GGRAsia – Junket firm Iao Kun seals deal to enter Australia market

Junket firm Iao Kun seals deal to enter Australia market

May 18, 2015 Newsdesk Latest News, Macau, Rest of Asia, Top of the deck

Nasdaq-listed Macau VIP gaming room investor Iao Kun Group Holding Co Ltd says it has completed a deal allowing the firm to expand its casino junket operations to Crown Perth Casino and to Crown Melbourne Casino, in Australia.

Iao Kun on Friday announced in a press release that it had “completed the acquisition of all the profit interests” of a person called Lou Kan Kuong from his junket operations at Crown Perth in Perth, Western Australia and for the Crown Melbourne in Melbourne, Victoria. The two casino properties are run by Australia’s Crown Resorts Ltd, controlled by James Packer.

Iao Kun added it expected to begin generating revenues under these agreements beginning on May 16.

The press release identified Mr Lou as an officer of Iao Kun who recently entered into agreements to act as a junket operator at the casinos on behalf of Iao Kun. The firm had first announced the deal on April 20.

“Today marks an important step in beginning to diversify our sources of revenue and expanding our presence internationally,” said Iao Kun’s chairman Lam Man Pou in a statement.

He added: “We’re excited to begin bringing our VIP clients to Australia and remain committed to finding additional opportunities to further expand our presence overseas.”

Iao Kun is a mid-sized investor in Macau’s government-licensed VIP gaming promoters, also commonly known as ‘junket operators’. It benefits from the economic activity of five VIP rooms in several Macau casino resorts, including City of Dreams Macau. The latter property is owned and managed by casino operator Melco Crown Entertainment Ltd. Crown Resorts is one of two controlling shareholders in Melco Crown, with a stake of 33.8 percent as of October last year.

For the first four months of 2015, Iao Kun’s rolling chip turnover was US$2.70 billion, an average of US$0.68 billion per month, down 58 percent year-over-year. Market wide in Macau, accumulated gross gaming revenue – a different measure of the industry’s performance – for the first four months of 2015 stood 37.1 percent lower than in the same period in 2014, according to official data.

The company on May 1 announced an executive reshuffle, including the appointment of a new chief executive, chief operating officer and chief financial officer.

Several recent announcements and news reports hint at a growing interest by Macau junket operators to expand their operations beyond the city, as the market environment there becomes tougher. Several investment analysts covering the gaming sector say VIP gamblers are staying away from Macau because they want to keep a low profile during the current corruption crackdown in mainland China. Some junket operators have already reduced their operations in Macau.