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Laos – Sanum stalls on Investment

Macau-based Sanum Investment is stalling on its development plans for Laos due to what it says is diminished confidence in operations in the country bordered with Cambodia, Thailand and Vietnam.

The operator opened its Savan Vegas casino and hotel in Savannakhet province in 2008 and is currently attracting between 8,000 to 10,000 players a month. It has spiked any development plans though following the government’s move to take control of Thanaleng Slot Machine Club near Vientiane.

Richard Pipes, Executive Vice-President of Sanum revealed that the company had also been hit with an unexpected tax bill for US$23m.

“Although we see a bright outlook for the gaming business in Laos, we’re not confident to expand our business now,” he said. “The government has to ensure foreign investors that their assets will be safe.”

The casino’s current capacity is around 2,000 players a day with its 490 hotel rooms running at 80 to 90 per cent occupancy levels during the week and 100 per cent at the weekends. With Chinese players becoming a more significant segment for the casino, Savan had been hoping to double its number of VIP rooms to 12 and add a Chinese-themed wing to its operation. It had also discussed investing up to $3m in upgrading the local airport. However the onset of legal wrangles with minority partner, ST Group, and the uncertainty of government seizure has left the group unwilling to make any more investments until its future is more guaranteed.
Sanum  has been busy filing legal documents with the World Bank’s International Centre for the Settlement of Investment Disputes, claiming the government has broken treaties protecting foreign investments.

If the retroactive tax bill is not settled, the entire future of Savan Vegas could be in jeopardy.