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Don’t bet on elections

Don’t bet on elections

The house always wins, except when there’s a disputed election scaring gamblers away from the tables.

That’s the message from Entertainment Gaming Asia Inc, which operates casinos in Poipet town and Pailin province as well as supplying NagaWorld casino with slot machines.

According to the company, Cambodia’s national elections in July, the results of which the opposition party still refuses to accept, are partially to blame for losses of some $309,000 in the third quarter of this year.

“In NagaWorld, we experienced lower player traffic levels as a result of events related to the national Cambodian elections held in July 2013,”said Clarence Chung, chairman and chief executive officer of Hong Kong-based Entertainment Gaming Asia, during a conference call with investors on Tuesday.

Chung did not go into more detail about what kept the players from gambling, but it may have been as simple as access. Since July 28, the day of the poll, several roads in the area have been cut off due to intermittent protests.

NagaWorld is also a stone’s throw away from the National Assembly, whose inaugural session, boycotted by opposition Cambodia National Rescue Party lawmakers, made authorities drape Phnom Penh in road blocks and razor wire. The opposition wants an investigation into alleged voting irregularities that its members say cost them extra parliamentary positions.

NagaWorld representatives declined to comment yesterday on the drop in player traffic during the third quarter reported by EGA.

Figures released in October by NagaWorld itself showed a third-quarter slowdown in cash spent on tables and slot machines. Entertainment Gaming Asia both supplies the machines and takes a portion of the profit from them.

CIMB gaming analyst Michael Ting said that the quarter was a bit weak for Naga in the realm of mass market gambling, which refers to the majority of players who enter the casino, and that the poor performance could be attributed to post-election tension.

Mass-market income for NagaWorld climbed from $625 million in the first half of 2012 to $750 million for the same period of 2013, representing close to a 20 per cent year-on-year increase.

The positive trend could not be sustained, however. The figures from September show a rise from $342 million in the third quarter of 2012 to $366 million for the same period in 2013, an increase of less than seven per cent.

Despite the sluggishness, CIMB’s Ting pointed out that high rollers had not been deterred by bothersome election tensions.

“The VIP was very strong due to some new initiatives such as a new junket revenue sharing program and targeting out of country VIP players from places such as China.” he said.

This is not the first time politics has shaken sections of the economy.

In October, Cambodia’s largest commercial bank, Acleda, lost $200 million in deposits over the third quarter as customers feared for the security of their savings during demonstrations and potential turmoil.

Acleda president and CEO In Channy claimed at the time that within nearly a week in October, close to $186.5 million had been returned.

Despite the third-quarter loss for Entertainment Gaming Asia, CEO Chung is still confident that the company is positioning itself for strong growth.

“Our gaming operations are a key component of our growth strategies and we are actively pursuing new projects in existing ready player markets that we believe will add meaningful scales to our operations,” he said.

As well as its casino operations in Cambodia, EGA has a gaming presence in the Philippines and also produces gaming chips.

Alluding to an ongoing partnership with Cambodia’s Sokimex-owned Sokha Hotel Co to supply gaming machines at the Thansur Bokor Highland resort in Kampot province, Chung hinted that EGA would be looking to deepen the relationship with the company.

“We are also building a very good rapport and relationship with this group, and hopefully we can enter into a co-operation with their other properties elsewhere in the Cambodia area,” he said.

Gamblers and pawn-shop owners at NagaWorld yesterday confirmed that there had been a decrease in activity over the past few months at the casino but stopped short of attributing it to the political situation.

“If I have money, I come,” said Srey Neang yesterday at NagaWorld, where he gambles twice a week. “When I lose money gambling, then I have less money to come as often as before.”

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