SJM to negotiate new revenue sharing arrangement with satellite casinos

Ambrose So Shu Fai, SJM’s vice-chairman and chief executive, said the company is renegotiating due to increased operating costs.

Macau.- Ambrose So Shu Fai, SJM’s vice-chairman and chief executive, has revealed that a new revenue-sharing agreement is being negotiated between the company and its satellite casinos as a result of increased operating costs.

During an interview with Hong Kong newspaper Ming Pao, he said: “Gaming operators cannot sack people (local staff) and have to afford the running expenses, as usual, averaging more than HK$10m a day, while the business volume has declined.”

There are currently 16 satellite casinos in operation in Macau, 14 of which are licensed by SJM. The remaining two are licenced by Galaxy Entertainment Group (GEG) and Melco Resorts Entertainment.

Macau’s new gambling law, which was approved in late June, prohibits the sharing of revenue between gambling operators and satellite casino companies, permitting only an “administration fee.” There is a three-year grace period to comply with the new requirements.

A week ago, SJM Holdings confirmed that SJM Resorts’ proposal to issue 7,200,000 additional Type B shares of par value MOP100 each in order to increase its share capital has been approved by shareholders and the government of Macau.

SJM had said it would increase its “Class B” stake from 10 per cent to 15 per cent of SJM Resorts’ issued share capital as Macau’s revised gaming law requires at least 15 per cent of gaming concessionaires’ share capital to be held by “managers” who are permanent residents of Macau.

The new Class B shares will be issued to the managing director of SJM Resorts at par payable in cash in order to maintain that director’s shareholding in the company.