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)