Imperial Pacific International Holdings or IPI has not gained profits in the last part of 2017. In fact, their profits fell by a third, even though the income for the total year was double that of 2016. Thursday, March 29, 2018, Imperial Pacific International filed with the Hong Kong Stock Exchange their net revenue. The number was $1.04 billion, which is about twice what they reported in 2016. The gross profit was double, but overall profit fell 32 percent according to their document submission.
In February 2018, IPI was very upset with at least one news-reporting agency about their financial numbers. Imperial Pacific in the news again after February announcement regarding financial data, but this time it seems there is nothing news agencies can find wrong with regards to their financial data.
IPI is having an issue, but they protest it is not hiding numbers or miss-filing those numbers, as allegations said a month ago. Instead, Imperial Pacific International Holdings announced their profits were lower than expected due to bad debt issues with VIP clients. They have a strategy that avoids junket operators, which means they directly provide their VIP gamblers with the credit to bet.
What happens—these gamblers may lose, which leaves the casino holding gambling debts. At the end of 2018, the debt from VIPs was $8.5 billion, which was higher than 2016. In 2016, the number was $5.3 billion. A shocking piece of information shows that one person owes eight percent of the overall VIP debt.
When looking at IPI, which operates Saipan’s only land-based casino, it is clear the Imperial Pacific Resort is relying heavily on whales to bring in revenue, but instead they are bringing higher debt. The casino resort is also unfinished.
Part of the February issue is IPI did not report VIP turnover numbers throughout 2017, perhaps because they wanted to get more investors.
Macau and Other Asian Data
Saipan’s IPI casino is not the only one to show trouble. Casinos have seen an increase in VIP debt since 2016. Macau is just one other location that has announced a high amount of debt relating to VIPs. The trend may have started when junket operators were being pushed into a corner, with the crackdown from China. However, it has left the casinos more vulnerable, such as the issue with Imperial Pacific Resort. To cater to the people that have money, it seems debt is a must.