Inside Asian Gaming

INSIDE ASIAN GAMING | October 2010 40 The source gives an at-a-glance assessment of the performance of the current casino inventory in Bavet. It doesn’t make happy reading for any investors or suppliers with exposure to the market. “On the right hand side as you come from theVietnamborder you have an empty construction site apparently earmarked for a casino. Then there’s Mocbai 1, which seems to be doing okay. Mocbai 2, next door, is a newcomer, and doesn’t seem to have any business. Next is Chateau Bavet, RGB’s casino. Things look bad here. It’s currently up for sale with a price tag of US$20 million. Then there’s Las Vegas Sun, which seems to have less action than it did a few years ago. Next to that is a small newcomer so underwhelming I can’t even remember its name. Next to that is Winn, and you know what happened there,” added the source. “On the left hand side as you come from the Vietnam border, there’s King’s Crown, which was recently bought out for US$10 million. That pricing is, I think, indicative of the way the local market is currently discounting the value of Bavet’s border trade. It won’t make it easy for RGB to get its USS$20 million asking price for Chateau Bavet. “Next on the left hand side is a newcomer called SilverWorld. After that there’s a new project, then there’s the Royale. Next door to that is Suncity, which I think changed hands recently. Then there’s the New World, Le Macau and Titan, [formerly known as Caesar International Hotel]. Last, and very much the least, is the VIP. To my knowledge it’s had three different owners this year,” stated the source. “Bavet can provide a reasonable business for three to four casinos. But not ten or more casinos. I simply can’t understand why people are still planning new projects,” said the insider. Another source spoken to by IAG said: “A lot of the [casino] properties in Bavet are simply real estate deals. A developer builds a casino and then tries to sell the property to an outside party. Another problem is that not only do players coming fromVietnam get hassled by the Vietnamese authorities on the way in—if they try to take foreign currency back into Vietnam the border guards try to extort money from them. These problems end up showing in the figures. I have heard that the slot machines in Bavet are doing less than US$15 per day on average.” It’s difficult to know whether Vietnamese officialdom’s attitude towards those Vietnamese nationals trying to gamble in Bavet is mere opportunism or reflective of a wider official policy. There have certainly been signs recently that Vietnam’s government is steering towards a possible policy of regulating and taxing its population’s obsession with gambling in order to try and suppress unlicensed Internet gambling. There has been talk of setting up a state-run lottery and a state-run sports betting operation. The government has solicited bids for technical assistance for such operations from international suppliers of lottery equipment and management services according to theVietnamesemedia. But so far there has been no official word as to whether Vietnam plans to put the proposals into effect. Mocbai 1—quite enough Mocbais to be getting on with in the Bavet market Winn Casino Bavet – closed due to reported bankruptcy A Winn Lose Situation The troubles of Bavet’s Winn casino may have wider implications In late September, the Phnom Penh Post reported thatWinn Casino in Bavet had closed due to bankruptcy, leaving 300 locals jobless. An industry insider spoken to by Inside Asian Gaming suggested the police sealed off the property on 28th September, while the local authorities sought assurances from the owners that outstanding staff wages would be paid. The source said: “Kevin Pham, who was owner or part- owner of Winn, hasn’t operated the casino for a while now. My understanding is he left it in the control of his wife and then latterly of his brother-in-law. Kevin himself is doing real estate business in Vietnam and earning more money there.” A local property agent—Khmer Real Estate Co—has been given the job of seeking buyers for Winn Casino, according to the Phnom Penh Post . The newspaper added the agent is also working on the marketing of two other Bavet casinos where the owners are wishing to sell, though the agency declined to identify the properties. ChrunTheravath, chief of casinomanagement at theMinistry of Economy and Finance, told the Post he was aware of the closure of Winn Casino, but that the company had not officially declared bankruptcy. “I know that the casino has shut down, but so far, there is no written official letter to inform the ministry,” he said. He said that the casino—which began business in early 2010 under ownership of an unnamed Vietnamese-Canadian national—was likely built with the intention of renting or selling the property, but was unable to find a buyer. Another Ministry of Economy and Finance official confirmed that the business had shut down, and said profits at casinos in Poipet near Thailand and Bavet on the Vietnam border had slumped in recent months. Some 27 casinos have licences for operations in Cambodia, but tax revenue from the sector declined US$17.5 million from 2008 to 2009, representing a 7% or 8% drop overall, said Ros Phearun, deputy director of the finance industry department at the Ministry. Cambodia