Outsourced management service provider, Success Dragon International Holdings Ltd (HKG:1182), said in a recent filing (pdf) that after experiencing ‘unexpected difficulties in obtaining the requisite business certificates for operation of electronic gaming machine business,’ its agreement with One Opera Hotel has been terminated and it will continue negotiating a new approach for the cooperation with Le Méridien Saigon.
In December 2015, the company, with headquarters in Hong Kong and offices in Macau and Ho Chi Minh City, Vietnam, entered into an agreement with Le Méridien in Ho Chi Minh City and One Opera Đà Nẵng Hotel for the provision of outsourced electronic gaming machine management services for both of the five-star hotels.
According to the filing, obtaining the requisite business certificates is “one of the conditions precedent to the effectiveness and continuation of the Le Méridien Business Cooperation Contract and Opera Management Agreement.” and both establishments in Vietnam encountered unexpected difficulties in obtaining the “Business Certificates.”
Success Dragon said, “Certain attempts have been made by the company for obtaining the Business Certificates, however, it is expected that the Business Certificates are unlikely to be obtained in the foreseeable future.” And, “there is a core change of Vietnamese laws in respect to electronic gaming machine introduced by end of 2016 which may affect the enforcement of the Agreements.” The latter is in reference to Decree 175/2016/ND-CP, which was issued on December 30, 2016. The amended Decree requires that gaming machines in foreigner-only casinos in Vietnam must now offer a payout rate of no less than 90 percent and that the new payout rate must be added to software within the slot machine while still in the factory.
Success Dragon has decided to end completely its agreement with One Opera and issued a notice of termination to Opera on January 11, 2017, to be effective immediately. In reference to Le Méridien, however, the firm has decided that it will continue to work on a new approach.