Inside Asian Gaming

October 2009 | INSIDE ASIAN GAMING 35 I t seems a cap on VIP agent commissions can’t come soon enough for Dr Stanley Ho’s casino operating company, SJM Holdings. The company revealed in its first half results that marketing and promotion costs had risen to 38.7% of its total gaming revenue—a 3% increase year-on-year, and a 2.6% increase compared to the second half of 2008. At the same time, in order to encourage big volume players to keep rolling, SJM also issued more credit to agents. As a result, receivables—money owed to SJM by junkets—rose 55.3% year on year from HK$612.3 million (US$79 million) in the first half of 2008 to HK$951.5 million in the first half of 2009. The extra expenses combined with recession in the feeder markets helped to produce a 40.8% fall year-on-year in SJM’s first half profit, to HK$338 million (US$43.6 million) from HK$571 million a year earlier. This was despite an aggressive cost savings drive that included a 5.6% cut in SJM’s workforce in the first six months of 2009. SJM’s gaming revenue in the first half of 2009 was HK$14.79 billion, down 4.3% year-on-year but up 17.9% from the second half of 2008. The prognosis for SJM in the Macau market still looks positive, however. The money the company spent on wooing agents did get results. SJM’s total Macau market share for the first half rose to 29.6% of gross gaming revenue, a year-on-year increase of 2.5%. At the same time as building share in the existing market, SJM is busy extending its market coverage, with the recent opening of a new casino, L’Arc, on the Macau peninsula. Oceanus, a property next door to Macau’s main ferry terminal on the Macau peninsula, is also reportedly due to open before the end of the year. No Coasting in the High Roller Rooms SJM’s junket costs rise