Gaming | NagaCorp revenues soar on back of rising Chinese tourism, investment

Revenues at Cambodia-based gaming operator NagaCorp soared 82.5 percent year-on-year during the first half of 2018, on the back of rising Chinese tourism and investment.

With a restricted customer base among the domestic market, the gaming operator was previously dependent on visitors primarily from across the border, in Vietnam.

Last year that showed signs of changing as Chinese visitation increased by a whopping 45.9 percent to 1.21 million, elevating China to number one among Cambodia’s source of tourists. According to Nikkei, Chinese investment into the country is growing at a similar pace.

Naga2 is driving much of this investment, partly because the second phase of the resort has a greater appeal among Chinese tourists. It’s also the place that Macau-based junkets want to be.

Naga2’s opening has enabled the company to convince junket operators Suncity Group and Venus Group to open VIP rooms this year. This is bringing a tide of high-roller gamblers to the city, adding significantly to the company’s bottom line.

VIP gaming revenue at the resort was up more than 160 percent year-on-year in the first half of this year, bringing the company’s total revenue to USD732.96 million. Meanwhile, its net profit rose nearly 20 percent to $180.13 million.

Accordingly, its Hong Kong-listed shares rose 8.9 percent on Wednesday to HKD8.35.

The company, which controls a 40-year monopoly on casino gambling in the Cambodian capital, last year doubled its hotel and gaming capacity with the opening of the USD369 Naga2 extension.

Moreover, the success of Naga2 has pulled forward plans for the third phase of the gaming resort.

“At Naga2, we are already running at capacity,” NagaCorp Deputy Chairman Philip Lee said, according to a report by Nikkei. “So we are already planning for Naga3.”

The company is also eyeing other projects overseas. Among them is a casino hotel just outside Vladivostok in Russia, and adjacent to another property that Macau gaming tycoon Lawrence Ho pulled out from last year.

Construction on NagaCorp’s $350-million Vladivostok project is expected to complete by the end of the next year.

Additionally, the company is considering whether to bid for gaming rights in Japan, following the recent government green light for casino development.

Ho reportedly exited Vladivostok in order to improve his chances of obtaining a Japan license. In an interview with Nikkei earlier this year, Ho said that he wanted to avoid the complications of having a presence in both Japan and Russia, in case the issue of contested territory reared its head.