A recent trend in Macau – whereby companies with interests in so-called ‘satellite casinos’ operating on a licence from one of the main concessionaires are also taking equity interests in VIP gaming operators – is continuing.
China Star Entertainment Ltd, which controls Casino Lan Kwai Fong in downtown Macau that operates under a licence from SJM Holdings Ltd, said in a filing to the Hong Kong Stock Exchange on Monday that there was further delay in its move to buy an equity interest in the profit stream from a junket operator called Eight Elements Entertainment Ltd. Eight Elements is a junket operator at Casino Lan Kwai Fong according to an earlier China Star filing.
The sole shareholder of Eight Elements and its parent business, Protective Capital Group Ltd, a British Virgin Islands company, is Kelvin Kam Lap Sing, according to a February 25 filing originally outlining the deal.
China Star has agreed to pay HK$800 million (US$103.2 million) to Mr Kam in three installments for the rights to the profit from the Eight Elements junket operation. The consideration is calculated at 10.69 times the net profit of Eight Elements for the year ended December 31, 2013. The first HK$300 million is in the form of a refundable deposit, with a further HK$300 million payable upon completion, and the balance of HK$200 million in the form of a promissory note to the vendor.
China Star Entertainment – previously a producer of Cantonese-language films – is chaired by Charles Heung Wah Keung.
Facilities at Casino Lan Kwai Fong include an 18th floor suite with eight VIP rooms according to the property’s website.
Late last year, another SJM affiliated business – casino services firm Macau Legend Development Ltd, co-chaired by former Macau legislator David Chow Kam Fai – restated in a filing its ambition to be both a casino operator and to participate in VIP gambling promotion – albeit on an “indirect” basis.
In April Macau Legend told the Hong Kong Stock Exchange that – subject to regulatory approval – its wholly-owned subsidiary, Hong Hock Development Co Ltd, had formed a variable-interest-entity agreement with a gaming promoter operating a VIP club on one of its premises, Pharaoh’s Palace Casino.
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"I am not going to speculate on what the [casino licence refreshment] tender requirements would be. I have full confidence and faith in the Macau government to treat everyone fairly"
Wilfred Wong Ying Wai
President and chief operating officer of Macau-based casino operator Sands China