Imperial Pacific’s planned high roller casino expansion in Saipan has been delayed yet again.
Hong Kong-based Imperial Pacific International Holdings first started planning its mega-casino development on the island of Saipan, which is a US territory, four years ago. It had plans to become a serious rival to Macau, but now appears to be failing in this pursuit.
Imperial Pacific already has a significant presence in Saipan’s gambling sector. However, it has had a turbulent time recently. Its half-year results, published in August, saw a decrease of 51% in revenue during the previous six months. Earnings dropped by more than 90%.
It also has almost $1.4bn worth of uncollected debt from its gamblers. This is significantly greater than the size of uncollected high roller debts seen at the leading Macau casinos. These struggles were compounded when Imperial Pacific had issues paying its staff during August.
Saipan regulators approved four junket operators in September. Now, it can add Imperial to aid it in attracting high rollers to its casinos. Imperial Pacific’s main focus is on Chinese high rollers.
Imperial Pacific was also given an extension of two and a half years to allow it more time to develop the 340-room hotel that will be built alongside its gambling offering. One of the reasons for this delay was a shortage in the supply of workers.
These various setbacks have caused a big stir in the gambling scene. Imperial is experiencing issue after issue, with many wondering if it will ever get its plans up and running.
The casino has been open since 2015 and has been a great boost to the island’s economy. Gigantic betting volumes have been reported, with certain industry analysts finding them hard to believe.
History of high roller casinos
Most people will have some sort of image of a high roller in their head. It may well replicate a scene from a James Bond movie where people are in black tie attire and drinking martinis. You will see these people playing roulette or maybe even blackjack. However, the reality is somewhat different.
The high roller industry is largely concentrated on gaming markets in Asia. One game, in particular, is the main game of choice for high rollers – baccarat.
Blackjack and poker have long been seen in the movies and television as being the sexy option at the casino, giving the impression that these are the most popular games. However, high rollers tend to go for baccarat.
If you are not too well versed in this game, it is straightforward. A player will bet on whether the dealer of the players will tie or get closer to a combination of nine with the dealt cards. The main reason high rollers prefer baccarat is because the house edge is very small.
In Macau, for example, about 90% of all gaming revenues derive from baccarat, with 60% being attributed to high rollers.
VIP players will be offered a reserved table that has its own dealer staff and is located in a private area. This will usually be near the main floor, but often it is in an even more exclusive area.
In Macau, a high roller will buy rolling chips. These are used to track their play and are bought in advance of arriving in Macau. A high roller has to bet at least once with these chips. Winnings will be paid in normal casino chips that can be redeemed for cash.
The majority of high rollers use lines of credit to gamble. Otherwise, they usually use markers instead of cash. In Las Vegas, for example, about 66% of high roller play will be through markers.
Markers are effectively IOUs that are given to high rollers, but there are constant cases of people failing to pay their debts to these casinos. These days, evidence of significant net worth is needed to get markers. It is part of the business when people don’t repay and this is why casinos generally write off about 5% of their debts each year as being uncollectable.
Generally, it is the first market that requires stringent checks, but subsequent markets are very easy to get hold of. All a host needs to do is nod to extend someone’s credit in order to have this high roller keep gambling.
Approximately 40% of all gambling revenues on the Las Vegas strip come from markers. The casinos generally are lenient in the beginning and let many months go by before calling for their debts to be repaid. If they fail to pay, this can result in a civil suit and even prosecution.
Lawsuits can be expensive for the casinos, so they often have to pick and choose on a case by case basis which they should pursue.