Liquidators Grant Thornton have taken control of one of London's most famous casinos after the COVID-19 pandemic and a tourist drought left the Palacegate struggling to pay its staff.
London’s Palacegate Casino — one of the city’s select group of VIP-focused properties and better known by its previous name Maxims — last week failed in its bid to complete a financial restructuring, with administrators taking control of the storied business on Wednesday.
In a letter to staff, seen by VIXIO GamblingCompliance, Grant Thornton said: "You may be aware that the directors have been working to attempt to rescue the companies through a solvent sale of the business. Unfortunately, they have been unable to complete a deal and subsequently the companies have been placed into administration.
"The initial strategy of the administrators will be to stabilise the companies and seek to secure a sale of the business and assets as a going concern which will allow the casino to continue to trade under new ownership."
The Palacegate casino was purchased by the Canadian casino management and development group Sonco from Malaysian-owned Genting UK in March 2019 for £35m.
Sonco Gaming Inc has developed and managed casinos across Canada, including Calgary's Grey Eagle Resort and Casino, since 1995.
CEO Mark Ross had previously written to staff back in July warning them that their salaries would not be paid until a restructuring had been achieved, but the casino has remained closed.
Grant Thornton on Wednesday sought to reassure employees that they would be paid as normal during the administration process: "We confirm that no redundancies are currently planned. You will be paid from the date of the administrator's appointment in the usual way for as long as you remain employed."
London's circle of high-end casinos has lagged the rest of the UK in terms of recovery largely because of their heavy reliance on wealthy international visitors, many of them from Asia and the Middle East, who have been hesitant to return to London.
In an emailed response to questions from VIXIO GamblingCompliance in July, Ross conceded, "the Palacegate Casino has a significant international customer base. Ongoing international travel restrictions therefore make the business unviable at the moment.”
Mid-tier casinos have also been hit across the capital. Grosvenor Casinos last week said it had suffered a 20 percent fall in net gaming revenues in the third quarter, compared with the same period in 2019.
Of Grosvenor's 52 UK sites, its nine London venues usually account for around 42 percent of the brand's revenues.
Still, Rank Group, its owner, said revenues outside the capital were now close to pre-COVID levels.
Among the highest tier of London casinos, Les Ambassadeurs re-opened for business at the beginning of October, joining Aspinalls and the Park Lane Casino, which had been the only high-roller specialist properties to brave the summer months.
The Park Lane casino had its licence revoked last year, but is currently operating pending an appeal expected to be heard in the coming weeks.
Crockfords and the Clermont Club are both shuttered and awaiting reopening dates.
Crockfords owners Genting is understood to be preparing for a reopening early in 2022, but have redeployed their croupiers and staff to serve elusive VIPs at London’s Palm Beach casino and the Colony Club in the meantime.
West End icon The Ritz Casino closed its doors permanently last year, blaming the disruption in business from the pandemic and punishingly high UK gaming duty, but its premises licence was snapped up at the start of the year by US casino group Hard Rock, which also acquired its client marketing list.
In July, US gaming giant Caesars sold its UK casino operations, including the VIP-focused Playboy Club, to Metropolitan Gaming Limited, an entity formed by the combination of the Silver Point Capital US-based private equity firm and Lancer Capital Management owned by Avram Glazer, the owner of football club Manchester United FC and US NFL franchise the Tampa Bay Buccaneers.