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

  • US think tank warns of China's 'ulterior motives'

    A US think tank on Tuesday warned that spreading Chinese investment in the Indo-Pacific follows a pattern of leveraging geopolitical influence at the expense of the nations receiving investment, including Cambodia. The report looks at a sample of 15 Chinese port development projects, noting that the

  • More than three tonnes of ivory reportedly bound for Cambodia seized in Mozambique

    A total of 3.5 tonnes of ivory reportedly bound for Cambodia was seized by authorities in Mozambique late last week, according to the NGO Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES). CITES' information was based on a report from the

  • Defence Ministry denies weapons in smuggling case came from Cambodia

    After a Thai national was arrested last week for allegedly smuggling guns from Cambodia to Thailand, Cambodia's Defence Ministry has claimed the weapons seized during the arrest are not used in Cambodia, despite the fact that both types of rifle seized are commonly found in

  • Shipwreck found off coast of Koh Kong

    Royal Cambodian Navy researchers are working to identify a decades-old shipwreck found earlier this month off the coast of Koh Kong province. Divers found the 70-metre-long wreck on April 4 about a mile from Koh Chhlam island, according to Navy officials. Deputy Navy Commander Tea Sokha,