HONG KONG, Feb 12 (Reuters) - U.S.-listed Macau junket operator Iao Kun Group Holding Co Ltd on Thursday said its application for a Hong Kong dual listing had been rejected due to its declining performance and uncertain outlook.
Mid-sized Iao Kun, which runs VIP baccarat tables in the world’s gaming capital, said the Hong Kong stock exchange blocked the plan citing “overall market conditions and the near-term industrial outlook in Macau”, among other factors.
The setback for Iao Kun comes as Beijing’s crackdown on corruption continues to play havoc with gaming revenues in the southern territory, the only place in China where casinos operate legally.
Many major junket operators, which extend credit to wealthy punters and facilitate their transport and accommodation, have been forced to close rooms due to lacklustre demand and escalating bad debts, according to junket company records.
Gambling revenue in Macau has slumped for 8 months in a row and February revenues are expected to plunge 40 percent year on year, as the crackdown keeps wealthy gamblers away and curbs lavish spending.
Analysts are mostly negative on the short-term outlook for Macau, with revenue growth from high-rollers expected to deteriorate further, putting more pressure for companies to squeeze profit from the mass market of lower-spending players.
“With the larger junkets now facing increasing sector pressures, we believe it is increasingly likely that ancillary non-gaming services will be scaled back or terminated,” Daiwa Securities analyst Jamie Soo said in Hong Kong.
That could hurt events like film festivals, concerts and sports tournaments, which junkets have previously sponsored as a way of attracting a broader spectrum of visitors besides VIP gamblers.
Iao Kun, which operates VIP rooms through its subsidiaries, said the company was committed to exploring further opportunities including strategic investments and finding VIP rooms in new locations. (Reporting by Farah Master; Editing by Stephen Coates)