SJM Holdings said Thursday that it has revised upwards a series of agreements with its own Co-Chairman and Executive Director, Angela Leong, in regard to the maximum amount it must pay to lease casino and retail space from her in the Jai Alai and L’Arc Hotel buildings.
As per a Hong Kong Stock Exchange filing, a revised lease agreement for use of Jai Alai through 2024 has seen the two parties agree to increase the maximum amount payable by HK$7.2 million to HK$10.2 million.
According to SJM, use of the Jai Alai building is seen as a “necessary component of the group’s ongoing business”.
A more substantial increase has been applied to a L’Arc Services Agreement entered into late last year between SJM Resorts and Leong’s L’Arc Entertainment, under which SJM was to pay a maximum HK$253.1 million for the year ended 31 December 2023 for the operation of a casino, including a mass gaming area, VIP room and slot machines.
With the amount of fees paid to L’Arc Entertainment for the first eight months of 2023 at HK$183.6 million, the two parties have agreed to raise the annual cap for FY23 to HK$510 million.
In doing so, SJM noted that service fees had been rising as a result of the increase in the gross gaming revenues generated by Casino L’Arc Macau. As such, it proposed an increase to the annual cap with reference to the actual GGR of Casino L’Arc Macau, expected growth in GGR and increasing visitor arrivals in Macau for the remainder of 2023, as well as the actual costs and expenses for provision of the L’Arc Services for 2023.
“The Group’s core business is the development and operation of casinos and related facilities in Macau,” SJM said.
“SJM Resorts is principally engaged in the gaming business in Macau and is one of the six companies authorised to operate casino games of fortune and other games of chance in casinos, under the terms of a gaming concession granted by the government of Macau. The Group operates nine casinos owned by third parties in Macau, including the casino in the L’Arc Hotel. The transaction under the L’Arc Services Agreement had been ongoing since 2009. T
“The Directors (excluding Leong) consider that entering into the L’Arc Services Agreement is a continuation of and in line with the Group’s business of operating various casinos owned by third parties, which is in the ordinary and usual course of the business of the Group.”
