Suncity forms Japan consortium, eyes local gaming in Vietnam

Thursday 17th of May 2018

Suncity Group, Macau’s leading junket operator, has formed a consortium in Japan to study a potential license bid there, executive director Andrew Lo said in an interview.

Lo said the consortium was made up of Japanese companies, although he declined to name them. He said the size of any potential investment would be dependent on the location for the resort and the final shape of the legislation.

“We are just beginning,” he said on the sidelines of G2E Asia. “We are willing to spend some expenses, form a consortium and hire a few guys to try to understand more because the rules and policies aren’t that ready yet.”

“A committee asked me what am I going to invest. I said if you give me a big plot of land in front of the palace i’m going to invest $50 billion, if they give me a remote island I may consider $500 million.”

Japan’s lawmakers are currently hammering out the details of the IR Implementation Bill, which will set out the fine print over how the industry will be governed. Some of the clauses that have already been revealed have raised concerns, such as the renewal period and procedure for the licenses, the high tax rates and the 3 percent cap on the size of the casino floor.

While some operators are seemingly prepared to spend whatever it takes to get a foot into the Japanese market, Lo said if tax rates are too high he would prefer to invest in smaller projects around the rest of Asia.

Suncity has been diversifying its business model to gain more operational control over the casinos in which it operates. The company has a management contract to run a casino in Van Don in Northern Vietnam and taking it one step further, has taken a 34 percent stake in the Hoiana casino in central Vietnam.

That property is expected to open in mid-2019 with 140 tables, half for the mass market and half for the VIP sector. Lo said they have projected table roll at the new resort to be $100 million per table, although that is likely to be highly conservative given a room it has been operating at the Crown Casino in Danang for a year and a half is rolling $200 million per table.

He said he is confident the resort will ultimately be permitted to allow locals to game, as it meets all the requirements in terms of size and scale.

Vietnam’s government has partially lifted a ban on allowing its residents to gamble, implementing a three-year pilot project at two casinos, neither of which are yet open, in the far north and far south of the country. Other major resorts are seeking inclusion in the program.

Lo said Suncity has diversified to ensure it has full operational control over the properties to which it brings its VIP clients.

“In Macau we are the number one but there are lots of things I cannot get. I have no say on the design, the restaurant or even the menu and sometimes I can’t even get a booking,” he said.
He said with full control, “it will be a lot more easy for the team to do marketing. VIPs hate to hear sorry or no, but it’s happening in Macau.”

The Hong Kong-listed company is looking at expansion across the region, including Korea, the Philippines and potentially Myanmar, he said.