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King of the New Frontier
Despite its tag as one of Asia’s poorest countries, Cambodia’s gaming industry has grown on a phenomenal scale. Now, one of the country’s new players is in Macau on a mission to find the secret of luring Chinese punters and forge a partnership with Asia’s gaming mecca. By Alan Tso
It was in the dusty Nevada desert that gambling first established itself as a multi-billion dollar business, but today Asia holds the mantle of gaming mecca, with Macau the biggest draw. Up and coming Cambodia is one of the brightest gems in the region’s casino crown contends David Suhr, President of Las Vegas Sun Hotel & Casino on the country’s border with Vietnam.
Despite the use of the world’s entertainment capital in the property’s name, Las Vegas Sun couldn’t be further from neon-town-Nevada.
Instead it is a venture mainly funded by South Korean capital and is well grounded in the vast neighbouring Vietnamese market. But the casino hotel’s name does reveal an inner truth, its founder’s aspiration to provide quality luxury services on par with those in Vegas.
“Whether you are running a hotel or a casino, the one thing that truly matters is service,” says seasoned Korean hotelier Suhr.
Open for less than a year, Las Vegas Sun – the first entertainment complex in Cambodia which boasts hotel and casino facilities under one roof – is a relatively new player in the fledgling Cambodian gaming market.
However, the firm can trace its roots back to Ho Chi Minh City in Vietnam, where it opened some slot machine arcades eight years ago. It was there that the firm began building its network of VIP customers, which now makes up about 90 percent of the clientele of Las Vegas Sun today.
With a total investment of about US$50 million (MOP402 million), the casino now has 48 gaming tables, 84 slots and 25 virtual machines. It is planning to add sports betting and online games, plus, a luxury villa casino is under construction.
China appeal
Despite the strong Vietnamese connection, Suhr aims to cast a wider net, setting his sight on the enormous Chinese market. According to the savvy executive, the Chinese market means more than just the mainland, it’s about the really Chinese diaspora in Asia.
“Let’s not forget that many countries in southeast Asia have a sizable population of ethnic Chinese who still maintain the Chinese way of life,” Suhr says. Conventional wisdom dictates, he underlines, that global gaming firms will be going after Chinese punters for years to come. And grabbing a slice of this considerable pie is the driving force behind Las Vegas Sun’s move to open a representative office in Macau.
“Setting up a presence here is a natural choice for us. We can’t afford to miss out on the action in Macau because it happens to have the largest gaming industry in the world right now,” says Suhr in his firm’s new Macau office.
The representative office’s mission is to promote cross-marketing between Macau and Cambodia.
He points out: “This is a win-win solution. On the one hand, we are hoping to use Macau as a gateway to attract more customers from mainland China and other Asian countries like Japan to Las Vegas Sun. On the other, we believe the Macau market can also benefit from our close ties with high-end Vietnamese customers.”
He says they intend to learn from the Macau experience of providing customised services for Chinese patrons.
“I think it’s crucial to learn more about the different customs and traditions of our target customers before we can offer the best services to them. So if we want to attract more Chinese customers, I think we must understand their needs first,” Suhr says.
Another important role for the Macau office is to gather information on the latest industry trends in a bid to help develop niche markets.
Although the mainland and Hong Kong now provide more than 70 percent of visitors to Macau’s casinos, Suhr is keeping an eye on the rapid growth of customers from neighbouring countries such as Japan and Malaysia. His firm is also hoping to embrace these markets through its Macau link.
But he asserts that he does not envisage direct competition between Macau and Cambodia, emphasising that the two places can be regional partners.
From strength to strength
Suhr is more than upbeat about Cambodia’s casino industry – hailing the developing country as the next cash cow for casino firms. In his opinion, if Vegas and Macau have managed to strike gold given their locations in the middle of a desert and on the tip of South China Sea respectively, Cambodia’s future could be just as bright given its strategic location.
“Needless to say, Macau’s gaming market is already mature and it has a better infrastructure than Cambodia. But in terms of growth potential, I think Cambodia definitely has more room for expansion. To put it in numerical terms, if Macau’s growth potential is 10 percent, then Cambodia’s will be 90 percent,” he says. To back this optimism, his firm’s projected revenue growth for next year is about 55 percent.
Although Cambodia’s gaming market has seen lightning growth in recent years, its scale remains far behind Macau. At present there are 25 casinos in Cambodia, most of which operate in the country’s border areas to cash in on clients from neighbouring Thailand and Myanmar where casinos are not legal.
However, many of these casinos are small-scale properties similar to those which populated Macau’s gaming scene before the industry’s liberalisation.
There is a long way to go before Cambodia can emulate Macau’s rip-roaring success story. But Suhr contends it may take Cambodia less time to transform itself into a robust gaming destination.
And to the sceptics Suhr says just take a look at the boomtown that is Macau today, achieving over the course of four years what Las Vegas took two decades to build.
Golden triangle
Suhr believes Asia-wide the growing trend of legalisation and liberalisation will be a good thing for the region: “Some people may have reservations about gaming, but the social benefits of the business are obvious. It is a legitimate form of entertainment and investment. Above all, it can stimulate growth in the entire economy by attracting tourist dollars and generating tax revenues,” he says.
Meanwhile Suhr does not think the opening of the gaming industry in more Asian jurisdictions will lead to fiercer competition.
His view is that there are boundless opportunities for growth and he is confident that the market is big enough for everyone: “It will keep expanding as long as we continue to improve our infrastructure and services, and build ever more state-of-the-art facilities.
“In the long run, Cambodia, together with Macau and Singapore, may emerge as Asia’s golden triangle for gaming,” he says.
But he has some advice for other aspiring jurisdictions in the world of gaming, it’s best to learn from Macau’s rich experience. After all, he says, the business is not simply about building a casino and inviting customers to it; there are other broader issues like branding and market regulation that must be tackled properly.
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