While the first couple months of the pandemic hit the gaming industry especially hard, the recent months have been seen as a continuous work in progress as operators strive to recover incurred losses in one of its most devastating periods. It was only last April 2020 when 193 licensed casinos in the Kingdom of Cambodia were required to close their doors in adherence to government guidelines aimed to prevent the spread of Covid-19. After more than three months of temporary closure, the capital’s exclusive casino NagaWorld has since bounced back to almost pre-Covid revenue while eyeing further expansion in the coming years. Sihanoukville, on the other hand, has seen a continuous evacuation of gaming operators in line with the country’s ban on online gambling.
NagaCorp’s road to recovery shows great results
Having reported an estimated $1.8 billion in revenue for 2019, casino operator NagaCorp has seen a steady increase in foot traffic since its reopening last July 8, “contributed by the patronage of mainly Chinese expatriates who have been currently living or conducting business activities in Cambodia.”
Geared for the worst, the world renowned establishment located in Phnom Penh revealed an outstanding recovery evident throughout its recent months. Figures reported gaming in all segments to be above 90% of the height of its pre-Covid months earlier this year with VIP gaming remaining at 70% given the limitations on international travel. The first half of 2020 concluded with NagaCorp in the green, posting a net profit of US$ 20.6 million despite being down 91% from the prior year period.
On its latest filing, the casino operator mentioned its recent actions of converting non-gaming areas into additional gaming space to accommodate “the growth of the gaming business.” “After reopening of casino operations in July 2020, the premium-mass segment has been the key mass-market revenue growth driver”, it said.
NagaWorld’s poker room has also since opened its cash game offerings with limits as low as $1/$1 for No Limit Hold’em to as high as $10/20 blinds. Home to WPT Cambodia, the venue has begun hosting small weekly tournaments for a limited player pool.
In line with its current successes, NagaCorp is booked to open its $3.5 billion resort expansion Naga 3 by 2025, set to add a 75-story and two 61-story towers at the site. The large investment by the Hong Kong-listed operator is being rewarded by the Cambodian government, a 10-year extension of its monopoly in Phnom Penh up until 2045. With five more years until completion, NagaCorp is likewise looking at other expansion plans on its quest to “explore viable and profitable [integrated resort] development in Siem Reap and Sihanoukville areas.”
Sihanoukville slowly loses its glimmer
The coastal town of Sihanoukville, which was once a prime spot for gaming operators looking to cater China’s gambling demands, has been seeing continuous closures and exits from its foreign businesses. A direct result of the Cambodian government’s ban on online gambling in addition to the global health crisis, over 60 casinos in the area have closed its doors while suspending employment for all staff for the rest of the year.
In the latest news, Century Entertainment International Holdings, one of Hong Kong’s largest casinos has also decided to move out of its Sihanoukville location, primarily in Sunshine Bay Hotel as its lease agreement expires. The said operator has turned its attention to another investment zone, Dara Sakor, and a new lease agreement with Long Bay Entertainment for a period of 15 years.
“Dara Sakor, Koh Kong Province is one of the most rapidly developing districts in Cambodia and is a well-known tourism destination in Southeast Asia. The new location at Dara Sakor is surrounded by luxury hotel resorts and a golf course.”, the company said in a statement.
With a new international airport under construction and plans of rail systems underway, Dara Sakor is looking to be increasingly attractive for foreign investors and tourists at the same time. Sihanoukville, on the other hand, is striving to keep its tourism alive having recently opened the 50,000 sqm Prince Mall while it struggles to keep its once thriving casinos operational.
Cambodia’s gaming industry has seen rapid growth and development in the past few years with more top international companies looking to build its businesses in the Southeast Asian soil. Competing on a global scale, a more attractive regulatory framework has been drafted which tackles commercial gambling management for the country’s growing number of casinos.
Cheam Yeap, Chairman of the National Assembly’s Commission on Economy, Finance, Banking and Audit noted that “This law is aimed to ensure management of the integrated commercial gambling centers and commercial gambling to contribute towards boosting economic growth, promoting the tourism sector, creating more jobs, collecting revenue, and maintaining social safety and security.”
Reported by the Khmer Times, the draft law has secured 114 out of 117 votes during a National Assembly this week and will be passed on to be signed into law by the King. Aside from the development in regulation, the country’s existing casinos are slowly getting back into the limelight as ten establishments have so far resumed operations. These include NagaWorld in Phnom Penh, Star Vegas Resort and Club in Poipet and eight other casinos in Sihanoukville.
Donaco International Ltd which operates the Star Vegas has since been allowed a limited reopening to “test its operational systems whilst ensuring the health and wellbeing of staff and visitors.” With the majority of its customer base coming from neighboring Thailand, the company revealed that it did not expect “any material additional expenses to be incurred following the limited reopening of the casino,” adding that “the border with Thailand, where most of the casino’s patrons have traditionally originated, remains closed”.
“The Company will continue to maintain its tight cost control strategy, while operations remain at limited operating capacity; and management will maintain the discretion to tailor up or down the pace of operations to local conditions,” Donaco said.
Considering only 10% of the kingdom’s gaming establishments have reopened since April, it remains uncertain when and if the other 90% will follow suit. Nonetheless, the overall long term situation of the casino industry in Cambodia looks to be in a progressive state with a series of plans for future development.