Australian-listed casino operator Donaco International Ltd is facing a delay in the implementation of its proposed acquisition by On Nut Road Limited (ONR), as well as growing uncertainty over its tax obligations in Cambodia.
The group operates DNA Star Vegas in Poipet, Cambodia and Aristo International Hotel in Lao Cai, Vietnam.
In a market update, Donaco said the Scheme Implementation Deed (SID) with ONR—announced on March 17th and offering shareholders AU$0.045 ($0.029) per share in cash—has been held up due to valuation and legal review complexities.
The company had initially scheduled the scheme meeting for June 3th, with the accompanying scheme booklet to be sent to shareholders by May 6th. However, these plans have now been pushed back.
Donaco blamed the delay on longer-than-expected timelines from third-party valuation contributors, extended legal analysis of Cambodian and Vietnamese regulatory frameworks, and public holidays in all three jurisdictions.
As a result, the Independent Expert reviewing the deal has not yet finalized its report, preventing the company from lodging documents with the Australian Securities and Investments Commission (ASIC).
‘The delay is through no fault of the Independent Expert,’ Donaco stated. ‘An updated scheme timetable will be provided once the report is complete and court hearing dates are confirmed.’
Tax trouble in Cambodia
Separately, Donaco revealed it may be liable for a significant new tax burden stemming from regulatory changes in Cambodia, where its Star Vegas casino operates.
Although Donaco has been paying a 7 percent contribution on gross gaming revenue (GGR) to the Cambodian Commercial Gambling Management Commission (CGMC), a new legal interpretation suggests an additional 10 percent value-added tax (VAT) may also now apply.
This stems from a directive issued by Cambodia’s Ministry of Economy and Finance in December 2022, which expanded tax obligations to include VAT, monthly and annual income tax payments on GGR for all licensed gaming operators.
While these measures had been deferred by the previous administration until at least the end of 2024—prompting many in the industry to assume the delay would be indefinite—the General Department of Taxation (GDT) confirmed in January 2025 that the taxes are now in effect.
Legal advice obtained by Donaco indicates that, effective from January 1st, 2025, the company is indeed liable for the additional taxes, even though no formal tax assessment has yet been issued. The company estimates that the VAT liability for the first quarter of 2025 could be as high as AU$666,000 ($426,246).
Adding to industry concerns is the fact that the 10 percent VAT is not offset against the existing 7 percent GGR contribution to the CGMC, raising the prospect of double taxation—a burden Donaco and other operators have flagged in discussions with Cambodian authorities.
In February, Donaco requested a delay in VAT reporting, but the GDT rejected the appeal in early April, insisting the company must fully comply with the directive and all relevant tax laws.
Engagements with the Cambodian government are ongoing, and Donaco said the final tax determination remains subject to government decision.
The group reported a slight drop in revenue during the quarter ended March 31st, despite stable visitation numbers across its properties.
