Land Deal Paves Way for Casino Hotel Project in Underserved Cambodia-Area Market
- May 28, 2010
May 28, 2010
By Barbra Murray, Contributing Editor
Hong Kong-based Elixir Gaming Technologies Inc., which maintains its U.S. headquarters in Chicago, has taken a big step forward in the development of its Dreamworld Casino and Resort in Cambodia’s Takeo Province with the acquisition of seven acres of land along the Vietnam border. If all goes as planned, the initial phase of the gaming property will open its doors by the end of 2011.
Elixir is purchasing the land, which sits on the well-traveled National Highway No. 2, for $1.76 million. The deal comes on the heels of the Government of Cambodia’s official granting of a license to Elixir for the development and operation of Dreamworld. The casino resort will be built in stages, with the first phase involving the development of 54,000 square feet of casino floor space and 50 hotel guestrooms at a cost of approximately $8 million to $10 million, including the land.
As is the case with any commercial development endeavor, location is everything. The land Dreamworld will occupy is strategically situated to allow Elixir to capitalize not on the Cambodian market, but on the Southern Vietnamese market. Dreamworld will be within a three-hour drive of a bevy of major cities in Southern Vietnam, including the capital city of Phnom Penh. So, if the target market is Southern Vietnam, why not just cross the border and buy land there? It’s a legal issue; Vietnamese residents are legally barred from gambling in their own country–as Cambodian residents are legally barred from gambling in theirs.
“The area where we’re building is very much an emerging market for gaming,” Traci Mangini, Elixir’s Senior Vice President of Corporate Finance, told CPE. “There’s a strong propensity to gamble within these markets, and while our primary target will be people in the cities of Southern Vietnam, there are a lot of transplants and people with dual passports we can cater to.” And then there’s the contingent of tourists. Dreamworld will be near a duty free trading zone that is home to a coveted shopping destination, and it will sit within a half-hour drive of a renowned temple in Vietnam that attracts more than one million visitors every year.
Upon the anticipated August 2010 closing of the land transaction, Elixir will be able to take the next step in developing the first phase of Dreamworld. As for additional phases, Elixir will expand the property as demand dictates.