Success Dragon International Holdings Ltd says it plans to leave the Macau gaming services market by the end of this month. The decision is related to a “less than satisfactory performance” in that business segment, Success Dragon said in a filing on Friday.
The Hong Kong-listed company stated that, as its two existing contracts with Macau casinos for “outsourced business process management” were expected to expire on April 30 (Friday) and May 31 respectively, “the board proposed not to renew the contracts.”
The filing did not name the casinos for which the firm had been providing gaming-related services.
Success Dragon added: “As a result, the company will cease to operate the outsourced business process management in [May].”
In its interim report for the six months ended September 30, 2020, the firm had said revenue generated from outsourced business process management for electronic gaming machines in Macau had “decreased significantly by approximately 57.7 percent” from circa HKD42.0 million (US$5.4 million) in the same period of 2019 to approximately HKD17.8 million.
Success Dragon stated on Friday’s filing that the business segment’s weight on total revenue had declined from approximately 94.9 percent in the April to September 2019 period to about 35.2 percent in the six months ended September 30, 2020.
“The decrease was mainly attributable to intense competition in the Macau gaming market faced by the group,” Success Dragon said in its latest filing. “The market competition was further worsened by the outbreak of Covid-19 pandemic,” it added.
Success Dragon stated it would “continue to develop its gold-laden carbon processing business and money lending services while exploring other profitable business opportunities.”
The company provides money lending services in Hong Kong, and is – since March last year – engaged in the processing of gold-laden carbon and the sale of gold and other precious metals.
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”Our own consensus is that any newcomers to this [junket] sector should be corporatised, and should be financially sound and able to commit a higher guarantee deposit”
Kwok Chi Chung
President of junket trade body, the Macau Association of Gaming and Entertainment Promoters