Operator News
China – Fall of VIP play could boost electronic terminal sector in Macau
By Phil - 29 March 2023
Paradise Entertainment, the patent owner and sole provider of live-multi game terminals in Macau via its LT Game subsidiary, generated a loss of US$21.2m in 2022 down 39.7 per cent from a year earlier due to the ongoing travel restrictions caused by COVID-19.
Looking to the future, Paradise believes that the decline in VIP gaming could help drive more terminal play. Dr. Jay Chun, Co-Chairman and Managing Director of Paradise said: “Macau’s new gaming law has accelerated the demise of the VIP gaming segment, and we expect that the demand for electronic gaming machines should continue to grow. The Group remains confident that our LMG machines and other ETG machines will have ample room for development in the future, both in Macau and in overseas gaming markets.”
The group, which also manages the Casino Kam Pek Paradise via a deal with SJM in Macau, said: “The decrease was mainly due to the decrease in revenue from the provision of casino management services in Macau and the sale/leasing of electronic gaming equipment and systems in Macau, which was partially offset by the increase in revenue from sale/leasing of electronic gaming equipment and systems in overseas markets.”
GGR generated by Casino Kam Pek Paradise amounted to HK$490.9m, representing a decrease of 35.6 per cent over that of HK$761.7m, giving a loss of HK$38m.
The company said: “The turnaround from profit to loss was mainly due to the decrease in GGR generated by Casino Kam Pek Paradise when compared with that generated for the year ended 31 December 2021. Electronic Gaming Equipment and Systems.”
Revenue from electronic gaming equipment and systems segment amounted to HK$30.9m, representing a decrease of 60.6 per cent over that of HK$78.4m for the year. The year saw the company upgrade 149 LMG terminals in Macau and sell 498 units of slot machine in overseas markets.
Dr. Chun said: “The positive impact of arrivals [to Macau] remains in sight to give a tally of patrons to casinos focusing on mass markets in particular, and the local economy continues its recovery amid the easing of Covid-19 related restrictions. We are particularly delighted to enter into a new service agreement with SJM Resorts, Limited on 30 December 2022 for our provision of casino management services in Casino Kam Pek Paradise (which operates under SJM Resorts’ gaming concession) for the period from 1 January 2023 to 31 December 2025. The Group has a good reputation as a casino management service provider focusing on mass market patrons for satellite casinos in Macau, and has a strong foothold in this aspect of the gaming industry, which has been demonstrated by the outperformance of Casino Kam Pek Paradise as compared to many other satellite casinos in Macau.”
He added: “We expect to continue facing unsteady headwinds while the world still faces austere economic and political uncertainties. The global geographical tensions are expected to impose great stress on the global economy, financial system, and logistics supply, amid the rise in global inflation and interest rate hikes in many countries. These uncertainties and tensions will continue to make precise prediction of the global economic growth difficult. In facing unpredictable market changes, the Group will maintain a prudent and conscientious attitude, and focus on developing its core business, continue to improve internal operation efficiency and management, and capture other good business opportunities so as to achieve steady growth and healthy returns for the Group.”
