Suncity Group to open new junket service at NagaWorld
In Cambodia, prominent junket operator Suncity Group has reportedly announced that it intends to begin running a new VIP service for high-value clients inside the NagaWorld casino and entertainments complex from next month.
According to a report from GGRAsia, Macau-based Suncity Group is to inaugurate the new high-roller offering inside the Naga 2 portion of the Phnom Penh venue on March 1, less than four months after the 900-room extension opened featuring a casino with a sportsbook alongside a range of gaming tables.
The Naga 2 section of NagaWorld is reportedly connected to its older Naga 1 counterpart via an underground shopping mall complex known as NagaCity Walk and also offers meeting and conference spaces with theater seating for up to 2,200 people.
NagaWorld is the only integrated casino resort in Cambodia and its owner, Hong Kong-listed NagaCorp Limited, reportedly used a Wednesday press conference to reveal that it had already given a second unnamed Macau-headquartered junket operator permission to run similar services inside the Phnom Penh facility.
GGRAsia additionally reported that Suncity Group’s revelation came only a day after NagaCorp Limited explained that the net annual profit for NagaWorld had risen by 38.6% year-on-year to stand at $255.2 million thanks to a 78.8% increase in overall revenues to $956.3 million. The casino firm moreover purportedly detailed that the Cambodian facility’s gross gaming revenues for 2017 had swelled by 84.9% to hit $926 million and account for some 96.8% of all takings while its VIP rolling chip turnover surged approximately 142% to around $21.1 billion.
Grant Govertsen from research and investments firm Union Gaming Securities Asia Limited reportedly told GGRAsia that its ‘makes sense’ for Suncity Group to be opening an operation for Naga 2 as he has ‘consistently heard’ that the venue is well exceeding expectations while Macau-based junket operators now ‘have no issues in bringing more of their players’.
“This gives us confidence in our forward estimates for NagaWorld’s VIP program to generate Macau flagship-like VIP volumes on a go-forward basis,” Govertsen reportedly told GGRAsia.
NagaCorp Limited records improved half-year results
Asian casino operator NagaCorp Limited has released its unaudited financial results for the first six months of 2017 reportedly showing that it experienced a 40% increase year-on-year in gross gaming revenues to $386.8 million.
According to a report from G3 Newswire, the Hong Kong-listed firm cited the “stable growth” of the Cambodian economy as the main factor behind its recent success as its half-year earnings before interest, tax, depreciation and amortization rose by 19% year-on-year to hit $181 million while its net profit of $150.6 million represented a swell of some 20%.
NagaCorp Limited is responsible for the NagaWorld casino and entertainments complex in Cambodia and explained that its overall revenues for the six-month period to the end of June enlarged by over 39% year-on-year to $401.6 million while its gross profit improved by 16% to $239.9 million.
“Our positive results were attributed to a combination of solid business strategy and acumen, operational and execution efficiency and an increasingly vibrant tourism market in a politically stable country, [which led] to an increase in business volumes across all segments of the gaming business,” read a statement from Timothy McNally, Chairman for NagaCorp Limited. “Today we operate the largest integrated leisure and gaming entertainment destination in the Mekong region.”
NagaCorp Limited explained that its overall half-year revenues from non-gaming activities of $14.8 million had represented a 4% boost year-on-year while its VIP takings advanced by 52% to $210.5 million. NagaWorld offers some 239 gaming tables and these saw their six-month revenues rise by 19% to $74.5 million while the property’s 1,660 slots experienced a 25% boost in takings to $101.8 million.
“The Cambodian economy has continued to register stable growth,” read the statement from McNally. “The International Monetary Fund is projecting real gross domestic product growth of 6.9% in 2017 and 6.8% in 2018 with an inflation rate of 3.2% and 3.1% respectively. In the first five months of 2017, visitation to Cambodia continued to grow with international arrivals increasing by 13% to 2.3 million visitors and arrivals at Phnom Penh International Airport growing by 19% over the same period. Visitation from China grew by 36% to 441,070 visitors, surpassing Vietnam to become the leading source of visitation to Cambodia.”
Cambodia Looks to Foreign Investors to Boost Casino Gaming Industry
BANGKOK — Cambodia is pushing ahead with new legislation in a bid to lure foreign investors to its vibrant casino and gaming industry, promoting the Kingdom as a key gaming center in South East Asia.
The proposed legislation, expected to be passed after general elections this year, has been three years in the making and will oversee an industry currently netting the government almost $50 million in tax revenues.
Cambodian officials said the government was looking to set a tax rate for casino games at between 4 and 5 percent to match regional casinos such as Singapore. Cambodia's casino business, with its sense of the "Wild West", has grown rapidly since the late 1990s, with 65 licensed casinos and the sector dominated by the Hong Kong listed Naga World Hotel and Entertainment complex in Phnom Penh.
Gambling a booming business
Ben Reichel, executive director of the Sydney-listed Donaco International, says across South East Asia there is significant demand underpinning the potential growth in the gaming industry.
"There's a lot of unsatisfied demand in the region as a whole. If you look at the number of tables compared to somewhere like the USA, it's actually a very low number of gaming tables available - which is why there is so much illegal competition going on," Reichel said.
Cambodia has benefited from restrictions or outright bans on legal casinos — such as in Thailand — or where local gamblers are prevented from entry to existing casinos. Outside Phnom Penh, where Naga World enjoys a monopoly, other key clusters of casinos are in the border town of Poipet, near Thailand, the seaport of Sihanoukville, and to the east along the border with Vietnam. But a decision by Vietnam's authorities to allow local gamblers to use Vietnam based casinos was seen as a threat to those casinos near Vietnam's border.
A major driving force in the growth of the casino business generally lies in operators, known as VIP junket agents. These operators' role is to act as facilitators, guaranteeing an amount of revenue, with offers of free accommodation, travel and other benefits to the gamblers.
And the impact of such VIP junket operators is significant. Cambodia's premier casino, NagaWorld, recently reported a 140 per cent growth in VIP rolling turnover to $21.1 billion for 2017 up from $8.71 billion a year earlier, according Naga Corp's Hong Kong stock exchange released financial results of February 28.
NagaWorld revenues amounted to $625.33 million in 2017 up from $225.66 million the previous year. Its net profit rose 39 percent to $255.2 million.
Reeling in Chinese gamblers
The boon to the Cambodian market also came with an easing of visa rules for Chinese visitors. In 2017 arrivals from China rose more than 40 per cent to 1.2 million, surpassing Vietnam to become the largest source of tourists in Cambodia.
"The government has said they want to make China one of their top three -- if not number one source of tourism going forward," said Donaco's Reichel.
In comments emailed to VOA, executives of Macau-based VIP junket operator Suncity Group said; "Chinese gamers will definitely be the main course for the VIP market in Cambodia".
Cambodia also offers Chinese gamblers an alternative to Macau where in recent years VIP junket numbers have fallen against the backdrop of President Xi Jinping's crackdown on corruption.
Another ‘hot’ Cambodian gambling area
Poipet, Cambodia's main border crossing with Thailand, is located between Siem Reap and Battambang. The Cambodian government is looking to further develop the Poipet region as an industrial zone. Donaco's Reichel, whose company oversees the Star Vegas casino in Poipet, says most costumers are from Thailand, but there is also a presence of gamblers from Indonesia, Malaysia, and expatriates living in Thailand.
"It really is growing rapidly and with the casino industry there you can cross the border [from Thailand] and you don't have to change currency. The whole town operates using Thai baht -- it's like a little piece of Thailand on Cambodian soil," he said.
But some operators are also cautious. Macau-based gaming investor, Amax International, with links to Cambodia, says the VIP market especially can be volatile. The gaming business, it said, is sensitive to economic downturns, uncertainties, and factors affecting tourism. Amax added that countries, such as China, "may impose or adjust government restrictions on currency conversion or their ability to export currency."