Macau VIP gambling room investor Iao Kun Group Holding Co Ltd reported unaudited rolling chip turnover of around US$110 million for August, down by 75 percent in year-on-year terms. It was the 23rd consecutive month of year-on-year chip roll declines for the Nasdaq-listed firm.
Iao Kun last posted a year-on-year increase in monthly rolling chip turnover in September 2014, when it reported chip roll volume of US$1.18 billion, up by 5 percent in year-on-year terms.
For the first eight months of 2016, Iao Kun’s rolling chip turnover was US$2.41 billion – an average of US$30 million per month – down 50 percent year-over-year, Iao Kun said in a Tuesday press release.
The firm announced on September 2 it would be undertaking a “comprehensive strategic review” of its VIP gaming room operations in Macau. Such a review was “due to the ongoing challenging VIP gaming environment [in Macau] and to enhance its operating performance,” the firm said in a press release.
As an initial cost-cutting measure, Iao Kun said it had closed its VIP gaming room at Sands Cotai Central – a property operated by Sands China Ltd in Macau’s Cotai district – with effect from August 31.
Following that closure, Iao Kun’s business partners still promote four high-roller facilities in Macau casinos, namely at: StarWorld; Galaxy Macau; City of Dreams Macau; and L’Arc Macau.
Union Gaming Securities Asia Ltd said in a Monday note that Iao Kun’s restructuring confirmed the brokerage’s view regarding “the exodus of Macau’s smaller junkets”. Analyst Grant Govertsen stated that Iao Kun could eventually reduce its presence in the Macau market “to as few as two” VIP rooms, in the face of the negative environment for the high-roller gambling segment.
“We are currently forecasting a market-wide VIP gross gaming revenue (GGR) decline of 13 percent year-on-year in Macau during the third quarter of 2016 (-1 percent sequentially),” Mr Govertsen said.
He added: “In the meantime, and as part of the exodus of VIP GGR from Macau, we expect other regional markets to benefit [including] Cambodia, Laos, Philippines, Saipan, South Korea, Vietnam and Vladivostok.”
Iao Kun announced in late June that it was to acquire the Jeju Sun Hotel and Casino on Jeju Island, South Korea, from Philippines casino operator Bloomberry Resorts Corp. The firm said that the acquisition was the “optimal way” to diversify its business outside of Macau.
Last year, Iao Kun started trial operations in Australia, namely at Crown Perth Casino and Crown Melbourne Casino, two properties operated by Crown Resorts Ltd.
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”We do not believe that reopening the advance notice nomination deadline [for board directors] is appropriate or justified”
Daniel Boone Wayson
Chairman of the Wynn Resorts board of directors