Donaco Hopes Star Vegas Resort Acquisition Will Help Boost Its Revenue
Casino operator Donaco International Ltd which operates in the Asia Pacific region recently acquired the Star Vegas Resort and Club in Cambodia and remains hopeful that the acquisition will help boost its overall revenues.
Donaco’s flagship business is the Aristo International Hotel which is a boutique casino located in northern Vietnam, bordering the Chinese province of Yunnan. In July 2015 Donaco took over Star Vegas Resort for US$360 million.
Established in 1999, Star Vegas is the biggest casino located in the border region of Poipet in Cambodia.
The casino like most of the casinos in the region primarily caters to Thai gamblers as gambling is banned in Thailand. It features around 1400 slot machines and over 100 gaming tables.
The acquisition resulted in revenues for Donaco rising by as much as seven times for the financial year ending June 30, 2016 as per the company’s financial reports. In a statement, Joey Lim Keong Yew Chief executive and managing director Donaco said,
We are optimistic about the prospect for further growth at… Star Vegas from leveraging our Manchester United relationship, VIP promotions and our recent expansion into the neighboring Star Paradise property.
In August 2015, the company had entered into a partnership with the premier English soccer club Manchester United, a team that is highly popular with Thais. Speaking at the company’s annual general meeting held at Sydney, Joey Lim Keong Yew said that the rest of the financial year would see improved revenue as the casino rolls out marketing initiatives such as events that leverage their status as the Official Resort Partner’ of Manchester United to increase mass market visits and additional VIP tournaments to bring in high-stakes players.
Donaco announced a net profit of AUD77.2 million (US$57.4 million) in August for the 12 months ending June 30. The company had recorded a loss of AUD2.9 million the earlier year. Lim stated that the company was finalizing its arrangements with its partner in Cambodia, regarding the management of the Star Vegas casino property. According to the terms of the deal, the partner will be the same vendor that managed the Star Vegas casino and will continue managing the casino for a period of two years after the completion of the deal.
Lim added that the financial arrangements which were currently under discussion would be reflective of the remuneration packages of senior casino executives. The arrangement of two annual management fee payments are a part of the original deal and include the guarantee of US$$60-million as EBITDA from the vendor.
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