Inside Asian Gaming

19 ynn Resorts scored a coup when it hawked the last remaining Macau casino sub-concession to Melco PBL for US$900 million in March 2006, practically covering the cost of the US$1.2 billion Wynn Macau, which opened in September that year with 600 hotel rooms and approximately 100,000 sq. ft of casino space. The US$300 million shortfall is hardly inconsequential, however, considering NagaCorp is building the 503-room five- star NagaWorld hotel casino in the heart of Cambodia’s capital, Phnom Penh, for a mere US$100 million.“That’s good value for money compared to other regional casinos which may cost significantly higher. Macau is now facing a dual handicap of cost push inflation and infrastructure constraints, particularly human resources issues,” com- mented NagaCorp President and CEO Tan Sri Dr Chen Lip Keong. Las Vegas Sands Corp, meanwhile, just reported that it could see a 20-40% cost escalation on its US$3.6 billion Marina Bay Sands project in Singapore, meaning the cost blowout alone could potentially add up to over 14 NagaWorlds. Cost escalation is not likely at NagaWorld, given the land has already been acquired (with land values in the area having subsequently jumped al- most 20-fold), and the property’s shell and many of its rooms are already complete. NagaCorp was awarded a 70-year casi- no license—Asia’s longest casino license— starting 1995, and opened its first casino in a floating barge in Phnom Penh. NagaCorp was also given a 40-year monopoly on ca- sino operations within a 200km radius of Phnom Penh. Stanley Ho’s 40-year Macau casino mo- nopoly, which expired in 2002, allowed him to develop a powerful operation which still retains the largest share of a market now contested by several new foreign and lo- cal licensees. Dr Chen argues: “40 years is a Emerging Value Too long associated with land mines and killing fields, Cambodia has many parallels with—and advantages over—the booming casino destination of Macau. Inside Asian Gaming visited NagaWorld in the capital of Phnom Penh, which looks set to grab a greater share of the region’s mid- to low-end VIP market W The casino at NagaWorld