Mar 01, 2023 Newsdesk Latest News, Macau, Top of the deck
Macau-based casino operator SJM Holdings Ltd has renewed an agreement with L’Arc Entertainment Group Co Ltd allowing the latter firm to run a satellite operation at L’Arc Hotel Macau (pictured in a file photo), on the Macau peninsula.
The deal is for a term of three years, starting from January 1 this year, according to a Tuesday filing to the Hong Kong Stock Exchange.
L’Arc Entertainment is indirectly and wholly owned by Angela Leong On Kei. She is the fourth consort of the late Stanley Ho Hung Sun, the founder of SJM Holdings. Ms Leong is also co-chairman and an executive director of SJM Holdings, and has a stake of 8.6 percent in the latter firm, according to that company’s 2022 interim results, published in August. She is also a Macau legislator.
SJM Holdings directly operates a number of casino properties in Macau, including the Lisboa and Grand Lisboa properties on the peninsula, and the Grand Lisboa Palace resort in the Cotai district.
The group provides its gaming licence to nine casinos owned by third parties in Macau, including the casino in the L’Arc Hotel. That deal has been ongoing since 2009 when the L’Arc complex opened doors.
The other satellite casinos that rely on SJM Holdings’ licence are: Casino Grandview in Taipa, and the Macau peninsula venues Casino Landmark, Casino Casa Real, Casino Kam Pek Paradise, Casino Fortuna, Casino Emperor Palace, Casino Ponte 16, and Casino Legend Palace.
SJM Holdings said in its Tuesday filing that “Ms Leong was absent from the board meeting of the company” while the latest deal with L’Arc Entertainment “was being discussed”. She also “abstained from voting on the board resolution on approving the renewed L’Arc services agreement,” SJM Holdings said.
Under the deal, L’Arc Entertainment will be entitled to get from SJM Holdings “fixed percentages” of monthly gross gaming revenue (GGR) from the casino operation, up to an annual cap to be adjusted over the course of the three years of the deal.
The cap for full-2023 is set at HKD253.1 million (US$32.2 million). For the 12 months to December 31, 2024, such cap is set at HKD351.7 million, rising to HKD450.1 million for full-2025, according to the filing.
SJM Holdings said the annual caps took into consideration, among other factors, the “expected recovery of visitor arrivals and gaming revenue as a result of the loosening [of] Covid-19 pandemic preventive measures and travel restrictions in Macau and China since late 2022.”
From January 2026, promoters of Macau satellite casinos will not be able to share in a percentage of gaming revenue with the concessionaire providing the licence. Instead satellite promoters must constitute themselves as a ‘management company,’ and be entitled instead to negotiate a management fee, though the precise format for that – and the implementation – are still to be clarified.
New regulatory arrangements for satellites, including a law passed in December by Macau’s Legislative Assembly, included a three-year grace period for the changes to take effect.
Under the latest arrangement for L’Arc Hotel, the L’Arc Entertainment entity will be responsible for all operating costs and expenses including gaming equipment costs, employee expenses, and other related gaming assets costs.
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Total number of visitor arrivals to Macau in February