Emperor Entertainment Hotel acquires Macau’s casino

Emperor Entertainment Hotel acquires Macau’s casino

Home » Emperor Entertainment Hotel acquires Macau’s casino
Emperor Entertainment Hotel acquires Macau's casino

After six months of direct administration by Macau gaming licensee SJM Resorts Ltd., a subsidiary of Hong Kong-based SJM Holdings Ltd., Emperor Entertainment Hotel’s Hong Kong subsidiary, Tin Hou Ltd., signed a lucrative three-year agreement with SJM to manage the Grand Emperor Hotel, a Macau satellite casino. On January 1, 2023, the agreement commenced.

Reform:

Tin Hou would “provide services to SJM in regard to the casino to be operated under SJM’s gaming concession” under the agreement.

Emperor International Holdings Ltd., the parent firm of Emperor Entertainment Hotel, will control 71.63% of the Grand Emperor Hotel, which will reopen as a satellite casino.

Tin Hou will cover “all operating costs end expanses including: management, décor and restoration of the gaming sections at the venue; providing gaming equipment in conformity with SJM Resorts’ standards; and personnel pay and expenses for the gaming floor.”

Tin Hou will receive a percentage of gross gaming revenue (GGR) “in consideration of the monthly operating performance of the Gaming Area,” divided monthly, with the yearly limit adjustable up to 36 months into the agreement.

The new three-year agreement sets financial restrictions of HK$100 million for the first three months of this year, HK$400 million for the financial year ending in March 2024, HK$600 million for March 2025, and HK$700 million for the last nine months to December 31, 2025.

These numbers were based on prior gaming performance at the Grand Emperor Hotel, including “the total number of tables and slot machines in the region and the predicted rebound in gross gaming income of Macau due to the progressive lifting of COVID-19-related restrictions.”

Either company can end the contract early with 21 days’ notice.

Emperor Entertainment Hotel management said, “It was in our best interest to negotiate the arrangement, so we could fully utilize its assets and space in Grand Emperor Hotel.

“The reopening of Macau’s border and the removal of quarantine will encourage visitation, which will boost Macau’s casino industry.”

Service contract cancellation:

In early 2020, the Emperor Entertainment Hotel group “has experienced the most difficult moment since its inception of gaming operations and incurred a loss for the first time in six months ended 30 September 2020” due to the COVID-19 epidemic.

Due to this and the end of China’s “zero Covid” policy on travel to and from Macau, Emperor has decided “to not renew its service agreement with SJM upon its expiration on 26 June 2022 and instead to receive a relatively steady monthly income from SJM Resorts for the provision of hotel rooms, catering and other ancillary services from the period from 27 June 2022 to 31 December 2022” during Grand Emperor Hotel’s gaming operations.

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