While most Asian markets including Macau experienced a significant decline in gambling revenues in 2015, Cambodia’s casino industry has bucked the trend and recorded strong profits. The NagaWorld casino resort in Phnom Penh is owned by Nagacorp Ltd and is also the country’s biggest casino resort.

The casino is currently the only licensed operator in Phnom Penh and enjoys a monopoly over the market which enabled the casino to bring in $172.6 million in net profit during 2015. NagaWorld has a total of 1,656 slot machines and 287 gaming tables and attracts a large number of VIP gamblers from Macau.

NagaWorld has also had a great start to 2016 as the casino reported strong growth during the first quarter of this year. While Macau’s casino industry has continued to decline for the third consecutive year, Citi Research analysts have predicted that NagaWorld will continue to experience strong growth but at a slower pace this year. During the first quarter of 2016, NagaCorp’s gross gaming revenue (GGR) stood at $153.8 million which was a growth of 35 percent when compared to the first quarter last year.

The casino has been successful in attracting both VIP and mass market gamblers in 2015, but Citi analysts predict that NagaCorp’s VIP GGR will drop from 27 percent as recorded last year to 15 percent in 2016. While countries like the Philippines and Vietnam have found it difficult to attract Macau’s VIP gamblers, Cambodia has had better success with junket operators who have been able to divert Macau’s declining VIP gamblers to NagaWorld.

NagaCorp recently decided to make a change to its successful junket collaboration by reducing the incentives it paid out to junket operators in an attempt to keep its VIP profit margin high. This new change in policy is a bold move from NagaCorp but junket operators do not have much of a choice now due to Macau’s on going anti-corruption crackdown.

In a statement, Lorien Pilling, the director of Global Betting and Gaming Consultants (GBGC) said “The gambling margins from VIP junket play tend to be low, but the costs of servicing them can be high. So the casino has to balance the costs of servicing the high-end players and the revenues they bring.”

Based on NagaCorp’s 2015 yearly report, the company spent around 70 percent of its $175.8 million in cost of sales in paying back the top five junket operators who were responsible for bringing in $503.6 million in revenue, which is a little less than a third of the company’s annual revenue.

Citi analysts predict that NagaWorld’s mass market growth will drop from 18 percent in 2015 to 12 percent in 2016 due to a decline in tourism numbers.