After earlier reporting a 47% drop year-on-year in company-wide rolling chip volumes for the first seven months of 2016 to $2.3 billion, VIP junket operator Iao Kun Group Holding Company Limited has closed its high-roller operations at Sands Cotai Central.
The NASDAQ-listed firm, which operated at the Cotai Strip property owned by Las Vegas Sands Corporation subsidiary Sands China Limited in partnership with King’s Gaming Promotion Limited, stated that it took the decision “as the current rolling chip turnover volume does not warrant the operation of five VIP gaming rooms” in Macau and that it now expected to generate savings of around $750,000 a year.
Iao Kun Group Holding Company Limited revealed that it will continue to operate high-roller VIP rooms at the StarWorld Casino And Hotel Resort, the Galaxy Macau Casino, the City Of Dreams Macau and the Casino Le Royal Arc although it may close “an additional one or two VIP gaming rooms in order to further optimize operating earnings” following the completion of a “strategic review” of its business.
“Given the lack of recovery in the VIP market in Macau and our expectations that this will continue for the foreseeable future, we are currently reviewing our overall operations in Macau in order to ensure their sustainability,” read a statement from Lam Man Pou, Chairman for Iao Kun Group Holding Company Limited. “We expect to take further prudent actions that we believe will be accretive to our earnings per share and to ensure the preservation of our capital as we continue to seek to generate long-term value for our shareholders.”
In an effort to diversify its business away from Macau, Iao Kun Group Holding Company Limited last year began trial operations at a pair of Australian casinos operated by Crown Resorts Limited, namely the Crown Melbourne Entertainment Complex and Crown Perth. In addition, late-June saw it declare that it had reached a deal to acquire the Jeju Sun Hotel And Casino in South Korea from Philippine operator Bloomberry Resorts Corporation for an all-cash consideration of $101 million.
“Iao Kun [Group Holding Company Limited] will provide details with respect to any additional expense reductions in due course,” read a statement from Iao Kun Group Holding Company Limited.