Inside Asian Gaming

IAG JAPAN MAY 2019 44 IN FOCUS and US$55 million Aristo’s rollout into China-Vietnam tensions and President Xi Jinping’s corruption crackdown. Thailand’s king passed away in October 2016 and mourning decreased Poipet revenue. Somboon’s Star Paradise hotel, across the street from Star Vegas, added gaming areas in 2016. Donaco says it wanted Star Paradise gaming to accommodate new junkets, although Star Vegas had ample space for gaming expansion. Others say Somboon wanted his own casino again. What’s clear is that Somboon has a non-compete clause barring him from opening casinos in Poipet, and that Donaco managed the Star Paradise facility for a US$150,000 monthly fee. In a March 2017 interview with Inside Asian Gaming , Joey Lim said Donaco hoped to extend Somboon’s Star Vegas management contract and, in case Thailand legalized casino gambling – Poipet’s nightmare – Donaco would rely on Somboon’s Thai connections to seek a license. BIG ASK Three months later, though, Somboon’s Star Vegas management contract expired unrenewed. “When we negotiated to extend, his ask was too much and [Donaco] decided to manage it thereafter,” Lim recalls. Attempts to contact Somboon were unsuccessful. Donaco was removed from Star Paradise but casino operations continued, and Star Vegas mainstay junkets relocated there. Star Vegas FY17/18 VIP turnover decreased 52%, gaming revenue fell 40%, EBITDA dove 52% and Donaco wrote down Star Vegas’ license value by AU$143.9 million. In the first half of FY18/19, revenue stabilized but EBITDA fell 29% to AU$13.2 million, and Donaco wrote down another AU$38.2 million of license value. Donaco has tried to rebuild the business by recruiting new junkets fromThailandandbeyond, upgrading facilities and initiating online gaming, with spotty results. It’s obtained injunctions against Star Paradise, subsequently renamed Winsor, and Star Paramax, a casino up the road behind a supermarket. Both continue to operate and a larger casino is under construction.