Hong Kong-listed Emperor Entertainment Hotel Ltd has resumed day-to-day operations of the satellite casino at its Macau hotel Grand Emperor, some six months after handing over operations to concessionaire SJM Resorts.
In a Friday filing, Emperor E said it had previously opted not to renew its long-running service agreement to run Grand Emperor’s casino under the license of SJM upon its expiration on 26 June 2022 and to receive instead a “relatively steady” monthly income from SJM for the provision of hotel rooms, catering and other ancillary services only for the period from 27 June to 31 December 2022.
However, the company said the provision of new 10-year gaming concessions to Macau’s six casino operators, including SJM, “has provided a clearer visibility in the future development of Macau’s gaming industry.”
It added, “Given the gaming facilities are retained in Grand Emperor Hotel all along, under the conditions that no additional capital expenditure is required and the gaming operation being a concrete and continuous revenue and profit contributor to the Emperor E Hotel Group prior to the outbreak of COVID-19, the Emperor E Hotel Group’s management believes that it is in the best interest of the Emperor E Hotel Group to enter into the Agreement with SJM, enabling the Emperor E Hotel Group to fully utilize its assets and space in Grand Emperor Hotel.”
Under its new agreement, which runs for three years until 31 December 2025, Emperor E Hotel subsidiary Tin Hou Ltd will be paid a percentage of gross gaming revenue, to be settled on a monthly basis. In return, it will be responsible for managing and decorating the gaming area at Grand Emperor, providing and adapting gaming equipment, and bearing operational expenses including staff salaries.
Emperor E’s share of GGR will be capped at HK$100 million for the three months to the end of its financial year on 31 March 2023, rising to HK$400 million for the year ended 31 March 2024, HK$600 million for the year ended 31 March 2025 and HK$700 million for the nine months to 31 December 2025.
“The reopening of Macau’s border and the lifting of quarantine requirement upon arrival will drive an increase in visitation to Macau, which is a catalyst to Macau’s gaming industry,” Emperor E said.
“With the recent infrastructure developments that enhance access to Macau, Macau’s position in Greater Bay Area, as well as Macau Government’s determination to become a world center of tourism and leisure, the Emperor E Hotel Group’s management is confident in Macau’s tourism recovery and its medium to long term growth prospects, and is prepared to capture the opportunities when the market revives.”
