Inside Asian Gaming

INSIDE ASIAN GAMING DECEMBER 2018 40 Although a full three years later than initially planned due to a lengthy series of delays, at least the company he has largely helmed since Ho collapsed at home in 2009 now has something to look forward to. The lack of a Cotai presence – with all five fellow concessionaires having now opened their properties following the February debut of MGM COTAI – has seriously hurt SJM Holdings’ bottom line. Once the dominant player in Macau, the company’s market share now sits at around 15.2%, having fallen from 19.5% a few years ago and from 15.4% last year. Most problematic is the mass segment, considered the industry’s long-term future, where SJM continues to lose share despite gaining some ground in VIP in 3Q18. Clearly the HK$36 billion Grand Lisboa Palace can’t come soon enough. Nevertheless, SJM is still throwing some punches even while it waits to climb back into the main ring. Current peninsula flagship Grand Lisboa continues to perform respectably, while Oceanus and Jai Alai – located alongside one another near Macau Ferry Terminal – have shown recent improvement on the back of more Jai Alai facilities coming online throughout the year. SJM also maintains a substantial footprint with 22 of Macau’s 41 casinos operating under its license either directly or as “satellite casinos” in third party locations. And the recent announcement by SJM Co-Chair Angela Leong that she and son Arnaldo Ho will launch a new IR called Lisboeta directly alongside Grand Lisboa Palace – including 820 valuable new hotel rooms – can’t hurt either. Chen Lip Keong FOUNDER, CONTROLLING SHAREHOLDER AND CEO NagaCorp POWER SCORE: 1,393 POSITION LAST YEAR: 18 CLAIMS TO FAME Created NagaWorld, the Mekong region’s largest integrated resort, in Cambodian capital Phnom Penh First casino enterprise listed on the Hong Kong stock market Building a new casino hotel outside Vladivostok in Russia’s Far East 14 Founded as a casino on a barge, NagaWorld entered the big time with its Naga2 extension, opened in November last year. Adding the Paul Steelman-designed twin towers produced a world class complex with 1,700 guest rooms, 600 gaming tables, 5,000 EGM positions, retail by China Duty Free and a world class theater that put Phnom Penh on the regional gaming map. Junkets from Macau and beyond visit frequently and Naga affiliate Bassaka Air flies in mainland China tourists in cooperation with China International Travel Services. Dr Chen Lip Keong, aMalaysian who like PrimeMinister Mahathir Mohamad studied medicine but found his calling elsewhere, founded and runs Naga. A successful property developer at home, he came to Cambodia as a part of Mahathir’s Prosper Thy Neighbor policy, hoping to drill for oil offshore. He struck a 70-year casino license in Phnom Penh including a 40-year monopoly within a 200 kilometer (124 mile) radius, while Cambodia was an investment pariah, still picking up the pieces from Khmer Rouge genocide and civil war. After moving onshore in 2003, Dr Chen took NagaCorp public on Hong Kong’s stock exchange in 2006, the first casino company listed there and the first business in Cambodia listed anywhere. When banks wouldn’t offer reasonable financing for Naga2, Dr Chen bet US$392 million of his own money through a convertible bond offering and now owns 66% of NagaCorp, valued at US$2.6 billion. Total capital expenditure on NagaWorld is an estimated US$1.5 billion and this year’s revenue is expected to rise 48% to US$1.4 billion, according to Union Gaming. Naga hopes to duplicate its Cambodia success in another frontier market, Russia’s Far East. It’s building a US$350 million casino hotel in the Primorsky Entertainment Resort City outside Vladivostok, expected to open in 2020. And in Phnom Penh, look for Naga3. ASIAN GAMING POWER 50 2 0 1 8