Cambodia is expected to lead the globe in terms of VIP gaming revenue growth as a percentage this year, according to a new report issued by US investment bank Morgan Stanley.
The report projects that Cambodian casinos will post a 39 per cent increase in 2016 VIP proceeds, noting that global casino VIP revenue recorded its first quarter-on-quarter growth in Q1 this year following eight consecutive quarterly declines.
While it projected that Macau would continue to have negative growth, Cambodia alone – which reported a 174 per cent increase in first-quarter growth at a total of $81 million – helped buoy global VIP revenue performance predictions.
The turnaround was attributed primarily to Chinese high rollers being more confident as the Chinese property market and currency stabilises, and the consolidation of junket operators.
The data highlighted that the “VIP market outside Macau is gaining relevance” as a global share of revenue.
Michael Ting, a Hong Kong-based gaming research analyst for CIMB Securities, said that the continued anti-corruption campaign in China has been a boon for Cambodian casinos.
“The trend is that as there is more diversification away from Macau for VIP junkets, peripheral markets in the region will come to Cambodia,” he said, adding that Cambodia has proven to be one of the most stable destinations in the ASEAN region.
He added that with NagaWorld planning to launch its NagaCity Walk by the second half of this year, and Naga2 in 2017, the Kingdom’s gaming industry should sustain its high level of growth.
Lorien Pilling, director at Global Betting and Gaming Consultants (GBGC) in the UK, said that Cambodia would continue to benefit from Macau’s slowdown.
“Prior to the issues in Macau, Cambodia was not really positioned as a high-end VIP casino destination,” he said. “The growth has come partly because of a repositioning of the Cambodian casino sector and also because it was starting from a low base.”
Pilling added that while Cambodia has done well in terms of attracting the VIP segment, it has also benefitted from Singapore not pushing for junket growth.
“The Asian region has high VIP demand and low regulated supply to cater for it, so Cambodia should be able to sustain its growth, despite future competition from the Philippines and South Korea,” he said.
Aharon Gini, general manager of the Queenco Hotel and Casino in Sihanoukville, said that the VIP sector was essential and that a marketable shift was beginning to be felt for the coastal destination.
“We have a lot of interest from big travel agencies coming from different cities in China directly to Sihanoukville,” he said. “The signals are much more solid as groups are signing contracts and putting down physical deposits for July and August.”
Ashish Patel, general manager of Titan King Casino in Bavet, which operates 139 gaming tables, said that if there was an increase in VIP revenue, it was limited.
“I think that information is wrong,” he said. “We have not seen an increase in VIP customers. And if there is, it is only in the Phnom Penh area.”