Citigroup Global Markets Inc says media reports stating Vietnam’s government plans to keep in place a ban on locals entering casinos in that country are good news for Cambodian gaming firm NagaCorp Ltd.
NagaCorp operates NagaWorld (pictured), a casino resort in Cambodia’s capital, Phnom Penh. NagaCity Walk, a shopping complex linked to NagaWorld, had a soft opening last month.
“In our view, if the Vietnamese government maintains the status quo on its gaming laws and regulations, it could be a major overhang removed for [NagaWorld],” Citi analysts George Choi, Anil Daswani and Aras Poon wrote in a Tuesday note.
They added: “Players from Vietnam represent around 10 percent to 20 percent of [NagaWorld]’s mass players, on our estimates, and we believe [NagaWorld] will continue to see Vietnamese players crossing borders and gaming in Cambodia.”
On Monday, Vietnam’s Thanh Nien newspaper – citing an official at the Ministry of Finance that it didn’t identify – reported that the latest version of a national draft decree on gaming, prepared by the country’s central government, proposed keeping in place a ban on locals entering casinos in Vietnam.
Brokerage Union Gaming Securities Asia Ltd had stated in a Tuesday note that if the news were confirmed, it would be “clearly bad news for international IR [integrated resort] developers” eyeing to invest in Vietnam.
Citi’s Tuesday note said that the latest version of the national draft decree maintained that casino operators needed to invest at least US$4 billion to be granted a casino resort licence in Vietnam.
“The US$4 billion minimum investment requirement, in our opinion, is probably too high for most potential investors to invest in a gaming jurisdiction that does not allow locals to play,” the brokerage stated.
In April, media outlets in Vietnam reported that Hong Kong-based Chow Tai Fook Enterprises Ltd; Macau junket operator Suncity Group; and Vietnam-based asset management firm VinaCapital Group, would soon start construction on a planned casino resort in Vietnam’s Quang Nam Province.
In May, Suncity said in an emailed statement to GGRAsia that the project would include three hotels. The statement did not mention gaming.
Management at The Grand Ho Tram, a beachside casino resort property in Vietnam’s Ba Ria-Vung Tau province, near Ho Chi Minh City, had told GGRAsia in an October 2014 interview that the venue hoped to be part of a national pilot programme for locals to gamble, possibly via the use of an entry levy for locals or some other economic test.
Las Vegas Sands Corp is among several major foreign casino investors that have in the past reportedly looked at development opportunities in Vietnam. So reportedly has Bill Weidner, a former president of that company, who has since pursued investments of his own. MGM Resorts International once had a branding deal with the Ho Tram resort, but pulled out in March 2013, prior to the property’s opening in July that year.
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"The [Macau] government has a lead in this subject in regards to what should be done after the [gaming] concessions expire. We will be first listening to what the government will say”
Ambrose So Shu Fai
Vice-chairman and chief executive at Macau casino operator SJM Holdings