Success Dragon confirms new deals with two Macau casinos
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Gaming services provider Success Dragon International Holdings Ltd is to “supply, set up and manage” a minimum of 120 slot machines and multi-terminal machine units in the slot halls of Macau casinos Grandview and Casa Real (pictured in a file photo), respectively. The announcement was made by the firm in a filing to the Hong Kong Stock Exchange.
The two new deals, announced on Friday, were done via Success Dragon’s wholly-owned subsidiary, Ace Advantage Developments Ltd. The agreements are still subject to regulatory approval and approval from casino operator SJM Holdings Ltd.
Hong Kong-listed Kingston Financial Group Ltd controls the Casa Real casino on Macau peninsula, and the Grandview casino on Taipa, in both cases using SJM Holdings’ gaming rights. Ace Advantage’s deals were done with Today Holdings Ltd, identified in Success Dragon’s filing as the manager of both Grandview and Casa Real.
The two agreements mark a U-turn from Success Dragon’s stated plan to leave the Macau gaming services market, as announced in late April. At the time, the firm had said it would discontinue the business segment due its “less than satisfactory performance”. The decision followed the official expiry of the agreements it then had in place with Grandview and Casa Real.
By late June, Success Dragon had flagged it would in fact stay in the gaming services segment.
In its latest filing, Success Dragon said it had continued to provide services to both the Grandview and Casa Real casinos after the expiry of the previous contracts. That was “because the manager was yet to identify new supplier(s) to replace” Success Dragon.
The start of the new deals now announced has been respectively backdated to the end of the original agreements, said the company in its filing.
That means the agreement for Grandview officially began on May 1, 2021; and the deal for Casa Real started on June 1, 2021. Both deals run until June 26, 2022, with an option for Ace Advantage to renew the term for another one year, subject to conditions.
Success Dragon stated that Ace Advantage would be entitled – on a monthly basis – to a “performance bonus”, being a fixed percentage of the net income of the manager from the slot operations for the given month.
Success Dragon said it had paid approximately HKD3.2 million (USD410,000) as deposits to Today Holdings for charges and expenses in relation to the cooperation between the two sides.
The company stated in its latest filing that the board of Success Dragon believed that the financial performance of the gaming services segment would “improve under a better market condition along the continued increase in vaccination rates and the gradual recovery of the tourism industry in Macau.” The firm added it would also introduce measures to improve operation efficiency of its gaming services segment, and implement “appropriate cost control measures”.
