Operator News
Cambodia – Chinese ex-pats take NagaWorld to full capacity with 85 per cent revenue growth
By Phil - 27 July 2018
With more and more Chinese companies investing in Cambodia, Phnom Penh has seen an influx of ex-pat Chinese living in it, which is one of the main reasons that revenues at the capital’s only casino have surged by 85 per cent in the first half of 2018.
The operator was well placed for the increase in Chinese residents having opened its $369m Naga2 extension in November 2017.
Deputy Chairman Philip Lee said: “Naga2 was the right product at the right time. When Naga2 opened, suddenly it became the place with all the gold, flashing lights and everything. It was somewhere they [the Chinese] wanted to be seen in.”
Mr. Lee stressed that one of the company’s biggest successes was that Naga 2’s customer base hadn’t cannibalised the existing customer base.
“The bulk of them are Chinese. Perhaps they felt that Naga1 was not up to their standard,” he explained. “Because of the huge volume of investment from China to Cambodia, there is such a big population of expat Chinese in Phnom Penh.”
The results are staggering. GGR came in at US$713.9m, VIP rollings increased 117 per cent to US$16.8bn, mass market tables buy-ins increased 53 per cent to US$573.8m whilst mass market Electronic Gaming Machines bills-in increased 22 per cent to US$1bn.
China continues to be the leading source of visitation to Cambodia, growing by 79 per cent to 0.6m visitors. Arrivals at Phnom Penh International Airport grew 41 per cent over the same period. The opening of Naga2 saw NagaCorp work with Macau-based junket operators Suncity Group and Venus Group to open up VIP rooms.
The company stated: “The 117 per cent increase in VIP rollings in 1H2018 was due to an increase of business at both Naga1 and Naga2, but more pronounced at Naga2 where customer demand for higher table limits has increased rollings. Suncity set up a fixed base business operation with full-fledged office facilities, commencing business on 1 March 2018, contributing in increased number of players and rollings. An increasing number of South East Asian players, noticeably from Thailand, have also been observed in addition to the traditional large number of Malaysians and other customers from the region.”
Mr. Lee added: “At Naga2, we are already running at capacity. So we are already planning for Naga3.”
Union Gaming analyst Grant Govertsen described NagaWorld’s growth as being in the same league as Macau’s largest casinos.
He commented: “Ultimately, the addition of high quality supply has spurred demand and NagaCorp is generating Macau flagship-like gaming volumes and levels of EBITDA typically only seen at 1st-tier operators. On a longer-term basis and with 18 years of exclusivity remaining on the company’s license, we look for even more supply to be developed. We look for Naga2 to continue to ramp over the coming months and expect the company to move forward with Naga3 in some fashion over the next few years.”
