Analysts Bullish on Success of Naga 2 Casino Resort Project

Analysts believe that Naga 2, the recently opened extension of the NagaWorld casino complex in the Cambodia’s capital Phnom Penh, has bright future if it succeeds to attract VIP casino players from Mainland China and other countries around the Asia-Pacific region.

Naga 2 celebrated its week-long soft opening last week. The property cost Hong Kong-listed developer NagaCorp the amount of $369 million and includes a hotel portion with 900 rooms and a casino floor that will accommodate 300 gaming tables and nearly 2,500 slot machines once fully operational. As mentioned above, the newly opened complex is part of NagaWorld casino resort.

Combined, the older portion and its new extension will feature 1,600 hotel rooms, a little less than 3,000 slot machines and over 550 gaming tables when construction work is completed. Multiple dining facilities, spa, convention and exhibition spaces will also be part of the property’s offering. NagaWorld and Naga 2 are connected via an underground retail complex.

Earlier, Hong Kong research firm Union Gaming Securities Asia Ltd. estimated that the newly launched Naga 2 could generate earnings of $113 million during its first year of operations.

Why Are Analysts Bullish on Naga 2’s Success?

According to analysts the new resort has the potential to attract high roller players to its casino floor and thus secure profitability for its parent company. Thus, Naga 2 can complement NagaWorld, which is more mass market-oriented and has established itself as such quite well.

According to CIMB Securities analyst Michael Ting, Naga 2 can build on the success of NagaWorld by luring more Chinese patrons. Mr. Ting recommended increased charter flights to and from China. He further pointed out that NagaCorp may think about boosting its promotional activities across Asia and hiring more junket operators to encourage growth in its VIP segment.

Gambling consultant Global Betting and Gaming Consultants also believes that junkets could contribute to the success of the endeavor, but that it is really important to select the right number of junkets to promote its offering.

Union Gaming Securities Asia dwelt that Naga 2 is of much more luxurious quality than its adjacent property and that it will certainly be able to cater to high-spending high rollers from the region. Of NagaWorld, the research firm said that the casino resort has been performing quite well so far as it has been generating high levels of revenue and cash flow. However, the firm went on to say the property was not intended for premium customers, unlike its sister venue that has just been opened.

Under an agreement with the government of Cambodia, NagaCorp is currently holding the monopoly over casino gambling in the Phnom Penh region and within a 200-kilometer radius from the capital until 2035. As reported by the company itself, the monopoly agreement has helped it boost its profitability and expand its offering.

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