NAGAWORLD, Phnom Penh’s only licensed casino, will put in play an extra 200 gaming machines in the next six months after a deal was signed with a US-based firm.
On Wednesday, Hong Kong-based magazine Business Wire announced that Elixir Gaming Technology has entered into an agreement with NagaWorld Ltd.
The move will see an extra 200 gambling devices placed in the lobby floor of the capital’s luxury casino over the next six months, raising the total number of Elixir-owned units from 440 to 640.
Around 120 of the extra machines are expected to be operational in the first quarter of this year, with another 80 ready by the second quarter of 2010.
Under the agreement – in which Elixir must pay NagaWorld a US$5.48 million commitment fee and contract amendment fee by January 31, 2010 – the companies will share revenue from the machines. Elixir will take 25 percent of the revenues and NagaWorld the remainder, the report said.
Over time, Elixir is expected to recoup its commitment fee through winnings.
“Given NagaWorld’s position as the exclusive casino licence holder in the Phnom Penh area, and our demonstrated success with our current slot machine operations at NagaWorld, we feel confident that we can continue to drive strong growth in participation revenue and cash flow,” said Elixir Gaming Officials Chairman and Chief Executive Officer Clarence Chung.
The agreement marks a further expansion in the gaming machine business in the capital’s casino – which has exclusive rights to operate within a 200 kilometre radius of Phnom Penh, except for in certain coastal locations like Sihanoukville and Bokor.
According to a September 2009 interim financial report from NagaCorp, NagaWorld’s Hong Kong-listed parent company, NagaWorld only operated 211 gaming and slot machines in June 2008.
In the document, which presented the company’s performance over the first half of 2009, NagaCorp said revenue from slot and gaming machines had risen 1,026.7 percent year on year to $16.9 million. In turn, revenue from the public gaming floor increased by 121.7 percent. That came in a six-month period when net profit decreased by 54.9 percent from $25.5 million to $11.5 million.
A NagaWorld spokesman did not respond to a request for comment Thursday, but a statement from Nagacorp’s chairman Timothy Patrick McNally and CEO Tan Sri Dr Chen Lip Keong, made in the interim report, points to the company benefitting from a government clampdown on Phnom Penh gambling, predicting a rise in the number of gaming machines to be introduced in the future.
“For the period under review, electronic gaming machines or slot machines brought in substantial revenue for the Group on the back of better government regulation,” the statement said. “The closure of many outlets and parlours that offered slot machines has reduced supply of venues offering such gaming activity in Phnom Penh.
The statement said NagaWorld planned to offer 1,000 slot machines.
Contact PhnomPenh Post for full articlePost Media Co Ltd
The Elements Condominium, Level 7
Hun Sen Boulevard
Phum Tuol Roka III
Sangkat Chak Angre Krom, Khan Meanchey
12353 Phnom Penh
Tel: +855(0) 23 888 161 / 162
Fax: +855(0) 23 214 318