Dispute is behind YoY drop
Donaco International Ltd. says its Star Vegas casino in Cambodia “continues to rebuild” in the wake of a bitter dispute with a Thai vendor for breach of contract and illegal competition in the Poipet market.
Explaining the reasons behind a 25 percent year-on-year decline in rolling chip turnover to THB24.78 billion (US$794 million) for the three months to March 31, the Australian-listed company blamed the vendor, Somboon Sukcharoenkraisri and his sons Lee Bug Huy and Lee Bug Tong for continuing to run gaming operations at Star Paradise, next to Star Vegas in Poipet, despite a non-compete agreement.
An Australian court recently ordered a freeze on Donaco shares held by Sukcharoenkraisri, Techatut Sukcharoenkraisri and Bhuvasith Chaiarunrojh, who collectively own 148 million shares or about 17.9 percent of the company’s issued capital.
The court order bars the defendants or their representatives from either selling or disposing of the shares “until the final resolution and payment of any award of damages” in some Singapore arbitration proceedings initiated by Donaco. The firm is claiming US$120 million in damages.
Inside Asian Gaming reports that Donaco, which is seeking damages of US$120 million, won an injunction via a Cambodian court in December to close Star Paradise casino and is continuing to pursue enforcement of its legal rights via arbitration proceedings in Singapore.
Despite the decline in rolling chip turnover, Donaco said it’s heading in the right direction. In the six months to December 31, volume dropped 64 percent. A new junket that opened February 9 saw total VIP turnover for the month increase 13 percent year-on-year to THB8.56 billion (US$274.4 million). Visitation was also up 30 percent in the first quarter.
Both visitation and rolling chip revenues increased at Donaco’s Aristo International Hotel in Vietnam, with VIP turnover up 1 percent to RMB2.5 billion (US$398.4 million). But company-wide EBITDA fell 48 percent to US$8.4 million in 3Q18 due to a combination of lower turnover and win rate, reported GGRAsia.
