HO TRAM, VIETNAM Gaming operator Pinnacle Entertainment Inc. will invest US$95 million to acquire a 26% stake in the developer of the Ho Tram Strip, a major integrated resort project in southern Vietnam.
Las Vegas-based Pinnacle plans to build and manage Ho Tram’s second resort, following the under-construction MGM Grand Ho Tram. Pinnacle’s newly-acquired interest is in Asian Coast Development Ltd. of Canada.
The Ho Tram Strip will be Vietnam’s first destination integrated resort and gaming complex and is scheduled to open in multiple phases. MGM Grand Ho Tram is scheduled to open in 2013 and will be managed by MGM Hospitality.
The second integrated resort of the Ho Tram Strip, for which Pinnacle has secured a management agreement, will be jointly developed by Pinnacle and Asian Coast, which will own the property. The development will be branded as a distinct premium resort and will be similar in project scope to MGM Grand Ho Tram.
“Our investment in ACDL and long-term management agreement for the second integrated resort bring meaningful strategic benefits to Pinnacle, including further diversification and potentially very significant returns on invested capital,” says Pinnacle CEO Anthony Sanfilippo. “We believe this region, when measured by gaming positions per available population, has strong growth potential, especially when compared to more mature markets. In addition to the attractiveness of the Asian gaming market, this opportunity in Vietnam offers many appealing characteristics, including an anticipated tax structure competitive with other Asian markets with integrated resorts and high, steadily increasing tourism levels in and around Ho Chi Minh City and Ba Ria-Vung Tau Province, which make the Ho Tram Strip development the ideal project for Pinnacle to participate in the growth of this region.
Until now, Pinnacle has been a largely regional player in the gaming industry, owning and operating seven casinos in Louisiana, Missouri, Indiana and Nevada. Its previous flagship development, L’Auberge Casino & Hotel Baton Rouge, Louisiana, is scheduled to open in summer 2012.