According to the interim results published by Emperor Entertainment Hotel Limited, the company suffered a major fall in revenue for the six months ending on September 30, 2022, when compared to the same period in 2021.
Cessation of Macau Gambling Business Impacts Total Revenue
Hong Kong-listed Emperor Entertainment Hotel Limited reported HKD 108.6 million ($13.9 million) in revenue for the period from April 1 to September 30, 2022, marking a decline of 51.4% when compared to the same period last year, when the reported revenue totaled HKD 223.4 million ($28.6 million).
The dire results reflected in a net loss of HKD 155.7 million ($20 million), which was 85% bigger than the reported loss of HKD 84 million ($10.8 million) for the same period last year.
Emperor Entertainment attributes this huge decline to the fact that it discontinued its gambling business in Macau in June. Other factors the company pointed to were the global economic challenges and the strict COVID restrictions in Macau and Hong Kong during the six months from April to September.
The falling revenue was also due to expenses in connection with the termination of the company’s gambling business.
Emperor Entertainment Hotel Limited is currently focusing on its hospitality business. The company operates six hotel and apartment properties located in Hong Kong and Macau. The venues located in Macau are Grand Emperor Hotel and Inn Hotel Macau.
Why Did Emperor Entertainment Hotel Limited Close 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 to Macau gambling regulations contributed to a significant upheaval of the gambling sector in Macau.
New junket rules in practice eradicated the VIP rooms at casinos, while changes in the rules on satellite casinos made concessionaires dial back and close some of their operations.
According to the new rules on satellite casinos, the concessionaire is obliged to be the owner of the property, where the casino operates. If the concessionaire is not the owner, the company does not have the right to take a share of the gambling operations revenue. It can only charge a management fee.
As a result, Emperor Entertainment Hotel Limited decided to close down the operations completely and not renew the contract with the hotel’s casino operator SJM Holdings Ltd which expired on June 26 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).