Macau’s casino junket industry is set for a major shakeup after Hong Kong-listed International Entertainment Corp (IEC) announced a deal to pay up to HKD 7.35b (US $948m) to acquire 70% of SunCity Gaming Promotion Co., the gambling arm of the SunCity Group. SunCity is one of Macau’s leading junket operators, controlling around 280 gaming tables in 17 VIP rooms across the world’s top gaming hub as well as VIP rooms at casinos in South Korea and the Philippines. In recent years, SunCity has diversified its operations via investments in such disparate fields as film production and iron ore mining, expanding its workforce to around 1,200 employees in the process. SunCity reported earnings of HKD 1.5b ($193m) in 2013.
IEC, which counts property developers, telecom firms, luxury hotels and retail chains among its various concerns, is 75% controlled by the family of Cheng Yu-tung, recently pegged as Hong Kong’s fifth-richest man by Forbes magazine with an estimated net worth of $15.5b. (Galaxy Entertainment Group chairman Lui Che-woo made #2 with a $21b nest egg.) Cheng’s son Henry is believed to be directing most of IEC’s business dealings since his father reportedly suffered a stroke in 2012.
Cheng already controls 10% of Sociedade de Turismo & Diversoes de Macau SA (STDM), the parent firm of SJM Holdings, Macau’s top casino operator by market share. Union Gaming Group analyst Grant Govertsen told Bloomberg that with Macau holding firm on its refusal to grant any further casino concessions, “buying into an existing junket operator is probably the easiest way to participate in Macau’s casino boom.”
In other junket acquisition news, Hong Kong-listed mega-junket Neptune Group has informed the market it needs more time to close its deal with Macau junket promoter Ocean Star Entertainment Co. Ltd. In November, Neptune announced its British Virgin Island subsidiary Credible Ltd. would pay HKD 241m for profit rights to the “not less than 11” gaming tables at Guangdong VIP Club at Melco Crown Entertainment’s City of Dreams casino on Cotai. Neptune now says more time is needed to conduct due diligence on the deal and negotiations have been extended until the end of January, although this new deadline may also be extended.
