There is no plan “for the time being” to increase the HKD36-billion (US$4.6-billion) budget of Grand Lisboa Palace – a Cotai casino resort being built by Macau gaming operator SJM Holdings Ltd – said the firm’s chief executive, Ambrose So Shu Fai (pictured). He was speaking on the sidelines of a company reception on Tuesday to mark China’s National Day.
“The budget, for the time being – we are not going to increase that,” stated the CEO in his comments in Chinese to local reporters.
This was despite Angela Leong On Kei – an executive director of the firm – having flagged last week that delay to the “end 2018″ planned launch previously declared by the group was “inevitable” following a fire that took place on site on September 23.
On Friday, market rival MGM China Holdings Ltd, promoter of the MGM Cotai resort being built nearby, said not only would it delay that venue’s opening from the fourth quarter this year to January next, due to damage caused by Typhoon Hato on August 23, but also that it would up that project’s budget by about 4 percent, to HKD27 billion.
Mr So’s assessment of the impact of the fire on Grand Lisboa Palace’s likely launch schedule appeared to contradict some of Ms Leong’s previous commentary.
He stated on Tuesday: “The fire damaged some equipment. We have insurance for that. The location of the fire… is not going to have significant effect on the [construction] process. We are currently evaluating the impact of the fire and will try to expedite the construction through adjusting the procedures. For this to be done there are several elements. On the one hand, there is a technical adjustment, and, on the other hand, there is an adjustment on labour force.” Mr So did not elaborate on those latter points.
He added: “We still [aim to open Grand Lisboa Palace] in the second half of 2018. We haven’t revised that.” But he did not rule out the possibility of a partial opening.
In a speech during Tuesday’s National Day event, Ms Leong mentioned that some SJM Holdings casino venues only resumed full operation recently, following Typhoon Hato.
Typhoon Hato damage
Mr So disclosed that the cost to the group of flood and other damage wrought by the typhoon amounted to approximately MOP200 million (US$24.9 million), excluding loss of casino revenue caused by disruption to local tourism.
Referring to Macau casinos owned by third parties but that rely on SJM Holdings’ casino licence, Mr So said: “Many satellite casinos… were flooded [at basement level] during the seawater intrusion… The damage was mainly to computers. Many servers were placed in the basement instead of above-ground-levels.”
The SJM Holdings chief executive said he was confident the shortfall could be made up during this year’s October Golden Week holiday. Some investment analysts expect market-wide gross gaming revenue performance for October to be very strong, with the highest monthly tally in absolute terms since “late 2014”.
Mr So stated: “I expect a good Golden Week this time because many hotels are fully booked. Many people are coming in the last three days [of the holiday]. The result is encouraging,” he said.
He added: “The [tourist] inflow this year was good. We hope that this will bring more income.”
October’s Golden Week period encompasses China’s National Day on October 1. China’s State Council declared the 2017 holiday period as running for eight days from October 1 to 8, as it includes the lunar calendar-based Mid-Autumn Festival, which this year falls on October 4.
Mr So also revealed that some of the gaming tables in a new SJM Holdings satellite venue – Casino Royal Dragon, which opened on September 27 – were reallocated from Casino Oceanus, another SJM Holdings casino near Macau’s main ferry terminal on Macau peninsula.
“The [Casino Royal Dragon] tables are by internal allocation. [Businessman Chan Meng Kam] relocated some from the [Casino] Golden Dragon. And we lent him some tables from Casino [Oceanus],” he said.
The SJM Holdings CEO was asked whether the Macau government might consider increasing the number of available gaming licences in Macau some time after the expiry on various dates in either 2020 or 2022 of the current ones.
“We are developing a world centre of tourism and leisure in Macau. There is also the talk about gaming restrictions [on casino employees] recently. I believe that we have enough gaming licences [currently] to develop [the market] at this stage. But the future development depends on the Macau government and the central government,” he said.
Hotel Royal Dragon boss Mr Chan - who controls three casinos in the city via satellite arrangements - commented on the sidelines of the Royal Dragon Casino opening ceremony on September 27 that the Macau gaming market “should be opened further”, but claimed that he was “not yet interested in” bidding for a standalone licence.
Regarding security conditions in Macau’s casinos, Mr So said the Gaming Inspection and Coordination Bureau – Macau’s gaming regulator, also known by its Portuguese-language acronym DICJ – had already requested Macau’s gaming operators to heighten their security prior to the mass shooting in Las Vegas on Sunday.
“DICJ regularly reviews the improvement of security measures with us the casino operators… The security upgrades may include, for example, the improvement in sensitivity of security checks for guests entering the venue… We are also going to study the adjustment of angles of the cameras inside the casinos,” he said.
In a press release on Tuesday, DICJ said it was paying close attention to the situation in Las Vegas, and had contacted the six gaming operators to remind them to continue tightening security measures for Macau casinos.
It stated: “The bureau will hold another meeting with the gaming operators after the [Golden Week] holiday to discuss and follow up on the strengthening of security measures in casinos.”
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Direct taxes on gaming collected by the Macau government in full calendar year 2018