Hong Kong-listed Paradise Entertainment Ltd, which has just missed out on an opportunity to acquire a Macau casino hotel to add to its business portfolio, told GGRAsia it would nonetheless seek other chances to take over so-called “satellite” properties.
Under Macau’s regulatory system, third parties are allowed to control either casino hotels or gaming operations within such properties, provided they use the gaming licence of one of the city’s six authorised casino operators.
Jay Chun, chairman of Paradise Entertainment, told us in a telephone interview that his company had “no definite target” for fresh investment at the moment.
Hong Kong-listed China Star Entertainment Ltd, a services provider in the Macau casino market, announced on Monday that Macau businessman and former local legislator Chan Meng Kam would acquire the Lan Kwai Fong casino hotel property – previously targeted by Paradise Entertainment – for a total consideration of HKD2 billion (US$256.2 million). A letter of intent between Paradise Entertainment and China Star allowing exclusive negotiations regarding that property had expired on September 30, with no agreement reached.
“We’ll still look into it [acquisition] when there are any suitable opportunities,” Mr Chun told us, but added, “currently we have not yet had any definite target.”
Paradise Entertainment already provides casino management services – via so-called service agreements – at two Macau peninsula casino hotels. One is for Casino Kam Pek, a facility with electronic gaming machines only, and no hotel, which makes use of the SJM Holdings Ltd casino licence. The other is for the Waldo casino hotel (pictured), which operates mass-market live-dealer tables and electronic games under the gaming licence of Galaxy Entertainment Group Ltd. Paradise Entertainment additionally develops, supplies and sells electronic gaming machines and systems in Macau and beyond, under the LT Game brand.
For the six months ended June 30, 2017, Paradise Entertainment recorded revenue of HKD399.1 million from the casino management services segment, which contributed 81.6 percent to the total reported revenue of the company in the period, according to its interim report filed in September. The adjusted earnings before interest, taxation, depreciation and amortisation (EBITDA) from Paradise Entertainment’s casino management services recorded a loss of HKD28.4 million for the six months ended June 30, 2017, a narrowing compared to the HKD36.2-million loss recorded on the casino management services segment in the same period in the previous year.
“Our business at the casinos has got better, and more stable,” remarked Mr Chun, suggesting that foot traffic to the two properties it currently manages had improved this year.
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International Monetary Fund