An agreement between NagaCorp Ltd (3918:Hong Kong) flagship NagaWorld and the Cambodian government has contributed greatly to the $48 million collected from the casino industry in 2016; a 40 percent increase from 2015.
The Khmer Times reports that Ministry of Economy and Finance (MOEF) deputy director-general Ros Phearun said that in addition to the government’s efforts to improve tax revenue, the agreement for additional payments for non-gaming activities at Phnom Penh’s only integrated hotel-casino entertainment complex, has resulted in a major increase in tax revenue.
Phearun reportedly said, “Now, we have got more from NagaWorld since they complied with our requirement to pay on non-gaming revenue.”
In 2016, NagaWorld, a subsidiary of Hong Kong-listed NagaCorp, which holds a 70-year casino license in Cambodia that runs until 2065, recorded a four percent hike in gross gaming revenue (GGR), bringing the year’s total to $500.8 million. A filing last month to the Hong Kong stock exchange (HKEX) indicated a seven percent rise in mass market revenues to $129.7 million, while electronic gaming machine revenue rose by six percent to $145.5 million. However, VIP earnings only increased by one percent to $225.7 million.
In 2016, the company’s net profit was $184.2 million, an increase of seven percent, with a 12 percent rise in earnings before interest, tax, depreciation and amortization (EBITDA) to $256.1 million. That compared with a 26 percent increase in the company’s GGR in 2015 to $480.6 million. In 2015, its mass market rose to $257.7 million, an increase of 33.4 percent, while VIP segments grew to $222.9 million, an 18.5 percent hike.
Last year, NagaWorld also increased ts monthly gaming payments to the MOEF by approximately $45,665, last year paying $410,987 compared with the $365,322 it paid to the Ministry the prior year. The filing stated, “During the year, having discussed with the MOEF, the group paid an additional obligation payment of $16,558,000 to the MOEF. Additional obligation payments [if any] are subject to future developments in this matter,” according to the news agency.
Also on the rise, said Phearun, is NagaWorld’s online gaming, which can now be offered to customers outside of Cambodia. He said, “They have a lot of customers now so now we don’t only rely on ground-based gaming but also online gaming.”
In addition to the Vietnamese decree which would allow locals with a monthly income of at least $450 to wager at approved domestic casinos, the government has also proposed an amendment to the current gaming law, which is expected this year. Phearun reportedly said, the government is cautious when it comes to online gaming due to it being difficult to manage. He said, “I have learnt from foreign experts on online gaming so we are planning to set up a system to manage it.” He added that he doesn’t think the addition of online gaming will result in a decrease in land-based gaming because the majority of customers “don’t just come for gambling but also to visit and relax in our country too,” according to the report.