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Cambodia’s 14 clusters of casinos in towns just over its borders with Thailand and Vietnam function as Macau does for China, offering a nearby, culturally familiar setting for gamblers from the other side of the border to do what they can’t do back home. The scale is just a little bit different.

Macau has massive resorts with hundreds of tables that collectively bring in seven times the casino revenue of Las Vegas. Cambodia’s border casinos mostly have a dozen or two tables that are often a few big player wins away from insolvency. In Bavet, the main border cluster for players from Ho Chi Minh City, there’s a scale copy of Bellagio called Winn, the name written in the same script that adorns Wynn Resorts properties, and a weed-strewn driveway leading to its locked entrance. Many border casinos seem like punchlines in search of a joke.

Donaco International has paid $360 million for Star Vegas, the best casino in Poipet, the Cambodian border town closest to Bangkok. (Photo credit: Muhammad Cohen)

But in Poipet, the cluster of ten casinos nearest Bangkok that I visited earlier this year, gaming operators were laughing their way to the bank early this century, before post-monopoly Macau, NagaWorld in Phnom Penh and Singapore’s mammoth integrated resorts began luring players to their brighter lights. Without a casino opening in Macau in three years (until last week), better roads for the three hour drive from Thailand’s capital, longer border opening hours and, perhaps most important, Thailand’s military rulers cracking down on Bangkok’s vast illegal casino trade, Poipet is all smiles again.

Australia listed Donaco International likes the picture enough to pay $360 million for Star Vegas, widely recognized as the best casino in Poipet. Star Vegas has 109 tables and 1,264 gaming machines on its vast casino floor that can easily accommodate twice the number of tables with a couple hundred more machines. The property also has 385 hotel room s that aren’t the best in town, but, more crucial for Poipet, its own water supply, electricity generators and fire engine.

The experience of another foreign listed company in the Cambodia border casino segment offers a cautionary tale. In 2012, NASDAQ listed Entertainment Gaming Asia, a subsidiary of Lawrence Ho’s Melco International, opened Dreamworld Pailin in a border casino cluster about two hours south of Poipet, closer to Thailand’s prosperous eastern seaboard. The casino operated at a loss, and EGA, previously known as Elixir Gaming Technologies, wrote down its $2.5 million capital cost in 2013 and sold it for $500,000 last year.

EGA also opened Dreamworld Poipet in 2013, a machines-only property with about 300 seats nestled in the sprawling Golden Crown complex with no street visibility, on a 40/60 revenue split. EGA is responsible for capital outlays and staffing costs. A source says EGA would like to sell the facility. EGA didn’t respond to questions from Inside Asian Gaming on its operations or plans, but stated in its 2014 annual report, “We will endeavor to pursue projects that are relatively larger in size and investment than our previous development projects and in more established markets with higher levels of existing natural player traffic.” Those were new properties, not going concerns like Star Vegas.

Donaco, which owns a casino in Vietnam just across the border from China’s Yunnan province, says the deal gives it vital diversification and doesn’t require any immediate investment, except perhaps for more tables. The company, started by grandsons of  Genting Group founder Lim Goh Tong, believes it has mitigated much of the risk with a guarantee from the seller of $60 million in Ebitda for the first two years, which basically covers Donaco’s cash outlay.

Unless Thailand legalizes casino gambling (very unlikely) or closes it border with Cambodia (as has happened for short periods but increasingly unlikely in the face of ASEAN integration), Star Vegas should keep Donaco smiling for years to come.

Hong Kong On Air author Muhammad Cohen is Editor At Large for Inside Asian Gaming. Follow him on Twitter @Muhammad Cohen.