Logo of Phnom Penh Post newspaper Phnom Penh Post - Donaco dumps its new junket operator

Donaco dumps its new junket operator

Donaco dumps its new junket operator

Donaco International Ltd has terminated its junket deal with Macau VIP gaming promoter Heng Sheng Group, saying the arrangement proved too restrictive for the marketing of its flagship Star Vegas Resort and Club in Poipet.

“[The] previously agreed deal with Heng Sheng has now been terminated. Operations were suspended from January 2016,” the ASX-listed casino operator said in a fiscal half-year earnings report yesterday.

Donaco completed its $360 million acquisition of Star Vegas last July. In August it entered a three-year contract with Hang Sheng Group to funnel high-rollers to the casino’s gaming floor and handle customer service.

Joey Lim, managing director of Donaco, told shareholders in November that the junket deal was off to a good start, and a swank new VIP gaming room at Star Vegas earned nearly $700,000 in its first full month of operation.

The company’s earnings report for the six months to December 31 also indicated strong growth of the casino’s VIP segment, with rolling chip turnover increasing 29 per cent compared to a year earlier.

Yet in January – just five months since inking its three-year deal with Hang Sheng – Donaco’s management terminated the contract, claiming it was hindering VIP traffic growth.

“Heng Sheng previously had exclusivity for certain countries and territories, preventing us from working with other junkets,” it said in the earnings report.

Donaco said negotiations with other international junkets were in advanced stages and new deals could result in a significant number of new players visiting Star Vegas in the coming months.

Most importantly, a potential deal with Thai junket operators could open the casino to cross-border VIP traffic – arguably a more natural fit than reliance on the distant Chinese market.

The company said it was considering options to expand its gaming floor into the adjoining 240-room Star Paradise Hotel to accommodate an expected surge in Thai VIP traffic.

In addition to the casino, Donaco operates the Aristo International Hotel in northern Vietnam near the Chinese border.

The company reported casino operating revenue of A$68.8 million (US$49.5 million) for the six months to December 31, with the Star Vegas contributing A$55.5 million and the Aristo recording A$13.4 million.

MOST VIEWED

  • Hun Sen asks Cambodians to believe in government

    Prime Minister Hun Sen on Monday asked citizens and investors to trust that the government will overcome the challenges brought about by Covid-19 and the loss of the EU’s Everything But Arms (EBA) scheme. Speaking to reporters at the Peace Palace in Phnom Penh,

  • Westerdam passenger ‘never had’ Covid-19

    The US Centres for Disease Control and Prevention (CDC) said the US citizen that allegedly tested positive in Malaysia after travelling on the Westerdam was never infected with Covid-19 in the first place. In an article published in the newspaper USA Today on Friday, CDC

  • ‘Ghost staff’ found, $1.7M returned to state coffers

    The Ministry of Civil Service said more than seven billion riel ($1.7 million) in salaries for civil servants was returned to the state last year after it discovered that the books had been cooked to pay ‘ghost officials’. This is despite claims by the Ministry of

  • Woman wanted for killing own son

    Police in Phnom Penh’s Meanchey district are on the lookout for a woman who allegedly hacked her son to death on Sunday in Stung Meanchey III commune. District police chief Meng Vimeandara identified the son as Chan Sokhom, 32. “The offender can’t escape forever.

  • H5N1 also poses deadly threat, ministry warns

    The Ministry of Health’s Communicable Disease Control (CDC) department has called on citizens to excise caution over H5N1 or bird flu that is spreading in the southern province of Vietnam. In a Facebook post, the department announced that it has made a series

  • Malaysia in turmoil

    Malaysian Prime Minister Dr Mahathir Mohamad has done it again. At the centre of two days of high drama and political manoeuvring, he has, wittingly or not, contributed to shaking Malaysia, and further causing its equities market to fall nearly three per cent. The drama