Lately, there is a lot of buzz in the casino industry and it appears that a relatively new entrant is at the heart of it. This game changer is none other than the Australia-listed gaming outfit Donaco International. And everyone is watching.
Donaco International Limited is a private company that owns and operates leisure and entertainment businesses across the Asia-Pacific region. Though it was formally incorporated in 2002, its origin in the casino and entertainment sector dates a few decades back to the Genting Group. Donaco, which is worth more than $400 million, is led by Joey Lim Keong Yew, who is the grandson of the founder of the Genting Group and late casino tycoon Lim Goh Tong.
Donaco had a humble beginning in 2002 with a 34-room boutique casino named Aristo International in Lao Cai along Vietnam’s border in China’s Yunnan Province. Its majority — that’s 95% — shares are owned by the company while the rest of the shares are owned by the local government. The old, small building was expanded to a modern and substantially bigger five-star facility in 2014. The new property has increased guest rooms by more than tenfold and the gaming tables fivefold along with a license for more expansion.
Since the Vietnamese residents are barred from casinos unless they show a foreign passport, Aristo International mainly caters to Yunnan residents who are allowed to cross the border visa-free for 48 hours. This is clear from the fact that Aristo allows betting in Chinese Yuan and also employs Mandarin-speaking staff. Even at the height of its activity, Aristo generates only less than one-fourth of the revenue being earned by Donaco as the lion’s share comes from Star Vegas.
Star Vegas Resort & Club is a successful casino and hotel complex in Poipet, Cambodia, on the border of Thailand. Established in 1999, Star Vegas was acquired for $360 million USD by Donaco in 2015, creating a debt of $120 million USD for the company. As per the latest information provided by Joey, more than half of the debt has already been serviced and the company should be clear its acquisition-related debt by 2018.
Star Vegas has more than 100 gaming tables, more than 1,500 slot machines, and 385 hotel rooms. As casino-related activities are legally not allowed for Cambodian residents, Star Vegas mainly caters to enthusiasts from Thailand. This is evident from the fact that Star Vegas allows betting in Thai Baht and also employs Thai speaking staff. Also, a deal with junket operator Heng Sheng Group in 2015 has helped to funnel Heng Sheng Group’s VIP customers to Star Vegas, leading to an increase in profits.
With a strong profitable base resulting from a steady rise, Donaco is now nurturing some ambitious expansion dreams.
In consonance with the ever-increasing prospects of the Vietnamese government relaxing a rule preventing locals from entering casinos, Donaco is planning to tweak its business strategy with Aristo to attract locals. Also, to capitalize on a possible jolt in business following the opening of Lao Cai airport, which is scheduled to be completed next year, Donaco is pumping in more investments to commercial and residential development.
Regarding Star Vegas, Donaco is planning additional investment to enhance the facilities substantially. Specifically, along with enhancing the physical infrastructure, it is also planning to introduce online gaming.
Apart from investments connected to Star Vegas and Aristo, Donaco is aspiring to extend its reach. With the signing of a deal with Manchester United, thereby gaining the right to be the English football club’s “exclusive casino resort partner” for Thailand, Cambodia, Vietnam, Laos, Myanmar, and South Korea, Donaco has made it clear that its expansion plans are real. While Donaco is on an expansion spree, the casino world is still admiring its rise. And there is no sign whatsoever that the pace of growth of Donaco will subside anytime soon.
