Cambodian casino operator NagaCorp says its gross gaming revenue topped $1b through the first three quarters of 2018, driven by strong VIP gambling turnover at its new Naga2 facility.
On Monday, NagaCorp informed the Hong Kong Stock Exchange that its gross gaming revenue over the first nine months of 2018 totaled US$1.07b, a 94% improvement over the same period last year, with both mass market and VIP gambling segments posting “sustained and accelerated business volume growth.”
Mass market table buy-ins were up 57% to $887.6m, while electronic gaming machine (EGM) bills-in rose 22% to $1.6b. VIP gambling turnover surged 128% to $25b, which NagaCorp credited to both premium players and junket operators having “confidence that the Group has sufficient resources to run its business.”
NagaCorp’s flagship venue is the NagaWorld property in Cambodia’s capital Phnom Penh, and the company opened the Naga2 extension last November. Leading junket operator Suncity Group began feeding VIPs to Naga2 in March, and NagaCorp said Suncity’s “physical space and the number of tables will be enlarged.”
The company said Naga2 enjoyed an occupancy rate over 85% in September and “often times” has endured “capacity constraints for both gaming and non-gaming areas.” As such, NagaCorp is ‘in advanced stages of planning for the development of Naga3,” expressing confidence that “additional capacity is necessary to further fuel business growth.”
NagaCorp assured investors that it’s mindful not to put all its eggs in its VIP basket. While Naga2 has experienced “demand for more higher table limits,” the company says it “continues to adopt a conservative gaming policy, diluting its risks and exposure to the VIP gaming segment.”
Cambodia’s international tourist arrivals were up 11% through the first seven months of 2018, while arrivals at Phnom Penh’s airport were up 35.4% over the same span. Visitors from China are up 72.6% and NagaCorp says its business has enjoyed an “increasing number of quality players from other parts of South East Asia” in addition to its traditionally large number of VIPs from Malaysia.
Cynically, NagaCorp also found space in its results announcement to butter up Cambodia’s military leaders, hailing the “political stability” brought by the July elections, which saw the ruling Cambodian People’s Party win every seat in the National Assembly, thanks to the outlawing of rival parties and a crackdown on critical local media outlets.