Cambodian integrated resort operator NagaCorp has told Inside Asian Gaming that it is focusing its energies on the “local captive market” in Phnom Penh, including “referral VIP”, after shutting its Suncity VIP Club due to COVID-19 in March.
NagaCorp was one of a number of regional casino and IR operators to confirm that Suncity rooms within their properties had long since suspended operations as a result of the pandemic, while Australia’s Crown Resorts and Star Entertainment Group have cut ties with all Asian junkets in the wake of local regulatory probes.
As reported by IAG, Suncity last week announced the closure of all its Macau VIP Clubs following the arrest of CEO Alvin Chau, who authorities have alleged is involved in criminal association, illegal gambling, money laundering.
In response to IAG’s inquiries in recent days, operators in the Philippines and South Korea confirmed their Suncity rooms had now closed – mostly due to COVID-19 – although at least one had only officially closed its Suncity VIP Club since news broke of Chau’s arrest. Resorts World Manila told IAG its Suncity rooms closed last year. Korea’s Paradise Co pointed to COVID-19 for the suspension of VIP operations, with the pandemic having rendered international travel largely impossible over the past two years.
While most were reluctant to elaborate, NagaCorp said it had closed its Suncity VIP Club at NagaWorld in March 2021, with the company instead “planning to concentrate on the local captive markets of mass, premium mass and what it described as “referral VIP”.
“The company is also reacting to tourism opportunities as soon as the country’s border opens up.”
Morgan Stanley analysts said in a note last week that NagaWorld had the highest EBITDA exposure to the VIP segment of all regional operators within its coverage at 45% in 2019, of which 25% is estimated to have come from Chinese VIPs.
“This was the result of Naga’s high revenue exposure to VIP (72% of GGR) and higher margin (24%), reflecting lower tax rates and opex,” they wrote.
In response, NagaCorp told IAG that Suncity had contributed 11.1% of NagaWorld’s total GGR and 6.7% of EBITDA in 2019 at US$191.7 million and US$45.2 million respectively. Last year, Suncity contributed 10.1% of NagaWorld’s US$88.2 million in GGR, and 6.2% of the US$16.4 million in EBITDA.
Suncity first opened its NagaWorld VIP room in March 2018.