Private equity firm NewCity Capital LLC is to be a “new financial partner” in the Ho Tram Strip beachside casino development (pictured) in southern Vietnam, said the project’s developer Asian Coast Development (Canada) Ltd (ACDL) in a press release. It didn’t specify what that meant in cash terms.
NewCity Capital, founded by American investor Chien Lee, is investing via a vehicle called NewCity Ho Tram Investment Co. It has also set up an entity called The GrandNewCity.
Phil Falcone, founder and principal of New York-based Harbinger Capital Partners LLC, which is Asian Coast’s majority shareholder, said in the statement: “…we are very excited to have an investor that brings capital as well as marketing and operating expertise to our project.”
The first phase of the Ho Tram Strip – The Grand Ho Tram Strip – opened in July last year with what Asian Coast described as a 541-room US$500-million hotel tower designed by Paul Steelman and 90 gaming tables – 55 of them for VIPs.
It was rumoured in the investment community last year that at least one Macau junket investor was mulling capital investment in the Ho Tram Strip. Meanwhile, anti-Chinese riots in Vietnam in May this year following flare up of a maritime territorial dispute between Vietnam and China led some analysts to fear a depressive effect on the numbers of Chinese gamblers visiting the Southeast Asia country.
Full build-out of what Asian Coast says is a US$4-billion project would include up to five integrated resorts with a total of 9,000 five-star rooms, and 180 tables and 2,000 electronic gaming machines in two casinos.
Asian Coast is a privately held Canadian company. It is therefore not required to publish to the public details of its finances.
Las Vegas-based Pinnacle Entertainment Inc, a publicly listed casino operator in the United States, said in filing in May 2011 it had become a 26 percent equity partner in Asian Coast. But it warned in another filing to its shareholders in November 2012 that issues and delays in the scheme occurring at that time meant Pinnacle risked losing its entire US$109 million investment.
In March 2013, global casino operator MGM Resorts International pulled out of a management and branding deal for The Grand Ho Tram Strip, telling Asian Coast it didn’t want to wait for the casino resort project to get its investment certificate from the Vietnam authorities.
Pinnacle has meanwhile written down its entire investment in the scheme.
Currently under Vietnam law, only holders of foreign passports are permitted to gamble in the country’s casinos.
Reuters reported on July 10 that despite legal gambling for Vietnamese passport holders being confined to the state lottery and dog and horse racing in some regions, there is a large pent-up demand for gambling products of all categories in the country.
Between the start of the FIFA World Cup on June 12 and July 10, near the end of the tournament, illegal soccer betting operations discovered by the authorities had handled a combined VND6.5 trillion (US$307 million), said the news agency.
Two-thirds of the country’s fast-growing population of 90 million are under the age of 30, and it has a consumer middle class that is expected to double by 2020, according to a recent report by the Boston Consulting Group.
