4 minute read
CAMBODIA
Casino boom attracts junket interest
Cambodia’s casino boom is continuing, with a 53 percent increase in licenses granted during 2018 and growing interest from Macau-based operators and junkets as Chinese tourism and investment surges.
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According to the government, there are now 150 licenses, up from 98 the prior year. The majority of the activity was centered on the coastal town of Sihanoukville, which now has 88 licenses granted, fuelled by inbound Chinese investment.
Local media cited the deputy director general of the ministry’s financial industry office, Ros Phirun, as saying authorities aimed to collect $56 million for 2018. “We are actively drafting a law to govern casino and gambling businesses, and when it is finalized and ready to be activated, we hope revenue from the sector will be bigger,” Phirun said.
The long-awaited legislation is expected to attract further investment by creating a regulated market, which will allow for the entry of larger, international players. It is expected to introduce a new tax regime, in the mid-single digit range, as well as set minimum capital levels. Local industry experts have also said it’s likely to weed out some of the smaller border operations.
The interest in Cambodia is being driven mainly by inbound Chinese tourism arrivals and investment under China’s “One Belt, One Road,” initiative. More than 1.27 million Chinese tourists visited the country in the first eight months last year, a 72-percent increase over the same period in 2017.
Figures for the amount of gross gambling revenue being generated are difficult to calculate, as they are not provided by the government. However, the country’s only listed operator, NagaCorp, has reported stellar growth, becoming one of the world’s most profitable casino companies.
For the first nine months of last year, GGR rose 94 percent to $1.07 billion, with mass table buy ins up 57 percent and VIP rollings jumping 128 percent.
The growth in the market is attracting interest from Macau’s junket operators.
SunCity Group late last year announced a strategic partnership agreement to provide consultancy services to a $360 million integrated resort in Cambodia, which is to be opened by local company Golden Sun Sky.
The resort is expected to have a gross floor area of 650,000 sqm with “certain gaming facilities” and is to open by the end of 2019.
Amax International has two Cambodian ventures. It recently reached a HK$9 million ($1.1 million) accord to provide technical and pre-opening services to a casino in Sihanoukville.
The casino is owned by British Virgin Islands-incorporated Cheung Shing Global Travel Entertainment. Amax will provide the design, development and implementation of information technology systems; the overall casino design; the establishment of operational and internal control structures and the provision of headhunting and recruitment services.
The company since Dec. 2017 has also been operating a VIP room at the Genting Crown Casino in Poipet on the border with Thailand.
Thai nationals have long been the major customers of the casino, however, recently, with theeconomic growth of Cambodia driven by the close business relationship with China, mainland visitors have become the new growth driver for the VIP room, Amax says.
Tak Chun, the second-largest Macau junket, is targeting to open its VIP hall at Naga2 early this year, as is the Guangdong Group, while SunCity opened its rooms at the resort in March last year.
“The increasing number of Macau-based operators bringing in quality players who spend longer hours in the property especially in Naga2 has helped elevating the business volume,” the company said. “Suncity physical space and the number of tables will be enlarged and its Naga2 based operation has already been ranked as one of the top operations in the Asia Pacific region since commencing business on 1 March 2018.”
Macau-based operator Macau Legend also plans an operation in Cambodia, recently agreeing to buy land in Siem Reap province for $90 million, on which it intends to build an integrated resort.
The company said it was buying the entire issued share capital of private Cambodian company Howing, which in turn will hold the land, which comprises several parcels with a total area of approximately 1,200 hectares.
Six injured in Poipet casino fire
Six people were injured after a fire broke out at an 18-floor casino building in Poipet in early January, according to a statement from a senior police official.
Major General Ath Khem, police chief of Banteay Meanchey province, said the fire broke out at 9:30 pm at the complex known as Golden Casino – starting at the casino’s elevator on the fourth floor before spreading to the 13th floor. “No one died in the flames. However, six men got injured due to smoke inhalation while they got trapped in the lift,” said the police chief in comments to Xinhua.
Ath Khem added that all those in the casino were successfully evacuated from the casino through an emergency exit. It is understood that the majority of the visitors to the casino were from China.
Amax says Cambodia drives VIP revenue
Amax International Holdings said its revenue in the six months to end September surged more than 493 percent to HK$62.3 million ($7.9 million), driven mainly by its VIP room business in Cambodia.
The company has been operating a VIP Room with 13 baccarat tables in Cambodia via Victor Mind Global Limited (VMG), a wholly-owned subsidiary, since December 1, 2017. Revenue generated from the VIP Room was approximately HK$50.3 million, the company said.
Looking ahead, Amax said it is optimistic for prospects in Cambodia, given the growth of Chinese tourists to the country.
