Inside Asian Gaming

26 recently visited Cambodia, where I was intrigued by tales of a booming casino scene in the border town of Bavet, mere me- ters away from the crossing into Vietnam. The place evokes scenes of an old cow- boy town out of the American Wild West. There are two ways to get there. The first is from Ho Chin Minh City (Vietnam) via a de- cent road which takes a bit over an hour.The second way, which I took, was from Phnom Penh. The countryside scenery was quite lovely, though the scrolling vista of buffalos and paddy fields was somewhat spoiled by the volatile displacement of my ocular sens- es (read very bad road). After about three and a half hours in the SUV, which included a charming ferry ride across the Mekong, the hard-packed dirt track interspersed with bits of bitumen mi- raculously transformed into a proper road, flanked by a row of shiny new streetlamps and bordered on both sides by large new casino hotels, resplendent with bright neon lights. On one side were the new Las Vegas Sun City and Volvo Mocbai. On the other were the wonderfully named Le Macau, New World, King’s Crown and Sun City. The old Fullhouse is currently empty with a brand new US$50 million facility being con- structed to replace it, complete with an 18- hole golf course. The latest arrival on the ‘strip’ is Las Ve- gas Sun City, complete with a logo that’s strikingly similar to that of Las Vegas Sands Corp’s Sands Macau. I rubbed by eyes—had I just landed in mini Macau? I wandered in- side and lo and behold,there was even a mini replica of Sands’ famous chandelier. Just like Sands, there was an also-ran Filipino band belting out covers on the stage. And what’s more, there were even the same ‘G-wings’ above the tables to house the lighting and surveillance cameras. The only thing missing was the unique two tone black and bronze uniforms, but that was probably because an- other casino over at the border with Thailand (Poipet) had already used that design. Las Ve- gas Sun City seemed to be doing good busi- ness considering it was the middle of the day, in the middle of the week. Crossing the road to the other side, I en- tered another casino which has the ambi- ance of an SJM casino. I was surprised to see the sheer number of people in the main hall. Almost every gaming table was full of play- ers, but the thing that stood out most was the large number of females wearing jackets of different colours circulating in the crowd. I learnt that these were the“Rolling Girls”; each coloured jacket representing a differ- ent junket agent. Their jobs were to “roll” the chips for the players—i.e. customers would hand them cash or cash chips in exchange for junket chips, akin to the transactions that occur in any VIP room in Macau, except that this was happening on the main floor. I went to inspect the other four casinos, and they were all the same. In fact, the nine or so junket agents in Bavet control all the main hall business of the town’s six casinos (each agent has between 50-100 ‘rolling’ girls working 24/7). The other common feature I noticed among Bavet’s casinos is that most of the VIP rooms sat empty. The junket agents there in- formed me this was because casinos wanted too much in terms of underlying lease/rent, leading the junkets to take their clients back into the main hall. Each casino has its own inventory of hotel rooms, some of them with up to about three hundred rooms, and there is even a new one being built which will boast a four hundred rooms. And almost all of these rooms are comped through the Junket Agents. The Bavet business model So what is the business model in Bavet and why is it booming? For starters, there is no above-the-line gaming revenue tax in Cambodia, so the ca- sinos in fact enjoy the full 2.52% (or 2.7% if you subscribe to the American belief) theo- retical house advantage. The casinos pay the agents 1.6% plus some minor soft costs like free hotel rooms and F&B coupons. As- suming these soft costs add up to 0.4%, the casino still enjoys a net 0.5% hold or a profit margin of 20% Not bad, when you compare it to the 0.2- 0.3% house margin in Macau. What do the Junket Agents get for bring- ing in the players from Ho Chi Minh City? Not only do they get the commission and the freebies, they also get special incentives in the form of visa and transport reimburse- ments; basically reducing their expenses to just two major items: credit and ‘rolling staff’ (each ‘rolling’ staff gets about US$100 per month plus tips; a pretty good wage package Rolling, Rolling, Everywhere Casino marketing columnist Octo Chang sees a vision of Macau’s future in a Cambodian border town I

RkJQdWJsaXNoZXIy OTIyNjk=