SJM Holdings Renews Satellite Casino Contract With L’Arc Entertainment
- SJM Holdings signed a new 3-year satellite casino deal with L’Arc Entertainment
- The deal allows L’Arc to continue to operate a satellite casino using SJM Holdings’ license
- From 2026, satellite casinos will be required to constitute themselves as management companies
SJM Holdings Ltd has renewed its satellite casino contract with L’Arc Entertainment Group Co Ltd, a company wholly owned by Macau billionaire businesswoman and politician Angela Leong On-Kei. Under the agreement, L’Arc Entertainment will continue to operate a satellite casino at L’Arc Hotel Macau until 2025.
SJM Holdings, L’Arc Maintain Long-Term Partnership
Satellite casinos are gaming venues owned and promoted by third parties that operate in Macau under the gaming license of a casino concessionaire. As the new 10-year gaming concessions began on January 1, 2023, only 11 satellites have been allowed to continue to operate, down from 18 in 2022. Nine of those properties are operating under SJM Holdings’ license, including Casino L’Arc Macau.
The agreement between SJM Holdings and L’Arc Entertainment has been in place since L’Arc Hotel Macau opened in 2009. The company’s owner, Leong, is the fourth partner of the late Macau casino tycoon Stanley Ho, the founder and former chairman of SJM Holdings. Leong, who is a legislator in Macau, also currently serves as co-chairman and executive director of SJM Holdings, with an 8.6% share in the company.
In a filing this week to the Hong Kong Stock Exchange, SJM Holdings stated that Leong “abstained” from voting on the board resolution regarding the renewal of the satellite casino deal and was not present when discussions on the renewal took place.
The agreement provides L’Arc Entertainment a fixed share of monthly gross gaming revenue (GGR) from SJM Holdings, subject to an annual cap which will be adjusted during the course of the contract. The cap starts at HKD253.1 million (US$32.2 million) for full-2023 and then goes up to HKD351.7 million for full-2024 and HKD450.1 million for full-2025.
The increase in caps has to do with the expected recovery of gaming revenue and visitor numbers with pandemic-related restrictions now lifted, SJM Holdings stated in the filing. L’Arc Entertainment will shoulder all costs and expenses involved in the operation of the satellite casino.
New Changes for Macau Satellite Casinos
From January 2026, Macau will implement a new system for satellite casino operators under which they will no longer be able to get a share of GGR with the concessionaire that owns the license. They will instead be entitled to negotiate a management fee, and they can do that by establishing themselves as a “management company”.