This article first appeared in The Edge Malaysia Weekly on September 11, 2017 - September 17, 2017
AS the eldest grandson of the late casino mogul Tan Sri Lim Goh Tong, Joey Lim Keong Yew will be closely watched as he runs his Australia-listed gaming outfit Donaco International Ltd. In an interview, the managing director shares his thoughts on Donaco and the direction he plans for it. Here is an excerpt from the interview:
The Edge: In July, you started the refurbishment of the Star Vegas, and you are adding some 90 tables.
Joey Lim Keong Yew: Yes, that is right. It is essentially a marketing deal with a company called Vivo Tower. The spending will hardly be much. Probably, a couple of hundred thousand US dollars, at the most; it won’t exceed a million.
Will it impact your bottom line considerably?
Absolutely. We have 140 existing tables, so it’s a pure rental model. At the moment, there is a mark, which when crossed, we enter into a revenue-sharing model with Vivo Tower.
There’s talk that Donaco will go into online gaming by October. Is it true?
We have been looking at online gaming very seriously and we are in a unique position — we own a dormant online gaming licence. This is from football betting to online casinos.
We have a licence from the Cambodian government.
Are these games yours?
We are working with a solutions provider who has the platform games, to acquire these games ... it is like a game publisher as well.
This is one exciting area of on-line gaming that we are definitely pursuing first and foremost before we launch online casinos or football betting.
We like to see ourselves as a unique company — we’re not a large integrated resort operator, we are not saying we’re excluding ourselves from that, but definitely we are looking at a section of the market that is not being served at the moment.
This will start in October?
Maybe not so soon. It will take a bit of time, maybe six to seven months to develop the platform and integrate it with our CRM (customer relationship management).
This will be broken down into two main categories — sport betting, which is quite prevalent in most countries in Asia, and live streaming.
We are hearing that Vietnamese may be allowed into your casino soon.
We have two locations in Vietnam that have been identified as pilot schemes. Everything is tied to an investment certificate, and you have a project and the land ... everything is sort of bundled into a laundry list of things that you need achieve before you can be awarded a licence. And you comply with what you’d applied to do, for example, [have] a hotel, casino, even a bar. The minimum requirement now for a casino licence is US$2 billion ... very chunky. That’s the amount of investment to be made.
But for us, we are a pioneer, so our licence was granted under different circumstances. It used to be the case — you have a five-star hotel, and for every 100 rooms, you get five tables, or something to that effect.
We’re the first in the country. Our licence was granted about 16 or 17 years ago.
So, you are considering this US$2 billion investment, but more of a long-term project?
Yes.
Are you looking to put more money into Lao Cai?
We are continuously looking to improve. We’re looking to develop a beer garden and [redevelop] the old property (Lao Cai International Hotel). It will become like a commercial area. There is growth in the border towns.
Property development in Vietnam is exciting; there is a lot of room for growth.
We also have land in Aristo International and we have local partners, and the local government is very helpful.
We’re looking at a couple of regeneration projects as well. There’s an old school. We are looking to relocate it and create an education quarter. We are looking at education initiatives as well ... setting up a hospitality school with the Lao Cai government.
What sort of property development are you looking at?
We are looking at commercial properties and hotels.
Hotels with casinos?
In Vietnam, they have slot clubs attached to hotels. These are on our radar [screen] as well.
How much are you looking to spend on this initiative?
In terms of gross development value, we are looking at US$100 million to US$200 million. In terms of refreshing properties, we are looking at US$50 million to US$100 million over the next few years.
Is there demand for all these developments in Lao Cai?
You should see the number of skyscrapers coming up across the border in China. I have a lot of faith in Lao Cai. It should be growing over the next few years.
Are you looking at any new initiatives?
Always. We are — I can’t say specifically — always looking at the region.
You forked out US$360 million for the asset in Poipet. That’s more than RM1 billion, that’s a lot of money …
If you are just to look at the hardware, you’d think it’s a waste of money. But what we are actually buying is the name and the establishment, meaning it’s not a mature business, but a well-established one.
A sum of US$360 million sounds expensive, but think about US$360 million for a casino closest to Bangkok, which is much bigger than Singapore. Bear in mind that Bangkok is a city of 12 million people … if you take Greater Bangkok, there are 20 million people. So, US$360 million for a Bangkok casino is cheap.
The Star Vegas deal also came with two years of profit guarantee — US$60 million for each year.
So, you are open to more borrowings, raising proceeds from the market?
Definitely, we’re open.
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