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NagaCorp posts record profit

NagaCorp posts record profit

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A man walks near NagaWorld Hotel in Phnom Penh. Its parent company posted record profits. Photograph: Pha Lina/Phnom Penh Post

Nagacorp, which owns Cambodia’s biggest casino, raked in a record $113.1 million net profit last year, 23 per cent higher than in 2011, Bloomberg reported on Wednesday.

Some 1.8 million people last year streamed through the doors of Nagaworld, the integrated gaming and entertainment hotel complex in Phnom Penh owned by NagaCorp.

Forty per cent of the casino’s clientele came from Vietnam, while 25 per cent were Cambodians with valid passports, NagaCorp chairman Timothy McNally said in a Bloomberg interview dated February 6.

Of the company’s $278.8 million revenue, gambling tables contributed 62 per cent, electronic game machines 32 per cent, and hotel profits six per cent.

The growth in revenue was due to increased numbers of tourists passing through Phnom Penh, as well as Cambodia’s “stable political environment, [and] a very warm and welcoming environment,” McNally said.

Despite an influx of Chinese tourists visiting the country, McNally said NagaCorp’s focus is primarily elsewhere. “We are not a Chinese-centric business – less than 10 per cent of our revenue stream comes from our Chinese customers.

We are an Indochina-based casino,” he said.

Responding to the company’s profits, an opposition legislator said the company should pay increased taxes to the government.

Last year, 3.9 per cent of NagaCorp’s net profit – or about $373,000 per month – was paid to the Cambodian  Ministry of Economy and Finance.

But Yim Sovann of the Sam Rainsy Party said the casino’s taxes should be raised to 50 per cent of net profits, which is comparable to what casinos in Macau and Las Vegas pay.

Casinos have “very high [negative] consequences on society”, and people have robbed to pay off debts, or even committed suicide, Sovann said, adding that he believes a 50 per cent tax would be “okay for the casino owner, as [its profits are] still a lot of money”.

NagaCorp currently pays a fixed monthly tax, irrespective of revenue. Under an agreement with the government, the tax would rise 12.5 per cent annually until 2018, Macau Business magazine said last year.

The ruling Cambodian People’s Party has rejected Sovann’s proposal.

In a televised speech last August, Prime Minister Hun Sen said, “I don’t like casinos, but the biggest goal for giving permission to build casinos is to protect the border.”

“One can remove border markers, but one can’t remove five-storey hotels. Don’t be stupid,” he said, responding to lawmakers who have been vocal critics of Cambodia’s casinos.

Cambodia’s borders with Thailand and Vietnam are dotted with casinos and hotels.

NagaCorp holds exclusive gaming operational rights within a 200-kilometre radius of Phnom Penh until 2035, and its casino licence is valid until 2065.

The firm is in the midst of constructing Naga2, a new complex including hotels, restaurants and entertainment located 200 metres from NagaWorld.

To contact the reporter on this story: Low Wei Xiang at [email protected]

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