Macau casino operator SJM Holdings says it has increased its annual payment cap related to the lease of the Jai Alai building site at Angela Leong On Kei. Jai Alai is a tourist complex near the Outer Harbor Ferry Terminal on the city’s peninsula, where SJM Holdings operates casinos.
SJM Holdings said in a filing with the Hong Kong Stock Exchange on Thursday that it had raised its annual limit related to the provision and licensing of services for casino operations at L’Arc (pictured), a hotel property in the traditional downtown casino area of the Macau Peninsula.
The company said the decision to increase the annual limits related to the two locations was “expected to extend the lease of the [Zai Alai] building” and “due to a significant increase in rock service fees from the beginning of 2023.
In March, SJM Holdings said it had agreed to lease the buildings of the Zai Alai building until Dec. 31, 2025, and would renew the lease annually. As a result, Ms. Leung and her colleagues, who are also directors of SJM Holdings, will receive up to HK$37.4 million (US$4.8 million) in “rents and related payments” from SJM Holdings within this year. The annual limit was set at HK$3.0 million in 2024 and the same level in 2025.
On Thursday, the casino company said it had increased its 2024 annual limit related to leasing Zai Alai to HK$10.2 million. SJM Holdings said its 2025 annual limit “has not changed and will be reviewed from time to time by the group’s management.”
In the same filing, SJM Holdings says it is raising its full-year limit for 2023 following an agreement with L’Arc Entertainment Group Co. Ltd., the company that controls the L’Arc casino hotel. L’Arc Entertainment is indirectly and wholly owned by Leong.
Under this agreement, L’Arc Entertainment will serve the SJM Group, and the designated areas of L’Arc Hotel will be available for casino operations, including bulk gaming areas, VIP rooms and slot machines.
The revised annual cap for 2023 was raised to HK$510 million from HK$253.1 million, according to the filing.
“The total amount of service fees paid in the eight months to August 31, 2023 was approximately HK$183.6 million, representing approximately 72.5% of the original annual limit,” SJM Holdings said.
“The actual service fee amount is increasing from about HK$12.4 million in January 2023 to about HK$45.1 million in August 2023,” it added.
The casino company said, “This increase is primarily due to the recovery of Macau’s gaming industry after COVID-19 and the increase in Macau visitors, resulting from an increase in total gaming revenue generated in Casino Rock Macau.”