Feb 22, 2023 Newsdesk Latest News, Macau, Top of the deck
Entities linked to Macau’s Grand Emperor Hotel (pictured in a file photo), a so-called ‘satellite’ casino hotel with a gaming licence provided by SJM Holdings Ltd, have jointly issued a filing seeking to explain further the commercial terms on which such satellite business was refreshed from January 1.
Tuesday’s filing to the Hong Kong Stock Exchange by Emperor Entertainment Hotel Ltd and Emperor International Holdings Ltd – both entities listed in that bourse – did not clarify the reason for the timing of the explanation.
But it said the terms of the agreement, that had been announced on December 30 – before mainland China, Macau and Hong Kong relaxed their Covid-19 countermeasures – were “on normal commercial terms, fair and reasonable and the percentage sharing is in line with the rate offered to other service providers of SJM [Holdings]”.
The Emperor Entertainment Hotel entity is majority-owned by Emperor International. Emperor Entertainment Hotel unit Tin Hou Ltd made the deal with SJM Holdings, that can run until December 31, 2025.
Under it, Tin Hou is entitled to get from SJM Holdings a percentage of monthly gross gaming revenue (GGR) from the casino operation, up to an annual cap to be adjusted over the course of the up-to-36 months of the deal.
The cap for the three months ending March 31 this year is set at HKD100.0 million (about US$12.8 million). For the 12 months to March 31, 2024, such cap is set at HKD400.0 million, rising to HKD600.0 million for the subsequent financial year to March 31, 2025. The cap for the nine months ending December 31, 2025 will be HKD700.0 million, according to the December 30 filing.
Tuesday’s filing said the terms of the agreement had been “thoroughly discussed among representatives of SJM, Emperor Entertainment Hotel and other service providers of SJM to ensure alignment”.
The announcement added: “The management of Emperor Entertainment Hotel has also compared the percentage sharing with the historical percentage sharing on gross gaming revenue [GGR] of other service providers of SJM based on the market-available information.”
The percentage sharing deal had also “taken into account the current tax rate” levied on gaming revenue in Macau.
Under the new regulatory system in place since the January 1 start of new 10-year concessions for the six existing operators, tax on GGR is 40 percent, which is 1 percentage point higher than the effective rate under the previous concessions.
Tuesday’s filing said: “The percentage sharing represents a majority of the monthly gross gaming revenue of the gaming area” at the hotel, receivable after GGR tax, and the terms of the deal “are substantially the same as the service agreement entered into between Tin Hou and SJM dated 19 February 2010”.
The latest announcement also said the filing companies had adopted “internal control procedures” to ensure that “the rate or mechanism of the percentage sharing is on normal commercial terms, fair and reasonable and in the interests of Emperor Entertainment Hotel and Emperor International, and their respective shareholders as a whole”.
Such steps involved a “compliance committee” with operations, finance and accounts, and legal and secretarial staff; a monthly review by finance and accounts staff of the “transactions and the services fee receivable”; and that the audit committees of the filing companies would review “at least once a year” one or more analysis report on the deal.
Mar 22, 2023
Mar 21, 2023
Apr 01, 2023
Mar 31, 2023
Apr 01, 2023Macau’s casino gross gaming revenue (GGR) was up 246.9 percent year-on-year in March, to just under MOP12.74 billion (US$1.58 billion). The March tally was up 23.4 percent month-on-month,...
Mar 31, 2023
(Click here for more)
”Efforts have pivoted to the construction of the hotel tower, with plans to launch a soft opening before the end of 2024 and a grand opening in 2025”
Casino investor LET Group
On the development of a casino hotel in Manila, the Philippine capital