Agbriefings May 2017

Jurisdiction Updates May 2017 Edition

Where to now?

Macau operators pg.30

Macau

Riding the high-roller wave pg.26

HONG KONG

Joint crackdown tackles illegal sports betting pg.34

JAPAN

Anti casino sentiment simmers pg.20

VIETNAM

Top five slot eyed with new decree pg.6

G2E 2017 SUPPLIER SPECIALS pg.46

MESSAGE 3

Back to Macau

A

s the gaming event circuit makes its way back to

concerns about the market’s ability to support some of

Macau for G2E Asia it will find a mixed picture.

the multi-billion dollar IR projects on the pipeline.

After a prolonged slump, gambling revenue is

Also in these pages is a preview of G2E Asia, now in

once again on the up and on the whole, sentiment

its 11th edition with an expected attendance of 12,000

is positive, though concerns remain. We dedicate the Focus

visitors. Highlights include the Integrated Resort

section of this edition of AGBriefings to Macau, where we

Experience (IRE), developed in response to the call for

explore how the market is finding its footing. On the one

diversification. This year’s conference is divided into

hand Macau has arguably shifted to a new premium mass

streams, including: Asian Markets Forum, Gaming

model, however, it’s the VIP sector that keeps moving the

Operations and Technology, Integrated Resorts and

needle. While concessionaires fight for local growth, they

Marketing, and the iGaming Summit, developed by AGB.

are keeping their options open and seeking to compete in

In this Special Supplier Preview we also take look at what

the regional arena, in Japan in particular.

participants can expect on the 12,000 square meters of

Across the sea, opportunity looms, but the levels of

exhibition floor.

enthusiasm vary – with the proponents of IRs acknowledging

The Asia Gaming Awards dinner, now in its second edition,

that the Japanese public has yet to be won over.

is to be held on the first evening of G2E Asia, Tuesday 16

Heading in the other direction, Thailand would be a major

May 2017. We expect more than 300 stakeholders from

draw for foreign investors were it to legalize its casino

the Asian gaming industry to be in attendance, including

industry and would likely provide significant competition

operators, regulators, suppliers, and service providers.

for other regional jurisdictions, rivaling even Singapore,

With over 1,000 nominations submitted, we are humbled

experts argue.

by the industry’s participation and honored to provide

Over the border, Vietnam’s new gaming regulation is

a regional platform to celebrate and acknowledge the

seen as a game changer for the industry that will propel

industry’s achievements.

the country into the top five gambling jurisdictions in

If you’d like to book a meeting at G2E Asia write to us

Asia within the next five years.

at G2E@agbrief.com or drop by the Asia Gaming Brief

Onto Southeast Asia, local operators say that The

booth 565.

Rosalind Wade

Luis Pereira

Philippines needs to improve its international image to boost tourism numbers and inbound investment to

Connect with us:

achieve the market’s full potential.

Hopping to Australasia we look at how new laws

@agbrief

currently in New Zealand are widening the scope of

Asia Gaming Brief

Asia Gaming Brief

current legislation on money laundering to pull in the sports betting and racing industry. We also report on

On behalf of Asia Gaming Brief

how a small change to Australian gambling law in 2015 is

Rosalind Wade & Luis Pereira

now having an impact on the wider industry as it raises

Publishers

www.agbrief.com

MAY 2017 EDITION Series II • Issue XIX

PUBLISHED BY Blue Sky Venture Ltd. 16/F China Law Building, 409 Av. da Praia Grande Macau SAR | P.O. Box 1139 t. +853 2871 7267 f. +853 2871 7264 e. enquiries@agbrief.com ADVERTISING ENQUIRIES advertising@agbrief.com SUBSCRIPTION ENQUIRIES memberships@agbrief.com EDITORIAL ENQUIRIES editorial@agbrief.com

PUBLISHERS & MDS Rosalind Wade, Luis Pereira MANAGING EDITOR Sharon Singleton ASIA EDITOR Felix Ng DESIGN People Press Publishing PHOTOGRAPHY Agencies PRINTING Hop Sze, Hong Kong

DISCLAMER All rights reserved. No part of this publication may be reproduced or transmitted in any shape or form, or by any means, or stored in any retrieval system of any nature, without prior express permission. The publishers accept no responsibility for loss or damage to any materials submitted for publication. The views expressed within are not necessarily subscribed by the publishers.

For more info, please visit our website www.agbrief.com.

AGBRIEF PARTNER EVENTS

› ICE Totally Gaming › iGaming Asia Congress › Japan Gaming Congress › G2E Asia › Russian Gaming Week › iGaming Super Show › World Gaming Executive Summit › Australasian Gaming Expo › Gaming, Racing & Wagering Australia › G2E Las Vegas › European iGaming Congress › IAGR Annual Conference › MGS Entertainment Show › Malta iGaming Seminar › SiGMA

Asia Gaming Briefings | May 2017

CONTENTS 4

INDOCHINA

NORTH ASIA

SOUTH EAST ASIA

VIETNAM

06

THAILAND

10

sOUTH KOREA

CAMBODIA

08

PHILIPPINES

12

JAPAN

20

MALAYSIA

16

RUSSIA

24

AUSTRALASIA

Greater CHina

18

SOUTH ASIA

MACAU

26

AUSTRALIA

36

INDIA

42

hONG KONG

34

CNMI

38

NEPAL

44

NEW ZEALAND

40

30

special focus

46

SUPPLIER SPECIAL REPORT

76

LAST WORD

THE MARKETPLACE FOR THE ASIAN GAMING INDUSTRY Market Trends. Quality Products. Networking.

G2E Asia: Informs smart business decisions.

MAY 16 - 18, 2017 THE VENETIAN MACAO A G2EA G2E EVENT EVENT

www.G2EAsia.com

Asia Gaming Briefings | May 2017

PRESENTED BY

PRESENTED BY

ORGANIZED BY

ORGANIZED BY

SPONSORED BY

SPONSORED BY

GAMINATOR Scorpion

®

Sharpen the Game.

The GAMINATOR® Scorpion brings the latest and greatest NOVOMATIC content to life in striking high definition.

Three ultra-sharp screens and the elegant game-dependent LED glow boast excellent design and breathtaking graphics to create a truly electrifying experience on the gaming floor.

One of 15 games in the Macao Mix: NOVO LINE™ Interactive Edition 1

Meet us at Stand # 1305

NOVOMATIC Gaming Industries GmbH Lawrence Levy, sales@novomatic.com

Phone: +43 2252 606 870 756 www.novomatic.com

INDOCHINA

6

VIETNAM

Betting on new framework Vietnam’s new gaming regulation is seen as a game changer for the industry that will propel the country into the top five gambling jurisdictions in Asia within the next five years, according to regional experts.

INDOCHINA

T

7

he government in January introduced three long-awaited decrees, covering the casino industry, sports betting and wagering and an amended bill on electronic gaming lounges.

The casino bill sets a regulatory framework that is expected to help encourage foreign investment and which paves the way for local Vietnamese to gamble for the first time from March 15th.

“The casino business will be transformed overnight by these decrees,” Joey Lim, managing director and CEO of Australia-listed Donaco International said at the recent ASEAN Gaming Summit in Manila. “You now see the viability to have large-scale IRs come to the fore.”

“I believe it will be in the top five gaming jurisdictions in Asia, even after Japan comes on line, especially if you include sports betting and lotteries.”

The government is hoping to boost its tourism industry, but is also seeking to bring back the estimated $800 million that Vietnamese are said to gamble overseas each year. Locals will be allowed to gamble on a three-year pilot basis, most likely in two designated resorts -Van Don in the North and Phu Quoc island in the south. However, the Grand Ho Tram, which is the only currently operational IR, is seeking to be included.

The minimum investment required for a gaming license was reduced to $2 billion, down from $4 billion specified in earlier versions of the bill.

“

You now see the viability to have large-scale IRs come to the fore.

”

The government also amended its law on electronic gaming lounges, which are only permitted in five-star hotels and are available only to foreigners. There are currently around 45 of them operating in the country. For every five rooms in the hotel, the property is allowed to operate one electronic table. The amended law also stipulates a 90 percent minimum payout ratio, whereas before there were no specified limits.

Augustine Vinh, president of Stellar Management, who has worked closely with the Vietnamese government on the gaming decrees, said he believes within the next four years

Vietnam will have four fully operational IRs. A further two applications are currently under active consideration by the government and two other applications have also been submitted. If all are approved, the country would have eight IRs. “There’s a lot of attention on Vietnam. We hear of groups that are planning to hit the $1 billion minimum investment threshold,” said Tim Shepherd, co-founder and president of Silver Heritage Group. “We might all be surprised by the number of parties along that coast who may want to get involved in Vietnam.”

Vietnam, with a population of around 92 million, had one of the fastest growing economies in Southeast Asia in 2016. Although its Q1 gross domestic product growth of 5.1 percent missed expectations after Samsung Electronics, which makes its smartphones in the country, slashed production. Tourism arrivals last year topped 10 million, gaining 26 percent from the prior year.

But it’s the prospect of having access to a large population, with fast-increasing spending power, that will be the main draw for foreign investors.

“One of the major challenges going forward will be competition,” said Lim, whose company runs the Aristo International property in Lao Cai near the Chinese border. “It will come hard and fast. Sheldon Adelson has been circling Ho Chi Minh City for the past five to eight years.”

Although the government has published the broad outlines of its laws governing the gaming industry, there is still uncertainty as to the details and implementation.

“The next step will be the enactment of a number of rules and regulations that will specify the implementation of the very generic provisions of the decree,” said Luis Mesquita de Melo, chief legal officer at Asian Coast Development, which owns the Grand Ho Tram. “We need to address a number of issues from junkets, to gaming credit to AML, but we are at a very good stage.”

The uncertainty is particularly high in the sports betting field. The government envisages different licenses for horse racing, greyhound racing and soccer. For a horse racing license, the minimum investment will be $450 million, while for greyhounds $137 million. For soccer, which is seen as the main prize, the rules seem to suggest there will only be one license provided.

“There are still many things up in the air,” said Albert Climent, CEO of Bluesea Gaming.

“Taxation levels have not been mentioned. There are a lot of stakeholders seeking clarification.”

At present, the regulations do envisage phone betting, but are mainly geared towards cash bets in high-street shops. There is no provision for online betting.

Vinh said that creates issues for potential

GROSS GAMING REVENUE Aristo International revenue 1H17 1H16

A$13.7m A$13.4m

EBITDA 1H17 1H16

A$8.4m A$7.8m

FLC gets greenlight for $2b project FLC Group Joint-stock Co., co-founded by billionaire Trinh Van Quyet, said it has received permission to invest $2 billion in a casino resort from the northern provincial government of Quang Ninh in Vietnam.

The project will include a five-star hotel, convention center and golf course in the Van Don Special Economic Zone on the islands of Ngoc Vung and Van Canh, Bloomberg reports. The company hopes its complex on a total of 4,000 hectares will tap tourists and possibly domestic gamblers.

Success Dragon breaks with Le Meridien Success Dragon International Holdings Ltd has announced it has decided to terminate a business cooperation contract with the Le Meridien Hotel in Vietnam. In January, the company terminated its agreement with One Opera Hotel, and said it would revise its cooperation with Le Meridien Hotel after experiencing ‘unexpected difficulties in obtaining requisite business certificates’.

The business cooperation contract with Le Meridien was terminated by mutual consent on March 27, 2017.

investors, who are not keen on risking investment in bricks and mortar only to have the government move to allow online gambling a few years down the road.

This is particularly pertinent, given that sports betting at present is restricted to FIFA games, which are held during the night in Vietnam.

“No Vietnamese will go to a shop at midnight,” he said.

Asia Gaming Briefings | May 2017

INDOCHINA 8

CAMBODIA

New rules to trigger consolidation Cambodia’s long-awaited gambling legislation is likely to be published mid-year and could herald the start of a dramatic shake out of the country’s 65 casinos.

A

draft copy of the bill was circulated for industry feedback in December.

It is expected to set out a new system of taxation, as well as formalizing a system for licensing; regulation of junkets; accounting and reporting procedures; greater disclosures and anti money laundering rules.

According to operators on a panel at the recent ASEAN Gaming Summit, the regulation is viewed as a highly positive development for the industry in Cambodia, which is very fragmented, consisting mostly of small clusters of casinos grouped along the borders with neighboring Vietnam and Thailand.

Although details of the new bill have yet to be finalized, there is expected to be a minimum investment requirement of between $50 million to $100 million over ten years.

According to Rhys Jones, managing director of Ha Tien Vegas Resort, this requirement is likely to slash the number of casinos in the country by about two thirds to just 20 or so properties.

“There are a lot of small casinos which are not working for the better of Cambodia, or for customers,” he said. “If we can centralize, it will be a lot better.”

Loren Stout, CEO of Pixil Asia, agreed that some consolidation would be a good thing for the industry, which has become overly competitive in some of the border areas.

However, he said that based on feedback from his talks with many of the smaller operators in the country he expects some push back.

“The regulations are being perceived as a framework for larger casinos, but there are concerns as to how the locals will benefit too,” he said. “I think you will see some revisions of the bill made to cater to the local market.”

One of the key issues in the new legislation will be its taxation of the gambling industry.

Operators until now have enjoyed competitive rates, though the system has been onerous

Asia Gaming Briefings | May 2017

“

The regulations are being perceived as a framework for larger casinos, but there are concerns as to how the locals will benefit too.

”

and difficult to explain to foreign investors and shareholders.

Donaco International CEO Joey Lim, which operates the Star Vegas property in Poipet, said the company is required to pay normal corporate taxes and then a fee based on the number of tables and the number of slot machines. It also has to negotiate a separate gaming tax fee based on historic earnings, rather than actual earnings in the past year.

In 2016, government tax revenue from the casino industry jumped 38 percent to $48 million, mostly due to the addition of back taxes on non-gaming revenue from dominant player Nagacorp, whose NagaWorld resort has a monopoly on a 200 km radius around the capital Phnom Penh until 2035.

Ben Lee, managing director of IGamiX Management & Consulting, said there has been discussion of the introduction of a two-tier system for taxation similar to that used in Singapore, with a rate set at between 3 percent and 5 percent for the first tier, which will be VIP and at about 7 percent to 8 percent

for the second mass market tier. However, operators stressed nothing has been officially communicated from the government.

“From our conversations with government, Cambodia is keenly aware of competition across the region,” said Timothy McNally, chairman of NagaCorp, which has enjoyed a flat tax rate. “Cambodia is certainly mindful to remain competitive and they will be on the lower end.”

Although the tax rate for casino operators in Cambodia has been low so far, the operators have played a part in helping to develop and rebuild infrastructure in the country in the wake of the devastation wrought by the Khmer

INDOCHINA 9

Rouge and subsequent political turmoil.

“In Poipet we have built schools, water supply, electricity, housing and all of that, more than the tax is important on a local and provincial level,” Lim said. “Now on a national level we are ready and mature enough to contribute on a national level,” he said, referring to the planned new taxation system.

The Cambodian economy enjoyed robust 7 percent gross domestic product growth in 2016, with a slight increase to 7.1 percent forecast by the Asian Development Bank for

GROSS GAMING REVENUE US$8.7b +11%

Nagacorp 2016 rollings

$617.8m $1.5b

+12%

+9%

Mass market

Gaming machines

Star Vegas 2016 Revenue

A$120m

EBITDA

$87.1m

2017. Tourism arrivals rose 5 percent to just over five million.

Visitors from China increased by 19.5 percent over the same period to 0.8 million visitors. The government is now offering three-year, multiple-entry visas to Chinese, South Korean and Japanese investors.

Although the gambling legislation bill is expected to be passed later this year, operators do not expect full enforcement immediately, given the limited experience and resources of the government.

Founder seeks full control of NagaCorp

NagaCorp 17Q1 VIP business tops forecasts

Founder, controlling shareholder and CEO of Nagacorp, Tan Sri Dr. Chen Lip Keong, is looking to gain full control of the casino operator by exercising conversion rights in respect of the TSCLK Complex Convertible Bonds. The move will boost his stake from about 39.98 percent to approximately 61.13 percent. The transaction needs approval from shareholders and from the Securities and Futures Commission.

NagaCorp recorded a 34 percent increase in VIP rollings for the first three months of 2017, beating analysts’ expectations. VIP Business (rollings) was US$3.7 billion, compared to US$2.8 billion in 2016. Mass table buy-ins increased 13 percent to US$169.4 million, while EGM bills-in increased 10 percent to US$417.3 million. Union Gaming raised its full-year VIP business forecast following the results. “Seeing VIP volumes growing nicely at the capacity-constrained NagaWorld casino gives us a higher degree of confidence in Naga2, which should open later this year,” it said in a note.

Asia Gaming Briefings | May 2017

10

SOUTH EAST ASIA

10

THAILAND

Foreign interest seen strong if casinos legalized Thailand would be a major draw for foreign investors were it to legalize its casino industry and would likely provide significant competition for other regional jurisdictions, according to panelists at the recent ASEAN Gaming Summit.

A

lthough it’s almost impossible to put a size on the potential market, given the lack of parameters such as whether

locals would be permitted to gamble, Thailand could feasibly become of similar a size to Singapore, which currently generates just under $6 billion in gross gaming revenue

from two integrated resorts.

The Southeast Asian Kingdom has a population of about 68 million and a well established tourism industry, pulling in 32.6 million visitors last year,

SOUTH EAST ASIA 11

GROSS GAMING REVENUE

“

I do think there would be considerable appetite to enter Thailand. It would be perceived to be a much greater risk to Singapore than just about anywhere in the region because of the infrastructure it already has for tourists right now.

”

a gain of 9 percent. Total international tourism revenue was around THB 1.64 trillion ($46 billion), representing a year-on-year increase of 11.68 percent over 2015.

At present gambling in the country is only permitted through the Bangkok Turf Club and the state lottery, but the illegal market is thought to be huge. Thais are also frequent visitors to the many border casinos in neighboring Cambodia.

A 2011 study from the Chulalongkorn University’s Social Research Institute study estimated that THB 102 billion annually was spent on the underground lottery, THB 76.7 billion on the government lottery, with THB 46.3 billion spent on illegal casino betting and THB 38 billion on football gaming.

Some reports have said that up to half of the population may gamble illegally.

Various Thai governments have mulled the legalization of gambling, going so far as to commission studies as the likely tax revenue and how to mitigate gambling addiction. Former Prime Minister Thaksin Shinawatra favored casinos and had planned to hold a national referendum on the subject, though he was unseated in a 2006 coup.

His younger sister was elected to government in 2011, resurrecting hopes she would push forward with her brother’s casino plans, though she too was ousted in 2014 before making any progress. Meanwhile, powerful members of the new military government have also indicated they are not averse to casinos.

Sungsidh Piriyarangsan, dean of Rangsit University’s College of Social Innovation, said in research last year that tax revenues of more than THB 100 billion (US$2.78 billion) could be achieved if casinos were legalized in Thailand.

“I do think there would be considerable appetite to enter Thailand. It would be perceived to be a much greater risk to Singapore than just about anywhere in the region because of the

infrastructure it already has for tourists right now,” said Paul Bromberg, Spectrum Asia CEO “The Thai market would be a very, very attractive one to foreign operators.”

Las Vegas Sands in particular has expressed an interest in large-scale developments in the country.

Bromberg said he did believe Thailand would eventually move towards legalizing casinos, though the current political instability means it’s not a priority. The country has been ruled by a military government since a 2014 coup and its highly revered king, who was seen as a stabilizing force, passed away last year.

The majority of the Thai population is not opposed to gambling, though the issue is likely to be highly politicized, given powerful vested interests in certain parts of society. Some of these control large underground operations in the capital Bangkok, as well as many of the casinos that dot the border areas.

The seaside resort town of Pattaya was seen as an obvious location, given its proximity to Bangkok’s international airport, though the island of Phuket is also likely to be a strong contender as a location, said Tim Shepherd, Silver Heritage president, business development and marketing.

He said at the end of the day, an IR in either location is unlikely to have a major impact on the border casinos, as betting patterns show locals will still frequent the properties nearest to them.

Bromberg said, were the government to muster the political will to push through gambling legislation, the process could potentially be quite fast. In a prior review it was decided that existing legislation that covers the elements of gambling that are legal in the country could be adapted for casinos.

“I’m not sure when it will happen but at some point in the future you will see an IR,” he said.

Underground lottery

THB 102 billion

State lottery Illegal casinos Football betting

THB 76.7 billion

THB 46.3 billion

THB 38 billion

(Source: Chulalongkorn University)

GLO plans stricter checks on retailers The Government Lottery Office has developed a two-year master plan to tackle overpriced lottery tickets, a longrunning problem in the country. The plan, scheduled to be unveiled in May will involve stricter checks on all lottery retailers throughout the country. It will focus in particular on the sale of packets of lottery tickets which is exploited by sellers to mark up prices. The government may consider offering the batches officially to keep a stricter control on prices.

Tension over location of border casino Anti-corruption activist Veera Somkwamkid claims a new border casino is sited in Ta Phraya National Park, which forms part of a World Heritage Site in Thai territory, rather than across the border in Cambodia.

The recently opened casino is reported to be situated close to the Sai Takoo border checkpoint in Buri Ram province. Following the complaints, Thailand’s National Parks Department undertook an examination of the official map of the national park to prove that the casino was not located within its perimeter, but the debate continues to simmer.

Asia Gaming Briefings | May 2017

SOUTH EAST ASIA 12

PHILIPPINES

Keeping up appearances The Philippines needs to improve its international image to boost tourism numbers and inbound investment, allowing it to achieve its full potential, local operators say.

G

ross gaming revenue reached P149.1 billion ($2.9 billion) last year, with that number expected to rise to between P155 billion and P160 billion in 2017. Revenue is being driven by the opening of new resorts and increasing revenue from online gaming licenses.

However, the country is finding it hard to overcome a long-standing impression that there are security issues, which have been exacerbated by global media headlines over President Rodrigo Duterte’s crackdown on drug dealers.

“Whether in Entertainment City, or regional cities, or casinos, the main thing we have to concentrate on is changing the perception of the Philippines because that’s one thing that

Asia Gaming Briefings | May 2017

is stifling the tourism industry,” said David Lawrence, vice president of gaming operations at Widus Hotel and Casino, which is located in the Clark Freeport Zone.

Lawrence was speaking on a panel discussion during the first day of the ASEAN Gaming Summit in Manila, which was dedicated to the opportunities and challenges for the gaming industry in Southeast Asia.

“I think with our foreign customer base, once they are here and they feel safe, they enjoy the environment and they are return customers, but we have to get more tourists coming in.”

That said, tourism numbers in the country have been steadily improving. Arrivals hit 5.96 million in 2016, just shy of a six million

target, but an 11.3 percent gain from the prior year. The government is targeting a doubling of the current numbers by the end of 2022.

Chinese tourism has seen particularly strong growth, jumping 37.65 percent with a target for 3 million Chinese arrivals this year, helped by warming ties between the two countries.

Still, the perception of instability continues to haunt the country. Earlier this month, Riskwise Global Capital told the Philippine Stock Exchange that concern over political risk caused investors in a $1.4 billion project to build a casino in Mactan, Cebu, to pull out.

“To get money from outside there is a challenge because people have a misconception about the Philippines and they are nervous

SOUTH EAST ASIA 13

GROSS GAMING REVENUE Thunderbird

Clark

Pagcor (1c)

Entertainment City

(in million PhP)

2015

395

7,140

2,147

1Q

16,948

16,948 424

1,849

7,550

16,400

2Q 387

3,250

7,894

Q3 GGR P39.74b

9-mo to sept.

P118.26

18,880

2016E

3Q 394

2,848

4Q

7,720

+11.2%

17,928

2020E

P135b P270b (Source: Pagcor)

2016

411

5,108

7,832

18,070

1Q 438

3,102

8,018

22,624

421

3,111

8,016

22,609

2Q 3Q (Source: Pagcor)

about investing,” Lawrence said. “Definitely at the moment the focus is on investors who know the market.”

It’s an issue that clearly irks the head of the country’s regulatory body, the Philippine Amusement and Gaming Corp.

Andrea Domingo gave the keynote address at the conference and used the occasion to launch an attack on the vice-president of the country over a video message sent to the United Nations, which criticizes the government’s methods in tackling crime.

Domingo, whose comments took an industry audience by surprise, later said she was venting her frustration at constantly seeing the Philippines portrayed in a bad light on the international stage.

The noise is overshadowing the achievements of a country otherwise known for its natural beauty and hospitable, well-educated people.

The Philippine economy is estimated to have grown between 6.5 percent and 7 percent in Q1, making it one of the best performing in the region.

Domingo said she had agreed to a five-year moratorium on new licenses in Entertainment City to give the market time to absorb new supply and protect the investments of the resorts which have already invested billions in projects there.

However, she is open to considering regional licenses with a minimum investment of $300 million, providing the host municipality agrees with the proposal.

Pagcor has recently approved a license for a $500 million IR in the Cebu region, which Domingo said could become another casino hub. She also said an application for a $300 million plus project in Mandaue City, Cebu, had been submitted by a group of Hong Kong investors and was under consideration.

Angel Sueiro, chief operating officer of Thunderbird Resorts, which owns two regional casinos, said he sees strong potential for growth, with many areas of the country underserved.

The country has a population of more than 102 million people. They tend to live in many small clusters of about 150,000 to 200,000, which can mean a demographic of about 2 million to three million people within a two-hour drive.

“We recognize there are still strong pockets of population that are underserved, so we believe there is an opportunity in regional markets which are underserved by Pagcor,” Sueiro said. “After the chairman’s remarks it’s clear that the focus of growth should be on those markets rather than those where Pagcor operates.”

Lawrence concurs, pointing to the fact that the population of North Luzon, which is where the Clark base is located, is the same as Metro Manila, but spread over a wider area.

“It’s not just in North Luzon it’s all over the Philippines so the potential is very great.

Certainly with our property we’ve seen revenue growth year on year.”

Tiger Resort Leisure and Entertainment Philippine’s largest integrated resort, the 44-hectare Okada Manila, is continuing to roll out its attractions, opening up its giant water fountain feature and 116 deluxe accommodations at the end of March. Company executives have said they hope the fountain will be a must-see attraction for visitors to Manila. Designed

by Wet Design, the same firm that created the fountain at the Bellagio in Las Vegas, the fountain has 739 water nozzles, including WET’s proprietary underwater robots, 2,611 colored lights, and 23 speakers across a 9.2 acre manmade fountain lake.

The $2.4 billion casino resort held a soft opening on Dec. 21, and officially commenced casino operations on Dec. 30.

The resort will feature two Y-shaped hotel towers with a total of 993 rooms, a casino floor with about 500 table games and 3,000 electronic

Asia Gaming Briefings | May 2017

SOUTH EAST ASIA 14

gaming machines, a 90,000 square-feet nightclub and beach club entertainment complex. It will also have an 8,409 square-meter retail promenade, a world-class spa and 40 restaurants ranging from casual, buffet, and international dining.

The restaurants include culinary masterpieces of Michelin-star chef Hirofumi Imamura at the Japanese Kappou Imamura restaurant.

Bloomberry Resorts Bloomberry Resorts swung to a net profit of P2.3 billion (US$46.1 million) for the year ended December 31, 2016, compared with a loss of P3.4 billion (US$66.9 million) in 2015. The group’s results are being held back by its operations in Jeju, South Korea, which it unsuccessfully attempted to sell last year.

Without South Korea, profit would have been P3.46 billion. Net revenue of P30.4 billion in 2016 was up 21.2 percent from the previous year. Gross gaming revenue grew to a record P38.5 billion in the full year 2016, up 18.7 percent from 2015, while non-gaming revenues increased 26 percent to a record P2.4 billion.

VIP volume growth was 29 percent, while mass table drop grew by 12 percent and EGM coin-in grew by 18 percent.

Solaire is a 16-hectare gaming and integrated resort complex along Asean Avenue in Parañaque City. The Bay Tower of Solaire consists of a casino with an aggregate gaming floor area of approximately 18,500 square meters (including approximately 6,000 square meters of exclusive VIP gaming areas), with approximately 1,400 slot machines, 295 gaming tables and 88 electronic table games. Bay Tower has 488 hotel rooms and 15 specialty restaurants. Contiguous to the existing Solaire Resort and Casino, the

Court rejects attempt to block Army and Navy Club development The Court of Appeals has rejected an attempt to stop the historic Army and Navy Club in Manila from being converted to a hotel and casino. The court said the Volunteers Against Crime and Corruption, which filed the injunction, should have first opposed the project before a regional trial court. The group was seeking the nullification of an accord between the Philippine Amusement and Gaming Corp., the city government of Manila, National Historical Commission of the Philippines, Oceanville Hotel and Spa Corp. and Vanderwood Management Corp. The plans call for the development of the Army and Navy Club into a boutique hotel and casino game facility.

Asia Gaming Briefings | May 2017

Sky tower consists of a 312 all-suite hotel, an additional ten VIP gaming salons with 66 gaming tables and 223 slot machines. It also includes a certified 1,760-seat lyric theatre

City of Dreams The $1.3 billion City of Dreams Manila is owned by Belle Corp and Melco Crown Entertainment’s local unit. At the end of Q4, the resort was operating 272 tables and 1,686 gaming machines. The table games win per unit per day was $4,576. In Q4 revenue surged to $144.7 million from $80.9 million in the fourth quarter of 2015, while adjusted EBITDA gained to $50.2 million from $15.5 million. Rolling chip volume totaled $2.1 billion for the fourth quarter of 2016 versus US$1.3 billion, while the mass market table games drop increased to $149.0 million for the fourth quarter of 2016, compared with $106.3 million.

For 2016, VIP rolling chip volume surged by 110.1 percent to $6.8 billion. Mass market saw a 24.6 percent increase to $550.5 million, compared to $441.4 million in 2015.

City of Dreams Manila has six hotel towers with approximately 950 rooms in aggregate, including VIP and five-star luxury rooms and high-end boutique hotel rooms, a wide selection of restaurants and food & beverage outlets, a 4,612 square meter family entertainment center in collaboration with Dreamworks Animation, a live performance stage, two international nightclubs and a multi-level car park. It includes an approximately 260 room Crown Towers hotel, Hyatt City of Dreams Manila, a 365 room hotel managed by Hyatt International Corporation and Asia’s first Nobu Hotel with 321 rooms.

Resorts World Manila Travellers International Hotel Group, a joint venture between Genting Hong Kong and Alliance Global, is the owner and operator of Resorts World Manila. For 2016, the group posted a decline in gross gaming revenue, with analysts attributing the drop to competition from the new IRs opening in Entertainment City. Net revenue for the year increased by 2 percent to P25.09 billion ($499 million). Gross gaming revenue dropped 2.3 percent to P23.65 billion, due to a decline in VIP volumes. The company’s Non-VIP segment drop volume increased by 8.3 percent, while the drop volume in the VIP segment contracted by 17.4 percent.

The hotel room count for the group’s three hotels (Maxims Hotel, Remington Hotel, and Marriott Hotel Manila) remains at 1,226.

Phase 2 at RWM is nearing completion with the addition of 228 rooms in the Marriott West Wing in Q4. Phase 3, which will consist of three hotels, Hilton Manila, Sheraton Manila Hotel, and Maxims II, will be completed by 2018. It will also include an additional gaming area, new retail spaces and six basement parking decks. PAGCOR has approved new gaming capacity of 420 gaming tables and 4,148 gaming machines at the resort.

Revenue from hotels, food and beverage was up by 6.4 percent in 2016, with hotel occupancy at Maxims at 81 percent, Remington at 88 percent and Marriott 81 percent. However, the company said the occupancy rates were boosted by complimentary rooms and promos. This accounted for 71 percent of the occupancy at Maxims compared with 64 percent the prior year and 53 percent at Remington compared with 39 percent the year before.

PhilWeb buys PAGCOR e-Games cafe PhilWeb Corporation has acquired a Pagcor e-Games site in Quezon City, according to a company filing to the Philippine Stock Exchange.

The e-Games operator bought the eGames site in Novaliches through its subsidiary, BigGame, Inc, from Jerry D. Bolo by giving the latter 340,000 common shares, according to the company.

The price per share was P7.78 ($0.17) at the time of transaction.

SOUTH EAST ASIA 15

Asia Gaming Briefings | May 2017

SOUTH EAST ASIA 16

MALAYSIA

Tourism tax to take toll on growth The Malaysian government plans a new Tourism Tax Bill, which analysts say is likely to weigh on the country’s hotel industry and the operator of the only integrated resort, Genting Malaysia.

T

he tax for non-rated hotels will reportedly be set at RM2.50 ($0.58), while the taxes for two-star, three-star, four-star and five-star hotels were set at RM5, RM10, RM15 and RM20, respectively.

The government could collect about RM654.2 million based on a 60 percent occupancy rate, Tourism Minister Nazri Abdul Aziz was reported as saying by state news agency Bernama. If the occupancy rate rises

Asia Gaming Briefings | May 2017

to 80 percent, the tax revenue could swell to RM872.8 million, Nazri said.

The new tax is designed to help boost government revenue, which has fallen following a slump in oil prices. However, it comes hard on the heels of a new Goods and Services Tax, which came into force in April 2015 and which hit consumer spending.

The nation’s hotel industry has criticized the tax, saying it will deter visitation.

CIMB Research analyst Ivy Ng Lee Fang also expects the tax to have a negative effect on tourism in the country.

“It is not clear when the new tourism tax will take effect,” she said. “We are of the view that this is negative for the hotel industry in Malaysia, as it may lead to an uneven playing field between licensed and unlicensed hotel operators, as the latter are not regulated,” said Ng.

SOUTH EAST ASIA 17

RGB targets double-digit earnings for 2017

Tourism arrivals 2017 31.8 million 2001 25.96%

2000

2005

2010

N° of arrivals

2015

2015

RM8.93b RM8.39b

“On top of this, hoteliers may not be able to pass on [charge] all the additional tax to the tourist as the hotel occupancy rate in the country was only 61.9 percent in 2015.”

Genting Malaysia may be “negatively impacted” if it is unable to pass on such additional tax to its customers, CIMB said.

Malaysia is targeting 31.8 million tourist arrivals this year, up from 26.7 million in 2016, with projected receipts at RM 118 billion. For 2020, it’s seeking to boost that number to 36 million with receipts of RM 168 billion. The industry has been helped in recent years by the weakness of the ringgit, which fell in part on weak oil prices, making the destination cheaper for external visitors.

Genting is involved in a $2.4 billion revamp of its Resorts World Genting property to draw in more visitors after attracting 20.2 million people in 2016, up about 4 percent from the prior year. Day-trippers made up approximately 71 percent of the total visitor arrivals, with the remaining 29 percent being the hotel guests. The occupancy rate at the resorts’ hotels stood at 93 percent in 2016.

The Genting Integrated Tourism Plan (GITP) is seen as the biggest driver for potential growth at the Malaysian operator. The tenyear plan was first announced in 2013 and foresaw a budget of RM5 billion. That was subsequently doubled, mainly to account for more spending on theme-park attractions.

Authorities crack down on online gambling Malaysian authorities have been intensifying operations aimed at illegal gambling, with a focus on illegal fourdigit (4D) public lottery and cyber gambling, local media reports. Police recently carried out 20 raids, netting cash amounting to RM10,714 (US$2,427). Mobile phones, portable printers, calculators and stationery items were also seized and operations are expected to be on-going.

Genting 2016 Revenue

2017

Percentage change year on year

GROSS GAMING REVENUE

RGB International Bhd has a target to deliver around US$40 million worth of gaming machines in 2017. The group is planning to make deliveries to the Philippines, Vietnam, Nepal and Laos, group managing director Datuk Chuah Kim Seah told StarBiz. “We are delivering 600 machines to the Philippines, while for Vietnam, Nepal and Laos, we are sending 300, 350 and 200, respectively. Chuah said the group is projecting double-digit earnings growth in 2017, and is currently working to promote its range of gaming machines to India, Nepal, Bangladesh, Pakistan, Bhutan and Sri Lanka. Chuah also said there was opportunity in Vietnam, now that two casinos are to be built in the North and South, which will also allow local entry.

“

It is not clear when the new tourism tax will take effect,” she said. “We are of the view that this is negative for the hotel industry in Malaysia, as it may lead to an uneven playing field between licensed and unlicensed hotel operators, as the latter are not regulated.

”

Asia Gaming Briefings | May 2017

NORTH ASIA

18

SOUTH KOREA

Changing perceptions Lottery revenues increased 9 percent year-on-year in South Korea in 2016 driven in part by changing player perceptions, but remain low when compared with other OECD countries, signaling room for further growth.

M

ore than half of all South Koreans purchased at least one lottery ticket last year, driving a 9.3 percent increase in sales to KRW 3.9 trillion (US$3 billion).

The rise came amidst an economic slump, which some believe is the main reason for the uptick in sales.

But while consumers undoubtedly turn to lotteries and games of chance in times of economic depression, the Korean Lottery Commission (KLC) believes more tangible factors are at play, including changing perceptions and the 543 new retailers that opened during the year. The introduction of online sales is also expected to be a gamechanger.

“Koreans now have a more positive attitude towards lotteries,” a spokesperson for the KLC said. “In a recent survey, we found that 71 percent of those asked had a positive attitude toward lottery draws, up from 68 percent in 2015.”

The KLC is looking to capitalize on this new-found positivity and increasing appetite for lottery products by opening another 670 outlets during the year, taking the total number in the country to more than 7,000.

Koreans are not short of lottery games to play either, with 12 different formats available including both draw and instant-win formats.

These include: lottos, three types of printed lotteries (Spitto-2000, Spitto-1000, Spitto-500) the pension lottery, and seven types of electronic lottery (Mega Bingo, Speed Keno, Power Ball, Treasure Hunter, Triple Luck, Double Jack Midas and Catch Me).

The Lottos, purchased from land-based retailers, are the most popular and accounted for more than 90 percent of revenues in 2016, but electronic lotteries are on the rise and the government recently amended the law to allow Lotto tickets to be sold online.

“We have an online version of the pension lottery and seven other types of electronic lottery,” the KLC spokesperson said. “We have revised related laws to allow the sale of Lottos online, which we are now working to implement,” they added.

Part of the lottery’s increasing popularity is that around US$1.5bn of proceeds are poured into the Lottery Fund each year, which supports welfare and cultural projects such as the Ministry of Science, ICT and Future planning.

Another reason for the lottery’s success is that it is properly regulated and its chosen operators fully vetted.

The KLC is a government agency and is responsible for formulating and implementing

NORTH ASIA 19

lottery-related policies. It also has the exclusive authority to issue, sell and manage lottery products, with the day-to-day operation undertaken by the private companies it selects.

Nanum Lotto Co currently holds a five-year contract (due to expire in 2018) to run online lotteries (via secondary operators) and printed ticket sales, while the Korea Union Lottery Co also handles printed and internet lotteries.

The whole sector is overseen by the National Gambling Control Commission, which plays watchdog over each operator and the secondary partners they choose to work with, which is helping to build that allimportant player trust.

“Supporting good causes and community projects are a vital part of government lotteries, and help players put distance between taking part in a lottery draw and gambling,” says Nils G Thomsen, CEO of the Winners Group.

In countries such as South Korea, where gambling is discouraged, lotteries have huge potential to grow their player base and revenues

FOREIGNER-ONLY REVENUE 2015 2016E 2017E 2018E

$1.13b $1.15b $1.21b $1.33b

(Source: Morgan Stanley)

as perceptions change for the better and greater access to lottery products is provided through online and mobile channels.

While ticket sales are on the up in South Korea, they remain low when compared to the other 34 members of the Organisation for Economic Co-operation and Development, which includes the UK, US, Australia and Japan.

The KLC isn’t concerned by this, however, and says it is because the government tries to discourage betting and that Koreans simply have a lower propensity to gamble than citizens of other OECD countries.

But the KLC’s decision to amend the law to allow Lotto tickets to be sold online may open the door to a whole new generation of Koreans playing lottery games for the first time via their computers and mobile/ tablet devices.

“Lotteries around the world are primed and ready to take their products online for the first time or in a more meaningful way, as is the case in South Korea,” says Thomsen.

Paradise 17Q1 casino revenues decline Paradise Co. Ltd. saw casino revenues slide 9.5 percent year-on-year in the first quarter of 2017. Casino revenue for the quarter was KRW 124.9 billion (US$110.3 million), with casino drop falling 2.8 percent to KRW 1.2 trillion. March casino revenues fell 10.8 percent to KRW 39.3 billion, which is compared to KRW 44 billion in the prior year period. Table revenue fell 11.9 percent year-on-year to KRW 36.4 billion in the month, while machine revenue grew 5.2 percent to KRW2.9 billion.

N.Korea seeks casino cruise investors North Korea is seeking foreign investors for a cruise ship program, which it says will be permitted to operate a casino, the Yonhap news agency reported. The program would link its eastern mountain resort area to the Russian Far East and Southeast Asia. The guideline said a foreign company or a consortium would be entitled to operate a tourist ship with an investment of US$10-20 million over the next 10 years. The program will run on two routes -- one linking the mountain resort to the Russian city of Vladivostok and the other to Southeast Asia. It also promises special permission to run a casino on the ship.

Asia Gaming Briefings | May 2017

NORTH ASIA 20

JAPAN

Taking the temperature of the casino debate The Japanese language includes the idiomatic expression “ondosa,” which literally means “a difference in temperatures.” However, it often appears in newspapers to represent a situation in which various parties don’t quite see eye-to-eye—that they view a matter with disparate levels of support or commitment. When it comes to the legalization of casinos in Japan, there are vast temperature differences.

O

n the one hand, there is considerable enthusiasm for the Integrated Resorts Promotion Law within the Shinzo Abe administration, some local governments such as that of Osaka, and among potential foreign investors.

On Apr i l 4, Pr ime Minister Ab e himself launched the “Headquarters for the Promotion of Designated Zones for Integrated Resorts,” which is supposed to map out many of the details of the followup legislation expected to be passed into law this autumn. The government has yet to reveal substantial information about the precise shape of what they are prepared to authorize, although it is expected that no more than three IRs will be given the nod in the first round of development.

Likewise, the Osaka Prefectural Government continues to advance its plan to open the first of the nation’s IRs at Yumeshima island in Osaka Bay. At a meeting with local business leaders on February 6, Osaka Mayor Hirofumi Yoshimura explained, “Yumeshima is to become the focal point for international tourism for Osaka. It will become a very important base for driving economic results.”

There is also no doubt that major players in the international casino industry are keenly interested in a market that some believe could eventually rival the size of Macau. Several of these casino companies have mooted such figures as a US$10 billion investment, or even “whatever it takes” to get in at the ground level of Japanese

Pachinko, racing unlikely in the firing line Japan’s government is unlikely to table a bill to restrict horse racing or its pachinko industry in tandem with regulation to introduce casinos into the country, Union Gaming said in a note. “Ultimately we believe the legislature has enough on its hands in the form of the IR bill and is unlikely to touch the existing frameworks of pachinko, horse racing, etc. Further, given that pachinko is a homegrown industry we are inclined to think it could actually get some form of legislative support (protection), especially in the context of the likelihood of foreign-owned IRs.”

Asia Gaming Briefings | May 2017

NORTH ASIA 21

casino development. There is the strong feeling that once the Japanese IRs are up and running, that they will dwarf most other international markets.

Perhaps. But political resistance may prove to be much stronger and more stubborn than the international operators yet realize. The notion of opening casinos in Japan remains deeply unpopular with the general public, and even the major news media outlets have been highly skeptical.

Most ordinary Japanese do not associate the opening of IRs with their own economic prosperity and that of their communities, but rather expect them to become a magnet for crime, addiction, and other social problems.

Every local government eager to allow casinos within their jurisdiction can expect to face citizens’ movements of various size

and strengths to arise in opposition.

It is already occurring in Osaka. On March 25 an anti-casino citizens’ group held an initial meeting that attracted almost one thousand participants. Indeed, a poll of Osaka residents by the Asahi Shimbun in late February found that 60 percent of the people opposed the establishment of a casino in their city and only 31 percent supported it. The opponents overwhelmingly explained their position by citing their belief that hosting a casino would have a strong negative impact on law and order in their community. Even many members of the Osaka chamber of commerce are opposed to casinos, unconvinced that the local economic benefits would be as robust as advertised.

Proponents of IRs acknowledge that the

Japanese public has yet to be won over, but they assert that much of the opposition is based upon misunderstandings.

On the surface, both sides appear to agree on the need to enact legislation to combat gambling addiction, which is already believed to be a major problem in Japan due to the prevalence of pachinko. Recent studies have presented alarming estimates about how deeply Japanese society is penetrated by gambling addiction related problems.

Both ruling coalition and opposition lawmakers have set up project teams on gambling addiction and are currently formulating countermeasures.

Noriko Tanaka, leader of The Society Concerned about Gambling Addiction and the only prominent activist in the field who lobbies all political parties, is skeptical that

Asia Gaming Briefings | May 2017

NORTH ASIA 22

the forthcoming anti-addiction legislation will have the teeth needed to truly address the problems. She tells AGB that she worries that even the lines of responsibility for tackling gambling addiction will not be made clear, leaving those who profit from gambling revenues in charge of the anti-addiction

GROSS GAMING REVENUE GGR 2030E $24.2b from six locations (Source: Global Market Advisors)

Osaka strip seen taking on Macau/Vegas The building of an “Osaka Strip” involving three or more operators could potentially give Macau and Las Vegas a run for their money, says Steve Gallaway, managing partner of Global Market Advisors.

The firm formulated a number of scenarios for IRs in Japan in a white paper titled “White Paper: Japan Integrated Resorts”.

“Japan has the potential to be one of the largest gaming markets in the world, generating up to $24.2 billion at six different locations by 2030,” said Gallaway in the executive summary.

Asia Gaming Briefings | May 2017

policies. She also feels that there is rush to pass something called “anti-gambling addiction legislation” simply to feign that the government is seriously grappling with the problem, while in reality little thought is going into shaping effective countermeasures.

At any rate, it is clear that the Abe government

and other proponents still have a long way to go in order to gain public acceptance of their plans to build IRs. Unless they present policies on policing crime and anti-addiction that are widely deemed to be credible and effective, they may still be facing 2-to-1 public opposition to casinos going forward.

NORTH ASIA 23

Asia Gaming Briefings | May 2017

NORTH ASIA 24

RUSSIA

Tigre de Cristal cuts gaming capacity, but rolling volume gains Summit Ascent Holding’s Tigre de Cristal has slashed its gambling capacity just 18 months after opening due to competition from illegal gambling and a lack of appetite amongst locals for casino games.

T

igre de Cristal, which is the only operating facility in the Primorye gaming zone near Vladivostok, has cut its gaming tables by half and has done away with its poker room, Betting Business Russia reported, citing an interview with Craig Ballantyne, director of local operating company G1 Entertainment.

When the casino opened in November 2015 it comprised 67 gaming tables and 651 slot machines. “It soon became clear that

Asia Gaming Briefings | May 2017

the attendance and revenue indicators did not meet initial expectations. As a result, the number of slot machines was reduced from 651 to 477. The significant investment in our marketing activities, made in 2016, did not help improve the situation. Amid the increased number of visits (mainly due to our entertainment activities, not related to gambling), the volume of sales on the local market and revenues have decreased,” he said.

Consequently, the company took measures

to reduce operating expenses “to ensure the profitability of the enterprise and its selfsufficient development.” The number of slot machines was cut to 319 units, and the tables, to 55 units. “At the same time, especially recently, the number of gaming tables for our foreign VIP clients is increasing, despite the existing administrative and legal barriers,” he stressed.

Ballantyne pointed to rampant illegal gambling as a problem for investors in the zone, with gaming rooms being organized

NORTH ASIA 25

in private apartments or at commercial enterprises, while rooms with slot machines are often disguised as internet cafes. “Illegal gambling is widespread in Primorsky Krai.

Such institutions, especially poker clubs, create a negative impact on legal business, despite all the marketing efforts undertaken by us. I note that the presence of approximately 8-9 illegal poker clubs in Vladivostok confirms the overall demand for these services,” he carried on.

“To reduce the company’s operating expenses (staff salaries, tax deductions) and prevent losses, Tigre de Cristal was forced to temporarily remove all Texas Holdem game tables from the gaming halls. It should be noted that at the time of opening 10 such tables were installed in the casino. In April 2016, we decided to reduce their number to six. Four tables remained in the hall until

February 2017. The number of players eager to support a single legal poker club has become insufficient. Therefore, the decision to remove poker tables did not cause much impact on the attendance.”

Primorye was considered as the most promising of Russia’s designated gaming zones, mainly due to its proximity to the northern Chinese and Korean and Japanese markets.

The head of the Primorye Territory tourism department Konstantin Shestakov recently said that about 30 percent of the visitors to Tigre de Cristal are currently foreigners, though visitation is growing, helped by efforts to improve access and infrastructure.

Summit Ascent chairman Lawrence Ho said the company remains confident in the region’s growth prospects and said there is strong foreign investor interest in the zone.

The Russian government is close to finalizing a simplified visa regime, which should help tourism arrivals from the summer of 2017.

The company said its own rolling chip volume has picked up strongly since it introduced two fixed-room operators in June 2016. It plans to open the first part of its own Phase 2 resort in 2019.

There are plans for three other gaming developments including a project from Hong Kong-listed Nagacorp.

The company recently said its resort remains “broadly on schedule for operation by 2019.”

In a commentary in its annual report, Chairman Timothy McNally wrote that the company has established an office in the city center and a number of key personnel have been appointed to monitor various aspects of the project. Piling work began in 2016.

The company agreed in 2013 to invest not less than $350 million in a resort project under the name of Primorsky Entertainment Resort City. It will join Summit Ascent Holding’s Tigre de Cristal, which opened in 2015. Other projects are planned by Royal Time Group and Diamond Fortune Holdings, though the Royal Time resort has reportedly been delayed.

Representatives of the Chinese investment company Zhonghe Linhai (Harbin) have also expressed the desire to become investors in the Primorye gambling zone.

According to local authorities, a working meeting between Zhonghe Linhai president Wang Wenli and representatives of the local administration took place during a recent visit of the Chinese delegation to the region.

The Chinese businessmen are reported to have said that Primorye is of great interest as a platform for long-term investment.

GROSS GAMING REVENUE Summit Ascent rolling chip turnover (in million HK$)

2015 Q4

570

2016 Q1 Q2

1,335 2,121

Q3 Q4

5,648 4,977

2017 Q1

3,457

(Source: Summit Ascent Holdings Limited)

RGW to unite industry in Moscow June 7th to 8th Russian Gaming Week 2017 will be held in Moscow from June 7 to 8 and will feature a two-day conference, panel discussions and the largest industry exhibition in CIS. More than 30 speakers from Russia and other countries will share their experience of running their businesses in various jurisdictions and present successful case studies.

Bookie tax signed into law Russian President Vladimir Putin has signed into law a bill that requires bookmakers to pay 5 percent of their proceeds every quarter towards the development of sports. The document obliges bookmakers taking bets on sports events to conclude agreements on the use of logos and names of events with “professional sports entities”, namely, all-Russian sports federations, professional sports leagues organizing such events, and on the basis of agreements to deduct certain sums from the proceeds.

The overall amount of deductions should not be less than RUB 15 million (US$264,645) per quarter.

The legislation will allow bookies to advertise in sports media, match broadcasts, at stadiums and on athletes’ uniforms.

Asia Gaming Briefings | May 2017

26

GREATER CHINA

26

MACAU

VIP growth spurt seen sputtering Macau’s VIP market, which was crushed by Beijing’s anti-corruption campaign, has bounced back, unexpectedly leading gross gambling revenue growth in Q1.

Asia Gaming Briefings | May 2017

GREATER CHINA 27

accounted for almost three quarters of total by accelerated capital outflows from China, revenue. It was the high rollers fueled by the strong liquidity in China and the strength junket system that helped propel Macau to a in China’s real estate market. These factors more than $45 billion market at its height in which supported VIP growth, however, are 2013. However, China’s campaign to crackdown short-term catalysts rather than long-term on corruption extended from officials to reach structural benefits,” it said.

Bernstein sees the VIP market ultimately into all sectors of society, triggering an exodus of VIP gamers concerned about appearing on gaining at a compound average rate of about 4 percent through the end of the decade, but Beijing’s radar.

The government in China and Macau has warns any changes in government policy could pushed the six operators to diversify their create significant deviation and volatility. revenue base to provide more non-gaming offerings and to appeal to the mass market. Their efforts have been paying off, While the gut reaction with the mass market leading a recovery in GGR from August would attribute most last year after 26 monthly of the strength in slots declines. Mass gaming now to the fact that Macau makes up more than half of total market revenue. is “on sale” and budgetThat was until Q4 of 2016, conscious gamblers can when VIP growth once again accelerated, surprising analysts get a cheap room, we with a 10 percent increase. also believe that high“This then marks the third consecutive quarter of end / VIP slots are also mass growth in the 11 percent outperforming. to 12 percent range and is encouraging in the context of a stable mass-anchored recovery,” Union Gaming wrote in a note.

Wells Fargo analysts agree, saying the rally “This also represents the first time in nearly six years (11Q3) that VIP grew at a faster rate could stall once the effect of China’s economic than mass. Digging deeper into the numbers, stimulus and housing bubble wears off.

“We continue to think loose credit it has become clear that the high end of the market has rebounded – and we would apply and housing have been driving the market this to both VIP and premium mass,” it added. recovery. We think continued curbs on housing Meanwhile, slots GGR also saw positive speculation and slowing of credit will impact numbers, growing 13 percent year-on-year revenues later in the year,” it said.

Bernstein also notes, the higher VIP revenue in the quarter, the highest level of growth in appears to have come from mid-tier and lower nearly four years.

“While the gut reaction would attribute most VIP customers, rather than a return of the of the strength in slots to the fact that Macau whales. Based on talks with junkets, it notes is “on sale” and budget-conscious gamblers that there appears to be increased visitation can get a cheap room, we also believe that rather than a major rise in spending.

The outperformance in VIP has also been high-end / VIP slots are also outperforming,” helped by new property openings, in particular Union Gaming says.

Despite the recent figures, most analysts say Wynn Resorts’ Wynn Palace on Cotai, which the outperformance is unlikely to be sustained held its debut in August last year. In the second in the notoriously volatile sector and the mass half, MGM Resorts is scheduled to open its MGM Cotai property, which is slated to be market is still the future of Macau gaming.

Bernstein Research estimates the VIP segment mass market only, while ultra-high end hotel, will head for 7 percent growth in 2017, with The 13 is expected to open in July and will be continued strong performance in the first half one of the most expensive hotels ever built, giving way to a drop of 3 percent in the second. with a cost per key at about $7 million.

Morgan Stanley is projecting 9 percent “The strong VIP performance in late 2016 and early 2017 has mainly been driven overall GGR growth for 2017, with mass growth

“

”

T

he VIP segment recorded MOP35.5 billion ($4.43 billion) in gross gaming revenue for the three months to endMarch, growing 16.8 percent yearon-year, and 6 percent sequentially, according to figures from the Gaming Inspection and Coordination Bureau (DICJ). The growth figures outstripped that of mass revenue, at only 7.9 percent in the quarter.

The VIP sector has historically dominated gambling in Macau and at its height in 2011

Asia Gaming Briefings | May 2017

GREATER CHINA 28

up 11 percent and VIP growth up 6 percent.

However, it notes that the VIP estimate may be conservative.

The firm also points out that the rebound in VIP is likely to come at a cost with higher promotional expenses leading to possible margin erosion.

GROSS GAMING REVENUE GGR 2016 MOP 223b

-3.3%

December MOP 19.8b

+8%

January MOP 19.3b

+3.1%

February MOP 22.9b

+17.8%

March MOP 21.2b

+18.1% (Source: DICJ)

Debtor database awaits data protection greenlight Macau’s debtor database is still awaiting approval of the Office for Personal Data Protection before it can start operations.

“The IT structure is in place and ready to go. What we’re missing is the goahead from the Office for Personal Data Protection. Once the system is cleared, then data can start to be inserted into the system,” said Gaming Inspection and Coordination Bureau director Paulo Martins Chan to TDM. The junketproposed debtor database, which was first announced in November last year, contains the details of high-rollers that owe overdue debts.

Gaming tax revenue rises Macau’s government raked in a total of MOP 14.1 billion (US$1.8 billion) in gaming taxes in the first two months of 2017, according to data from the Financial Services Bureau. The figures represent a 5.4 percent year-on-year growth compared to the same period in 2016. The government has estimated that it will collect around MOP 71.9 billion in taxes in 2017.

Asia Gaming Briefings | May 2017

“Promotional allowances rose to a recordhigh level in 16Q4, so did advertising and marketing expenses in 16H2, rising for the first time in two years. Together with VIP revenue growing faster than mass, we see margin pressure in 2017,” it said, adding that mass will need to gain by at least 10 percent to maintain margins.

SJM Holdings SJM Holdings (880:HK) has 20 casinos on the Macau Peninsula. The company is currently building The Grand Lisboa Palace on Cotai, which is scheduled for opening in H1 2018.

The casino’s original plans were for 700 gaming tables and over 1,200 slot machines across a gaming floor area of approximately 27,000 square metres. Analysts at Bernstein say the company is facing near-term headwinds as it is coming late to Cotai and has significant

exposure to low quality peninsula-based satellite properties. In March, the company opened a new gaming space on the first floor of its Grand Lisboa property as part of an ongoing revamp. The new area includes 870 square meters of space, with 10 gaming tables and over 40 slot machines as well as a dining area.

Morgan Stanley estimates EBITDA could rise 7 percent quarter on quarter driven by mass revenue at Grand Lisboa and Jai Alai (opened 35 tables in December 2016).

Galaxy Entertainment Group Galaxy Entertainment Group (27:HK) has three main properties and runs three City Club casinos inside hotels. The company’s Galaxy Macau Phase 2 and Broadway at Galaxy Macau opened on May 27, 2015, almost doubling the capacity of the resort. The operator said it continues to move forward with Cotai Phase 3, with the

GREATER CHINA 29

potential to start construction in late Q1, or early Q2. It also said it is moving ahead with plans for a low-density IR on the neighboring island of Hengqin. The group posted Q1 revenue of HK$13.4 billion (US$1.7 billion), up 1 percent sequentially and down 2 percent year on year.

Adjusted EBITDA was HK$2.4 billion, down 2 percent sequentially and up 6 percent year on year. A gain of 12 percent in adjusted EBITDA at Galaxy Macau was offset by a 15 percent decline in the same measure at the StarWorld Macau resort. Bernstein Research said the results were slightly better than it had expected, but noted that the company is still underperforming its true potential in the mass market sector.

Sands China Sands China (1928:HK) has five properties in Macau. The new $3 billion The Parisian opened in September and received a highly

positive reaction from analysts. It features a scale replica of the Eiffel Tower, nearly 13,000 hotel rooms, two million square feet of retail-mall offerings and two million square feet of MICE capacity. The company recently announced its retail line up for another 170 shops. Sands was still only awarded 100 tables at the open, like the VIP-focused Wynn Palace.

The company recently announced a new program to help support small and mediumsized businesses, which will include invitational matching sessions for businesses to connect with Sands China user departments. To be known as the F.I.T. programme, it will target small and micro companies, “Made in Macau companies and Macau young entrepreneurs.

The company will provide financial support, targeting Macao young entrepreneurs with a staff of 15 or below, providing them with a 30 percent advance payment on purchase orders.

Bernstein Research notes that Sands’ product positioning focused on mass and its location advantaged inter-connected properties on Cotai are a key value driver.

Melco RESORTS & Entertainment Melco Crown Entertainment (6883:HK) is changing its name to Melco Resorts & Entertainment. The company has three casinos and the Mocha Clubs. Melco International Development recently acquired an extra US$1.1 billion worth of shares in the company taking its stake to 51.3 percent stake, compared to 37.9 percent before. This follows the decision of partner Crown Resorts to sell down its holding.

Despite a slow ramp up, the company’s newest resort, the Hollywood-themed Studio City, is now making a strong contribution to results. The property opened with only mass tables, but has added a small VIP operation since November.

The company recently announced its City of Dreams will rebrand the existing Hard Rock Hotel to “The CountDown”. The name change is expected to take effect from July 2017 until March 31, 2018 with a countdown clock timed to the unveiling of a new phase of development of City of Dreams. April 2018 will mark the opening of Macau’s new landmark: Morpheus, a new iconic luxury hotel designed by the late Dame Zaha Hadid.

Morgan Stanley expects Melco to report a 14 percent quarter on quarter gain in property EBITDA in Q1, with Studio City property EBITA up 23 percent. The firm notes it is 18 percent above consensus on the company.

Wynn Macau Wynn Macau (1128:HK) opened its $4 billion Wynn Palace in Cotai on August 22 after facing construction delays. The company’s original property is on the Macau Peninsula.

The Wynn Palace has 1,700 hotel rooms and 90 percent of the resort will be non-gaming.

Although its properties are seen as at the higher-end of the market, recent research from Morgan Stanley based on Google searches suggested it may outperform in the mass sector.

The brokerage notes that Google searches for Wynn’s Macau properties have recently surpassed that of Galaxy and Melco Crown’s properties - a potential leading indicator for much higher market share. While Wynn’s mass market share has increased from 8 percent to 10 percent in 16Q4, it is still far below Melco and Galaxy Entertainment’s of 18 percent, suggesting potential upside, the firm said.

MGM China MGM China (2282:HK) is operating a single casino on the peninsula. The opening for its new $2.9 billion development, the MGM Cotai, has been pushed back from late 2016 to the second half of 2017. The resort will not feature any VIP rooms at the opening and will focus on mass gaming, while its original property will continue to offer VIP services.

MGM Cotai will have approximately 1,500 hotel rooms and suites, meeting spaces, high end spa, retail offerings and food and beverage outlets. The project has a jewellry-box design and 85 percent of its gross floor area will be dedicated to non-gaming facilities. It will also feature a permanent collection of more than 300 Asian and Chinese artworks. MGM Resorts International in March announced the appointment of Aaron Fischer as chief strategy officer. Fischer, who is presently based in Hong Kong and serving as senior vice president of corporate development for MGM Resorts, has been working closely on strategies for the global development of integrated resorts in Asia. He will relocate to the company’s corporate headquarters in Las Vegas. Bernstein notes that the company will face near-term headwinds as it loses market share to other Cotai properties, but the opening of its own resort gives it the largest incremental expansion of all the properties with respect to footprint, room inventory and gaming capacity; however, full value from the property is still a ways off.

Asia Gaming Briefings | May 2017

FOCUS 30

Looking for growth While the Macau market still has plenty more to give, operators are starting to look elsewhere for future growth potential.

M

acau’s six casino operators have done well out of the market, but the prolonged slump in VIP play and an increase in alternative options for mass and premium mass players in neighboring countries is forcing many to re-think their growth strategies.

Most if not all are closely analysing opportunities in additional Asian markets, such as the Philippines, Vietnam, Laos and Japan, while others are looking further afield to Europe and the likes of Cyprus and Spain.

But operators seeking to grow their presence in Asia are struggling to identify markets that are large enough to drive growth, while Europe is already well established and the integrated resort model totally unproven.

There is more growth to be squeezed out of Macau, however, but with some operators better placed than others to benefit. Under the assumption that mass market play will continue to be the catalyst, Sands China is in the driving seat to capitalize.

“In this scenario, scale matters more than anything else and Sands China is the clear winner given its outsized share of hotel rooms, non-gaming amenities and gaming amenities,” says Grant Govertsen, managing director at Union Gaming.

“Galaxy (Entertainment) should be able to close

Asia Gaming Briefings | May 2017

the gap to Sands China, however, as they are the only operator with a significant amount of developable land to build on, giving them a greenfield path to growth for the next five years. No other operator enjoys this dynamic.”

There’s more to be had from VIP, too, which returned to growth in 16Q4 with Bernstein estimating it will enjoy a 7 percent uptick in GGR this year. This will benefit operators with a small/exclusive offering, and those who remained focused on VIP despite the downturn.

Vitaly Umansky, senior research analyst at Bernstein, says the “changing market dynamics” provide an opportunity for outsized success for those able to “exploit the shift by relying on product offering, customer acquisition strategy, cost control and marketing process.”

But who is most likely to extract growth from a steady rise in VIP play? Looking at recent VIP performance in Macau, Galaxy and Wynn have the most exposure on a top line basis.

“A continued differentiation on segment focus will create winners and losers in the overall Macau market,” Umansky adds.

While Macau still offers untapped potential, operators are also looking to expand their geographical reach right across Asia and further afield to ensure the long-term success of their businesses.

FOCUS 31

The unexpected downturn in VIP play and the impact it has had on Macau has been a tough but important lesson to learn for operators, who have come to realize that pegging all their hopes on one market is not a sound strategy.

But there are limited opportunities to expand elsewhere.

“There are not many good opportunities on the table that are realistic or strike the right balance between risk and reward,” says Jon Oh, managing director, head of global gaming and lodging at CLSA. “There is nowhere large or attractive enough to make a difference. Cambodia, Vietnam, Laos; unfortunately they are too small to move the needle for the likes of Sands China and Wynn,” he adds.

Govertsen disagrees and says there is potential, but governments have failed to establish the right frameworks to make such markets attractive for Macau operators.

“Markets like Korea and Vietnam have managed to snatch defeat from the jaws of victory and not one major international operator is engaged in development in these markets that have so much potential.”

There is one market, however, that every Macau operator wants to enter – Japan. But with just two integrated resort licenses believed to be up for grabs, competition will be fierce and most will walk away empty handed.

Those most likely to succeed in Japan are Macau operators with a proven track record and a large balance sheet that can execute on their IR plans. Oh names Sands China, Wynn, MGM, Genting and Melco as the front runners.

“There is a second tier of operators that have the potential to do well, those enthusiastic and willing but lacking the scale and scope of their rivals. For example, Galaxy has the balance sheet, experience and the need to branch out due to their sole footprint in Macau,” Oh said.

“Macau operators also face competition from the likes of Hard Rock who are interested and want to be in the market, and Caesars who have the hunger to do something. Then there is Bloomberry in the Philippines.

“Japan is still a long way from legislation being formalized and licenses granted, but when it opens up it will be the ultimate prime market and everyone will want in on the action.”

Thus far, Melco has been the most active when it comes to expanding its reach into new markets as a means of driving growth. The operator runs the City of Dreams Manila IR, while parent company Melco International is pursuing opportunities in Europe.

The Philippines is a strong market for the company, and GGR has grown consistently over the past few years even while Macau was declining. Much of this is a function of the country’s fast-growing economy, which has boosted the locals/mass segment of its business.

Bernstein remains bullish about City of Dreams Manila, in which Melco holds a majority stake, and believes it will continue to ramp up with GGR estimated to increase 12 percent CAGR from 2016 – 2019 compared to 8 percent CAGR for Macau market GGR. Melco’s plans for Europe have the potential to be equally successful, particularly its Cyprus joint venture with Hard Rock where it has been given the green light to build an integrated resort by the local government.

There are currently no IRs in Europe, and the JV’s plans for Cyprus – which include a 500 room hotel, 1000 gaming machines and 100 tables – should help to fill that void. But Oh remains cautious about the project’s long-term success.

“The IR model can work, but key conditions need to be met. They must be clustered; there are 38 casinos in Macau giving consumers plenty of choice. There must also be a strong local market that can access the resort within two to three hours by driving.

“In addition, it must have seamless connectivity to an international airport, and be in a location with a warm climate and nice weather throughout the year. It needs to be a place where people will not hesitate to visit.

“Cyprus and other European countries tick most of these boxes, the only one they don’t at present is the cluster of IRs which, in many ways, is the most important.”

Macau’s six main operators will undoubtedly remain focused on the market, and the individual areas they can find additional growth. But lessons have been learned, and most are now keeping one eye on opportunities elsewhere.

Some are better placed to extract growth from Macau, others in additional Asian markets and further afield. Regardless, all six will have to adapt to emerging trends and the everchanging landscape of the industry to ensure they remain ahead of the curve.

Asia Gaming Briefings | May 2017

FOCUS 32

Macau stock rally seen losing steam Macau’s gaming stocks have rebounded to trade at two-year highs, tracking the recovery in gross gaming revenue, however analysts warn against over optimism, saying growth may be nearing its peak, at least in the short term.

G

ross gambling revenue jumped 13 percent in Q1 this year, led by a surprising gain of almost 17 percent in VIP revenue, which returned to positive territory for the first time in 26 months in December.

These gains have added further steam to the rally in Macau’s listed gaming stocks. Wynn Macau is up more than 43 percent over the past 52 weeks; Sands China up 25 percent; Galaxy Entertainment up 52 percent; MGM China up about 50 percent; SJM Holdings up 32 percent and Melco Resorts up 43 percent. During the same period, Hong Kong’s Hang Seng Index has gained about 12 percent.

Although still far short of their late 2013 peak, the share price gains have been impressive. Analysts have

Asia Gaming Briefings | May 2017

also been revising upwards their forecasts for annual GGR, which could provide further momentum.

Morgan Stanley has raised its full-year GGR forecast to 12 percent from 9 percent, while Fitch Ratings has also set its estimate at 12 percent. Aegis Capital Corp. has upped its forecast to 11 percent from 9 percent.

However, analysts say the stocks may now be fairly valued and may lack further catalysts for growth. The boost from the surprise recovery in VIP revenue is likely to wane in the near future, in particular due to the close correlation between the VIP sector and China’s Producer Price Index, which they say is now near its peak.

The PPI peaked in February at 7.8 percent and Morgan Stanley economists expect it to slow down to zero by end-2017.

FOCUS 33

“Macau gaming stocks have underperformed the Hang Seng Index in Q2 every year since 2012,” Morgan Stanley said in a note. “We expect high valuation, a seasonally weak quarter and a peak in China’s PPI to be medium-term risks.”

JP Morgan analysts agree, saying the cyclical boost from China’s macro backdrop (e.g., liquidity easing, property rally, commodity price hikes) is waning or even rolling over.”

“As the sector runs out of positive catalysts, we think investors will focus more on the individual operator’s execution and resulting earnings revision potential, making stock calls increasingly more important,” it said.

When it comes to the individual operators, analysts cite Melco Resorts as their top pick, saying its valuation at 10X EV/EBITDA for 2018 is attractive.

Union Gaming recently raised its rating to Buy, upping its price target to $26 from $18.

“We think MLCO has been a share taker in Macau and is outperforming in the ongoing VIP recovery,” analyst Grant Govertsen wrote.

“At the same time with market-wide mass GGR growing 11 percent or better for the third consecutive quarter we look for this trajectory to continue and for MLCO to be a market rate (or better) grower for the balance of 2017.”

Wynn Resorts is also highly favored, especially in the near term given its strong VIP focus,

with the concern about the cannibalization of its peninsula property due to last year’s opening of the Wynn Palace fading.

“For Wynn, we project 38 percent EBITDA growth in 2017, with Palace continuing to ramp up through 2017,” Morgan Stanley, which has an overweight rating on the stock said.

The firm also rates Galaxy Entertainment as overweight, with Sands China and MGM China at equalweight and SJM Holdings at underweight.

It says Sands is fairly priced given a slower projected rate of EBITDA growth of just 8 percent for 2017, while any bounce for MGM from its upcoming opening of MGM Cotai later this year is largely priced in, given a 66 percent surge in the stock in 2016.

SJM, which will be the last to open its property on Cotai in 2018, is likely to continue to suffer from a loss of market share up until that time, analysts say.

“New resort openings on the Cotai Strip should help to extend revenue and EBITDA gains through 2018 as it features more hotel and table capacity as well as non-gaming attractions,” Bloomberg Intelligence analyst Margaret Huang said.

Despite the recent focus on VIP, Huang points out that it will continue to be the mass sector that underpins Macau and will likely

return to be a stock price driver.

“It will be critical to track the mass-market segment’s growth as it supports long-term, steady revenue and generates higher profits.

VIP may also expand, yet it will be more volatile and it also faces more competition as junkets consolidate and select operators add more facilities to compete for these high rollers.”

“All operators are shifting to Cotai in hopes of capturing a higher share of the massmarket business. Late entrants may face more hurdles as other peers have already ramped up and pricing may be more difficult given higher capacity.”

Although analysts are lukewarm on the prospect for Sands this year, they say in the future it is likely to benefit from its strong mass market focus and dominance of the center of the Cotai strip.

“We believe LVS is looking into FY18 and beyond in Macau, as it prepares for the opening of the ferry terminal in May and more importantly, the open of the Hong Kong-Zhuhai-Macau bridge, in FY18,” The Buckingham Research Group said. “While the infrastructure upgrades should benefit the entire market, they should benefit LVS the most, as the leading mass market operator, with the most hotel rooms and meeting/ convention space.”

Asia Gaming Briefings | May 2017

GREATER CHINA 34

Hong Kong

CITIbet in spotlight as authorities target illegal gambling Horse racing authorities are intent on closing the net on exchange CITIbet, but leading officials in the sport admit “there is no silver bullet” and say they will need government and law enforcement assistance.

T

he Asian Racing Federation (ARF) recently formed the Anti-Illegal Gambling Task Force, with the ARF’s 21-member nations represented in a group that will share information and work with government agencies to control what they feel is a growing black market.

The ARF Task Force has already signed memorandum of understandings with the Victorian Racing Integrity Commissioner and more recently the Australian Criminal Intelligence Commission (ACIC), while in late April task force chair and Hong Kong Jockey Club head of security Martin Purbrick spoke at an Interpol illegal betting conference in Bangkok.

ARF chairman Winfried EngelbrechtBresges said the formation of the task force, ACIC agreement and Interpol briefing were further steps towards keeping criminality out of horse racing.

“The agreement is the first that the ARF has signed with a law enforcement agency and illustrates the commitment of the ARF and its members to work with and assist law enforcement agencies in upholding the integrity of horse racing and combatting illegal betting, a key driver of sports corruption,” he said.

The prime concern for Asian racing administrators is the growth of CITIbet, with ARF research indicating the exchange now turns over in excess of US$50 billion annually .

CITIbet is similar in nature to Betfair in that customers can bet on horses to win or lose, but unlike Betfair, it is not licensed in any racing jurisdictions.

Nor does CITibet pay fees to horse racing, or share information with the sports’ authorities, a particular concern given the company’s agent-based structure.

CITIbet’s website also streams live racing from all around the world using pirated pictures and features loosely regulated bet types including in-play betting.

Asia Gaming Briefings | May 2017

“CITIbet is not an exchange that cooperates with racing authorities,” he said. “There’s no silver bullet but the question is whether or not something should be done about CITIbet now, because it has grown so much. It is clearly an unlicensed, unregulated criminal enterprise, and it’s having an impact on racing now. That’s one question we will ask government agencies, can you do something now?”

One of the first tasks of the ARF Anti-Illegal

Betting Task Force was to undertake research on the size and scope of illegal betting in the region, including CITIbet.

“What we will do through the ARF Taskforce is produce a report on the illegal betting situation in each country, we’ve done market sizing, not just on CITIbet as a whole, but on each different racing jurisdiction, and there is some interesting data,” Purbrick said.

One of the key pieces of data is the astounding growth of the exchange, and illegal betting overall, in southern China.

The ARF research indicates that RMB500 billion ($72.5 billion) is bet illegally each year in Guangdong province alone, with more than RMB150 billion wagered on horse racing.

CITibet’s biggest holds are, not surprisingly, on Hong Kong racing, with officials estimating that the site’s turnover is around one-fifth of the Jockey Club’s annual turnover of around HKD$100 billion.

“There has been a lot of growth in the illegal market in southern China and we suspect that it is where a lot of CITIbet’s turnover comes from,” Purbrick said. “Southern China is where

GREATER CHINA 35

we have seen the growth of very large agents and conglomerates of bookmakers, and they are turning over huge amounts of money, and a lot is going through CITIbet. It’s not a transparent market obviously, but we understand, through our research and talking to police, that it is absolutely huge. We have sized the Guangdong market at RMB 500 million on racing and sports.”

It is virtually impossible to get informed, independent experts to speak on the record about CITIbet, but one professional gambler, speaking on the condition of anonymity, felt the exchange’s hold on Hong Kong might be even bigger than the ARF numbers.

“Some of the biggest gamblers in the world are using it,” he said. “It’s easy to see how big the market is, just take a look at the site on race day.”

Another tell tale sign that there is serious liquidity in CITibet is the uncanny way it preempts the ‘market moves’.

“Horses that are not favoured on CITIbet always drift, and those that are bet on always shorten in price. Clearly illegal bookmakers are using the site, taking bets and then using the Jockey Club pools to manage their liability.”

BETTING AND LOTTERY REVENUE

Football Betting

HK$11.9b

Horse Racing

HK$16.9b

Mark Six Lottery (Source: HKJC)

HK$3.9b

Problem gambling declines Gambling participation and the prevalence of gambling disorders among Hong Kong people have been on the decline, according to a study commissioned by the Ping Wo Fund. The study, which was conducted by the Hong Kong Polytechnic University and saw the rate of Hong Kong people’s participation in gambling activities at 61.5 percent in 2016, lower than 62.3 percent in 2012 and significantly down from 77.8 percent in 2001.

Rexlot raises cash to strengthen capital Rexlot Holdings said it will raise about HK$600 million ($77.1 million) in net proceeds from a share subscription accord and convertible bond issue. The proceeds from the transaction will be used to repay the company’s existing loans and for general working capital, the company, which is involved in the lottery industry in China, said. “The board believes that after the completion and repayment of the existing loans, the company will be able to strengthen its capital structure and resume a sound financial position underpinned by improved overall cash flow, gearing and liquidity position which will allow the company to pursue its business strategy and re-focus the group on growing its business in the long-run,” it said.

Asia Gaming Briefings | May 2017

36

AUSTRALASIA

36

AUSTRALIA

Gambling on Australia’s preferences A small change to Australian gambling law in 2015 is now having an impact on the wider industry. The amendment highlights why many are concerned about the market’s ability to support some of the multibillion dollar IR projects being planned.

Asia Gaming Briefings | May 2017

I

n the Northern Territory, pubs and clubs were given permission to increase the number of gaming machines, known as pokies, they could install on their premises, as well as relaxing wager and deposit limits.

It was a relatively minor tweak, but one that has hit casino operators in the region hard. In its 17H1 financial results, SKYCity Entertainment said there had been a 60 percent increase in the number of pokies outside of casinos in Darwin since the law came into force in June 2015, with ripples from the changes now negatively impacting its revenues in the region.

This highlights the size and scope of the domestic market across Australia. Although Australians are among the biggest gamblers in the world, locals prefer to wager in pubs and bars over large casinos and integrated resorts.

According to a Roy Morgan Research report, only 12 percent of the Gold Coast population gambles at their local casino, while Crown Perth attracts just 9 percent of locals.

These statistics, and the strength of the locals market, bring into question some of the planned multi-billion-dollar integrated resort developments due to break ground in regions such as Queensland and Sydney over the coming months and years.

The government says these resorts will draw tourists to the region, and will not be negatively impacted by pokies or locals’ gambling preferences.

“While local communities will benefit from the facilities, entertainment and public benefit that IRs provide, the key focus of these resorts is to attract significant numbers of international tourists,” says a spokesperson for the Department of State Development.

“All indications are that there is an appetite for IR development in Queensland,” they add.

Others disagree, however, and suggest operators and the government have overestimated the appetite for visitors to travel to Queensland to stay at casino, hotel and entertainment resorts.

This is certainly the case when it comes to luring lucrative VIP players from China.

“The Queensland Government is looking to large integrated resorts to boost tourism, like the Singapore experience,” says Vicky Melbourne, senior director at Fitch Ratings. “But unlike Singapore, Queensland doesn’t enjoy the proximity with short flights to the VIP base in South East Asia.”

These concerns – among others – have already seen one casino project run aground before it set sail; Aquis pulled the plug on its six-year plan to build the A$8.15 billion ($6.2 billion) Great Barrier Reef IR, with Hong

AUSTRALASIA 37

Kong tycoon Tony Fung saying the whole gambling industry had changed drastically over the past 26 months.

The resort is still going ahead, but without the casino element and with a much smaller investment of just $2 billion. The Queensland government is now seeking expressions of interest for that license and says interest has been strong.

“I think Aquis and ASF would face challenges with the economics and return on investment of an integrated resort [in Queensland], as the VIP market is saturated and is facing competition from new properties and markets opening in Asia, and would need a strong locals market to make the economics work,” Melbourne said.

These resorts were conceived long before the Chinese clampdown and resulting fall in VIP revenues across Asia.

Lorien Pilling, director at Global Betting and Gaming Consultants, says that while the decline in VIP play and ongoing uncertainty over how the Chinese authorities will view gambling abroad continue to offer cause for concern, there

is plenty of upside and opportunities to attract new visitors to the region.

“The Asian middle class is on the rise and has more money now than ever before, especially people in China, India and the Philippines. And they are more willing and able to travel abroad.

New venues are likely to draw much interest, especially immediately after opening their doors for the first time.”

Despite this, there is still the risk that casino operators have drastically overestimated the number of tourists and VIP players they can attract. Star Entertainment’s Brisbane development plans to draw in an additional 1.39 million tourists per year while the Gold Coast venue plans to add some 1.5 million per annum.

This seems somewhat optimistic based on the total number of foreign visitor arrivals to Australia last year – 8.4 million. That said, the whole Gold Coast area is primed for growth; it has around 10 million visitors per year, but accounts for just 10 percent or 855,000 foreign visitor arrivals in 2016.

GROSS GAMING REVENUE

Queensland seeks casino investor

All gambling Y14/Y15 A$22.73b

+7.7%

Sports betting $814,6m

+30.1%

Queensland is seeking expressions of interest for a third casino in the state after plans for an A$8.1 billion ($6.2 billion) dollar investment from the Aquis Group, backed

by Hong Kong investor Tony Fung, were dropped. Speaking at the ASEAN Gaming Summit, David Edwards project CEO of State Development, said there had been strong interest in the market’s potential both from operators in the Asian region, but also from the U.S, from those who did not already have a foothold in the region.

Racing $2.81b

+2.7%

Total Gaming (including pokies and lottery) $19.1b Casinos $5.17b

+7.7%

+17.8% (Source: Queensland Treasury)

Crown Resorts 1H Australia revenue $1.48b Star Entertainment 1H revenue $1.08b

-12.5%

+25.3%

32Red exits Australia 32Red has become the latest online gaming operator to cease operations in Australia ahead of the likely passage of the Interactive Gambling Amendment Bill. The bill, which is expected to sail through the House, makes it more difficult for unregulated operators as it stipulates that only operators with licenses in the country can legally offer their services to Australians.

According to reports, affiliate program TTRpartners has informed affiliates it would no longer accept players in Australia as of Monday, April 3.

Asia Gaming Briefings | May 2017

AUSTRALASIA 38

CNMI

Moody’s concerned over default risk Ratings firm Moody’s Investor Services shaved its rating on Imperial Pacific by one notch to “Caa1” and said it still had a negative outlook on the company, indicating it sees a significant chance of another downgrade in the medium term.

T

he firm last cut its rating on the firm in January.

“The downgrade of Imperial Pacific’s corporate family rating reflects our concern over the company’s trend of weak operating cash flow,” said Kaven Tsang, a Moody’s vice president and senior credit officer. “Moody’s is also concerned over Imperial Pacific’s liquidity position and the sustainability of its business model, given its high levels of accounts receivables.”

Moody’s notes that the current temporary casino is reliant on VIP gaming operations, which accounted for HK$7.1 billion or 95 percent of total revenue in 2016.

Asia Gaming Briefings | May 2017

The company also demonstrates some concentration of credit risk, as seen by the fact that at end-2016 its five largest customers accounted for 33 percent of its accounts receivables (53 percent in 2015), the agency said.

“Imperial Pacific has asked its clients to arrange for collateral in the form of guaranteed deposits. However, the risk related to its accounts receivables remains high. This situation is reflected in the company writing off HK$300 million of accounts receivables and increasing its impairment provision by HK$847 million in 2016.”

For March Imperial Pacific reported a

VIP roll at its temporary casino of $2.96 billion, recovering from February, but short of a peak of $5.58 billion recorded in January.

However, the Saipan government has only approved one junket agent, meaning the operator is taking on the risk. Moody’s said the release of the company’s recent annual report had highlighted the concerns about high receivables and added it sees little prospect for improvement in the near term.

The Hong Kong-listed company beat rival Marianas Stars Entertainment for a license to operate a casino on Saipan in 2015. Shortly after winning the permit, it pledged to double its investment in CNMI

AUSTRALASIA

FBI makes arrests at casino site

Tonga PM nixes casino idea

The U.S. Federal Bureau of Investigation has arrested two people in connection with the death of a construction worker at Imperial Pacific International Saipan casino site, according to Bloomberg. “The FBI conducted a search and made an arrest in response to the recent death of an individual working at the construction site of the Imperial Pacific Resort,” the news agency cited the bureau’s Michele Ernst as saying. “The investigation is related to allegations of a federal violation of the workplace visa system, including reports the company was systematically harboring individuals who are out of status and in violation of federal statutes.” The company has denied it was the subject of a raid.

Tonga Prime Minister Akilisi Pohiva has shot down the idea of a casino resort being developed in the country, local media reports. Pohiva’s comments come after Tavake Tamafua Ltd said it had been given tentative approval from the government to build a casino in the country. The company said it received a letter from government minister Tevita Lavemaau saying that government supports the initiative to establish a casino and will grant an exclusive right under conditions to build in Tonga within the next two years.

GROSS GAMING REVENUE

“

The downgrade of Imperial Pacific’s corporate family rating reflects our concern over the company’s trend of weak operating cash flow.

”

Imperial Pacific GGR 2016 $0.9b 2017E $1b - $1.4b (Source: Fitch)

2016 January February March

$2.26b $1.94b

$1.88b

April

to about $7 billion, raising concerns about the sustainability of the project.

The company has been operating a temporary casino at T Galleria, a luxury shopping mall right across from the location where the 373-room hotel is being built. The facility was to help fund the construction of the new resort and to provide a live training facility. However, its license was due to expire at the end of April.

Since the casino opened in the T-Galleria with just a handful of tables in late 2015, the property has far exceeded expectations, generating an average roll of more than $2 billion a month.

February’s figure was $1.66 billion.

The new resort was supposed to open on January 28, just in time for the Chinese Lunar New Year of the Fire Rooster. However, it was pushed back due to unforeseen events since the CNMI government, represented by the Commonwealth Lottery Commission, and IPI signed the casino lease agreement (CLA) in August 2014.

The initial gaming facility will have 193 gaming tables and 365 slot machines, which is a significant increase compared to the 48 tables and 141 slot machines at their temporary facility.

Imperial Pacific Chairman Mark Brown has written to CNMI Governor Ralph Torres to request amendments to the CLA and for an extension of deadlines for the implementation schedule. According to the CLA, Imperial Pacific would be charged $100,000 per calendar day for any delay.

The first reason given for the delay was the devastation caused by Typhoon Soudelor in 2015. Brown said no one was spared when the storm barreled through Saipan causing major damage to homes, buildings, and other infrastructure, including power, telecommunications, and water. Soudelor, one of the strongest tropical cyclones to hit the CNMI since Typhoon Kim in 1986, also had an impact on the company’s construction site in downtown Garapan.

May June July August

$3.18b $2.52b

$1.65b

$1.74b $1.55b

September

$3.94b

October

$3.84b

November

$1.70b

December to January 2017

$5.58b

2017 February March

$1.66b $2.96b

Asia Gaming Briefings | May 2017

AUSTRALASIA 40

NEW ZEALAND

New AML laws pull in betting industry New laws widening the scope of current legislation on money laundering and the financing of terrorist activity are currently before the New Zealand Parliament and similar moves are expected in Australia.

T

he new legislation takes in sectors that were previously exempt. Both Australia and New Zealand have previously passed laws requiring banks and non-bank financial institutions, including casinos, to comply with laws intended to counter money laundering and the financing of terrorism.

Known as AML/CFT laws these are now common in Western aligned Asian/Pacific countries following international agreements reached in the early 2000s.

The second round of legislation takes in sports betting, including racing.

New Zealand’s Minister of Justice Amy Adams said: “By extending the (current) Act to lawyers, conveyancers, accountants, real estate agents, sports and racing betting, and businesses that deal in certain high-value

Asia Gaming Briefings | May 2017

goods, we can better prevent and detect money laundering and reduce the impact on victims and the wider community.”

“Businesses that deal in certain high-value goods, including motor vehicles, jewellery and art, will also have obligations under the Act when they accept or make large cash transactions.

“The businesses that will have to comply with the Bill are at particular risk of being targeted by criminals. We have worked with the affected sectors to ensure that the changes strike the right balance between combating crime, minimizing costs to business, and meeting international obligations.

The value of transactions resulting from crime is thought to be substantial. Minister Adams told Parliament, “It is estimated that the reforms in this Bill could disrupt up to $1.7 billion in fraud and drug crime over

the next 10 years.

“Estimates also suggest they may prevent up to $5 billion in broader criminal activity and reduce about $800 million in social harm related to the illegal drug trade.”

In New Zealand, the provisions of the new legislation have been widely discussed with affected parties such as the racing industry.

Substantial changes have already been made to the government’s initial proposals, mainly to reduce compliance costs, says Ms Adams.

A report from international advisory firm, Ernst and Young, and adopted by the government, recommended changes which have “significantly reduced the predicted compliance costs – the initial estimate of up to $1.6 billion over 10 years has been lowered to between $800 million and $1.1 billion.”

While the new legislation takes in sectors

AUSTRALASIA 41

previously exempt, it does little to change the position of the banking and financial services industry, or the operations of licensed casinos.

SkyCity Entertainment Group Ltd, which operates five of New Zealand’s six licensed casinos, said the company had “a comprehensive Anti-Money Laundering Programme together with supporting systems and processes which have been audited by the Department of Internal Affairs, and independently reviewed.

The New Zealand Racing Board’s Chief Executive John Allen says the racing industry is facing significant costs, which he hopes will not “rip the guts out of the profitability of the industry.”

“Significant costs are likely, although not yet fully quantified, but they are likely to run into millions of dollars. We have 650 outlets – about as many branches as the major banks.”

The New Zealand Racing Board owns the Totalisator Agency Board (TAB) which has a statutory monopoly on betting on horses and dogs and other sports. Profits

“

We support the intent of the legislation but we are very interested in making sure that costs are not loaded onto the industry and therefore affect our profitability.

”

are returned to the racing industries.

“When we need to change out the technology in the outlets it will lead to better control over large cash bets, and we will need to train our staff to identify and report suspicious transactions.

“We support the intent of the legislation but we are very interested in making sure that costs are not loaded onto the industry and therefore affect our profitability.”

Mr Allen ruled out seeking government subsidy or assistance to meet the costs preferring to seek changes to the reporting threshold and the timing of the legislation

taking effect.

Specifically, he said the industry wanted the $1,000 reporting threshold lifted to $10,000 and the phase in period extended 18 months to four years.

Longer term, after the transition and its costs have been absorbed, Mr Allen is not expecting the racing industry’s profitability to be affected.

“It’ll probably be positive for the industry.

Our customers need to know that the industry is well run, compliant and efficient, and all these go to confidence in the industry and its operations.”

GROSS GAMING REVENUE Total GGR 2014-2015 2015-2016

Casinos $2.1b $2.21b

TAB in talks for automated system The New Zealand Race Board is in talks to develop a fully automated bookmaking service for the TAB with software developer Openbet and Paddy Power Betfair, according to local media. At the moment, the New Zealand fixed-odds betting is manually controlled by TAB bookmakers, although they do use some betting software. ‘’That means we can’t easily compete with the international players who can offer vastly more books than we can offer,” the report cited the board’s CEO John Allen as saying. The new automated system can manage many more betting options but it will cost less per option for the TAB to produce them, meaning more returns for the NZRB.

TAB turnover

$527m $586m

Pokies turnover $2.1b $2.3b

$8.95b $9.39bb

SkyCity says NZICC on track SkyCity Entertainment says the New Zealand International Convention Center remains on track and on budget and is still expected to open in the first quarter of 2019. Fletcher Construction, the company building the center, recently warned of a drop of between NZ$610 million and NZ$650 million in EBIT for the year through to end June due to issues in its Buildings and Interiors division. Local media cited SkyCity communications general manager Colin Espiner as saying the company is “comfortable” with the contract it has with Fletcher.

Asia Gaming Briefings | May 2017

42

SOUTH ASIA

42

INDIA

Law Commission sees gambling merit, but no decision yet India’s powerful Law Commission acknowledges that the government would raise substantial revenue from regulating the country’s estimated $60 billion gambling industry, but hasn’t decided whether to throw its weight behind efforts to legalize the sector.

Asia Gaming Briefings | May 2017

J

ustice Balbir Singh Chauhan told a recent conference hosted by the All India Gaming Federation and the Federation of Indian Chambers of Commerce and Industry in New Delhi that the industry required proper regulation, rather than a complete ban in most states as is the case presently. However, he added that the Law Commission which is looking into the matter is “yet to make up its mind.”

Casino gambling is banned across India, apart from in the state of Goa and the territory of Daman, while online gambling is allowed in Sikkim and Nagaland. If legalized, analysts estimate it could rapidly become one of the biggest markets in Asia, if not globally.

Chauhan estimated that about $2.6 billion could be raised by legalizing and taxing the industry, but added it may come “at the cost of public morality and health. It may lead to the demand to regulate prostitution,” he said.

According to Justice Chauhan, “political will and the philosophy of the party in power” held the key to any such move. Nevertheless, he observed that the revenue that could be generated “was a huge amount to spend on public welfare.”

Several legal experts weighed in on the subject of legalization and regulation of the industry at the conference. They noted that the industry needs a strong overall framework, rather than relying on a patchwork of exceptions to govern the industry.

Ranjana Adhikari, co-head Media Entertainment and Gaming Practice at the reputed Mumbai-based firm Nisith Desai Associates, went into the finer points of legislation in Sikkim and Nagaland. She pointed out that there was a lack of clarity on whether the provisions could be implemented in the rest of the country, especially those dealing with licensing online operators outside the borders of the states issuing them, especially in the case of Nagaland.

Suhan Mukerjee, one of the panelists and a senior lawyer practicing in Delhi, counseled that the gaming industry would do well to not depend on exceptions like the Nagaland model. “Sustainable businesses cannot be built on exceptions,” he contended. He exhorted the industry to have continuous engagement with the relevant ministries and to come up with a blueprint for the way forward which could be used to facilitate the engagement with judiciary, law enforcement and political parties as well.

Adhikari also noted that under India’s existing gambling laws, the presence of a

SOUTH ASIA 43

physical structure, defined as a Common Gaming House, where games of chance were being allowed to be conducted with a profitmotive in mind, was critical for initiating criminal proceedings.

The Common Gaming House is relevant as the law distinguishes between public gambling activities and private ones, with the latter not being punishable. Gambling privately on the Hindu festival of Diwali remains widely popular in India.

At present, foreign direct investment is banned in both the casino and the lottery sector, but has not stopped the online sector, especially rummy and fantasy sports websites from receiving funding from foreign partners.

Some speakers pointed to how regulation can lead to improved standards, with companies taking it upon themselves to tighten operations.

Pranav Bagai, of the Poker Sports League, cited the example of the Direct Selling Companies in India, which, when put under the regulatory scanner, “asked hard questions of themselves, created manuals for law enforcement, and worked with lawmakers to remove grey areas.”

In the absence of legislation, other commentators urged the industr y to regulate itself.

Nandan Kamath, a Bangalore based lawyer who deals in sports laws, said: “Change of this nature takes time. Regulate yourself before others do,” cautioned Kamath. He also advised the industry to “push for reforms” in the legal arena.

Post deliberations on legal issues, two panel discussions were held. The first, moderated by Albert Climent, of Bluesea Gaming, covered issues related to responsible gaming and ‘cyber security.’

The second panel was moderated by lawyer Vidushpat Singhania and covered the current scenario in the Indian gaming industry.

GROSS GAMING REVENUE Total GGRE (including sport betting) $60b

Goa casino fees rise for third year Fees for onshore and offshore casinos have been raised for the third year in a row. Fees for the renewal of licenses went from Rs 2 million (US$31,125) to Rs 3 million, while transfer fees for onshore and offshore casinos were raised to Rs 100 million and Rs 200 million respectively. The current FY 2016-17 had imposed Rs 200,000 as an application fee for transfer and Rs 50 million crore upon approval from the government.

The annual recurring fees for landbased casinos were also hiked by Rs 5 million, whereas offshore casinos will need to pay depending on the passenger capacity.

Nagaland uncovers lottery scam The Comptroller and Auditor General (CAG) of India has uncovered a massive loss in revenue for the Nagaland state government due to irregularities in the conduct of Nagaland State lotteries. According to local media reports, the distributors made “huge profit” from the sale of state lotteries, whereas the revenue of the state government was in the form of (Minimum Guaranteed Revenue) MGR only. Out of the total sales of Rs 176.5 billion from the 2010-16 period, distributors only deposited Rs 569.3 million to the state, said the report.

Asia Gaming Briefings | May 2017

SOUTH ASIA 44

NEPAL

Nepal’s economy rebounds, boding well for casinos

Nepal’s economy is forecast to grow at the fastest pace in 20 years in 2017, with tourism arrivals also recovering, helping to attract foreign investment into its casino sector.

A

devastating earthquake in 2015 killed more than 9000 people and crippled the country’s economy.

A subsequent border blockade with India, coupled with the fallout from New Delhi’s decision to demonetize its economy to crack down on black money took a further toll.

However, foreign investors are now moving back into the country and the casino sector.

During the Nepal Investment Summit in March a total of $13.7 billion was pledged in foreign direct investment, with the bulk from China.

About $10 million was earmarked for tourism.

The Himalayan country has a long history of casino gambling. It opened its first casino under the then royal regime in 1968 and it flourished as a South Asian Las Vegas under RD Tuttle, an American businessman. However, until recently it didn’t have a regulatory framework that was up to international standards. In an effort to upgrade the industry, the government introduced new legislation in 2013 and shut down all properties that failed to comply. The industry was just beginning to get back on its feet when the earthquake hit.

A total of 729,550 international travelers visited Nepal last year, up 31 percent from 2015, the Department of Immigration said, although figures for Indian tourists, who are freely able to cross the porous border into Nepal weren’t included in the calculation.

The highest number of arrivals were from India (16.21 percent) and China (11.04 percent), with the United States (7.35 percent) and Sri Lanka coming in third and fourth position.

The Asian Development Bank predicted in March that Nepal’s GDP will grow by 5.6 percent in the year ending in mid-July. The projected

Asia Gaming Briefings | August 2016

growth, up from 0.8 percent the previous year, if realized, will be the highest in 20 years.

Five casinos -- Millionaire’s Club and Casino, Casino Mahjong, Casino Royale, Casino Pride and Casino Rad -- currently operate in Nepal.

That’s down from 10 before the government clampdown. More are scheduled to open.

Imperial Private Limited, a company that is 90 percent-owned by Indian operators, with the rest from Nepal, is set to open Casino Anna, which was demolished after the earthquake.

The company will operate the casino one floor above a high-end coffee shop facing the five-star Hotel De l’Annapurna, according to casino sources. A Nepali businessman based in Sri Lanka in partnership with Sri Lankan casino operator, Bally’s Casino Colombo, the island nation’s largest casino, has set up a company called Vintage Nepal to run Casino Venus at Hotel Malla, the sources said. Bally’s Casino Colombo has a 51-percent share in the company, with the rest held by Nepali partners.

“The sector has rebounded strongly. More casinos are opening in Kathmandu as a result of strong demand from India as well as an increasing number of Chinese businessmen and tourists coming to and in many cases living in Nepal,” said Mike Bolsover, CEO of Australia-listed Silver Heritage Group, which runs Millionaire’s Club and Casino.

“The fundamentals of the proposition remain strong. Positive broad structural demographic trends in India underpin a burgeoning middle class in the neighbouring state of Uttar Pradesh with its population of some 215 million citizens, and the 1.32 billion citizens of the Republic of India,” he said, explaining Nepal’s attraction.

Silver Heritage is scheduled to open its Tiger

Palace Resort later this year, near Bhairahawa.

The debut of what will be the country’s first integrated resort has been delayed from February due to problems including shortages of raw materials and fuel.

Bolsover said the opening of Tiger Palace Resort “will be a game change for the industry in the subcontinent”. Access to the area is being improved through a new six-lane highway directly past the resort, as well as the upgrading of the airport at Bhairahawa, about 20 minutes drive away, to full international status.

“The expansion of the domestic Indian airport at Gorakhpur (just 100km over the border in India) will substantially improve ease of access from the largest cities in India such as Delhi, Mumbai, Kolkata and also internationally,” Bolsover said.

Meanwhile, in a clear sign of investors’ growing confidence in Nepal, several international hotel chains have also begun construction in Kathmandu, with the Marriott Hotel and Hilton Hotel nearing completion.

TOURISM ARRIVALS 803,092

797,616

790,118 554,747

2012

2013

2014

729,550

2015

2016

Silver Heritage hikes Nepal casino budget Silver Heritage Group has increased the budget for its integrated resort in Nepal by A$18 million ($13.8 million) to $70.3 million and said it’s in the process of raising more capital. The timing for the completion of the Tiger Palace Resort will be staged, with the completion of hospitality areas by August, with the remainder of the facilities available

by November.

Demonetization not seen hitting economy overall India’s sudden decision to withdraw the highdenomination banknotes is expected to have a ‘limited impact’ on overall economic activity of Nepal, the International Monetary Fund said.

However, it noted that the number of rupee notes in private households and companies is unknown and those holding them have seen their purchasing power affected.

“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 46

G2E 2017

A focus on non-gaming Macau’s biggest gaming industry exhibition celebrates its 11th anniversary this year, with attendance expecting to surpass 12,000 visitors.

O

rganized by the American Gaming Association (AGA) and Reed Exhibitions, the exhibition has defined itself as the preeminent show for the Asian gaming-entertainment industry.

Last year’s edition of G2E Asia marked a decade of growth with a record 10,887 visitors from 83 countries and regions.

According to organizers, G2E Asia 2017 is set to break even more records, with more than 12,000 square meters of exhibition space hosting around 180 exhibitors.

Key customers at the show includes Ainsworth, Aristocrat, Aruze, Asia Gaming, Astro, BB IN Technology, Bingotimes, Boller Technology, eBet, Generator Digital Technology, Golden Royal, Hydako, IGT, Interblock, Jumbo Technology, Konami, Oriental Group, RGB, SA Gaming, Scientific Games, Xiang Shang International and Xin Wang Group.

A key highlight of the show this year is G2E’s Integrated Resort Experience (IRE), developed in response to the Macau government’s call to attract a market beyond pure gaming enthusiasts.

The IRE is also the first-ever event at G2E Asia to centralize sourcing of new products, technologies, and services that drive revenue and value from nongaming sources across Entertainment, Clubs, Bars, IR Technology and Business Solutions.

Asia Gaming Briefings | May 2017

“With the surge in non-gaming spending, the Integrated Resorts Experience (IRE) is a timely new addition to the booming event and an excellent way to diversify revenue streams for Macau,” said organizers.

Other non-gaming areas which will be featured at the show include digital display integrated systems, security solutions, augmented reality, big data analytics and CRM, as well as a broad array of solutions that can improve patrons’ experience and boost operational efficiency.

The 2017 show will also see the second instalment of the Asia Gaming Awards, produced by Asia Gaming Brief (AGB) in association with G2E Asia and The Innovation Group, held on Tuesday 16 May. The Asia Gaming Awards are open to operators, regulators, suppliers and service providers that have made outstanding contributions to the land-based and online casino industries. It also recognizes young gaming executives from Asia based on their talent and potential to shape the industry in the coming years.

For those in attendance to the G2E conference this year, delegates can attend up to five separate conference streams across the three-day event, including: Asian Markets Forum (16 May), Gaming Operations and Technology (17 May), Integrated Resorts and Marketing (17 May), IAGA Best Practices Institute (18 May) and iGaming Summit (18 May).

47

THE MARKETPLACE FOR THE ASIAN GAMING INDUSTRY Market Trends. Quality Products. Networking.

G2E Asia: Informs smart business decisions.

MAY 16 - 18, 2017 THE VENETIAN MACAO A G2E EVENT

A G2E EVENT

PRESENTED BY

PRESENTED BY

ORGANIZED BY SPONSORED BY

www.G2EAsia.com

Asia Gaming Briefings | May 2017

SUPPLIER SPECIAL REPORT 48 ABBIATI

High security casino currency

A

bbiati will be presenting its new line of chips and plaques enhanced with innovative security features at G2E Asia this year.

“Our company has an increasing focus in Asia and we have been working hard to meet the demanding needs of the Asian customers who require reliable and state-of-the-art products,” said CEO Giorgio Abbiati.

The plaques have an impressive range of new patterns, designs and materials, meanwhile its innovative chips line will include Abbiati’s patented “Tie” chips as well as a new line of chips called “il Gettone.” All of the company’s currency products are available with numerous security features, such as 13.56 MHz PJM RFID; 8-color UV pigments; 3-in-1 UV security feature; Laser Tracer technology; Optical Variable Ink, and high security holograms.

This year the Italian company will be exhibiting a brand new Baccarat table model designed specifically for the Asian market, which features a unique high-end design with elegant and refined finishing.

Abbiati Casino Equipment will also exhibit its GLI-25 certified American roulette wheel, which incorporates the upgraded Abbiati patented invisible laser technology (Class 1A).

Along with the wheel, Abbiati will present its range of high quality multimedia Winning Number Displays.

Being the exclusive worldwide distributor for Modiano, Abbiati will present a complete range of 100 percent plastic and paper plastic coated playing cards, including new high security features such as tracking mechanisms and cards with barcodes specifically designed to meet the requirements of online gaming operators.

With the new line of chips, plaques and jetons, Abbiati Casino Equipment seeks to establish itself once again as the leading supplier of incomparable security casino currency products.

The company can be found at stand 525 at the show.

Asia Gaming Briefings | May 2017

Ainsworth

World-renowned games

T

o show its commitment to delivering products designed for the Asian market, Ainsworth will showcase a range of premium titles at the upcoming G2E Asia expo.

Ainsworth recently introduced its new A600 cabinet line, which incorporates the company’s deep and long-standing knowledge into an exciting new product for its casino partners.

The A600 takes Ainsworth technology to the next level with larger game screens, dynamic lighting effects and a state-of-the-art LCD touchscreen button deck.

At G2E Asia, a range of link progressives and SAP packages will be shown on the A600 that complement the variety of products developed for the region. Titles including: Lucky 8 Treasures, Fire Power Series, Oriental Express, Grand Fortune, Double Shot Gold, Quad Shot and Lucky Ways.

“We believe the A600 can be a game changer,” said Ainsworth president - North America, Mike Dreitzer. “Our game library has grown and with upgraded hardware capabilities we can offer customers entirely new possibilities for their casino floors.”

While being focused on supreme engineering and best-in-class reliability, the A600 includes the high-end graphics, high-resolution screens, and interactive button decks that are expected by operators and players.

Two 24-inch screen and game-driven lighting effects enable players to experience Ainsworth’s games in a new way.

Sneak Peek: Ainsworth will be introducing the stunning A640 cabinet to the Asian market. The A640 will be displayed with Fortune Rabbit, Fortune Horse and Rumble Rumble Bison.

“The Asian market has an appetite for the best in class games and at Ainsworth we are dedicated to satisfying these demands with highly innovative technology, cabinet flexibility, product performance and a wide range of game options,” said Dreitzer.

The Ainsworth team will be at stand 1305.

ANGEL PLAYING CARDS

Best quality playing cards

A

ngel Playing Cards is a pioneer in the manufacturing of superior casino-grade playing cards, with over 50 years of experience.

Since its inception in 1949, Angel Playing Cards has consistently been providing the global market with the best quality playing cards, following its basic policy of aspiring for perfection.

The company has customers across Asia and Australia.

“We believe that ongoing communication with customers is essential in building a mutual understanding, and ultimately increasing our customer’s satisfaction. We have started many of our business relationships in this fashion. We place a high value on face to face meetings, to ensure that we provide the highest possible quality, service and security. We look forward to your inquiries,” said the company.

The staff will be pleased to meet you to find out more about you and your needs.

See them at stand 1025 & 1031.

SUPPLIER SPECIAL REPORT 49 ALFASTREET

Multi Touch Roulette

T

he beginning of the year 2017 marked the presentation of Alfastreet’s brand new product, the Multi Touch Roulette.

It’s a fully automated live Roulette game, featuring a 65” HD central monitor and eight gaming stations.

“During the past years other producers tried to get into the gaming venues with similar products, but were lacking both in design and reliability,” the company said.

The Multi Touch table combines the industry’s leading experience in the field of electronic table games, the latest technology and the sublime art of transferring the touch and feel of a live game into an automated electronic version. The clear and entertaining graphic animations from the central monitor provide complete immersion to the players that each play on the individual betting screen.

This is the only machine of its kind that provides 8 gaming stations in a compact and efficient format.

Multi Touch can be fitted with both live and automated Roulette wheels, depending on an operator’s requirements and can be aesthetically fully personalized, to best fit into the venue. The main advantages over classic roulette tables are the absolute security and ease of operation, since there’s no need for a highly skilled professional dealers and supporting personnel. This machine is also completely inter-connectable with other systems and can be easily expanded with a range of Alfastreet products.

The response after the 2017 ICE presentation in London has exceeded predictions and the first units are already up and running in selected casinos of North America, Asia, Latin America and, after the latest installation, in Europe as well.

ALL-IN

All-in going all out

A

ll-in offers translation, localization and copywriting services with a focus on online gaming, a truly international enterprise.

But nowhere does the phrase ‘think global, act local’ count more than in the need to communicate well with different audiences all around the world. Since 2008, All-in has been playing an integral role in putting casinos and lots of other gaming venues in touch with their players by ‘speaking their

language’ in all ways.

Asian gaming is the up-and-coming growth industry, and in line with the company’s growth strategy for 2017, All-in will be looking to embrace opportunities here.

Fronting for All-in is Erica Chang, Allin’s business developer for Asian markets.

Her expertise straddles both Western and Asian markets, and her in-depth knowledge of Chinese culture and language is a valuable

asset for industry players looking to expand from West to East or vice versa.

All-in’s business manager Michele Spiteri and sales executive Maciej Kwiatek will be there as well to let anyone interested learn more about the company’s services and the kind of work that it does.

Drop in at the All-In booth, at stand 1830 for a chat, or if you need help with some instant interpretation during the show.

Asia Gaming Briefings | May 2017

SUPPLIER SPECIAL REPORT 50 Aristocrat

Innovate and entertain

A

ristocrat will showcase its newest game and cabinet creations, designed to help operators cater to all types of players and gaming floor segments.

“Our global teams of designers, creatives, mathematicians and engineers are united behind one goal: to create innovative games and cabinets that help our customers provide their guests with the best player experience and entertainment possible. We are excited to present our newest innovations at G2E Asia and to showcase our broad and deep product portfolio that will help our customers appeal to every type of player,” said Vincent Kelly, Aristocrat managing director Asia-Pacific.

Aristocrat’s global slot sensation Lightning Link is expanding at G2E Asia with new games that have been customized to the Asia-Pacific market, complete with tailored graphics, jackpots

and bet options.

Building on the success of Lightning Link is Aristocrat’s new Long Teng Hu Xiao slot game. Long Teng Hu Xiao combines scalable bonus prizes, and prizes on the reels linked progressive with strong Reel Power mechanics for a new level of fun.

Also on display will be key extensions of Aristocrat’s biggest Asian brand, and one of the best loved and recognised slot brands across the region, 5 Dragons.

In addition, Aristocrat will be showcasing the Spin It Grand slot game at G2E Asia 2017.

Spin It Grand is a new game concept in our stand-alone progressive jackpot category with a wheel-style mechanic in the top box.

Aristocrat will be showcasing completely new Multiline Baccarat, Baccarat 88, Baccarat Streak and Baccarat Zhuan Zhuan Fa slot games

on the Arc Single cabinet.

Based on Baccarat and wrapped in Aristocrat creativity, these will be games to watch.

The team looks forward to welcoming you to stand 637 at the show.

Aruze

Asia Live Tech

A

A

Burning Wheels Nitro Inferno ruze Gaming is very excited to showcase its two newest products - Dragon Sic Bo on its famous G-Station platform, as well as debut the Cube-X Innovator Deluxe at G2E this year.

Attendees will also be welcomed with additional titles on the Cube-X Vertical and Cube-X Ultimate.

The brand new design Dragon Sic Bo has a breathtaking jackpot feature and additional multipliers for a different gaming experience. With wrap-around signage, this new title is equipped with a curved 42-inch LCD screen displaying game history and results. Aruze continues to focus on entertainment by having the ability to ‘shoot’ the dice to effectively recreate the look and feel of the actual table game.

From top to bottom, the Cube-X Innovator Deluxe starts with a 23-inch LCD topper displaying the title of each theme.

The 42-inch LCD vertical game monitor is pumped up with the addition of a larger-than-life video wheel. Sitting below these additions are five physical reels brought to life with Aruze’s famous Radiant Reels.

The first two titles are Burning Wheels Nitro Inferno and Burning Wheels After Burner which contains a four-level progressive that can be linked, or remain as a stand-alone unit.

Cube-X Vertical continues to expand its library with two new series, Ancient Wheel and Thunder Storm. This video slot series awards free games and allows players to play up to four-levels of progressives. One title from the Thunder Storm series will be available on the Cube-X Vertical 80 platform.

Denise Amorim Hung of Aruze Gaming Macau Ltd. states; “We are very excited to showcase our product once again at G2E this year, and we look forward to bringing new entertainment to the casino floors.”

Asia Gaming Briefings | May 2017

New global strategy sia Live Tech is an igaming developer and solutions provider company, which encourages its employees to reach for the stars.

Focused on the Asian market, the company’s products and games are a testament to their Asian touch and expertise.

“We are the best gateway for people looking to get a slice of the juicy Asian market; it is no secret growth is going strong here. And with growth comes entertainment needs. Our gambling solutions, including White Label Casinos and Product Integration, are what the shrewd entrepreneur requires to succeed in that part of the world,” said a company spokesperson.

G2E Macau is not the only way Asia Live Tech is going global. Reworking their website and communications, along with a new marketing team with experts coming from France, Japan, Kenya, Vietnam, Malaysia and the Philippines, Asia Live Tech has what it needs to think outside the Asian box.

“This is a thorny but incredibly rewarding journey to define such a new and ambitious strategy.

We have booklets, brochures, videos, websites or even games to rework, improve and deliver to the world. The G2E 2017 will be our new stepping-stone in this regard. This is where we are going to turn into a global firm.”

Should you be interested to know more about Asia Live Tech and where they come from, you are welcome to visit stand 2251 at the show.

51

Asia Gaming INFO@AGAMACUA.COM.MO • +853 2857-5762 • WWW.ARUZEGAMING.COM

Briefings | May 2017

SUPPLIER SPECIAL REPORT

Colored Logo Primary Usage

52 asia gaming

BETSOFT

S

B

Slot3 shines

Baccarat tournament uccessfully returning from ICE 2017 in February, Asia Gaming, the leading provider of Live Casino solutions, is coming to G2E Asia with the theme “Be Dynamic, Play Terrific”, showcasing the latest products to visitors targeting the Asia market.

The gaming supplier will be featuring a live demo of its feature product Baccarat tournament, as well as its European Blackjack offering.

The AG Baccarat Tournament is a poker tournament with a predefined number of players, which begin once all of the seats are filled.

The last remaining player in the tournament is the winner. Prizes are determined according to the Tournament Prize Pool Structure.

Apple(黃暐婷), a Taiwanese celebrity will be joining the stand as the guest MC over the three-day show, celebrating this remarkable event and presenting the tournament to all visitors.

Besides the Baccarat Tournament, the European Blackjack will be showcased this year.

Kelvin Chiu, sales director of Asia Gaming, said: “We believe there are a specific group of players that prefer playing Blackjack rather than any other poker games. By adding several new betting options to this game, they will start playing on our platform now and it will definitely become a hit undoubtedly.”

Last but not least, Jackpot-oriented slot game “Jackpot Lobby” powered by Xin Gaming, will be available on the Asia Gaming stand for trial. This “Jackpot Lobby” was built exclusively to every slot-lover, with plenty of Jackpot-related information such as real-time Jackpot winner, which is displayed in the lobby right before the player even chooses his/ her game.

Asia Gaming can be found at stand 1907 during G2E Asia.

BBIN

New BB Sports

B

BIN is back again at G2E Asia, bringing new products and directions for industrial development to the market.

“Best Bet of Asia” is not only BBIN’s brand appeal for 2017; it is also BBIN’s theme for this year’s ICE and G2E Asia exhibitions. With both the White Label Solution and the Game API, BBIN’s services are provided throughout East Asia, Southeast Asia, China, Japan, South Korea, Vietnam, Thailand, Indonesia, Malaysia and many other regions, to nearly 500 platform operators.

A major highlight at the exhibition this year is the New BB Sports, put together by BBIN and Betconstruct. This is a new betting platform, with even more advanced features

Asia Gaming Briefings | May 2017

and services. New BB Sports not only supports nearly 40,000 sports-related bets and e-sports events worldwide with a brand new interface, it also provides nearly 200 types of Events and Live Betting game play, including winner, handicap, measurement, and O/E. It also integrates the system with multiple simultaneous betting capabilities and statistics to provide analysis of each team’s winning percentages. In addition, customers can experience BBIN’s leading technologies in hardware and software first-hand at the stand.

In addition to trying out the Remote Rolling Tech on-site, players are able to remotely control the speed and power with which the roulette wheel is spun or the dice are thrown. This promotesanimmersiveentertainment experience. Moreover, BBIN uses app integration technology to release the Game Zone App, which not only combines all four gaming products, but also allows users to log in with a single key anywhere, anytime to get their latest cash flow statistics.

Visit their team at stand 1609 at G2E Asia.

etsoft Gaming announced that they will have a prominent stand at this year’s G2E Asia conference.

The industry supplier will be showcasing several of its latest Slots3 games, most notably THE SLOTFATHER: PART II. This long-awaited sequel to the original smash hit THE SLOTFATHER brings back the iconic characters of the seedy underworld, and features an exciting bonus round where players can claim their own cut of the Slotfather’s ill-won earnings. Also to be shown is the gorgeous, anime-styled FA-FA TWINS, which pays 243 ways and is dominated by a special functionality where reels will synchronize with adjacent reels to provide many opportunities for winning. THE ANGLER, the newest addition to the Slots3 family, is centered around a burly fisherman and a unique fishing mini game, where players can fish up bonus credits.

Betsoft’s new Vault download client will also be showcased at the event. Vault will enable players to download Betsoft games directly to their desktop computer rather than accessing them via a browser, creating near instant load times.

“We always look forward to attending G2E Asia,” said Mark McKeown, Betsoft’s VP of Sales and Marketing. “This is an unmatched opportunity to let our Slots3 product shine for the show’s attendees. We are pleased to introduce Vault, our new download client, as we believe it will create a better experience for all players of Betsoft games. Our stand, 1809, at G2E Asia 2017 will be exhibiting the best games available in the market today, alongside Vault, and we are proud to offer these creations to the show’s attendees as a taste of what Betsoft has to offer.”

Betsoft can be found at stand 1809 at the show.

SUPPLIER SPECIAL REPORT 53

ALDERNEY - YOUR ACCESS TO WORLD MARKETS

Access new markets.

Reach your potential.

Where do you want to grow?

Globally recognised, Alderney provides a refreshingly flexible, risk-based approach to licensing, supporting licensees to access worldwide markets.

We can help you reach your potential.

alderneygambling.com

Asia Gaming Briefings | May 2017

SUPPLIER SPECIAL REPORT 54 BetConstruct

CPI

T

C

VR Casino

Powerful cash management solution

his year, BetConstruct travels with its innovative and proven offerings to G2E Asia 2017 in Macau, the heart of the Asian gaming industry, to display an extensive range of market-leading products including Sportsbook, Data Feed and Marketing Solutions, Casino Suite, Live and Virtual Reality Casinos, SlotBuilder and many more.

BetConstruct is proud to showcase its renowned Sportsbook with Asian view developed specially for the region. It appeals to Asian players who demand a more time-focused and uniform layout of markets as well as regular updates of odds.

The RNG Casino Suite of BetConstruct counts more than 3,000 exciting games. The range is provided by multiple partners of BetConstruct and is always freshened up with high-resolution graphics and attractive design. And Live Casino provides 24/7 HD quality streaming maintaining the real casino atmosphere with multilingual and multicurrency options.

But for an over-the-top experience, one may try the demo version of VR Casino - an exclusive product in the iGaming market.

BetConstruct’s VR Casino is designed with an all-interactive gameplay where any user can play Slot Machines, visit Sport Bar and try their best at VR Live Dealer with real money betting and immediate 24/7 payouts.

Also, as a part of exclusive content, all visitors can take a look at the SlotBuilder which gives an opportunity to design your very special slot machine. With highly customizable units, all operators can make a truly personalized and crafted design for their casino machines from choosing the number of lines and changing the reels layout to uploading images to start integrating into slot machine logic.

Meet BetConstruct at stand 1808.

rane Payment Innovations (CPI) will be exhibiting at G2E Asia with the most comprehensive portfolio of automated payment systems in the gaming industry.

Among the products on display will be the SC Advance note acceptor and EASITRAX Web cash management solution.

Known for its powerful performance capabilities, SC Advance is part of the reliable SC line of note acceptors, of which more than 2 million units have been sold worldwide. It features the industry’s best first-pass acceptance rate for new and street-grade notes; a robust recognition system for reading the high-tech security features that are now being introduced on banknotes around the world; and expansive memory to accommodate not only new banknote introductions but also new security algorithms that will help protect against fraud as criminals become ever-more sophisticated.

At G2E Asia, visitors will have the opportunity to evaluate SC Advance alongside the powerful EASITRAX Web cash management solution, a recent software extension of the RFID-based EASITRAX Soft Count system, which has now been installed in more than 200,000 games worldwide. Designed to maximize control and flexibility, EASITRAX Web allows operators to create customized reports, grant permission levels and track performance remotely from anywhere in the world with secure intranet access.

In addition to SC Advance and EASITRAX Web, CPI will show a range of coin acceptors, coin hoppers and integration devices which allow developers to quickly and easily integrate different combinations of payment peripherals into a machine without having to spend the time and money associated with creating customized payment software.

For more information, please visit CPI at stand 825 during the show.

DGx Hub

Bigger and better

D

igital Graphix Hub Technologies Inc. is back, bigger and better with 40 of their 2D, HD, HTML5 and flash slot games at G2E Asia 2017.

The company brings headline games this year including Ninjizzu, which is set during the time of the ninja and the tumultuous period of feudal Japan. Kagero is a ninja spy uses her feminine charms to serve their masters and save innocent lives.

Dragon Masters pays homage to the legendary Martial Arts Action Stats of the Kung-Fu movie era. Takes place in Ancient China when clans fought to be the best of the best.

Imperial Maiden transports the player back to Ancient China and in the time of fantastic Femme Fatales vying for the right to call themselves the strongest woman in the world.

Dragon God: Shen Long, featuring the likeness of classic symbols of wealth such as the Smiling Buddha, Jade Turtle, White

Asia Gaming Briefings | May 2017

Tiger and the Red Phoenix, immerse yourselves as you receive the many blessings of Shen Long, the mighty Dragon God. Finally, Lucky Fortunes is a slot game theme based on popular symbols of prosperity, wealth and blessings found in East Asian Culture.

DGx will also showcase its newest development “VR Bac” a proxy betting tool that uses virtual reality to enable gamers to play table games as if they are within the actual casino. All that is needed aside from the “VR Bac” app are just a VR cardboard compatible mobile phone, VR headset and internet connection.

The team can be found at stand 944 at the show.

SUPPLIER SPECIAL REPORT 55

Peak performance.

Put higher profitability within your reach with CPI. It’s no wonder that more than 2 million SC note acceptors have sold globally, especially with SC Advance now leading the way. By maximizing acceptance and security, while minimizing note jams and maintenance requirements, its performance is unmatched – helping operators around the world achieve new heights of profitability.

When it comes to raising your profitability, SC Advance has the power to get you to the top. Please stop by our G2E Asia booth #825 or visit www.CranePI.com to learn more.

CranePI.com

Technology that counts.

Asia Gaming Briefings | May 2017

SUPPLIER SPECIAL REPORT 56 First Cagayan

Leading iGaming jurisdiction

T

he Cagayan Economic Zone Authority (CEZA) is a government-owned and controlled corporation.

It is the first offshore gaming licensing body in the Philippines and Asia, which has now emerged as one of the leading interactive gaming jurisdictions in the iGaming world.

CEZA guarantees that its gaming regulatory operations meet the highest and strictest industry standards and are commensurate with best industry practices. For over a decade, CEZA has appointed First Cagayan Leisure and Resort Corporation (FCLRC) as the Master Licensor to regulate and monitor all activities pertaining to the licensing and operation of interactive games on behalf of CEZA. This is complemented by the world-class

services of LR Data that are tailor-designed for online gaming businesses. An affiliate company of First Cagayan, LR Data is a bespoke, gaming-centric provider of a wide range of hosting services with robust data center operations located in the Philippines and nodes in key regional locations. FCLRC and LR Data are at the forefront of the internet gaming sector in Asia as enablers for the licensing and data hosting requirements of Asia-facing international operators and their ancillary service providers.

First Cagayan and LR Data have been developing the jurisdiction with the stateof-the-art technology and infrastructure, collaborating with global Tier 1 Telcos, and promoting the Philippines to become one of

the leading interactive gaming jurisdictions in the world. Beyond licensing and hosting services, First Cagayan and LR Data strive to offer an extensive range of value-added services including legal consultation services, technical expertise, pre- and post-opening assistance.

This kind of close coordination delivers a business-friendly environment leading towards a hassle-free start up for licensees and locators seeking work-life balance. The combined effort and responsibility of Cagayan Economic Zone Authority, First Cagayan, and LR Data accord gaming operators an appropriate operating base from which they can penetrate the Asia-Pacific gaming markets and the rest of the world.

You can find First Cagayan at stand 1625 at the show.

EZUGI

GLI (GAMING LABORATORIES INTERNATIONAL)

E

G

OTT solution zugi, a live dealer solution provider, will go live with its over the top solution, OTT, over 3 Baccarat tables, at Queenco Casino, Cambodia.

The Ezugi OTT solution provides the bridge between the online and offline casino worlds, by creating a unique gaming experience.

After installing the OTT product on their Baccarat tables, which connects them to the Ezugi network, land-based casinos can automatically drive new online traffic to their offline tables creating new revenue channels.

OTT Baccarat allows players to bet on the actual Baccarat table in the casino and to play alongside online customers accessing the same game.

Land-based players can place bets in the traditional manner, while the live video stream can be accessed by an unlimited number of players via the internet on a desktop computer or connected mobile device.

Using automatic shufflers, Ezugi ensures maximum game security.

Sagi Ifrach, business development director of Ezugi said: “Ezugi has created the way to turn any land-based baccarat table into an online offering with a simple implementation onsite driving instant traffic upon launch. Ezugi’s OTT product is a natural expansion of the Ezugi Network strategy where we aim to become the biggest pool of table games by connecting landbased casinos around the world under one shared game lobby.

Joining our regulated network by adding simple equipment on top of tables instantly generates money to the land-based baccarat hosts. Land-based casinos are a central part of the Ezugi strategy, and OTT is an important step to strengthen our offering.

Ezugi is working on the second phase which will allow betting behind in same location using mobile phones as part of its on property mobile solution.

Asia Gaming Briefings | May 2017

Sharing global expertise aming Laboratories International (GLI) will be sharing its global expertise with all those that visit their stand at G2E Asia this year.

Because GLI has had a strong presence in Asia for the past 10+ years, the company is very familiar with local challenges in the region. At G2E Asia, GLI’s experts will be more than happy to discuss issues such as: Network Risk Assessments; Network Security Review; iGaming Testing; Regulatory and Jurisdictional Consultation; and Quality Assurance Testing.

With over 1,000 experts located on six continents and in over 20 locations worldwide, GLI brings a truly global and local perspective to the show. For over 25 years, GLI has delivered land-based, lottery and iGaming testing and consulting to over 475 jurisdictions all over the world. By offering so much more than just testing, GLI has become a trusted partner for many regulators, suppliers and operators.

Important to many clients is the Gaming Labs Certified® mark, which is recognized globally. The product bearing this symbol has passed the most challenging tests and meets the most rigorous industry standards. It is only given after devices pass tests for the intended jurisdiction. GLI’s experts would be pleased to discuss this mark and its importance as a sales tool, which can be displayed at trade shows and in other places.

To learn more about GLI and our extensive world-class services, visit us at stand 906 at the show.

57

Asia Gaming Briefings | May 2017

SUPPLIER SPECIAL REPORT 58 GOLDEN RACE

ONLINE platform

G

olden Race will be showcasing its new ONLINE platform and the direct-tomobile experience at G2E Asia 2017, along with the complete range of proven, profitable, and popular solutions for retail and online operators around the world.

Golden Race´s ONLINE platform is entirely unique in the industry. Built from the ground up to be the only real, complete sportsbook with virtual results, it contains all the features that players love from real sports betting, including combination bets, bonuses, and multi-event betting across different sports.

Only Golden Race captures the authentic betting experience from real sports and casino betting, and packages it into a data-friendly, fast, secure, reliable, and completely manageable 24/7 betting solution.

Give your players pre-recorded HD video races alongside digital 3D Football, with all the major competitions in the world available, and the ability to make accumulator bets across different events and even different sports and games.

A complete, fully manageable solution which includes instant odds and limits adjustment, powered by the certified RNG backed, multi-regulatory body licensed, retail-proven platform.

With real odds created by professional in-house bookmakers, all the popular markets, all the major competitions, combination bets, accumulator bets, bonuses, and more, Golden Race provides the authentic betting experience, completely manageable,

completely schedulable, and completely whitelabel, ready to be branded from POS all the way through to in-game panels, promotions, colours, logos, teams, and more.

Visit Golden Race at stand 1825 at the show.

C

IDNPLAY

GPI

Series of social events

Innovative currency

G

PI is a leading global supplier with an extensive suite of table game products including chips, plaques, jetons, playing cards, RFID solutions, layouts and dice. GPI will be showcasing these as well as its newest currency, table layout and RFID offerings to its Asian market customer base this year.

The V-Series, produced with a new, innovative and highly durable injection material formula, is a Bourgogne et Grasset (BG) chip that was

Asia Gaming Briefings | May 2017

developed to provide customers an additional gaming currency option with advanced chip design flexibility. The V-Series chips are unique in that they allow customers to design their chips with a greater amount of versatility.

The V-Series chips also come standard with an infra-red security feature exclusive to GPI. GPI offers an unmatched range of currency security features. These include covert security features that are easily authenticated through visual inspection and overt security features that are invisible and can only be authenticated with special tools. Currency security features can be layered to help provide optimum currency protection. SecuriFilm, which is compatible with RFID, is used on a chip’s decal and features a semi-transparent hologram-like effect.

Customers will be able to see firsthand demonstrations of GPI’s exclusive SMART RFID offerings. SMART offers the latest advancement in casino currency RFID technology and, when used with its Chip Inventory System (CIS) software, SMART delivers a complete currency tracking and authentication solution. GPI offers all the necessary components from SMART RFID currency, both antennas and readers. SMART is available on all of its currency brands.

For more information, visit the GPI team at stand 1451.

I

DNPLAY Corporation is an online gaming company based in Manila, Philippines.

Founded in 2010, IDNPLAY has designed and produced software for online gaming and has established numerous partnerships with different brands all over Asia. As of March 2017, IDNPLAY is currently second in the worldwide online poker rankings.

This year, IDNPLAY will be hosting a series of social events at G2E Asia.

Returning in 2017 is the annual charity poker, held at the Venetian Casino poker area.

IDNPLAY and Oriental Game will also be collaborating together to provide attendees with special performances and a party hosted by a famous Asian female DJ. See firsthand what IDNPLAY is all about at stand 1965.

M

Y

CM

MY

CY

CMY

K

59

Innovative Innovative Currency Currency & & Table Table Game Game Products Products We We are are the the leading leading global global gaming gaming supplier supplier of of an an unmatched unmatched suite suite of of innovative innovative chips, chips, plaques plaques and and jetons jetons with with an an extensive extensive portfolio portfolio of of design design and and currency currency security security options. options. Make Make your your gaming gaming tables tables stand stand out out by by adding adding our our full full range range of of casino casino quality quality paper paper and and plastic plastic playing playing cards cards and and eye eye catching catching full full color color graphic graphic layouts. layouts. In In addition, addition, our our RFID RFID currency, currency, RFID RFID products products and and RFID RFID solutions, solutions, can can help help you you protect protect your your money money while while providing providing aa multitude multitude of of operational operational enhancements. enhancements.

See our Products in Macao at G2E Asia Booth 1451

See our Products in Macao at G2E Asia Booth 1451

www.gpigaming.com www.gpigaming.com

Asia Gaming Briefings | May 2017

SUPPLIER SPECIAL REPORT 60 IGT

Innovations for Asia

I

GT will be hosting a range of gaming products that reflect the theme, “Innovations for Asia” at G2E Asia this year.

IGT will showcase its globally successful casino management systems solutions such as IGT Advantage, as well as its Table Manager solution, an automated system for rating and rewarding players as well as its Lucky Chip Bonus.

Other solutions to be demonstrated include the award-winning Cardless Connect mobile solution and the award-winning PlaySpot mobile software solution, which was recently named “Casino Product of the Year”.

IGT’s innovative SPHINX 4D game on the CrystalCurve TRUE 4D cabinet will be making its Asia debut at the Show. The game offers a multi-sensory experience that enhances its glasses-free 3D technology with mid-air haptic and gesture-based technologies that enable players to touch and manipulate 3D objects emerging from the screen.

IGT’s TRUE 3D title Phoenix Rising 3D will be making its world debut at the show.

Housed on the AXXIS 3D cabinet, Phoenix Rising 3D features bold, fiery graphics and offers players an immersive glasses-free 3D gaming experiences.

IGT will also spotlight the multi-level progressive title Cai Yun Heng Tong.The title offers players a high-volatility four-level progressive. The game’s multiplier symbols generate coins that can trigger the MLP bonus, or place random wild symbols anywhere on reels two, three, four and five.

Another standout theme in IGT stand will be Rong Hua Fu Gui on the CrystalDual cabinet. The four-level progressive video slot game was designed for the Paltronic Link and includes a mystery bonus trigger that unlocks the game’s Pick Bonus.

To experience these and more IGT “Innovations for Asia” visit stand 601 at G2E Asia.

HABANERO

iSoftBet

Showcasing new content

Game Aggregation Platform

Q

L

uality slots and table games provider Habanero will be revealing the latest additions to its fast-growing portfolio at G2E Asia 2017.

Habanero has released a host of new HTML5 titles optimized for mobile devices over the previous 12 months, including most recently the highly-acclaimed Bird of Thunder, Koi Gate, and Fire Rooster.

Furthermore, the developer’s brand new title will be on show for all to see, and looks set to become one of the supplier’s most popular games to date.

The interface for each of Habanero’s slots is very easy to use and the rotation from landscape to portrait works perfectly, even on the smallest device, always using the full real estate of the screen.

As a result, they are perfect for the next generation of tech-savvy players, brought up on console gaming.

Few exhibitors will be able to match Habanero’s robust capability and use of the latest mobile technology, which is now attracting the attention of operators around the world.

Head of sales Daniel Long will be on site in Macau, alongside the rest of Habanero’s senior team, to talk you through their innovative offering.

You can also try out Habanero’s games ahead of the show at their demo site: haba88.com where you will find Habanero’s comprehensive gaming portfolio now featuring 74 video slots titles, 11 table games, and 50 video poker titles.

Habanero is integrated into over 60 operators and aggregators and available in 21 languages, including thirteen European and eight Asian ones.

Habanero can be found at stand 1431.

Asia Gaming Briefings | May 2017

eading online and mobile casino content provider iSoftBet has reached an agreement with Asiafacing live casino developer SA Gaming ahead of G2E Asia 2017.

The supplier’s state-of-the-art portfolio of games along with its advanced Game Aggregation Platform (GAP) will take centre stage during the show.

2017 marks the fourth year iSoftBet has exhibited at the conference in Macau, but this will be its biggest to date with the supplier set to launch a raft of new titles including Lucky 3 and Beetle Jewels in the run up to, and during, the show.

Delegates visiting the iSoftBet stand will also be able to spin the reels on other soon-to-be-released slots such as Booster, The Ruby and Double Disco, as well as popular classics Shaolin Spin, Neon Reels and Astro Magic.

The show coincides with iSoftBet striking a deal with its latest Asia-facing partner, SA Gaming, which has built a formidable reputation for designing and developing Asia-themed live casino and live-stream lottery products.

Michael Probert, head of business development at iSoftBet, said: “Our deal with SA Gaming is the best way to kick-start our build-up to G2E, which we hope to be the most successful show to date.

GAP is a powerful and flexible content aggregator, giving operators access to more than 1,000 blockbuster titles from 30+ suppliers via a single integration completed in under two weeks. It also allows suppliers to launch their games with some of the largest operators in the market.

Find out more about GAP at stand 1815.

61

Asia Gaming Briefings | May 2017

SUPPLIER SPECIAL REPORT 62 INTERBLOCK

JCM Global

New ETG products

iPRO-RC bill validator

L

uxury gaming manufacturer and electronic table game (ETG) market leader Interblock has announced plans to exhibit its Diamond, StarBar and MiniStar product lines at G2E Asia.

“Asia is one of Interblock’s fastestgrowing markets, and continues to lead theETGsegmentinrecordnumberswith large-scale product placements,” said Michael Hu, VP of Asia at Interblock.

“Interblock Stadium is one of many products we can offer casinos for their players. We are delighted to be exhibiting at the G2E Asia show once again with new innovations designed to deliver incremental revenue for casino operators.”

Interblock will exhibit a mix of its Diamond, MiniStar, and StarBar product lines, including Interblock eTable, Diamond Video Baccarat and Blackjack, Diamond Automated Roulette and Sic Bo, MiniStar, Big Six and StarBar. The company’s new eTable is offered with Baccarat in a five-seat configuration and allows operators to simply press a button to change the game to play with or without a live dealer.

Other new features on display at Interblock’s stand will include Diamond Video Blackjack and Baccarat, with new 3-D Virtual Dealers and functionality that will allow players to wager on multiple side bets at a time. Newly licensed side

J

bets, including Galaxy Gaming’s 21 + 3 side bet and Seven Gaming LTD’s Lucky Lucky side bet, will be displayed on the Diamond Video Blackjack game.

The G2E Asia show follows Inteblock’s recent success with the placement of multiple Interblock Stadium installations, including an 84-seat Stadium at Okada Manila; a 50-seat Stadium at Resorts World Genting; a 40-seat Stadium at One Opera Hotel; and a 40-seat Stadium in New World Hotel.

The company will be on stand 751 with its latest products, functionality, and newly licensed side bets.

Matsui

New gaming chips

M

atsui will be showcasing the latest additions to its product line at G2E Asia 2017.

The company recently expanded its gaming currency portfolio through investment in new security and newly designed moulding segments.

Adding to the traditional security features such as Visible & Invisible UV, Matsui introduces its exclusive MG EYE security, new generation EAS gate check, Material Track, and newly added Laser Trace security.

Their new casino currency products, including innovative PEARL decal chips, will also be introduced this year.

Shigeki Machida, managing director of Matsui Asia, at Matsui’s Macau office commented; “We are very excited to introduce these new gaming chips as well as our other core products such as highly durable heavyweight layouts

Asia Gaming Briefings | May 2017

to our customers at G2E Asia 2017. We are also excited to launch a new series of chips… This will surely provide even more choice and performance for our customers.”

In response to the high demand for Matsui’s Table Layout, the company recently expanded its production capacity with new new machinery and equipment to further speed up and improve the quality of products.

“We have been re-investing a lot of our revenue to improve the quality of our products and upgrade our production facility,” said Mr. Shigeki.

Celebrating its 10th anniversary in Macau this year, the team will be happy to share what it can offer.

Visit Matsui at stand 1331 at the show.

CM Global will help casino operators throughout Asia-Pacific move beyond transactions to making real connections with their customers at G2E Asia this year.

“Asia Pacific is one of the most exciting regions in the world for gaming, and JCM Global has the products backed by world-class service to help operators succeed by making true connections with their customers,” said JCM general manager of Asia Pacific Ian Payne.

Leading JCM’s exhibition is the landmark and award-winning iVIZION, one of the most widely used bill validators in the global gaming industry. iVIZION is the better, smarter, faster bill validation solution and captures more than 9.5 million data points on every note.

JCM’s award-winning ICB (Intelligent Cash Box) system eliminates multiple points of human error for faster, more accurate drops. Plus, because it electronically matches cashbox to EGM, any box can be used at any gaming device.

JCM will also show two leading printing solutions. First is the GEN2 U, equipped with ITH (Intelligent Ticket Handling), large paper capacity, and an expanded graphics memory. The new GEN5 printer builds on that foundation, and adds an even faster processor, dual channel communications, and FUZION-ready technology.

When the iVIZION and GEN5 are connected to the casino’s existing casino management system, JCM’s FUZION technology has the potential to turn every slot into a multi-line profit center, with lottery ticket vending and redemption, race and sports ticket vending and redemption, promotional couponing, tax forms, and more.

Last, JCM will show the all-new PromoNet 2.0, the floor-wide couponing solution that delivers the right promotion to the right customer at the right time.

Visit JCM on stand 1325 at G2E Asia.

SUPPLIER SPECIAL REPORT 63 NOVOMATIC

Gaminator Scorpion

S

haring a stand with Ainsworth Game Technology (AGT) for the first time at G2E Asia, a range of NOVOMATIC product innovations will be on prominent display.

The latest slot and bingo machines with market-attuned content will be featured, alongside key system solutions, and will demonstrate the ongoing expansion of NOVOMATIC in the Asia-Pacific region.

NOVOMATIC, supported by its official distributor in the region, Jade Entertainment and Gaming Technologies, will showcase a range of products.

A bank of sleek GAMINATOR Scorpion cabinets will stand at the front of the stand, featuring a wide range of content including the NOVO LINE Interactive Macau 1 game mix.

From the V.I.P. cabinet line will be the spaceoptimized V.I.P. Lounge with brand new content

as well as a special version of Globe Roulette that has recently been approved in Macau.

On show for the first time at G2E Asia will be cutting-edge video bingo machines by Otium, which became part of the NOVOMATIC Group last year. A spotlight will be on the OT-100 cabinet, which is already proving a major success in the Philippines, updated with new features such as LED animations, a USB charger and optional modular separators. The machines will feature leading bingo titles such as Bingosaurus and Multi Dragon, as well as standalone and linked jackpots.

With an increasing number of installations throughout Asia, the Octavian ACP – Accounting Control and Progressives – casino management system will be returning to G2E Asia. The systems specialist of NOVOMATIC will be on hand to present new modules, including intelligence,

reporting, player loyalty and marketing. In addition, as part of the ACP system will be diverse progressive and mystery jackpot solutions.

The company can be found at stand 1305.

launched in February this year, has been a phenomenon since then. The drastic improvement in graphics in each of the designated themes

proved to be very popular among players.

Find out more about SA Gaming at stand 1851.

SA GAMING

Hunger for success

S

A Gaming is set to participate in G2E Asia, a gaming exhibition to be held at Venetian Macao, for the second consecutive year.

It is worth noting that the company has just taken part in ICE Totally Gaming in London back in February. The second show in four months is a sign of picking up where they have left off.

SA Gaming looks to expand and consolidate ties within Asia, where various business opportunities are yet to be exploited. Extensive knowledge of Asian cultures ensures swift and adequate product localization, supporting multiple languages. One clear example would be the ample availability of Asian-themed slot games.

Other than specialities in various gaming products, SA Gaming also provides one-stop technical support and strong network security for clients. SA Gaming places great emphasis on security, which is arguably the core of accomplishing success and creating values with business partners.

During the 3-day exhibition, SA Gaming will offer a full-range showcase of its products, as well as a free trial of games, including live games, slots, multi-player games and live stream lottery Lotto48. An HTML5 version of games ensures excitement will be found not just on PCs, but also on mobile devices.

The Hot Model Slots, which was first

Asia Gaming Briefings | May 2017

SUPPLIER SPECIAL REPORT 64 Play’n GO

Spintec

Demo their top titles

Introducing Aura

S

pintec is presenting two product lines at G2E Asia this year, including the Karma line, well-known for its compact solutions, and the completely new product line, Aura, made for multigame amphitheatre setups.

Both product lines offer a variety of games (Roulette, Sic Bo, Craps, Baccarat) in different setups with any technological solution (automated, virtual, live).

Each year Spintec takes an opportunity to have an Asian launch of its new products at G2E Asia. After a successful introduction at ICE for the European market, Aura is presented for the first time in Asia.

With a revolutionary new approach in design, Aura aims to have the most comfortable and ergonomic gaming terminal on the market.

“The multigame wall has already been installed at Perla Hit Casino in Slovenia with excellent feedback from the players and from

Asia Gaming Briefings | May 2017

the casino managers. Players can choose from different virtual dealers and enjoy different virtual games in a well-known HD quality,” explains Primoz Krsevan, regional sales manager at Spintec.

Spintec’s core product line, Karma, consists of compact electronic table games solutions and will be presented at G2E Asia with three products: automated Roulette, automated Sic Bo and Craps.

It is a stand-alone virtual playing station with a wider monitor and multigame option for a players to choose between virtual Roulette, virtual Baccarat and virtual Sic Bo. All products hold Spintec’s promise of comfort of the player, proprietary technical solutions and psychological knowledge of the player.

Spintec welcomes all to G2E Asia, stand 953.

P

lay’n GO is an award-winning gaming specialist and the leading mobile-casino gaming developer.

Its games are designed for great performance on smartphones, tablets, terminals and websites.

Play’n GO’s gaming content, designed for multi-device consumption stands out from the competition and is greatly appreciated by players worldwide.

Stop by stand 931 at G2E Asia for a demo of their top performing titles, meet the friendly Troll Hugo and have an Ice Cream or two.

Quixant

Ever-expanding range

Q

uixant, a supplier of gaming platform hardware and monitors, will once again be showcasing a growing product offering at G2E Asia 2017.

A long-renowned manufacturer of control board solutions, Quixant has recently further strengthened its versatile range with the release of the QXi-400 – the company’s most advanced platform to date for use in two-screen applications.

Utilizing powerful AMD processing technology with its on-board 3rd-Generation G-series SoC, QXi-400 provides unprecedented opportunities for those game designers using a more compact cabinet footprint. There is full Windows 7 and 10 support, thus providing an option for both a platform upgrade in existing machines, and entirely new developments. Visitors to G2E Asia will have the opportunity to experience this cutting-edge solution for the first time in this region.

The QXi-6000, another recent addition to Quixant’s control board portfolio, will also be on show. Already proving hugely popular on a global scale, QXi-6000 provides three-screen support, 4K UHD compatibility, and a vast array of connectivity and security features – in a highly affordable package. Allied to these new lines, established products such as the cost-effective QXi-307, and the impressively versatile QXi-300, will also be available for demonstration.

“Asia has always been an incredibly important market for us,” comments John Malin, sales director of Quixant UK Ltd. “This year at G2E Asia, we will have our widest spectrum of products ever, and are looking forward to sharing our existing and new solutions with customers and prospects alike.”

Quixant can be found on stand 238.

65

Asia Gaming Briefings | May 2017

SUPPLIER SPECIAL REPORT 66 sEGA SAMMY

Cutting-edge machines

P

art of the Sega Sammy Group, Sega Sammy Creation is a comprehensive entertainment entity that provides people around the world with various forms of entertainment, such as games, pachislot and pachinko, animation and toys.

Sega Sammy Creation utilizes the group’s wealth of creativity, entertainment experience and technology to produce a new and exciting experience for the global gaming market.

Since its inception in 2013, Sega Sammy Creation has provided the gaming market in Macau with the best quality electronic table gaming machines “SICBO BONUS JACKPOT” and “Exciting Baccarat”, featuring eye-catching decorations, main cabinets on

a massive scale and exciting side games including the Jackpot.

In order to contribute to the further

development of the gaming markets, the company is aiming to manufacture cutting-edge machines exceeding players’ expectations.

sPORTRADAR

360° one-stop shop provider

B

etradar is a brand of Sportradar, a global leader in understanding and leveraging the power of sports data and digital content for its clients around the world.

This year, Betradar will once again be exhibiting at G2E Asia, presenting a broad range of innovative services and products to the betting industry.

One of the highlights will be Betradar’s Live Channel, a dedicated live streaming solution for online and retail bookmakers.

By increasing its extensive and diversified media rights portfolio fourfold, from 7,100 to over 30,000 live events a year, it’s now the largest portfolio in the market.

Another highlight will be Betradar’s eSports Betting Service, which now provides the broadest and most credible live betting offering within the market. This was made possible by an exclusive cooperation with DOJO Madness, an eSports big data startup that develops prediction services based on the analysis of millions of eSports data sets for all major titles.

Finally, Betradar will introduce its technology and data powered Managed Trading Services (MTS), which offers a 100 percent

Asia Gaming Briefings | May 2017

risk-free trading to sportsbook operators.

Utilising MTS, bookmakers have the same access to Betradar’s extensive odds and data offering without all of the technology, people or fixed fees previously needed to support it.

Moreover, MTS offers operators the flexibility to outsource their day-to-day trading, either

partially or completely, without sacrificing control of their operations.

All these innovations plus the entire portfolio consisting of Betting Solutions, content solutions and gaming solutions can be discovered and discussed at Betradar’s stand 2352 at G2E Asia.

SUPPLIER SPECIAL REPORT 67

ISLE OF MAN. WHERE YOU CAN FIND A WORLD CLASS BASE FOR YOUR E-GAMING BUSINESS 马恩岛是一个欧洲离岸管辖区，我们理解如何并已经成功地和众多亚洲游戏公司 模型合作。许多亚洲最大的游戏公司选择在马恩岛安家。来到马恩岛您会发现这 里有极佳的声誉，先进的基础设施技术，和受严格监管的合规规范，同时您有机 会加入许多亚洲领先的知名游戏品牌。我们诚挚邀请您来马恩岛并加入他们！ Kami ay isang isla sakop sa hurisdiksyon ng Europa, na nakakaunawa at matagumpay na nakapagtrabaho sa modelong pangangalakal ng sugalan ng Asya. Ang isla ay tinaguriang tahanan ng mga kilalang kompanya ng sugalan ng Asya at ipinagmamalaki ito bilang isang lugar na may pinakamahusay na reputasyon, infrastraktura at regulasyon. Halina sa Isle of Man upang kayo ay mapasama sa mga nangunguna at hinahangaang pasugalang kompanya ng Asya. Inaanyayahan namin kayong sumali sa kanila.

Kami adalah negara pinter di Eropa yang sangat mengerti dan telah berhasil bekerja sangat sukses dengan model bisnis GAME Asia.

Kami adalah rumah bagi perusahaan-perusahaan GAME terbesar di Asia. Kami telah memiliki reputasi, infrastuktur dan regulasi yang terbaik.

Dengan mengunjungi Pulau manusia (Isle of Man), anda akan berada di dalam negara di mana banyak pemimpin GAME merk dari Asia berada. Kami mengundang anda untuk bergabung bersama mereka. 我々欧州のオフショア管轄区域は、アジア向けのゲーミングビジネスモデルについて熟 知しており、数々の成功をおさめてきました。 アジアの優れたゲーミング会社の多くがマン島でのライセンスを取得し、運営法人も設 立しています。管轄区域としての信頼性、インフラおよび規制に関しては他のどこより も評価が高く、自信をもってお勧めできます。アジア屈指のゲーミング会社を目指すの であれば、マン島を管轄区域として是非選んでください。決して後悔はさせません。

Contact the Isle of Man e-Gaming team at: Tel: +44 (0) 1624 687185 Email: info@iomegaming.im

www.whereyoucan.com/egaming Asia Gaming Briefings | May 2017

SUPPLIER SPECIAL REPORT 68 TCSJOHNHUXLEY

SUZOHAPP

T

S

Innovation and excitement CSJOHNHUXLEY will be showcasing its new Qorex electronic gaming solutions as well as the exciting GFL Bonusing progressive system and a suite of new games at the forthcoming G2E Asia exhibition.

Rebecca Kingswell, TCSJOHNHUXLEY managing director APAC comments, “We are very excited to be debuting Qorex to our customers in Asia. Following the launch at G2E Las Vegas and the ICE show in London, customer reaction has been overwhelming with the roll out and installation program well underway in many regions. The flexibility of Qorex is perfect for all types of casino operations, allowing traditional terminal configurations as well as more innovative designs and layouts. We will be unveiling our Qorex Tablet Table with integrated note acceptors and ticket printers, that provides operators with yet another innovative electronic gaming solution for their casino floors.”

All Qorex terminals are driven by the Gaming Floor Live platform, which delivers essential requirements such as security and real-time reporting so casino operators can evaluate the status of their terminals at any time and act immediately as required.

The benefits of the Gaming Floor Live platform will also be seen showcasing GFL Bonusing, the powerful floor-wide event and mystery driven progressive jackpot system.

Debuting at the show will be three new original games – Nutz, Lucky Roll and Poker Bo. These are the first in a range of proprietary and side bet games which are being offered exclusively by TCSJOHNHUXLEY following the recent agreement with developers, CLUB Gaming Pty Ltd, a wholly owned subsidiary of Crown Resorts Limited (Crown).

To discover these and the rest of the product portfolio, visit stand 1351 at the show.

Asia Gaming Briefings | May 2017

Picture Key Technology UZOHAPP is ready to show a variety of unique components and solutions that meet the demands of various gaming market segments.

One of the highlights this year is the new Picture Key Technology (PKT) button panel. SUZOHAPP is a licensed provider of PKT, which enables dynamic content within a tactile surface. Through the use of a bonded fiberoptic image conduit, SUZOHAPP creates assemblies that can display dynamic video content, or provide self-labeling keys, all the while providing a robust assembly and 100 percent consistent coloring.

The Loyalty Kiosk, integrated with a number of Loyalty system providers and POS companies, will also be a highlight. This solution is available in two configurations: a free-standing cabinet for foyer use, or a countertop for bar or counter use with an external ticket printer.

SUZOHAPP will also be showing the BoothTV and the DisplayPRO, featuring a 42” HD screen ideal for visual campaigns. This solution has been designed specifically for flexible end of bank signage application in a gaming venue.

As the global partner for Elo and TransAct, great focus will be placed on the Elo solutions, such as the 23.8’’ and 21.5’’ LCD openframe touchscreens, and on the award-winning EPIC 950 and the EPIC 880 printers.

Other solutions on exhibit include the latest SH1950 video topper and the Comestero RM5 HD electronic coin validator, as well as a selection of high-performance components such as the ‘Charge N Play’ USB charger.

“We are focused on quality, innovation and technology, and our new logo perfectly portrays our company strategy and identity,” said Geoff McDowell, APA managing director.

Meet the SUZOHAPP team at stand 1125 at the show.

69

NEW CUSTOMERS. NEW TECHNOLOGIES. FOR ONLINE, LAND BASED AND LOTTERY GAMING. 4-6 July 2017

W Hotel, Barcelona 300+ C-level executives 13+ hours of networking including gala dinners, yacht trips & pool parties 80+ of the industry’s best and brightest speakers Confirmed speakers include: A

A

A

A

Conny Dorrestijn

Werner Becher

Member of the Advisory Board, Holland FinTech

CEO, Interwetten

A

A

Kevin Clayton

A

A

Paul Richardson

A

A

Jan Jones Blackhurst

Group Director of Strategy and EVP Government Relations and Corporate Development, Corporate Responsibility, Caesars Rank Group Entertainment Corp

A

A

A

A Chief Marketing Officer, Galaxy Entertainment Group

A

A

Sarah Sculpher

Chief Executive Officer, Mybet Sportsbook

Chief Marketing Officer EMEA, Caesars Entertainment UK

President, The European Lotteries

A

A

Markus Peuler

Hansjörg Höltkemeier

A

A

Mor Weizer

Andrew McIver

CEO, Intertain Group Ltd

Chief Executive Officer, Playtech

To claim an exclusive 10% discount, enter ‘QCSG’ at checkout.

Visit terrapinn.com/WGES-AsiaGamingBrief for more information.

Asia Gaming Briefings | May 2017

SUPPLIER SPECIAL REPORT 70 XPG

Emotions of a real casino

X

PG is bringing its latest live casino technology, designed for existing operators and White Label entrepreneurs that wish to offer an unsurpassed live gaming experience.

Using the XPG system, casino operators can provide avid players with all of the emotions of a real casino while playing in the comfort of their homes XPG broadcasts live from its studios set in the heart of Europe. The studios use the highest quality video and broadcast equipment available on the market today, ensuring customers’ satisfaction while emulating a real casino environment.

Adding the widest range of Live games

(10+) on the market plus 500+ virtual games of its partners, the XPG system is is the quickest way for operators to earn higher revenues and better player retention.

The system is extremely flexible and can be integrated within a matter of days with virtually any platform on the market via manageable API’s.

If you are seeking a live casino system which will allow you to start your own live online casino immediately, XPG offers the quickest turnaround time on the market.

XPG can connect you to its live video stream, develop a full website according to your specifications, provide translation services and connect you to its advanced back office within

a relatively short period of time.

As with all of our business models, XPG provides our White Label partners full technical support around the clock, allowing them to maintain full, secure control of their valuable database.

XPG’s flexible gaming system can be customized to meet each client’s specific needs in almost any language. The multilingual system currently supports English, Italian, Spanish, French, Hungarian, Turkish, Greek, French, German, Portuguese, Russian, Chinese, Japanese, Thai and Korea.

Meet the team at stand 1425 at G2E Asia this year.

systems that allow the operator to program promotions in a dynamic and flexible way.

As a novelty for the Asian market, Zitro will present its new video slot brand Bryke, with its first multi-games of the Pick & Win series, which is backed by surprising results in Latin America, where it has been tested with unprecedented success.

Sebastián Salat, CEO of Zitro, says that “we are convinced that Big Time will receive in Asia the same enthusiastic

acceptance it has had in other continents, and we believe that our Bryke video slots can bring a differentiated product to operators in the region, particularly operators in the Philippines, a market that Zitro sees as a priority in this part of the world on our way to our goal of becoming a global leader in the gaming industry. “ Zitro will be exhibiting at stand 1315, sharing space with its distributor, RGB, a company of recognized prestige in the region.

ZITRO

Bryke video slots

Z

itro will be showcasing its wide catalogue of products specifically targeted at the Asian market at G2E this year.

Reiterating its commitment to this continent, Zitro is bringing the latest innovations in Video Bingo and introducing Big Time to the Asian market.

The product comes with new games for casino and bingo specifically adapted for the Philippine market - where Zitro has a significant share - and Big Time promotional

Asia Gaming Briefings | May 2017

FEATURING

PRESENTED BY

SAVE THE DATE THE WORLD’S LARGEST GATHERING OF GAMING PROFESSIONALS

OCTOBER 3-5 SANDS EXPO CENTER LAS VEGAS

GLOBALGAMINGEXPO.COM S TAY I N T H E CO N V E R SATI O N

#G2E2017

Asia Gaming Briefings | May 2017

71

CALENDAR OF EVENTS 72

]

JULY

mAY

Japan Gaming Congress 10-11 May 2017 Grand Hyatt Tokyo IMGL Spring Conference 10-12 May 2017 Turnberry Isle Miami Asia Gaming Awards 16 May 2017 The Venetian Macao www.asiagamingawards.com G2E Asia 16-18 May 2017 The Venetian Macao www.g2easia.com IAGA International Gaming Summit 30 May - 1 June 2017 JW Marriott, Essex House, New York www.theiaga.org

JUNE Russian Gaming Week 7-8 June 2017 Moscow, venue TBC www.rgweek.ru/en

World Gaming Executive Summit 4-6 July 2017 W Hotel, Barcelona, Spain www.terrapinn.com/conference/world-gaming-executivesummit/index.stm iGaming Super Show 11-14 July 2017 Amsterdam RAI, Netherlands www.igamingsupershow.com Amsterdam affiliate conference 11-14 July 2017 Amsterdam http://www.igbaffiliate.com/events/amsterdam-affiliateconference

aUGUST Gaming, Racing & Wagering Australia 14-16 August 2017 Novotel Sydney, Darling Harbour, Australia www.gamingdownunder.com Australasian Gaming Expo (AGE) 15-17 August 2017 ICC, Darling Harbour, Australia www.austgamingexpo.com

Become a member Exclusive access to AGB Intelligence BE the first to receive our daily briefs priority registration for our events REGISTER NOW AT AGBRIEF.COM

Asia Gaming Briefings | May 2017

SEPTEMBER Asian Gaming Networking Social 8 September 2017 Manila www.agbrief.com/events Central & Eastern European Gaming Conference & Awards 19-20 September 2017 Budapest City, Hungary, Venue TBC www.ceegc.eu

OCTOBER Global Gaming Expo (G2E) 3-5 October 2017 Sands Expo Center, Las Vegas, USA www.globalgamingexpo.com European iGaming Expo (EiG) 30 October - 1 November 2017 Arena Berlin, Germany www.eigexpo.com

73

GAMING, RACING & WAGERING AUSTRALIA

14-16 AUGUST 2017 • NOVOTEL SYDNEY, DARLING HARBOUR

Gaming, Racing & Wagering Australia (GRWA) is the region’s premier gaming conference taking place in August. The conference and exhibition will bring together Australia’s leading sports betting, gaming, wagering, lottery and racing executives to learn about the latest developments in the industry, incoming regulations and disruptions, and strategies to stay ahead of the curve. It is a must attend industry event for all operators in Australia and from around the world.

10% Discount for all AGB friends and members to attend.

Quote promo code BA778AGB

To register: Call +61 3 9008 5946 | Email: info@beaconevents.com | Online: gamingdownunder.com Asia Gaming Briefings | May 2017

Become a member SUBSCRIPTION FORM, PLEASE TICK AS APPROPRIATE, USE CAPITAL LETTERS

STANDARD MEMBERSHIP BENEFITS TOP NEWS HEADLINES

SINGLE MEMBERSHIP

E-BRIEF CONTAINING IN-DEPTH FEATURE ARTICLES

$615

SEARCHABLE ARCHIVE OF GAMING NEWS

US$ 128.00/ MONTH, 6 MONTHS - US$ 768.00

DISCOUNTED ACCESS TO EVENTS AND OTHER AGB PRODUCTS

US$ 108.00/ MONTH, 12 MONTHS - US$ 1,296.00

$1,035

CORPORATE STANDARD MEMBERSHIPS THREE (3) MEMBERSHIPS: 10% DISCOUNT

FIVE (5) MEMBERSHIPS: 20% DISCOUNT

6 MONTHS: US$ 690 EACH Total: US$ 2,070 (Save: US$ 234)

6 MONTHS: US$ 615 EACH Total: US$ 3,075 (Save: US$ 765)

$ 552 each

12 MONTHS: US$ 1,165 EACH $ 932 each Total: US$ 3,495 (Save: US$ 393)

$ 492 each

12 MONTHS: US$ 1,035 EACH $ 828 each Total: US$ 5,175 (Save: US$ 1,305)

* Sign up and pay in full for 12 months and get the 13th month free!

TEN (10) MEMBERSHIPS: 35% DISCOUNT

$ 399

6 MONTHS: US$ 499 EACH each Total: US$ 4,990 (Save: US$ 2,690)

$ 672 12 MONTHS: US$ 840 EACH each Total: US$ 8,400 (Save: US$ 4,560)

* The above discounts cannot be used in conjunction with any other discount

CONTACT INFORMATION FIRST NAME :

LAST NAME :

EMAIL

:

SKYPE NAME :

COMPANY

:

ROLE

ADDRESS

:

STATE

:

CITY

:

USER NAME :

:

PROVINCE : POSTAL CODE

:

MOBILE

:

COUNTRY : +

PHONE

:

+

PAYMENT DETAILS: HSBC HONG KONG | “BLUE SKY VENTURE LTD” | #658-046347-838 | SWIFT: HSBCHKHHHKH I WOULD LIKE TO SETTLE VIA CREDIT CARD. PLEASE SEND ME A DEDICATED PAYMENT LINK TO THE EMAIL ABOVE

WHAT IT IS

WHAT YOU GET

AGB serves as a platform for multiple levels of information about the Asian gambling industry in the form of feature articles, latest news headlines, networking events, directories of key authorities and players, bespoke research, introduction services, and access to experts who can answer your questions.

AGB consists of a weekly eBrief reporting on recent regional news and developments in the Asian gambling industry. Articles are written by experts living and working in Asia and cover a range of legal, operational and market issues, offering in-depth analysis of the opportunities these developments provide for operators and those who work with them.

WHAT’S DIFFERENT

WHY YOU NEED IT

Our extensive network of regional advisors ensures that the intelligence you receive is real, topical, and based on fact. No other service gives you such comprehensive insights into the political, legislative and competitive developments affecting the markets in this region, and what they mean for you. Get your information from the horse's mouth, not from third parties

Gain access to the vast knowledge and experience of those who actually work in and with the Asian gaming industry and get the inside scoop on the next great opportunities, as well as answers to your everyday operational challenges. By becoming a member, you also connect with other like-minded people who want more than just surface-level information.

AGB Gaming Brief Venture -- Reg#43675 enquiries@agbrief.com AGB - Asia Gaming Brief || Trading Tradingas as Blue Blue Sky Sky Venture Reg#43675 SO SO | enquiries@agbrief.com 16/F China Law Building, 409 Av. da Praia Grande, Macau SAR | P.O. Box 1139

Join IAGA in New York City May 30 – June 1 2017 where top industry executives will discuss the global INTERNATIONAL ASSOCIATION OF GAMING ADVISORS

opportunities and challenges facing gaming today. With a wide range of panels, break-out sessions and keynote speeches addressing the industry’s top issues and hot topics, this is a gaming conference you won’t want to miss. Visit theiaga.org to learn more.

PLATINUM ANNUAL SPONSORS

SILVER ANNUAL SPONSORS

LAST WORD 76

VIP market fizzing, but hold the champagne Sharon Singleton

Managing Editor, AGB

With VIP revenue surging 18 percent in the first quarter, surprising most observers with the strength of the recovery and stocks at two-year highs, it may be easy to assume Macau is back to the races.

M

any had warned growth in the VIP percent to 11 percent, whereas on mass it’s between sector would never return to its former 30 percent and 40 percent.

In fact, Morgan Stanley warned recently that the heady levels, with the high rollers who made the region the world’s gambling uptick in VIP business, coupled with increased demand hub having moved on to pastures new, further from for staff from the opening of news casinos, such as The Parisian and Wynn Palace, Beijing’s radar. was already leading to margin However, it’s probably too pressure. It says mass revenue early to break out the champagne. needs to grow at least at a 10 The VIP sector is still far from The VIP sector percent clip to avoid erosion. its former glory, when it made is still far from A l s o, V I P r e v e n u e i s up more than three quarters notoriously volatile, and analysts of gaming revenue and that’s its former glory, are not expecting the current probably a good thing. when it made up growth levels to be maintained.

Pushed by the government, In fact, Bernstein Research Macau’s six operators have more than three expects a new downtrend in made an effort to diversify their quarters of the second half of this year, revenue streams and focus more gaming revenue reducing total growth for the on the mass market. As a result, year to about 7 percent. the mass sector now makes and that’s The jump in VIP flows has up about half of overall GGR. probably a good been sparked by a series of Efforts to reposition Macau exceptional factors that are likely as a tourism destination, with thing. to be only temporary. China a wider tourist base than its has eased its anti-corruption traditional mainland Chinese campaign and that is certainly market, also appear to be paying dividends. Last year, tourism arrivals as a whole providing some support, though improved liquidity were up 0.8 percent, though visitors from China on the mainland as a result of efforts to stimulate were flat. Overnight-stay visitor arrivals exceeded the economy last year and rising property prices are same-day visitor arrivals in 2016 for the first time seen as the main driving forces.

Bernstein says it now sees signs that strength in in the last 10 years.

Non-gaming revenue as a percent of total gaming China’s real estate market is beginning to slow down, revenue is also heading in the direction the government partly driven by cooling measures and a tightening has mandated, rising to more than 9 percent at the credit cycle.

Any further efforts by China to control capital end of 2015 and hitting the government’s 2020 target five years early -- though few believe Macau will ever outflows would also likely have a detrimental impact manage to reinvent itself as a leisure destination along on the market.

So, while the recent VIP bounce will certainly be the lines of Las Vegas.

Although the mass market is unlikely to generate welcome, the continued steady-as-she-goes progression the same volume of revenue as the whales, the towards a mass-focused market is still likely to be business is far more profitable, with no need for the key to Macau’s future success. It will also keep the promotional items expected by VIPs and the the policy makers at home and in Beijing happy, and given they are really the ones able to control growth commissions to junkets.

EBITDA margin on VIP is estimated at about 7 in the market, that’s probably also for the best.

“

”

Asia Gaming Briefings | May 2017

GET INVOLVED! Tu esd ay 16 M ay 201 7 VISIT ASIAGAMINGAWARDS.COM Produced by

in association with

78

Asia Gaming Briefings | May 2017

79

Asia Gaming Briefings | May 2017