Inside Asian Gaming

September 2015 inside asian gaming 47 SkyCity Darwin in the Northern Territory while securing expansions at both. Darwin, it’s worth noting, saw its international business more than double over the last 12 months. His focus now is on executing a comprehensive expansion strategy whose first plank was laid in Auckland in 2013 via a critical agreement with the government of New Zealand. The company has committed to building a NZ$450 million International Convention Centre at SkyCity Auckland in exchange for a sizable expansion of its largest casino—230 more machine games and 40 new tables, an option to add either 12 additional tables or 240 ETG positions, permission to deploy cashless gaming across the entire operation and higher limits on a portion of the slot floor. A pretty big deal in all considering that last year Auckland Joey Lim is making quite a name for himself, befitting the one he was born with. In 2002, Mr Lim and his grandfather, Genting Group founder Lim Goh Tong, started Donaco. Now it’s the Donaco head’s bold initiatives putting the Australia-listed company, which has no business ties to Genting, in the spotlight. Last November, Donaco completed construction of Aristo International, which had a soft opening six months earlier, replacing Lao Cai International Hotel built in 2003. Vietnam’s Lao Cai is a great spot for a border casino; residents of China’s neighboring Yunnan province can cross the border visa-free and stay up to 48 hours. The new $55 million Aristo is a significant upgrade over its predecessor, with 428 guest rooms, 40 gaming tables and 58 machine positions in its foreigners-only casino. Gaming turnover—overwhelmingly VIP—rose 17% during Donaco’s fiscal 2015 that ended 30th June, but revenue fell on a VIP win rate under 2%. Management wants to boost mass play, targeting Hanoi’s expatriate community, now just three hours away via a new highway. Donaco says property net revenue in July was $1.8 million, 69% above July 2013 and 55% better than the FY15 monthly average. In January, Donaco reached a deal to acquire Star Vegas Resort and Club in Poipet, the Cambodian border casino area closest to Bangkok, for $360 million, an eye-popping price for that market. Fans of the deal say Star Vegas, with 109 tables and 1,264 machines, plus 385 hotel rooms, is a best-in-market asset. The seller, a Thai businessman, has taken a third of the price in Donaco stock and is guaranteeing annual EBITDA of $60 million—the 2014 level—for the first three years. The acquisition, closed 1st July, dwarfs Donaco’s Joey Lim Managing Director and CEO Donaco International previous business, which consisted solely of Aristo after completing sales of two mobile technology subsidiaries last year. Donaco expects Star Vegas to produce 85% of its FY16 revenue. Last month, Donaco announced two more deals. It signed a three-year contract with English football’s Manchester United as “exclusive casino resort partner” for Thailand, Cambodia, Vietnam, Laos, Myanmar and South Korea, where Donaco is reportedly among hopefuls for a casino license. “Through our partnership with Manchester United, we look forward to delivering compelling marketing campaigns to better engage with our customers and fans and help expedite our growth and footprint across the region,” Mr Lim says. Donaco also signed a three-year deal with Macau VIP promoter Heng Sheng Group for Star Vegas, expanding its customer base beyond Thais. Under the revenue share agreement, Heng Sheng will guarantee minimum monthly roll equivalent to 3 billion Thai baht ($83 million), equivalent to 30% of current Star Vegas turnover, as well as assuring a minimum win rate and paying all junket commissions. A new dedicated VIP area with capacity for 50 tables plus an exclusive entrance and restaurant is on track to open this month, with Heng Sheng sharing building costs. Players will fly into Siem Reap, about two hours by road from Poipet and site of the Angkor Wat complex, a popular destination for Chinese tourists, Pacific Financial Services founder Tony Tong, a consultant on the deal, notes. “This deal provides an illustration of the multiple growth opportunities for our Star Vegas business,” Mr Lim says. It also highlights the vibrant vision Donaco is bringing to Asia’s small markets. generated 60% of group revenue and 81% of group EBITDA. What this also achieved was to allow Mr Morrison to turn his attention to transforming SkyCity Adelaide into the hub of a government- sponsored entertainment precinct on the banks of the River Torrens and a credible destination for the Asian VIP trade. The first A$50 million phase was completed early this year with a top- to-bottom refurbishment and reconfiguration of the existing gaming and non-gaming product that included the introduction of cashless wagering, the creation of new high-limit areas and the opening of two gourmet restaurants. Next up is the addition of a six-star boutique hotel to go with a significantly expanded casino floor and more private VIP rooms and signature restaurants. The cost is estimated at A$350 million.