Hong Kong-listed Paradise Entertainment Ltd hopes to start operating the casino hotel Lan Kwai Fong in downtown Macau by the end of this year, provided that a process to acquire the property goes smoothly, the firm’s chairman and managing director Jay Chun (pictured in a file photo) told GGRAsia.
Mr Chun confirmed his firm wished to run hospitality and casino operations at Lan Kwai Fong, and to make gaming there for mass market customers rather than VIP players.
“For sure we are not using the listed vehicle [Paradise Entertainment] to finance it [the acquisition of Lan Kwai Fong],” Mr Chun said. “That means we are not using means like placing [Paradise Entertainment] shares to finance the deal.” He did not elaborate on how the deal would be financed.
Paradise Entertainment had announced on June 29 that it had negotiated a letter of intent with casino services firm China Star Entertainment Ltd to acquire the Macau peninsula property for a purchase price of HKD2.38 billion (US$304.9 million).
The venue houses a total of 209 guest rooms. The gaming venue inside the property – Casino Lan Kwai Fong, which operates under the gaming licence of SJM Holdings Ltd under a so-called service agreement – hosts a total of 84 gaming tables and 70 slot machines, according to China Star Entertainment’s 2016 annual report filed in April.
“On top of that portfolio of gaming elements, we’ll also be adding more live multi-game terminals to Lan Kwai Fong,” Mr Chun told us, referring to a form of electronic table game product his group makes and that uses a live dealer to electronic betting and bet settlement. “Currently Lan Kwai Fong is very much VIP gaming-oriented, which we’ll change to a more mass-focused venue,” he stated.
“We’ll reinforce the marketing strategy for Lan Kwai Fong, and we’re also confident that we’ll be able to enhance the gaming table income for the venue,” he added.
In late March China Star Entertainment reported it had swung to a net loss in 2016, due in part to “significant decrease in revenue from service income from gaming operations as a result of the recession in the gaming industry in Macau”.
Paradise Entertainment already provides casino management services in Macau at two peninsula venues under service agreements. One is with SJM Holdings at Casino Kam Pek; the other is at Waldo, under the gaming licence of Galaxy Entertainment Group Ltd. Paradise Entertainment develops, supplies and sells electronic gaming machines and systems in Macau and internationally under the LT Game brand.
Mr Chun also told GGRAsia that his firm would continue searching for fresh opportunities to acquire other so-called satellite casinos located on Macau peninsula.
“Traditionally, for this type of casino [satellite casino], it cost a lot for the set up of slot machines and other electronic gaming machines. But for us, it’s quite cost-effective because we already have the ready software and technology to install those at the casino,” Mr Chun said.
“It’s true that we don’t have experience in hospitality. But I believe that it won’t be a difficult segment for us to handle,” he remarked.
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Amount that each Macau casino operator paid for the circa six-month extension of their respective contract