GGRAsia – Suncity may take VIPs to NagaWorld from December: analyst

Suncity may take VIPs to NagaWorld from December: analyst

Nov 18, 2014 Newsdesk Latest News, Rest of Asia, Top of the deck

Suncity Group, one of the largest junket platforms in Macau, could begin sending VIP players to NagaCorp Ltd’s flagship property in Cambodia by December, says a note from Union Gaming Research Macau Ltd published on Tuesday.

NagaWorld (pictured) has been benefiting from a new incentive VIP programme launched last year. The property has been repositioning itself as an attractive niche product for junket operators looking for more attractive deals with casino operators compared to Macau.

“We expect Suncity to begin sending volume to NagaWorld as early as December,” said a note by Union Gaming analysts Grant Govertsen and Felicity Chiang following a visit to NagaWorld.

“While the company has not given any indications as to what magnitude of volume to expect, we would think the volume Suncity brings to NagaWorld is at least inline with what Asian Nations is already bringing,” the note added.

Asian Nations, a mainland China-based junket that does not have exposure to Macau, started contributing to NagaWorld operations from end-August. It sends players to jurisdictions outside of Macau.

“Over the early weeks of the Asian Nations junket bringing players to Naga, we believe the run rate is approximately US$150 million in monthly rolling chip volume, or nearly 40 percent incremental rolling chip volume relative to the existing junket volume on property,” said the note from Union Gaming.

“To put this in perspective, we estimate that US$150 million in monthly rolling chip volume is the equivalent of only 1 percent of Suncity’s typical rolling chip volume in Macau,” Mr Govertsen and Ms Chiang added. “We believe it is realistic to think that a junket like Suncity could allocate the equivalent of a low-single-digit share of its VIP volume to NagaWorld.”

Hong Kong-listed 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.

NagaCorp chairman Tim McNally told GGRAsia in August that the casino operator was ready to sign up seven or eight junket operators with exposure to Macau.

NagaCorp reported gross gaming revenue of US$91.5 million for the third quarter of 2014, up 23.5 percent from a year earlier. Credit Suisse AG said then that the “robust volume growth” suggested a “solid execution of Chinese-focussed strategy”.