After closing its high-roller operations at the Sands Cotai Central, the StarWorld Casino And Hotel Resort and the Galaxy Macau Casino earlier this month, VIP junket operator Iao Kun Group Holding Company Limited has now released its financial results for the second quarter of the year showing a 51% decrease year-on-year in rolling chip turnover.
The NASDAQ-listed firm still offers VIP services at the City Of Dreams Macau and the Casino Le Royal Arc and revealed that its rolling chip turnover for the three months to the end of June hit $900 million, which is considerably less than the $1.7 billion reported for the second quarter of 2015.
This saw Iao Kun Group Holding Company Limited record a second-quarter net loss of $104.4 million, which represents a rise of some 338% on the $23.8 million it lost for the same period last year, while it is now projecting annual rolling chip turnover of $2.5 billion to $3 billion.
Iao Kun Group Holding Company Limited declared that the loss was mainly due to an incurred “one-time” impairment on intangible assets of $97.3 million as well as lower quarterly rolling chip turnover. This reduction, it explained, was down to 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”.
“As we expect that the VIP market in Macau will continue to be challenging for the foreseeable future, we commenced a strategic review of our operations to reduce expenses and continue to preserve our capital,” read a statement from Lam Man Pou, Chairman for Iao Kun Group Holding Company Limited. “As a result of the review, we recently closed three of our VIP gaming rooms in Macau. While we streamline our operations in Macau, we are looking forward to completing the acquisition of the Jeju Sun Hotel And Casino as well as a non-expiring transferrable gaming license, which will allow us to further diversify our revenue streams while providing a significant opportunity to rapidly grow VIP operations on Jeju Island.”