Juggling junkets

Australia-listed Donaco International has been revamping its marketing strategy and changing the junket mix again at its Star Vegas property after assuming full management control in July.

The property saw a 6.8 percent dip in revenue in fiscal 2017 to THB 2.89 billion ($87.5 million) due to subdued consumer sentiment and a weak economy in Thailand, which has been marking an official 12-month mourning period for King Bhumibol Adulyadej who died in October last year.

Thais are the biggest source market for Star Vegas, which sits on the border at Poipet. The company says it expects the performance of the resort to improve once the mourning period for the King ends and as new initiatives begin to bear fruit.

Donaco bought Star Vegas in January 2015 for $360 million, although the Thai vendor agreed to stay on for a further two years to manage the property, offering a guaranteed minimum of $60 million in EBITDA during the period.

The company entered a three-year contract with Macau-based junket, the Heng Sheng Group, in August of the same year, though that was terminated in early 2016. It said the exclusivity Heng Sheng had for certain countries and territories had prevented it from working with other junkets.

Now the company has taken on full management control of the property from the vendor, it is once again rejigging its junket operations.

AirAsia to offer Sihanoukville flights

Operators in the town of Sihanoukville, home to some 14 casinos, are likely to get a boost from improved transport links with Malaysia. AirAsia has said it will fly a four-times a week service between Kuala Lumpur and the coastal town. The town’s airport is located 7 km to the north of the port and has up until now been served by domestic airlines and a flight from Vietnam.

Koreans busted for illegal gambling ring

Five South Korean nationals were arrested in August for illegal football gambling, local media reports. Provincial police deputy chief Chea Kimsan said the five men were arrested during a raid on an online gambling shop in Krous Village in Siem Reap. Kimsan said the men, aged between 29 and 49, operated and managed the shop. The men face up to five years of jail each if convicted.

“During this transition period, Donaco anticipates that earnings from the VIP portion of the Star Vegas business in the first quarter of FY18 will be lower than the corresponding months last year,” the company says, though the mass business will be unaffected.

 

All key management appointments at Star Vegas have now been made, and the company is implementing new marketing initiatives to attract new junkets and additional players to the venue.

It has announced deals with Vivo Tower, Poker King Club and the Asian Poker Tour, and has engaged a number of new Thai junket operators. A further 100 tables are also expected to be added to fill underutilized space, which may boost revenue.

“We have also made good progress in signing up additional junket operators, with new customers joining us during August 2017, and further deals signed for more junkets to commence in September 2017,” CEO Joey Lim said. “The main hall and slot machine business has remained robust during the transition period, and the VIP business is rebuilding well.”

“Some of our new junket customers will commence offering online gaming in September 2017, as new facilities are built out.”

The company, which saw a 32 percent gain in non-gaming revenue last year, has brought on third-party providers to build new entertainment facilities for VIPs, including a nightclub and karaoke rooms.

Cambodia’s casinos saw a spike in interest from junket operators after the collapse of the Macau VIP market from 2014, though turnover has been high. Jimei International was operating tables at the country’s biggest operator Nagacorp in Phnom Penh, though that accord lapsed early this year as a result of the non-renewal of relevant contractual documents, it said in an annual results filing.

Naga, which began aggressively courting China’s high rollers in 2013, has since scaled back on the incentives it offers to improve margins.

Meanwhile, junket Amax International Holdings in September said it had entered into a Letter of Intent to obtain the operating rights to a VIP room in Cambodia.

The company did not specify which casino, but noted that the VIP room operates 13 baccarat tables and is owned by a PRC citizen. Amax said the move was made in order to diversify its income stream and expand its gaming business. Under the agreement, Amax will be required to pay a fixed monthly fee for a period of two years for the exclusive rights to operate the VIP room.