GGRAsia – SJM awaits Macau govt view on concession extension: CEO

SJM awaits Macau govt view on concession extension: CEO

Jul 19, 2018 Newsdesk Latest News, Macau, Top of the deck

Ambrose So Shu Fai (pictured), vice-chairman and chief executive at Macau casino operator SJM Holdings Ltd, told local media on Thursday that the firm would wait for the Macau government’s directions regarding the currently-scheduled 2020 expiry of the firm’s present Macau gaming concession.

“We will express our thinking on the topic on various occasions. But the government may have a different thought on the subject,” said Mr So.

Last month the CEO went on public record saying he hoped the firm could be granted a two-year extension on its current rights, to put it on the same 2022 starting line – for a potential rebid – as four of the other Macau operators.

MGM China Holdings Ltd, which is technically operating gaming in Macau via a sub-concession of SJM Holdings, has said it would welcome any opportunity to talk to the city’s government about the same topic.

SJM Holdings’ Mr So was asked on Thursday whether his group was seeking direct talks on the matter with the local government. He replied: “The government has a lead in this subject in regards to what should be done after the [gaming] concessions expire. We will be first listening to what the government will say.”

Mr So added that it would be “preferable” if a two-year extension could be achieved. Macau law currently allows for a maximum five years of extension to the respective current 20-year concessions; after which time there should be a fresh bidding process via a new public tender.

Mr So spoke to the media on the sidelines of the launch of an education programme for SJM Holdings employees regarding China’s national history and culture, jointly organised by Macau Millennium College and the Chinese Academy of Social Sciences. At the event, Mr So also made brief remarks on the firm’s under-construction HKD36-billion (US$4.6-billion) Grand Lisboa Palace resort scheme on Cotai.

“We of course strive to, within this year, complete all construction works for it so that we can then have sufficient conditions to apply for the operation permits from the government,” Mr So said.

Cotai opening

The SJM Holdings executive reiterated that the launch of the Cotai project was due in the second half of 2019. He said three hotel towers for the scheme under the respective brandings “Grand Lisboa Palace”, “Palazzo Versace” and “Karl Lagerfeld” were likely to open at the same time – although he did not offer any guarantee to that effect.

The three hotel towers will in aggregate provide approximately 2,000 rooms, SJM Holdings had noted in its annual report for 2017 filed in April.

“Amongst the non-gaming elements, the most important of all will be the accommodation experience offered by the Versace and Karl Lagerfeld hotels,” Mr So remarked to the media.

Speaking of the firm’s own gaming revenue performance, the SJM Holdings executive said that it had seen better trends in the mass segment than in the VIP segment in the first half of this year, a trend that is similar to the performance of the other gaming operators in the city.

The latest data released from Gaming Inspection and Coordination Bureau showed that gross gaming revenue (GGR) in Macau’s VIP segment expanded by 14.4 percent year-on-year in the second quarter, while that for mass play – including slot machine play – was 20.8 percent.

“We have observed quite a good [gaming revenue growth] trend here. But of course the trade war will drag down China’s GDP,” said Mr So, referring to a trade tariff stand-off between the United States and China.

“But still, it [China’s economic growth] is a sizable figure, relative to Macau’s GDP. I believe that given this condition, the impact [of a U.S.-China trade war] to Macau is slight,” Mr So added.