China Star loans cash to unnamed junket promoter

Jul 18, 2014 Newsdesk Latest News, Macau, Top of the deck  

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Hong Kong-listed China Star Entertainment Ltd is to loan HKD200 million (US$25.8 million) to an unnamed Macau junket promoter, only identified as ‘Junket Company 3′.

The loan is via a China Star Entertainment subsidiary registered in the British Virgin Islands called Classic Champion Holdings Ltd and is spread across 24 months at an annual interest rate of 10 percent, the company said in a filing to the Hong Kong Stock Exchange.

The filing said the junket firm concerned currently promotes 46 tables at an unnamed casino in Macau.

China Star – which runs Casino Lan Kwai Fong in the Macau Peninsula under the gaming licence of SJM Holdings Ltd – added that the junket promoter had generated rolling chip turnover of approximately HKD357.38 billion for the 18 months to June 30.

China Star reported in its 2013 annual results to December 31 that Casino Lan Kwai Fong operated a total of 84 gaming tables, targeting VIPs and mass-market customers, and 128 slot machines.

Also in its 2013 annual report, the firm announced a 6 percent fall in revenue from hotel and gaming services, to HKD1.24 billion, and a 56 percent fall in revenue from gaming promotion operations, to HKD6.84 million.

China Star said in late June there was further delay in its move to buy an equity interest in the profit stream from another junket promoter at the casino hotel called Eight Elements Entertainment Ltd.

But the listed firm said in its annual report, referring to that proposed deal: “The directors believe that the proposed acquisition will allow the group to have greater control over the management and marketing of the VIP rooms gaming floor in Casino LKF as well as to receive a higher percentage of gross gaming income generated by the VIP rooms…”

An expert in Macau gaming law and regulation recently questioned the scenario in Macau whereby entities controlling hotels in partnership with casino concessionaires were themselves taking stakes in the profits of gaming operations.

“…problems needing attention are profit-sharing agreements by which parties that have not been subject to suitability investigations may be able to gain access to the market,” wrote Jorge Godinho in the University of Nevada, Las Vegas, Law Journal.

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