Iao Kun closes one more VIP room, only one left in Macau
Macau VIP gambling room investor Iao Kun Group Holdings Ltd announced on Friday that it had closed its VIP gaming room at the casino hotel Le Royal Arc, on the Macau peninsula.
The closure was effective from September 29. Le Royal Arc – which goes by the name “L’Arc Macau” on its official website – is a third-party managed casino hotel operating under the gaming licence of casino operator SJM Holdings Ltd.
Iao Kun has shut down four of its promoted Macau VIP rooms since late August. The latest announcement means it now only promotes a single VIP room in Macau, located at City of Dreams Macau, a property run by casino operator Melco Crown Entertainment Ltd.
Iao Kun additionally stated in its Friday press release that it had been focusing efforts over the past month “on the collection of its outstanding markers receivable and expects to continue those efforts in the near term to pay down its line of credit owed to the licence operators.”
It added: “Consequently, and because of the lengthening and difficulty of collecting markers receivable, the company will not be actively extending credit to its clients during this period and therefore it expects business volume to be minimal.”
Iao Kun-related junket operations had previously been halted at three Macau VIP rooms: one at Sands Cotai Central, a property of Sands China Ltd; and one each at respectively, Galaxy Macau and StarWorld Hotel, properties of Galaxy Entertainment Group Ltd.
The moves coincided with what Lam Man Pou, chairman of Iao Kun, described as “a strategic review of our operations to reduce expenses and continue to preserve our capital”.
Iao Kun reported a net loss of US$104.4 million year-on-year in the second quarter, a widening of the loss recorded in the prior-year quarter.
The Nasdaq-listed company said in the Friday release that the closure of the VIP room at Le Royal Arc could generate annual overall cost savings of approximately US$750,000.
Iao Kun confirmed in the same release the lapse of a purchase agreement for Jeju Sun Hotel and Casino on Jeju Island in South Korea. The announcement came after Philippines-based casino investor Bloomberry Resorts Corp – the owner of the property – refuted a claim by Iao Kun’s management that Bloomberry had agreed to extend the closing date for the deal regarding the property.
Bloomberry had announced in June that Iao Kun planned to acquire the venue for a total consideration of KRW117.5 billion (US$106.3 million). It added there was an expectation the deal would be closed within 45 days of the June 23 announcement.
Casino operator Galaxy Entertainment stated last month it was the one to terminate agreements with Iao Kun for the VIP rooms at Galaxy Macau and StarWorld Hotel after what the casino group alleged was a breach of contract by the VIP promoter.
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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