Australian-listed casino operator Donaco International says its acquisition of the Star Vegas Resort & Club in Poipet, Cambodia will be completed by July 1.
Donaco announced the $360m acquisition in January and now says it has successfully completed its due diligence. Donaco will assume complete control of the Star Vegas property on July 1, two months later than it had originally planned. The balance of the payments owed the current vendors will be made by late July.
Star Vegas currently boasts 109 gaming tables, 1,264 gaming machines and 385 hotel rooms. Union Gaming Research Macau has called Star Vegas ‘the only resort in Poipet for which an argument can be made that it is approaching international standards.”
Star Vegas is one of 10 casinos in Poipet, which is located on Cambodia’s border with Thailand. Poipet casinos cater mainly to Thai gamblers, who aren’t allowed to gamble in their own country and who don’t need a visa to cross the border. Poipet casinos accept Thai baht, another factor that keeps Thai gamblers from travelling further afield to satisfy their gambling urges.
This reliance on Thai gamblers worries some analysts, who note that political spats between the two countries have occasionally resulted in border closings, which can turn Poipet into a ghost town. Thailand is also mulling legalizing casinos within its borders, which could have a devastating effect on traffic to Poipet. But. Donaco exec director Ben Reichel believes legalization in Thailand isn’t likely “in the short term or even medium term.”
Meanwhile, Donaco also provided a trading update on its Aristo International Hotel. The Aristo property is located in Vietnam’s Lao Cai province, which shares a border with China’s Yunnan province, from where most of the casino’s clientele originates. Aristo welcomed 10,254 players in the month of May, a 19% improvement over the previous month and a new property record. Aristo says it plans to hire 60 new staff to handle the influx.
Aristo’s gaming turnover in May was a “robust” $207m but VIP win rate has “continued to be volatile.” VIP win rate for May was just 1.29%, less than half the 2.85% theoretical win rate. Donaco says this matter “is being carefully monitored and reviewed by the Board and management.”