Every other day there is a something or the other good and no to so good happening in the casino industry in Macau. At one side there are new casino being opened and are getting a license to add more tables to serve and attract new customers and at the same time, there are others who are in the process of restructuring. The casino industry is going through an unpredictable stage where they have to handle their operations in a smart manner not only for booking profits but also for survival in these difficult times. In a recent move, Iao Kun Group Holding Company announced that it has closed down its VIP gaming room at the Sands Cotai Central Casino in Macau, effective August 21. With this closure, it has also terminated its agreement with King’s Gaming Promotion Ltd. which is related to this facility as the current Rolling Chip Turnover volume does not allow them to run the operation of the VIP gaming rooms.
With this closure of the VIP rooms, IKGH believes that it will generate an overall savings of approximately US$750,000 and look into this structure they may further close an additional 1-2 VIP gaming rooms to optimise its earning. Iao Kun Group Holding Company is a holding firm that operates through its subsidiaries and related promotion entities that act as a VIP room gaming promoters. The company has a market cap of $31.19 million. IKGH conducts VIP gaming promotion business at approximately five VIP gaming rooms located in over five casinos in Macau and approx two casinos in Australia through the promotion entities which include Promoter companies, the collaborator in Macau and Junket operator in Australia. This decision to close VIP gaming rooms came as currently, they have negative earnings. The company has its VIP rooms located in Star World Hotel & Casino in downtown Macau; Galaxy Macau Resort, Sands Cotai Central and City of Dreams Macau in Cotai; Le Royal Arc Casino, located in NAPE, Downtown Macau; Crown Perth Casino in Perth, Australia, and Crown Melbourne Casino in Melbourne, Australia.
The company has recently struck Junket deals with Australian casino operator Crown Resorts and has decided to take a more direct role in casino business via its acquisition of South Korea’s Jeju Sun Hotel & Casino.
IKGH chairman Lam Man Pou said;
“The review was necessary “given the lack of recovery” in Macau’s VIP market and “expectations that this will continue for the foreseeable future.”
