Hong Kong-listed gaming investor Amax International Holdings plans to offer live-dealer online gambling to high-rollers on the island of Vanuatu. Amax announced this week it had agreed to acquire 60% of Forenzia Enterprises Ltd., a British Virgin Islands company that holds a local online gambling license.
Amax’s new venture plans to install a closed-circuit live-dealer studio in Vanuatu’s capital Port Vila, which would only be accessible by terminals located in VIP gaming rooms at local hotels or other commercial buildings. There would be no more than 10 tables to start, possibly growing to 15 as demand warrants.
The technology will be handled by Chartreuse Holdings Ltd., a Vanuatu-registered firm in which Forenzia holds a 50% stake. In February, Chartreuse was issued a 15-year online gambling license by the Ministry of Finance and Economic Development. The license carries a $50k annual fee and a 2.5% tax on net gaming revenue.
Amax announced the deal in March, but the two parties needed four extensions of their negotiating deadlines to get the deal done. Amax says it will issue and allot up to 37m shares to Forenzia as full or partial payment of the HKD 48.1m (US $6.2m) sale price.
Amax will need to convince junket operators to convince high-rollers from China and other Asian countries to submit to the lengthy journey to Vanuatu just to gamble online. Amax wants the junkets to shoulder the cost of flying and housing those VIPs, and if Vanuatu decides to apply 12.5% value added tax to this pseudo online gambling, Amax wants the junkets to pay that, too.
Amax can offer Macau junkets a sweeter taste of the takings based on Vanuatu’s more favorable tax rate. Amax told investors that it has “dealt with enough junkets to obtain sufficient rolling” chip volume for its first year of operation on Vanuatu and believes it has a 50% shot at achieving HKD 30b ($3.9b) in annual turnover.
HELL HATH NO FURY
In other Amax news, the company has publicly complained that its estranged Macau business partner has failed to honor a court order. Amax has been locked in a lengthy legal fight with Greek Mythology (Macau) Entertainment Group (GMEG), which operates 20 gaming tables at VIP rooms in Macau. Amax holds a nearly one-quarter stake in GMEG but Amax claims it hasn’t received proper accounting from GMEG in over two years, which has played havoc with Amax’s own records.
The dispute between Amax and GMEG stems from the latter’s August 2012 decision to terminate its relationship with some 40 gaming tables at the Greek Mythology Casino, which operated out of the Imperial Palace Hotel under an SJM Holdings license. The tables, which were returned to SJM for redistribution to other SJM properties, represented about two-thirds of GMEG’s business.
This summer, Macau’s Court of First Instance ordered GMEG to produce books for the year ending Dec. 31, 2012 and to “convene a general meeting to approve the annual accounts.” On Tuesday, Amax announced that it had received “what purported to be the management accounts” of its associate but no meeting had been convened. Amax believes GMEG has failed to comply with the court’s ruling so Amax is seeking legal advice before taking further action.
Complicating matters, the Imperial Palace (formerly the New Century) is partially owned by Chen Mei Huan aka Chan Mei Fun aka the ex-lover of Amax boss Ng Man Sun. Last month, Ng published a notice in a Chinese-language newspaper warning his ex not to sell the property or transfer her shares to anyone else. Ng has been unsuccessfully trying to get courts to believe that he transferred the shares to Chen in 2011 as a temporary measure but then they broke up. Not long after, Ng was attacked at the hotel by what witnesses said were six men with razors. Kinda puts posting embarrassing photos of your ex on Facebook in its proper perspective, don’t it?