Inside Asian Gaming

JANUARY 2018 INSIDE ASIAN GAMING 17 Naga2 lifts the only casino in booming Phnom Penh into the top rank of regional gaming destinations. The gleaming gold twin towers of Naga2 substantially raise the ante for a company that has kept its focus on the Southeast Asian mass market, largely escaping the 2014-16 downturn that devastated Macau and fellow ASEAN (Association of Southeast Asian Nations) member Singapore. Naga2 also enables management to play for a greater share of growing Chinese outbound tourism, forecast to reach 200 million travelers by 2020. China has supplanted neighboring Vietnam as Cambodia’s largest visitor source, growing 44% to 700,000 in the first eight months of 2017. “We’ve just built a foundation from mass market tourism and I think our Chinese visitors in particular will continue to grow and enjoy our new property,” NagaCorp Chairman Timothy McNally says. In its 22 years, starting on a barge on a branch of the Mekong River, Naga has upped its game incrementally. It came ashore with a few dozen gaming tables and couple of hundred slot machines in 2003. In 2006, its Hong Kong IPO – the first international stock listing for a principally Cambodian enterprise – raised US$95 million to add hotel rooms. A decade of measured steps built business capacity and credibility – NagaRock and Saigon Palace themed gaming floors; a live dealer multigame area and, when that proved successful, a second node; a second hotel wing targeting the mass market; outreach to Macau junkets; more VIP rooms and guest suites sufficiently stylish to rival any in the region. “The idea is to position a first world product in a third world market,” NagaCorp CEO, founder and majority shareholder Chen Lip Keong told a media briefing ahead of the Naga2 opening. “That is a competitive edge.” NagaCorp’s revenue has grown from US$150.5 million in 2010 to US$531.6 million in 2016 and US$401.6 million in the first half of 2017. EBITDA rose from US$61.9 million in 2010 to US$256.1 million in 2016 and US$181 million in the first half of 2017. Building from that base, Naga has taken a great leap forward. DOUBLE UP Officially soft-opened on 3 November, Naga2 more than doubles the size of the NagaWorld complex. Completing its outfitting in the coming months, the two new towers add at least 300 gaming tables and 2,500 slot machines across four main gaming levels and multiple VIP areas. The full complex is expected to reach 600 tables and more than 5,000 machines, some still operated via third party partnerships that include placement fees and revenue share for NagaCorp. Naga2 gaming areas extend the casino cell concept with varied design, food and music choices. They also continue the Macau level COVER STORY “The overwhelming bulk of Naga2 rooms are in the hotel tower, but the VIP tower may become NagaWorld’s signature. The VIP tower features nine floors of suites, four per floor. Two suites per floor include their own gaming room with a table.” A VIP hotel suite