Junket Operator Abandons Sands Cotai Central
Earlier, VIP junket operator Iao Kun Group Holding Company Limited shut down Sands Cotai Central's go-roll operations after it reported a 47% year-over-year decline in company-wide rolling chip volume to $2.3 billion in the first seven months of 2016.
The Nasdaq-listed company, operated by Sands China Limited, a subsidiary of Sands Corporation in Las Vegas, from Kotai Streep Realty, which is owned in partnership with King's Gaming Promotion Limited, said it made the decision "because the current rolling chip turnover doesn't guarantee five VIP game room operations in Macau" and now expects to cut costs by about $750,000 a year.
After completing a "strategic review" of the business, Iao Kun Group Holding Company Limited said it would continue to operate high-roller VIP rooms at Starworld Casino and Hotel Resort, Galaxy Macao Casino, City of Dreams Macao and Casino Le Royal Arc, although "one or two additional VIP game rooms may be closed to further optimize operating revenue."
Lam Man Pou, Chairman of Iao Kun Group Holding Company Limited, said, "Given that the Macau VIP market is not recovering and our expectation that this will continue in the near future, we are currently reviewing our overall operations in Macau to ensure their sustainability." "We believe it will increase in our earnings per share as we continue to seek long-term value creation for our shareholders and expect to take more cautious steps to ensure the preservation of our capital."
As part of its efforts to diversify its business outside of Macau, Iao Kun Group Holding Company Limited has launched a pair of Australian casinos run by Crown Resorts Limited, namely Crown Melbourne Entertainment Complex and Crown Perth, and announced in late June that it has reached a deal to acquire South Korea's Jeju Sun Hotel & Casino from Philippine operator Bloomberry Resort Corporation for $101 million in cash.
"Iao Kun [Group Holding Company Limited] will provide details regarding additional cost savings in due course," said Iao Kun Group Holding Company Limited.
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