LifeTec bets on baccarat as gambling goes electric
[ May 13, 2006 ]
Pharmaceuticals firm LifeTec Group announced yesterday it had signed a five-year contract with Macau gaming boss Stanley Ho Hung-sun's Sociedade de Jogos de Macau (SJM) to install proprietary semi-automated baccarat gaming systems in all 16 casinos run under the SJM umbrella.
In a revenue-sharing deal similar to the subcontracting agreements SJM has with VIP room operators, LifeTec will receive 31 per cent of the winnings from the baccarat tables it manages.
The new gaming system features a human dealer, but unlike traditional baccarat where players sit 14 to a table, LifeTec's version has 20 singleplayer video terminals with touch-screen betting and a computerised payout program.
The company installed its first 20 terminals inside the Greek Mythology casino, which has a revenue-sharing agreement with A-Max Holdings, and plans double the number to 40 by the end of the month. LifeTec will install another 20 terminals in the Jai Alai casino by early next month and hopes to have 300 terminals across Macau by the end of the year.
'We are offering a service in between the traditional mass-market tables and the VIP rooms,' said company secretary Philip Poon Yick-pang.
'This live baccarat system is a combination of [traditional] baccarat and the slot-machine styles of gaming and we feel the potential is enormous,' Mr Poon said.
LifeTec shares surged 25 per cent to close at 13 cents in trading on
Thursday even though a press release announcing the deal was not
distributed until after the market closed. The firm announced the deal to the stock exchange yesterday morning and after a brief midday rise the counter slid 5.38 per cent to end the week at 12.3 cents.
LifeTec is controlled by chairman and managing director Jay Chun, who holds 14.46 per cent of its shares. Gaming is a new business for the lossmaking firm, which has focused mainly on selling biopharmaceutical products.
Mr Chun was founding chairman of the Chamber of Hong Kong Listed Companies, currently chaired by Mr Ho's son, Lawrence.
Lawrence Ho is the chairman of rival gaming firm Melco International
Development, which operates slot machine gaming parlours in Macau.
Melco's technology-focused subsidiary Elixir Group makes and supplies the video terminals used in LifeTec's baccarat system.
The video terminals cost LifeTec less than $100,000 per unit, according to Mr Chun.
In addition to providing the terminals, the SJM deal also calls for LifeTec to cover the costs of maintenance and technical support, pay rent to the hotel proprietor, and pay the salaries of SJM staff who operate the baccarat tables.
Mr Chun said these expenses would take more than half of his firm's revenue from the gaming operation, but did not provide a more detailed earnings projection.
Reporter Neil Gough