Naga Floats Amusement Park Plans for Cambodia

The head of casino heavyweight NagaCorp said the company wants to add a waterpark or theme park to its hugely profitable Cambodian portfolio, industry magazine Asia Gaming Brief reported on Wednesday.

“I can say without a formal announcement yet, you will see a Naga3 from us,” NagaCorp chairman Tim McNally told a panel at the Macao Gaming Show, according to the magazine.

Phnom Penh’s NagaWorld casino in January. (Jens Welding Ollgaard/The Cambodia Daily)
Phnom Penh’s NagaWorld casino in January. (Jens Welding Ollgaard/The Cambodia Daily)

“It’ll be additional hotel facilities and may be a water park or a theme park because in the long run, Cambodia is a reasonable cost destination,” he said.

Mr. McNally predicted that the integrated resort would draw visitors from across the region, particularly from China.

He also said he expected a new Cambodian law on gambling regulations would be put forward in the next few months and contain few “major surprises.”

The company’s local office referred questions to the Hong Kong headquarters, which did not respond to requests for comment on Friday.

NagaCorp, which is publicly trad­ed on the Hong Kong Stock Exchange and incorporated in the Cayman Islands, enjoys a monopoly on legal gambling in Phnom Penh and within a 200 km radius around the city until 2035. It has long benefited from favorable tax rules that allow it to pay just 1 to 2 per­cent of its gross revenue in tax­es, compared to a 39 percent tax on gambling revenue in Macau.

The project would come on the heels of NagaWorld’s ongoing $369 million Naga2 expansion, which will add over 1,000 hotel rooms, 38 luxury VIP suites, up to 300 gaming tables and 500 electronic gaming machines early next year, according to the company’s website.

Lorien Pilling, director of Global Betting and Gaming Consultants, said the company had cashed in on a corruption crackdown in main­land China that scared rich, high-profile gamblers there away from tables in nearby Macau.

Naga3 “helps NagaCorp diversify its revenues from the fortunes of the gaming tables” and compete with new regional projects, Mr. Pilling said in an email on Friday.

“NagaCorp has benefitted in recent years from the difficulties faced by nearby markets, particularly Macau. But these markets are reacting to the new conditions and evolving their business models, so neither can NagaCorp afford to stand still if it wishes to retain its position in the region’s gaming sector,” he said.

According to the Finance Min­istry, a total of $34.7 million in taxes was collected from Cambodia’s ca­si­nos last year, a figure that is ex­pected to increase with stronger regulations and stricter enforcement.

But opposition lawmaker Son Chhay said the revenue was still paltry compared to Naga’s profits, and called for the Finance Ministry to release a long-awaited draft law.

“We have waited for two years” for the ministry to release its draft law, he said. “We hardly collect any revenue compared to other countries.”

Finance Ministry officials could not be reached on Friday.

Even with a new tax and gambling regulations, many analysts remain bullish on NagaCorp giv­en its Phnom Penh monopoly and high profits, which the company’s fi­nan­cial filings show rising 24 percent to $125.2 million in the first half of this year.

A September analysis from Citi Velocity Analytics and Data Serv­ices predicted the new rules would peg taxes at roughly 5 percent, which would still be the lowest in Asia.

But the analysis also noted that any drops in tourism or increased competition from Thailand and Vietnam could hurt the company’s bottom line as could “the perceived ‘weak’ control environment in Cambodia” and “any investment into non-gaming ventures outside of the company’s expertise.”

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