Cambodian casino operator NagaCorp Ltd – which runs the NagaWorld casino resort complex in the country’s capital, Phnom Penh – has been expanding the areas for mass-market high-limit table play, and has added side-bet options to help ramp the business in the post-pandemic era.
So said Mike Ngai (pictured, second left), NagaCorp’s chief operating officer (COO), as part of responses to several questions from GGRAsia during the company’s Wednesday press briefing in Hong Kong on the firm’s interim results.
NagaCorp’s first-half gross gaming revenue (GGR) was US$283.4 million, a year-on-year growth of 12.3 percent, with the mix now shifted in favour of mass play compared to 2019. But the interim GGR this time was only circa 32.5-percent of equivalent period in 2019, when it reached US$872.4 million.
Mr Ngai stated: “Certain adjustments in our operation… continue to drive our GGR. One of them is we have more [mass] high-limit areas. Before, we only had them at Naga 2; now we also have them at Naga 1. There’s demand for them.” He was referring respectively to the complex’s original site, and an extension connected via a below street-level shopping walk.
The management did not provide fresh detail on its Naga 3 project, a further extension of the project, other than the commentary it gave in its first-half results.
The COO did note however, in terms of the value to the company of the mass customers in its existing facilities: “We tried to improve the [house] win rate. [The] introduction of new side bets… provides a much higher house edge for us.”
According to Mr Ngai, a side bet introduced to NagaWorld in the second quarter was a baccarat variant known as “tiger baccarat” in the Singapore casino market. This format is now also prevalent in the Macau market, where it has another name: “Small 6/Big 6”.
NagaCorp’s management mentioned at Wednesday’s briefing, that the first-half mass table games “win rate” was 2 percentage points higher year-on-year, at 19.8 percent, which was also 40 basis points higher than first-half 2019.
VIP market, effect of one-off costs in 1H
Mr Ngai stated to the gathering that for its house-managed VIP business, which it calls premium VIP, “we are close to 100 percent recovery” relative to 2019.
Though he added the segment was “more volatile” because of what he termed “economic conditions”. This, the COO said, was “in line” with the experience of other regional casinos in Asia.
NagaCorp’s total interim VIP GGR stood at US$91.44 million, of which circa 66 percent was derived from house-managed high-roller play. The remainder was from “referral VIP” – players introduced by third-party agents. Recovery there was however “way behind” other segments, stated Mr Ngai.
The firm would work to introduce more junket operators in the coming quarters to boost the referral VIP business volume, the COO said.
Anthony Cheung (pictured, first left), the group’s chief financial officer, gave some commentary on how the interim performance would have looked without the influence of several one-off factors, including an impairment declared on a casino resort scheme the group had been building near Vladivostok in the Russian Far East.
He stated: “If you look at the [interim] EBITDA of US$55.5 million, and add back the US$89.1 million [Vladivostok project] impairment; and also add back the US$8 million on the impairment loss on the receivables and [another] US$6.5 million on [a] one-month staff bonus, actually, our EBITDA growth is more or less in line” with year-on-year growth of GGR in the first six months.
According to Mr Cheung’s remarks, that would have meant first-half EBITDA growth of circa 11 percent year-on-year, which would have been in line with the circa 12 percent GGR growth for the group.
Regarding possible disposal of the Vladivostok project, where above-ground work was already well advanced, the firm’s chairman, Tim McNally (pictured, centre) stated: “We’re open to proposals.”
