Ponte 16 Casino to shut for good next Friday
Gaming concessionaire SJM announced yesterday that it has decided to drop its plan to acquire the property where Ponte 16 Casino is located so that the so-called satellite casino, located in the Ponte 16 hotel resort in the Inner Harbour district, will close for good after midnight on Friday next week.
On the contrary, SJM announced yesterday that it has signed an agreement to acquire the company that owns L’Arc Hotel in Nape, where Le Royal Arc Casino is located, for HK$1.75 billion, adding that after the acquisition gets off the ground, SJM will “directly operate” the casino following its scheduled closure as a satellite casino by the end of this year.
The two casinos are two of the six “satellite casinos” currently still in operation in the city.
Yesterday’s announcements came after SJM said in June that it was considering the possibility of acquiring the ownership of the hotels where two of its satellite casinos, Ponte 16 and Le Royal Arc, are located in order to convert them into “directly-operated” casinos after their respective closures as satellite casinos.
The so-called satellite casinos in Macau are formally owned by gaming concessionaires but are actually run and managed by third parties as they are housed on premises that are not owned by the respective gaming concessionaires.
The satellite casinos are currently operated under partnership models where the respective gaming concessionaires and third parties share the revenues.
According to the gaming law’s newly amended version, all casinos must be housed on premises that are owned by their respective gaming concessionaires.
The new legislation amending the gaming law stipulates a three-year transition period, which started on January 1, 2023, during which existing satellite casinos can continue operating under their current partnership models.
After the three-year transition period, which is scheduled to end on December 31 this year, all satellite casinos must close, unless the respective gaming concessionaire chooses to hire a “management company” to operate the casino. However, such a management company is only allowed to receive a management fee from the respective gaming concessionaire, no longer being permitted to share in the casino’s revenues.
If the respective gaming concessionaires choose to hire management companies to operate the casinos after the three-year transition period, the casinos can continue to be housed on premises that are not owned by the gaming concessionaires.
The government announced in June that the three respective gaming concessionaires, SJM, Galaxy, and Melco, decided to terminate the operations of all 11 satellite casinos before the expiration of the transition period based on their respective commercial decisions, comprising Grandview, Legend Palace, Fortuna, Landmark, Ponte 16, Le Royal Arc, Emperor Palace, Kam Pek Paradise, and Casa Real owned by SJM, Waldo owned by Galaxy, and Grand Dragon owned by Melco.
This means that none of the three gaming concessionaires decided to continue operating these casinos through the hiring of management companies after December 31 this year.
Among the 11 satellite casinos, five have meanwhile closed for good one after another since late July.
Unlike its other satellite casinos, SJM said in June that it was considering the possibility of acquiring the ownership of the hotels where casinos Ponte 16 and Le Royal Arc are located with the aim of applying to the government to operate them as “directly-operated” casinos after their respective closures as satellite casinos.
However, SJM Resorts announced in a statement yesterday that following a comprehensive business review, it has decided not to proceed with its previous intention to acquire the property where Ponte 16 Casino is located.
The statement underlined that SJM has made the decision after a thorough assessment of its long-term business planning, commercial considerations and resource prioritisation, reflecting the company’s disciplined approach to capital deployment and its focus on strengthening core operations in line with market developments and its long-term development strategy.
The statement said that based on its decision, SJM Resorts has signed a mutual termination agreement with Pier 16 Entertainment Group Corporation Limited that will bring forward the cessation of services at Ponte 16 Casino.
With the agreement in place, the statement said, Ponte 16 Casino will cease operations after 11:59 p.m. on Friday next week.
The statement also said that all gaming tables and slot machines currently operating at Ponte 16 Casino will be redeployed to other SJM casinos.
Meanwhile, the Gaming Inspection and Coordination Bureau (DICJ) said in a statement yesterday that it will ensure that SJM fulfils its promise to ensure the employment of those working at Ponte 16 Casino after its closure. According to the statement, there are currently 1,025 employees working at Ponte 16 Casino.
On the contrary, SJM Holdings Limited announced in a statement yesterday that two of its subsidiaries, namely SJM-Investment Limited and SJM Resorts, have signed an agreement to acquire Arc of Triumph Development Company Limited, which owns L’Arc Hotel.
The statement said that the hotel is located in Nape, a key node within the Macau peninsula’s most concentrated and high-performing entertainment and hospitality cluster. The property has a gross floor area of approximately 86,438 square metres and encompasses hotel accommodation, food and beverage outlets, retail and the premises of Le Royal Arc Casino, which SJM Resorts currently operates under a service arrangement.
The statement said that according to the agreement, SJM-Investment and SJM Resorts will acquire 100 percent of the issued share capital of Arc of Triumph Development from its current owners, Goldarch Holdings Limited and Solar King Investments Limited. The statement underlined that the acquisition is still subject to approval by SJM Holdings’ independent shareholders at an upcoming extraordinary general meeting, as well as the necessary regulatory approvals from Macau’s authorities.
The statement said that under the terms of the transaction, SJM-Investment and SJM Resorts will pay an aggregate amount of HK$1.75 billion for the acquisition of Arc of Triumph Development, comprising a nominal purchase price for the issued shares of Arc of Triumph Development and the repayment of a portion of an outstanding loan owed by Arc of Triumph Development to a bank under an existing loan facility. Such amount, the statement said, has been determined with reference to an independent professional valuation of the L’Arc Hotel property, which assessed the hotel’s market value at such amount.
The statement said that Arc of Triumph Development’s principal liability is an outstanding bank loan of HK$1,927,525,000 as at signing of the agreement. Under the agreement, the statement said, SJM-Investment and SJM Resorts will arrange repayment of this bank loan up to HK$1,749,825,243. A nominal share consideration of 180,000 patacas (equivalent to HK$174,757) will be paid for the transfer of 100 percent of Arc of Triumph Development’s equity interests, representing the acquisition of its operating businesses, and be applied to repay the bank loan.
The statement said that the shortfall, amounting to HK$177,525,000, will be borne by Goldarch Holdings and Solar King Investments, funded through a loan to be provided by SJM Resorts under a separately executed loan agreement with the beneficial owners of Goldarch Holdings Limited and Solar King Investments Limited. This loan, the statement said, has a three-year term which bears interest equivalent to SJM’s current credit facility rate, and is secured by a share charge over SJM Holdings shares owned by the beneficial owners of Goldarch Holdings and Solar King Investments.
In the past five years, Macau’s number of casinos (not including slot-machine parlours) has fallen from 42 at the end of 2021 to 28 at the end of the third quarter of this year, according to data released by the Gaming Inspection and Coordination Bureau (DICJ) last month.
This photo taken last month shows people gathering outside the entrance to Ponte 16 Casino in the Inner Harbour district. – Photos: Tony Wong
This file photo taken early this year shows visitors gathering on Avenida 24 de Junho in Nape, where L’Arc Hotel (centre) is located.
