After announcing last month that it had closed its high-roller operations at the Sands Cotai Central, the StarWorld Casino And Hotel Resort and the Galaxy Macau Casino, VIP junket operator Iao Kun Group Holding Company Limited has now shuttered its service for the Casino Le Royal Arc in a move that it hopes could save it up to $750,000 a year.
According to a report from the Macau Business Daily newspaper, the most recent closure has also seen the NASDAQ-listed firm, which now only offers VIP services at the City Of Dreams Macau, terminate a related promotional collaboration agreement with an individual known as Lee Wai Man.
Iao Kun Group Holding Company Limited recently revealed that its second-quarter rolling chip turnover had fallen by 51% year-on-year to $900 million, which was considerably less than the $1.7 billion it reported for the same three-month period in 2015, while the period saw it record a net loss of some $104.4 million. It declared that this shortfall was mainly due to an incurred “one-time” impairment on intangible assets of $97.3 million as well as a decline in the demand for VIP baccarat along with the “economic downturn and ongoing anti-corruption campaign in mainland China where the majority of [our] VIP gaming patrons reside” and the “continued tightening of government policies in mainland China including restrictions on credit card usage”.
In addition to the closure, Iao Kun Group Holding Company Limited has also reportedly pulled out of its planned purchase of the Jeju Sun Hotel And Casino in South Korea. The deal announced in June was to see the Macau-based promoter pay around $101 million to Bloomberry Resorts Corporation for the Jeju Island facility, which features a 12,800 sq ft casino offering 45 slots and 20 gaming tables, in hopes of diversifying its business.
Iao Kun Group Holding Company Limited further explained that it now intends to focus on collecting outstanding debt as it seeks to pay down its lines of credit with licensed operators. It stated that this strategy will see it maintain minimal business volumes by not actively extending credit to clients due to the “lengthening and difficulty of collecting markers receivable”.