NagaCorp Ltd reported unaudited data to the Hong Kong Stock Exchange Friday of almost U.S. $400 million GGR for the first nine months of 2015. This financial data represents an increase of 47% from the U.S. $271.9 reported for the same period in 2014.
NagaCorp operates Nagaworld, the company’s flagship destination casino located in the Cambodia capital Phnom Penh. Nagaworld is the largest hotel, gaming and leisure operator in Cambodia, and is the only casino in the country not located along Cambodia’s border regions. The NagaCorp website states that the company is in possession of a 70-year license for it’s operations [until 2065], as well as a 41-year monopoly within a 200km [125mi] radius of Phnom Penh, expiring 2035. NagaCorp was incorporated in the Cayman Islands.
Reuters recently quoted Union Gaming Securities analyst Grant Govertsen as stating that the outlook for [Macau’s] VIP gambling industry will continue to worsen. NagaCorp sees Macau’s downturn as opportunity, stating in the company’s 2015 Interim Report their plans “to further penetrate the regional and Chinese gaming markets”.
Since it is illegal for Cambodian residents to gamble within their country, NagaCorp depends exclusively on tourism revenue. The Interim report states that Cambodia had 2.3 million visitors the first half of 2015, and that 21% originated from Vietnam, 15% from China, and 10% from South Korea, with an increase of 22% year-on-year of visitors from China. Cambodia does not currently track gambling revenue from the country’s current 75 licensed casinos.
Independent gambling investment analyst Vince Martin, writing for Seeking Alpha warns that much of NagaCorp’s VIP market increase is due to “buying Chinese VIP revenue” via higher operating expenses associated with outreach for junket and VIP gambling diverted from Macau.
Additionally, NagaCorp is currently developing the Primorsky Entertainment Resort City (PERC Project) in Vladivostok, Russia. The PERC Project is not expected to be operational until 2018.