Blended tax rate in “mid-single digits”
The gaming tax rate is likely to be “more competitive” than in other jurisdictions in the Asia Pacific says Union Gaming analyst Grant Govertsen.
In an investor note cited by GGRAsia, Govertsen said high-ranking officials from Cambodia’s Ministry of Economy and Finance, Ministry of Tourism and Ministry of Interior attended a recent NagaCorp conference and indicated that a new tax rate “would be more competitive than the current lowest GGR tax rate in the region, Singapore, which is at a 10 percent blended rate between VIP and mass.”
“This makes sense in order to attract further investment into Cambodia,” said Govertsen. “We came away with a high level of confidence that the blended GGR tax rate in Cambodia will ultimately be in the mid-single digits.”
The Cambodian government has been modifying its gaming laws since 2014 in an effort to draw major casino operators to that country. Govertsen said the regulatory and tax bill could be complete “in the first half of 2017.”
According to the Khmer Times, 65 casinos now operate in Cambodia, many on the borders of countries where casino gaming is prohibited. The most high profile among them is NagaWorld in Phnom Penh, operated by Hong Kong-listed NagaCorp. NagaCorp is currently developing an expansion of NagaWorld called Naga2, which is set to launch before the end of the year.
“We remain confident that high-quality supply is exactly what’s needed to attract higher quality customers, which the company is on pace to accomplish via increased airlift from China in conjunction with a newly announced partnership with Cambodia’s Ministry of Tourism,” said Govertsen.
The Nikkei Asian Review reports that NagaCorp is “doubling down on the Chinese market.”
“Ultimately what we would love to do is control all Chinese visitation to Cambodia,” said NagaCorp Chief Financial Officer Philip Lee at a recent press conference in Hong Kong. “We want to control the entire tourism ecosystem of Cambodia, covering the entire tourism supply chain.”
The company is expected to invest in new hotels, retail, restaurants, entertainment, transportation and other business elements in the resort town of Sihanoukville and Siem Reap, near Angkor Wat, the Review reported—though both Sihanoukville and Siem Reap are outside NagaCorp’s gaming monopoly zone. Chairman Timothy McNally indicated gaming might eventually feature in resort projects beyond Phnom Penh.
