• It's Here!

    Etf Pro

    Get the big financial market moves right, bullish or bearish with Hedgeye’s ETF Pro.

  • It's Here


    Identify global risks and opportunities with essential macro intel using Hedgeye’s Market Edges.

The Macau Metro Monitor. January 26th, 2010


Amax accused Melco of breaching its contract by entering into individual agreements with junket promoters since Dec 2009 without their consent.  Due to the release of what AMA deemed sensitive information in Citigroup's Jan 13th report (see relevant text below) the company requested to suspend its trading in the shares on the HKSE from January 18 - 22.

“During the 4th quarter of 2009, Melco Crown Entertainment [“Gaming Operator”] has restructured its Gaming Promotion Agreement with AMA at Altira Macau given the current commission cap regime. Although the aggregator model now appears dead and buried, VIP rollings are already back to normal levels, with all junket commissions now set at 1.25%. Gaming Operator’s earnings will be hurt as it transitions from its super junket arrangement to dealing directly with junket operators”

On Jan 24th AMA announced that due to Macau's changes to fix the commission cap to 1.25%, AMA and Crown have signed a revocation agreement of their existing Gaming Promotion Agreement and entered into fresh agreement on December 23, 2009. 

However, despite an agreement to operate Atlira still being in place, AMA claims that Melco entered into separate agreements with junket promoters that are subject to a contract with AMA, since December 2009.  In response to an inquiry from Macau Daily Times, Melco's response was that it “will strive to maintain existing and build new relationships across our operations in Macau, so as to remain competitive and have full respect for the prevailing contractual and regulatory frameworks within which we operate,” but failed to confirm whether it entered separate agreements.