Nagaworld Resorts receives green light for a $3.5 billion extension named “Naga 3”
Cambodia’s biggest casino is about to get a lot bigger. Plans for a large extension to the casino have been approved, paving the way for an expansion which will be called Naga 3. This new development will be three times larger than NagaWorld and Naga 2 combined.
Shareholders agree with plans for expansion
The shareholders of NagaWorld have voted overwhelmingly for the Naga 3 project to move forward, with the initial planning stage having been underway since April. CEO of NagaCorp, Tan Sri Dr Chen Lip Keong abstained from the vote, stating that it was important to maintain “good governance”, but that fact he has agreed to pay for half of the project himself, perhaps speaks for itself.
What does this massive project bring with it?
Naga 3 will feature four towers, each 42 stories high, with thousands of new hotel rooms and tens of thousands of jobs created. The new resort will be built on a 7,757sq meter area of land, but reports state that a further purchase of 9,080sq metres has also taken place. This land, which is in the same area as the build site, will be filled with entertainment establishments, hotels and apartments. More specifically, the non-gambling sectors of Naga 3 will offer indoor virtual reality theme parks, shopping centres and family recreational areas, in addition to extensive accommodation for guests.
Why now?
The approval for Naga 3 comes in the wake of online gambling being banned, which has added significant financial viability to the ambitious project. In addition, gross gaming revenue for NagaCorp increased by 32% compared with the same timeframe last year. Net profit has also seen a rise of 53% since 2017. These numbers are of course, unsurprising given that NagaWorld is the only licensed casino in Phnom Penh and online gambling is currently dying due to legislation changes. With profits on the rise and the future seemingly bright, the 98% of shareholders who voted for this project to go ahead clearly feel there is no better time for a huge investment such as this. There is, however, another side to that coin.
Potential pitfalls
With a license monopoly in Phnom Penh and business booming, there are many positive points to be made about this project, but there are certainly negatives too. In neighbouring Sihanoukville, there is strong competition from another popular resort which targets the exact same wealthy Chinese players Naga 3 hopes to lure in through its doors. When the plans were first announced in April, share prices for NagaCorp tumbled by 20%, a fact which suggests investors are dubious about NagaCorp’s ability to produce a return on their vast outlay of over $3.5 billion.
With Naga 1 opening in 2003 and Naga 2 in 2017, some feel that adding a hugely expensive Naga 3 resort just two years later represents an over-reach and a gamble which could yet backfire. Managing Partner at Euro Pacific Asia Consulting Shaun McCamley said it was “hard to justify an expensive third property in a city where NagaCorp already holds exclusive rights” and that the plan was “too ambitious”.
NagaWorld’s unique status
NagaCorp will be hoping that the unique status and prestige held by its enterprise in Cambodia will ensure the success of its newest venture. NagaWorld’s gaming license is guaranteed for the next forty-six years, and a monopoly guarantee for Phnom Penh city which lasts another sixteen years. Having fostered a special relationship with the Royal Government of Cambodia, NagaWorld has become an attractive gambling hub for players from China, Malaysia, Thailand and Vietnam, drawing customers from countries where gambling laws may be less clear, like a lantern in the legislative darkness.
This special status has made NagaWorld ideal for hosting major events, and with the poker room on existing NagaWorld property having recently been renovated, WPT has announced the WPT Cambodiafestival will be hosted in its casino in November.
Article by Craig Bradshaw
