Inside Asian Gaming

INSIDE ASIAN GAMING | November 2010 16 (30,000 square meters) of land. Cambodia’s border casinos have sprung up within the last ten years—many of them in a sudden growth spurt in the last five years, riding on the back of a general upswing in optimism about rising gaming industry revenues in Asia. Bavet, on the border with Vietnam, has 14 casinos, plus at least two more projects apparently under construction. In theory, Bavet has a favourable location for border casino business. It is not much more than an hour by road from Ho Chi Minh City in Vietnam, that country’s biggest urban centre with a population of 7.1 million at the 2009 census. Many of those people are passionate gamblers who aren’t allowed to visit Vietnam’s casinos unless they have access to a foreign passport. In reality, though, an hour’s commute to Bavet can stretch into a much longer journey due to Vietnamese red tape that can vary in length from week to week and even day to day. In late September, the Phnom Penh Post reported that Winn Casino in Bavet had closed due to bankruptcy, leaving 300 locals jobless. More could follow in Bavet and elsewhere unless either cross- border trade improves, or the authorities put a cap on the number of licences they are willing to issue. Cover Story Thunderbird is Go India gets a new casino resort and more could be on the way Strait Talking Taiwan’s casino plan is still under debate INDIA TAIWAN T here’s a widely held belief that Indians are not nearly as interested in casino gambling as the Chinese. The opening in October of Amsterdam-listed Thunderbird Resorts’ new casino resort property in the former Portuguese colony of Daman may be a sign that things are changing. Thunderbird says it is specifically targeting locals as customers, rather than foreign tourists. Between now and January, the Daman property on India’s west coast will fully open its 7,600 square-meter casino with up to 400 slot machines and 25 table games onto what is essentially a brand new market. The resort also has a 176-room hotel. The company said in a filing last year it had raised an initial US$58.5 million for the project through a mixture of debt and equity. The 1976 Gambling Act of Goa, Daman & Diu prevents Thunderbird (as a non-Indian national entity) from owning or operating a casino in India. The casino operations in India are instead held by a group of Indian nationals who lease space from a joint venture company set up for the purpose called Daman Hospitality Private Limited. The only other places in India with casino gaming are Goa and the former kingdom of Sikkim. Goa has a very limited operation, consisting of a small number of slot machines for use by foreigners-only in some luxury hotels, and a handful of casino boats. Political squabbling over the future of Goa’s gaming industry has resulted recently in what the operators say amounts to near harassment by the authorities, forcing them to moor further and further down river. Sikkim opened a land-based casino in March 2009, but only foreigners are allowed in. Thunderbird could shortly be joined by another casino property in Daman. Mumbai-based Delta Corp, which started life as a textile business and expanded into real estate and gaming, says it has an agreement in principle with the Daman & Diu government for a land-based gaming licence. Delta Corp already owns and operates two riverboat casinos in Goa, and said recently it was in talks with Advani Hotels & Resorts to acquire a controlling stake in the company operating a third casino boat out of Goa, the M.V. Caravela. Forced further out to sea—the M.V. Caravela H as Taiwan missed the boat regarding its ambitions to create its own (albeit arms-length and offshore) casino industry? The answer is probably ‘not quite’. But the resort or resorts eventually constructed in Taiwan could be a lot smaller and less of a draw for international visitors than the slick integrated operations created in Macau and Singapore. Does that matter? The key to success will surely be the rate of return on investment. So even if a Taiwan casino has a modest capex compared to the billions spent in Macau, it could still prove a success for investors if it can pull in enough customers. There, some political uncertainties come into play both domestically within Taiwan and in terms of Taiwan’s relations with the mainland. Currently the frontrunner to play home to Taiwan’s first casino resort is the county of Kinmen, an offshore archipelago. It is nearer to mainland China than to Taiwan, and as a consequence, is bristling with concrete bunkers and other old military installations