AGBriefings August 2014

Jurisdiction Updates - August 2014 Edition

AUSTRALIA: Whither sports betting?

Massive IRs reshape industry landscape • Special focus p.26 • Last words p.56

MACAU

Project cost overruns p.06

CHINA

Lottery potential untapped p.10

SINGAPORE

Revenues hit plateau p.40

AGE special report: new blood in new venue p.42

MESSAGE 3

Australia evolving

W

e are excited to be in sunny

AGB is lucky to have some extremely

Sydney once again for the

talented and experienced advisors, several

Australasian Gaming Expo

of whom have written columns for this

and the Gaming, Racing &

edition, examining the legislative directions

Wagering Australia conference.

being taken by the states currently and

The AGE is now in its 25th year and is

their impact on the market. James Packer’s

attracting more interest than ever. The

Sydney dream looks like being realized

new venue on Glebe island should provide

soon, the Queensland coast will be changed

a refreshing change as exhibitors take the

forever, while sports betting matters remain

opportunity to redesign their stands for the

mired in controversy and limbo.

new space.

As always there is plenty going on in

Meanwhile, we will be attending and

Australasia and the Asia Pacific region as

speaking at GRWA at the Swissotel on

a whole and we hope to bring you up to

Monday and Tuesday.

date with all the latest in this edition of

The conference goes from strength to

AGBriefings.

strength and this year has attracted several

If you’d like regular updates on all Asian

industry heavyweights as well as key

gaming news, you can subscribe to our

regulators for what should be an eye-

eBrief, sent out daily to ensure you don’t

opening few days on the future direction for

miss a thing. Once a week our members also

Australian casinos and sports betting.

receive two in-depth articles about specific

No doubt much of the discussion will focus

jurisdictions which go beyond the headlines

on Asian money fueling growth, both from

and provide valuable market insights. Please

a customer and a funding perspective, with

see the membership form at the back of this

several Chinese companies involved in new

publication for more info.

consortiums and projects.

AGB - your gateway to Asian gaming! l

Rosalind Wade

Luis Pereira

The end of gaming license state monopolies, has brought in a new wave of expansion, posing new opportunity and challenges.

On behalf of Asia Gaming Brief Rosalind Wade & Luis Pereira PUBLISHERS

www.asiagamingbrief.com AUGUST 2014 EDITION SERIES II • ISSUE III

1

Jurisdiction Updates - August 2014 Edition

AUSTRALIA: Whither sports betting?

Massive IRs reshape industry landscape • Special focus p.26 • Last words p.56

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MACAU

Project cost overruns p.06

CHINA

Lottery potential untapped p.10

SINGAPORE

Revenues hit plateau p.40

Asia Gaming Briefings | August 2014

AGE special report: new blood in new venue p.42

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Asia Gaming Briefings | August 2014

CONTENTS 4

SOUTH EAST ASIA

SOUTH ASIA

GREATER CHINA

MACAU

06

INDIA

17

PHILIPPINES

22

HONG KONG

09

NEPAL

18

SINGAPORE

24

MALAYSIA

25

CHINA

10

AUSTRALASIA

INDOCHINA

NORTH ASIA

JAPAN

12

VIETNAM

SOUTH KOREA

14

CAMBODIA

20

TAIWAN

15

THAILAND

21

RUSSIA

16

AGE SPECIAL REPORT

Asia Gaming Briefings | August 2014

38

CALENDAR OF EVENTS

19

49

AUSTRALIA

26

AUSTRALIA SPECIAL FOCUS

28

PACIFIC ISLES

35

NEW ZEALAND

36

LAST WORDS

50

GREATER CHINA 6

MACAU

Growth optimism outweighs cost overrun concerns Some of Macau’s multi-billion dollar resort plans on the Cotai strip are running over budget amidst rising labor and construction costs, though analysts and industry players remain optimistic the potential for topline growth will eventually outweigh the sky-high expense

Asia Gaming Briefings | August 2014

N

ews of the cost overruns comes

In a recent statement to the Hong Kong Stock

as gross gambling revenue in the

Exchange, Melco Crown said it would incur an

world’s biggest gambling hub shows

additional $300 million in costs for its Studio City

signs of slowing down, squeezed by a

development in Cotai, jacking up the total cost

combination of factors, such as the weakening

to $2.3 billion from an initial plan of $2 billion.

macro-environment in China, a clampdown on

Melco Crown reaffirmed that the 1,600-room

illegal money transfers and the distraction of

resort remains on track to open in mid-2015.

the FIFA 2014 World Cup.

The investment breaks down to a cost per room

The mix has sent stock investors running for the

of about $1.4 million.

exits, with Hong Kong-listed gambling stocks

SJM Holdings, which vies with Sands China for

down about 35 per cent from their 52-week

the biggest market share in Macau, also recently

high late last year.

warned its 2,000-room Lisboa Palace project

Still, casino and resort operators remain

is likely to run over budget. The company has

positive about the developments in Cotai and

raised its estimate for its resort complex by an

the budget overruns should be well managed,

additional $645 million to bring the total up to

Robert Drake, chief financial officer of Galaxy

about $3.8 billion. That works out at about $1.9

Entertainment, told AGB on the sidelines of

million a room.

the company’s shareholder meeting recently.

Ambrose So, SJM CEO, said the budget overrun is

Drake said the second phase of Galaxy’s Cotai

inevitable given the labor crunch and increased

project remains on track to open in the middle

construction costs. He said the company is

of next year, with the budget within the original

expecting the property to help it regain market

plan. He added the cost overruns experienced by

share once it opens in 2017.

some other operators are within reasonable range.

Once the monopoly holder in Macau, SJM has

GREATER CHINA

GROSS GAMING REVENUE $100b

$56.9b +18.6% $45.2b $48.8b

Y13

Y14E

Y21E

Y15E

JUNE GGR

-3.7%

JULY GGR

-3.6%

MARKET SHARE (as of end of Y14 July)

seen its market dominance erode due to capacity

and labor costs, which may be about 10 to 20

constraints.

percent higher than their original plans.

Galaxy is currently adding about 1,350 rooms

According to the latest government statistics,

SANDS CHINA (1928:HK) 23.1%, +1.1

for about $2.04 billion, while the third and

labor costs in Macau have risen 10 percent

GALAXY ENTERTAINMENT GROUP 20.6%, -0.9

fourth phases of its development will take total

this year, while overall inflation was about 6

development costs to as much as $7.7 billion.

percent in April. The former Portuguese colony

MELCO CROWN ENTERTAINMENT 12.3% +0.8

Las Vegas Sands is paying $2.7 billion to add

has almost full employment at less than 1.7

3,000 rooms at its Parisian-themed resort,

percent, and additional workers need to be

while MGM China raised the budget for its

imported. Adding to the natural constraints,

Cotai project to $2.9 billion from $2.6 billion

the government also restricts foreign labor.

earlier this year. It’s adding 1,600 rooms. Those

Nearly all food and construction materials need

numbers work out to about $900,000 per room

to be brought in from elsewhere, making costs

for LVS and $1.8 million for MGM.

one of the major risks for operators.

Wynn Resorts is likely to be the most expensive

The government has indicated that it will impose

of all, paying out a total of between $8 billion to

a moratorium on new projects until at least

$9 billion to add 3,200 rooms in two phases at

2025 once the current round of construction is

its high-end luxury resort, according to Fitch

completed. Therefore, there is a lot at stake for

research. That works out at approximately

operators, who are keen to use the new properties

$2.8 million a room at the higher end of the

to differentiate their product offering and gain

cost range.

market share, Aaron Fischer, CLSA gaming

Matthew Kwok, an analyst at China Yinsheng

analyst Asia-Pacific Markets said.

Wealth Management, said Wynn Macau and MGM

“This is not a massive surprise to us and we

China are likely to face a surge in construction

generally welcome companies investing more

SJM HOLDINGS (880:HK) 24.1% - 0.8

WYNN MACAU (1128:HK) 11.2%, +1.7 MGM MACAU (2282:HK) 8.8%, -1.5

The Macau government, clarifying rumors of a clampdown on illicit credit, said it has banned jewellery and watch retailers from adding any further China UnionPay terminals, but has not asked the stores to move out of casinos or to cease operations. It has also asked banks to strengthen their scrutiny of major cash and card transactions

Asia Gaming Briefings | August 2014

7

GREATER CHINA 8

money into the non-gaming component,”

is investing $2.5 billion in the second phase

million in the three months to end March,

Fischer said, referring to the cost overruns.

of its Galaxy Macau development, which

compared with $0.6 million in the same

Analysts, including Deutsche Bank, Nomura

is scheduled to come online in 2015. The

period a year ago. The company said the

and Wells Fargo have all recently cut their GGR

expansion will nearly double the capacity

resort is on track for a mid-2015 opening.

forecasts for Macau for 2014 and are revising

of the resort. Construction on Phase 3 and

Melco is also considering a casino mega-

down their estimates for share prices and

4 is expected to begin by the end of the year

project near Barcelona in Spain. Q1 revenue

earnings amidst a sharp slowdown in VIP traffic.

with a total investment of HK$60 billion

gained 19 percent to $1.35 billion, helped by

Revenue dropped 3.7 percent in June, marking

($7.7 billion). Galaxy Entertainment Q1

mass market tables, while group EBITDA

the first year-on-year decline in five years.

adjusted EBITDA rose 38 percent, driven

rose 31 percent to $359 million, slightly

Despite the gloomy headlines, the current

mainly by Galaxy Macau to $3.8 billion, while

above the consensus view for $355 million.

slowdown is seen as a short-term blip with most

revenue jumped 33 percent year-on-year to

still predicting significant expansion. Deutsche

$20.2 billion. Total gaming revenue grew 33

Bank estimates that Macau will be a $100 billion

percent to $20.2 billion as total mass table

market by 2021, double its current level.

revenue increased 37 percent to $5.1 billion

Also, much of the recent concern centers on the

and total VIP revenue grew 32 percent year-

VIP market. While still dominant, VIP Baccarat

on-year to $14.6 billion.

has declined from its peak in the second quarter of 2011 when it accounted for about 80 percent of total revenue, to about 60 percent at present, according to UBS. At the same time mass market revenue has seen growth of between 30 percent to 45 percent for the past four years, with superior profit margins, which should help mitigate the impact of higher costs.

WYNN MACAU (1128:HK) has an 11.2 percent market share and currently has one casino. Its $4 billion Wynn Palace development is scheduled to come online in the first half of 2016, with approximately

SANDS CHINA (1928:HK) has a

2,000 rooms and 500 table games. Wynn Resorts Q1 adjusted income was $236.7

market share of about 23.1 percent and has

million compared to $205.6 million a

four casinos. Analysts say the company has

year ago. Net revenues were $1.51 billion,

had a lower room occupancy than rivals in

compared to $1.38 billion a year earlier.

Cotai, meaning it has more potential for

Revenue was boosted by a 14.2 percent

revenue growth if it fills the rooms. The

increase from Macau.

company’s new developments include the $3 billion The Parisian that is scheduled to come online in 2015. It recently expanded retail

MGM MACAU (2282:HK) has an

space at its Sands Cotai central property,

8.8 percent market share while operating

with the addition of 150,000 square feet

a single casino in the peninsula. Its new

of space, with shops designed to appeal to

developments include the MGM Cotai,

SJM HOLDINGS (880:HK) holds the

families. LVS reported an almost 12 percent

which is a $2.9 billion project scheduled for

jump in Q2 revenue, with adjusted earnings

completion mid 2016. Q1 revenue at MGM

biggest market share of 24.1 percent as of

per share up 31 percent, but both measures

China climbed 26 percent to $941 million,

July with 20 casinos. Its $3.2 billion Palazzo

missed analysts’ forecasts. Net revenue

driven by a 45 percent gain from mass

Versace development is scheduled to come

came in at $3.62 billion, below the consensus

market and 12 percent VIP. The company is

online in 2017. The company has indicated it

for $3.8 billion, while adjusted EPS was

adding mass market tables. l

may be interested in opportunities in Japan.

$0.85, compared with expectations for $0.89.

OPERATORS

The company is currently building The Lisboa Palace on Cotai. The casino will have 700

27,000 square metres. The total production

MELCO CROWN ENTERTAINMENT (6883.HK) has

cost is estimated at about HKD$30 billion

three casinos and a 12.3 percent market

($3.8 billion), although the company has

share. Melco recently awarded France’s

expressed concern over costs. Q1 property

Bouygues a $488 million contract to build a

EBITDA rose 2.9 percent to HK$2.19 billion

six-star hotel. The 39-floor building will be

($282.5 million). Gaming revenue rose 4.9

part of the City of Dreams and will have 783

percent to HK$22.78 billion.

bedrooms, a casino, restaurants, conference

gaming tables and over 1,200 slot machines across a gaming floor area of approximately

GALAXY ENTERTAINMENT GROUP (27.HK) has a 20.6 percent market share with six casinos. The company

Asia Gaming Briefings | August 2014

room and a sky pool. The company said recently it’s increasing the budget for its Studio City development in Cotai by about $300 million, taking the total cost to $2.3 billion. Pre-opening costs rose to $0.9

New regulations tightening rules on transit visas are seen as having minimum impact on Macau gambling revenue, analysts say. The number of days Chinese visitors are permitted to stay under a transit visa has been cut to five from seven, from July 1st. Those who repeatedly abuse the law will be banned from entry

GREATER CHINA 9

HONG KONG

Illegal Sports betting booms in Hong Kong While gambling outside of the Hong Kong Jockey Club is illegal in the former colony, a recent report estimates that the illegal sports betting market may have generated turnover of HK$500 billion ($64.4 billion) last year, dwarfing casino revenue in neighbouring Macau, the world’s biggest legal gambling hub. Punters lost $12 billion

T

GROSS GAMING REVENUE

he size of the problem has prompted

“As the operation of illegal gambling becomes

calls for coordinated action amid

more sophisticated, the Club will have to

concern the government is losing

remain competitive against them. We also

millions of dollars in potential tax

believe a multi-pronged strategy involving the

revenue on illegal sports betting.

government, the police and other stakeholders

The HKJC itself recognizes the limitations

would be essential to combat such activities.”

in its ability to keep up with an increasingly

Authorities in Hong Kong launched a major

varied and sophisticated offering from illegal

crackdown on illegal gambling during the FIFA

online players.

2014 World Cup, forming a special task force

Patrick Jay, the club’s head of trading told AGB

and cooperating with counterparts in Mainland

that the club needs a wider array of products

China and Macau to curb activities.

to remain competitive.

During the last tournament in 2010, H.K. police

Given illegal operators are not paying taxes

seized some $386 million in illegal sports

they are able to attract customers with a wider

betting receipts.

variety of bet types and incentives, including

While this time, the clampdown resulted in one

credit and discounts.

of the biggest illegal betting busts seen in the

“Take football betting as an example, they offer

territory, with police smashing a cross-border

as many as 230 different bet types, of which

gambling ring that may have been taking as

100 are in-play types, compared with only six

much as HK$500 million a day ($64.5 million)

in-play options provided by the Club amongst

in illegal soccer bets.

its total of 17 bet types,” he said, talking about

While land-based casinos are illegal in Hong

the illegal operations.

Kong, cruise ships operating out of the city

Jay said while the club needs to improve its

are able to offer casino-style gaming such as

offering, it will never offer credit, or be in

baccarat and slot machines once they are out

a position to develop such a wide variety of

of territorial waters. They also offer intranet

betting options.

baccarat, which can be played on tablets on

Jay said advances in technology were helping

the ship, thereby increasing their capacity.

illegal bookmakers, with most moving to

These cruise ships are growing in popularity

online platforms for gambling operations.

as a quick and cheap alternative to traveling to

From September 2013 to February 2014, there

Macau’s casinos. Although these cruise ships

were over five million visits to some of the

pay no tax on revenues, compared with the

territory’s top five offshore betting–related

39 percent they are required to pay in Macau,

websites. And the number of visits to these

operators in Macau do not see these cruise

five websites is growing.

ships as a threat. l

2013/14 Horse Racing $101.83b

+8.5%

2013 Football betting $50b

+7%

HKJC net margin HK$8.78b

+8.3%

ILLEGAL SPORTS BETTING

HK$500b

Success Universe Group agreed to sell its Macau Success cruise ship for HK$93 million ($11.9 million) to British Virgin Islandsbased Star Sail Inc. The company said it will book a pre-tax gain of $44.2 million from the sale and plans to use the proceeds for general working capital Genting Hong Kong is looking for a new President after David Chua Ming Huat resigned with effect from January 2, 2015 to pursue his personal interests. Chua will take sabbatical leave and annual leave during the six months’ notice period. Chairman and CEO Tan Sri Lim Kok Thay will take over the role of acting president until a replacement is found

Asia Gaming Briefings | August 2014

GREATER CHINA 10

Y13 GROSS GAMING REVENUE

CHINA

Lottery sales $51.1b

+18.3%

China lottery potential still untapped

H1 $28.78b

+19.2%

China’s underground lottery may be three times the size of the official market, while remote sales provide opportunities for foreign providers

F

June Sports Lottery $3.1b

+83%

June Welfare Lottery $2.7b

+18%

AGTech Holdings agreed to buy a Chinese lottery equipment and design company for HK$489.5 million ($63.1 million) for cash and stock. It will issue a total of 178,571,428 shares representing 4.06 percent of the existing issued share capital of the company

igures released by the Ministry of

websites in China today offering lottery tickets

Finance (MoF) this month reveal

for sale – so what is going on?

that China Sports Lottery revenues

Almost all of these websites are operating

increased by 83 percent to RMB19.4

under legacy retailer agreements with different

billion ($3.1 bn) in June 2014 compared with last

provincial lottery authorities. Does this comply

year, no doubt boosted by the FIFA World Cup.

with the ban on intra-province sales? Probably

The Ministry of Public Security was reported

not since it is unlikely that these websites

as saying that, during the World Cup alone,

know where their customers are coming from

more than RMB18 billion ($2.9 billion) had

and, more importantly, the provinces are

been detected in illegal football gambling.

incentivized to increase their sales so actively

The Welfare Lottery also increased by 18 percent

want this “cross border” business (and pay

in June, with total sales of RMB16.8 ($2.7 billion).

high commissions accordingly).

Overall lottery sales in China for the six months

Why is this being tolerated by the authorities?

January to June 2014 have risen 19.2 percent to

The answer comes down to a technology gap.

RMB178.41 billion ($28.74 billion).

Currently neither of the lotteries, i.e. Welfare

Meanwhile, the illegal gambling market in

and Sports, have their own central or provincial

China is estimated to be worth around $160

customer registration and lottery engines –

billion in GGR terms.

i.e. the technology required to know who your

Although the lottery market is the second

customers are, where they are located, how

largest in the world behind the USA, only

old they are and how much they are playing.

eight percent of the population participates

The regulator is pushing for technologies to be

in it. This suggests that there is a high degree

developed by both the Welfare and Sports lotteries

of inefficiency in the current system, and that

to be able to deal with these location issues and

2. Providing content for lottery games

there is enormous untapped potential.

thus comply with the intra-provincial laws.

Only MoF approved lottery games will be

One area that the lottery authorities are trying

Today, both the Operators (Welfare & Sports

available for sale. Any new content will require

to develop is that of remote sales. In terms of

Lotteries) and Regulator (MoF) want to create

approval by the MoF, which can be a multi-year

regulation, in March 2012 the MoF prohibited

a modern, effective, efficient and responsible

approval process.

remote lottery and many websites that were

remote sales framework and technology solution

operating illegally closed down.

that requires customer registration and that is

3. Becoming an approved retailer on the new platforms

In January 2013 the MoF repealed this decree,

thus “approvable” by the Regulator.

Once the new platform(s) are in place, the plan

allowing remote sales via the internet to be

Broadly speaking there are three areas of

is to issue licenses for remote sales retailers.

conducted, with the caveat that companies needed

opportunity for foreign companies to participate

Applicants will need to register with the national

to have approval from the National MoF and

in the China lottery:

lotteries to secure one.

China LotSynergy said its Guangzhou Lottnal Terminal unit has won a contract to supply terminals to the Guizhou Provincial Sports Lottery Administration Centre, its second in the province. Lottnal will provide its upgraded Standard Type KT301 terminals, which it says is more personalized and user-friendly and is proving one of its most successful terminal types in China

Underlying all of this is the concept that lottery

1. Developing a back-end system to include crm and payment solutions

sales should be strictly intra-provincial only.

One national system required for both the

the most profitable ones is not easy. One thing

Today only two entities have any authorization

Welfare Lottery and Sports Lottery, which is

is inescapable and that is finding the right

from MOF – 500.com and another non-trading

already developing its own.

local partner, whether that be an amenable

entity owned by the National Sports Lottery.

For mobile lottery, one system per province

province, technology provider or (future)

Notwithstanding this, there are numerous

will be required.

licensed retailer. l

either the National Welfare or Sports Lottery.

Asia Gaming Briefings | August 2014

There are certainly roles available for foreign players in China’s lottery future, but identifying

NORTH ASIA 12

JAPAN

High hopes for Fall casino bill passage While international operators continue to jockey for position for a casino license in Japan, the bill that will unlock the door to a potential $40 billion market remains in political limbo

Asia Gaming Briefings | August 2014

A

fter weeks of delays, legislators

“Integrated resorts are expected to provide a

began debate on framework

great contribution to tourism, regional economies

legislation that would legalize

and industry, I think, and can be one of the key

casinos in Japan in June, but with

elements of Japan’s growth strategy,” Abe said.

not enough time to allow passage before the

Abe and other supporters of the bill see casinos

end of the Diet session on June 22.

as an integral part in the country’s efforts to

Analysts are now hopeful that the bill will be

boost tourism arrivals. The country welcomed

passed once the parliament returns in Fall,

about 10 million tourists in 2013 and seeks to

especially as Prime Minister Shinzo Abe seems to

double that number, though it hasn’t set a

have thrown his weight behind the legislation.

timeframe. The long-term goal is for 30 million

Abe, who took time out of a trip to Singapore

visitors by 2030. Japan will host the Olympic

earlier this Spring to visit the city state’s two

Games in 2020 and many hope to have the

integrated resorts, told Bloomberg in an interview

first resorts open to capitalize on the expected

that he hoped that in his capacity as leader of

influx of visitors.

the Liberal Democratic Party, Japan’s biggest

In the opening days of debate on the bill, some

political party, he would be in a position to help

lawmakers expressed concern about the potential

push the bill through.

social impact of gambling, saying not enough

NORTH ASIA 13 an interest in the market.

Caesars Entertainment recently said a casino

GROSS GAMING REVENUE CASINOS

project in Japan would require investment of

$40b

at least $5 billion and that it has held talks with potential local partners, including Fuji Television Network, Kajima Corp. and Mitsui Fudosan Co. While both MGM Resorts and Las Vegas Sands

$18.4b

have said they may be prepared to invest as much as $10 billion to gain a foothold in the market.

Winning a license in either South Korea or Japan

$9.4b

is likely to reap rich rewards for shareholders, with whoever wins in one of the two major cities likely to see their market capitalization rise between $30 billion to $40 billion, or maybe more, LVS Chairman Sheldon Adelson told an

Y20E

investor meeting in New York recently, saying

Y30E

Y25E

(UBS)

(CLSA)

his figures had come from analysts, journalists and industry observers.

Bloomberry Resorts, owner of the newly opened Solaire Resort and Casino in Manila

Y1 ESTIMATE (billions)

is also interested. CEO Enrique Razon told shareholders that the company is in talks with

$7

a potential Japanese partner in preparation for

FITCH

$16.5

bidding for a gaming license in Japan. He didn’t

$23.8

TELSEY

give further details of what would be the first overseas venture for Bloomberry, which opened its Solaire resort last year.

Genting Singapore has set up eight subsidiaries as it jockeys for position there. Galaxy Entertainment, Boyd Gaming, Melco Crown and Wynn Resorts

PACHINKO/PACHISLOT ANNUAL REVENUE

are among the others lining up their ducks.

$234b

Estimates for the potential size of the market

(Kinbasha Gaming International)

vary, with CLSA saying if all works out for the best it would be worth as much as $40 billion, putting it a close second to Macau. The consensus had been done to tackle current problems related

however is around $20 billion.

to the country’s pachinko parlours.

Japan has a population of 127 million with a

Pachinko and its variants account for more than

per capita Gross Domestic Product last year

two-thirds of total revenue volume in Japan’s

of 38,492, compared with 53,143 for the U.S.,

gaming industry, generating an estimated

according to World Bank figures. The bill is not

$234 billion in gross revenue per annum and

expected to contain any provisions restricting

employing over 310,000 employees, according

local access to casinos.

to Kinbasha Gaming International.

The country also has sophisticated infrastructure

“We strongly believe that not enough has

and transport links, with close proximity to

been done in terms of studying and addressing

much of the China market, boosting its appeal.

gambling addiction,” Takeshi Iwaya, a member

The prize licenses are seen as Tokyo and Osaka.

of the ruling Liberal Democratic Party was

The Osaka authorities have thrown their full

cited as saying. He added some of the revenue

support behind the idea of casinos and are pushing

generated from casinos would be put aside to

a site in Yumeshima, an artificial island in Osaka

help address problem gambling.

Bay. Though Tokyo Governor Yoichi Masuzoe

Meanwhile, as the political process grinds on,

has proved more reticent, saying developing a

casino operators continue to line up to express

casino was not a priority for the city. l

USJ Co., the operator of Universal Studios Japan, plans to seek a casino license in Osaka. The theme park operator is likely to team up with other parties interested in the new business and lead a consortium Japan is considering adopting a Singaporean-style model, charging its own citizens to enter casinos, while foreigners can enter for free, according to Japan’s Nikkei. The fee however is likely to be less than the S$100 ($80) Singapore charges, the report said.

Asia Gaming Briefings | August 2014

NORTH ASIA 14

GROSS GAMING REVENUE

SOUTH KOREA

China tourists drive revenue growth

(Source: CIMB)

$2.8b

$2.7b $2.7b

$2.7b

Rising Chinese tourism numbers are driving revenue in South Korea’s casinos, attracting the eye of international investors and changing the product bias of the market Y13

R

evenue from South Korea’s 17

When broken down geographically, the capital

casinos rose about 7.6 percent to

Seoul made up almost two thirds of the foreigner-

2.64 trillion won ($2.7 billion) in

only market, followed by Jeju at 15.9 percent, up

2013, according to the Korean Casino

from 11.5 percent the year before. Busan stood

Market Review by Kore Co.

at 11.3 percent and Incheon had a 6.4 percent

The total number of casino visitors exceeded 5.7

share, almost doubling from the previous year.

million last year, with 2.7 million categorized as

The proximity to the ballooning outbound

foreigners. In terms of overall visitor numbers,

China tourism market has not gone unnoticed

foreign arrivals into South Korea last year rose

by international players, with Las Vegas Sands,

to 12.15 million, with 22.2 percent of those

Wynn Resorts, Melco Crown and MGM Resorts

visiting the country’s casinos.

all at one point having expressed interest in

Chinese tourists made up 36 percent of the total

the country.

and the country has plans to attract 10 million

The market is set for at least two major new

Chinese visitors a year by 2020, compared with

international-investor driven projects.

4.3 million last year, according to data from

Earlier this year, a consortium made up of

Korea Tourism Organization.

Lippo Group and Caesars Entertainment got

“As for foreign players, the number of Chinese

the greenlight for a $805 million foreigner-

players continues to grow to account for

only resort on Yeongjong island. It was the

approximately half the market at 46.7 percent,”

first casino license to be awarded to a foreign

the report said. “This dramatic shift is reflected

corporation and the first instance of an award

in the sharp increase of baccarat tables.”

through the “pre-approval regulatory process.”

In terms of casino preference, Chinese tourists

Caesars Entertainment vice president of Asia

opted for Paradise Walkerhill and Seven Luck

Development William Shen said he’s confident

Hilton in the capital Seoul.

that the company’s new joint venture project

While on Jeju Island, the Hyatt Hotel, which

in South Korea will see strong growth, despite

has just been bought by Chinese property

not having access to the local market.

developer Landing International, reported

While Genting Singapore is teaming up with

that 95.3 percent of its players were Chinese.

Landing International on a $2 billion resort on

Overall, South Korea’s foreigner-only casinos

the “honeymoon” island of Jeju.

had 1.36 trillion won in sales, outperforming

Groundbreaking on the site has been delayed

the only casino open to locals, Kangwon

from June 24th to the third quarter of this year,

Land, which had 1.28 trillion, the report said.

reportedly to give the company time to brief

Paradise and Seven Luck made up 90 percent

the island’s new incoming administration on

of the foreigner-only market, with growth of

the project and its contribution locally.

6.6 percent.

The casino, open only to foreigners, will have

“When considering that the two operators grew

800 tables, including 200 for high-stakes

at an average rate of 9.4 percent since 2009,

gamblers. It will be built on a site with an area

there is a good possibility that Paradise and

of 2.3 million square meters (25 million square

Seven Lucks would overtake Kangwon Land

feet) and will have a theme park, a mall, luxury

this year,” it said.

apartments and three hotels with 2,800 rooms. l

Asia Gaming Briefings | August 2014

Y14E

Y15E

Y16E

CASINO VISITORS • 2.7m

5.7m

• FOREIGN CASINO VISITORS

FOREIGNER-ONLY CASINO REVENUE

$1.3b

China market share

46.7%

(Source: Kore Co.)

Landing International has completed the acquisition of the gaming business at the Hyatt Regency on South Korea’s Jeju Island for $113 million. The hotel was operated under the trade name of Beluga Ocean Casino Paradise Co said Chelsea soccer team manager Jose Mourinho will feature in the company’s new ad campaign, replacing current brand ambassador Robert De Niro. Paradise, which is teaming with Japan’s Sega Sammy Holdings Inc to build a $1.7 billion casino resort in the coastal city of Incheon, is hoping to capitalize on the growing popularity of soccer in China to lure Chinese visitors

NORTH ASIA 15

Y13 TOURIST ARRIVALS

TAIWAN

Optimism despite political stagnation Taiwan’s long-awaited bill to legalize casinos remains mired in political limbo, though experts are optimistic it may still

8,016,280

48.91%

visitors from HK, China, Macau

CHINA VISITORS

+12.7%

pass by the end of this year Q1 VISITOR ARRIVALS

2.3m

T

he Tourist Casino Management Act,

minimum investments, which will be contained

though considered a priority bill, has

in a separate integrated resorts bill, which has

been stalled by a political stalemate

already been drafted by the Tourism Bureau.

TAIWAN LOTTERY CO. Y14 SALES TARGET

$3.47b

on the island, including a series of

The bill foresees casinos being opened on

student protests that effectively shut down

Taiwan’s outlying islands and will not permit

parliament for a month earlier this year, putting

IRs on the main island, which may reduce the

most legislative decisions on hold.

allure of Taiwan for potential casino investors

“There’s no real controversy over the bill,” said

and is likely to mean much smaller amounts

William Bryson, a partner at law firm Jones Day

than those being touted for casino investments

in Taiwan. “Neither of the two major parties

on neighbouring Japan.

are against it. It’s just because of a higher level

“Everyone interested in casinos would prefer

of disagreements.”

to have them on Taiwan proper and not on an

The bill was supposed to have been considered

island,” said Marcus Clinch of law firm Eiger

in a special summer session of parliament after

Law. “They would want a type of free trade zone

having failed to get to the top of the stump in

that would include casinos.”

the regular session, but it has not been put on

However, the Legislative Yuan’s passage of the

the agenda. However, there is hope that the

casino bill is not an automatic guarantee that

summer debates will help clear the backlog,

casinos will go ahead. Residents of the three

including issues relating to China/Taiwan

islands -- Kinmen, Matsu and Penghu -- need

relations and free economic pilot zones, paving

to approve the proposal through a referendum.

the way for passage in the next regular session

Matsu held a referendum in 2012 which was

that starts in September.

passed, making it the only place currently

and Taiwan. It already has the infrastructure,

“I am hoping that once the above-mentioned

eligible for an IR in the country. Penghu may

the government built a desalination plant and

higher priority bills have been addressed in

be considering a second referendum after the

upgraded the airport,” Bryson said.

the special summer session, the legislature

first was rejected some five years ago. Kinmen

The most interest is likely to be in Kinmen,

will focus its energy on other bills having

has still to test the waters.

famous for the production of Chinese Kaoliang

important economic implications, such as

“They are three very different islands, so it’s

liquor. The island has a local population of about

the gaming bill,” said Anita Chen, managing

not a case of one size fits all,” Bryson said,

100,000 and has relatively good infrastructure.

director at Park Strategies (Taiwan). “If the

referring to the level of investment that may be

Matsu on the other hand would need a lot of

gaming bill is passed by the end of 2014, it is

possible. “A $2 billion resort might be possible

infrastructure investment to support an IR. Bill

expected that Taiwan will see its first IR open

in Kinmen but not in Matsu.”

Weidner of Global Gaming Asset Management

by late in 2017 or 2018.”

Matsu and Kinmen are pure China plays, with

did have plans for the island, though those

The bill is designed to provide a framework for

Kinmen so close to the mainland province

appear to have stalled.

legalizing casinos. It doesn’t currently set out

of Xiamen that it’s possible to see with the

Taiwan’s proposed gambling bill doesn’t prohibit

the number of licenses, which will ultimately be

naked eye.

the country’s 23.3 million population from

determined by the regulator and the Executive

“Penghu is in the Taiwan strait and a different

entering casinos, and neither will it charge a

Yuan. Neither does it spell out details, such as

play. It would be a combination of Japan, China

fee to locals. l

Taiwan’s tourist arrivals hit 817,735 in May, up 32 percent year on year. China visitors rose 45.1 percent Taiwan’s public welfare lotteries generated a surplus of NT$5.51 billion ($182.77 million) in the first quarter of the year, according to data released by Taiwan Lottery Co. In March alone, the lotteries generated a surplus of NT$1.57 billion

Asia Gaming Briefings | August 2014

NORTH ASIA 16

Illegal market GGRE $15b Primorye Y22E $5.2b Azov $300m

SUMMIT ASCENT GROSS GAMING REVENUE

RUSSIA

(Source: Goldman Sachs)

Putin expands gambling zones Russia’s State Duma has passed a bill establishing gambling zones in the newly annexed region of Crimea and in Sochi, the site of the 2014 Winter Olympics, expanding legal gambling in the country and seeking to recoup the economic costs of the games

five years before revenue is generated.

In Sochi, the government is keen to recoup some of the $51 billion spent on building facilities for the Olympics. Russia built 14 venues for the games with a total capacity of 145,000 people.

“We should do everything to make these projects bring returns on the investment, so that they don’t go bankrupt,” Deputy Prime Minister Dmitry Kozak said.

Gambling is banned in Russia, apart from in five specially designated zones. However, many

T

have not attracted the expected revenue or

Y16E

$375m

Y20E

$1.7b

Russia is considering legalizing online poker in a bid to generate tax revenue, in a move that could generate $146 million a year for government coffers Summit Ascent has the potential to more than treble gross gaming revenue from 2016 to 2020, Goldman Sachs says. Gross gaming revenue may reach $375 million in 2016, rising to $1.7 billion in 2020

he creation of a gambling zone

tourism dollars as they tend to be remote and

in Crimea will attract additional

infrastructure is poor.

investment to the region, create

The zone in the Far East in Vladivostok is seen

jobs and improve the tax base,” said

as one of the most promising, with Goldman

percent stake in the venture.

Anatoly Karpov, the First Deputy Chairman of

Sachs recently touting it as one of its top picks

Summit is in negotiations with the top junkets

the Duma Committee.

among the smaller Asian markets, along with

in Macau and plans to bring in VIP players by

The Crimean zone is likely to be located in Yalta,

Cambodia. The investment bank in a report

mid-2015. The casino is scheduled for a soft

but the exact location hasn’t been determined,

pointed to the exceptionally low tax regime,

opening towards the end of this year.

according to local media.

but said political instability and infrastructure

Azov City, which has three casinos, is seen as

Acting Crimean Governor Sergey Aksenov

may be issues.

the other stronger zone in Russia, attracting

said casinos would not be scattered across the

Summit Ascent holdings, which is building a

annual revenue of about $300 million.

peninsula, but are likely to be concentrated

casino in Vladivostok, is well placed to tap into

The second phase of Azov is now being built in

all in one place.

underserved gaming demand in North Asia,

Anapa, which is within 250 miles from Crimea

As early as April, when the idea of a new gaming

Goldman said. It has the potential to more than

and about 300 miles away from the first phase,

zone for Crimea was touted, Crimean Deputy

treble gross gaming revenue from 2016 to 2020.

where the existing casinos are located.

Prime Minister Rustam Temirgaliyev said

Gross gaming revenue may reach US$375 million

Projects in other zones appear to be stagnating

authorities had already attracted nearly $1.5

in 2016, rising to $1.7 billion in 2020, it said.

with repeated delays. The opening of the

billion in private investment.

The lowest effective gaming tax rate globally,

“Siberian Coin” gambling zone in the Altai Krai

The country’s Regional Development Ministry

coupled with low labour costs should allow the

was scheduled to begin operations this summer

has estimated that creating an entertainment-

company to offer attractive incentive programs.

after repeated delays, while the remaining

tourism cluster in Crimea would bring in

Summit, which is owned by Hong Kong billionaire

gambling zone in Kaliningrad, situated close to

an additional 600,000 tourists a year to the

Lawrence Ho, bought majority control of the

the local airport, was recently extended by 100

peninsula and add $28 million to the state’s

casino project in April from a local partner.

hectares despite the fact that the initial casino

coffers. But it also said it’s likely to be at least

Ho’s flagship Melco International holds a 5

project there has long been at a standstill. l

Asia Gaming Briefings | August 2014

SOUTH ASIA 17

INDIA

Delta expands gambling empire

Lottery sales $12.5b

Horse racing $250m

Sports betting $60bE GROSS GAMING REVENUE DELTA Y13/14

$52.6m India’s Delta Corp is expanding its gaming empire, with the launch of the country’s biggest offshore gambling boat in August last year and a five-star luxury casino resort in the Union territory of Daman

has rebranded its operations as Deltin, owns three of five boats operating offshore casinos in Goa, the only place gambling is allowed in the state. The Deltin Jaqk, formerly know as Casino Royale, was Mody’s first boat, and

20% of profits

offers games such as flush, dana (a game of

POTENTIAL TAX REVENUE

dice), andar bahar and teen patti.

The second boat, Deltin Royale, launched on 16 August last year, has replaced Kings Casino. It

$2b - $3.1b (Source: KPMG)

is the largest casino boat in India to date, with 123 tables and a total of 850 gaming positions and 250 slot machines.

The addition of the boat helped boost gaming

T

POTENTIAL SPORTS BETTING TAX RATE

revenue to 315.98 crore ($52.6 million) for the he 176-room property will feature

year ended March 2014 from 268.77 crore the

Daman’s first in-house casino

year before.

spread over 60,000 sq ft, which

The company is also planning a third offshore

will begin operations now that the

casino in Goa, known as the Dolphin. The two-

property has received a five-star certification,

storey boat replaces the Caravela, which was

a prerequisite for operating a casino.

on lease and has been returned to its owners.

“We expect that our Daman property will

Delta says the Indian market has massive

become a magnet for tourists, gamers,

potential, with rising income levels in a country

vacationers as well as corporate for the

of more than 1.2 billion people, with a propensity

Western India region,” Chairman Jaydev Mody

to gamble. According to India’s National Council

said in a letter to shareholders posted on the

of Applied Economic Research, by 2025-26 the

company’s website. “With a full bouquet of

number of middle class households in India is

offerings, the hotel holds the potential to

likely to more than double from the 2015-16

become a gaming hub for at least four cities –

levels to 113.8 million households or 547 million

Surat, Baroda and Ahmedabad (all in Gujarat)

individuals.

and Mumbai (in Maharashtra).”

The company is also interested in developing

The property will feature between 1,000 and

a resort in neighbouring Sri Lanka, but is

1,500 gaming positions. The company, which

awaiting regulatory clarity. l

India’s diamond producers may have defaulted on payments of as much as $84 million in June alone, with the figure for the first half likely to be about $100 million, according to reports. About 95 percent of those defaults were down to losses from gambling on cricket matches Bangalore police recently arrested 59 businessmen from Gujarat in an illegal gambling sting. Most were wealthy diamond merchants who were flown in by gambling kingpin Dinesh Shah, who is wanted in many parts of the country for running illegal gambling operations

Asia Gaming Briefings | August 2014

SOUTH ASIA 18

NEPAL

Government softens casino stance

TOURISM ARRIVALS Y13 797,759

-0.7%

DIRECT TOURISM CONTRIBUTION (Source: WTTC)

Y13

$714.6M OR 3.9% OF TOTAL GDP

Y14E

$785.2M

Y24E

$1.2B OR 4.7% OF GDP

China visitor numbers to Nepal have almost doubled over the past three years, gaining to 89,509 in 2013, from 46,360 in 2011, with the average spend also doubling from $50-$60 to $100 “The government has realised that the closures have incurred loss to tourism. Hotels are reporting decrease in occupancy,” says Amba Datta Bhatta, executive director of Casino Association Nepal

Nepal’s government is showing signs of softening its stance after closing down the country’s casinos for the first time in more than four decades earlier this year, amid concern over the impact on tourism revenue

Kathmandu owe the government 657.66 million rupees ($10.8 million) in tax and royalties and also have outstanding debts to local hotels.

In addition to the fees, the new rules which came into effect on July 16, 2013, stipulated

foreign tourists annually, mostly Indians, who

that casinos should have paid-up capital of

contribute about 15 percent to the occupancy

at least 250 million rupees ($2.5 million),

rate at the five-star hotels in Kathmandu.

with the minimum set at 150 million rupees

Nepal’s casinos had already been suffering

for mini-casinos.

and losing Indian tourists to casinos in Goa.

However, since the initial closure three mini-

The shutdown is estimated to cost the casinos

casinos have been allowed to reopen after the

themselves about 8 million rupees a day.

n a new Financial Bill, the government

Supreme Court issued an interim stay order.

The new regulations were aimed at bringing

in Nepal has reduced its proposed

“The government has realised that the closures

order to the country’s casino industry and

royalty for casinos to 30 million rupees

have incurred loss to tourism,” said Amba

were expected to cause a major shakeout.

($3.1 million) from 40 million rupees.

Datta Bhatta, executive director of Casino

The Casino Pokhara Grande closed its doors

Similarly, the fee for mini-casinos is now 20

Association Nepal (CAN). Hotels are reporting

days after the rules came into effect, with

million rupees instead of 30 million rupees.

decrease in occupancy.

the higher fees cited as a contributing factor.

The government ordered the closure in April

Bhatta said that Casino Mahjong has also

Casino Fulbari, Pokhara’s other casino, had

after casinos failed to meet a deadline to comply

applied to renew its operating license under

closed its business months earlier. Casino

with a new regulatory regime introduced last

the new regulations and owes 266.80 million

Shangri-La, which was taken over in 2010

year that introduced a new fee structure.

rupees in dues to the government.

by an affiliate of Widetech (Malaysia) Bhd,

The country’s seven casinos in the capital

Casinos are estimated to pull in about 150,000

shut down in August last year. l

I

Asia Gaming Briefings | August 2014

INDOCHINA 19

VIETNAM

Donaco’s Aristo pulls in China VIPs

GROSS GAMING REVENUE Y13E MIN

$275m

MAX

Donaco It also said that while the tensions between

Donacao International, the operator of Vietnam’s newest luxury resort, is upbeat about the casino’s prospects and said business had been brisk despite tensions with its giant neighbour China

Vietnam and China had not affected VIP visitation

+44%

to the resort, they may have affected overall tourism to the country, having an impact on the mass market.

According to the preliminary data from the Vietnam National Administration of Tourism (VNAT), the country welcomed 539,776 overseas

GAMING TAX (JUNKET COMMISSIONS CAN BE DEDUCTED)

30%

visitors last month, 4.9 percent fewer than in June 2013. However, arrivals from mainland China were up 5.5 percent.

The latest maritime tension came from China moving an offshore oil platform into disputed waters on May 2nd, which Beijing has now said will be moved by August 15th, according to Donaco. The tensions sparked widespread

D

Y13H1 $25.87

$300m

and violent street protests across Vietnam.

A decision by Vietnam’s government to open the country’s casino market to locals is not imminent, but is only a matter of time, Donaco managing director Joey Lim believes. Vietnam is currently discussing a bill to revamp casino legislation, with access to foreigners one of the most controversial aspects

onaco said VIP visitors to its property

However, the border crossing into nearby Yunnan

in Lao Cai, northern Vietnam, more

had remained open throughout the tensions

than doubled in May from the same

and in fact trade at the Lao Cai border gate was

period last year. The company,

up 59 percent in the five months to end May.

which had a smaller existing casino at Lao Cai,

In a recent report Bank of America/Merrill Lynch

held the soft opening for its new luxury Aristo

said it was optimistic about prospects for the

International Hotel on May 18th.

property, seeing significant mid-term upside.

In a filing with the Australian Stock Exchange,

Vietnam has seven licensed foreigner-only

the company said total visitation had increased

casinos and allows a limited number of slots

by 41 percent since the soft opening, while

in five-star hotels for the most part in the

VIP numbers were up by 116 percent, driven

capital Hanoi and in Ho Chi Minh City. There

by strong interest from junket operators. The

are also Electronic Gaming Clubs in Da Nang

mass market however declined 13 percent.

and Vung Tao.

Overall turnover also almost doubled, gaining

Five casinos are in the north of the country,

one casino, the Crowne Plaza now known as

94 percent, it said.

mainly on the coast or close to the Chinese

Silver Shores, in addition to an electronic gaming

Donaco has the right to operate a maximum of 50

border, with the biggest currently at Halong

club located at the Furama Hotel.

gaming tables in Vietnam with a gaming license

Bay, some 150km from Hanoi, which boasts

The coastal city has the third-largest airport

until 2044. The casino has 428 hotel rooms,

18 live tables. The remaining two casinos are

in Vietnam and is only an hour and a half away

permission for 150 slots and 150 electronic table

located in southern (Ho Tram) and central (Da

from southern China. It also enjoys strong ties

games. In its most recent release, the company

Nang) Vietnam.

with Macau and China junkets.

said it was currently operating 40 tables.

VinaCapital appears to be moving ahead with its

The Grand Ho Tram project, developed by Canadian

The property gets 90 percent of its revenue from

plans for a $4 billion integrated resort development

company Asian Coast Development Ltd., finally

VIPs, with the majority from the neighbouring

South of Hoi An, in the central Vietnamese

opened its doors in July last year. The company

Chinese province of Yunnan.

province of Quang Nam, after partnering with

recently announced that NewCity Capital, a

The company pointed out that the strong

Iowa-based Pacific Peninsula Group.

company established by American investor

performance had come despite the fact that

One of the most interesting areas of the country

Chien Lee, will be its new financial partner in

some facilities at the resort are still not open.

is still seen as Da Nang, which currently boasts

the venture. It didn’t disclose financial terms. l

Vietnam’s locals ban costs $800 million in lost revenue annually, while Cambodia’s border casinos boast 1,500 visitors a day from Vietnam

Asia Gaming Briefings | August 2014

INDOCHINA 20

CAMBODIA

Cambodia plans casino legislation revamp Cambodia is considering an overhaul of its gambling legislation and may legalize online betting to broaden the government’s revenue base and attract investment from major U.S. and Macau casino operators

(Source: CIMB)

$0.4b

$0.4b

$0.4b

Y13

Y14E

Y15E

that will run until 2065, as well as a 41-year monopoly within a 200km radius of Phnom Penh that expires in 2035.

The group reported a 24 percent jump in revenue in 2013 to $344.9 million, while net profit increased by 24 percent to $140.3 million. It’s planning to open a second resort, Naga2, in 2016.

Many of the country’s other casinos are small

R

GROSS GAMING REVENUE

NAGACORP Y13 GGR $325m

Q1 GAMING REVENUE

and proliferate along the border regions,

$76.8m

os Phirun, a spokesman for the

attracting a large audience from Thailand

Ministry of Economy and Finance’s

where gambling is illegal. Those casinos have

Y13 TOURISM ARRIVALS

gaming and casino department,

reportedly seen a spike in revenue recently as

was cited as saying that the

Thailand’s new military junta clamped down

4.2m

+25% +16% +17.5%

TOURISM ARRIVALS Y20 ESTIMATES

government is in the process of drafting

on illegal gambling at home.

stricter, more transparent regulation and

Meanwhile, Entertainment Gaming Asia said

investigative requirements.

it has agreed to sell its Dreamworld Casino

“Currently, we are in the process of drafting a

in Pailin, Cambodia, to a local buyer after

Casino Law to attract bigger casino operators,”

effectively writing off its investment in the

he said, adding that a new draft could be

property earlier this year.

finalized as early as this year. “While we don’t

The company said it sold the casino for $0.5

provide online licences yet, it is in the process

million, with $100,000 being paid up front and

of being studied,” he said.

the remainder to be paid in sixteen $25,000

Despite having one of the strongest growing

instalments. It has also terminated all of its

tourism markets in Asia, Cambodia has

agreements with its Cambodian partner, who

failed to attract the same levels of casino

is a relative of the unnamed buyer.

investment as its regional neighbours, such

Entertainment Gaming Asia opened the

as the Philippines and Singapore.

Cambodian property in 2012. It was built on

The World Bank forecasts that foreign direct

land owned by its partner in the northwest

investment inflows to Cambodia will rise 12

of the country next to the Thai border. The

percent in 2014 to $1.6 billion. Meanwhile,

company said the resort has suffered from a

the International Monetary Fund is projecting

low level of natural player traffic, the inability

that Cambodia’s gross domestic product will

to secure a long-term third-party table game

expand 7.2 percent in 2014, with inflation at

operator and political unrest in Thailand.

incurred as of that date.

3.4 percent.

However, it did say losses have narrowed in

For 14Q1, the company reported a 29 percent

International tourist arrivals to Cambodia

recent months. Casinos in the border areas

drop in profit as both its gaming operations

significantly outpaced worldwide tourism

have been reporting a spike in revenue as

and gaming products division declined. The

growth in 2013, increasing 17 percent to

Thailand’s new military rulers have cracked

company reported revenue of $6.9 million.

approximately 4.2 million visitors. Vietnam,

down on illegal gambling dens at home.

Gaming operations revenue, which comprised

China and Korea were the top three countries

The Dreamworld sale includes all assets of

slot and casino operations, was $4.1 million

in terms of total tourist arrivals, with visitors

the casino with the exception of all electronic

for the first quarter of 2014, down 25 percent.

from China increasing by 39 percent year-on-

gaming machines and certain surveillance

Dreamworld Pailin, contributed $216,000 to

year, to 463,123 visitors.

equipment. It also prohibits any use of the

total gaming operations revenue in the first

However, Cambodia’s casino industry is

Dreamworld brand name

quarter of 2014 compared to $1.1 million in the

dominated by Hong Kong-listed NagaCorp’s

The company in January reported an

prior year period.

NagaWorld, which has a stronghold on the

impairment charge of about $2.5 million as

The company said at the time that it remains

most-prized location in the country.

of end December 2013 on the casino, which

committed to seeking new gaming projects in

The resort has a 70-year casino license

represented the entire capital expenditure

Indochina. l

Asia Gaming Briefings | August 2014

Y13 4.2m

Y20E 7.5m

Australian aquaculture company turned casino operator, Cell Aquaculture, held the soft opening of its Roxy Casino in Cambodia’s Bavet City, Syay Rieng Province in May. The casino is 200 metres from the Vietnamese border and hopes to capitalize on gamblers crossing the border from Vietnam, where gambling is illegal for locals

INDOCHINA 21

THAILAND

Booming business brings extra challenges

GROSS GAMING REVENUE $23b

STATE LOTTERY

International online operators are doing booming business in Thailand, where officially gambling is banned, providing a challenge for authorities which are seeking to crackdown on illegal internet activities

O

perators see great value in the Thai

service provider (ISP) firms will operate the

market and pursue it aggressively.

facility to shut down inappropriate content.

The only legal forms of gambling

Police in March also issued an order to seize

allowed in the Kingdom are through

any slot machines or horse racing gambling

the State Lottery and the Bangkok Turf Club,

machines anywhere in the country.

however the underground market is estimated to

That move came in part amid concern that

be worth at least $3.23 billion, dwarfing the official

criminal gangs were taking advantage of the

government lottery with funds of $2.48 billion.

political protests that were demanding so much

Some experts said the black market figure is

police time to operate illegal gambling rings.

conservative and noted that there had been a

But experts say it will be near impossible to

surge in gross revenue in recent weeks.

stop online gambling, which saw a surge in

A recent investigative report by the Bangkok

activity amid the FIFA World Cup. Thai police

Post’s Spectrum supplement put the illegal

said they have arrested 5,064 people for illegal

market at as high as $23 billion, with the State

gambling during the World Cup, including

Lottery at just $1.3 billion.

258 bookmakers and 127 betting slip runners.

However, authorities are cracking down and

This compares with around 3,800 people being

have already blocked access to some sites. The

arrested across Thailand for gambling during

Information and Communication Technology

the previous World Cup in 2010.

(ICT) Ministry is planning to create a national

If convicted, they could face up to two years in

internet gateway in July to crack down on

prison and a 2,000 baht ($60) fine, but most

improper use of the internet.

are expected to receive suspended jail terms

It’s unclear how the “clampdown” will be

unless there are particularly large amounts of

policed, though local media reports have said

cash involved.

the two state telecom enterprises, TOT Plc and

More than 2,000 football gambling websites

CAT Telecom, plus six telecom and internet

have been shut down, the report said. l

$1.3b

DOMESTIC HORSE RACING $258m

Y13 TOURISM ARRIVALS 26.73m

+19.6%

Y14E 26.3m ARRIVALS

(CUT FROM 28m) (Source: Spectrum)

Thai Gamblers expected to spend almost 45 billion baht ($1.4 billion) on illegal World Cup betting, up 17 percent from the previous tournament, the University of Thai Chamber of Commerce estimates Thai junta’s gambling crackdown has spurred a boom in border casinos and sports bars in Cambodia, Laos and Myanmar.

Outlets report an increase in revenue of between five and ten times their normal intake

Asia Gaming Briefings | August 2014

SOUTH EAST ASIA 22

PHILIPPINES

Filipino eGame-model attracts Asian interest for central reporting to owners and government

a better business environment by ensuring that

regulators, minimizing the risks of fraud.

proliferation is managed.”

The Philippines’ government regulator, Philippine

Pagcor clarified that it does not see the ordinance

Amusement and Gaming Corp (Pagcor), has

as being in conflict with its rules and regulations.

deployed a lot of resources to monitor stand-

“Our position is for the eGames operators to

alone gaming sites such as e-Bingo, Instawin

follow the city ordinance,” Francis Hernando,

and Slot Clubs, he said. “But, with eGames,

Pagcor’s vice president for gaming licensing, said.

they utilize modern technology to centrally,

Quezon City is adjacent to the capital Manila and

remotely monitor all activities.”

is home to most government offices, including

The Philippines is widely seen as the leader

the Lower House of the Philippines Congress.

in online gaming in Asia. Last year, eGames

Ordinance 2285, signed in May, also covers

remitted more than 2 billion pesos ($46.1

venues such as eBingo and Poker Clubs and

million) in revenue to PAGCOR.

prevents an eGames station from being within

The eGames outlets are similar to internet

a 300 meter radius of another internet café.

cafés, but are dedicated to online gambling.

“From our initial read of the ordinance, gaming

The outlets offer about 300 games ranging from

venues that are not compliant, particularly

baccarat to slot machines and online poker and

with regards to the distance between other

tend to cater to a local crowd who live or work

gaming venues, have a reasonable amount

in proximity to the internet cafe.

of time to cure the problem, whether it be by

would say we are advanced in that respect,”

“Our customers come primarily for amusement

transferring locations, combining or closing

Brian Ng, Philweb Senior Vice President

and entertainment. The economics are much

the venue altogether,” Ng said.

for eGames said in an interview, referring

smaller compared to the regular huge casinos

The city has given two years to comply with

to the Philippines’ lead in the industry.

in hotels or gambling resorts,” Ng said.

the regulations.

“eGames is a low-capital expenditure means

Philweb said its profit in the three months

Asked if other towns and cities might follow

for governments to increase their revenue

through June dipped slightly though operating

suit in their bid to regulate eGames, Ng said

collection. Rather than spending $25,000 for a

revenue rose. The company posted a profit

most local government units already have

slot machine, operators can spend $1,500 on a

attributable to parent equity holder of 211.84

similar ordinances covering the establishment,

computer connected to a central server running

million pesos ($4.9 million), compared with

operation and taxation of gaming businesses

software certified by a reputable third-party

262.47 million a year earlier. Earnings per share

in their jurisdictions.

auditor,” he said.

dipped to 0.180 from 0.189.

“Ng said the Philippines’ objective to become

The company recently hosted visitors from East

Operating revenue rose to 414.6 million pesos,

the center of gaming in Asia rests largely with

Timor who were interested in the product and

from 373.5 million pesos in the same period a

the integrated resort-type casinos that are being

Ng said he is fielding frequent enquiries and

year earlier.

established in Entertainment City and their

has been busy accommodating tours to eGames

Ng said no new stations have been added so far

ability to attract foreign high-value customers.

stations to demonstrate operations.

this year, while since 2012 most new outlets

Aside from eGames, the Philippines is a popular

Ng declined to comment on other visitors, but

were in provinces outside the crowded Metro

center for the front and back-office operations

according to the company’s web site it already

Manila area.

of large internet casinos, employing thousands

serves customers in Cambodia and Guam, while

He said a recent ordinance by Quezon City,

of people in a BPO-type work environment.

representatives from Nepal, Sri Lanka, Laos

which imposed strict new regulations on the

These online casinos can only take bets

and Palau have all had talks with the company.

location of eGames outlets, had not had much

from abroad and operate under license from

Ng said a big attraction is that the system allows

effect, adding the ordinance as a whole “creates

the Cagayan Export Zone Authority (CEZA).

PhilWeb, which operates 299 eGaming cafes across the Philippines, said its business model is attracting growing interest across Asia from regulators and gaming firms eager to replicate the business at home

I

Asia Gaming Briefings | August 2014

SOUTH EAST ASIA

GROSS GAMING REVENUE (Source: CIMB)

OPERATORS

$4b

of gaming tables and electronic table games

$3.5b

upon opening. “The regulatory revisions

$3b

allow for an increased number of gaming

SOLAIRE RESORT & CASINO Bloomberry Resorts’ Solaire Resort & Casino was the first to open in Entertainment City and is now set to open its 200,000 squaremeter extension in October this year. The $400 million add-on will feature more VIP gaming sections, 300 all-suite hotel rooms, a shopping center with 30 to 40 high-end shops, a 1,800-seat entertainment theater, 3,000 parking spaces, a nightclub and more restaurants. The initial outlay was boosted to $680 million, $60 million more than

tables, additional bonus junket tables and electronic gaming machines provided that various size thresholds for hotel rooms, room suites and villas are met,” said Chimmy Leung, director of corporate communications at Melco Crown Entertainment Limited.

According to Melco’s Q1 results, the City of Dreams had about $8.8 million of operating opening costs as well as share based compensation costs. It recorded a net loss of approximately $21.8 million.

RESORTS WORLD BAYSHORE

“This is definitely going to drive visitation

Genting Hong Kong and AGG. Travellers

to Solaire not just from locals but more so

International Hotel Group said it will focus

from foreign VIPs going forward,” said Leo

on developing Resorts World Manila before

D. Venezuela, Director of Investor Relations

pursuing development of the $1.1-billion

at Solaire Resort and Casino.

Resorts World Bayshore along Manila Bay,

Bloomberry Resorts Corp. results improved

which is scheduled to open in 2017. The

in the first quarter of the year with an

company, a joint venture between Genting

unaudited consolidated profit of P1.46 billion

Hong Kong and Alliance Global Group has

($33.7 million) from a loss of P1.06 billion in

allotted $600 million for the second and

the same period of 2013. Total gross revenues

third phases of Resorts World Manila to

reached P7.38 billion, over 11 times the

boost retail space by 60 percent. It will add

P661 million generated in the same period

1,100 rooms to the existing 1,226 rooms in

last year, with gaming accounting for 95.7

Resorts World Manila’s Maxim’s, Marriott

percent of the total.

and Remington hotels. Travellers Group

Since opening in March 2013, Solaire has

president Kingson U. Sian told reporters

signed up about 50 junket operators to bring

last July that the 12-hectare Resorts World

in foreign VIP players. The mass gaming

Manila is already a prime lot with a mature

player sign-ups also reached 256,000 in 2013

tourism and gaming market so returns will be

while total visitation for the year hit the

faster. In a disclosure to the Philippine Stock

3-million mark.

Exchange in April, Travellers said Pagcor

Crown are scheduled to open the City of Dreams casino resort project towards the end of this year. City of Dreams will also bring luxury brand, Nobu to the Philippines, as well as an educational entertainment center in a venture with Hollywood studio, Dreamworks.

In June, Melco upped its estimate for the Entertainment City resort by about a third,

Y13

Y14E

Y15E

Y16E

expenses, which primarily related to pre-

previously announced.

CITY OF DREAMS Belle Corp and Melco

$2.2b

Solaire Resort and Casino launched a major branding and marketing campaign with AirAsia, wrapping an Airbus A320 with the resort’s colors. The campaign is scheduled to run through to 2016. Solaire claims to be the first consumer brand in the Philippines to fully wrap a brand around a commercial airline Bloomberry Resorts and Hotels has asked the Supreme Court to overturn a Bureau of Internal Revenue ruling that calls on casino companies to pay income taxes on top of the franchise tax they pay to the Philippine Amusement and Gaming Corp.

Bloomberry is arguing that Pagcor’s charter exempts licensees from paying taxes

cleared the installation of an additional 420 gaming tables and 4,148 gaming machines. At end-2013, Resorts World Manila housed 287 gaming tables for the VIP and mass markets, 1,822 slot machines and 210 electronic table games. Travellers says it has so far used about 1.11 billion pesos ($25.5 million) of the 16.8 billion pesos that it raised through an initial public offering on the Phase 2 expansion of the Marriott Hotel and the Maxim’s Hotel and facilities.

and bribery charges filed against Japanese billionaire Kazuo Okada and his companies.

As of going to press, Universal unit Tiger Resort, Leisure and Entertainment was still scouting for a local partner for the project after the termination of its agreement with Century Properties Group (CPG) designed to help Universal comply with the Philippines’ 40 percent-limit on foreign land ownership.

The company is seeking to open its

MANILA BAY RESORTS Universal

$2-billion gaming complex by the third

The property will feature 365 gaming tables, 1,680 slot machines and 1,680 electronic

Entertainment Co. Pagcor chairman and

The casino will feature 2,000 rooms, state-

table games upon opening, catering to both

CEO Cristino Naguiat Jr. has that Universal

of-the-art gaming facilities, and an indoor

the VIP and mass market and 950 hotel

Entertainment’s Manila Bay Resorts would

man-made beach club covered by a huge

rooms.

not be allowed to open its casino until

glass dome, high-end and casual dining

City of Dreams Manila has been permitted

outstanding issues were resolved, including

restaurants, upscale retail shops, trade halls

to operate a substantially increased number

foreign equity limits on land ownership

and cinemas. l

from $680 million to $832 million.

quarter of 2015.

Asia Gaming Briefings | August 2014

23

SOUTH EAST ASIA 24

SINGAPORE

Singapore hits plateau, few growth drivers seen

GROSS GAMING REVENUE (Source: CIMB)

+3.8% $6.07b

Singapore took less than five years to catapult itself to the third spot in the global gambling industry, but that heady early growth now seems to have hit a plateau with few new drivers for growth expected in the short term

S

$6.8b

$7.1b

$7.5b

Universal Studios theme park.

However, recent results have been mixed.

In the latest quarter ended June 30th, Marina Bay Sands reported property EBITDA rose 17.6 percent to $417.8 million.

Meanwhile, Genting Singapore reported stellar Q1 results, but warned that the situation is getting tougher and that it plans to streamline operations

Y13

Y14E

Y15E

Y16E

and introduce new products to lure tourists.

Q1 net profit soared 77 percent, boosted by a pick up

trict government regulation, limited

in its gambling business. Revenue rose 24 percent

real estate and other resources, cautious

to S$828.8 million ($663 million), while net profit

economic sentiment, and newly

came in at S$257.6 million. The company said its

developing regional rivals threaten

gaming business saw revenue rise 29 percent on

to stall industry growth in the coming years.

the back of higher rolling volume and a higher

“The outlook for the industry in Singapore

win percentage in the premium market.

remains cautious,” Lucius Jesudason Chong, an

Most pundits agree that the casino and gaming

analyst at CIMB Research, says. “Government

business in Singapore is leveling off as economies

regulation is still the major deciding factor in

in the region soften.

the growth prospects of the industry.”

“Despite being economically stable, the Singapore

The government tightened legislation last

economy is finding it hard to grow,“ Chong says.

year, with amendments to the country’s

The downbeat economic sentiment in Singapore

Casino Control Act that include an increase

has contributed to the cooling of the demand in

in the maximum financial penalty that casino

Singapore’s casino and gaming industry, which

operators may face, from S$1 million up to 10

is reliant on discretionary spending.

percent of annual gross gaming revenue for

On a year-over-year basis, Q1, 2014 GDP grew

breaches of regulations.

by 4.9 percent, similar to the growth rate seen

This indicates that the government’s stance on

in the previous quarter.

gambling is “unlikely to change,” said Chong.

According to the Singapore Tourism Board,

The industry generated gambling revenue of

international visitor arrivals were flat at 3.9

$6.07 billion in 2013, up 3.8 percent from the

million. Arrivals from China, one of the largest

previous year and a far cry from the 18 percent

markets for the integrated resorts, fell 14 percent

spurt recorded in Macau.

compared with the prior year period.

Marina Bay Sands is considered the most expensive

“Casinos are an attraction for tourists, but

stand alone integrated resort property in the

the government is cautious in promoting it

world, with Las Vegas Sands investing a total

as the centrepiece of Singapore’s economy,”

of S$8 billion to complete the construction of

Chong explains.

the waterfront city centre. Marina Bay Sands

Also, the government has to approve any

occupies 15.5 hectares of reclaimed land with

expansion of the current integrated resorts,

a gross floor area of 581,000 square metres.

particularly in adding land area and hotel rooms.

Genting Singapore’s Resorts World Sentosa is

Real estate is a sought after commodity in the

located on the island of Sentosa, off the southern

country and, with casinos contributing less than

coast of Singapore. Also considered as one of

5 percent to Singapore’s gross domestic product,

the most expensive casino properties in the

allocating valuable real estate to integrated

world, Resorts World was developed for $6.59

resorts is just not the government’s priority.

billion or $4.93 billion. The resort occupies

LVS chairman and CEO Sheldon Adelson said

over 49 hectares (121 acres) of land. It features

he didn’t expect the government to approve

Universal Studios Singapore, the region’s first

its request to add more rooms. l

Asia Gaming Briefings | August 2014

Y14 Q1 tourism receipts $4.8b

+5%

Gaming, entertainment receipts $1.3b

+19%

Visitor arrivals 3.9m CHINA ARRIVALS

-14%

Singapore has launched a marketing campaign to attract Chinese visitors amid a drop in tourism numbers. The 5 million yuan ($802,491) campaign will run through to October and will be jointly organized by airport operator Changi Airport Group (CAG), the Singapore Tourism Board and Chinese and Singaporean travel agencies A Singapore delegation has visited the French igaming regulator ARJEL to gain a better understanding of the French online gaming regulatory model.

Singapore is currently reviewing its approach to online gaming regulation

SOUTHEAST EASTASIA ASIA SOUTH 25

GROSS GAMING REVENUE

MALAYSIA

Second casino license for Malaysia seen unlikely Genting Bhd, the operator of Malaysia’s only casino, is unlikely to lose its monopoly despite ambitions by tycoon Vincent Tan to apply for a license for the Berjaya Hills Resort in Pahang, analysts have said

$2b $1.6b

$2.1b

$1.7b

massive plans for expansion both at home and abroad. The diversified conglomerate is planning expenditure of $9.5 billion over the

Y13

Y14E

Y15E

Y16E

next five years, according to CIMB estimates, and that doesn’t include a potential project in Japan or Miami.

Fitch Ratings recently reaffirmed Genting’s credit ratings, saying the group has the financial

GENTING Y14 Q1 revenue

+20%

Net EPS

+25%

muscle to support its expansion.

The group’s Long-Term Foreign Currency Issuer

T

(Source: CIMB)

Default Rating (IDR) and senior unsecured rating an told a local newspaper in an

were confirmed at ‘A-’, among the highest

interview that he’d be prepared to

among Fitch-rated gambling companies. It

invest 3 billion ringgit ($933 million)

also affirmed Genting Singapore’s ratings at

in the Berjaya complex, creating

the same level.

Greece’s Intralot said Malaysia’s Magnum Corp has extended a lottery services contract for a further seven years, with the option to extend for a further two. The agreement covers the procurement, installation and support of an advanced, integrated lottery system to support up to 2,450 gaming terminals, among other items. The implementation will begin immediately and the commercial operation is estimated for mid 2015.

10,000 local jobs. Berjaya, which is close to

“Genting’s ratings reflect its continued

Genting’s Resorts World Genting property, is

strong market position in the Malaysian and

only permitted to offer slot machines.

Singaporean gaming markets, its robust and

It would be the second attempt by Tan to obtain

improving operating margins, and low net

a casino license in the hills, after an earlier bid

financial leverage, it said.

a decade ago was thwarted by protests.

Genting’s low net leverage, with negative net

“We will reapply for the license. Malaysia should

external debt on a consolidated basis which was

not stick to one operator. It should be shared

negative 0.21x in FY13, also supports its rating.

with other operators as tourism developments

The group recently announced a project on

can generate a lot of income for the country,”

South Korea’s Jeju Island with Chinese developer

Tan was quoted as saying.

Landing International, plans for a project in

“South Korea, Japan and Taiwan are looking

Las Vegas and a major revamp of its Resorts

to give out licences to operate casinos as they

World property at home. It is also bidding

realise the full potential of such developments.

for a casino license in New York State and is

“We will market Berjaya Hills as a new casino

interested in operations in Florida. Its name

destination globally. I have 4,600ha in Berjaya

has also been connected to a potential bid for a

Hills and there is lot that can be done with such

license in Japan. The group’s Singapore-listed

a licence,” he said.

unit, Genting Singapore said it has set up eight

However, Malaysian property developer, Tan

subsidiaries in Japan, ahead of the expected

Sri Low Yow Chuan, has claimed he has the

legalization of casinos in the country.

right of first refusal should Malaysia decide to

In a Singapore stock exchange filing, Genting

allow a second gambling license in the country.

said “each subsidiary will be principally engaged

According to The Star newspaper, the license

in investment holding, leisure and related

was granted in 1970 by Malaysia’s first Prime

businesses.” Genting is seen to be positioning

Minister Tunku Abdul Rahman to the 81-year-old

itself in Japan after losing out on a license in

patriarch of the Low Yat group and reaffirmed

Macau. The group is pushing hard to diversify

in 1993.

globally to reduce dependence on the sluggish

Either way, analysts said it was unlikely that

Singaporean and Malaysian markets.

Profit rose to RM1,464.2 million ($455.4 million)

authorities would grant a second license amidst

The company, which has interests ranging from

from RM933.3 million in the same period a

opposition from politicians and conservative

gambling to palm oil, said its Q1 pre-tax profit

year ago. Group revenue gained 20 percent

sectors of the mainly Muslim country.

from continuing operations surged 57 percent,

to RM4,693.4 million. Net earnings per share

Meanwhile, Genting is pushing on with

boosted by its casino businesses.

were up 25 percent. l

Malaysia’s Home Minister Datuk Seri Dr Ahmad Zahid Hamidi has warned that police action alone won’t be enough to tackle illegal gambling. He wants a coordinated approach among community, local authorities and police to ensure phone lines, water and electricity are cut to illegal gambling dens

Asia Gaming Briefings | August 2014

AUSTRALASIA 26

AUSTRALIA

Bookies fees risk inflating illegal market Fee hikes for bookies in Australia’s horse betting market threaten to boost illegal gambling, push players back offshore and may force companies to change their business models, experts say

Asia Gaming Briefings | August 2014

V

ictoria has changed its fee structure,

fees are increased to 2.5 percent, or 30 percent

while New South Wales has also

of gross revenue. For non-pari mutuel bets the

proposed similar hikes, sparking

fees rise to 3 percent for premium meetings.

concern others may follow suit and

In Queensland, the proposed structure will

raising a furore among the nation’s bookmakers.

see totalisator bets charged at 1.5 percent of

According to the Australian Wagering Council,

turnover for standard meetings and 2.0 percent

racing accounted for 13.6 percent of Australia’s

for premium meetings. Non-totalisator bets

total A$19 billion ($17.8 billion) spend in the

will be charged at 2.5 percent of turnover for

2008 - 2009 period. A report by the The Victorian

standard and 3.5 percent for premium. New

Commission for Liquor and Gambling Regulation

South Wales may also follow suit.

for 2012 - 2013 estimated that the combined

According to Tabcorp, without mitigating

racing and sports betting take had risen to some

strategies the Queensland changes would have

15 percent of total spend.

cut net profit after tax by $3 million, while

Under the new fee structure, for pari mutuel

the Victoria hikes would have cost $4 million.

bets, bookmakers in Victoria will have to pay

Paddy Power has condemned the increase and

the higher of 1.5 percent of turnover, or 15

has threatened to redirect promotional activity

percent of gross revenue for 440 standard

to sports betting and racing in other states.

race meetings in Victoria. For the 45 group and

A representative of the Australian Wagering

listed meetings the charges rise to the higher

Council told AGB that “regular reviews of the

of 2 percent of turnover, or 20 percent of gross

product fees levied to bet on racing in Australia

revenue, while for the 10 premium group one

impact significantly on wagering service providers

meetings, including the Melbourne Cup, the

and the racing industry itself.”

AUSTRALASIA 27

CASINO GAMING REVENUE (Source: CIMB)

Y13

$3.5b

Y14E

$3.6b

Y15E

$3.7b

Y11/12

GAMING (INCLUDING POKIES) $151.5b RACING $9.2b SPORTS BETTING $3.9b (Source: Queensland Treasury)

Echo Entertainment said it has agreed to team up with rivals Chow Tai Fook Enterprises and Far East Consortium International to bolster its chances of obtaining a casino license in downtown Brisbane. The new consortium will be known as Destination Brisbane Consortium and the parties will work together on a detailed proposal to develop the Queen’s Wharf project The AWC believes that these fees will limit

William Hill does not yet have a plan of how

competitiveness and may drive punters towards

it will deal with the increase in fees, he said.

either “illegal, unregulated starting price (SP),

“We are currently assessing the impact of the

or offshore bookmakers.” They do not pay tax

change and next steps.”

and do not have policies in place to maintain

The fee hikes may also help to accelerate a

responsible gambling, the body argues.

trend in the country’s betting market away

Karen Avery, Senior Director Gambling and

from wagering on horses to a broader sports

Licensing Services, Department of Business,

betting model, especially online.

for the Northern Territory said the state doesn’t

Bill Brown, of law firm Rockwell Olivier, predicts

plan to follow suit with fee hikes.

that these fee hikes will not necessarily lead

James Henderson, Group Operations Director

to investment back into racing. Brown says

at William Hill, told AGB that he concurs with

“there are no external checks and balances

the AWC’s assessment that the increase in

on how the racing controlling bodies spend

racing fees will negatively affect both punters

the money raised.” He says the race fields

and the industry more generally.

legislation needs to be re-visited so that “the

However this growth marks more of a move

“The real risk is that the increase in fees pushes

fees are not frittered away on administration

from one platform to another, rather than an

consumers to unregulated offshore operators,

rather than on improving the quality of the

expansion in the overall market. The wagering

which defeats Racing Victoria’s objectives as

racing product.”

market has not, overall, expanded tremendously

revenues are funneled offshore”, said Henderson.

Overall the online sports betting market in

in the past four or five years but merely

He believes that such operators do not have the

Australia is booming. The growth has attracted

kept pace with Australia’s general economic

same commitments to responsible gambling

an influx of foreign investment, with many local

growth at about 4 to 5 percent, according to

or harm minimization.

bookmakers being bought up by overseas giants.

AWC figures. l

Tatts and Tabcorp said they will need to take a charge to their results after The Court of Appeal of the Supreme Court of Victoria overturned a ruling regarding pokie machine levies due to the Victorian government. Tatts said it will need to take a charge of about $25.7 million to cover the ruling, while Tabcorp expects its 2013/14 earnings to be impacted by about $19 million

Asia Gaming Briefings | August 2014

AUSTRALIA SPECIAL FOCUS 28

SOCIAL GAMING:

Enticing opportunities, mounting concerns The social gaming market is triple the size of the online gambling market, with revenues growing at a healthy 34 percent clip from 2013 to 2014, creating an enticing opportunity for operators, but also raising concern about the implications for problem gambling

G

ambling operators are increasingly active

brand’s personality to engage and create excitement

on social media platforms, most notably

in their communities.

Facebook and Twitter. Australia is likely to

One popular activity on social media platforms is social

prove fertile ground with one of the most

gaming, and social casino games are one of the most

Internet connected populations worldwide.

profitable genres of this activity. Social casino games

It is estimated that 89 percent of the population have

refer to games based on, or interacting with, a social

a social network account and spend an average of two

media platform that replicate a gambling activity, but

hours per day on social media platforms. Over 12 million

do not award real money prizes. These games are free to

Australians use Facebook and YouTube and there are 2.5

play, but users can choose to pay real money to access

* Dr. Sally Gainsbury is Senior

million active Twitter users.

additional content.

Lecturer, Centre for Gambling

In addition to hosting communities and creating content,

As well as the rise in social gaming revenue over the past

Education & Research,

gambling operators can display promoted content on

year, monthly active users have also risen, up 12 percent,

Southern Cross University

social media and target advertisements to a specific

mainly due to the increased use of mobiles, similar to

population. Social media can be used to portray a

the impact of this device on the gambling market.

Sally Gainsbury*

Asia Gaming Briefings | August 2014

AUSTRALIA SPECIAL FOCUS 29

Recognising the popularity of social casino

(estimated at approximately 2 percent) has

be particularly attractive to young people as

games, several operators have launched or

raised the question of whether these games

they feature themes such as cartoon animals

partnered with social casino game sites in an

cater for different consumer groups.

from popular movies and shows.

effort to engage with customers and diversify

Behavioural economist, Dan Ariely, has argued

The extent to which social media use and

their product offerings.

that social casino games are actually undermining

social casino games should be regulated has

Social casino games owned by Caesars Interactive

gambling by encouraging potential customers

been debated internationally, including in

Entertainment, a division of the U.S. gambling

to prefer a free version, rather than pay for

Australia. A number of studies have shown a

company, represented over one-fifth of the

the experience.

correlation between the use of social casino

total social casino revenue from March to June

If social casino game players are motivated to

games and online gambling and gambling

2014, followed by DoubleDown Casino, owned

play for the enjoyment of the game, according to

problems among young people.

by International Game Technology. In addition

behavioural economic theory, these players should

However, these correlational studies do not allow causal inferences to be drawn. Currently,

to brand recognition, player analytics provide valuable insights into the popularity of games and user play patterns and preferences.

The explicit connection between social casino games and gambling operators is important in jurisdictions such as the U.S. and Australia, where real money gaming (i.e., casinos, slots, poker, etc.) is mostly prohibited. Online games offer a way to increase brand awareness among consumers and provide a preview of gambling experiences.

For example, MGM Resorts International launched a standalone social gaming website that offers social casino games and allows users to construct casinos on a virtual Vegas strip.

All games are free to play, but users can win

"OVER THE LONG TERM, USERS, PARTICULARLY YOUNGER USERS, MAY BECOME ACCUSTOMED TO THE ONLINE ENVIRONMENT AND BE LESS LIKELY TO VISIT GAMBLING VENUES. THIS IS A POTENTIAL CONCERN FOR THE LAND- BASED GAMBLING INDUSTRY IN AUSTRALIA, WHERE PARTICIPATION AND EXPENDITURE ON ELECTRONIC GAMING MACHINES HAS DECLINED IN RECENT YEARS"

there is insufficient evidence as no research has been conducted to determine the impact of these new technologies on gambling and vulnerable populations.

Despite this, further efforts are needed to ensure that social casino games are not inadvertently marketing gambling to young people or adversely impacting this vulnerable population.

Social casino gaming has proven its value as a source of revenue in its own right.

Whether synergies will emerge between gambling and gaming is yet to be seen. To further the understanding of the impact of new technologies, including social media and

loyalty points and rewards that can be redeemed for real prizes such as complimentary hotel

be resistant to paying a higher price to gamble,

social casino games on gambling and related

rooms, restaurant meals, and show tickets,

as they have learnt to enjoy the free version.

problems, an online survey is being conducted

linking the games to gambling venues.

Over the long term, users, particularly younger

by CGER at Southern Cross University.

There is a theory that users who are interested

users, may become accustomed to the online

The survey aims to recruit Australian social

in social casino games may also be interested

environment and be less likely to visit gambling

media users, including those who play social

in gambling and that users may be prompted

venues. This is a potential concern for the land-

casino games and/or gamble. The results

to migrate from these games to real money

based gambling industry in Australia, where

will determine the crossover and impact

gambling sites. The attraction is that if even

participation and expenditure on electronic

between these activities, and any impact on

a small proportion of the social casino game

gaming machines has declined in recent years.

gambling problems.

players migrate to gambling, the expense will be

The concomitant increase in popularity of

For the study to be successful, a large number

worthwhile. Furthermore, the cost of migrating

social casino games and the convergence

of Australian social media users, social gamers

customers from social casino games to gambling

with gambling operators has led to concerns

and gamblers must be recruited. The CGER

is expected to be significantly lower than the

that social casino games may be harmful if

is looking for organizations that are willing

costs of acquiring new customers.

consumers have difficulties distinguishing

to host recruitment notices and links to the

There is some evidence that social casino game

gaming from gambling.

survey on relevant websites, or send notices

players are interested in gambling. A recent study

The widespread popularity of social casino games

to customers to encourage participation in the

conducted by the Centre for Gambling Education

may increase normalization and favourable

survey. The link is http://cger.scu.edu.au/.

& Research (CGER) found that approximately 13

impressions of gambling, which may lead

Support for the recruitment process by relevant

percent of Australian gamblers also play social

to increased gambling participation and the

organizations is critical to ensure the results

casino games and these people were more likely

subsequent development of gambling disorders.

are meaningful and informative.

to be younger and gamble on the Internet than

The impact of social media and social casino

If you are interested in supporting this research

non-social gamers.

games on children and adolescents is of particular

by hosting a recruitment notice or finding out

However, the relatively low conversion rate of

concern given the lack of age restrictions on

more about this research please contact Dr. Sally

social casino gamers to real money gambling

these platforms. Many social casino games may

Gainsbury at sally.gainsbury@scu.edu.au. l

Asia Gaming Briefings | August 2014

AUSTRALIA SPECIAL FOCUS 30

Saving sport: Government action needed Chris Eaton*

T

he FIFA World Cup hosted by Brazil dominated

For example, with the extremely significant arrests of

the world of sport over June and July. While

illegal gambling organizers during the World Cup in Macau,

arguably the biggest global sport competition

Vietnam and USA among others, and with hundreds of

next to the Summer Olympics, and always

millions of dollars seized and billions of dollars in bets

controversial in some way, no prior World Cup has been

taken by those arrested, the prediction by John Sun,

so affected by the shadows of administrative corruption

chairman and CEO of AGTech that betting on this World

and match fixing.

Cup would be four times higher than for the previous

Despite their best efforts, FIFA were not able to completely

tournament, with some games attracting six times the

deflect the interest of the media and the public away from

revenue, seems to have been more than accurate.

In this global sport-betting-

corruption taints and allegations solely onto the competition itself.

In some ways this is an echo of the International Olympic Committee and Salt Lake City. In other ways it is an echo of endemic, almost institutionalized doping in other sports, such as cycling. However, the double whammy in football of corruption on the field and in governance is even challenging the hitherto seemingly impervious

“BECAUSE TODAY THERE IS NO INTERNATIONAL SPORT BETTING REGULATION OR SUPERVISION AND NO INTERNATIONAL PLATFORM TO JOIN UP THOSE NATIONS THAT ACTUALLY DO REGULATE SPORT BETTING, IN EFFECT THE INDUSTRY IS A GLOBAL MARKET FREE-FOR-ALL”

without-borders environment, a reputable betting monitor has estimated that over €14 million ($18.7 million) on average was bet for every minute of play during the 64 matches of the World Cup. If you add the illegal, legal and under-regulated betting markets, it was estimated that an average of €2 billion was bet on each match, and that €5 billion was gambled on the final.

edifice of FIFA. There is a simple enough reason for this. The growing

Internal greed and corruption in sport and in sport-betting

frequency of football scandals worldwide is seriously

has created a permissive environment within which,

eroding the confidence of all football fans in both the

at worst, match-fixing and betting-fraud has become

game itself and the credibility of its administrative organs

tantamount to acceptable and at best, easily ignored.

to take control of the problem. When the institutions

And because today there is no international sport betting

of governance cannot control the real purpose of their

regulation or supervision and no international platform

existence, just as when the police cannot maintain public

to join up those nations that actually do regulate sport

safety, the blame naturally elevates to government

betting, in effect the industry is a global market free-for-all.

leaders, as it should. When you lose the confidence of

Sadly international sport just doesn’t seem to care enough

your “public”, you will pay the price sooner or later.

and does not find a voice on match-fixing until it actually

Debilitating cynicism is the enemy and whether people

hurts its image or its income. Even then responses are

in football like this reality or not, they must either firmly

usually calls for soft solutions, such as education and

deal with this phenomena, or continue to slowly wither.

betting monitoring.

This withering of confidence might not be so obvious,

Generally international sport betting just doesn’t care

particularly to those blinkered in short-term office or

either. Sport betting globally is competitive, business

to those dominant in the business of sport, but nor was

driven and without either a social context, or a social

*Chris Eaton is Executive

it so obvious in wrestling and boxing until it was too late

responsibility outside of those forced on them by some

Director - Sport Integrity

and these became discredited fringe sports.

individual governments. The sport betting industry will

for the International Center

Football is the archetypal modern sport. It is dominated by

not responsibly self-regulate. Only governments have

for Sports Security (ICSS),

wealth and the wealthy, and by those who want to join them

the power to do this.

and an AGB Advisor

on that “pedestal” in any way possible. It is this wealth that

Saving sport from criminals and global greed must become

naturally brings those who illicitly prey on it into the scene.

one of the highest priorities of international leadership. l

Asia Gaming Briefings | August 2014

AUSTRALIA SPECIAL FOCUS 31

Sports betting matters

A

s participants of sports betting know, it’s all

The Canadian Senate may not be the only upper house

about speed. Betting companies spend big

to restrict regulatory reform in sports betting. Should

to ensure that punters can place their bets

the Australian Government decide to make changes to

as quickly as possible. This is particularly

the Interactive Gambling Act to allow “in the run” bets

important in the rapidly growing segment of the market

to be placed over the internet (and there is no evidence

that participates in “in the run” betting.

I am aware of that it will), that amendment would need

It is therefore particularly ironic that the one area which

to pass the Australian Senate. Who among us has any

would arguably make the biggest difference for punters is

confidence in the likely outcome of an Australian Senate

the one that is moving at snail’s pace. Regulatory reform,

vote right now?

to put it bluntly, has hit the wall.

Let’s look at the Australian States and Territories where

Regulatory reform of sports betting, however, should

all gambling regulation, other than that restricted by the

not be motivated just by the desires of the punter, or the

Commonwealth’s Interactive Gambling Act, resides. The State

commercial interests of betting companies. The primary

of Victoria implemented its sports betting integrity model

reason why regulatory reform is needed is to protect the

in 2007 – and seven years later, even though it appears to

integrity of sport itself.

be fulfilling exactly what was intended, no other Australian

From the U.S., to Canada, to Australia, there’s the

State or Territory Government has followed up with matching

possibility of reform, but a decided lack of activity. In

legislation. It would seem that professional sports see the

the U.S., various state governments are testing the

value in the Victorian model, with nine sporting bodies

waters but, as it was recently explained to me by a U.S.

now approved as controlling bodies for their sports. (This

gaming attorney, governments in America no longer run

approval provides those sports with the power to require

the country, the U.S. Supreme Court does. So, while we

betting operators to have their approval before any bets

wait for the U.S. Supreme Court to determine whether

can be placed.) So why haven’t the other Australian State

individual states have the right to implement sports

and Territory governments come to the party?

betting, let’s look at Canada.

Fortunately, as Victoria hosts most of the big sporting

There the House of Commons voted unanimously two

events or, at least, some elements of a broader national

years ago to support legislation which would, in effect,

competition, the Victorian legislation provides protection

remove the restriction preventing individual provinces

across Australia. But the implementation by all other

from legislating to allow regulated sports betting. That

Australian State and Territory governments of companion

bill never made it through the Canadian Senate. Should

legislation would not only strengthen the integrity model

it fail to pass, it will apparently be the first bill in history

but also signify the intentions of those governments

* Peter Cohen is Director,

to be unanimously supported in the House of Commons,

to take the issue of sports corruption seriously. While

Regulatory Affairs,

but refused by the Senate. That’s the sort of power you

punters, betting companies and even tax collectors

at The Agenda Group,

think might better be reserved for national security or

might all benefit from these reforms, the bigger picture

and an AGB Advisor

personal privacy laws rather than sports betting, but

is that sports and the people who love them, will be the

that’s the Canadian Senate’s prerogative.

main beneficiaries. l

Peter Cohen*

Asia Gaming Briefings | August 2014

AUSTRALIA SPECIAL FOCUS 32

Race field fees: How to avoid a slow (funding) death

W

hen asked for a comment recently

Without going into too much detail about the history

on the setting of race fields fees in

of race fields fees, race controlling bodies in Australia

Australia, I expressed my concern that

were given the power to raise funds directly from betting

some of the money collected might not

and wagering operators by imposing a fee for use of

be invested productively.

racing product.

I meant no disrespect to the various racing controlling

This has largely resulted in operators being relieved of

bodies in Australia. My intention was to raise the prospect

wagering and betting taxes imposed by State and Territory

that the money might, for one reason or another, get

governments.

diverted to such a degree that the industry is forced to

The race field fees were also introduced to deal with the

* Bill Brown is a well known

do one of two things:

“free rider” problem attributed to operators licensed

Australian gaming law expert,

To either go back, cap in hand, to the government for

in the Northern Territory and elsewhere. Without the

and an AGB Advisor

financial assistance, or to “tax” licensed Australian

imposition of race field fees, those NT operators had no

betting operators out of the market.

legal obligation to pay for use of the states’ race fields

Bill Brown*

Asia Gaming Briefings | August 2014

AUSTRALIA SPECIAL FOCUS 33

information. The NT operators were said to be

any measure of reasonableness in setting that

appears that Queensland has reserved some

contributing nothing of significance to the racing

fee. Otherwise, a Queensland control body is

power for the relevant minister to intervene.

industries in Australia. While not directly linked

not constrained in setting the fee.

The minister can give a direction to a control

to the “free rider” issue, there were also issues

If the worst were to occur, what means could

body on a range of matters, including one to

of integrity floating in and out of the debate.

be employed to ensure that the race fields fees

ensure that its actions are accountable and its

As this was going on, the rise of offshore operators

raised by control bodies across Australia were re-

decision-making processes are transparent.

accelerated in parallel. The Federal government’s

directed to productive uses? The most obvious

As well, the minister may direct the body to

attempt at regulating the availability of offshore

is the power to make regulations to impose

review an existing policy, or to make a new

online gambling and betting was proving to be

controls over how a body pursues its objectives.

policy about a matter. Victoria and NSW have

ineffective. Then and now, Australian punters

Regulations can usually be implemented at the

chosen not to reserve this type of power to their

continue to bet more and more on these largely

administrative level, as opposed to statutory

relevant minister.

unregulated offshore sites.

changes which must pass via parliament.

So if we assume the power is there, what might the relevant department consider? Conceptually,

Can or should governments do anything to regulate the way in which each control body spends the fees raised? Some background on the race fields legislation first.

The key states here are Victoria, New South Wales and Queensland. The relevant laws and the resultant schemes are similar in structure, with some differences in execution.

The relevant control body is invested with the power to issue race field approvals to operators.

The approval is to use and publish race fields on races conducted in the particular state. Without approval, the operator commits an offence in the state and can be fined.

In each state, the control body is only constrained in what it must consider in determining whether or not to grant an approval if regulations prescribed by the government are in place. In Victoria, some

“REGULATIONS SHOULD NOT BE SO BURDENSOME THAT THEY CHOKE THE CONTROL BODY’S ABILITY TO RAISE SUFFICIENT FEES TO MEET THE GENUINE SHORT, MEDIUM AND LONG-TERM NEEDS OF THE INDUSTRY. THEY SHOULD ALSO RECOGNISE THAT IN THE CURRENT FUNDING ENVIRONMENT, RACING AND GAMBLING ARE CO-DEPENDENT, WITH THE RESULT THAT RACING NEEDS A VIBRANT AND FINANCIALLY VIABLE AUSTRALIAN WAGERING AND BETTING INDUSTRY”

the regulations should not be so burdensome that they choke the control body’s ability to raise sufficient fees to meet the genuine short, medium and long-term needs of the industry.

They should also recognise that in the current funding environment, racing and gambling are co-dependent, with the result that racing needs a vibrant and financially viable Australian wagering and betting industry.

Some things departments could require a control body to consider in setting and spending of race fields fees are: 1. Giving due recognition to the differences between returns to operators based on the betting model adopted (ie, betting exchange v fixed odds v tote) and differentiating the fee as between those models; 2. Balancing the financial interests of the

regulations have been put into place to regulate the control body exercising its powers, however

In Queensland, regulations may prescribe a

industry and of operators via a fee which does not

no matters have been prescribed in relation to

condition to which approval of a control body

materially adversely impact potential financial

race fields. The situation is similar in NSW and

is subject. This regulation making power could

returns to Australian licensed operators;

Queensland, however both those states require

be used by the Queensland government to

3. Recognising that offshore “free riding”

the control body to take into account whether

impose a condition on a Queensland control

operators exist and putting in place mechanisms

the operator is licensed in Australia, is fit and

body regarding the manner in which it sets

to minimise revenue leakage to them or, at least,

proper, and whether granting of the application

and spends race field fees.

put law-abiding Australian-licensed operators

will undermine integrity of racing in the state.

A similar regulation making power exists in

at an advantage to them;

In Queensland, there is a very interesting

the NSW legislation, establishing the NSW

4. Having clear, transparent and publicly available

difference, which indicates a deliberate intention

control bodies. However the independence of

financial forecasts and business plans that

regarding how the fee is to be set. Under one

NSW control bodies from government (other

justify the fee against actual industry needs;

provision of the Queensland law, a fee charged by

than in selection of members) appears to be

5. Requiring regular independent review and

a control body must reflect the reasonable cost

a key feature. As well, the set prescribed fees

audit against those business plans and forecasts.

to that body of providing the service for which

for “premium race meetings” in NSW provides

Governments have shown faith in control bodies

the fee is charged. However, this reasonable

little (if any) room for any other fee levels to

across Australia and these are suggestions to use

cost test does not apply to constrain a control

be set for those meetings.

regulation making powers to prop up that faith.

body in setting the amount of the fee for using

In Victoria, the relevant law provides that the

Let’s hope the faith shown is well founded and

race information. Accordingly, it can be inferred

control body must, for the purpose of determining

we don’t have to go back to old days of taxes or

that a race information fee in Queensland is not

an application, consider any matters prescribed

levies on Australian licensed operators. That

a matter of cost recovery. Further, it could be

in the regulations.

would be a great pity and would only hurt the

inferred that the control body is not bound by

Aside from the regulation making power, it

good guys. l

Asia Gaming Briefings | August 2014

AUSTRALIA SPECIAL FOCUS 34

Packer’s Sydney dream comes close to reality Jamie Nettleton & Elizabeth Cameron*

O

n July 8 2014, James Packer’s Crown Resorts

only members and guests will be permitted to play; and

passed a probity assessment conducted by

there will be no access for the general public.

the New South Wales Independent Liquor

The licence fees and gaming taxes (29 percent of gambling

and Gaming Authority (the ILGA) over its

revenue and 10 percent of rebated ‘international’ VIP

proposal to operate a second Sydney casino.

gambling revenue) payable to the state government are

The assessment was a critical step for Crown in realizing

expected to generate $1 billion over the first 15 years of

its objective for its Sydney casino to begin operations in

the casino’s operation. Various guarantees were given

November 2019. The proposed $1.3 billion VIP-only casino

to the government over the amount of gaming taxes

is planned to operate for 99 years as part of Sydney’s Barangaroo South’s centrepiece hotel resort.

This probity review was completed fairly quickly – in just over six months. This took into account the previous probity review conducted in relation to Crown Resorts’ shareholding in Echo Entertainment, which took over a year. It also contrasts with the

“THE LICENCE FEES AND GAMING TAXES (29 PERCENT OF GAMBLING REVENUE AND 10 PERCENT OF REBATED ‘INTERNATIONAL’ VIP GAMBLING REVENUE) PAYABLE TO THE STATE GOVERNMENT ARE EXPECTED TO GENERATE $1 BILLION OVER THE FIRST 15 YEARS OF THE CASINO’S OPERATION”

probity review of Genting, which

payable to the NSW government over specified periods.

Within a week of the execution of the agreement, Crown Resorts was to pay the NSW State government $100 million as a licence fee.

Like other gaming licences granted by governments, various undertakings are given by the NSW government to Crown in respect of the security of the licence.

This will result in compensation

is still ongoing after almost two years.

being paid if the licence is amended or cancelled, save for

The ILGA investigated the ownership, financial security

breach or wrongful conduct by Crown Resorts.

and viability of Crown Resorts, as well as its management and operations, to assess its suitability to operate a Sydney

NOW THE WORK STARTS IN EARNEST

casino. The investigation took into account business

Crown Resorts is required to lodge a development

associates, both domestic and international, with the

application with the Barangaroo Delivery Authority to

objective of ensuring that its operations are free from

commence construction.

criminal or inappropriate influence.

Under the Barangaroo Delivery Authority Act 2009 (NSW), developer agreements may also impose further

STATE GOVERNMENT AGREEMENTS

developer contribution fees on Crown Resorts. For the

The probity approval was announced nine months after

project to proceed, Crown Resorts will have to secure all

Packer secured the blessing of the NSW state cabinet for

necessary planning and development approvals and enter

Crown Resorts to be an ‘approved applicant,’ following

into agreements with the Barangaroo Delivery Authority

its submission of an unsolicited proposal to develop a

and the developer of Barangaroo South, Lend Lease. This

* Jamie Nettleton is a Partner

second Sydney casino.

will take a considerable period to progress.

at Addisons Lawyers, Sydney

At the same time as the announcement of the probity

In the meantime, the gaming licence process is well

and an AGB Advisor. Elizabeth

approval, the NSW government granted the company a

advanced with the various agreements between the

Cameron is a Law Clerk at

Restricted Gaming licence for the project.

government and Crown Resorts expected to be tabled

Addisons Lawyers

The licence is limited in a number of ways: there will be

before the NSW Parliament during the next sitting period,

no poker machines; there will be minimum bet limits;

which will conclude by the end of August 2014. l

Asia Gaming Briefings | August 2014

AUSTRALASIA

GROSS GAMING REVENUE

SAMOA E $10m Q1 tourism arrivals

+7%

CNMI April arrivals

-1%

25,000 32,035

PACIFIC ISLES

Samoa gets first casino Samoa is set to get its first casino at Aggie Grey’s Lagoon Beach Resort & Spa in August, with a second planned for early 2015, as the South Pacific island seeks to boost tourism numbers, which plummeted after 2009’s devastating tsunami

employs close to 1,000 people in Samoa and 150 in Tahiti and French Polynesia making it the largest private-sector employer on the island.

The resorts will also add much-needed jobs to the Samoan community where unemployment stands in the region of 2 percent.

Samoa passed a bill legalizing casinos in 2010 to help boost tourism and revenue after the 2009 tsunami. The legislation faced stiff opposition from church groups and opposition

T

parties who threatened to repeal the law if they

CLUB C Saipan, a gaming and entertainment venue, located at Kanoa Resort Saipan, has opened.

The facility features 8,000 squarefeet of entertainment space, gaming machines and stadiumstyle electronic table games with a seating capacity of 200. Major suppliers include Aruze and LT Games, and a mix of slots. Club C Saipan comes on the heels of the introduction of the E-Gaming Law signed last December Hong Kong-based Honest Profit International has signed a lease accord on 40,087 square meters of land on Saipan, where it plans to build a $130 million, 300-room hotel. The lease is for 25 years, with an optional 15-year extension for a total of 40 years

he casino at the 145-room luxury

get into power.

hotel will be managed by Australia’s

Aggie Grey’s was handed one of two casino

Indo Pacific Gaming International

licenses, however, the process ran into

and Hong Kong’s Gaming Concepts

controversy. A second license granted to

Group. It will have 12 tables and a variety of

Chinese developer Chengdu Exhibition Tourist

electronic gaming machines.

Group was pulled after reports its Chairman,

2015, but to attract the premium player.

A second casino is planned for 2015 and will

Deng Hong, was being investigated for

Meanwhile, the island of Saipan has given

be in Aggie Grey’s Hotel and Bungalows in

corruption by Communist Party officials over

the go-ahead for a $2 billion resort to Best

the main town of Apia. The casino there will

land deals in China.

Sunshine International, a company owned by

feature 24 tables and more than 200 electronic

The Chinese company had planned a 500-room

Hong Kong-listed Imperial Pacific.

gaming machines.

hotel and casino.

The award of the license, after an acrimonious

Games to be offered initially will be Roulette,

Feeney said it’s considered unlikely the second

legal battle, has proved controversial, with

Baccarat, Blackjack and Poker, while Sic Bo

license will now be granted, with the barrier

some claiming the award was a foregone

will be added at the end of the year. As far as

to entry being the need to build a five-star

conclusion.

electronic gaming machines are concerned,

establishment.

As part of the process to win the license,

the casinos will be offering a mix of brands

Tourist numbers to Samoa now are only

Best Sunshine promised cash handouts

with several jackpots and will look to the New

slightly above 2004 levels. Though in the first

to all residents. It said it will make a $10

Zealand market to determine the best mix.

quarter of 2014 total visitors rose 7 percent to

million contribution to the local community,

The potential size of Samoa’s casino market

25,000 over the same period last year.

distributing the amount through cash vouchers

will rival that of Vanuatu and New Caledonia

Distance however is likely to remain an issue

to all locally born adults.

once the second casino is up and running. The

for Asian travelers, with most studies showing

It will also pledge $20 million in cash to be

resorts will cater only to foreigners, as locals

that the Chinese currently prefer destinations

distributed within 60 days of commencing

are not permitted to gamble, and are expected

with less than five hours flying time.

construction works on its first hotel in the

to generate at least 1,500 visitors a day.

The distance also makes junkets unviable. The

project and at least $20 million in cash every

The Grey family, which owns the two resorts,

casino may look at using the VIP promoters in

year after the first full year of operations. l

Asia Gaming Briefings | August 2014

35

v

AUSTRALASIA

36

GROSS GAMING REVENUE Y13 GGR $2.07b TAB/Sports betting $294m

NEW ZEALAND

SkyCity tightens customer procedures after media expose SkyCity Entertainment, New Zealand’s only casino operator, said it has introduced “customer service ambassadors” to roam its casino floors and monitor client behaviour, tightening its scrutiny of potential problem gamblers

Adelaide and Darwin in Australia.

In the first half of the fiscal 2014 year, SkyCity reported that normalized net profit after tax was $66.4 million, compared with $72.1 million a year ago. Normalized revenue was $467 million down from $493.4 million for the corresponding period with the strong NZ dollar affecting revenue from Australia.

+$7m +4%

Lotteries $432m

+3.1%

Casinos $520m

+2.1%

Pokies $826m

-3.3%

Lotto New Zealand has launched a smartphone app that will check the player’s ticket and notify them if they are lucky enough to win. Customers can also use the app to find nearby stores.

The app is connected directly to the Lotto gaming system and is available on both Apple and Android smartphones GuocoLeisure, the hospitality company that owns the Clermont Club in London, delisted from the New Zealand Stock Exchange on June 27th this year, but retained its listing in Singapore. Guoco, which was established in New Zealand, moved its primary listing to Singapore in 2000

SkyCity last year won approval to expand its gaming facilities in Auckland in return for

T

building a $402 million convention centre. he move comes six months after a

Meanwhile a recent report on youth gambling

television expose that revealed that

from the University of Auckland and

in gambling activities that are illegal for their

a 76-year old man was allowed to

UniServices found a drop in youth gambling

age group, such as gambling in a casino.

spend 14 hours gambling on slot

in the country.

Students of Maori, Pacific and Asian origin were

machines without being approached by staff.

The report, commissioned by the Ministry

more likely to report worrying about the time

“It is one of several measures we are taking

of Health found there were “small, but

and money they spent on their own gambling

to address the situation,” SkyCity company

statistically significant, decreases in the

than New Zealand European students. Concern

secretary Peter Treacy was cited by local

amount of time and money that students spent

about other people’s gambling behaviour was

media as saying. “We share the concern of

on gambling from 2007 to 2012.”

particularly pronounced for Māaori and Pacific

the department that has the role of monitoring

Nearly one quarter of the 8,500 secondary

youth living in areas of high deprivation (22.2

us, that in this instance we did not approach

school students surveyed reported gambling

percent and 27.9 percent respectively).

the customer and talk to him at any point.”

in some form over the previous year, with most

“The effects of gambling on communities are

SkyCity said the Department of Internal Affairs

saying they gamble to have fun, win money or

strongly linked to deprivation. For example,

investigated the incident and the Gambling

because they want a challenge.

the greater density of gambling outlets in low

Commission was involved in reviewing

The most common gambling activities were

deprivation neighbourhoods can entice people

procedures and looking at staff training.

bets with friends or family, Instant Kiwi

into gambling as a way of making money and

The company operates casinos in Auckland,

(scratchies), and cards or coin games, but

escaping poverty,” University of Auckland

Hamilton and Queenstown, as well as in

some students did say they had participated

researcher Dr Fiona Rossen said. l

Asia Gaming Briefings | August 2014

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Luis Pereira, Managing Director & Co-Founder, ASIA GAMBLING BRIEF

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Chris Downy, CEO, AUSTRALIAN WAGERING COUNCIL

Nadine Grinblat, General Manager, AUSTRALASIAN GAMING COUNCIL

Tim Moore-Barton, Commercial & Strategy Director, BETFAIR

John Lee, CEO, CASINO AND RESORTS AUSTRALASIA

Jeff House, CEO CLUBSACT

Ben Reichel, Executive Director, DONACO INTERNATIONAL

Sudhir Kale, Founder, GAMEPLAN CONSULTANTS

Peter Caillard, Chairman, GREYHOUND RACING VICTORIA

Chris Eaton, Director of Sport Integrity, ICSS

Ken Gamble, Executive Chairman, Internet Fraud Watchdog, Chairman, THE INTERNATIONAL ASSOCIATION OF CYBERCRIME PREVENTION

Matt Ryan, Gaming Analyst, JP MORGAN

Mike O’Kane Business Director, LADBROKES

Mark Bryan, Senior Director, Emerging Companies & Gaming Research, MERRILL LUNCH EQUITIES

Malcolm Richardson, Deputy Director North, Gambling and Licensing Services, NORTHERN TERRITORY / DEPT. OF BUSINESS

Jason Neave, Founder and CEO, PUNT CLUB

Alister Shennan, General Manager of Marketing, RACING AND WAGERING WA

Adam Fry, Tablet Manager, SPORTSBET

Luke Rattigan, Chief Operating Officer, SPORTSBET

Doug Freeman Executive General Manager, Commercial Development TABCORP

Elliot Forbes, CEO, TASRACING

David Holderness, Global Insights Manager, TOURISM AUSTRALIA

Serge Sardo, Foundation CEO, VICTORIAN RESPONSIBLE GAMBLING FOUNDATION And much more…

OFFICIAL PARTNERS

MARKET INTELLIGENCE PARTNER

SUPPORTING ASSOCIATIONS

INDEPENDENT VIEWS, NEWS & NET WORKING

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ORGANISER

Resort and Entertainment Technology

TO REGISTER, PLEASE VISIT: GAMINGDOWNUNDER.COM PHONE +852 2219 0111 OR EMAIL INFO@BEACONEVENTS.COM

AGE 2014 SPECIAL REPORT 38

The Australian Gaming Expo is celebrating its 25th anniversary edition amidst a roll of first time exhibitors and a new venue on Glebe Island

New blood in new venue

A

Asia Gaming Briefings | August 2014

ustralian Gaming Exhibition

compelling some of the world’s most

organizers say this year’s show

prominent suppliers, such as Ainsworth,

has attracted more interest

Aristocrat, Aruze, Bally, IGT, Konami and

than ever before, with over 180

WMS Gaming to be present at the exhibition

companies registered. Over 40 of those are

floor, spanning an area of about 15,000

attending for the first time, while 18 have

square meters (161,458 square feet). Also on

been exhibiting for 25 years. The Expo, now

show will be audio visual equipment, ATM

in its 25th year, is one of the biggest trade

equipment, building services, cash handling

shows in Australia.

& equipment, through to furniture, I.T. and

Running from August 12th to 14th, the AGE

interior design. Last year more than 2,300

has moved to a new venue in Glebe Island

visitors attended each of the first two days.

while the Sydney Exhibition Centre, the

Visitors who attend the Australasian Gaming

traditional venue in the recent past, is under

Expo are also eligible to win a trip for two

renovation.

to the Global Gaming Expo in Las Vegas

“The big talking point this year is the

– including airfares from Sydney and five

venue,” said Ross Ferrar, CEO of organizer

nights at the luxurious Palazzo Venetian

Gaming Technologies Association (GTA).

Resort and Casino. One trip for two will be

“The new venue means a whole new

drawn on each day of the Gaming Expo.

approach from the major exhibitors, with

The event now also has its own app, AGE14,

newly-designed stands taking full advantage

which is available at the Apple Store and on

of the opportunity to best use the new

Google Play. The app features all relevant

space.”

information that visitors to the show might

With direct Sydney Harbour water frontage

need, including how to get to the new venue,

on three sides and captivating views of

transport timetables and booking facilities,

the Anzac Bridge and the Sydney Harbour

an interactive floor plan and a detailed

Bridge, the new venue is bound to make an

exhibitor list.

impression.

Concurrently with AGE, “Gaming, Racing &

A number of entry points, by land and sea,

Wagering Australia”, the region’s leading

have been put in place to cope with the

conference for Australia’s gaming, sports

expected high visitation. Complimentary

betting, lottery and racing executives is

ferries will operate on the event days from

taking place at the Swissotel in Sydney on

Darling Harbour’s Convention Wharf to

11-13 August.

Glebe Island; complimentary buses from

Over 150 senior gaming / wagering executives

Pyrmont and from Central Station, along

nationwide are gathering to learn about new

with a complimentary shuttle bus from the

gaming regulations, strategies to increase

Sydney domestic airport.

growth & profitability, and other new

The Australian gambling market is

developments in the industry.

dominated by its “pokie machine” industry,

AGB is an industry partner to both events. l

39

Asia Gaming Briefings | August 2014

AGE 2014 SPECIAL REPORT 40

Alfastreet has sold 50,000 ETGs to date and the Asia Pacific market accounted for a significant proportion

BALLY TECHNOLOGIES

Bringing momentum to Australia

W

ith Bally’s recent accord with Mohegan Sun that marks their biggest such transaction in North America, the company is

ready to keep its momentum going at the Australasian Gaming Expo (AGE). “Bally is excited to return to the Australasian Gaming Expo to showcase our expansive product lineup following our acquisition of SHFL Entertainment last November,” said Adrian Halpenny,

ALFASTREET

Bally’s Senior Vice President of Australia and Europe.

Design and technology to win customers in Asia

Bally believes its acquisition of SHFL Entertainment will allow them to offer even more, with SHFL’s player-favorite EGMs joining Bally’s stellar product lineup, giving them an even larger footprint in Australia and Asia.

Their e-table SHFL Fusion, for instance, offers a wide variety of gaming options and provides a multi-game environment that can be played simultaneously. The award-winning SHFL Fusion is sold in Australia under the Vegas Star brand.

In addition to expanding the company’s geographic footprint, Bally

As Alfastreet celebrates their

has been very proactive in strengthening their digital capabilities,

20th anniversary this year,

illustrated by their recent acquisition of Dragonplay.

Alfastreet has a mission to

Ranked among the 10 top-grossing game developers in the social

strengthen the company’s

casino genre, Dragonplay is with top-grossing applications for

position as world-class

Android, as well as a significant presence on Facebook and Apple

producer with distinctive

iOS, exemplified by approximately 700,000 daily active users and

design, high quality and

nearly three million monthly active users across all platforms.

advanced technology.

Bally believes “the strategic acquisition helps position Bally at the

Alfastreet describes the

forefront of social casino gaming by leveraging the company’s world-

Asian market as “extremely

class content, including proprietary table games and award-winning

demanding” but the company

video slots, on Dragonplay’s increasingly popular social casino”.

is confident about their

At this year’s AGE, Bally will feature their signature and new

products as one of the most wanted ETG products in the region.

game titles including Super 88, an addition to its strong Asian-

To date, Alfastreet has sold 50,000 ETG machines and the Asia

themed game lineup on their Pro Series and Equinox cabinets.

Pacific market accounted for a significant proportion. The company

Bally will also showcase their table products, systems and Mobile

is in final negotiation with new partners acquired at this year’s G2E

Concierge Solutions ranging from multi-terminal gaming solution

show. Alfastreet prioritizes product features and player’s comfort

Vegas Star to Bally Enterprise

in their product development. Take R8 roulette for example: not

Progressive System and cloud-

only is it connected to live and automated games, but also it allows

based custom mobile concierge

the player to play two games simultaneously on one screen.

apps for casino patrons. l

Alfastreet has also invested a great amount of time in developing products that suit the player’s body.

Alfastreet will not participate in this year’s AGE. l

Asia Gaming Briefings | August 2014

BALLY TECHNOLOGIES WILL BE AT STAND 350.

AGE 2014 SPECIAL REPORT 41

Casino Technology is also eyeing business opportunities in emerging markets, such as Cambodia, Laos and Vietnam

CRANE PAYMENT INNOVATIONS

Further integration to win in Asia and Australia

A

s a result of Crane’s acquisition of MEI in

2013, the newly established company Crane Payment Innovations (CPI)

CASINO TECHNOLOGY

Macau, Philippines prime targets

has expanded its footprints in Asia with an ambition to further increase its market share in the region.

Since last year’s AGE, MEI has expanded in the Philippines. Solaire Resort and Casino, Manila’s second largest casino, installed SC Advance note acceptors with EASITRAX Soft Count across its entire floor of 1,200 slot machines.

A

With significant market share in Singapore, the Philippines and s the Asian market expands, Casino Technology sees growing

Macau, CPI also has market footprint in Australia including New

demand for innovative gaming concepts and a wider array of

South Wales, Queensland and Victoria.

investors and manufacturers in the region.

CPI expects a continuous growth of the Asian gaming market

Among Asian markets, Casino Technology’s main targets are Macau

especially if casino gambling is legalized in Japan. CPI also eyes

and the Philippines, but it’s also eyeing business opportunities in

Macau’s gaming market, where gaming remains one of the hottest

emerging markets, such as Cambodia, Laos and Vietnam.

topics and offers tremendous potential for growth.

With the ambition to further strengthen its brand recognition,

To compete in the increasingly competitive Asian market, CPI

Casino Technology relies on precise product selection as well as the

sees its progress as a unified company as an edge. By pooling the

expertise and support of local distributors and partners.

strengths and resources of MEI and Crane Payment Solutions,

To compete in a highly competitive market such as Asia, Casino

CPI positions itself as a solutions provider with commitment to

Technology says that it’s important to offer products and solutions

high standards for customer service and product quality.

adapted to the requirements of the jurisdiction and the local audience.

At this year’s AGE, CPI will be showcasing MEI SC Advance note

At this year’s G2E Asia show, Casino Technology showcased a new

acceptor and EASITRAX Soft Count system, the CashCode SM

series of progressive Asian themed games with HD graphics and

BackLoad note acceptor and a range of Money Controls coin

colorful characters from Chinese mythology such as PEACOCK

hoppers. l

AND DRAGON. Casino Technology will not participate in this year’s AGE. l

CRANE PAYMENT INNOVATIONS WILL BE AT STAND 618.

Asia Gaming Briefings | August 2014

AGE 2014 SPECIAL REPORT 42

EveryMatrix has launched their first Korean operator and will soon launch their first Japanese operator

DLV

EVERYMATRIX

Clear game plan for Asia

Asia and Australasia are the priority

I

n view of the growing importance of the Asian gaming market, EveryMatrix prioritizes the Asian and Australasian markets with

their first Asian office launch in Manila.

To unlock the business potential of sports betting, European company EveryMatrix is trying to offer more Asian and Australian live sporting events for their OddsMatrix Sportsbook in-game betting options. As a result, EveryMatrix reported major successes with Korean and Japanese baseball and also with an expanded

D

Australian sports offering.

LV sees tremendous potential

Meanwhile, EveryMatrix has been trying to improve the way they

in Asia and says it has a clear

deliver web services to Asian players. As a full service provider,

game plan to unlock these market

EveryMatrix hosts all of the servers, networking and other technical

opportunities.

functions needed to deliver the core internet services to operators

Among jurisdictions in Asia, DLV

and players around the world and the company has integrated a

has given priority to the Philippines,

Content Delivery Network (CDN) in order to improve their speed

Singapore and Cambodia. Meanwhile,

of delivery.

DLV is undergoing the certification

EveryMatrix also values the importance of language availability

process in Macau.

and casino content. After launching websites in Chinese to meet

The company aims to adapt and

the growing demand on their services, EveryMatrix has launched

customize its products for each client

their first Korean operator recently and will soon launch their first

and says its business proposition

Japanese operator.

includes competitive pricing and high

As operators increasingly demand that Live Dealer games are

quality.

available on mobile devices, EveryMatrix not only makes many of

DLV also has a wide array of products

their games available on their mobile platform, but also continues

that are customized for Asian players

to recruit new Live Dealer providers especially those with Asian

including STD, DWS and HD cabinets,

game variants and mobile capability.

as well as a three-level Dragon

EveryMatrix will not participate in this year’s AGE. l

Jackpot with its combination of red and yellow.

DLV considers eye-catching graphics, engaging mathematics, bonuses and free games as some features that appeal to Asian audiences.

At this year’s G2E Asia the company showcased its products to Asian audiences.

DLV will not participate in this year’s AGE. l

Asia Gaming Briefings | August 2014

AGE 2014 SPECIAL REPORT 43

GLI has added 18 staff members in its Australian labs including the full service labs in Adelaide, Melbourne and Sydney

GAMING LABORATORIES INTERNATIONAL

An exciting time of technological convergence

A

s Gaming Laboratories International (GLI) celebrates its 25th anniversary, the company sees emerging opportunities arising

from technological convergence in the region.

With more than 20 years in the Australian market, GLI sees game, system, land-based and online converging from a technological standpoint, and that raises both players and regulators’ expectation on fairness and game integrity.

GLI describes the trend as “an exciting and challenging time” and the lab strives to meet the rising expectations with due diligence.

To meet the growing demand on land-based and lottery testing

GOLD CLUB

New games to launch in Macau

and certification as well as consultation, GLI has added 18 staff members in its Australian labs including the full service labs in Adelaide, Melbourne and Sydney.

The company’s sister lab, GLI Asia assisted regulators for developing the PAGCOR (Philippine Amusement and Gaming Corporation)

S

lovenia-based gaming devices supplier Gold Club is about launch three new slot games in the Macau market.

With a network of distributors, agents and after sales centers, Gold

Technical Standard for Electronic Gaming Machines.

Club has a market presence in 100 countries across the globe and

At this year’s AGE, GLI will take a non-traditional approach; instead

the company has an aggressive game plan to establish itself as an

of showing products, the company will be talking about its service

up-and-coming player in the global gaming industry.

offerings including lottery testing, gaming device and systems

To unlock the business potential of the world’s biggest gaming

testing, online gaming systems and security testing, rule writing,

market, Macau, Gold Club will launch three slot games which are

consultation and professional services. l

adapted to the local market with a new approach to the player and interactivity. The new games, namely Great Wall of China,

GAMING LABORATORIES INTERNATIONAL WILL BE AT STAND 513.

Rainbow Cash and Riches of the Nile, are currently in the process of certification.

Also there will be a new 10-station roulette for the market with WAP jack pot to connect to different locations.

Asked about the challenges faced in Macau’s market, Boštjan Krašovec of Slovenia-based Gold Club highlighted the need to understand the Asian mentality, as well as keeping pace with ever-changing legislation.

However, Krašovec thinks that smallto-medium sized suppliers such as Gold Club may have the edge when it comes to adapting to a changing landscape as they are able to be more flexible than bigger companies.

Gold Club will not participate in this year’s AGE. l

Asia Gaming Briefings | August 2014

AGE 2014 SPECIAL REPORT 44

“Australia and New Zealand have traditionally been mature markets with regulatory caps putting a hold on growth and innovation” SABBY GILL, SR VP OF INTERNATIONAL SALES, INTERNATIONAL GAME TECHNOLOGY

INTERBLOCK

Returns to AGE with innovations

INTERNATIONAL GAME TECHNOLOGY

Australasia full of potential

A

A

fter an absence of several years, Interblock is returning to the AGE with its newest and most innovative products and design.

With Australia being one of the largest slot markets in the world, Interblock plans to further expand, in particular in New South Wales.

Interblock said there has been a shift in the world’s biggest gaming and entertainment hubs, such as Las Vegas, Macau and Singapore, to large scale integrated casino resorts.

To maximize its market penetration, Interblock seeks to continuously

head of this year’s AGE, International Game Technology (IGT)

reinvent the company with new products to meet this trend.

shows optimism in growing its market share in Australia

Meanwhile, Interblock is counting on wider product choices to help

and New Zealand.

reinvigorate demand in the NSW hotel, club and casino markets.

IGT has celebrated major success in New Zealand, where the

At this year’s AGE, Interblock will present products, including NEW

company boasts more than 60 percent market share. The company

G5 IB-HG 55” LCD with 05 G5 Play Stations with NEW mini LED sign,

is also able to amplify its systems footprint, including a full system

NEW Revolutionary G5 MiniStar Roulette with 05 G5 Play Stations

installation into SunnyBank Community and Sports Club.

with one-sided PID and LED sign and G5 Roulette Generator with

“Australia and New Zealand have traditionally been mature markets

05 Play Stations. l

with regulatory caps putting a hold on growth and innovation, but it is a healthy industry and IGT plays a very active role in supporting our customers,” Sabby Gill, IGT Sr VP of International Sales said.

IGT also sees opportunities from the recent change in systems requirements in Queensland and other business opportunities in New South Wales.

To further grow IGT’s market share in the region, the company is developing more Multistar games that package both classic IGT games with newly released content.

At this year’s AGE, IGT will showcase its robust portfolio of thrilling games including Back to the Future – Back in Time, Candy Bars, Spooky Loot and the culturally enriched title Wulin Master.

Also on display will be the company’s systems technology such as Advantage Club system and Service Window capabilities. l INTERNATIONAL GAME TECHNOLOGY WILL BE AT STAND 130.

Asia Gaming Briefings | August 2014

INTERBLOCK WILL BE AT STAND 430.

AGE 2014 SPECIAL REPORT 45

Asia is likely to move to regulate betting markets because of increasing international pressure and the recognition of the revenue potential

KONAMI

Unsurpassed results in Victoria and Queensland

I

n the Australian market, where slots play such an important role, Konami sees unique opportunities

in Victoria and Queensland.

The company has released Podium Stack, the first slot game with a reel matrix of 7-8-8-8-7 in the company’s target market.

Konami says it has achieved unsurpassed results with all the new games and features available in Victoria. It has also bought its KP3 platform to the casino floors in Queensland.

Konami also highlights its growth in Asia, including Macau, Singapore and the Philippines, where its newly developed game, Brothers of Fortune, has now arrived.

ODDSLIFE

Asia future revenue driver

S

ocial betting platform provider Oddslife launched its secondgeneration platform ahead of the 2014 FIFA World Cup with

an ambition to expand to Asia.

Konami values AGE as an

The Oddslife platform engages sports fans through a free-to-play

opportunity to meet and gain

social betting game. While the Oddslife platform can work as a

feedback from the region’s

major affiliate, or even as a real-money sports betting platform

leading gaming executives and

for a bookmaker in a regulated market, the affiliate model comes

professionals.

into play in a restricted market, with the option of selling ads for

At this year’s AGE show,

other products. Even in markets where sports betting is banned,

Konami will be presenting an

the option of virtual currency is still available, as well as advertising

array of new releases, such as

and sponsorships.

the KP3 Podium Stack cabinet,

Oddslife describes the global i-gaming markets as being in “a

a new multi-game, multi-

constant state of flux,” which makes “medium- to long-term

denomination product, SeleXion

planning very difficult for some of the most vibrant markets.”

and the Podium Goliath video

Oddslife’s distribution is currently limited to Europe. However,

cabinet. l

it said Asia is likely to move to regulate betting markets because of increasing international pressure over match-fixing, together

KONAMI WILL BE AT STAND 540.

with the recognition of the revenue potential.

As a result, Oddslife has identified Asia as an area for major growth and plans to launch in 10 countries in the region by the end of next year.

Oddslife is also looking into strengthening its European exposure and making inroads into both North and South America.

Oddslife will not participate in this year’s AGE. l

Asia Gaming Briefings | August 2014

AGE 2014 SPECIAL REPORT 46

TCSJOHNHUXLEY boasts one of the largest product portfolios and an extensive installation base across the Asia Pacific region

SPINTEC

Asia challenge for suppliers

S

pintec sees the Asia Pacific market as one of the most challenging gaming environments for suppliers, but says it’s confident

about its strategies in the region.

The company notes players and operators are demanding in the fast-growing regional markets. As a result, only suppliers with guaranteed reliability, access to authentic, up-to-date equipment and in-depth industry knowledge can gain a competitive edge.

The company said its philosophy is that the finest engineering is an essential ingredient of gaming machine production. Spintec also incorporates a holistic approach to player needs and customer

TCSJOHNHUXLEY

Uniting Australia and Asia

specifics.

For example, with its flagship product KARMA, Spintec seeks to guarantee longer gaming sessions by improving player comfort.

The product has an automated roulette, virtual wheel and live table connection installation.

Spintec credits local partner Asia Pioneer Entertainment for its achievements in Macau, where its products are installed on major gaming floors including City of Dreams, Mocha, The Venetian, Grand Lisboa and Galaxy.

In addition to Macau, Spintec also has made inroads into the Philippines and India and expects a solid market entry to the wider

A

s the Asian market continues to expand, TCSJOHNHUXLEY is seeking to leverage its regional experience with a new

management structure.

Asia Pacific region.

TCSJOHNHUXLEY boasts one of the largest product portfolios and

Spintec will not participate in this year’s AGE. l

an extensive installation base across the Asia Pacific region.

The company has been supplying chipping machines, roulette wheels, electronic Sicbo, Omni Baccarat systems, electronic terminal games, table displays as well as tables and layouts in the region for years.

TCSJOHNHUXLEY supplies products, solutions and support to help drive its customer’s business through innovative technology, such as the real-time game optimization tool, Gaming Floor Live, Supernova Table Bonus System and the Idepsys Intelligent Drop Box. To streamline its business in the APAC region, TCSJOHNHUXLEY brought Australia and Asia together under Rebecca Kingswell’s leadership and appointed Amanda Green as Regional Director for Australia and New Zealand.

TCSJOHNHUXLEY will not participate in this year’s AGE. l

Asia Gaming Briefings | August 2014

AGE 2014 SPECIAL REPORT 47

TBS spots a certain standardization among different offerings available in the bookmaking market

TABCORP GAMING SOLUTIONS

Loyalty driving growth

W

ith a strong focus on growth in Victoria and New South Wales (NSW), Tabcorp Gaming Solutions (TGS) seeks to ensure its

venues outperform the market through a whole of venue approach.

First launched in Victoria in August 2012 and expanded into NSW in late 2013, TGS is the market leader in Victoria and the only operator of its kind in NSW. For instance, TGS serves almost one third of the Victorian gaming market with more than 170 contracted venues and approximately 8,500 EGMs. Since last year’s AGE, gaming loyalty using the IGT Advantage Club system has been introduced in Victoria. The company has begun the rollout of this new initiative, the first of its kind outside of Melbourne’s Crown Casino. Initial results point to double-digit growth.

TGS values AGE as an opportunity to showcase its offering to venue managers. It will demonstrate the TGS offering, as well as

TOTAL BETTING SOLUTIONS

Asia future revenue driver

its InEGM loyalty program and the exclusive Diamonds Rewards kiosk at this year’s AGE. l TABCORP GAMING SOLUTIONS WILL BE AT STAND 222 AND 224.

D

espite intense competition, bookmaking software solutions provider, Total Betting Solutions (TBS), thinks now is a good

time to enter the Australian market.

With more than a decade of experience in creating and delivering the online wagering technology needed to compete as a leading corporate bookmaker, TBS provides a full range of bookmaking software solutions to handle the complexities of Australian racing and sports.

The Australian market has been widely considered as increasingly challenging due to factors such as rising product fees and minimum bet limits.

And yet, TBS believes that with the capabilities to assist wagering operators to deal with the direct impact of the changes, its platform will be able to compete in the Australian market.

With the capabilities to service different market segments across sport, casinos and racing, TBS considers “racing” as its dominant strength.

In addition, TBS spots a certain standardization among different offerings available in the bookmaking market. As such, it sees the real driver to generate profits as being through differentiation.

TBS has developed front-end channels that are unique in regard to both navigation and the ability to encourage interaction between existing and potential customers.

Total Betting Solutions will not participate in this year’s AGE. l

Asia Gaming Briefings | August 2014

48

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CALENDAR OF EVENTS 49

AUGUST GAMING, RACING & WAGERING AUSTRALIA (GRWA)

11-12 August 2014

Swissotel, Sydney, Australia www.gamingdownunder.com

AUSTRALASIAN GAMING EXPO (AGE) 12-14 August 2014

Sydney Exhibition Center @Glebe Island, Sydney, Australia www.austgamingexpo.com

CRIMEA GAMING CONGRESS

GAMESBEAT 2014

15 September 2014

INTERNATIONAL ASSOCIATION OF GAMING ADVISORS (IAGA) ANNUAL CONFERENCE

Parc 55 Hotel, San Francisco, California, USA http://events.venturebeat.com/event/ gamesbeat2014

Marriott Downtown, Philadelphia, USA www.theiaga.org/iaga-summit

EGR US POWER SUMMIT 16-17 September 2014

The Montage Laguna Beach, California, USA www.EGRSummitUS.com

ELU BY EUROPEAN LOTTERIES 31 Aug - 5 Sep 2014

Pullman Bordeaux Aquitania, France www.european-lotteries.org/event/elu

SEPTEMBER ASIAN GAMING NETWORKING SOCIAL MONSOON MEET-UP 4 September 2014

71 Gramercy, Makati City, Philippines

EGR MOBILE POWER SUMMIT

NOVEMBER

GLOBAL GAMING EXPO (G2E) 30 Sep - 2 Oct 2014

Sands Expo & Convention Center, Las Vegas, USA www.globalgamingexpo.com

22 August 2014

Yalta, Crimea www.smileexpo.ru/en/crimea-gamingcongress

28-31 October 2014

OCTOBER BIG AFRICA SUMMIT

INTERNATIONAL MASTERS OF GAMING LAW (IMGL) AUTUMN CONFERENCE 5-7 November 2014

Florence, Italy www.gaminglawmasters.com/conference/ autumn2014

RUSSIAN GAMING WEEK SOCHI 5-6 November 2014

6-8 October 2014

Sochi, Russia www.rgwsochi.ru

Emperors Palace, Johannesburg, South Africa www.bigafricasummit.com

6TH ANNUAL MALTA IGAMING SEMINAR

EIG

11-12 November 2014

21-23 October 2014

The Hilton, Malta http://www.maltaigamingseminar.com/

Arena Berlin, Germany www.eigexpo.com

SAGSE LATIN AMERICA

BALKAN ENTERTAINMENT & GAMING EXPO 21-22 October 2014 Inter Expo Center, Sofia, Bulgaria www.balkangamingexpo.com

8 September 2014

MOBILE & TABLET GAMING SUMMIT USA

South Lodge Hotel, West Sussex, UK www.egrmagazine.com/egr_mobile_power_ summit_2014

27-28 October 2014

Bally’s, Atlantic City, New Jersey, USA www.mobilegamingusa.com

10TH EUROPEAN CONFERENCE ON GAMBLING STUDIES & POLICY ISSUES

INTERNATIONAL ASSOCIATION OF GAMING REGULATORS (IAGR) ANNUAL CONFERENCE

9-12 September 2014

29-31 October 2014

Helsinki, Finland www.easg.org/website/conference

Marriott Downtown, Philadelphia, USA www.iagr.org

11-13 November 2014

Buenos Aires, Argentina www.monografie.com/sagse_bsas/ingles/ index.php

MACAO GAMING SHOW 18-20 November 2014

The Venetian Macao Resort, Macau www.macaogamingshow.com

NATIONAL ASSOCIATION FOR GAMBLING STUDIES (NAGS) 24TH ANNUAL CONFERENCE 26-28 November 2014

Jupiters Hotel Gold Coast, Queensland, Australia www.nags.org.au

Asia Gaming Briefings | August 2014

OPINION 50

LAST WORDS

Will they come? *Sharon Singleton

T

his year’s Australalasian Gaming Exhibition

downtown location. The company said it will now bid

takes place amidst an upsurge in activity in

together with Hong Kong’s Chow Tai Fook Enterprises

Australia’s casino industry, with some of the

and Far East Consortium International.

more bullish observers even labelling the

They will go head to head with Crown Resorts, which

country as the next Asian casino hub.

recently joined forces with China’s Greenland Holdings.

Sydney has just won approval for its second casino, with

The state government is banking on the adage that if you

Crown Resorts’ new six-star property scheduled to open in

build it they will come.

Barangaroo in 2019, while the Queensland government is

And they might; the weaker Australian dollar is already

auctioning off three licenses in a bid to boost the tourism

boosting arrivals. Visitor numbers rose by 10.4 percent

dollar. Other properties around the country are also either

in the 12 months through April, with China ranked only second to New Zealand as the

undergoing, or have recently been upgraded and revamped.

Without a doubt all eyes are on the prized Asian market, with the key to success seen as being the ability to attract the highspending Chinese VIPs. James Packer has adopted a

“WHETHER AUSTRALIA AND IN PARTICULAR QUEENSLAND CAN TRANSFORM INTO AN ASIAN GAMBLING HUB REMAINS TO BE SEEN”

novel approach sponsoring the

* Managing Editor, AGB

greatest source of visitors. Chinese visitors are already spending more in Australia than travelers from any other country.

Queensland, in the far north of the country and therefore significantly closer to Asia, may have the advantage, with studies showing Chinese favour

Sydney Philharmonic Orchestra to trumpet the merits of

resorts within five hours’ flying time.

his new Sydney property on a tour of mainland China.

But the question is how welcome will they really be? The

Not overtly of course, as promoting gambling in China

idea of Queensland’s pristine beaches and rainforest

is illegal, but nevertheless a clever branding initiative to

being the subject of massive multi-billion dollar casino

attract the attention of Chinese, who are said to be big

developments does not necessarily sit well with the local

fans of classical music.

population, or environmental groups, many of which

The Queensland government has given strong preference

have campaigned actively against them.

to Asian-backed ventures in its plans to offer up new

They may have a point. The average hard-cord Chinese

casino licenses.

gambler is still not known for environmental sensitivity

Two of the regional permits will go to Asian companies

and, once damaged, these eco-systems will not be replaced.

pending final environmental assessments, while half

Already the Barrier Reef is under pressure from agricultural

of the bidders for the downtown Brisbane development

runoff and other forms of pollution.

project are Asia-backed.

Then there’s the risk for the operators if the Chinese fail

Hong Kong billionaire Tony Fung is planning to build one

to come. Some locals have called the massive scale of the

of the world’s biggest integrated resorts, with investment

proposed properties “ludicrous.” They point out that the

of about A$8 billion ($7.40 billion), just outside of Cairns,

area has a sparse local population, whose favoured punt

while state-backed ASF China Property Consortium wants

has traditionally been on pokies in local pubs. Therefore

to build a A$7.5 billion casino and cruise ship terminal

the casinos won’t be able to rely much on the local dollar

at the Gold Coast.

should for any reason the tourism trend reverse.

Echo Entertainment, the incumbent operator in Brisbane,

Whether Australia, and in particular Queensland, can

has eschewed plans to go it alone and has teamed up with

transform into an Asian gambling hub remains to be

a rival consortium with the pre-requisite Asia credentials

seen, but it will certainly make for interesting reading

in its bid for a second license in the prized Queen’s Wharf

for anyone following the industry. l

Asia Gaming Briefings | August 2014