Chen growing gambling in Cambodia
Despite the coronavirus outbreak taking a toll on gaming, Chen Lip Keong is trying his luck in Russia.
His NagaCorp company is building a $300 million casino hotel outside Vladivostok, due to open in 2021.
“I like the entrepreneurial spirit behind the development,” Chen told Forbes.
Booming growth at his Cambodian casino complex helped push Chen’s net worth up six per cent to $5.3 billion, now at number four on Forbes’ list.
NagaCorp’s share price has nearly doubled since November 2017, when the Naga2 extension opened in Phnom Penh.
Chen, 72, has used the monopoly licence he won in 1994 to ride Cambodia’s economic reemergence from decades of war and more recently, a wave of investment and tourism from China into Cambodia.
In 2006, NagaCorp became the first casino operator and the first Cambodia-based company – to list in Hong Kong.
Today it has annual revenue of almost $1.8 billion, up 19 per cent last year and a market capitalisation of HK$48 billion (US$6.2 billion).
A former doctor, Chen got a sweet deal in 1994: a 70-year licence that includes a gaming monopoly in Phnom Penh and the surrounding 200 kilometres that was recently extended in 2045, and special tax breaks.
“Dr Chen was in the right place at the right time,” says Michael Zhu, senior vice president at US gaming consultancy The Innovation Group.
From his first casino on a river barge, Chen built NagaWorld into a major resort, becoming a billionaire.
He then invested $369 million to build Naga2.
Now he’s building the $3.5 billion Naga3, slated to open in 2025, with 3500 rooms plus convention and entertainment facilities.
This latest extension will be linked to the current complex underground, similar to the NagaCity Walk retail corridor linking NagaWorld and Naga2.
“Naga3 may sound ambitious and at first blush appears outsized, but this company understands the dynamics of this market,” says Klebanow Consulting’s Andrew Klebanow, who is based in Las Vegas.
Chen says his Russian project represents as big an opportunity as he found in Cambodia when he launched Naga in 1994.
“The entry costs should not weaken our ability to travel a long journey to see success,” Chen said.
More new casino licences granted in Cambodia
The number of casino licences issued in Cambodia continues to soar, with the Ministry of Finance revealing another 13 licences had been issued during the first four months of 2019.
Asgam reported in June last year that the new licences lift the nationwide total to a new high of 163, with more than half of those – 91 to be precise – located in Preah Sihanouk province, known as Sihanoukville.
The rapid rate of development in Sihanoukville, primarily relating to new casino resorts funded by Chinese investment, has become a major point of contention in recent years amid concerns over growing violence and widespread pollution.
Casino closes due to complaints
In March last year, officials ordered the closure of the Jin Ding Hotel and Casino following multiple complaints that the resort was flushing raw sewage straight into the sea.
First reported in March, Cambodian officials ordered the closure of the casino.
It had recently opened on Koh Rong Samloen Island and was forced to shut from March 22 after failing to follow a range of official guidelines.
The property is said to have ignored development restrictions and promoted illegal online betting games, according to local media reports.
The property is owned by Chinese national Zhou Jianhua via his company 168 Jinding International Entertainment Co Ltd.
“The casino’s owner had the building constructed on the beach too close to the sea and violated some terms and conditions,” a local government spokesman said.
“We ordered [the owner] to completely close it on March 22 in order for his staff to find other jobs.
“We are not closing it immediately – we have instructed him on many occasions but he failed to comply with our directives.”
The closure comes after 77 families filed complaints, which led to a working group inspecting the property.
The group found that the property was illegally built directly on the sandy beach and did not incorporate a proper sewage filtration system.