Hong Kong-listed NagaCorp has announced it has entered into an agreement with the government of Cambodia to extend its gaming exclusivity in Phnom Penh by an additional ten years.
The company operates under a 70-year license, in which the company has the exclusive rights to operate casinos within a 200-kilometer radius of Phnom Penh until 2035.
Under the new agreement, the exclusivity period has been extended to 2045.
In exchange, NagaCorp has paid a US$10 million fee to the government and will pay an additional US$3 million on an annual basis for 10 years.
The company’s Naga 3 development, which involves an investment of approximately US$3.5 billion, was also taken into account when it was granted the extension, it said.
Analysts viewed the extension as a positive, particularly for the company’s upcoming Naga 3 project, which is anticipated to open in 2025.
Union Gaming analysts said the extension effectively doubles the available runway for Naga 3, therefore making the return profile of the project much better and with greater visibility.
“While the Naga3 project is long-dated, we remain bullish on the project in part due to the transformational nature of the Naga2 project (November 2017) and the impact it has had on Phnom Penh as a gaming destination,” said the analysts.