Cambodia’s Casino Drive: Another Asian Success Story

The casino industry is booming across Asia, with the proliferation of integrated casino resort facilities in destinations like Macau, Singapore and Vietnam. Macau has been a prominent gaming hub in the continent, with revenues surpassing Las Vegas casinos. At $37.6 billion, Macau registered a 14% year-on-year growth in gaming and gambling revenues in 2018. Las Vegas recorded merely $11.9 billion in the same year, less than a third of Macau’s earnings. Given its proximity to the Chinese market, Macau remains a dominant casino investment destination for the future.

Inspired by the success of Macau, another country is investing heavily into its casinos. Cambodia attracts tens of thousands of international visitors every year, especially from China and Vietnam. The country is targeting 2 million Chinese visitors by 2020, and big companies like NagaCorp are all set to make it the next Asian gaming capital.

The Growing Cambodian Casino Market

In 2018, the government granted 52 gaming licenses to companies, bringing the total number of casinos in the country to 150. This marked 53% growth from 2017, when only 98 casinos existed in the kingdom.

A huge influx of Chinese tourists has been driving the demand for these speciality resorts, which includes casino gaming together with hotels, fine dining, entertainment, shopping complexes and exclusive lounges. The industry is also supported by a huge number of tourists from Thailand, where casino gaming is prohibited by law.

Efforts by the government to boost the tourism industry, through more casino licenses seem to have paid off. In 2018, Cambodia registered a 4-year high growth in real GDP, at 7.5%. This has been possible due to a surge in foreign direct investments (FDI) in the construction and tourism sectors.

The construction sector has been expanding in Sihanoukville, Poipet and Bavet towns, which hosts 90 of the 150 casinos in the country. Poipet city alone has four special economic zones, employing over 20,000 workers.

Role of NagaCorp in Regional Development

NagaWorld, with 1,658 suites and rooms, is located in the capital city of Phnom Penh and is the largest casino in Cambodia. It is a subsidiary of NagaCorp, which has an exclusive casino license within a 200 km radius of Phnom Penh, valid till 2035.

NagaWorld casino is expected to register 30% higher VIP gaming revenues in 2019, surpassing Macau’s VIP gaming revenue projections. Macau’s top three junket operators have set up base in the NagaWorld complex, which helped increase the company’s gross gaming revenues by 55% in 2018.

In April 2019, NagaCorp announced its plans to invest $3.5 billion in building a third casino resort in the area. This ambitious project will be spread across half a million square metres and will include four high-rise hotels and a 48-storey condotel, along with various nightclubs and entertainment facilities. It is projected to be completed by 2025 and will generate higher tourism revenues for the country and generate jobs for the local population.

Cambodia is now being touted as one of the fastest growing regions of the world. The leisure and hospitality industry has changed the landscape of the country, which was among the poorest nations a decade back. The government expects 12 million tourist arrivals by 2025, which will further drive demand for housing and hotels in this Southeast Asian nation.