Cambodia’s long-delayed draft gaming law has taken a step forward with a recent meeting between high-level members of the government and more than 100 members of the private sector.
The bill is designed to set out a regulatory framework for the industry and is also expected to cover online activities. The Kingdom currently has 69 casinos and was one of the strongest-performing in Asia last year, benefiting from improved transport links, in particular with China and as proxy betting boomed in border casinos.
Tax revenue from the casinos gained 35.5 percent in the first nine months of this year to $37.4 million. Nagacorp, the operator of Phnom Penh-based NagaWorld, contributed the lion’s share, paying about $16 million in tax.
According to sources cited by the Khmer Times, the new bill will preserve Naga’s exclusivity to run a casino within a 200 km radius of the capital through to 2035. It’s license term will be guaranteed through 2065.
The tax rate is expected to gain to about four percent to five percent of total gaming revenue, the newspaper said.
“While no tax rate was unveiled we believe it will remain very modest and not a significant departure from what Naga is paying today,” Union Gaming wrote in a note, which also said the firm is “feeling positive” about the operator following a recent visit.
For the nine months to end Sept, Nagacorp reported VIP rollings rose 11 percent to $6.6 billion, while mass table buy-ins were up 13 percent to $456 million. Electronic gaming machine revenue jumped 15 percent to $1.14 billion.
Donaco mulls online options
Australia-listed Donaco International says it is looking at options for utilizing an online gaming license owned by Star Vegas in Poipet sometime in the fiscal year 2017. “The Star Vegas business also owns an online gaming license which has yet to be utilized,” said managing director and CEO, Joey Lim in an annual report to shareholders. “We are currently exploring the alternatives for the utilization of this license and expect some progress to occur during FY17.”
Casino tax collection jumps
Cambodia collected $37.4 million in taxes from casinos in the first nine months of 2016, Xinhua reported a Finance Ministry statement as saying. The tax revenue represents a 35.5 percent increase over the same period last year, following a number of changes the government took to improve the transparency, efficiency and equity of the tax system last year. Phnom Penh-based NagaWorld casino accounted for the largest contributor of tax revenue, making up 43 percent of the total, or around US$16 million.
In its interim report the company attributed its strong growth to improving visitor arrivals to Cambodia, especially from China, Korea and Vietnam, which were up by 16 percent, 8 percent and 20 percent respectively in the first half of the year.
“Continued visitor growth from these gaming-centric countries is one of the key drivers of our business growth,” chairman Tim McNally said in the report.
Cambodia’s secretary of state at the Tourism Ministry, Tith Chantha, quoted by AKP, said this year Cambodia was expected to welcome up to five million foreign visitors, generating jobs for 600,000 Cambodians.
Cambodia Airports welcomed more than five million passengers and 53,000 flights in the first nine months of the year, representing an increase of 6.2 percent and 2.8 percent respectively compared to the same period last year.
The ministry is aiming for 7.5 million international tourists a year by 2020, including two million from China. Union Gaming says there are “lots of drivers” for further growth, including another aircraft. The operator recently raised money through a share placement, with about $100 million expected to be allocated to the interior fit-out of Naga2 and $20 million likely to buy a 3rd A320 for Bassaka Air.
“Having a 3rd aircraft will allow Naga/CITS to hit 5 Chinese cities (from 2 today). This alone should put bodies in 300 rooms nightly (1,700 total rooms available between Naga/Naga2), and more importantly should continue to be a key driver of mass growth in the out years,” it said.
The existing NagaWorld complex is reaching full capacity with 80 percent to 90 percent room occupancy on a regular basis. It’s extension, Naga2, is being built with a budget of $369 million and will have a built up area of about 110,105 square meters.
It consists of the NagaCity walk with extra retail and public space and the TSCLK Complex, which will have about 1,000 hotel rooms and additional gaming space up to about 300 gaming tables and 500 electronic gaming machines.
The group is also developing a resort in the Primorye gaming zone in Russia’s Far East, close to Vladivostok.