Australian-listed firm Donaco International, which currently has operations in Vietnam, has confirmed it is entering Cambodia’s already-crowded casino and gaming industry.
The company announced on Friday that it had entered into an acquisition agreement to purchase the Star Vegas Resort and Club casino in Cambodia’s Poipet town in Bantey Meanchey for $360 million. The acquisition is expected to be finalised in April.
The acquisition is subject to completion of due diligence and customary conditions, the statement added.
“Shareholders will receive substantial benefits from the increase size and scale of the company and the diversification of our revenue streams,” Joey Lim, managing director and CEO of Donaco International, was quoted saying.
“This transformational acquisition is the culmination of many months of work, and is a major step forward in our expansion strategy.”
Star Vegas Resort consists of 109 gaming tables and 1264 electronic gaming machines.
Gross gaming revenue for Star Vegas Resort declined from $103 million in 2012 to $87 million in 2013, however showed signs of recovery during the first half of 2014 reaching more than $45 million. Visitor numbers meanwhile have increased year-on-year to more than 47,000 in 2013.
Donaco International operates a boutique casino in northern Vietnam, on the border with China’s Yunnan province as part of a joint venture with the government of Vietnam. The Aristo International Hotel, which was launched in May 2014, has recently been expanded to include a five-star resort complex with 428 hotel rooms.
Ros Phirun, deputy director of the Ministry of Finance’s Industry Department, said he was yet to receive official notification of the Star Vegas Resort and Club acquisition.
When asked if he thought the casino’s revenue and player decline in Thai gamblers crossing the border to play at Cambodia’s casinos was the reason for the Star Vegas Resort sale, Phirun said it was unlikely.
“It is common. The sellers [Star Vegas] will want to sell their business if the acquisition results in profit for them,” he said.
Cambodia has a total of 59 casinos, the majority of which are located on either the Thai or Vietnam border.
Ho Vandy, Co-chair of the Tourism Working Group, said that Vietnamese, Thai, Chinese and Korean tourists were the main tourism markets driving the over-crowded industry.
Vandy added that while casinos have proven to be a lucrative driver of tourism revenue for the Kingdom, the industry remains under regulated.
“More casinos are a good thing for the tourism industry, but it needs to be well-regulated,” he said.