Macau casino operator Galaxy Entertainment Group (GEG) says it booted junket investor Iao Kun Group Holdings (IKGH) from its properties, contradicting IKGH’s claim to have voluntarily closed two VIP gaming rooms.
This week, IKGH announced that it had closed VIP rooms at GEG’s Galaxy Macau and StarWorld properties based on its ongoing strategic review of its Macau operations. On Thursday, GEG issued a statement calling bullshit on IKGH’s claims, saying it needed to “put the record straight.”
According to GEG, it was the one who “terminated the promoter agreements with Iao Kun and closed” the two VIP rooms “as a result of Iao Kun’s breach of the agreements made with us.”
GEG offered no specifics on the nature of IKGH’s breach of contract but did say that it intends to “pursue vigorously against Iao Kun … by taking legal action against it and its relevant directors and/or officers.”
Earlier this month, IKGH announced that it was also closing its VIP room at Las Vegas Sands’ Sands Cotai Central. The three closures reduce the company’s Macau presence to just two rooms, one at Melco Crown Entertainment’s City of Dreams and the other at SJM Holdings’ L’Arc Macau.
IKGH’s Macau business has been on a sustained downturn, posting 23 straight months of year-on-year turnover declines. The slump has done a number on IKGH’s share price, to the point that IKGH announced on Thursday that it had received notification from the NASDAQ exchange that it was in breach of its obligation to maintain a minimum bid price of $1.00 per share.
NASDAQ has given IKGH 180 days in which to regain compliance. The matter will be dropped if IKGH manages to push its closing shrare price over $1.00 for ten consecutive days at any point during this 180-day period. IKGH may also be eligible for a further 180-day period in which to rectify its shortcomings provided it undertakes a reverse stock split during this second period.
IKGH announced this week that it would release its Q2 earnings report on Sept. 22. In its Q1 results, IKGH reported a net loss of $3.5m versus a $17.1m profit in Q1 2015.