A third-party promoter of a Macau satellite casino and with the option to share place revenue with related game concessions may be willing to switch to a so-called management company as needed under the city’s updated regulatory framework at the end of the three-year grace period, says a boss at Satellite Real Estate Ponte 16.
“If the market proves still profitable over the next three years, there is still a possibility that the satellite will consider a transition to a management company,” Hoffman Mahoman, vice chairman of Success Universe Group, told GGRAcia. The Hong Kong-listed company promotes Ponte 16, a casino resort near Inner Harbor in Macau, and uses a gaming license from SJM Holdings.
Under the new regulatory framework, succession management companies will not be allowed to share profits with the satellite’s casino licensees once the three-year transition phase is completed.
In addition, under the revision of the game law, game concessions must be approved by the incumbent Macau CEO in connection with service contracts with management and company partners. 경마사이트
Ma told GGRAcia that even if a “fixed fee model” was applied to the successor management company, such arrangements could still be managed “to determine how much the satellite operator should be paid” at the three-year transition stage “because historical performance can be considered.”
He also noted that “many of the existing satellites are still likely to consider switching to management companies if Macau’s gaming performance, especially its public business, can recover well to pre-COVID levels.”
In August, Success Universe reported that Ponte 16 had a negative adjusted earnings before interest, taxation, depreciation and amortization (EBITDA) of HK$1 million ($127,800) for the first six months of 2022. This compares with negative EBITDA of HK$41.4 million in the first half of 2021.
Macau has 11 satellite casinos that continue to operate under a new 10-year gaming permit that began on Jan. 1. Locationally, the segment has shrunk by about 40% as there were 18 satellite casinos in the market as of the end of June 2022.
Of the 11 satellite casinos that continue, 9 rely on SJM Holdings for gaming. In a note Sunday after investment analysts from banking group Morgan Stanley visited Macau that weekend, the agency said nine would continue to pay SJM Holdings “53% to 55% of its earnings as before,” citing its own research. Morgan Stanley, however, said the performance of these satellite game venues is expected to be “difficult” for SJM Holdings until the market’s gaming business size improves.
Nevertheless, Ma, president of Ponte 16, expressed optimism in GGRAcia about the prospects for the sustainability of the business at his location. He added that his company will focus on public business and review plans for an extension at the resort complex, particularly with regard to non-game elements.
Other satellite casinos that continue to rely on licenses from SJM Holdings include Taifa’s Casino Grandview and Macau Peninsula’s Casino Landmarks, Casino Casa Real and Casino Campec ParadaIs, Casino Portuna, Casino Emperor Palace, Casino Lark Macau, Casino Legend Palace.
The remaining satellite game venue under the license of the Galaxy Entertainment Group is Casino Waldo in downtown Macau. It is the casino grand dragon in taifa that uses the gaming rights of melco resort and entertainment.