Inside Asian Gaming

AUGUST 2018 INSIDE ASIAN GAMING 29 IN FOCUS nephew and majority owner Cui Li Jie’s son. Cui holds shares and options equivalent to 65% of IPI’s outstanding shares. Ji has been called the “mastermind” of the Saipan project, is paid an annual salary of US$1 million with a bonus of up to US$2 million and has lent IPI HK$400 million through a convertible bond arrangement that entitles him to a 90% share of the company if exercised. “Imperial Pacific Saipan might have more equity in it than any other Asian casino complex,” Steelman notes. “The owner has a lot to lose.” The flip side of those otherworldly VIP numbers remains unpaid player debt. IPI’s reports show outstanding receivables totaling HK$13.3 billion at the end of 2017, up from HK$5.9 billion a year earlier. IPI’s HK$7.4 billion receivables increase represents 58% of 2017 VIP revenue and nearly 12 times IPI’s reported operating profit of HK$637 million. For comparison, corporate Wynn Macau reported HK$575 million in receivables on VIP revenue of HK$26.5 billion, 2% of VIP revenue and 11% of its operating profit. IPI characterizes HK$4.7 billion of its debt as impaired, 35% of the total. For 2016, IPI wrote off HK$300 million, so its total unpaid lending to players since it began VIP operations in November 2015 is HK$13.6 billion. That’s 64% of IPI’s combined GGR of HK$21.3 billion for those three years and more than eight times its combined operating profit of HK$1.6 billion. Marianas Variety newspaper reported in June that IPI filed a lawsuit against a Chinese VIP for an unpaid debt of US$5 million, 0.3% of IPI’s outstanding total. That seems like trying to empty a swimming pool with a teaspoon. What seemingly remains easy are huge VIP rolls, juiced by the move to the larger casino. Overall gross gaming revenue grew 75% last year to HK$13.1 billion (US$1.7 billion). Note: Sands China and Galaxy Entertainment data not available VIP AVERAGE DAILY ROLL AND WIN PER TABLE 2017 (HK$) PROPERTY VIP ROLL VIP WIN IMPERIAL PACIFIC SAIPAN $45,962,573 $1,516,244 WYNN MACAU $12,964,307 $426,380 WYNN PALACE $10,794,566 $306,521 GRAND LISBOA $7,865,018 $225,110 CASINO LISBOA, OCEANUS, TAIPA $6,124,168 $206,501 SJM SATELLITE CASINO $4,205,708 $145,741 CITY OF DREAMS MACAU $6,960,466 $201,726 ALTIRA MACAU $5,428,602 $166,115 STUDIO CITY $9,889,171 $293,708 MGM MACAU $5,084,610 $162,100