Discretion pays for Vietnam casino raking in wealthy Chinese

NagaCorp

06/12/2015 21:00

* Privately owned Crown has exclusive licence in Danang 
    * VIP turnover exceeds Philippines, Cambodia and Malaysia 
 
    By Farah Master 
    DANANG, Vietnam, Dec 7 (Reuters) - A small beachfront 
Vietnamese casino is giving Macau's VIP gambling scene a run for 
its money, drawing in more wealthy Chinese through its columned 
facade than many Southeast Asian rivals with the allure of sun, 
sand and discretion. 
    Few outside Danang have heard of the Crown International 
Games Club, a privately owned casino located along this rapidly 
developing city's main resort strip and which over the past year 
has emerged as the most exciting place for wealthy Chinese to 
drop bets worth at least HK$1 million ($129,030). 
    The popularity of this low-profile casino among the world's 
most prolific gamblers coincides with the waning fortunes of 
bigger, more famous rivals such as the opulent Wynn Macau and 
Grand Lisboa in Macau as a Chinese government crackdown on 
corruption and conspicuous spending batters the world's biggest 
gambling industry.  
    "This is a test case of a casino going under the radar that 
is doing extremely well," said Ben Lee, managing partner at 
Asian gaming consultancy IGamiX. "There is no other destination 
I know where the junket and casino organise 25 charter flights a 
week from China." 
    Crown's lack of renown can be put down to the Vietnamese 
government's reluctance to promote Danang as a destination for 
gambling, an activity which remains restricted to foreigners in 
this conservative, Communist country which maintains a rigid 
stance on social order.  
    Owned by Chinese businessman Hui Kong, Crown is one of seven 
licensed casinos in Vietnam, already a popular destination for 
many Chinese tourists. 
    Its main gaming area - plushly decked out in beige and gold 
- and 13 VIP rooms are about a quarter the size of an average 
Macau casino, but industry executives estimate monthly VIP 
turnover has increased over the past year to $3 billion a month, 
a figure at least double what larger rivals such as Solaire in 
the Philippines, NagaCorp in Cambodia and Genting Highlands in 
Malaysia rake in. 
    Crown executives declined to give any financial details. 
    "Right now many people come here mostly to gamble," said 
James Yang, marketing director at the luxury Crowne Plaza which 
flanks the casino. The hotel, managed by the Intercontinental 
Hotels Group  IHG.L , caters to its mainly Chinese guests by 
providing a sauna, a karaoke parlour and Mandarin-speaking 
staff. 
    The resort complex, already Danang's largest, will also 
double the number of its rooms as part of a $600 million 
redevelopment plan that includes opening a JW Marriott-branded 
hotel, a duty free shopping mall and an expansion of the casino. 
     
   NOT JUST PUNTS 
   Several companies are also betting on Vietnam, which analysts 
say could become a major Southeast Asian casino hub if it allows 
locals to gamble. Augustine Ha Ton Vinh, a professor who advises 
the government on the gambling industry, said this restriction 
is likely to come up for debate next year. 
   Hong Kong-based Chow Tai Fook Enterprises and VinaCapital are 
building an up to $4 billion casino resort in central Quang Nam 
province which is due to open by 2018, while the Ho Tram, a 
casino backed by U.S. hedge fund Harbinger Capital, is expanding 
its premises on a beach a two-hour drive from Ho Chi Minh City. 
    So far, Chinese are the biggest client base for Vietnam's 
casinos and Crown, like its peers in Macau, works with junket 
operators, typically companies which loan credit to VIP gamblers 
and help them bypass China's currency controls. 
    At least 10 of these junkets are now only focusing on 
Danang, industry executives say, as the slump in Macau's gaming 
industry pushes their business model to the brink of collapse. 
 urn:newsml:reuters.com:*:nL3N13E2OU 
    "Customers like the environment here much better," said 
junket operator Hugo Huang as he sipped fresh coconut juice 
inside a private dining room adjacent to the casino. "We have 
beautiful beaches, cultural sites and it's very easy for Chinese 
to feel comfortable." 
    Huang, who also runs VIP rooms in Macau and Cambodia, 
charters two flights a week from China to Danang. Last month, he 
flew in 100 VIP gamblers from China for a golf tournament, 
capping off the trip with a gala dinner and pop music concert. 
    Playing up all the leisure activities Danang has to offer 
fits in with the government's drive to rebrand the former 
wartime outpost for U.S. soldiers into a tourist destination for 
all. 
    "At the moment, we are positioning ourselves as a leisure, 
beach and meeting and conferencing destination," said Nguyen 
Xuan Binh, director of Danang's tourism promotion office. 
    Asked about Crown, with its impossible-to-miss glitzy facade 
and elaborate fountains, Binh said he had never heard of it. 
($1 = 7.7501 Hong Kong dollars) 
 
 (Editing by Miral Fahmy) 
 ((farah.master@thomsonreuters.com; +852 28431631 , +852 9631 
8262; Reuters Messaging: 
farah.master.thomsonreuters@thomsonreuters.net)) 
 
Keywords: VIETNAM GAMBLING/CHINA