Iao Kun Group Holding Company Limited Announces Rolling Chip Turnover of US$1.50 Billion for November 2013
Iao Kun Group Holding Co. Ltd. (NASDAQ:IKGH)
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Today : Tuesday 3 December 2013
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Iao Kun Group Holding Company Limited (“IKGH”) (NASDAQ:IKGH), which operates through its subsidiaries and related promoter companies that act as VIP room gaming promoters, today announced unaudited Rolling Chip Turnover (as defined below) for the month of November 2013 at the company’s VIP rooms in Macau was US$1.50 billion, up 19% year-over-year, compared to US$1.26 billion for the month of November 2012. Win rate for the month of November 2013 was 1.64%.
For the first 11 months of 2013, IKGH’s Rolling Chip Turnover was US$15.69 billion (an average of $1.43 billion per month), down 7% year-over-year, compared to US$16.83 billion (an average of $1.53 billion per month) for the first 11 months of 2012.
Due to the low win rate in both October and November, the company experienced an operating loss for these two months. As a result, it is unlikely that the company will achieve its previously announced non-GAAP income guidance for the full year 2013.
The Company’s VIP rooms are primarily focused on high stakes baccarat. Baccarat accounts for approximately 88% of total Macau casino winnings according to the Macau Gaming Inspection and Coordination Bureau (DICJ). In Macau, two remuneration methods are used to compensate VIP room gaming promoters. On a fixed commission basis, VIP room gaming promoter revenues are based on an agreed percentage of Rolling Chip Turnover. On a win/loss split basis, the VIP room gaming promoter receives an agreed percentage of the “win” in the VIP gaming room (plus certain incentive allowances), and is required to also bear the same percentage of losses that might be incurred. Compared to the fixed commission basis, the win/loss split basis subjects the VIP room gaming promoter to the risk of losses from the gaming patron’s activity and greater volatility.
As of September 1, 2012, all IKGH VIP rooms are on a revenue sharing remuneration model.
