NagaCorp Shows Glimpses of Recovery Despite Russian Casino Project Pause

  • NagaCorp’s non-VIP gaming segments all rose year-on-year in Q1
  • The company has struggled with COVID-19 restrictions and with issues with two other projects
  • NagaCorp has paused work on its planned Russian casino resort due to current uncertainties
  • The casino company had originally been planning to open the Russian casino in 2022
Businessman pressing pause button on virtual screen
NagaCorp’s Q1 financial results show a marked improvement following recent COVID-19 restrictions and the pause of its Russia casino development. [Image: Shutterstock.com]

Green shoots of recovery

NagaCorp seems to be gradually bouncing back from some of its recent struggles. The Hong Kong-listed casino company has announced its first quarter financial results, showing a 14% year-on-year drop in gross gaming revenue to $110m. A large reason for the drop is a fall in VIP gaming levels.

However, the first quarter results were much better than the final quarter of last year. Its non-VIP gaming segments all had improvements year on year amid the lifting of COVID-19 restrictions.

Last year, the company reported a $147m net loss.

It has been a rough couple of years for NagaCorp. Like many other casino operators, it struggled due to COVID-19 restrictions on land-based properties. Its Cambodia casinos had to close down between March 2021 and September 2021. Last year, the company reported a $147m net loss. There have also been delays to the development of a new casino in Cambodia, as well as the suspension the development of a casino project in Russia.

Putting Russian project on hold

NagaCorp has put its partially built Russian casino resort project on hold for the time being. Development of the Primorsky Entertainment Resort City in Vladivostok will remain paused “until the circumstance is clearer.” It is believed that the ongoing invasion of Ukraine by Russia is the reason behind the halt, but there was no mention of the conflict in NagaCorp’s press announcement. Many other companies in the gambling industry have stopped serving the Russian market since the start of the invasion.

NagaCorp currently operates two casinos in Cambodia and is building another. It holds a monopoly on the country’s casino sector until 2035.

NagaCorp has a force majeure clause as part of its investment agreement in Russia that allows it to suspend operations. The announcement cited “various uncertainties in respect of the Group’s gaming and resort project in Vladivostok, Russia” as the reason for the pause. The board of directors will issue further announcements in the future regarding the project.

Pushing back the timeline

The origins of the casino resort project in Russia date back to 2013 when NagaCorp agreed to invest at least $350m. The location of the resort is in a picturesque region that has views of the sea, hills, and an inland lake.

Malaysian billionaire Chen Lip Keong started NagaCorp in 1995. With a net worth of about $3.4bn, he was named Malaysia’s ninth richest person in 2021.

By the end of 2021, the hotel building was complete, as well as a large portion of the casino. NagaCorp had been hoping to open the casino resort at some stage in 2022, but that no longer appears to be possible.