According to interim results released by Emperor Entertainment Hotel Limited, the company has experienced a significant decrease in revenue for the six months ended 30 September 2022 compared to the same period in 2021.
The cessation of gambling business in Macau affects the overall revenue
Hong Kong-listed Emperor Entertainment Hotel Limited reported revenue of HK$108.6 million (US$13.9 million) for the period April 1 to September 30, 2022, down 51.4% in comparison compared to the same period last year when reported revenues totaled HK$223.4 million (US$28.6 million).
The dire results were reflected in a net loss of HKD155.7 million (US$20 million), which was 85% higher than the reported loss of HKD84 million (US$10.8 million) in the same period of the year previous year.
Emperor Entertainment attributes this huge drop to the fact that it shut down its Macau gaming operations in June. Other factors the company pointed out were the global economic challenges and the strict COVID restrictions in Macau and Hong Kong during the six months from April to September.
The decline in revenue was also due to expenses related to the closure of the company’s gaming business.
Emperor Entertainment Hotel Limited is currently focused on its hospitality business. The company operates six hotel and apartment properties in Hong Kong and Macau. The venues in Macau are the Grand Emperor Hotel and the Inn Hotel Macau.
Why has Emperor Entertainment Hotel Limited closed the casino at the Grand Emperor Hotel?
Several factors contributed to the closure of casino operations at the Grand Emperor Hotel.
First of all, various legislative changes in Macau’s gambling regulations contributed to a significant upheaval in Macau’s gambling sector.
New junket rules in practice eliminated the VIP rooms in casinos, while changes in satellite casino rules caused concessionaires to recall and close some of their operations.
Under the new satellite casino rules, the concessionaire must own the land on which the casino operates. If the concessionaire is not the owner, the company has no right to share in the revenue from the gaming operations. Only an administration fee may be charged.
As a result, Emperor Entertainment Hotel Limited decided to cease operations entirely and not to renew the contract with the hotel’s casino operator, SJM Holdings Ltd, which expired on 26 June this year. However, SJM was allowed to run the casino until the end of the year in exchange for a hefty fee of HKD 21.0 million ($2.6 million).