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China – Paradise to benefit from ETG replacement in Macau

By - 27 March 2018

Fewer new openings in Macau saw Hong Kong-based ETG supplier Paradise Entertainment post revenues of HK$1,011.8m in 2017, representing a decrease of 13 per cent over 2016 but as the only-approved supplier of ETGs in Macau its revenues will be boosted over the coming year by a government-enforced replacement cycle.

The company deployed a total of 78 live multi game (LMG) terminals in Macau as compared to 893 LMG terminals in 2016 when there were a number of new flagship casinos opened. It continued to increase its investment in research and development on new/upgraded ETG machines, slot machines, casino management system etc. to HK$47.7m in 2017.

Jay Chun, Chairman and Managing Director of the Group, said: “The Macau gaming market has recovered from the third quarter of 2016 as evident by the positive growth in GGR since then. However, 2017 remained a challenging year as satellite casinos in Macau experienced sluggish recovery. Nevertheless, our management team has successfully executed the business strategies and the group has achieved solid results on the back of such a challenging and competitive operating environment in Macau.”

“The decrease was partly due to the change of the cooperation mode at Casino Macau Jockey Club. The group has changed the contractual arrangement with Casino Macau Jockey Club from provision of casino management services to revenue sharing from LMG terminals since 1 January 2017. Under the new arrangement, although the group does not record the full operating revenue from the casino, it is entitled to share revenue from the LMG terminals at the casino and will not bear any operating expenses of the casino, and hence will not incur loss from the casino,” he added. “At the same time, there was decrease in sale of electronic gaming equipment and systems in 2017 when compared with that in 2016 as more electronic gaming equipment and systems were sold in 2016 when there were a number of new flagship casinos opened in Macau.”

In December 2017, the DICJ published the Dealer-Operated Electronic Table Game Technical Standards Version 1.0 with the effective date of 1 January 2018. The Technical Standards have provided a grace period for all those existing DETG machines to be updated to meet the new technical requirements. After 31 December 2019, DETG machines which do not fully comply with the Technical Standards should not be used or operated in Macau casinos.

Mr. Chun said: “The group, being the inventor, the patent-owner and the sole-supplier of DETG machines, is technically competent and in a position to provide ready-made services to provide support to casinos currently equipped with DETG machines and assist them in meeting the requirement of the Technical Standards. The publication of the Technical Standards has brought business opportunities to the group and has accelerated the replacement cycle of those deployed DETG machines of the group in Macau. Looking ahead, the Group remains cautiously optimistic and will continue to expand its existing businesses.”

“The group will also develop its product lines further, catering not only to the Macau gaming market but the overseas gaming markets as well. The group will continue to look for potential opportunities in Macau and elsewhere to expand its business to increase its market share in the gaming industry and to maximise returns to the shareholders.”

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