IKGH reports widened loss in 16Q2

VIP gaming promoter and casino operator Iao Kun Group Holding Company Ltd has reported a 51 percent decrease in rolling chip turnover for the second quarter of 2016.

According to a press release from the company on Thursday, the operator said rolling chip was $0.9 billion for the second quarter ended June 30, 2016, down from $1.7 billion in 15Q2.

Net loss for the second quarter was $104.4 million, widened from a loss of $23.8 million in 15Q2.

IKGH said the loss was mainly due to an incurred ‘one-time’ impairment of intangible assets of $97.3 million, as well as lower rolling chip turnover during the quarter, caused by “(i) a reduction of players for VIP baccarat, consistent with the overall decline of VIP baccarat gaming revenue in Macau; (ii) the economic downturn and ongoing anti-corruption campaign in mainland China, where the majority of IKGH’s VIP gaming patrons reside; and (iii) the continued tightening of government policies in mainland China, including restrictions on credit card usage.”

“As we expect that the VIP market in Macau will continue to be challenging for the foreseeable future, we commenced a strategic review of our operations to reduce expenses and continue to preserve our capital. As a result of the review, we recently closed three of our VIP gaming rooms in Macau,” said Mr. Lam Man Pou, chairman of IKGH. “While we streamline our operations in Macau, we are looking forward to completing the acquisition of the Jeju Sun Hotel & Casino as well as a non-expiring transferrable gaming license, which will allow us to further diversify our revenue streams while providing a significant opportunity to rapidly grow VIP operations on Jeju Island.”

Given the recent closure of three of its VIP rooms, the company is now projecting 2016 rolling chip turnover guidance in Macau of between $2.5 billion and $3 billion.