GGRAsia – MGM Fee to SJM for Extension of License Term

The casino operator MGM China Holdings Ltd will pay 20 million MOP (2.47 million USD) to SJM Holdings Ltd as part of the extension of its sub-gambling concession in Macau until the end of the year. June 26, 2022, said the two companies in separate documents filed on the Hong Kong Stock Exchange. Friday.

Each enterprise will also have to make a financial commitment to the local authorities regarding the rights and conditions applicable to local workers.

Earlier Friday, the Macao government said had approved a request for extension of the game concessions of SJM Holdings and MGM China for just over two years. Their respective licenses were due to expire in March 2020.

The SJM Holdings concession was granted for 18 years, giving the government leeway to authorize one or more extensions up to the limit of 20 years. MGM China – as a subcontractor – was bound to the same license term. The Macao casino sub-concession used by MGM China was purchased in 2005 for US $ 200 million from SJM Holdings.

This extension aligns the terms of these two gaming concessions with the other four operators in the Macau market, whose licenses will expire in June 2022.

The new contracts with respectively SJM Holdings and MGM China units were signed Friday morning, according to the government. MGM China is the Macao division of the US casino operator MGM Resorts International.

Jim Murren, President and CEO of MGM Resorts, said in a press release, "We are grateful for the support of the Macau government for allowing and extending our sub-concession to align with the rest. . of the market. "

He added, "We continue to believe in the long-term success of Macau. As the region continues to become an international destination for leisure and tourism, MGM China remains committed to supporting this vision … "

In Friday's report, the board of directors of SJM Holdings said that the extension of the concession represented "an important development" for the company because it is now placed "in the same position as the others. dealers when the Macau government plans to launch a tender for the next round of gaming concessions ". .

"Reasonable" terms

SJM Holdings confirmed in a statement Friday that it has already signed with the local government the documents necessary to extend the extension of the concession and with MGM China for the corresponding sub-concession.

Ambrose So Shu Fai, managing director of SJM Holdings, said in a prepared statement, referring to the Sociedade de Jogos de Macau SA, the locally registered division holding its Macau concession: Government. Synchronizing the expiration dates of all concessions and sub-concessions is entirely in the interest of Macao and its tourism industry. "

As part of the extension of the license, SJM Holdings and MGM China will each have to pay 200 million MOP to the government as compensation.

Other conditions imposed by the government require that the two gambling operators join the city's "non-compulsory central provident fund system" and establish what is called a "human rights protection fund". creditors ", as advocated by the local legislation in effect among employers 2015 – within three months from the date of signing of new contracts.

Under the Labor Creditors' Rights Protection Fund, SJM Holdings is required to provide a bank guarantee of at least 3.5 billion MOP to the Macau Government "in order to guarantee compliance with a commitment existing labor liabilities after the expiry of the concession extension contract. "In the case of MGM China, the company is required to provide a bank guarantee of at least 820 million MOP.

The agreement also provides that the Government may require each of the companies to increase the amount of the specified guarantee, depending on the number of eligible employees hired by them.

(Updated March 15th at 5:05 pm)