Maybe Vietnam will be Asia’s first big bust gambling community; things are certainly not looking cheery for the MGM Ho Tram Strip these days (only for want of a “p” are the jokes on that name not endless).
According to a recent Securities and Exchange Commission (SEC) filing, MGM Resorts International exercised its right to terminate their agreement to manage the property based on a lack of pre-opening milestones having been achieved as of March 1, 2013. The project is partially owned by Las Vegas-based Pinnacle Entertainment.
The story began in August of 2011, with Pinnacle purchasing a $95 million stake in Asian Coast Development, with Harbinger Capital Partners being the majority owner. Pinnacle was a 23 percent stakeholder; apparently, that was not a harbinger of good things to come.
By 2012, Pinnacle had already written off $25 million on their investment, caused by delays. A prominent gaming security analyst, Chad Beynon of Macquarie Securities, told investors he expected that Pinnacle could well take even more write-offs on the Vietnamese property.
“The fact that MGM Hospitality will no longer be associated with this project will greatly detract from the success of the resort/casino,” said Beynon in a recent report. “MGM not only provided a global brand name, but it was also a significant part of the design and vision of the first phase. It remains unclear who will actually manage the first phase of the project now.”
Asian Coast Development, Ltd, the developer of the Ho Tram Strip integrated resort complex in Vietnam, is currently in the first of five planned phases for the property. The plan is for an integrated group of resorts to be built on more than 400 acres of land and about 1 1/4 miles of beachfront in Ho Tram, a seaside resort known for over a century as a health sanitorium for treatment of a variety of diseases with its mild climate and sea water. Along with its sister beach city Ho Coc ( we just report this stuff, folks), the area is poised to become a major resort destination for the region.
The area is also home to a 27-acre rainforest that was designated as a nature reserve in 1975. Although most of the larger wildlife was either poached, killed or moved (many of the area’s elephants ended up in Thailand), numerous wild birds and monkeys still remain in the rainforest.