Macau concessionaire SJM Resorts S.A. said Friday it has revised upwards the maximum amount it can pay to the operating entity of satellite casino L’Arc, and extended by three years the lease of Jai Alai from another entity, due to the steady improvement in business performance seen post-COVID.
Both entities are majority owned by Angela Leong, the Co-Chairman and Executive Director of SJM Resorts parent company SJM Holdings.
In a series of filings, SJM said it has revised upwards the annual cap payable to Leong’s wholly-owned L’Arc Entertainment for services rendered and for allowing the company use of the hotel and casino areas at the peninsula property. In both instances the cap has more than doubled, from HK$351.7 million (US$45 million) to HK$908.3 million (US$116 million) in FY24, and from HK$450.1 million (US$58 million) to HK$960 million (US$123 million) in FY25.
This, SJM said, was because the amount paid under the existing L’Arc Services Agreement had been rising every month since reopening and had reached HK$157.4 million (US$20 million) in 1Q24 – equivalent to 44.7% of the existing full year cap.
The decision to increase was therefore made in view of “expected growth in gross gaming revenue and visitor arrivals in Macau in the remaining period of 2024 and in 2025, in particular the expected growth in the holiday seasons,” SJM said.
In a separate filing, SJM said it has also entered into a new three-year lease agreement for the use of the entire Jai Alai building for the operation of Casino Oceanus at Jai Alai and other facilities including hotel and restaurants. The new lease, backdated to 1 April 2024, will see Macau Jai Alai, of which Leong holds a 97% stake, paid monthly rent of HK$3.5 million (US$447,630) for the first year, rising to HK$4 million (US$511,580) in the second and HK$4.5 million (US$575,525) in the third.
SJM said, “In view of the steady growth in the business performance of Casino Oceanus at Jai Alai and expected high volume of visitor arrivals in Macau in the coming years which will drive a continuous high demand for hotel rooms, the Board (excluding Ms Leong) considers that the leasing of the Premises under the Lease Agreement would allow the Group to continue the operation of Casino Oceanus at Jai Alai and provide hotel rooms to our patrons at a low cost, and is beneficial to the Group for its on-going business and for avoiding any possible business disruption.”
SJM’s business operations have been slowly recovering in recent quarters, with the company reporting a 77% year-on-year increase in GGR in Q1 to HK$6.89 billion (US$881 million).
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