NagaCorp Ltd has officially signed two junket operators from Macau and plans to fly some customers to its property in Cambodia starting in September, says chairman Tim McNally (pictured).
The casino operator has signed up over seven VIP promoter groups from Southeast Asia, primarily from Malaysia, in recent years, but earlier this month it said it was ready to sign up seven or eight junket operators from Macau.
“We have formally executed agreements with two of those groups. We already had some visitation from them, but we will formally launch the agreements in September,” Mr McNally told GGRAsia.
Nagaworld – the Phnom Penh casino resort operated by Hong Kong-listed NagaCorp – has been benefiting from a new incentive VIP programme launched last year.
In recent years, Nagaworld has been repositioning itself as an attractive niche product for junket operators looking for more attractive deals with casino operators.
“With the signing of these Macau groups, we just expect a better quality player, in terms of sizeable rollings – generally with better quality players your win rates improve, which ours have,” said Mr McNally.
“We just think we are going to the next level in terms of improving our VIP play,” he added.
NagaCorp has a 70-year casino licence in Cambodia that will run until 2065, as well as a 41-year monopoly – expiring in 2035 – within a 200-kilometre (124-mile) radius of Phnom Penh. Nagaworld had 169 tables and 1,544 electronic gaming machines as of June 30.
The operator has raised the table limits in the past year, from a range of US$40,000 or US$50,000 to US$100,0000 or US$150,000 for maximum bets.
That lower roller segment are increasingly finding themselves bumped down in Macau as casino operators look to boost yield from a growing player base in the so-called premium mass segment.
“We offer VIP services that that level of player would not receive in Macau,” Mr McNally said. “We have good momentum going into the second half, and 2015 will see a continue growth.”
NagaCorp’s gross gaming revenue rose by 27 percent year-on-year to US$180.3 million in the first half of 2014, the company reported a fortnight ago. Revenue from VIP gaming jumped 61.3 percent in year-on-year terms, while in the mass-market segment it grew by 19.8 percent. VIP play accounted for about 62 percent of all gaming table revenue in the first six months of 2014.
“By no means we want to reach a point where 80 percent of our revenue comes from the junket side. We want a very robust mass market as well as junket operators,” NagaCorp’s chairman said.
To increase its exposure to the mass market, NagaCorp purchased two Airbus A320, which will be operated by an independently operated airline. The company is also targeting high-end spenders with its private jets.
Mr McNally says some flights are scheduled for September, when Nagaworld will host a mixed martial arts event. “We will be bringing a number of Macau players and groups,” he said.
“On the mass market side, we have signed an agreement with China Travel Service – we are very interested in increasing our source of players, from China, South Korea, Japan,” said Mr McNally.
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Andrew Lee and David Katz
Analysts at brokerage Jefferies LLC