Southeast Asian casino operator Donaco International Ltd says it is looking to reduce the contribution of VIP at its flagship Cambodian resort Star Vegas and focus instead on growing the mass market and online sectors.
Speaking with Inside Asian Gaming at the inaugural Cambodia International Gaming Conference, Donaco Executive Director Ben Reichel said that although the company has recently started re-introducing junkets at Star Vegas in recent months after splitting with its former partner, of greater importance was building up the mass market by expanding its sources of visitation.
“We want to build up visitation from other countries including China, Malaysia and Indonesia and we also want to focus on the online industry which is a burgeoning industry, particularly in Poipet,” Reichel said.
“Historically VIP has represented about 40% of our revenue, which is all junket-based business. Our aim is to get that down to 25% by growing the mass market, by growing the slot machine base in particular and also by the online side.
“We do have an agreement in place to bring in Chinese mass market players from Siam Reap because there is a lot of Chinese visitation there, it’s a very famous tourist destination and it’s a market we’ve been looking at for a while.
“We think we have the right partner now to start bringing in Chinese tour groups to our property just for one night or so, so that will complement the Thai mass market side.”
Reflecting the rapid explosion of online gaming operations in Cambodia’s main casino centers, including Poipet, Bavet and Sihanoukville, Donaco earlier this month also announced the launch of its new online gaming platform – described by Reichel as a “significant growth engine” for the company.
“We’re not making forecasts on how much that will make but it is a very big opportunity,” he said. “It is a crowded space, there are a lot of brands out there, but one of the benefits is that Star Vegas is a very well-known brand so hopefully that will have some cut-through.”
Also key to Donaco’s mass expansion plans is a return to stability in Thailand following the death of King Bhumibol Adulyadej in October 2016
“That certainly had quite a severe impact for the first few months, even for up to six months a lot of our players didn’t come down and gamble,” Reichel said.
“They did eventually come back but what has happened since then is that the domestic demand in Thailand has been a bit suppressed. That’s mainly because the military government has been keeping a very tight hold on social order in the country. They have been promising elections but the elections keep getting pushed back. They’re now talking about March next year.
“The Thai economy is actually doing quite well but most of it is from exports and tourism. The domestic demand is still very soft and that has had an impact on our business.”
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