NagaCorp Casino To Profit From Vietnam’s Casino Ban On Locals

Brokerage firm Citigroup Global Markets Inc has said that if the draft decree by the Vietnamese government retains its restrictions on locals playing in casinos, then Cambodia’s NagaWorld Casino would continue to benefit immensely.

According to local media reports in Vietnam, an official at the Ministry of Finance has stated that the latest version of the government decree on gambling, which provides the framework for the country’s gaming industry, is expected to retain the existing ban on locals entering the country’s casinos .

NagaWorld, a casino operated by Hong Kong-based NagaCorp in Cambodia’s capital city of Phnom Penh is the biggest casino in the region and very close to the Vietnam border. The casino has been successful in attracting Vietnamese players as a result of the ban and with the decree most likely to continue, NagaWorld’s revenue will remain protected.

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In a statement, George Choi, Anil Daswani and Aras Poon, Citi analysts said

In our view, if the Vietnamese government maintains the status quo on its gaming laws and regulations, it could be a major overhang removed for [NagaWorld]. Players from Vietnam represent around 10 percent to 20 percent of [NagaWorld]’s mass players, on our estimates, and we believe [NagaWorld] will continue to see Vietnamese players crossing borders and gaming in Cambodia.

According to Citi, the new version of the decree also retains the minimum investment limit of $4 billion, which has often been labelled as too high to attract large international casino developers to the Vietnamese market. Analysts say that the country’s market potential does not support such high investments, considering locals would not be allowed to play at the casinos, which greatly restricts revenue potential.

Brokerage Union Gaming Securities Asia Ltd noted that the retention of the investment level limits could be bad news for integrated casino operators who have been looking at Vietnam for future investments, assuming locals are allowed casino entry.

Las Vegas Sands Corp is one of the casino operators who have previously evaluated investment opportunities in Vietnam. Numerous projects nevertheless have been kicked off in the recent past. Hong Kong-based Chow Tai Fook Enterprises Ltd, junket operator Suncity Group, Vietnam-based asset management firm Vina Capital Group are said to be commencing work on a large casino resort in Vietnam’s Quang Nam Province.

The Grand Ho Tram Casino is the country’s only integrated casino resort that had earlier offered to participate in a pilot program which the government had considered earlier to test the impact of removing the ban on locals. However, the pilot program is yet to be launched and there is no information if the government still intends to carry out the test.

Adrian Sterne

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