After Financial Storm, Casinos On Vietnam Border Up for Sale

After taking a major financial hit from the global economic crisis, three casinos in Bavet City on the border with Vietnam worth a combined total of $26 million are now for sale, local realtor Khmer Real Estate announced this week.

Kim Heang, marketing manager for Khmer Real Estate, said the three casinos include a $17 million establishment already in operation as well as two smaller operations, one worth $6.5 million (also in operation) and another worth $2.5 million that is due to open in July.

Citing investor confidentiality, Mr Heang declined to identify the casinos for sale. There are now 12 casinos in operation in Bavet

Last year, casinos across the board complained of a steep decline in customers and revenue and, according to one government official, a near-term recovery is doubtful.

Chea Peng Chheang, secretary of state for the Finance Ministry, said he expected incomes at casinos nationwide to drop by five percent this year after felling by a similar amount in 2009, a sign of more turbulent times ahead.

?I have seen income at casinos decreasing even before the world economic crisis,? he said, adding that revenues from casinos represented a sizable revenue source for the government?s national budget

Last month, in a gesture of confidence in the industry, Cambodian businessman Kith Thieng inaugurated the $100 million Titan King Casino in Bavet, which covers 2.5 hectares of land and employs 6,000 people.

Mr Thieng said yesterday he was not aware of the three casinos for sale in Bavet He added that last year's financial turmoil had already resulted in the closure of one casino in the area.

Ho Vandy, co-chair of the government-private sector Tourism Working Group, expressed doubt as to the ability of casinos on the border to earn major profits this year as the aftermath of the economic crisis still makes its presence felt

?Only if the economy grows will it be better than last year,? he said.

Asked about the sale of the three casinos in the border town, Mr Vandy said that aggressive promotional and marketing campaigns by Mr Thiengs Titan King Casino could possibly lead to shrinking market share for other competitors in the city.

Nonetheless, Mr Heang, the realtor, claimed that several investors had already expressed interest in the two smaller casinos but the larger casino was still without any prospective buyer.

?We have had some good offers. We have nearly managed to sign the contracts,? Mr Heang said, adding only that potential buyers were from Asian countries.
He said that 2009 had been a difficult year financially for casino owners who were confronted with a drop in visitor arrivals and lower spending power among consumers.

Net profit at NagaCorp in Phnom Penh, Cambodia's largest casino, decreased by 36.3 percent to $25.5 million in 2009, according to the company's end-of-year report released last month.

Sourced = The Cambodia Daily