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

  • Seven positive for Covid-19, Hun Sen confirms local transmission

    Prime Minister Hun Sen announced that there has been local community transmission of Covid-19. However, he urged the people not to panic even though the Ministry of Health announced the discovery of seven new cases on Sunday. Among the victims are Chhem Savuth, the director-general

  • Cambodia at ‘most critical moment’, Hun Sen warns

    Prime Minister Hun Sen said the first community transmission of Covid-19 in Cambodia has led the country to the “most critical moment” that warranted urgent, large-scale operations to contain the pandemic. Hun Sen, who confirmed the first local transmission on November 28, said the source of

  • PM confirms community transmission, calls for unity

    Prime Minister Hun Sen has called on the public to stay calm, unite and follow the Ministry of Health guidelines after the wife of a senior official tested positive for Covid-19 in the Kingdom’s first case of community transmission. The case has drawn criticism

  • Over 110 garment factories close

    A government official said on November 22 that at least 110 garment factories had closed in the first nine months of the year and left more than 55,000 workers without jobs – but union leaders worry those numbers could be much higher. Ministry of Labour and Vocational Training undersecretary

  • Singapore group seeks $14M in damages from PPSP over ‘breach of contract’

    Singapore-based Asiatic Group (Holdings) Ltd is seeking a minimum of $14.4 million relief from Cambodia Securities Exchange (CSX)-listed Phnom Penh Special Economic Zone Plc (PPSP) for allegedly breaching a power plant joint venture (JV) agreement. Asiatic Group’s wholly-owned Colben System Pte Ltd and 95 per

  • PM vows to protect Hun family

    Prime Minister Hun Sen has vowed to continue his fight against opposition politicians who he said intend to smash the Hun family. Without naming the politicians but apparently referring to former leaders of the Supreme Court-dissolved Cambodia National Rescue Party (CNRP), Hun Sen said there