VIP junket operator Iao Kun Group leaving two more Macau casinos

The NASDAQ-listed firm, which still offers VIP services at the City Of Dreams Macau and the Casino Le Royal Arc, revealed that the terminations for the properties operated by Galaxy Entertainment Group Limited went into effect from Saturday and also involved ending agreements with partners Sang Heng Gaming Promotion Limited and Sang Lung Gaming Promotion Limited.

Iao Kun Group Holding Company Limited declared that the moves were part of a “comprehensive strategic review” of its operations in Macau and could lead to annual overall cost savings of approximately $4 million. The firm explained that the examination of its business “remains ongoing” and that it expects to take “additional action to reduce its operating expenses and preserve its capital position in due course”.

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Iao Kun Group Holding Company Limited recently reported a 75% drop year-on-year in unaudited August rolling chip turnover to approximately $110 million, which represented its 23rd consecutive month of such declines

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At the same time, it additionally detailed a 50% decrease in rolling chip turnover for the first eight months of 2016 when compared with the same period last year to $2.41 billion.

American financial services firm Morgan Stanley disclosed on Monday that a recovery for the Macau VIP gambling market was “not in sight” as overall second-quarter revenues from the vertical dwindled by 21% year-on-year as “no new VIP tables have been allocated [by the Macau government] to newer casinos since 2015”.

“Casinos do not grant incremental credit to the junkets and junkets are mainly relocating resources between casinos,” read the disclosure from Morgan Stanley.

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.