor Entertainment Hotel.
Under the deal Tin Hou and a nominated gaming promoter – that is a fellow subsidiary of Tin Hou – will be entitled to a share of the gross win and gross loss in respect of the monthly operating performance of the gaming area at the hotel.
The filing said the deal was made “after arm’s length negotiation” between Tin Hou and SJM Holdings.
Tin Hou will reimburse SJM Holdings for “all costs and expenses in relation to the resources allocated by SJM to the gaming area,” under the agreement, which was dated May 4 and comes in the form of an addendum to a 2010 service agreement..
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”Our own consensus is that any newcomers to this [junket] sector should be corporatised, and should be financially sound and able to commit a higher guarantee deposit”
Kwok Chi Chung
President of junket trade body, the Macau Association of Gaming and Entertainment Promoters