The two parties announced this week that they’d signed a three-year deal under which Heng Sheng will bring high-rollers to a new VIP gaming room at Star Vegas that will open in mid-September. The new room will feature up to 50 baccarat tables, which will be manned by Donaco-supplied dealers, while Heng Sheng will handle customer service.
The two parties have agreed to split the room’s profits, with the larger share going to Heng Sheng. In exchange, Heng Sheng will pay all junket commissions and Donaco will not face any liability from bad debts arising from insolvent VIPs.
Heng Sheng has also guaranteed a certain minimum win rate and a minimum turnover of THB 3b (US $84.3m) per month. The new room will cater entirely to new business for Donaco and will have no impact on Star Vegas’ existing Thai customer base.
Union Gaming analysts issued a note saying that, based on Heng Sheng’s turnover guarantee and industry standard win rates, the deal could boost Star Vegas’ gross gaming revenue by $29m per year, with Donaco taking around 15% to 20% of that sum to the bottom line.
Donaco, which also operates the Aristo International Hotel in northern Vietnam, acquired Star Vegas in January. Last month, Star Vegas reported revenue rising 17% in its most recent fiscal year thanks to a 54% spike in VIP table revenue.
The deal marks another example of junket operators expanding their horizons to compensate for Macau’s year-plus VIP revenue slump. Heng Sheng, which controls 82 gaming tables in seven Macau VIP rooms, failed to make a profit guarantee this January. In addition to its Macau operations, Heng Sheng also ferries VIPs to casinos in Vietnam and the UK.