CASINO

Iao Kun’s Macau Rolling Chip Turnover Improves in July

TAGs: iao kun group holding company ltd., junket operators, Leonard Postrado, Macau

Macau casino junket operator Iao Kun Group Holdings Ltd.’s rolling chip turnover in Macau has improved despite posting a 44 percent, year-on-year fall in July.

Iao Kun’s rolling chip turnover rose to US$250 million in July from US$230 million in June, which indicates that the Macau VIP gambling room investor is slowly recuperating back to profitability.

Iao Kun’s Macau Rolling Chip Turnover Improves in JulyBut in terms of year-on-year comparison, Iao Kun’s data for July 2016 is lower than the US$440 million it posted in the same period of 2016. Its win rate for the month of July was 3.20 percent, Iao Kun said in a statement.

The Nasdaq-listed firm’s rolling chip turnover for the first seven months of 2016 was down 47 percent year-on-year US$2.30 billion or an average of US$330 million per month. During the same period in 2015, the firm recorded aggregate roll of US$4.36 billion, an average of US$620 million per month.

Iao Kun’s Macau rolling chip turnover data in July reflects the present state of the Macau casino industry as a result of Beijing’s relentless crackdown on corruption of wealthy government officials and the slowing economy of the world’s second largest economy.

On Monday, Macau’s Gaming Inspection and Coordination Bureau announced that the gambling revenue in the former Portuguese enclave dropped 4.5 percent to 17.8 billion patacas ($2.2 billion) last month as wealthy rollers from mainland China continue to avoid the world’s biggest casino hub amid a protracted anti-corruption campaign by Beijing.

The company’s VIP rooms are primarily focused on high stakes baccarat. Baccarat accounts for approximately 88% of total Macau casino winnings according to the Macau Gaming Inspection and Coordination Bureau (DICJ).

Like many struggling junkets, IKGH is trying to diversify its geographical profile. Last year, Iao Kun forged an agreement with Australian casino operator Crown Resorts to steer VIP gamblers to Crown’s casinos in Melbourne and Perth.

Iao Kun also bought Jeju Sun Hotel and Casino on South Korea’s Jeju Island from Philippine casino operator Bloomberry Resorts Corporation for KRW 117.5 billion (US$102.6 million) as an “optimal way to diversify outside of Macau.”

“After a comprehensive review of opportunities, the company focused its efforts on the rapidly expanding market of Jeju, Korea,” the Nasdaq-listed gambling firm said in a statement. “Jeju provides excellent accessibility from the Chinese Mainland, with many daily flights from the major Chinese cities.”

Comments

views and opinions expressed are those of the author and do not necessarily reflect those of CalvinAyre.com