Donaco International Ltd chairman Stuart McGregor says initiatives taken by the Australian operator of casinos to build up its Star Vegas casino business in Cambodia should pay off in due course.
The chairman, writing in the Donaco annual report for the financial year ended June 30, mentions the difficulties caused by the dispute between his company and the former owners of the Star Vegas Resort and Club (pictured) business in Poipet.
But Mr McGregor said: “Progress has also occurred during the year, with new junkets introduced at Star Vegas, new facilities being built and introduced at the property to attract new main floor and VIP patrons, the refurbishment of hotel rooms, the introduction of new gaming machines and gaming systems, and the recently announced launch of the online gaming operations. These initiatives will all hold the business in good stead over the next few years.”
The dispute centres around a no-compete clause that Donaco says the former owners of the Star Vegas willingly entered into. The trio have since gone into a new business, which was trading under the “Star” name. Mr McGregor said the competing casino had changed its name from Star Paradise to Winsor.
Donaco is claiming damages against the three men at arbitration in Singapore for US$190 million. “The board would like a rapid resolution to this issue, but unfortunately the hearing date is currently set for 29 July 2019, due to unavailability of lawyers and the arbitrator,” Mr McGregor wrote.
The executive paints a hopeful picture after a difficult year for his company. Donaco announced in August that it made an underlying net profit after tax of AUD18.3 million (US$13.34 million) on revenue of AUD96.2 million in its last financial year, having made an underlying net profit after tax of AUD54.6 million on revenue of AUD136.4 million the year before.
The company made a statutory net loss after tax – which includes non-recurring items – of AUD124.5 million in its last financial year, having made a statutory net profit after tax of AUD31 million the year before. Donaco said the statutory net loss after tax took into account a non-cash impairment charge of AUD143.9 million in the value of the Star Vegas casino licence due to its dispute with the former owners.
Annual revenue at the Star Vegas casino fell to AUD66.6 million from AUD 110.2 million.
The company’s biggest business is the Star Vegas, with more than 100 gaming tables, more than 1,000 slot machines and 385 hotel rooms. The Aristo International Hotel is a boutique casino in northern Vietnam, located on the border with China’s Yunnan province, that has some 400 rooms.
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”Our own consensus is that any newcomers to this [junket] sector should be corporatised, and should be financially sound and able to commit a higher guarantee deposit”
Kwok Chi Chung
President of junket trade body, the Macau Association of Gaming and Entertainment Promoters