AGBriefings August 2015

Jurisdiction Updates August 2015 Edition

Russia

Macau

Investors upbeat in uncertain times pg.14

Looking for a non-gaming changer

Taiwan

Bill stuck in limbo pg.09

pg.06, 30, 58

Thailand

Weighing up the odds pg.22

Australia

Cleaning up dirty money pg.36

AGE 2015 supplier special pg.52

MESSAGE 3

Adventures in Australia

W

e are once again very pleased to be able to

This year, GRWA has stepped away from “What If”

attend the two highlights in the annual

to “What will” talks. Over three days, GRWA will be

gaming calendar for this region - the

covering completely new ways to engage customers –

Australasaion Gaming Expo (AGE) and the

with ideas and lessons learnt from outside the gaming

Gaming, Racing & Wagering Australia (GRWA) conference

industry. It will also be covering new products lines

that take place during the week of 10 August in Sydney.

– by taking a look at other gaming markets and seeing

AGE owner and operator, the Gaming Technologies

what’s possible in this market. At the same time,

Association (GTA), says this year’s Australasian Gaming

the conference will also look at the evolution of our

Expo has “more” of everything – more exhibitor space,

industry here – setting a solid plan for what’s to come.

more products offered, more innovation, and more

AGB Managing Director, Ros Wade, will be chairing

food and beverage space. The 2015 show features 175

the first afternoon of the conference on Monday which

exhibitors, including 35 exhibiting for the first time.

discusses the growth opportunities, major challenges,

With some GTA members becoming larger and more

new regulatory realities and the path to profitability for

‘international’, their expanded product range will bring

Australia’s operators.

new gaming machines and games not seen before to

In addition to our regular jurisdiction updates, this

the event.

edition of Asia Gaming Briefings features a series of

And with two new casinos announced recently for

articles on the development of non-gaming amenities

Australia – and 15 more scheduled in the Asia-Pacific

- a topical subject as Macau attempts to diversify away

region in the next five years – now is the time for

from being a pure gaming hub, primarily for Mainland

buyers to connect with sellers, to think about what the

Chinese customers, to an international entertainment

industry will look like in five years’ time and what they

destination. Does Macau have a definable brand?

will need to succeed.

What are some of the things on offer? And can its

The Australasian Gaming Expo is open from 10am

infrastructure support this evolution? These are some

on Tuesday 11th, Wednesday 12th and Thursday 13th

of the questions that we attempt to answer in our

August. Visitors who attend the AGE are eligible to win

feature articles.

a trip for two to the Global Gaming Expo in Las Vegas

As always, we look forward to connecting with you at

– including airfares from Sydney and 5 nights at the

one or other of the events, or remember to stay up to

Palazzo Venetian Resort and Casino. One trip for two

date with all the developments by following us on social

will be drawn on each day of the Gaming Expo.

media. l

The Gaming, Racing & Wagering conference takes place from Monday 10th - Wednesday 12th August at the Novotel, Darling Harbour. When organizers Beacon Events first started to put together the programme for GRWA 2015, one of the leading questions delegates kept

@agbrief

Rosalind Wade

Luis Pereira

Asia Gaming Brief

Asia Gaming Brief On behalf of Asia Gaming Brief

asking was “Is it really possible for our industry to truly

Rosalind Wade & Luis Pereira

innovate further?”

Publishers

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Asia Gaming Briefings | August 2015

4

Greater CHina

G2E 2015 SOUTH EAST ASIA

CONTENTS

SOUTH ASIA

Macau

06

PHILIPPINES

16

INDIA

26

TAIWAN

09

Singapore

19

NEPAL

28

malaysia

21

THAILAND

22

SAVE THE DATE SAVE THE DATE G2E 2015 SAVE THE DATE G2E 2015 G2E 2015 INDOCHINA

NORTH ASIA JAPAN

SOUTH KOREA RUSSIA

AUSTRALASIA

10

Cambodia

24

AUSTRALIA

36

13

NEPAL

25

NEW ZEALAND

38

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GREATER CHINA 6

MACAU

Entertainment and engagement seen as key drivers for Macau machine market Gaming equipment suppliers are upbeat about the prospects for Macau with $27 billion worth of new properties coming onstream in the next few years but, as the market shifts towards the mass player, entertainment value and player engagement may be the key to the winning hand.

Asia Gaming Briefings | August 2015

T

he six Macau operators will all be

for theming and a different style of experience.

opening new properties over the next

That’s probably why Sands has decided to

two years and, with the government

develop a Parisian theme compared with what

indicating it will stick firmly to its cap

it was originally planning to do because they

of not allowing a more than 3 percent annual

know that captures the imagination of the mass

increase in gaming tables, operators will be

player, who is really just a visitor to Macau who

looking at alternatives to fill the floors.

ends up playing because they are in the casino.”

However, the Macau market continues to evolve

Scientific Games was showing off the latest

from the dominance of VIP-driven table games

version of its successful Duo Fu Duo Cai with

to the mass market and to players increasingly

a new Asian-themed progressive link called

looking for interactivity with the games they are

Da Fu Da Gui, which means “big riches, big

playing, creating challenges and opportunities

honors. The game features the original babies,

for suppliers.

but now grown into toddlers. The company

“Even though gross gambling revenue in Macau

has installed more than 6000 of the original

is down, with six new properties opening we’re

game worldwide since it was introduced two

going to get some sales because they need

years ago.

products on floors,” Ken Jolly, vice president

Sabby Gill, senior vice president international

of Scientific Games Asia said in an interview

sales at International Game Technology also

with AGB.

said he was confident the company now has

He said electronic table games and slots will

the right products for the Asian market and

be the obvious winners, however, casinos

is optimistic about the group’s prospects in

will seek to be more creative in an attempt to

the new casinos.

differentiate themselves.

“The games we have now come out with and

“That mass market person is going to be looking

that we are showcasing are a completely

GREATER CHINA 7 different animal from those anywhere else

GTECH in April, with projected cost synergies

around the world. The math is different and

of $280 million by the third year after closing,

they are specifically built for the local market

while Aristocrat Leisure last year said it was

here in Macau.”

merging with Video Gaming Technologies for

“The games that we are finally coming out with

$1.23 billion.

over the past six to seven months are really

“Big companies have different strengths,” Jamie

starting to make waves and gain traction in

Odell, CEO and managing director of Aristocrat

the local market,” he told AGB.

Entertainment said during the panel. “In terms

Gill said Galaxy Entertainment has upped its

of the value chain across the operators and

originally planned purchase order for Phase 2

ourselves, it will come down to the product that

based on the successful performance of games in

gets the best return on investment. If we can

its existing casino. The company is introducing

make more money and the operators make more

several of its linked progressive machines and

money, then you will get the pricing power.”

new games such as San Xing Bao Xi.

Much discussion at the show revolved around

IGT CEO of International Walter Bugno recently

potential new product developments, with the

said the company has high expectations for

possibility of skill-based games, which have just

the San Xing product, which features two base

been approved in Nevada and the convergence

game themes, Dragon Dynasty and Golden Frog,

of mobile and social gaming. The companies

and boasts a series of play mechanics designed

are also looking at tablet style devices that can

to elevate player excitement and encourage

be used anywhere within a licensed casino,

players to bet up.

including restaurants and smoking rooms.

“There’s an entertainment value and more

“With the mobile technology, with the innovation

increasingly so an engagement value. People

in all of these things, that’s where we’re going

want to engage with the game beyond the tapping

to really benefit in the long term,” Gill said.

of a button and that’s where a lot of our efforts

“We are excited about some of the opportunities

go, towards creating a level of engagement

going forward.”

After the recent wave of consolidation in the industry, the companies agreed that they are not

Y14 $44b -2.6% June $2.18b -36.2% Y15 June mass -33.3% June VIP -52.5% (Source: Sterne Agee)

Y15E -27%

UBS

-29%

Fitch Ratings

-32%

BoA/Merrill Lynch

-34%

Morgan Stanley

Y16E BoA/Merrill Lynch

through our various bonus opportunities that are built into the game,” he said.

GROSS GAMING REVENUE

OPERATORS

Morgan Stanley

5.3% 6%

necessarily better placed in terms of bargaining power with the operators, but that economies of scale had allowed for greater depth in the research and development budgets.

SJM Holdings (880:HK)

Holds a 20.3 percent market share as of mid-June

Table-only Market share as of MID-JUN. 2015 (Source: Sterne Agee)

“Scale enables you to focus your R&D on future

with 20 casinos. Its $3.2 billion Palazzo Versace

developments,” Scientific Games president

development is scheduled to come online in 2017.

and CEO Gavin Isaacs said in the panel session.

Mass market property the Jal Alai is scheduled

“You are only as good as your last game. You

for a mid-2016 opening with 130 rooms and 45

want to make sure that the company you are

gaming tables. The company has also indicated it

making the investment with has the content

may be interested in opportunities in Japan. The

to support that cabinet for the life of how long

company is currently building The Lisboa Palace

the operator wants it to be there.”

on Cotai, which is also scheduled for completion

“In the old days, they wanted to keep a cabinet

in 2017. The casino will have 700 gaming tables

for five years and then throw it away, that doesn’t

and over 1,200 slot machines across a gaming

happen any more. These days a customer would

floor area of approximately 27,000 square

like to keep a cabinet on the floor for 100 years.”

metres. The total production cost is estimated

Gill agrees, saying companies now need a big

at about HKD$30 billion ($3.8 billion), although

Sands China (1928:HK) 22.1%

library and an investment plan. “We will be

the company has expressed concern over costs.

SJM Holdings (880.HK) 20.3%

introducing a continuous amount of new games

During 2014 Casino Grand Lisboa expanded its

over the next six to nine months all based on

mass market table gaming operations from

Melco Crown Entertainment (6883.HK) 11.9%

the version 1.1 standard and really getting those

250 tables as at 1 January 2014 to 274 tables as

out to market.”

at 31 December 2014, whilst VIP tables were

Scientific Games, which completed its $5.1 billion

reduced from 181 to 177 during the same period.

merger with Bally Technologies in November

Q1 EBITDA dropped 43 percent to HK$1.24

last year, says it’s on track to achieve the $235

billion, below expectations, according to Union

million in cost synergies expected from the

Gaming. Gaming revenue was down 37 percent

transaction.

to $14.3 billion.

Galaxy Entertainment (27.HK) 25.1%

Wynn Macau (1128:HK) 10.2% MGM China Holdings (2282:HK) 9.7%

IGT completed its $4.7 billion merger with Italy’s

Asia Gaming Briefings | August 2015

GREATER CHINA 8

Galaxy Entertainment

Melco Crown

below the $1.33 analysts had been looking for.

Group (27.HK)

Entertainment (6883.HK)

almost 45 percent to $212.3 million, mainly due

Melco Crown Entertainment (6883.HK)

in the VIP segment fell by half to $17.1 billion.

properties. The company’s new Galaxy Macau

has three casinos and an 11.9 percent

The decline in revenue was exacerbated by a

Phase 2 and Broadway at Galaxy Macau opened

market share. The company’s $3.2 billion

drop in VIP tables in the quarter to 252 units,

on May 27 this year, almost doubling the capacity

Studio City is scheduled to open on

from 279 in the same quarter a year earlier due

of the resort. It was given an allocation of 150

October 27, 2015, it was announced during

to a renovation of the casino floor.

tables by the government, far short of the

a “sneak peak” ceremony on August 5.

400 it had requested. Analysts say so far the

But in a note published a few days before

response has been lukewarm and not given

the announcement, Bernstein Research

much of a boost to GGR so far. That said, the

estimated that it would be 100 days before

company had the biggest increase in market

the property is ready to open. The resort

share in June, up by 3.8 percentage points. In

will feature a 5,000-seat multi-purpose

the latter part of 2015, the company expects

theatre, a permanent magic show, jungle-

to begin site investigation works for Cotai

themed river rides, a figure-8 Ferris wheel

Phases 3 and 4, the plans for which are almost

and a Batman attraction. Melco says

complete. “Cotai Phases 3 & 4 will provide GEG

the resort will be made up of 95 percent

with thousands of new hotel rooms and a vast

non-gaming components. The company

array of leisure and entertainment facilities,”

recently refinanced $1.75 billion in credit

the company said. In Q1, the group reported a

facilities, giving rise to speculation it may

32 percent year-on-year decline in revenue,

choose to buy out its minority partner in

while adjusted EBITDA during this period fell

the Studio City resort. It has warned that a

40 percent. The company announced that its

table allocation of less than 400 at the new

revenue fell to HK$13.7 billion, and adjusted

property will materially affect cash flow.

EBITDA, to HK$2.3 billion. The company is

Deutsche Bank estimated that the resort

also expected to break ground on its hotel on

will receive roughly 150 gaming tables from

Hengqin Island this year. Galaxy is planning a

the government, a figure that will “serve

“Maldives-style” resort.

as the baseline for expectations” for future

Has a 25.1 percent market share with eight

openings in Cotai. In Q1, net revenue fell 22 percent to $1.05 billion, while adjusted

Sands China (1928:HK)

property EBITDA was down 35 percent

Has a market share of about 22.1 percent and

net income attributable to Melco Crown

has four casinos. Analysts say the company

Entertainment was $60.6 million, or $0.11

has had a lower room occupancy than rivals in

per ADS, compared with$239.5 million, or

Cotai, meaning it has more potential for revenue

$0.44 per ADS a year earlier.

which is now expected to come online in mid2016. The company has requested further labor

Wynn Macau (1128:HK)

Has a 10.2 percent market share and currently

from the government to help bring forward the

has one casino, while its $4 billion Wynn Palace

opening date, which was originally planned

is under development and scheduled to open

for late this year. Sands China also recently

in the first half of next year, with 1,700 hotel

expanded retail space at its Sands Cotai central

rooms. Chairman Steve Wynn says 90 percent

property, with the addition of 150,000 square

of the resort will be non-gaming. The company

feet of space, with shops designed to appeal

said the resort will feature a performance lake,

to families. In Q1, the group’s results came in

casino, spa, retail and other outlets. It is aiming

weaker than expected, with adjusted property

for about 500 table games. Q1 earnings were

EBITDA at Sands China falling 43.4 percent to

well below analysts’ forecasts and the company

$531 million, while net income at the unit fell

slashed its dividend to $0.50 from $1.50 Overall

by more than half. Total revenue fell by 34.9

net revenue fell to $1.1 billion, missing estimates

percent to $1.77 billion. Rolling chip volume at

for $1.2 billion, with Macau revenue down 37.7

its flagship Venetian Macau property declined

percent. Adjusted earnings for the quarter

44 percent to $8.52 billion, while non-rolling

were $70.7 million, or $0.70 a diluted share,

chip drop was also lower, with a 22.5 percent

slumping from $236.7 million, or $2.32 a share

decline to $1.87 billion.

in the year earlier quarter. That’s significantly

Asia Gaming Briefings | August 2015

to a drop in VIP revenue. Table games turnover

MGM China (2282:HK)

Has a 9.7 percent market share while operating a single casino in the peninsula.

Its new developments include the MGM Cotai, which is a $2.9 billion project scheduled for completion mid 2016.

The company recently agreed with lenders to upsize its credit facility to $3 billion to provide financial flexibility to continue to invest in MGM Macau and develop its Cotai property.

It also extended the maturity on the credit.

MGM China’s Q1 revenue dropped 33 percent to $630 million with main floor table games revenue decreasing 13 percent and VIP table games revenue decreasing 45 percent. MGM China’s Adjusted EBITDA was $148 million, a decrease of 38 percent. MGM China CEO Grant Bowie recently quashed speculation the company is planning a merger with rival Wynn and would sell Mirage in Vegas.l

to $253.3 million. On a U.S. GAAP basis,

growth if it fills the rooms. The company’s new developments include the $3 billion The Parisian,

In Macau, adjusted property EBITDA dropped

Macau’s government has relaxed its policy regarding transit visas, which was tightened in July last year. Chinese passport holders will be able to enter on transit visas for seven days, instead of five for the first visit and can stay for two days, up from one, on the second visit.

The impact of a full smoking ban may not have yet been factored into earnings estimates for Macau’s casino operators, Deutsche Bank says. The government is widely expected to bring in a blanket ban on smoking in casinos, doing away with the exemption for VIP rooms and the specially designated smoking rooms that were introduced on casino floors in Oct. 2014.

GREATER CHINA 9

GROSS GAMING REVENUE Tourism arrivals Y14 9.9m Y15E Jan - April Arrivals 3.3m

+24% +3.8%

Y15E 10m Public Welfare Lottery Y14 NT$132.2b ($4.3b)

TAIWAN

Taiwan casino bill remains in legislative limbo The regulator session of Taiwan’s Legislative Yuan has ended for the summer and, despite high hopes earlier this year, the Tourist Casino Administration Act was not passed.

A

Bloomberry Resorts Chairman Enrique Razon says his company would be interested in expanding into Taiwan should the bill to legalize casinos be passed.

The owner of the Philippines’ Solaire Resort & Casino has been eyeing overseas expansion opportunities.

The head of China’s Taiwan Affairs Office threatened to sever the “three mini links” of direct flights, post and shipping between the mainland and Taiwan’s offshore islands if they seek to establish casinos.

t the time of going to press, it was

Taiwan’s offshore islands would be permitted

unclear as to when the bill that will

to establish casino-based integrated resorts.

set the ball rolling on legal casinos

Eventual casinos in Taiwan will be located on

will next be discussed. There has been

the offshore islands of Kinmen, Matsu and

that a casino license cannot be pledged or

talk of a special summer session of parliament,

Penghu. Before the islands can develop casino-

mortgaged, though industry has commented

but it has not yet been scheduled.

based integrated resorts, they will need to hold

that this prohibition may impact a company’s

Prior to breaking for the summer, the speaker

a referendum. In past votes on the issue, the

ability to finance a project.

of the Legislative Yuan arranged cross-party

island of Penghu defeated the proposal while

There has also been discussion over taxation. In

consultations to resolve articles of the Act

the voters on Matsu, the smallest of the three

addition to the normal corporate income tax rate

that had not previously been agreed, but the

islands, voted in favor. Once the Act is passed,

of 17 percent, the draft Act proposes GGR-based

consultations ended after two hours with no final

it is likely that Penghu and Kinmen will also

taxes of a national-level special permit fee of

resolution on some of the outstanding articles.

consider holding referendums on casino gaming.

between 7 percent and 9 percent, a local-level

Still, with no major opposition to the bill,

Some the most important points of political

special gaming tax of up to 7 percent, a 0.5

proponents are still optimistic it will ultimately

disagreement have centred on the number of

percent contribution to social welfare funding,

be passed.

casino licenses, taxation and license terms.

and a 0.5 percent contribution to a gambling

Comments by the head of China’s Taiwan

The draft act states the number of licenses per

addiction prevention foundation to be formed

Affairs Office, Zhang Zhijun, that China would

island should be determined by the regulator,

by the Regulator. The DPP has proposed taxes

cut the “mini three links” between China

but the main opposition party, the Democratic

which potentially total up to 62 percent of GGR.

and Taiwan’s offshore islands if they were to

Progressive Party, wants a limit of two per island.

Industry has objected to the DPP’s tax proposal,

establish casinos may have actually increased

The Act also provides for 30-year license terms,

as has the Executive Yuan.

the possibility that the law will ultimately pass

whereas the DPP wants 15-year

The Annex of the Act also provides that gaming

the Legislative Yuan.

terms. There is agreement on all sides (other

winnings will be exempt from personal income

Legislators across party lines reacted to the

than industry), that the government can reserve

tax for a period of 20 years after the first gaming

statement by the TAO head by asserting that it

the right to revoke a casino license on a no-

license is issued. The DPP objects to the 20-year

was up to Taiwan, not China, as to whether or not

fault basis. There is also political agreement

exemption. l

Asia Gaming Briefings | August 2015

NORTH ASIA 10

JAPAN

Japan’s Casino Bill champions in political decline The most powerful voices in Japan’s political world, who have been championing the so-called Casino Bill, have suffered reverses that seem to have dimmed the prospects for passage of the legislation.

Asia Gaming Briefings | August 2015

L

ast November, Hirokazu Nakaima, who

a popular referendum. Hashimoto says that he

favored bringing integrated resorts to

will retire from politics later this year.

his southwestern prefecture of Okinawa,

Among Japanese local government leaders there

was defeated in gubernatorial elections

has been no one as outspoken and aggressive

by Takeshi Onaga, who opposes the idea.

about the need for integrated resorts than Toru

Governor Onaga finally made his opposition

Hashimoto. He advocates using a manmade island

unequivocal as recently as July 17 when he told

in Osaka Bay called Yumeshima as a site for a

journalists, “Casinos are not suitable for the

major integrated resort. This land had originally

soil of Okinawa.”

been reclaimed as part of Osaka’s failed bid to

A much heavier blow to the casino project was

host the 2008 Summer Olympics, and Hashimoto

delivered exactly two months earlier on May

believes the introduction of casinos could create

17 as Osaka Mayor Toru Hashimoto suffered

an engine for local economic revival. He even

a humiliating defeat when his plan to merge

declared that the project would create between

Osaka Prefecture and Osaka City was rejected in

70,000 and 240,000 jobs, and that the casino

NORTH ASIA 11 developers might be contracted to fund a new

Yokohama remains keen on building an integrated

train line serving the island.

resort in its Minato Mirai district, which it

Toru Hashimoto’s political defeat in the Osaka

estimates could bring in annual revenues at

unification referendum also gave a black eye to

the 410 billion yen level (US$3.3 billion) and

the Yumeshima casino development project,

create employment opportunities for about

though it is not completely off the table. In

40,000 local residents.

early June, an annual research budget from

None of the local projects will become possible

the city and prefectural governments that

unless the national government passes the

had been proposed at the 114 million yen level

enabling legislation, known popularly as the

(US$927,000) was slashed to only 30 million

Casino Bill.

yen (US$244,000) at the insistence of rival

The bill was reintroduced to the National Diet

political parties.

on April 28, and since the ordinary Diet session

This research budget is to be used to compile a

has been greatly extended until September 27,

feasibility study and to lay the groundwork for

there ought to be more than enough time for it

more specific development plans.

to be debated and scheduled for a vote.

While Toru Hashimoto and his ally Osaka

However, at the national level too the main

Governor Ichiro Matsui remain committed to

champion of the Casino Bill has run into political

the Yumeshima integrated resort plan, their

trouble. Prime Minister Shinzo Abe, who

waning political influence is having a direct

views integrated resorts as useful to stimulate

impact on its prospects.

national economic growth, is watching his

But the picture at the local government level is

own popularity tumble after he forced deeply

not entirely grim. As Okinawa pulls itself out of

unpopular security legislation through the

the running and Osaka’s bid stumbles, Yokohama

House of Representatives.

city has emerged as the clear frontrunner.

Like the security legislation, the Casino Bill is also unpopular with the general public. A recent survey by the Tokyo Shimbun found 65

CASINO GGR ESTIMATES GGRE $6b (Source: Fitch based on two major IRs)

Pachinko annual revenue $153b (Source: Japan Productivity Center)

Dynam Japan Holdings says it will venture into resort development, which it sees as “a promising new business.”

The company said it is well placed to move into the resort sphere as it has been operating pachinko halls for 48 years. The company identified Marine Pier Toyoura DYNAM Training Institute in Yamaguchi prefecture as the intended site for a new resort.

percent opposing the bill against only 30 percent in support. About two-thirds of the Japanese public—along with the ruling coalition Komeito Party—fear that domestic casinos will lead to higher rates of gambling addiction and crime, and will also be a bad cultural influence on Japanese children.

In spite of his positive stance towards integrated resorts, there is no doubt that the security legislation is a higher priority for Shinzo Abe, as is the survival of his suddenly-faltering administration.

As his popularity began to plummet, Prime Minister Abe quickly reversed himself on plans to build a highly expensive national stadium for the 2020 Tokyo Olympics. With his security legislation being so unpopular with the public, the prime minister seems to have calculated that it would be unwise to try to push through a separate unpopular policy.

Fitch Ratings says it believes Japan’s casino liberalization bill stands a better than 50 percent chance of being passed this year. It sees Japan’s casino industry as being modeled on that of Singapore, with limited licenses and an entrance fee levied on locals. Osaka and Yokohama are the likely locations for the two major IRs, which could generate more than $6 billion combined in revenues. This assumes 500 table games and 3,000 slot machines each and respective win per day rates of around $14,000 and $600.

From this point of view, it would seem that passage of the Casino Bill has also become endangered. With most of the Japanese skeptical about the social impact of hosting casinos, Prime Minister Abe may very well decide that he cannot afford to spend any of his rapidly dwindling political capital on passing this bill.

The outcome remains uncertain, but the odds seem to be growing that Japan’s ruling coalition will quietly bury the Casino Bill for this Diet session and perhaps try again in the future. l

Asia Gaming Briefings | August 2015

Japan Gaming Congress Tokyo | 7 – 9 October, 2015

#JgC15 japangamingcongress.com

NORTH ASIA 13

GROSS GAMING REVENUE GGR 2014 (including lottery and racing) KRW19.87 trillion (US$17.64b) Foreigner-only casinos $1.25b Tourism arrivals May China arrivals

SOUTH KOREA

South Korea license bidding heats up With the door to casino gambling in Japan still firmly shut, South Korea continues to reap the benefit in terms of interest from foreign operators.

A

ccording to the country’s Ministry of

foreigners market can double from the current

Culture, Sport and Tourism, 34 groups,

base, that would equate to less than 10 percent

both local and foreign, have put

return on investment with approximately $5

forward proposals for new ventures.

billion of capital in the pipeline.

The ministry is expected to review the proposals

Competition for northern Chinese players will

and select around two potential sites in August,

also intensify over the next few years with

followed by a full request for proposal process

legalization looming in Japan and Vladivostok’s

in November. The licenses are likely to be issued

first casino due to open this year.

by the end of this year, local media has reported.

“We believe there is minimal chance of Korea

South Korea is seen as a natural market to

expanding gaming to nationals in the medium

attract tourists from northern China, which

term,” it added.

still remains underpenetrated in terms of

A government plan to allow locals to gamble on

tourism. Chinese visitation to South Korea has

cruise ships flying the national flag has faced

been rising strongly and gained 42 percent to

harsh criticism.

a record 6 million last year.

Critics have said that the maritime ministry’s

However, recently the country’s tourism industry

move will contradict the current near-nationwide

has been hit hard by an outbreak of Middle East

ban on locals gambling in land-based casinos.

Respiratory Syndrome, which prompted travel

The ministry promoting the local casino cruise

warnings from some governments, including

ships idea says there would be tough rules to

Hong Kong and Macau.

protect citizens from addiction and anti-social

Reports have said Macau’s Galaxy Entertainment,

behavior and that South Korean citizens are already

Suncity Group, a consortium made up of Genting

using foreign cruise ships for such activities.

and South Korea’s Lotte and NagaCorp, which runs

Maritime Minister Yoo Ki-june, from the

Cambodia’s biggest casino, have all made bids.

Ministry of Oceans and Fisheries, said locals

Caesars Entertainment, Mohegan Tribal Gaming

using such South Korean cruise ships would

Authority and Sega Sammy are also among those

only be allowed to gamble for five to six hours

interested in developments in South Korea.

at most per day while the ships are sailing in

However ratings agency Fitch was less enthusiastic

international waters. The maximum betting

about the prospects for the market, especially

amount for individuals would be below $100

given locals are banned from gambling in all

for a five-day trip.

but one of the country’s casinos.

Kangwon Land, the operator of the only casino

The agency said it agrees northern China

that allows locals to gamble, is said to be one of

remains underpenetrated, however even if the

the strongest opponents to the plan. l

June GGR E

+1%

+0.3%

+7.6%

+19.5% -20%

Grand Korea Leisure Co. says it has reached an agreement with Incheon International Airport Corp. to locate its latest casino resort on nearby land. The company says the memorandum of understanding between the two parties was signed after a careful study, but no further details were given.

South Korea has waived visas for visitors from China and Southeast Asia through to the end of September in an effort to lure tourists after an outbreak of Middle East Respiratory Syndrome, which hit the tourism industry hard.

Asia Gaming Briefings | August 2015

NORTH ASIA 14

RUSSIA

Optimism remains despite regulatory uncertainty Potential investors say they remain upbeat about the prospects for Russia’s gaming zones, despite continuing regulatory uncertainty and the unpredictability of the government, which abruptly announced the shutdown of the Azov area earlier this year.

R

ussia banned gambling in 2009 apart

in this region. And we have resources for

Hoetzinger also mentioned several conditions

from four specially designated zones:

that,” he said.

that would make the zone more attractive

Azov in southern Russia, which to

However, as yet even the zone’s precise

for foreign investors: Russia should lower

date is the only functioning zone,

location has not been determined, with the

taxes and lift all restrictions on marketing

the Primorye region in Russia’s Far East,

final decision to be taken by the newly-elected

and advertising of casinos, and should also

Siberian Coin in Altay Kray and the Amber

governor of the territory.

simplify entry requirements for foreigners.

in Kaliningrad Region. Last year, Russian

“If the gaming zone is approved in the Krasnaya

Tax on gambling businesses is paid by

President Vladimir Putin also signed a bill

Polyana ski resort, then we propose to make

registered gambling outlets at a flat rate per

on the creation of two more zones in Sochi

two casinos there [to provide a choice for

table, or slot machine. For example, one slot

and Crimea.

potential gamblers] and no casinos in the Sochi

machine is taxed at 1,500–7,500 roubles ($27-

Peter Hoetzinger, CEO of Century Casinos, told

centre. If we talk about the centre of Sochi,

$135 dollars) a year, and one table at 25,000–

Asia Gaming Brief during the recent Russia

then up to four casinos may be successful

125,000 roubles ($450-$2,260 dollars) a year.

Gaming Week that he is willing to take a risk on

there,” Hoetzinger, who took interest in the

While zones such as Primorye enjoy simplified,

investing in Russia’s Sochi Gaming Zone, which

zone about three years ago, said.

or visa-free, access for foreign tourists, that

was formed to take advantage of infrastructure

However, due to the political and legal situation

privilege so far has not been extended to

built for the Winter Olympics. However, there

the exact timing of the company entering the

Sochi. Russian law also prohibits advertising

is still a lack of clarity on regulations.

Russian market is unclear, he said, adding that

of casinos and slot facilities.

“We are very interested in receiving directions

Sochi has “very similar potential to the gaming

Over in Primorye in the Far East, which is seen

from political leaders as soon as possible. I know

zone in Denver” with good infrastructure and

by many as the most promising of Russia’s

that my company and others are interested

sightseeing attractions.

gambling zones, Nicholas Middleton, vice

Asia Gaming Briefings | August 2015

NORTH ASIA 15

GROSS GAMING REVENUE Primorye Y16E $410m Y20E $1.7b NagaCorp Russia Y20E Ebitda $220m (Source: Citi)

Expected junket commissions Primorye 1.7% (Source: Citi)

Tax rate: RUB125,000/ gaming table and RUB2,500/slot per month

president of marketing for The First Gambling

zone. These include China, Japan, South Korea,

Company of the East, presented his company’s

Australia and Singapore.

Tigre De Cristal project. After many delays the

Middleton downplayed the delay in opening the

casino is now scheduled to open on August 28th.

resort, which has now been moved back to 28

The First Gambling Company of the East is a

August, saying such delays happen everywhere.

consortium involving Lawrence Ho’s Melco

The only casino in the Siberian Coin has

International Development and Summit

been functioning since December 2014, but

Ascent, Taiwan-based gaming device maker

is still not fully operational as there are no

Firich Enterprises, Hong Kong’s Perfect Giant

hotels and restaurants. On May 18, its owner,

Investments and local partner Elegant City Group.

Yevgeniy Kosikh, announced that the full-scale

According to Middleton, the opportunities for

opening has been postponed till 2016 as critical

gaming operators in Russia are “extraordinary”

infrastructure, including a road to the casino,

and Primorye is “the best among the zones”

has not been finished. The project is aiming to

outlined in the law.

attract Chinese businessmen who have business

“The political headwinds and the economic

in Siberia. As of now, its average attendance is

situation is favourable, as Russia and China

about 3,000 gamblers per month.

continue to build their relationship. We have

In Southern Russia, the situation with the Azov

great positioning, we offer a European-like

gaming zone, remains murky. The government

experience for Asian customers, as well as

announced the closure of the zone earlier this

millions of Russians who live in Primorye,”

year, for reasons that were unclear though, as

Middleton added.

of now, it is still operating.

“Our location [Primorye] is within a two-and-

While over in Crimea, similar to Sochi, investors

a-half hour flight from 300 million underserved

are still waiting to hear where any gambling

northern Chinese customers, as well as an

zone may be located. However, the head of

additional 100 million in north-eastern Asia,”

Russian-controlled Crimea, Sergey Aksyonov,

he noted.

also recently announced that the peninsula may

Other advantages include plans to upgrade

give up on the zone if it proves to be ineffective.

Vladivostok’s airport, which was recently bought

The construction of the first leg of Russia’s

by a consortium including Singapore’s Changi

westernmost zone in Kaliningrad is expected

Airport Group, and the fact that a number of

to be built by the end of the year. No launch

Asian countries have visa-free entry to the

date has been announced yet. l

Russia’s latest decree on the online gambling market failed to provide the clear regulatory framework to legalize online sports betting that many in the industry had hoped for and left more questions than answers.

Decree No. 452, published in midMay introduced the concept of an online bet, but Russia experts say it doesn’t make it legal to accept bets through the Internet.

Hong Kong-listed NagaCorp has broken ground on its planned resort in the Primorye region. The budget for the first phase of the venture has been put at between $50 million and $70 million.

Asia Gaming Briefings | August 2015

SOUTH EAST ASIA 16

PHILIPPINES

Pagcor remains upbeat on 2015 prospects despite investor gloom The Philippine Amusement and Gaming Corp. remains bullish about gross gambling revenue growth in the country this year, in sharp contrast with stock market investors who have turned sour on local operators’ prospects.

C Asia Gaming Briefings | August 2015

hairman Cristino Naguiat recently

as a potential boon, with new offerings able

reiterated his earlier forecast for

to lure away China’s high rollers.

a 20 percent gain in the Philippine

However, stock market investors have taken

market to about $3 billion, helped by

a different tack. Philippine casino stocks are

Melco Crown Entertainment’s newly opened

among the world’s worst performing year to

City of Dreams Manila.

date, partly amid concern that the country

At the beginning of the year, many analysts

won’t be able to attract the same levels of

had also tipped the Philippines to be one of

Chinese visitation as had been expected.

the world’s fastest-growing casino markets

Political tensions between Beijing and Manila

in 2015. The ongoing rout in Macau was seen

over the disputed Spratly Island chain in

SOUTH EAST ASIA 17

GROSS GAMING REVENUE Y14 $2.5b

+16%

H1E $1.4b

+16%

Y15E $3b

+20%

(Source: Pagcor)

4

Y15E

2

$3.31b

$2.77b

0 (Source: Morgan Stanley)

Gaming table growth: 1,013

1,075

1,152

595

Y14

Y15E

Y16E

Y17E

(Source: Morgan Stanley)

the South China Sea, coupled with a general

million, is expected to report gross domestic

casino resorts.

perception Manila is unsafe make the country

product growth of about 6 percent in the second

The company is planning a VIP resort on

a tough sell for the Chinese.

quarter, helped by government infrastructure

the island of Napayawan in the province of

In the first five months of this year, tourist

spending. That’s below the government’s own

Masbate with investment of about $300 million

arrivals in the Philippines increased 8.2 percent

targets for 7-8 percent growth for 2015, 2016,

and a $650 million mass to premium mass

to 2.23 million, with most coming from South

but an improvement from the first quarter.

property on Mactan, which is situated next

Korea, who accounted for 24.5 percent of the

Melco Crown Entertainment’s Philippine unit

to the popular and well-established tourist

total, followed by the U.S. and Japan. China

opened the third and largest resort in Manila’s

destination of Cebu.

is the fourth largest source of tourists, with

Entertainment City in February this year.

The company is currently in negotiations with

a 7.1 percent share.

The company is offering a broad spectrum of

the Philippine Amusement and Gaming Corp

Naguiat has cited the wider client profile of

leisure facilities, including a DreamWorks-

over licensing for the casino element, but

Philippine casinos as being one of their main

themed interactive play and creativity centre,

doesn’t expect to complete the process until

strengths. The market is currently split fairly

developed together with the DreamWorks

2016 after the next presidential elections.

evenly between local patrons and visitors

film studio.

However, the group has secured the necessary

from overseas.

At a grand opening of the attraction in June,

land and has approvals from local municipalities,

That leaves the question as to whether expansion

company executives said visitation has exceeded

agencies and the church to proceed with the

in the domestic market can support the new

expectations since its soft opening in March.

first stage of development.

casinos coming on line, or whether growth

Elsewhere, Macau Resources, which is

Michael Foxman, a director of Macau Resources

will come from cannibalization of clients from

73-percent owned by Sino-America Gaming

and managing director of Sino-America Gaming,

other properties.

Investment Group, is betting on islands further

said the company has teamed with Las Vegas-

The Philippines, with a population of about 98

afield in the Philippines to develop boutique

based hospitality and nightlife company Macro

Asia Gaming Briefings | August 2015

SOUTH EAST ASIA 18 Management to bring celebrity-branded

table games, catering to both the VIP and

third quarter of 2015. The casino will feature,

products to the two casino resorts.

mass market.

state-of-the-art gaming facilities, and an

Foxman stressed the resorts are not seeking

The company said it had around 20,000 visitors

indoor man-made beach club covered by a

to compete with the mega billion properties

on its first day.

huge glass dome, high-end and casual dining

springing up in Entertainment City and will

Melco Crown Philippines reported Q1 revenue

restaurants, upscale retail shops, trade halls

focus more on the islands’ appeal as a broader

gained to PHP2.34 million from PHP 21,334 in

and cinemas.

tourism destination.

the same quarter a year ago. Its loss per share

The group has also faced regulatory issues and

“In terms of product we are taking a strong

rose to PHP 0.63 from PHP 0.22.

needs a local partner to comply with Philippine regulations on foreign land ownership. l

focus on the leisure and nightlife experience,” he said, although he added that the casino component will be pivotal to making the resorts profitable and without the license the total investment is likely to be lower.

Resorts World Manila

Travellers International Hotel Group, a joint

The group is planning to begin the build out of

venture between Genting Hong Kong and

Phase 1 by Nov. 2016. The company is planning

Alliance, is pushing ahead with the expansion

a third resort in Dalian, China, without a casino

of Resorts World Manila.

and has secured 25 hectares of land.

Travellers president and CEO Kingson Sian told shareholders recently that it plans a PHP

OPERATORS

8 billion spending budget this year, higher than last year’s PHP 5.9 billion, to develop Phases 2 and 3 and kick off Phase 4.

The expansion will cover a two-hectare area

Solaire Resort & Casino

Bloomberry Resorts posted a 9 percent rise in Q1 revenue, net of promotional allowances, to PHP6.43 billion. GGR was up 15 percent to PHP8.09 billion, split evenly between VIP and mass. Net gaming revenue, after the deduction of junket and other promotional fees, rose 8 percent. EBITDA in the quarter declined 19 percent, mainly on higher costs.

Total expenses rose 42 percent to PHP6.2 billion.

In November, 2014, the company opened its SkyTower, more than doubling the size of the resort, increasing the room count by 64 percent to 800.

As of December 31, 2014, the group has 64 junket operators that actively bring in foreign VIP players. Solaire Rewards Club registered

currently used as a carpark. This will include a four-star international branded hotel offering 1,000 rooms, sitting atop a full-service shopping mall that will link Resorts World Manila to Terminal 3 of the Ninoy Aquino International Airport.

The bridge will be finished next year and the last phase of expansion may be completed in 2019- 2020.

The company has delayed the opening of a second Manila resort, the $1.1-billion Resorts World Bayshore along Manila Bay to 2018.

Pagcor has approved new gaming capacity of 420 gaming tables and 4,148 gaming machines at the resort. 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.

406,000 members and visitation for the year had reached 4.5 million.

Manila Bay Resorts City of Dreams

Belle Corp and Melco Crown held the soft opening of the $1.3 billion City of Dreams casino resort project in December and the grand opening on Feb. 2. The resort features about 950 hotel rooms under the Crown Towers, Nobu and Hyatt brands, as well as a family-oriented entertainment center designed by DreamWorks Animation. Melco has also teamed with the Ault Group to add two renowned nightclubs -- Pangaea and Chaos The property features about 365 gaming tables, 1,700 slot machines and 1,700 electronic

Asia Gaming Briefings | August 2015

Resorts World Manila is likely to be able to remain profitable because it is more of a casino destination for the premium mass and mass markets, Maybank analyst Rommel Rodrigo wrote in a note to clients.

About 51 percent of gross gaming revenue comes from mass market tables and slot machines, the company’s main drivers.

Universal has requested an extension for the opening of its Manila Bay Resorts complex until the first quarter of 2017 and said it will invest a further $700 million.

The company plans to increase the gross floor area by 97,000 square meters.

The changes will result in “additional guest rooms and parking area and would also contribute to the strengthening of the structure and architectural design,” PAGCOR President and Chief Operating Officer Jorge V. Sarmiento told lawmakers.

The company had planned to spend $2-billion on the resort, with a scheduled opening for the

Japan’s Universal Entertainment may have overcome a roadblock that was delaying its $2 billion integrated resort in Manila by selling its stake in a local affiliate that owns the majority of the land on which the casino is being built, according to media reports. Universal, controlled by billionaire Kazuo Okada, has sold its entire 40 percent stake in Eagle II Holdco to local firm All Seasons Hotels & Resorts Corp for $2.9 million.

SOUTH EAST ASIA 19

SINGAPORE

Singapore adjusts to online laws, social gaming still a grey zone Singapore has made its position against online gambling clear, outlawing the practice through some of the most draconian legislation anywhere in the world. However, the law has left major grey areas, in particular when it comes to social gaming.

S

ingapore’s Remote Gambling Act (2014)

maybe taking bets from Singapore citizens or

notice just ahead of the activation of the laws,

came into effect on Feb. 2 and criminalizes

in some way targeting Singaporeans. The laws

clarifying its stance on social games – one

the entire spectrum of remote gambling

also came into effect at reasonably short notice

which seemingly still leaves some grey area

activities. The restrictions are extremely

– it was late 2014 when the law was passed and

and grounds to prosecute certain operators.

broad and will be felt by operators, agents,

there was only a one or two week notice period

The clarification, released on January 28, stated:

brokers, service providers, advertising networks,

when it was known exactly when the law would

“The Act will prohibit casino-style games which

payment processors, financial institutions, ISPs

take effect.”

give players a chance to win money or real-

– and, of course, players.

It seems that most of the changes caused by

world merchandise” and added, “the act does

The legislation included the unprecedented

the laws actually came about through self-

not cover games which do not, as part of the

steps of allowing government agencies to geo-

regulation as nervous betting agencies ensured

game design, enable players to receive money

block websites, stop bank payments and even

they weren’t open to prosecution.

or money’s worth consequent to the outcome

issue extradition orders to offshore parties.

“As a risk management step in anticipation of

of that game.”

So what happened before February 2, prior to

the laws, most reputable operators had already

Gaming software operators with staff or

the law coming into effect, what has happened

taken steps to ensure they were safe,” Pollins

headquarters in Singapore were still concerned

since and, more importantly, what do experts

said. “People took quite a conservative view

– and some say they are still to receive full

expect to happen next?

of it and operators had already started to geo-

clarification of where they stand in relation

Matt Pollins, a lawyer from Olswang who

block Singapore from their sites, and most had

to the laws.

specializes in gaming law, watched closely

started to send emails to Singaporean players

“The whole situation is tenuous at best,” one

from his Singapore base as the industry tried

saying they would shut down their accounts

source said. “The laws are so wide-ranging

to make sense of the far-reaching laws.

and return any funds in accounts.”

and open to interpretation that we have even

“It’s fair to say that the industry didn’t know

Amid the speculation surrounding the laws was

heard that Twitter, because of some related

what to expect and the overwhelming feeling

the suggestion that social games that contain

advertising, is concerned. Even though these

was one of uncertainty in the lead up to the

elements of chance or monetary payment for

types of companies aren’t the intended target

laws being passed,” Pollins said. “There had

“tokens,” rankings or points would be banned

of the laws, they are in the crossfire and it is

never been a law in Singapore like this. There

– and games pushed on social media like Candy

hard to be completely relaxed.”

were a lot of companies that didn’t know how

Crush Saga and Farmville would be under threat.

The Industry of Home Affairs is the driving

it would effect them, not just in Singapore,

Singapore’s Media Development Authority

force behind the legislation and, in conjunction

but companies outside of Singapore that were

(MDA) took the unusual step of sending a

with the Singapore Police Force, is regulating

Asia Gaming Briefings | August 2015

SOUTH EAST ASIA 20 the laws. The Monetary Authority of Singapore

that exemption, that we know of - like having

is responsible for payment blocking while the

to be Singaporean based and distribute profits

MDA deals with site blocking.

to charity, but there may also be certain social

So far there have only been one set of arrests

safeguards in the form of restrictions that need

under the Remote Gambling Act as police busted

to be met as well. We won’t know those details

a suspected illegal gambling ring early last

until they are granted a license.”

month. Nine men and two women were arrested in various locations, but all in Singapore, in early May. Police suspect the group of taking

OPERATORS

GROSS GAMING REVENUE Y14 $6.12b

+1%

Y15E $6.06

-1%

(Source: Citi Research)

S$3million ($2.2 million) worth of bets in the space of two weeks and seized computers, betting records, bank details and more than S$200,000 in cash during a raid on May 2.

So what is next? There is no sign that the full extent of the laws, like arrests in foreign jurisdictions and extradition orders, will be enacted by authorities on overseas operators – at least for small cases.

Gambling law expert Yap Wai Ming, a director at Morgan Lewis Stamford LLC, believes that unless an overseas operator is particularly aggressive in targeting Singaporean residents, authorities will be content to stick with the mechanisms used so far.

“As the arrests show, if they are located in Singapore, they will go after them, but I think if they are offshore they will simply use blocking mechanisms to stop them reaching Singaporean players,” Yap said.

Further to that, Yap believes that if an operator has displayed due diligence in key areas, they should have a solid statutory defense should they be investigated.

“If the sites have notified customers that betting from Singapore is not allowed, that would give them a full statutory defense under the remote Gambling Laws,” he said. “As long as they have undergone geo-blocking, have sought full verification of customer information and they have actually put notice on their websites, then they cannot be prosecuted.”

Under the laws certain operators are able to apply for exemption and apply for special online betting licenses – a loophole seemingly aimed at Singapore’s two established legal operators – Singapore Turf Club and Singapore Pools, both not-for-profit, charitable organizations whose applications are believed to still be pending.

“They should qualify for the exemption but I think are the only two,” Yap said. “To qualify for the exemption they must be local operators and they must be for charitable purposes. They are both government-owned and the profits are returned to social causes.”

Pollins said there may be even more boxes the Singapore Turf Club and Singapore Pools will have to tick to qualify for the exemption.

“There are certain provisions that come with

Asia Gaming Briefings | August 2015

GENTING’S Resorts World Sentosa

Spans 49 hectares and features six hotels, a convention centre, the region’s only Universal Studios theme park, one of the world’s largest aquariums, as well as restaurants and spas. The casino has more

Y14 $6.05 Y15E

-4%

(Source: Morgan Stanley)

Singapore Pools, Singapore Turf Club GGR five-year average $2.39b

than 500 tables and more than 2,400 slots.

Genting Singapore said 15Q1 profit plunged 64 percent as VIP gaming dried up and the mass market remained relatively flat, with the company predicting no end in sight to the problems in the high roller segment.

Net profit plunged to S$91.7 million from $257.5 million a year earlier. Earnings per share slumped

VIP tax 5% mass tax 15% International visitors Y15 Jan-April 15.1 million

-3.1%

72 percent to $0.52 cents. Revenue declined 23 percent to S$639.2 million.

Adjusted EBITDA was $228.1 million, down 43 percent year-on-year.

During the first quarter of 2015, the attractions business enjoyed a daily average visitation of about 16,000 and the hotel business maintained a high occupancy rate of 93 percent with the daily average room rate at S$381.

Las Vegas Sands’ Marina Bay Sands

Features approximately 2,600 rooms and

Singapore’s Ministry of Home Affairs is reviewing applications from the The Singapore Turf Club and Singapore Pools that would allow them to offer remote gambling services for their existing products.

The Ministry said it will evaluate the applications based on the “strict” criteria set out in Section 26 of the RGA that include whether the entity is based in Singapore and whether the exempt operator is a not-forprofit entity.

suites located in three 55-story hotel towers.

Atop the three towers is the Sands SkyPark, an extensive outdoor recreation area with a 150-meter infinity swimming pool and several dining options. The integrated resort offers approximately 160,000 square feet of gaming space with approximately 600 table games and 2,500 slot machines.

In Q1, the resort generated adjusted property EBITDA of $415.3 million, a decrease of 4.6 percent compared to the first quarter of 2014.

Non-Rolling Chip drop was $1.11 billion during the quarter. Rolling Chip volume decreased 22.0 percent to $10.09 billion for the quarter. l

Morgan Stanley says an upcoming extension of multiple-entry visas for Chinese tourists could help drive visitation but not gaming revenue at Genting Singapore, since the company remains cautious on extending credit. Bad debt provisions could remain high at 19 percent of VIP revenue in 2015.

SOUTH EAST ASIA

GROSS GAMING REVENUE

MALAYSIA

(Source: Morgan Stanley)

Resorts World Genting revamp in full swing, seen driving visitation Malaysia’s only casino operator, Genting, is now one and a half years into a huge RM5 billion ($1.3 billion) renovation project at its 50-year-old Resorts World Genting property, with construction works proceeding mostly to schedule, analysts say.

T

Y14

Y15E Y16E

$1.88 b

$2.04b

$2.42b

NFOs Y14 $2.82b Gaming tables Y14 550 Gaming tables Y16E 587 Share of Asia market Y14 1.9%

he renovation is expected to drive visitation

is crucial as it will be the amenity housing new

and add non-gaming attractions capable

gaming floors and gaming units like electronic

of attracting a wider tourism base.

table games and slot machines,” the analyst said.

RWG announced the “Genting Integrated

Tower 3 and Tower 4 are expected to be two new

Tourism Plan” in December 2013, detailing plans

high-end hotels offering 1,150 rooms each. The

to give Malaysia’s first-and-only gaming resort a

two facing blocks are slated for openings in 2017

much-awaited facelift. The plan includes building

and 2018 respectively, upping the room capacity

hotel Towers 2A, 3 and 4, a theme park, Sky

by another 20 percent, but fail to introduce the

Avenue, Sky Plaza, and a new cable car station.

architectural wow factor some of Asia’s other

The hill resort, located about an hour’s drive

casinos can boast.

away from capital Kuala Lumpur, had 20 million

The day of AGB’s site visit was the start of two-

visitors in 2014. It aims to lure 26 million tourists

week school holidays in Malaysia and Singapore,

by 2018 and 30 million by 2020.

and many parents brought their children to the

On a recent visit to RWG for an update on the

resort for a quick getaway.

renovation, AGB saw the property abuzz with

On the mass gaming floors, the Pontoon and

crowds on a June Monday, despite ongoing

roulette tables were occupied, while the others

construction works in some areas.

were less busy.

The resort is set to raise its total room capacity by

A good indicator of the business was during this

13 percent when a new hotel tower fully opens in

Chinese New Year (CNY) festive period. An analyst

July 2015. Tower 2A, a RM500 million extension

who visited the property on March 1, the second

of First World Hotel, will boast an inventory of

weekend within the 15-day CNY celebration, said

1,286 rooms when fully operational. As many

that the mass crowd was thinner compared to

as 412 rooms, from the lower levels to the ninth

that of last year.

floor, were soft-launched in December 2014.

“While there used to be an average three to four

The bulk of the rooms, from the tenth to 28th

rings of people per table, there were only one to

floors, are scheduled for opening either June or

two rings of people per table this year. However,

July, pending the passage of a fire inspection from

the minimum bets were raised from RM50-RM100

the authorities, an employee told AGB.

last year to RM100-RM300 this year, indicating

Along with First World Hotel, one of the world’s

the mass market is resilient despite recent macro-

largest hotels with 6,118 rooms, and four other

economic challenges,” a second analyst said.

brands including Maxims, Genting Grand, Resort

To boost gaming revenue and ward off growing

project, however, is the Twentieth Century Fox

Hotel and Theme Park Hotel, RWG currently has

competition from its regional peers, RWG recently

World, the first theme park licensed by the US

a total capacity of 9,770 rooms.

added a new VIP club called the Genting Club

studio.

“There is a strong correlation between the

Seasons, said the analyst.

This RM1 billion theme park will be a major selling

number of rooms and revenue at RWG. The timely

It is understood that the club has 10 new VIP rooms

point after the facelift, adding to the overall

opening of the Tower 2A and Sky Plaza is of utmost

themed on four seasons (spring, summer, autumn

appeal of its non-gaming attractions. Resorts

importance as the former will drive patronage

and winter). Most rooms have three baccarat

World Sentosa in Singapore, also developed by

to the latter,” said an analyst with a Malaysian

tables each, while a few have two baccarat tables

RWG’s owner, Genting Group, touts a Universal

firm, who tracks the region’s gaming industry.

and a roulette table each.

Studios theme park.

Construction of Sky Plaza, a lower building located

“Minimum buy-ins are RM3 million for junket

The new theme park, whose launch date has

below the yet-to-be-constructed new hotels

VIPs and RM2 million for direct VIPs; the minimum

been pushed back to late 2016 from early in the

Tower 3 and Tower 4, has reached the fourth floor.

bet is RM1,000,” the analyst said, adding it is a

same year, will feature more than 25 rides from

“At this juncture, we don’t see why Sky Plaza will

worthy addition to RWG’s gaming operations.

the studio genres such as action, animation,

not be opened by this year. Its timely opening

The real crowd puller of the RM5 billion renovation

adventure and sci-fi. l

Genting Malaysia Q1 revenue $575m

+3%

Genting Malaysia plans to sell its entire 17.8 percent stake in the group’s Hong Kong-listed unit Genting Hong Kong for a price of not less than $0.33 a share in cash.

The total number of shares being sold is 1,431,059,180, meaning Genting Malaysia will raise at least $472.2 million in gross proceeds.

Malaysia’s Chief Minister has dismissed the claim by an assemblyman that the Penang government will build a casino in the state. Lim Guan Eng said it was the policy of the state government not to allow a casino in Penang because it was not suitable for the local economy and the people.

Asia Gaming Briefings | August 2015

21

SOUTH EAST ASIA 22

Thailand

Las Vegas Sands eyes Thai casino, but faces uphill battle

Las Vegas Sands CEO, Sheldon Adelson, has offered to spend up to US$6.0 billion on a 450-room entertainment and casino complex in central Bangkok, but local support for legalizing gambling remains far from certain, even though some senior figures have thrown their weight behind the debate.

T

he talks, in mid-June, were the latest

visitors to border casinos in neighbouring

A key part is the promotion of Meeting Incentive

efforts by Adelson’s Las Vegas Sands

Cambodia and Laos where casinos are legal.

Conference and Exhibition (MICE) business, a

to break into the market, according

According to a study reported in local media

major draw-card in Thailand’s tourism sector,

to sources close to the situation. The

by academic Sungsidh Poriyarangsan, who is

with a development model incorporating a

plans were presented to senior Thai ministers,

also a member of the National Reform Council,

casino, but not dominating the project.

including Finance Minister, Sommai Phasee,

legalizing casinos could generate about 400

But many Thais remain opposed to legalized

who was at the centre of previous discussions

billion ($11.8 billion) to 500 billion baht per

casinos. Recent academic surveys indicated 35

with the U.S. gaming giant.

year. That would create a market almost double

percent strong support for a project similar to

Gambling is illegal in Thailand apart from

the size of Singapore.

that proposed by Las Vegas Sands’, but with

through the state lottery and the Bangkok Turf

Las Vegas Sands’ executives said their latest Thai

55 percent still opposed and the remainder

Club, however, it remains extremely popular

proposal was part of plans to develop several

uncertain.

with numerous illegal gambling dens spread

complexes across Asia, similar to the company’s

After initially remaining on the sidelines, Prime

throughout the country. Thais are also frequent

iconic Marina Bay Sands property in Singapore.

Minister Prayut Chan-o-cha, has now also come

Asia Gaming Briefings | August 2015

SOUTH EAST ASIA 23 George Tanasijevich, according to sources familiar with the negotiations.

The possible location for the casino and entertainment project is land owned by the Finance Ministry and the State Railways Authority

GROSS GAMING REVENUE Annual GGRE $11.8b

of Thailand, which faces heavy debts.

Official lottery

Thailand’s latest casino debate has been led by the National Police Chief, General Somyot Paompanmoung. It was also taken up by members of the military-appointed National

Govt. target for reformed lottery

Reform Council (NRC) aimed at putting forward

Underground lottery

proposals for social and economic reform.

General Somyot was cited by media as saying a website will be launched on Sept. 1st outlining

THB 20b ($625m)

THB 44b

THB 102b

(Source: Chulalongkorn University)

the pros and cons of casinos. General Prayut has since warned his police chief to stop speaking

30

Y15E 30m +20%

in favor of casinos.

The underground casinos in Thailand are largely controlled by local station police. Since the Thai

25

Military came to power, there have been stepped up raids on the illegal casinos with small time operators having to close down operations to avoid arrest.

20

Y14 tourism arrivals 24.78m

(Source: DB)

Since the latest debate emerged, Prime Minister Prayut has largely sidestepped questions on the issue.

The Thai media has been awash with rumours over the proposals, including suggestions that a senior Thai military figure was behind the push to lift the ban.

In a commentary, “The Nation” newspaper asked whether Thailand needed the funds “to help prop up the economy,” or stop the outflow

Thailand has launched a major crackdown on illegal gambling dens run by South Koreans. More than 40 have been arrested so far this year, with police citing visafree entry for Korean nationals as being one of the attractions of the country.

of money to casinos outside the country, or rid out against the idea, saying the proposal needs

Thailand of bribery from illegal casinos.

further study.

“Before we ask the question whether casinos

Adelson, now 81, had been in talks with former

should be legalized, we should ask if we get

Thai Prime Minister and telecommunications

the expected benefits. If the answer is yes, we

tycoon Thaksin Shinawatra, who was in office

could go ahead with legalizing casinos,” the

from 2001 until being ousted in a September

commentary added.

2006 coup. The plans then were to build a

Debate has also centered over the style of

casino in the seaside resort of Pattaya 150

casino after the proposal by Las Vegas Sands

kilometers from Bangkok at the Ambassador

for an entertainment complex and casino and

City Jomtien Resort.

the extent to which locals would have access.

Since then Adelson has also approached former

Dr Visanu Vongsinsirikul, a lecturer in economics

Prime Minister Samak Sundaravej, who took

at Dhurakij Pundit University, says large

office from 2008. Samak was aligned with

entertainment complexes and casinos are less

Thaksin, who fled Thailand in 2008 to avoid a

appealing to Thai gamblers. Visanu, who gained

jail term for corruption.

his doctorate in the United Kingdom, said if

Adelson also held talks during the administration

Thailand moved ahead to legalize casinos, the

of Thaksin’s younger sister, Yingluck Shinawatra,

British model of small casinos was more likely

elected in 2011 and ousted by the military in a

to succeed with local gamers.

coup in May 2014.

He says the smaller casinos are in line with

A key person in the latest talks is the current

Thais of lower income levels. The middle-to-low

finance minister, Somai Phasee, also a member

income gambler prefers to travel to Cambodia

of the Samak Cabinet in 2008-2009.

and other neighbouring countries. “If they

The most recent Bangkok talks included

want to set up a legal casino I think the small

President and CEO of the Marina Bay Sands,

casino is more suitable than the entertainment

A government move to cap lottery ticket sale prices at THB80 ($2.34) is hitting small vendors hard. A survey of vendors in Chonburi province showed about 30 percent had thrown in the towel as they can’t make a profit at the official price, local media said.

complex,” he told AGB. l Asia Gaming Briefings | August 2015

INDOCHINA 24

GROSS GAMING REVENUE Y14 Y15E

Y16E

CAMBODIA

Analysts upbeat on Nagacorp, Donaco takes control of Star Vegas 500 electronic gaming machines.

Analysts are cautiously optimistic about the outlook for Cambodia’s largest casino operator, NagaCorp, saying improved connectivity with Macau, new junket relationships, an electronic table game agreement and expansion of the resort will drive growth.

“The upcoming opening of NagaCity Walk in 1Q16 bodes well for mass gaming revenue. The new resort could attract strong tourist arrivals to its new gaming facility amid improving accessibility,” analyst Eva Yip of EBS International wrote in a recent report.

The company recently put out a positive profit warning, saying it expects its profit in the first half of 2015 to be at least $100 million, boosted by an electronic table gaming accord with a group

Cambodia is currently working on new draft casino the second half of this year. Part of the proposals may include revisions to the gaming tax away

iti analysts held a recent meeting with

from a lump sum payment to a levy calculated

management and reported back that VIP

on GGR, Citi analysts said.

operations at NagaWorld in Phnom Penh

They added that Naga may voluntarily pay more

remain solid. One Macau-based junket,

tax this year to lobby hard for as low a gaming

which began operations a year ago continues to

tax as possible. They said that tax is likely to be

bring in business, while a few more Macau-based

introduced in 2017 and may be as low as 7 percent,

junkets, including Sun City will be soft-launching

among the lowest in Asia.

operations in the near term.

Meanwhile, Donaco International has completed

Also aiding VIP visitation has been increased air

the acquisition of the Star Vegas Club and Resort

links with Macau. Bassaka Air has been running

in Poipet, Cambodia in a deal that it says will be

two weekly flights since May 1, with a load factor

transformational for the company.

averaging 60 percent.

Ben Reichel, executive director of Donaco

With its existing resort operating close to full

International, said Star Vegas is performing

capacity, Hong Kong-listed NagaCorp is planning a

well and expects the casino to sharply increase

$369 million expansion, currently known as Naga2.

revenues for the company.

The new resort area has a total built up area of

“We are very pleased to have successfully completed

110,105 square metres, which includes the NagaCity

this deal. The Star Vegas business is robust, and

Walk, with about 13,248 square metres of retail

is performing strongly. The handover process

and public space. It will have about 1,000 hotel

has been very smooth and seamless so far. We’re

rooms, 38 luxury VIP suites and a multi-purpose

excited to be entering this new era for Donaco,

entertainment theatre. The additional gaming

with Star Vegas set to increase our revenues by

space will involve about 300 gaming tables and

around 500 percent.” l

Asia Gaming Briefings | August 2015

+23%

1H15E profit $100m Y15E profit $205.8m Y16E $187.6m Y17E $238.1m H1 tax revenue $12m

legislation, which is expected to be introduced in

C

Y14 GGR $381m

million for the management of about 300 machines.

gaming machines at a later date.

$483m

NagaCorp

(Source: EBS International)

$10 million with Naga to buy state-of-the-art

$443m

(Source: Morgan Stanley)

of four investors under which it will receive $40 The investors have agreed to deposit a further

$381m

+20%

China LotSynergy said it has teamed with Cambodia’s National Sports Lottery Company to launch a hotline transaction system, betting terminals and lottery games, marking a milestone for the company’s international expansion.

Jimei International said one of its units will run a junket operation at NagaCorp’s NagaWorld casino in Cambodia for an initial period of one year. The company said it currently plans to promote at least seven VIP tables, though that may change over time.

The one-year contract will be extended automatically for another year, unless either party gives notice of non-renewal.

INDOCHINA 25

Y14 Donaco revenue

VIETNAM

Gaming & hospitality $2.05b

+33%

VIP $2.71b

+67%

Slots $2.71b

+144%

April Y15 Casino visitation

+43%

VIP turnover April $219m

Visitation

Vietnam struggles with sports betting legislation Vietnam, which is debating draft legislation that will update its casino market, is also struggling with separate laws to legalize sports betting.

T

he bill has been under discussion for

from Vietnamese citizens travelling to border

more than five years and, in an effort

towns in Cambodia.

to break the deadlock, Prime Minister

Local access is expected to be allowed on a trial

Nguyen Tan Dung recently ordered

basis in one or more of the country’s large

the Ministry of Finance to consult with related

integrated resorts, such as the Ho Tram Resort

agencies to resolve outstanding issues.

Casino, formerly known as the Grand Ho Tram.

According to a 2007 survey done by U.K.

In the meantime, investors continue to express

bookmaker Ladbrokes and cited by Vietnamese

interest in the country and new projects are

media, the turnover from illegal gambling on

continuing to emerge.

sports events runs at about $3 billion to $4 billion

Prime Minister Dung recently approved the

a year, resulting in significant lost revenue for

construction of a $1 billion complex on Vu Yen

the government.

Island in the northern port city of Hai Phong,

Some of the sticking points include a proposal

which local officials hope will eventually

to cap the maximum daily bet at VND1 million

include a casino.

($46). Some say that limit is far too low and

The island will be developed into an “ecological

will do little to bring those gambling illegally

zone” with villas, a 36-hole golf course, and

into the system.

amusement parks spread over an area of 872

Nguyen Van Hien, chairman of the parliamentary

hectares in the districts of Thuy Nguyen and

judicial committee, has proposed increasing

Hai An.

the limit five times.

Hai Phong Chairman Le Van Thanh was cited

Meanwhile, there is still no clear timeframe for

as saying the development will attract more

when Hanoi will approve new casino gambling

tourists to the city but, to achieve its aims a

legislation. The new laws are widely expected

luxury marina, dock, five-star hotel, a casino

to allow locals to gamble in the country for

and a cable car system should be added to the

the first time, helping stem a loss of revenue

project plan. l

Y15 Jan-June 3.8m

-11.3%

June arrivals 5.3m

-8.2%

Vietnam’s government has approved a new location for a proposed casino resort on Phu Quoc Island off mainland Vietnam’s Kien Giang province.

The site to be pitched to investors will be at Bai Dai Ecotourism Area in Ganh Dau Commune on the island instead of Bai Thom Commune, which is expected to be more appealing to foreign investors.

The developer of the Laguna Lang Co resort is moving ahead with Phase II of its multi-million dollar resort project and expects to select a casino operator in early 2016. Laguna Lang Co is similar to Laguna Phuket “only master planned on a far grander scale,” said Andrew Klebanow, partner with Global Market Advisors.

Asia Gaming Briefings | August 2015

SOUTH ASIA 26

INDIA

Casino operators eye Indian tourist dollar China’s exploding outbound tourism market and how it will shape the future of the global leisure and luxury industries over the next decade has been well documented but, so far, less attention has been paid to giant neighbour India, which offers similar potential.

I Asia Gaming Briefings | August 2015

ts already 1.2 billion population is expected

2020, a 14 percent annual growth rate, or 8

to expand by 51 percent up to 2050, while

percent in real terms. While the Brookings

China in absolute terms is expected to

Institution forecasts that by 2030, India

begin to shrink from 2030 onwards,

will be the world’s biggest consumer, with

the United Nations World Population report

its middle class spending more than $12.8

forecasts. According to World Bank estimates

trillion per annum.

its middle class is likely to swell to more than

The global middle class is defined as households

1 billion by 2025, or about two thirds of its

with daily expenditures between $10 and $100

forecast population at that time.

per person in purchasing power parity terms.

The Boston Consulting Group says consumer

Add to that a natural propensity to gamble

spending in India is likely to more than triple

and it’s easy to see why the India card is likely

from $991 million in 2010 to $3.6 trillion by

to play an increasingly important role in the

SOUTH ASIA 27 number of Indian outbound tourists in 2013 was 14,924,755, an increase of 11.4 percent over 2012. Figures for 2014 aren’t yet available.

According to the Tourism Ministry, the top

GROSS GAMING REVENUE GGR $60b

five destinations were Saudi Arabia, Thailand, Singapore, Kuwait and the U.S. Tourists to Saudi Arabia were most likely making a pilgrimage to the Haj, whereas Kuwait numbers may be skewed by job seekers entering the country as tourists.

Macau, seeking to diversify its tourism base away from mainland China, has set out to woo the Indian visitor with some success in recent years. More than 150,000 Indians visited Macau in 2014, according to figures released in May this year by the Macau Government Tourism Office. That pales in comparison with the 21.2 million arrivals from China, but shows explosive growth from the 29,000 recorded in 2006.

However, some experts say the Macau offering is too focused on Chinese players whose game (Baccarat), service and entertainment requirements (spa, sauna, and KTV) are almost the opposite of Indian players (Roulette, poker, rummy, and other derivative card games, decent service, and a lively atmosphere within the casino). investment decisions of foreign gambling

Singapore, whose two casinos are among its

operators.

prime tourist attractions, also receive hundreds

Casino gambling in India is restricted mostly

of thousands of Indian visitors every year, with

to Goa and Sikkim states, but betting on horse

the number increasing almost three times

racing and the lottery is legal, as are card

between 2000 to 2013, according to figures

rooms for Poker and Rummy. Consultancy

released by Singapore Tourism Board.

firm KPMG estimates that $60 billion was

Neighbouring Nepal, where gambling is legal,

wagered in India in 2010 on lottery, online,

also gets the majority of its tourists from India,

cricket, and card games. Around $40 billion

with 180,974 visiting in 2013, according to

of that is thought to have been bet illegally.

Ministry of Culture Tourism and Civil Aviation

Domestically, the industry continues to be

statistics. However, the data falls far short of

plagued by political bickering and regulatory

the true numbers of Indians visiting Nepal

uncertainty and is thought unlikely to open

as those crossing by land are not required to

further to gambling any time soon.

show a passport and aren’t counted. Many

Delta Corp, the largest and most organized

border crossings are also open 24 hours a day.

player, has received permission to start a new

The three Indian states bordering the mountain

floating casino in Goa, but does not yet know

Kingdom include the capital New Delhi and

where it can locate the ship as the government

have a population of more than 400 million.

wants to move casinos further away from the

They are also well served by the country’s

Mandovi river.

major highway systems, as the East-West

The group opened its ambitious integrated

Corridor and the northern section of the

casino-cum-resort in Daman last year, but

Golden Quadrilateral pass through all of these

the casino has yet to begin operations.

border states.

Jay Sayta, a lawyer and expert on gambling,

The country’s potential attracted Silver Heritage

said it may take up to a decade for the climate

Group, which announced plans in December

within India to become favorable to legalized

last year for a $100 million investment in five-

gambling.

star facilities in phases along Nepal’s borders

However, the pent up demand is there. So,

with India. Its investment rationale was driven

where will this newly rich Indian middle class

by expected Indian demand. l

Illegal betting ($40b) 66% (Source KPMG)

Deltin Q1, Y15 Gaming revenue $11.7m

+10%

Foreign tourist arrivals Y14

+6.8%

Indian outbound tourism Y13 $14.9m

+11.4%

Foreign exchange earnings from Tourism Y14 $19.6b

+6.6%

Goa’s state government has framed draft rules to prevent locals from entering casinos.

Any person under 21 and any Goan is subject to arrest under the proposed legislation. Locals working in casinos won’t be affected, according to local media.

Goa’s offshore floating casinos are facing an ultimatum to either relocate out of the Mondovi river or not have their operating licenses renewed. The first of the licenses comes up for renewal on August 29th. Other potential sites include Aguada Bay, Chapora river or the Zuari river.

travel to satisfy their desire to gamble? The

Asia Gaming Briefings | August 2015

SOUTH ASIA 28

NEPAL

Back in business

Travel & tourism 8.9% of 2014 GDP (Source: WTTC)

Nepali authorities are in the process of assessing damage to the country’s all important tourism sector after the deadly earthquake that hit the country on April 25, though casino operators say they are already back in business and expect any impact on revenues to be temporary.

T

he earthquake, which measured 7.8

to present to the donors by June 5 for recovery

according to the U.S. Geological Survey,

and reconstruction.

killed nearly 9000 people and injured

“While the massive cancellations (of hotel

20,000. Nepal’s biggest natural disaster

bookings) were natural after such a huge

in 80 years also destroyed half a million houses

disaster, it happened during the off season, so

and buildings and is expected to lead to a big

we were spared of losing the tourists in peak

hit to the economy, which relies on tourism for

season,” Prabesh Aryal, executive manager of

more than 8 percent of Gross Domestic Product.

the Hotel Association Nepal, told AGB. “For a

Nepal’s casino industry hopes to boost tourism

week after the quake, hotels were booked to

and assist with the recovery.

capacity because of the delays in flights and

The initial tremblor was followed by another

incoming journalists. But now all we have is

powerful earthquake measuring 7.3 on the

only a small number of relief workers.”

Richter Scale on May 12, while even a month

However, as reconstruction gets under way,

after the first quake, aftershocks measuring 4 to

the casinos, which reopened in February 2015

5 in magnitude continued to rock Nepal, which

after a year-long shutdown for failure to comply

sits on the seismic fault lines of the Indian and

with new regulations, may benefit as Indian

Tibetan plates.

businessmen continue to enter the country

Insurance and risk management company

for leisure and for business.

Aon has estimated that the quake could cause

Three casinos -- The Millionaire’s Club &

economic losses to Nepal of about $5 billion,

Casino at the Shangri-La Hotel & Resort, Casino

or 25 percent of its GDP.

Mahjong, and Casino Royale -- all closed after

About 800,000 tourists visited Nepal in 2014,

the quake but reopened two weeks after the

according to the Nepal Tourism Board. Nearly

disaster following the Nepali tradition of 13

half of them visited the country for leisure,

days mourning out of respect for the victims.

with 13 percent travelling to the Kingdom for

Casino Royale at the Yak and Yeti Hotel was first

mountaineering and trekking.

to open its doors on May 8, when a handful of

A week after the disaster, the government

Chinese and Indian gamblers heeded the call.

formed a Tourism Recovery Committee to carry

The Millionaire’s Club and Casino at Shangri-

out an assessment of damage to the tourism

La also opened for business on May 9, while

sector, including trekking, mountaineering,

Casino Mahjong at the Soaltee Hotel began

hotels and heritage sites.

operations on May 10.

Headed by Tulasi Prasad Gautam, the director

After the second major shock, The Casino Royale

general of the Department of Tourism, the

and Casino Mahjong remained closed for three

five-member assessment committee has been

days while The Millionaire’s Club & Casino at

consulting stakeholders and making field trips

Shangri-La shut only on the day of the quake in

to prepare a detailed report on the quake’s

consideration of the safety of players and staff.

implications for the industry.

Paul Simmons, senior vice president of casino

“We have sent our teams to 11 districts (affected

operations at Silver Heritage Limited, the Hong

by the quake) to collect data on the damage.

Kong-based gaming company that owns the

We are gathering information on the damages

license and operates The Millionaire’s Club &

to buildings for hotels and restaurants, loss of

Casino, told AGB that he expected the casino

employment and equipments,” Gautam told AGB.

industry to quickly bounce back.

He said the committee’s report would be handed

“The casino industry worldwide is known for

to the National Planning Commission, which

its resilience in troubled times. Locals are not

is working on post disaster need assessment

permitted to play in the casino, so there will be

Asia Gaming Briefings | August 2015

Employment in travel and tourism in 2014, 3.5% of total

Prior to the earthquake, The World Travel & Tourism Council ranked Nepal 26th out of 188 countries on the list of fastest growing Travel & Tourism economies in 2015.

The US, the UK and New Zealand have lifted restrictions on their citizens travelling to Nepal, except for districts hit hard by the earthquake, and more countries are likely to follow suit, Nepal Tourism Board officials said.

no loss of business locally, however supplies of building materials and food which are flooding into the country are providing opportunities for Indian businessmen, our target audience, who are now flowing into the country,” he said.

Some of the country’s other casinos, which had remained shuttered following the introduction of the new regulatory regime may now be demolished completely.

Casino Anna, which failed to pay the lease on land belonging to Hotel Annapurna, had received an order a few days before the quake to vacate the complex, according to Kumar Shrestha, the casino’s operations manager.

However, after the April 25 earthquake, the 23 year-old building received a red sticker, meaning that the structure is currently unsafe for habitation. “It is now being demolished. In its place, the hotel plans to build a multi-storey parking lot,” Shrestha told AGB. Hotel Everest is the only five-star hotel with a casino that received a red sticker, although for now it will remain standing pending further assessment. The interior of Casino Tara at Hotel Hyatt has also been damaged by the quake. l

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SPECIAL FOCUS 30

Macau needs better branding, tourism planning for successful transition Macau, whose meteoric success was fueled by the high-spending VIP gambler, needs to improve its branding and tourism planning if it is to transform to a majority non-gaming model and replace income from the missing high rollers.

W

hile the mass market gambler is more

gaming destination and generate sufficient volume to

profitable for the casino in terms of

recreate the revenue growth seen in the past.

margin than the VIP counterpart, it still

“I doubt that Macau can achieve an image [of a new

requires between 6.25 and 12.5 grind

Las Vegas] among Chinese visitors, which would

mass bodies to replace one VIP, according to CLSA

bring a lot of non-gaming high-spending guests to

estimates. It takes 3.75 grind mass players to replace

Macau. So it will not be an easy task to make the move

one premium mass customer.

towards the Las Vegas model,” said Professor Wolfang

The average visitor is also likely to spend less and

Georg Arlt, head of the China Outbound Tourism Arlt

doesn’t have the same amount of money to splash on

Research Institute.

Macau’s luxury retail outlets and five-star hotels. Add

He said Macau is not “exotic” enough for high-spending

to that government plans to cap the number of Chinese

Chinese visitors and also pointed to the capacity problem.

tourists entering at 21 million and it’s hard to see how

“If non-gaming means less spending per day per visitor, the

the territory will shift to a mass market, majority non-

question of carrying capacity arises -- how many Mainland

Asia Gaming Briefings | August 2015

SPECIAL FOCUS 31 government following one marketing message and the operators largely following their own individual agendas.

“You need to have clear distinctive branding.

If you look at destinations that are successful, the branding they have is clear, distinctive, compelling and believable.”

At present the operators still rely on gambling for almost 90 percent of their income and success in monetizing non-gaming elements has been mixed.

Take MGM Resorts International for example: While its US operations have shifted their major revenue stream from casino operations to leisure and entertainment with only 40 percent from gaming, MGM China invested $108 million on non-gaming promotion last year but it only earned $41 million, according to the Financial Times.

All six of Macau’s gaming concessionaires will have new projects on the Cotai strip by the end of 2017 and each will boast an array of nongaming elements. Galaxy Entertainment opened its Galaxy Phase II and Broadway Macau resorts in May, but reaction so far has been muted with little impact seen on visitation or GGR growth.

Melco Crown Entertainment will be the next to open with its giant cinema-themed Studio City resort later this year.

However, the new resorts, which were conceived when Macau GGR was on a steep upward trajectory, also still feature mainly high-end hotels and luxury retail, which will do little to dispel the perception that the territory is not Chinese visitors can Macau accommodate before

within China without value-added-tax, the falling

for the ordinary leisure traveller.

it becomes simply too crowded?”

number of Chinese tourists to Hong Kong may

“It will be difficult to fill the resorts at that

However, with gross gambling revenue falling

provide new opportunities for Macau, Ma said.

price point,” McCartney said. “We will see a

for the 13th consecutive month in June, the

According to Macau Tourist Office statistics,

decline in prices, but it’s difficult to drop the

government is focused on its longer-term aims.

two-thirds of Macau’s visitors in May were from

price that much of a high-end hotel. We will

In this year’s policy address, Macau’s chief

Mainland China. But the cumulative number

see a lot of packaging and marketing.”

executive Fernando Chui Sai-on again stressed

of Mainland tourists has dropped 3.1 percent

He also pointed to the problems of attracting

the need to diversify Macau’s economy to reduce

on a year-on-year basis.

more MICE business to Macau until general

its dependence on gaming -- a transformation

Ma doubted if Macau would be able to compete

infrastructure improves. He said he ultimately

Las Vegas has already achieved.

with neighboring cities, such as resort island

believes there are solutions to the territory’s

The U.S. city’s gaming/non-gaming revenue

Hainan, if operators solely focused on offering

shortcomings, but it won’t be in the short term.

mix changed from 60/40 percent in 1970 to

resort-type experiences. Comparing the number

Professor Altr does not share the same level of

37/63 percent in 2013.

of domestic tourists, Hainan had 35.9 million

optimism. According to him, Macau’s gaming

“Many people compare Macau to Las Vegas

visitors in 2013, almost double the number of

industry is learning a hard lesson about the

but their positioning is not quite the same,”

Macau at 18.6 million.

Chinese consumer.

Hoffman Ma Ho-man, deputy chairman of

Glenn McCartney, an assistant professor of

“More than other markets, large parts of

Success Universe told AGB.

gaming and hospitality management at the

market segments follow the trend of what is

“While Las Vegas mainly targets tourists from

University of Macau, said the transition from

hot and what is not. So the seemingly unending

North America and entertainment appears

a gaming-dependent model is being hampered

growth can abruptly turn south if it goes out

such an important element, Macau mostly

by the lack of a cohesive marketing strategy

of fashion to buy a certain product or go to a

attracts tourists from Mainland China and

and tourism masterplan from the government.

certain destination.”

their appetite for shopping is stronger than

He said the government has adopted the slogan

“There will be a ‘new normal’ but the days

entertainment.”

of calling Macau a “world-class city,” but has no

of frenzied growth seem to be over for the

With Hong Kong and Macau the only two cities

clear definition as to what that means, with the

foreseeable future,” he added. l

Asia Gaming Briefings | August 2015

SPECIAL FOCUS 32

Macau’s luxury malls turn to High Street as VIP spending shrinks Macau’s retail malls, dominated by the luxury brands favored by high rolling mainland Chinese, are turning to more affordable High Street names as VIP revenue falls, but the shift is unlikely to have a major impact on operators’ profits, analysts say.

A

lthough retail revenues have moderated in

Seasons Macao and Sands Cotai Central) and Marina

Macau, the downturn has been less severe

Bay Sands in Singapore reached $134.4 million for the

than the slump in overall gross gambling

second quarter of 2015, an increase of 13.6 percent

revenue, which dropped 36.2 percent in June,

compared to the second quarter of 2014.

declining for the 13th consecutive month.

“Interestingly, despite much talked about overhang

In Q1, retail sales declined 10.7 percent to MOP 16.41

in higher-end spending in Macau, LVS’ mall revenues

billion ($2 billion), according to government figures.

across the portfolio are up strongly, in the range of

Watches and jewellry were the hardest hit, slumping

+15-30 percent this quarter,” UBS analyst Robin Farley

nearly 28 percent.

wrote in a note.

However, Las Vegas Sands, the first of the operators

But the market is changing and success will hinge on how

in Macau to report Q2 earnings, said its Asian retail

well retailers adapt to the tastes of the new client base.

operations had shown considerable resilience, despite

When soccer star David Beckham was in Macau recently

the slump in the luxury market.

on behalf of Las Vegas Sands, it was to promote a

Gross revenue from tenants in the company’s retail

decidedly different image of the city to a different

malls on Macao’s Cotai Strip (The Venetian Macao, Four

class of consumer.

Asia Gaming Briefings | August 2015

SPECIAL FOCUS 33 The sporting superstar who was there earlier

a decline of 18 and 19.2 percent at constant

after a slight decline of negative 1 percent in

in the year as part of an ad campaign in which

exchange rates.

2014. Bernstein Research’s channel checks

he was filmed in LVS’ properties dressed in

“The decrease in local consumption and

indicate sales for luxury goods are down 10

sharp suits and enjoying moments of luxury

tourist flows, especially in Hong Kong and

to 40 percent in Hong Kong with around a 5

was in Macau in June to launch high-street

Macao, prolonged a period of stagnation that

percent additional decline in Macau.

brand H&M’s first store in Macau.

has now been underway for several months,”

However, a shift from high-end to more affordable

The Swedish retailer, whose men’s shirts sell

Prada SpA said in a filing.

goods is not going to have a meaningful impact

for around $25, has plans to open an additional

Similarly, Chow Tai Fook, the largest jeweller

on operating profit, says Grant Govertson at

store later in 2015.

listed in Hong Kong, recorded revenue of

Union Gaming, due to the small component

Linda Switzer, vice president of retail operations

HK$64.2 billion ($8.2 billion) in FY2015,

of total profit that non-gaming represents.

for SJM, said the the pressure on retail should

representing a year-on-year decrease of 17

“As such, changes in tenant mix (and presumably

see operators adjust their product range to

percent. Its gross profit decreased 9.8 percent

changes in rental income) are unlikely to have

accommodate a shift in the customer base.

to HK$19 billion.

a big impact,” Govertson said in an email.

“As more and more retail offerings appear with

Francis Gouten, director of Gouten Consulting,

Govertson said in the long term the mass market

the new properties opening, there will be a

said some brands have already reduced their

will remain the biggest driver of earnings

greater assortment of brands. It’s inevitable.”

prices in Greater China to remain competitive

growth in Macau over the coming years.

“We have to remember that everyone is still

with their European line. However, a better

“With this in mind, we think having more

making money,” Switzer added.

strategy, would be to launch new products

mass market-oriented retail makes a lot of

However, at the top end Cartier, Prada, and

and target the medium-high market, along

sense. In all likelihood, we will continue to

LVMH are just some of the brands that have

with scrapping a culture of gifting, he said.

see more and more non-luxury retail options

cited Hong Kong, Macau and China as the lame

Gouten says H&M’s entry is an example of this

coming to Macau to provide a better fit for the

ducks of their geographic markets.

type of aspirational brand at a lower price point.

future customer base.

Prada’s net revenues in the first three months

Some of the “non-luxury price but luxury

“I don’t think there is a major risk of vacant

of this year amounted to 828.2 million euros

image brands are looking to China and Macau.”

retail spaces as the next wave of resorts come

($909.1 million), a year-on-year increase of

Bain & Co., an adviser to the global luxury

online. However, I think the mix of retail

6.5 percent, while Greater China contributed

market, forecasts the 15 billion-euro luxury

tenants is likely to be different (perhaps quite

net sales of 199.3 million euros, a decrease of

goods market in Mainland China will contract

different) than operators may have envisioned

0.4 percent at current exchange rates, and

2 to 4 percent in 2015 at constant currency,

just a few years ago.” l

Asia Gaming Briefings | August 2015

SPECIAL FOCUS 34

Melco counts on Batman, magic to lure crowds to Studio City With the opening of Galaxy Entertainment’s Phase II development seemingly doing little to generate additional traffic in Macau, the focus has now shifted to the launch of Melco Crown Entertainment’s $3.2 billion Studio City property later this year.

M

ost analysts see the cinematic-themed

“We strongly believe that the continuous diversification of

property, which is scheduled to open October

Macau’s leisure and tourism offerings will lead to sustainable

27 this year, as the true game changer when

long-term growth,” Melco Chairman Lawrence Ho told

it comes to boosting non-gaming facilities

AGB in emailed comments. “Therefore, we are continuing

in Macau and therefore a better indicator as to whether

our respective efforts through the development of Studio

the territory can diversify and attract a wider tourist base.

City, which is committed to contribute to the ongoing

Construction on the resort, located next to the Lotus Bridge

transformation of Macau into Asia’s Entertainment Capital.”

immigration point connecting Hengqin Island and a future

“We believe our unique offerings will create unique

station-point for the Macau Light Rapid Transit, is now

entertainment that appeals to visitors from mainland

advanced. The property’s art-deco facade and design is

China, other parts of Asia and around the world.”

clearly visible, with its giant figure-eight ferris wheel

“Having said that, we will also strive to remain competitive

front and center.

in our gaming business, as advancement in the non-

The company says the resort will feature more non-gaming

gaming businesses will depend on success in our gaming

amenities than any properties currently on the market,

business too,” he said.

with 95 percent of its components not related to gambling.

The resort will include Asia’s highest Ferris wheel, Golden

Asia Gaming Briefings | August 2015

SPECIAL FOCUS 35 Reel; the world’s first flight simulation ride based

still don’t expect Melco to obtain all of the gaming

it the financial firepower.

on the Batman intellectual property franchise,

tables it had requested from the government.

Analysts at Sanford Bernstein said the new credit

Batman Dark Flight digital ride; and the Warner

Galaxy Entertainment only got 150 tables of the

facility will provide the company with over $1

Bros. Fun Zone which is packed with rides and

400 it had asked for, as the government sent a

billion in additional liquidity, on top of the $1.7

interactive activities themed around popular

clear signal it was going to stand by its policy of

billion unrestricted cash on hand.

Warner Bros. and DC Comics characters.

capping annual table growth at 3 percent a year.

“We believe the additional liquidity may be used

Other attractions include The House of Magic,

Melco Crown in the latest Studio City quarterly

in relation to the potential acquisition of the 40

hosted by acclaimed illusionist Franz Harary; a

report said that if the new property was allocated

percent JV partner in Studio City, which we argue

5000-seat Studio City Event Center; a working

“fewer than 400 tables,” it would have “a material

could be a near-term catalyst,” analysts Vitaly

TV studio known as Studio 8; and Macau’s first

adverse effect on our cash flow.

Umansky, Simon Zhang and and Bo Wen wrote.

Pacha Macau mega club, which brings Ibiza-style

It could also affect its ability to meet “certain

“By acquiring the minority interest in Studio

nightlife to Macau and Greater China.

conditions and requirements of the Studio City

City, MPEL may be more willing to reallocate

In terms of retail, The Boulevard at Studio City is

Project Facility,” the report said. According to

under-utilized tables from City of Dreams and

a 350,000 sq. ft. immersive retail entertainment

some media reports, the debt covering Studio

Altira to Studio City.”

environment. The operator also recently

City has a covenant that states the casino needs

The analysts estimate it may cost the company

announced that it will offer over 30 food and

a minimum of 400 tables.

$1 billion to buy out the minority interest.

beverage venues located throughout Studio

Galaxy has solved the problem by moving

Apart from Studio City, the fifth hotel tower at

City, including Shanghai Magic, a Shanghainese

tables from other properties, however such an

City of Dreams designed by the award-winning,

restaurant with close up magic, and Cosmos Food

option is unlikely to be as palatable for Melco,

“Queen of the Curve” in architecture, Dame

Station, which will serve dishes amid holographic

which only owns 60 percent of the project and

Zaha Hadid, is under development, and a further

projections of deep space.

therefore would not get the full revenue stream

tourist attraction, says Ho.

“We have planned and developed our property

from the tables.

“Overall, we strive to offer thrilling experiences

to engage a much broader group of leisure

The dilemma has led to speculation that Melco

that our visitors cannot find anywhere else.

entertainment seekers, those who want emotionally

may seek to buy out its minority partner, New

No other operator can boast this type of true

engaging experiences that they can share with

Cotai, in Studio City. Adding to that speculation

commitment to the government’s long-term

friends and family,” Ho said.

was the decision this month by the company to

vision for Macau. And we are proud of this

Despite the clear focus on non-gaming, analysts

refinance $1.75 billion in credit facilities, giving

fact,” said Ho. l

Asia Gaming Briefings | August 2015

AUSTRALASIA 36

AUSTRALIA

Australia regulatory round up: Anti-money laundering body bares its fangs There have been several recent changes to its gambling legislation in Australia that may have wide implications in both the online and land-based sphere, including the first case brought under the anti-money laundering act by AUSTRAC.

Jamie Nettleton*

*Jamie Nettleton, an AGB Advisor, is a Partner at Addisons Lawyers, Sydney

Asia Gaming Briefings | August 2015

O

n 22 July 2015, AUSTRAC, the statutory

The High Court has granted leave recently

body that has oversight of the Anti-

to each of the State of Victoria and Tabcorp

Money Laundering and Counter-Terror

respectively for a hearing to take place in

Financing Act 2006 (Cth), which

respect of appeals against the decisions of the

contains Australia’s anti-money laundering

Supreme Court of Victoria (Court of Appeal)

laws, initiated court proceedings against three

relating to claims arising from the Victorian

subsidiaries of Tabcorp for “extensive, significant

Government’s decision to change the regulatory

and systemic non-compliance with Australia’s

structure relating to gaming machine licensing

anti-money laundering and counter-terrorism

in Victoria.

financing legislation.”

Among the changes effected was the replacement

This is the first time that AUSTRAC has initiated

of the duopoly held by Tatts Group and Tabcorp

Court proceedings under the AML/CTF Act,

relating to the supply and operation of gaming

alleging 100 separate breaches of the AML/

machines with arrangements under which

CTF Act by Tabcorp.

venues would hold operating licenses directly.

This case is expected to set an interesting

At the same time, it was announced that neither

precedent for the Australian gambling sector.

Tabcorp nor Tatts would be entitled to any

It will cause all gambling operators to ensure

compensation arising from the expiration of

compliance with Australia’s anti‑money

their licenses in 2012.

laundering regime and is likely to shake any

The State of Victoria has appealed the decision

belief that AUSTRAC is merely a “toothless tiger”.

of the Court of Appeal that Tatts should recover

Meanwhile, in the State of Victoria, Tabcorp

$500 million from the Victorian Government.

has also been embroiled in litigation, along

While Tabcorp has appealed the seemingly

with rival Tatts.

contradictory decision of the Court Appeal that

AUSTRALASIA 37 it is not entitled to recover $650 million from the Victorian Government.

CASINO GAMING REVENUE

In the interactive sphere, there has been considerable press recently about Australia’s

Y20E

A$6.2b ($4.87b)

leading bookmakers engaging in activity which allegedly contravenes the in‑play prohibitions contained in Australia’s Interactive Gambling Act. These articles have reported that complaints to Australia’s communications regulator have

(Source: IBIS)

Y14 Australia, NZ combined

resulted in the various services being referred to

$4.44b

Y15E

the Australian Federal Police for investigation.

$5.13b

These issues are an indication of the extent to Y16E

which the Australian regulatory regime relating

$5.72b

to interactive gambling is inconsistent with the regimes in other first world countries, such as

Australian regulators are cracking down on foreign bookmakers taking in-play bets by phone, prompting Ladbrokes to take down its Quickcall feature. The services were also being promoted by bet365 and William Hill. Free-to-air television in Australia has also said it won’t advertise the services until their legality can be established in court.

(Source: Morgan Stanley)

the United Kingdom.

Indeed, recommendations have been made

Y16E

by various enquiries conducted by Australian authorities calling for reforms to be made to the

AS$4.6b

(Source: Citi Research)

Interactive Gambling Act but, to date, none of these reforms have resulted in any legislative proposals.

In South Australia, the government has introduced new taxation that is being closely watched as

Market share as of Jan. (Source: Queensland Treasury)

it could set a precedent for the governments of other states, particularly at a time when these governments are looking for new ways to raise revenue.

The South Australian government made public its proposal to introduce a state-based gambling tax that would require online gambling operators located outside of South Australia, including

total gaming $17.4b (including pokies and lottery)

Echo Entertainment Group has won the right to develop a gambling resort in the center of Brisbane, beating rival James Packer’s Crown Resorts and allowing the company to keep its twodecade casino monopoly in the city. Echo and its consortium, which includes Chow Tai Fook Enterprises and Far East Consortium, has been chosen to develop a resort on the river-front site which could could cost as much as $1.5 billion.

Work is expected to begin in 2017.

casinos $4.11b racing $2.7b sports betting Y12/13 $484.78m

those located overseas, to pay a state tax if they

In May 2015, the Federal Government passed

offer gambling services to South Australian

legislation that would cause Norfolk Island to

customers.

become a municipality of New South Wales.

In other words, tax would be paid to the South

The Federal Government has since abolished

Australian government by these operators on a

the Norfolk Island Legislative Assembly.

point of consumption basis in a manner similar

As a result of these changes, which were

to the taxes imposed currently on traditional

foreshadowed by the Federal Government last

land-based gambling operators. (This seeks to

year, Norfolk Island is no longer able to self-

follow the UK approach.)

govern. It is unclear whether the legislation

And finally, Norfolk Island can no longer self-

under which Norfolk Island gambling licenses

govern. What does this mean for its wagering

have been granted will remain in effect from 1

operator licensees?

July 2016 onwards (which is the date that these

Most Australian corporate bookmakers are

changes will come into effect in full). This calls

licensed by either the Northern Territory (for

into question whether licenses granted under

example, bet365, William Hill and Sportsbet)

this legislation will remain in effect after 1 July

or Norfolk Island (for example, Ladbrokes).

2016. l

Asia Gaming Briefings | August 2015

AUSTRALASIA 38

NEW ZEALAND

VISITATION

SkyCity convention centre project inches ahead after cost overruns

Y14 TAB racing and sports betting $311m

+5.6%

Lottery $463

+7.2%

Casinos $509m

-2.1%

Pokies $808m

-2.2%

International business is helping fuel revenue growth at SkyCity Entertainment, with turnover in the 2015 year to date up 83 percent to $8.62 billion during the period. The win rate improved to 1.37 percent compared to 1.12 percent in the previous corresponding period.

SkyCity Entertainment, New Zealand’s only listed casino operator, is moving closer to breaking ground on its new convention centre complex in Auckland after being forced to scale down its original design due to cost overruns.

T

New Zealand is conducting a review of its legal approach towards online sports betting amidst concern the country’s horse racing industry may be losing out, with locals gambling as much as $300 million a year through offshore online sites.

he company passed another hurdle in

in funding and it was seeking government help

July, when the city council decided that

to finance the overrun.

the resource consent application for the

Instead, the company and the government

more likely to end up being $450-470 million

New Zealand International Convention

reached an accord on a scaled back plan in

(including land).

Centre can proceed without public input.

May, that will be financed by SkyCity.

“Taking in to account the associated construction

CEO Nigel Morrison says the decision is good

While the revised design is for a slightly

of additional car parks, the laneway development

news for the project and allows SkyCity to move

smaller centre, its design ensures it will be

as well as the planned new 300 room 5-star

ahead with selecting a construction partner

a landmark building for Auckland and New

Hobson Street hotel, this represents a

and finalizing a date for turning the first

Zealand,” said Morrison.

$650m-plus investment in much-needed

sod on the building. “We now await the final

The new design envisages 32,000 sqm gross

public and tourism infrastructure in downtown

resource consent decision, to be finalised by

floor area and a plenary with 2,850 seats -

Auckland,” Morrison said.

the independent commissioners over the next

just 150 fewer seats than originally planned.

The current SKYCITY Auckland, is the group’s

few months,’’ he said. “We are continuing to

The building will also feature an exhibition hall

flagship property and was the best performer

work towards signing a binding building works

able to host banquets of up to 3000 people,

in the first half of its 2015 financial year,

contract for the NZICC by October and then

and a laneway offering cafes, restaurants,

with normalized revenue up 17.2 percent to

commencing construction by the end of 2015.”

bars and retail.

$302.5 million and normalized EBITDA up 15.0

Under a 2013 deal, SkyCity agreed to build a

SkyCity said the key amendments to the

percent to $124.3 million. This strong growth

$402 million convention centre in return for

building’s development included an increase

continues the positive momentum exhibited

concessions on its gambling licenses, including

in the company’s minimum capital investment

during 2H14, with growth across all business

more “pokies”. But late last year it said there

from $402 million to at least $430 million,

segments, delivering four consecutive quarters

was now a $70 million to $130 million shortfall

though the company says the eventual cost is

of EBITDA growth, it said. l

Asia Gaming Briefings | August 2015

AUSTRALASIA 39

PACIFIC ISLES

For Saipan business leaders size does matter When Hong Kong-listed Imperial Pacific announced it was doubling the size of its planned casino development on the South Pacific island of Saipan to $7 billion some analysts began scratching their heads.

I

VISITATION May tourism arrivals 39,955

+22%

China visitors 15,198

+14%

Korean arrivals 16,237

+79%

The owners of Mariana Resort & Spa in Marpi, Kan Pacific Saipan, received a letter from the Department of Public Lands saying the government will be announcing a request for proposals for the lease on their property, which expires in 2018. The DPL indicated the lease will not automatically be renewed.

mperial Pacific envisages a new resort

out of this development,” said Sablan.

co mplex , w hi c h wo uld have ab o ut

He said there is an opportunity for Saipan to

4,000 hotel rooms, 1,600 gaming tables

develop a resort that will meet the need of

and 3,500 slot machines. The resort is

various tourism markets, including the MICE

scheduled to be built over five years with

sector, but at present the island is not capable

the final phase opening in 2020. The first

of handling such large groups.

part involves a town hotel with 254 rooms

“The government has to work with the developer

and gaming facilities, which is scheduled for

to try to expand this opportunity,” he said,

completion late next year.

noting that the local preference is likely to be

But doubts have been raised as to whether

for a lower-scale resort that integrates with

the tiny island, with a population of about

the local landscape than large skyscrapers.

54,000, and tourism arrivals of 459,681 last

There are “a lot of qualms with respect to

year, could support such a mammoth project.

large, tall buildings that block views of the

“I seriously doubt that I will see a $7 billion

landscape and the ocean,” he said.

integrated casino in my lifetime. It will take

Marianas Business Plaza owner Erick Van Der

more than 10 years, or even 15 years, or even

Maas agrees that Saipan needs an integrated

longer, before we see a $1 billion casino on

resort, offering a wide variety of attractions,

Saipan,” said former lawmaker and president

but also agrees on a smaller scale.

of Juan T. Guerrero & Associates, Juan Pan

“I think Saipan needs an integrated resort. We

Guerrero. “Note that I said $1 billion. I do

are a resort island,” he told AGB. “This will

not believe that Macau or Australia or even

not only attract gamblers but also families.

the US have a single integrated casino worth

We need family tourism,” he said.

$7 billion.”

In terms of size, Van Der Maas said he believes

“Considering our CNMI infrastructure and

four 500-room or two 1000-room hotels

manpower, it will be something to see

would be feasible on Saipan instead of a single

accomplished. Call it a miracle or something,

2000-room facility.

if it happens,” added Guerrero, whose Strategic

There has been much debate in Saipan about

Gaming Solutions Inc. introduced the first

the scarcity of available land for large-scale

competitive Asian casino market, they said.

e-gaming facility into the Commonwealth

developments. However, local business leaders

“Together with the casino and all the hotels

of Northern Mariana Islands.

said there is private land that is still available

we need to make a plan for a national airline

Amid the concern, local business has asked

for development.

flying to Guam, Taiwan, Hong Kong, and three

the government to become more involved in

“Why is the government only pushing for

or four destinations in Japan. China and Korea

the development process. Saipan Chamber

public land? The CNMI needs to push the

is already taken care off by Asiana, Jeju Air,

of Commerce president Alex Sablan recently

issues and require the investor to acquire

Century and STI and are growing,” he said.

told a business meeting in Guam that his

more private land. There are plenty of private

Guerrero adds: “A casino needs regular flight

organization has asked the administration

lands so that should not be an excuse. It is

services in place and supported by charter

to take a look at “right sizing” so that any

more on the CNMI government not doing

flights.

project is successful.

much to push the issue,” Guerrero told AGB.

mentioned by our casino developer. Our CNMI

On a recent visit to Singapore, Sablan

However, for both Van Der Maas and Guerrero

lacks sufficient airport and port facilities

noted how closely involved the Singapore

one of the major challenges in introducing

for more carriers. CNMI lacks essential

administration had been in developing the

such a large-scale resort is that the island

infrastructure that includes roads, public

island’s integrated resorts.

lacks sufficient flights to bring in tourists, as

transportation, hotels, water, power, sewer,

“They [Singaporean government] were very

well as other basic infrastructure. That will

hospital and most essential is the necessary

hands on with respect to what they wanted

put it at a disadvantage in an increasingly

manpower to support it.” l

The U.S. Department of the Treasury has the right to regulate casinos in the Commonwealth of Northern Mariana Islands under authority granted by the U.S. Congress, a local judge ruled. U.S. District Court of the NMI Chief Judge Ramon Manglona said the U.S. Treasury has the authority to enact regulations to prevent money laundering by casinos licensed on the islands.

No such infrastructure has been

Asia Gaming Briefings | August 2015

AADC 40

Marina Bay Sands wins inaugural All Asia Dealers Championship Singapore’s Marina Bay Sands took the top prize in the first All Asia Dealers Championship held at G2E Asia in Macau, beating 15 teams to win the All-Asia team award after 3 days of stiff competition.

J

Asia Gaming Briefings | August 2015

udged in baccarat, blackjack and roulette,

NagaWorld, from the Philippines: City of

the team scored high marks in all areas

Dreams Manila, Solaire and RWManila; from

which included technical skills, guest

Singapore: Marina Bay Sands and RWSentosa.

interaction and personal presentation.

The competition, which drew a crowd of spectators

The team’s prize is a trip to Australia.

and raucous applause over three days, was a

The MBS team also scooped best blackjack

chance for the frontline staff of Asia’s major

dealer and best roulette dealer awards, while

casinos to meet and learn from each other while

Resorts World Manila won the award for best

doing their best under pressure.

baccarat dealer.

“The competition was important to boost the

The best dealer team in Macau went to Sands

morale of perhaps the most important people in

China, which won four awards overall. With

the industry who interact with customers every

the exception of Galaxy Entertainment Group

day,” said Rosalind Wade, managing director of

all other local concessionaries supported the

Asia Gaming Brief, which co-hosted the event.

championship: SJM, MGM China, SCL, and

“It was an opportunity to showcase their skills,

Wynn Macau. Regional teams that took part

meet their counterparts from around Asia and

in the competition included Phnom Penh’s

get the appreciation they deserve.”

AADC 41

Team

Wynn A

Wynn B

Best Macau Baccarat Dealer

Runner up Macau Blackjack Dealer

Name: Lei Weng Kuen (Vicky Lei) Age: 32 Nationality: Chinese Property: Wynn Macau Position: Dealer Length of time in job: 7 years Career history so far: Sales, Waitress

Name: May Chan Age: 32 Nationality: Chinese Property: Wynn Macau Position: Dealer Length of time in job: 4 years Career history so far: Dealer in Altira for around 1 year

Why did you decide to become a dealer?

Why did you decide to become a dealer?

I would like to change my working environment.

Being the leading industry in Macau, the future

What do you think is the role of a dealer?

prospects are great. We have a stable salary and

I want to gain more knowledge through my job and have better development in my career path.

What makes you good at the job?

I provide good customer service and brisk dealing skills.

What’s your personal style?

I always wear a warm smile and have appropriate interaction with players.

What do you like best about where you work?

Wynn Macau provides a working environment with lots of learning opportunities.

What was the best part about participating in the AADC?

a better career path.

What do you think is the role of a dealer?

Wynn

Name

Role

Vicky Lei

Dealer Blackjack

Jimmy Lam

Dealer Roulette

May Chan

Dealer Baccarat

Jimmy Leong

Dealer Blackjack

Chi Fai Tai

Dealer Roulette

Sam Chio

Dealer Baccarat

Xenia Lam

Judge

Wilson Wong

Judge

Macky Cheang

Judge

Baby Ieong

Judge

Jonathan Louie

VIP Guest Judge

Morgan Ho

VIP Guest Judge

Stanley Loi

VIP Guest Judge

Elizabeth Doherty

VIP Guest Judge

Dennis Hudson

VIP Guest Judge

Hoi Kou

VIP Guest Judge

The dealer is the frontline staff in the gaming industry. Our professional customer service and skills could make an impression on our guest.

What makes you good at the job?

I always have interaction with the players and keep friendly eye contact with them.

What’s your personal style?

I’m a straightforward and careful person.

I always provide a harmonious and relaxed atmosphere to our guest.

Vicky Lei

What do you like best about where you work?

We have a comfortable, tidy and cooperative

The most fun part was to learn different

working environment. Our company often

competitors’ skills from other countries.

offers different training opportunities, which is the thing I like the most.

What was the best part about participating in the AADC? AADC is a relaxed style of competition. Dealers

May Chan

were able to show their personal style and outstanding performance.

Asia Gaming Briefings | August 2015

AADC 42

Runner up Macau Baccarat Dealer

Runner up Macau Roulette Dealer

Name: Man Weng Ip Age: 24 Nationality: Chinese Property: Sands China Limited Venetian Position: Dealer Length of time in job: 2 years Career history so far: I have 2 years Dealer’s experience in the gaming industry.

Name: Un Wai Kin Age: 26 Nationality: Chinese Property: Sands China Limited – Sands Cotai Central Position: Dealer Length of time in job: 7 ½ years Career history so far: Working as a Dealer in Venetian Macau Limited is my first job.

Why did you decide to become a dealer?

Why did you decide to become a dealer?

I was a waiter in a restaurant inside a Casino; I

At the time that I graduated from high school, I

observed the Dealers and was impressed how they

knew that Venetian Macau was hiring Dealers,

conducted the payments so quickly on the tables.

I realised that this was a great opportunity, so

I thought it was very exciting, and I wanted to

I applied to be a Dealer.

be one of them so I applied to become a Dealer.

What do you think is the role of a dealer?

What do you think is the role of a dealer?

Communicate with the guests and ensure they

Man Weng Ip

have a great time.

What makes you good at the job?

Delivering service to different people every day, it increases my confidence to continually improve.

SCL A

SCL B

SCL

Role

Man Weng Ip

Dealer Baccarat

Wang Zhen Han

Dealer Blackjack

Ng Chi Kin

Dealer Roulette

Lo Man U

Spare Dealer

Hoi Choi Fong

Dealer Baccarat

Zhong Xiao Huan

Dealer Blackjack

Un Wai Kin

Dealer Roulette

Mak Wai Hang

Spare Dealer

Martin Ieong Lap Kun

Judge

Sarah Lei Sek Ha

Judge

Thomas Ieong Weng Hei

Judge

Anca Slavila

Judge

Christine MacDonald

VIP Guest Judge

Miki Lois

Team Leader

Asia Gaming Briefings | August 2015

The support I receive from Management and great working relationships with colleagues motivates me to do my best.

What’s your personal style?

Active and funny.

What do you like best about where you work?

I like to improve my hands’ skills and payment

Name

What makes you good at the job?

Positive attitude, welcoming feedback, both

calculation, SCL gives us many opportunities

Team

enjoy their time at the casino.

What’s your personal style?

What do you like best about where you work?

Un Wai Kin

Communicate with guests and ensuring they

for training and skill refreshment.

What was the best part about participating in the AADC? Gained more experience from other casinos’ Dealers.

positive and for improvement.

SCL gives me the opportunity to widen my experience and have new opportunities in the future.

What was the best part about participating in the AADC? Meeting and learning from people from all over Asia

Best Team Macau

AADC 43

Runner up All Asia Blackjack Dealer & Best Macau Blackjack Dealer Name: Wang Zhen Han Age: 27 Nationality: Chinese Property: Sands China Limited – Sands Cotai Central Position: Pit Supervisor 2 Length of time in job: 8 Years Career history so far: My first job was to be a Dealer in Venetian Macau starting from 16th July 2007 and progressing to Pit Supervisor 2.

Why did you decide to become a dealer?

Since Macau Government increased the Gaming licenses from one to six in 2003, and there was a period of gaming prosperity in 2007, I thought it would be a great opportunity to become a Dealer.

What do you think is the role of a dealer?

Meet the company requirements, follow procedures and most of all, provide good customer service.

What makes you good at the job?

Praise from Managers and Players encourages me to do a great job.

What’s your personal style?

It is my style to provide good service and

Team

interaction with guests, try to make everyone happy and have fun while they are playing on my table.

What do you like best about where you work?

There are various opportunities to represent

MCE A

the company to participate different type of competition and also great opportunity to have Cross Department Training.

What was the best part about participating in the AADC? I enjoyed competing against my fellow colleagues to qualify for the competition, and then competing

MCE B

against all of the Dealers from around Asia.

MCE Wang Zhen Han

Name

Role

Kin Lam Fong

Dealer Baccarat

Salina Rafaela de Assis

Dealer Blackjack

Ka Hou Kuok

Dealer Roulette

Pyi Sone Hnin Win

Spare Dealer

Kenneth Chung Yeung

Coach

Wai Pun

Dealer Baccarat

Min Ko Ko Zin

Dealer Blackjack

Sio Lam Pang

Dealer Roulette

Sunny Lam

Coach

Romulous Pereras De Leon

Team Manager

Lee Wee Lin

Team Manager

Sio Vai Pat

Judge

Iut Peng Chio

Judge

Heong Im Hoi

Judge

Mei Fong Chao

Judge

Mark Preece

VIP Guest Judge

Asia Gaming Briefings | August 2015

AADC 44

Team

Name

Role

Chan Chan U

Dealer Roulette

Leong Pak Chon

Dealer Baccarat

Tong Pui Ha

Dealer Blackjack

Fong Mei Wa

Spare Dealer

Kuok Ka Hou

Dealer Roulette

Wan Kin Long

Dealer Baccarat

Lou Man Wai

Dealer Blackjack

Wu Leong Richardo Arturo

Spare Dealer

Jacky Cruz Y Lin

Team Manager

Eva Chan

Team Manager

SJM A

SJM B

SJM

Asia Gaming Briefings | August 2015

45

Runner up All Asia Roulette Dealer & Best Macau Roulette Dealer

Team

Name

Role

Ivan Cheong

Dealer Baccarat

Name: Lim Hong Chai (Jimmy Lim) Age: 30 Nationality: Malaysian Property: MGM Macau Position: Supervisor Length of time in job: 12 years Career history so far: Dealer and Dealer Inspector, Pit Manager.

What makes you good at the job?

Why did you decide to become a dealer?

won’t be easily affected by difficult players.

Because everyday I can meet different customers and may face different challenges from which I can improve my personal skills. I believe the

MGM A

MGM B

MGM

Samuel Lei

Dealer Blackjack

I love to smile and make friends with different people and I enjoy my work. I can work well with my colleagues and will give them a helping hand whenever they need.

What’s your personal style?

I am a bit shy, but like to work in groups and enjoy team work spirit. I have good temper and

What do you like best about where you work?

I love MGM because it provides lots of opportunities for me to learn and grow. Most of the colleagues

gaming industry will provide lots of opportunities

here are friendly and nice.

for me in my career.

Jimmy Lim

Dealer Roulette

What do you think is the role of a dealer?

What was the best part about participating in the AADC?

Ivy Cheang

Dealer Baccarat

To serve customers and create a happy and

I have known people in the gaming industry

pleasant experience for them.

from other countries and in the competition

Gary Lam

Dealer Blackjack

Tata Chan

Dealer Roulette

Celia Lio

Judge

Alan Ao

Judge

Gini I

Judge

Debbie Lam

Judge

David Ip

Judge

I have known more how customer service is delivered by other contestants.

Jimmy Lim

Asia Gaming Briefings | August 2015

AADC 46

Best Team All Asia

Asia Gaming Briefings | August 2015

AADC 47

Best All Asia Roulette Dealer Name: Ria Krisiska Binte Herman Age: 26 Nationality: Singaporean Property: Marina Bay Sands Position: Dealer Inspector Length of time in job: 5 years 4 months Career history so far: First full-time job

Why did you decide to become a dealer?

I was previously working part-time, teaching ethnic music to students. My mum told me to get a real job and suggested that I look for opportunities at Marina Bay Sands. Not knowing which job to apply for, I picked the one that was new and different for most Singaporeans.

What do you think is the role of a dealer?

Best All Asia Blackjack Dealer & Miss Congeniality Name: Chow Yoke Hui Age: 28 Nationality: Malaysian Property: Marina Bay Sands Position: Dealer Length of time in job: 8 years Career history I started working in the casino industry in 2005, when I was 18 years old and have since worked in three casinos. The first is Genting Highland Resort, followed by Resorts World Sentosa. I am currently with Marina Bay Sands.

Why did you decide to become a dealer? portrayed in movies and TV dramas, and thought it was a cool job, so I applied to be a

a-lifetime experience for them is important

dealer for fun. After being a dealer, I began

by executing each game with style, accuracy

to recognize the long-term career path of

and confidence. Most importantly, we need to

being a professional dealer. I grew to love chip

ensure that everyone has fun, including yourself.

handling and I continue to hone my skills day

What makes you good at the job?

by day. Since I started working in the casino

at work and simply having fun.

What’s your personal style?

My personal style is to deal each game as fast as possible and make sure my players have ample time to place their bets. So I always think of the fastest way to take in the losing bets and pay the winnings in accordance with the company’s procedures. I will also ask my players if they are ready for every game.

What do you like best about where you work?

Besides the work itself, I enjoy the staff privileges that I get within the property, such as dining discounts.

What was the best part about participating in the AADC? Meeting new people from this industry.

What do you like best about where you work?

I have no regrets in choosing Marina Bay Sands.

I have really gained a lot and appreciate what I have now. Being recognized as a best Dealer in Marina Bay Sands and also being recognized as a Champion in Asia too.

What was the best part about participating in the AADC? The best part about participating in AADC is that I got to know a lot of different dealers, and to know a lot of friends. I also got to learn other casino skills and about gaming equipment. appreciate the chances I was given.

I was influenced partly by how dealers are

greeting guests. Hence providing a once-in-

holding grudges about any unpleasant situation

my patrons about.

I don’t regret joining this competition and

We are in the service industry, meeting and

Treating each day as a brand new day, never

I find different topics to engage and talk to

Chow Yoke Hui

line in 2005, I have never stopped training to improve myself. I hope that I’ll be able to impart what I’ve learnt to future dealers.

What do you think is the role of a dealer?

For me, the role of a dealer is similar to that

Team

of a singer, dancer or even a magician, as they need to showcase their skills to keep their

Name

Role

Chow Yoke Hui

Dealer Blackjack

Khor Boon Ang

Dealer Baccarat

Ria Krisiska Binte Herman

Dealer Roulette

Long Jiawei

Judge/Team Manager

audiences entertained. The gaming tables are our stage. A dealer requires hand skills, good chip work and must offer good customer service to continuously engage and entertain our patrons when they play.

What makes you good at the job?

I continue to improve myself, my skills, my calculation, and my communication every day.

MBS

I observe and learn from the other dealers who are good in hand skills. To help me calculate faster and more accurately, I will count the chips on my table during lull periods. As a dealer, I meet different players every day and the need of each player differs. I always try my best to communicate with the patrons in my own way and provide excellent customer service at all times.

What’s your personal style?

I have a sporty and outgoing personality and this is reflected in the way I prefer to deal Ria K. B. Herman

– fast and smooth to keep the momentum going. To keep things more lively at my tables,

Asia Gaming Briefings | August 2015

AADC 48

Team

COD

Name

Role

Era Mia Santos

Dealer Baccarat

Kerwin Chua Reaport

Dealer Blackjack

Juan Rufino Bernado Cequena

Dealer Roulette

Romulous Pereras De Leon

Team Manager

Mary Huon De Navrancourt

Judge

Mr. Congeniality

Kerwin C. Reaport

Name: Kerwin Chua Reaport Age: 26 Nationality: Filipino Property: City of Dreams-Manila Position: Table Games-Dealer Length of time in job: 1 year and 2 months Career history so far: Sales Finance Officer

Why did you decide to become a dealer?

Becoming a casino dealer has always been my dream job. I have always been fascinated by the glamorous lifestyle of casino dealers and how they interact with various guests from different cultures as depicted in movies, books and in real life.

What do you think is the role of a dealer?

The role of the dealer primarily is to offer an exciting gaming experience to guests as they spend their money during holidays, vacation, or just by simply having a great time while generating

cut above the rest.

What’s your personal style?

My own style of dealing is rooted from my personal commitment to deliver what the company expects from me and even more. This is translated by giving my guests on the table a remarkable gaming experience that is truly Filipino – sincere and hospitable.

What do you like best about where you work?

City of Dreams-Manila has provided me all the knowledge that I need to be able to compete with dealers internationally. The company has given me all kinds of support that makes me truly competitive, reliable, and noticeable.

What was the best part about participating in the AADC? The best part about participating in the AADC is the fact that I was given the chance to compete with some of the best Black Jack Dealers in the gaming industry and honed my skills as a dealer

revenue for the casino at the same time.

even more. Also, meeting a lot of renowned people

What makes you good at the job?

Overall, AADC reinforced my firm belief that

in the industry has expanded my references.

The skills that I have learned throughout my

it is in the gaming industry where I truly and

stint as a casino dealer in City of Dreams-

rightfully belong.

Manila coupled with my excellent style of

Asia Gaming Briefings | August 2015

providing great customer service make me a

AADC 49

Best All Asia Baccarat Dealer Name: Louie Albert Ramirez Age: 29 Nationality: Filipino Property: Resorts World Manila Position: Inspector Length of time in job: 6 years Career history so far: None

Louie Albert Ramirez

Why did you decide to become a dealer?

Actually it was my Girlfriend who applied for dealer and I was encouraged by her because I

Team

RWM

Name

Role

John Eldrick Sunga

Dealer Roulette

Louie Albert Ramirez

Dealer Baccarat

Table awareness and good customer service.

Vincent Raposas

Dealer Blackjack

Work with no pressure.

DJ Aldrin Sosa Ruiz

Spare Dealer

Marietta Rivera

Judge/Team Manager

Elina Bondoc David

VIP Guest Judge

Hakan Dagtas

VIP

Ethel Asido Bernade

VIP

don’t have a job during that time. With God’s grace I was hired and now I’m a supervisor.

What do you think is the role of a dealer?

What makes you good at the job?

What’s your personal style?

Relax, have fun and enjoy.

What do you like best about where you work?

The Management and the Company because they know how to take care of their people.

What was the best part about participating in the AADC? The best part is that we went to Macau and the experienced that we gained during the competition.

Asia Gaming Briefings | August 2015

AADC 50

Runner up All Asia Baccarat Dealer Name: Pamela Jules Lai Age: 26 Nationality: Filipino Property: Solaire Resort and Casino Position: Supervisor Length of time in job: 2 years and 7 months Career history so far: Croupier in Resorts World, Manila Team

SOL

Name

Role

Pamela Jules Katigbak Arias

Dealer Baccarat

Anna Margarita Santos Sioson

Dealer Blackjack

Kathryn Cunanan Lagrata

Dealer Roulette

Wallace Canlas

Judge/Team Manager

Rosario C. Chavez

VIP Guest

Why did you decide to become a dealer?

I march to my own drumbeat - my style is untiring, challenging myself and out bettering my performance. I think that’s what sets me apart from everyone.

What do you like best about where you work?

The vision it gives me. Solaire saw my potential, it gave me a strong motivation and foundation to start with. My superiors, such a good support group.

unintentional. I landed a job in the entertainment

What was the best part about participating in the AADC?

industry but it reached to a point wherein I had

Meeting individuals who are as driven, competitive

to decide if I should embrace what I have and

and seeing what they’re capable of is just so

where I was. I am happy.

rewarding. Experiencing Macao itself is a win!

Everything was given in a form of a ‘gift,’

What do you think is the role of a dealer?

A facilitator and an entertainer. I have to make sure I do everything accurately while maintaining a fun atmosphere.

What makes you good at the job?

Consistency. I like to think I’m a project that’s improving every single day, learning nonstop.

Asia Gaming Briefings | August 2015

What’s your personal style?

Pamela Jules Lai

AADC 51

Team

RWS

Team

NAGA

Name

Role

Seang Thona

Dealer Baccarat

Ket Sopronita

Dealer Roulette

Seng Sineht

Dealer Blackjack

Chang Chai Khoon

Judge/Team Manager

Chris Tessitore

VIP Guest

Name

Role

Ong Kian Meng, Marvin

Dealer Baccarat

Mak Suet Si

Dealer Blackjack

Chua Kok Boon

Dealer Roulette

Than Khong Lim

Team Manager

Godfrey Chong Tze Vui

Judge

Asia Gaming Briefings | August 2015

SUPPLIER SPECIAL REPORT 52

Australasian Gaming Expo

Amazing Australia The Australasian Gaming Expo taking place from 11 to 13 August at Sydney Exhibition Centre @ Glebe Island is one of the four major global gaming industry trade shows annually. At 15,600 square metres it’s also one of the largest trade events in Australia and easily the largest gaming event. A finalist in last year’s EEAA Awards for Excellence, the event attracts exhibitors and visitors from around Australia and internationally. from around the region to experience the latest,

will be transported from Darling Harbour to the

cutting-edge gaming design and technologies.

event on a complimentary Sydney Harbour ferry

And with 17 new casinos scheduled to open in

cruise, or they can ride on shuttle buses from

the Asia-Pacific region by 2020 – including two

Central Station, Pyrmont or Sydney airport, all

in Australia – now is the time for suppliers to

free of charge. Limited car parking is available

engage their customers.

at the venue and taxi services are available to

New gaming technologies are not the only attraction,

and from the event.

wned and operated by the Gaming

with more than 165 exhibitors (including 31 for

There they’ll see over 750 poker machines and

Technologies Association, the Gaming

the first time) proudly showcasing Audio Visual

hundreds of truckloads of signage and equipment

Expo is the ultimate showplace for

equipment, ATM Equipment, Building Services,

which is moved in to Glebe Island, installed,

new gaming technologies for casinos,

Cash Handling & Equipment, Consultancy Services,

connected, tested, used and compared by the

clubs and hotels. The biggest attraction is the

Entertainment, Financial Services, Food and

most demanding critics and then moved out

new machines and games from poker machine

Beverage, Furniture, I.T., Interior Design & Fitout,

again – all in only a few days.

suppliers, who look forward to August each year

Marketing Services, Membership Management,

Last year well over 2,300 visitors attended the first

to unveil their best products.

Paging & Communication, Point of Sale Systems,

day, with 2,500 on the second day and 1,000 on

The Association’s primary members Ainsworth,

Retail, Security, Signage & Displays and Staff

the third day. They came from every Australian

Aristocrat, Aruze, Bally, Ebet, IGT, Konami are

Uniforms. So there’s definitely something for

State and Territory, along with a big contingent

world-best at their trade and the Gaming Expo

everyone in the hospitality world.

from New Zealand and international guests

presents a great opportunity for their customers

Visitors to this year’s Australasian Gaming Expo

from America, Europe and around the Asia-

O

Pacific region. 97 percent of visitors surveyed last year saw the Expo as an opportunity to see new products and technology, while 99 percent said the exhibition stand quality was good or excellent and the event itself was satisfactory or excellent. One quote was “the best trade show I have been to!”.

The event website includes the interactive floor plan which is updated in real time, along with a list of exhibitors which can be sorted by company name, stand number or category – and provides contact details for each exhibitor and their website address for further information.

Exhibition entry is complimentary to gaming industry executives, courtesy of the Gaming Technologies Association. The exhibition is open from 10am on Tuesday 11, Wednesday 12 and Thursday 13 August and closes at 5pm on the Tuesday and Wednesday (closes at 3pm on the Thursday). Trade suppliers are not eligible to attend the event unless exhibiting and nobody under 18 years of age (including infants) may enter the Exhibition. l

Asia Gaming Briefings | August 2015

“Gaming is our business. But we leave nothing to chance with our currency handling needs.”

Creating Confidence. In people focused operations, you need the time and flexibility to provide those people – your customers – with the services they want. Our compact, efficient and highly secure solutions for your count room offer a range of advanced processing features, including banknote authentication, denomination sorting, and ticket processing, plus a portfolio of service packages tailored to your needs. Saving you time to concentrate on your customers. www.gi-de.com

SUPPLIER SPECIAL REPORT 54 BMM TESTLABS

Celebrating a successful year

CRANE PAYMENT INNOVATIONS

Automated payment systems

IGT

New systems innovations in the spotlight

B

A

another successful year in Australia, in the

global strength and customer-first focus

run up to AGE.

of the newly formed company. IGT will

With unprecedented technology innovation

present cabinets, content and systems

in 2015, along with regulatory changes in

innovations developed specifically for the

various gaming markets, BMM continues

casino, club and hotel markets in Australia

to play a significant role in the Australian

and New Zealand.

gaming industry, providing independent

The marquee product on IGT’s stand -

MM Testlabs, the world’s leading gaming testing laboratory and technical

consultancy is pleased to be celebrating

product testing services to all the major gaming manufacturers; state and venue monitoring and system operators; wagering operators

t the 2015 Australasian Gaming Expo, gaming leader IGT will showcase a

suite of innovations that speaks to the

C

number 130 - will be the CrystalDual-i

rane Payment Innovations (CPI), a

cabinet. Making its global debut at AGE,

Crane Co. company, will be exhibiting

the CrystalDual-i is a sister product to the

on booth #522 at AGE 2015 with the most

widely praised CrystalDual cabinet. Sharing

Kirk White, executive vice president and

comprehensive portfolio of automated

many of the CrystalDual cabinet’s dynamic

general manager of BMM International, said:

payment systems in the Gaming industry.

design elements, including a mobile device

“The Australian gaming market is growing

Among the products on display will be

charging port, sleek black chrome paneling,

more sophisticated every year as it delivers

the combination of the SC Advance note

advanced ergonomics and state-of-the-art

greater innovation in gaming product design

acceptor and EASITRAX Web, as well as the

light and sound capabilities, the CrystalDual-i

and changes to address social and community

Cyclone Hopper and the Condor Premier

offers players an exciting new interface

commitments. With the increasing complexity

coin acceptor.

designed with multi-game functionality.

of products being released into the market,

SC Advance is part of the reliable SC product

The CrystalDual-i will launch with nine titles

BMM’s customers are seeing increased value,

line that has achieved a global installed base

including one link and four player-selectable

as the quality of our testing lowers their

of more than 1.5 million units. Its value

multi-denomination games.

overall product revocation risk.”

proposition revolves around the key performance

IGT will also present new games for the

“BMM is providing an additional quality

attributes responsible for operator profitability

existing bluechip Neo-N+ cabinet by

level across our offices globally by ensuring

and customer satisfaction – acceptance, jam

releasing new multi-game packages that

our highly skilled and experienced testing

rate, security and cost of ownership. Even

maximize gaming investment and floor

engineers qualify to ISTQB standards. This

as currencies evolve, operators can remain

space. Show attendees can see the new

falls in line with BMM Australia’s ISTQB

confident in SC Advance for reliable note

Multistar Champion

Gold Level partnership,” he added. l

acceptance. It has the expansive memory to

Series - Gold game,

accommodate new banknote introductions,

in addition to the new

including those that will soon be released

10-game package,

and online platform and game developers.

Asia Gaming Briefings | August 2015

in Australia and New Zealand. CPI plans to

Mightystar 2

provide updated software well before the new

featuring IGT legends

notes actually enter circulation.

Siberian Storm and

When used together, SC Advance and

Cooee Country. IGT

EASITRAX Web represent one of CPI’s most

will also spotlight

comprehensive cash management solutions.

Eastern Treasures 2

EASITRAX Web is a recent software extension

and Mighty Dragon

of the EASITRAX Soft Count system, which has

2, each including the

now been installed in more than 150,000 games

new “Firecracker

worldwide. It links the slot floor to the back

Bonus” feature that

room, collecting performance data from SC

can trigger jackpots

acceptor heads that can be used to streamline

and free games.

the drop process, facilitate asset evaluations and

In total, IGT will

conduct preventative maintenance programs.

highlight more than

The Cyclone Hopper and Condor Premier

40 games across the

coin acceptor will be among the coin

new and existing

products shown on the CPI booth this year. l

platforms. l

SUPPLIER SPECIAL REPORT 55 INTERBLOCK

Luxury arrives in Australasia on Interblock’s Stand at AGE 2015

JCM

JCM Global products make Australian premiere at AGE 2015

A

ll over the world, JCM Global’s award-winning and industry leading products help gaming operators make better

connections with their customers. Now JCM, which is celebrating 60 years in business, is deepening those connections when the company’s GEN2 Universal thermal printer, Ticket2Go system and PromoNet system make their Australian premiere at AGE 2015.

JCM will be on stand 722 at the Sydney Exhibition Centre, where the company will show these products, along with its industry-leading portfolio of award-winning peripheral products.

JCM Australasian sales and business manager Matt Collaros said, “This is an exciting time at JCM. For 60 years, we have created innovative solutions that have changed the way entire industries do business.

Now at AGE 2015, we are thrilled to introduce the latest in our history of innovations that will help gaming operators across Australasia make even better customer connections.”

The GEN2 Universal printer is equipped with ITH (Intelligent Ticket Handling) technology that makes the cashout ticket available only after the ticket is fully printed internally and automatically burst.

Ticket2Go is a retrofit ticketing solution designed specifically for gaming and AWP devices that do not support standard ticketing protocols.

Multi-lingual and multi-currency, Ticket2Go can be installed across multiple sites, enabling operators to replace coin payout technology with a simple ticket-based solution.

PromoNet is an intelligent couponing solution that identifies valuable carded and non-carded players, links promotions to game-play, and

L

uxury arrives in Australasia in grand style when Interblock brings its line of electronic table games to AGE 2015. Interblock

is celebrating 25 years of market leading innovations and will be on stand #506 at the trade show, displaying the newest in its Diamond Line of products, including the MiniStar.

Interblock senior vice president of Asia Pacific Cameron Louis said, “We are excited for AGE 2015, where we will be showing independently

delivers promotions exactly where and when they are needed.

JCM Global, stand 722 Three JCM products will make their Australian premiere at AGE: the GEN2 Universal thermal printer, the Ticket2Go TITO system and PromoNet promotional couponing system. JCM will also discuss its successes in and plans for the Australasian market. Interview is with Australasian sales and business manager, Matt Collaros. l

on our own stand. We have been carefully building an Asia Pacific team, and we are in an excellent position to provide direct sales and service with a passion that equals our products’ luxury.”

Interblock will exhibit its latest luxury gaming innovations including MiniStar Roulette with 5 play stations, Diamond Roulette Generator with 5 play stations, 4 Diamond play stations with Multigame connection to MiniStar Roulette Wheel and Diamond Roulette Wheel.

Interblock, stand 506 Interblock has been growing strongly in the region and will be showing its latest innovations from its Diamond line, as well as discussing its recent successes and aggressive growth strategy for Asia Pacific. Interviews are with CEO, John Connelly, and Sr. VP of Asia Pacific, Cameron Louis. l

Asia Gaming Briefings | August 2015

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LAST WORD

China stock crash, weak PMI signal further VIP gloom

58

With gross gambling revenue in Macau recording its 14th consecutive month of declines in July, analysts are combing through the figures looking for potential cause for optimism.

Sharon Singleton*

M

ost agree that July GGR has stabilized,

correlation coefficient of 0.82—as spending on gaming

while recent policy reversals by the

by high-rollers is affected by the wealth effect due to

government, such as its decision to ease

changes in business and sentiment.

transit visa requirements, lit a fire under

While China’s PMI stabilized in July, the figures were

gambling sector stocks.

not robust.

After a fall of about 50 percent over the past year, they

The official manufacturing Purchasing Managers’ Index

gained 10 percent the day after the visa changes were

likely stood at 50.2 in July, on par with the previous

announced in early July.

month’s reading, according to the median forecast of

However, it may be too early to crack the champagne

20 economists in a Reuters’ poll. But growth was tepid,

just yet. Certain historical correlations between Macau

with the reading just above the 50 point mark that

and the performance of the Chinese stock market and its

separates contraction from expansion on a monthly basis.

economy make the rally appear to be on very shaky ground.

The flash Caixin/Markit PMI released earlier showed

Deutsche Bank analysts, who have been among the

China’s factory activity contracted by the most in 15

most aggressive in writing down their expectations for

months in July.

Macau’s prospects, were quick to point out in a recent

While the official survey looks more at larger, state-

note that the crash in the Shanghai Stock Market is

owned firms, the Caixin/Markit survey focuses on

likely to put a further dent in the VIP market.

smaller firms and therefore may be a better indicator

The stocks had their worst one day fall since 2007 on

for gauging how the businesses run by VIP gamblers

July 27th, shortly before this article went to press,

are faring.

despite government efforts to stabilize the market.

“While we think the liquidity squeeze in the junket

Analyst Karen Tang wrote that there is a 70 percent

system is still small at this stage, we think the negative

correlation between the Shanghai A-share market with

wealth effect will dampen VIP and premium mass demand

Macau’s VIP gaming revenue and, as such, damage to

for longer,” Deutsche Bank analyst Karen Tang wrote.

the sector is to be expected.

Bernstein Research was of the opinion that July GGR

“The Shanghai A share index has fallen 23 percent

figures would show signs of stabilization and improvement

from its peak in mid-June having climbed 60 per cent

month-on-month.

from early January. Many junket agents are Mainland

“Although 2015 will be a challenging year in Macau, we

Chinese. According to our channel checks, many have

view the Macau gaming industry as a secular growth

lost much money in the Chinese stock market in the

story driven by the paradigm shift from VIP to Mass. We

past three weeks”, she said. “In the extreme cases,

expect to see a bottoming by the latter part of the year

some have even withdrawn their deposits with junket

with rejuvenated growth beginning in 2016,” it said.

operators to cover margin calls for their A-share

However, in its disclaimers it also notes that its

investments in China.”

assumptions are based on the belief that China’s gross

However, the liquidity squeeze is not the most immediate

domestic product will continue to grow in mid-to-single

problem, which rather comes from lack of demand

digits, with a critical risk factor being a significant

due to China’s ongoing anti-corruption drive and the

deterioration in China’s economic backdrop.

slowdown in the economy.

That deterioration, it points out, could come from stock

Another historic correlation has been between the

market losses and a decrease in disposable income,

performance of China’s Purchasing Managers’ Index

among other factors.

and VIP revenue.

Neither the Chinese stock market, or its PMI indicators

According to Credit Suisse, high-roller GGR growth

at present give rise to believe we will be off to the races

is led by the China PMI by three months with a good

any time soon. l

* Managing Editor, AGB

Asia Gaming Briefings | August 2015

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