In September, beleaguered Macau junket investor Iao Kun closed three VIP rooms in the special administrative region. Two of the rooms were located on Galaxy Entertainment Group (GEG) properties; one at StarWorld and the other at Galaxy Macau. The same month GEG issued letters to Iao Kun linked promoters Sang Lung Gaming Promotion Company Limited and Sang Heng Gaming Promotion Company Limited asking the two companies to repay lines of credit amounting to HK$312 million (US$38.8 million).
According to a December filing to the Nasdaq Stock Market, at least one of the companies had been summoned before Macau’s Court of First Instance to answer a plea by Galaxy to declare the company bankrupt.
At that time, Iao Kun wrote in their stock filing that, “The lines of credit for Sang Heng and Sang Lung are guaranteed by Mr. Lam or Mr. Vong and are secured by their personal checks and a deposit paid by Mr. Lam,” referring to the company’s chairman and chief executive officer. “The Company has engaged counsel in Macau to handle the matter and to defend the claim against Sang Heng and Sang Lung,” the filing added.
This week the Court declared Sang Lung Gaming Promotion Co Ltd bankrupt and on March 22, told creditors to make their claims within 45 days. No decision has yet been published about Sang Heng Gaming.
In early March of this year Iao Kun announced that although they would remain with the firm, Mr. Lam and Mr. Vong had resigned from their executive positions with Lam taking on the duties of chief marketing officer and Vong moving to the position of chief operating officer.
The company had been hit hard by Beijing’s crackdown on junket operators and the firm began a process of diversification. After securing junket operations in Australia in May of 2015, this past June the firm announced it would take a 96.23% stake in Bloomberry/Solaire’s Golden Luxury to acquire the Jeju Sun Hotel & Casino in Jeju, Korea. In October the company announced it was restructuring operations as well as closing a fourth room at L’Arc Macau. The Jeju deal was cancelled while Iao Kun remarshalled its forces and the company furthered diversification by acquiring a software development company.
Once one of the most important junket promoters in Macau with five rooms in operation including one at Sands Cotai and a smaller room at Le Royal Arc, Beijing’s iron fist has squeezed a measurable part of life out of the company, founded on the rising tide of Macau VIP gaming in 2007, as president Xi Jinping attempts to root out all real and perceived gaming improprieties and irregularities. Iao Kun’s last bastion in the city is a VIP gaming room at City of Dreams Macau.