AGBriefings December 2021 Edition by Asia Gaming Brief

JURISDICTION UPDATES December 2021 Edition

In focus pg.22

Reviews and forecasts Asia’s turn to rebound?

MACAU

Life beyond junkets pg.6

THAILAND

Could IRs be a reality this time? pg.16

PHILIPPINES New openings signal positive start pg.12

AUSTRALIA

AML spotlight on pubs and clubs pg.48

SUPPLIER SPECIAL REPORT pg.50

Asia Gaming Briefings | December 2021

MESSAGE 3

What’s next for Asian gaming?

n what has now become an Asia Gaming Brief tradition,

upheavals as pubs and clubs come under the money

the Focus Section of our December magazine takes a

laundering spotlight. The NSW investigator said that as

look at the year in review and asks for forecasts on how

much as A$1 billion ($714,000) may have been laundered

the year ahead may evolve. In the following pages, you

through the country’s casinos, pubs and clubs.

will find those predictions from a selection of leading figures

Across to Malaysia,Genting’s crown jewel in the $2.4

in Asia’s gaming industry.

billion revamp of its Gentings Highlands Resort is making

We also focus on some key themes that have emerged

its debut this month, with analysts expecting the attraction

throughout the year and look at how they may impact

to deliver a significant boost to visitation. The country is

the industry moving forward. As the region starts to

considering opening its borders to international travellers

reopen to international tourism, the industry is likely

on January 1 next year in a bid to accelerate the country’s

to be facing a giant China-shaped hole in its visitation

economic recovery.

numbers and spending.

Over to India, the AIGF is urging state governments to work

Looking back at last year’s predictions, few were super bullish

with the skill-based online industry to develop a regulatory

about a quick snap back in Asia, although no one anticipated

framework that will benefit all stakeholders.

the devastating impacts of the new variants either. Going

The Special Supplier Report rounds up this year’s final

forward there is a cautious sense of optimism that things will

edition. We’ve invited the leading manufacturers, suppliers

be better, but uncertainty dominates.

and service providers, to highlight some of their proudest

A key trend across the 2022 predictions is the continuation of

achievements of the year and, in turn, share a preview of

the wave of mergers and acquisitions we have seen in 2021.

what they might expect in the year to come.

Globally, the convergence between online and land-based is

It’s been another challenging year but this industry has

expected to continue, although analysts are beginning to raise

shown its resilience and ability to adapt.

red flags about lofty valuations.

Looking ahead, the Team at AGB is excited to be planning

In this December edition of AGBriefings magazine we also

for the ASEAN Gaming Summit in Manila in March next year

bring the most relevant updates across the Asia jurisdictions.

and as always remains committed to bringing you relevant

Starting off with Macau, the arrest of Suncity’s Alvin

content in engaging formats.

Rosalind Wade

Luis Pereira

Chau hit the markets like a bombshell and everything changed. Despite the upheavals in Macau over the past

Here’s to a better 2022!

few months - first the gaming law amendments, then the

Merry Christmas and Happy New year!

junket crackdown - most still predict that the same six concessionaires will still be on the scene following the new

On behalf of Asia Gaming Brief

bidding process.

Rosalind Wade & Luis Pereira

In the Philippines, the industry has posted significant GGR

CO-FOUNDERS

improvement and is on track for opening two new resorts next year - The Hann in Clark and NUSTAR in Cebu. Suntrust

Connect with us:

says Alvin’s Chau arrest has no impact on the Westside project in Entertainment city.

@agbrief

Meanwhile, Australia’s gambling industry is heading

Asia Gaming Brief

into the New Year with no signs of an end to regulatory

www.agbrief.com

DECEMBER 2021 EDITION SERIES II • ISSUE XIX

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Asia Gaming Briefings | December 2021

CONTENTS 4

GREATER CHINA

SOUTH EAST ASIA

INDOCHINA

MACAU - GAME CHANGER

PHILIPPINES

MACAU - SETTING SUN

MALAYSIA

THAILAND

NORTH ASIA

SPECIAL FOCUS

Asia Gaming Briefings | December 2021

INDIA

SUPPLIER SPECIAL REPORT

AUSTRALASIA

SOUTH ASIA

KOREA

CAMBODIA

AUSTRALIA

LAST WORD

66 54

Asia Gaming Briefings | December 2021

GREATER CHINA

MACAU

The year the game changed Macau’s gaming industry is now heading towards “healthy and sustainable” development, the government said, after a tumultuous few months that have led to the virtual collapse of the junket agents and the VIP business they were instrumental in building.

Asia Gaming Briefings | December 2021

GREATER CHINA

fter decades of seemingly turning a blind eye to the junkets’ activities and their role in helping high rollers to bring capital out of China, everything changed with the arrest of Suncity CEO Alvin Chau, according to panellists on a recent Asia Gaming Brief webinar. His indictment on charges of arranging illegal gambling and money laundering led to the almost immediate suspension of all of its VIP gaming rooms in Macau. Other junkets are expected to follow as operators end their partnerships. This will result in an immediate 30 to 50 percent drop in VIP revenue, according to analysts at J.P. Morgan. However, the impact on their bottom line is far less significant given the low margins in the VIP business. It’s a different story for the government, however, which derives its taxation base from gross gambling revenue, of which VIP still makes up about a third of the market. There is also likely to be a knock on effect on all the high-end services, such as restaurants and retail that cater to the high rollers, forcing a significant economic readjustment. While saying the future of Macau gaming will be more sustainable, Secretary for Economy and Finance Lei Wai Nong, concedes that unemployment will rise from the current 3.8 percent as junkets close. The fact that Macau authorities were prepared to wield the axe over a segment that makes up such a large chunk of its revenue shows that paying lip service to economic diversification was no longer an option. It also appears to have put pay to the view that China’s ongoing crackdown on capital outflows and its targeting of key industries as part of its “common prosperity” drive wouldn’t affect Macau. “This is a significant change,” Steve Vickers,

head of risk consultancy Steve Vickers & Co. said on the webinar. “It’s not just about junkets and whether we describe them as premium mass etc, it has gone beyond that. This is a very significant difference, and I think the government will push very hard to try and turn Macau into something different than it is at the moment. But that will be a very painful exercise and it brings up pretty scary issues for the current concessionaires.”

I think the “government will

push very hard to try and turn Macau into something different than it is at the moment.

”

Investors in Macau’s gaming stocks already had frayed nerves as they tried to assess the likely impact of China’s actions on its technology giants and other areas of the economy, pushing the ‘too big to fail’ mantra to the limit. The publication of amendments to Macau’s gaming law in mid-September sent them over the edge, triggering a record drop in the share prices as investors took fright at proposals that may restrict the distribution of capital to shareholders amongst other items. The draft law contained very few details and although analysts are now more confident that the government will take a pragmatic view

on concession renewals, there remains a high degree of uncertainty. Macau is proposing a shorter concession period than the 20 years on offer in the first round, as well as likely mandating more investment in non-gaming activities. At the same time the recovery from Covid has been at a snails’ pace due to China’s adherence to a zero-Covid policy, with no change expected in the short term. Panellists on the webinar all agreed that everything has now changed in Macau, although what the future will look like is another matter. One of the key questions to answer will be what happens to the premium mass business and how Macau will be able to overcome the $50,000 annual cap on bringing money out of China. Given Beijing’s concerted efforts to clamp down on the estimated $150 billion that leaves its borders each year for gambling, it’s difficult to expect it not to also stamp out other methods used by players to raise funds for gambling, such as multiple Union Pay debit cards and local pawn shops. “I genuinely believe that China is flexing its muscles, it hasn’t put the axe down, there’s going to be more blood and it will definitely be affecting the China UnionPay, it will definitely be affecting the jewellery shops and the digital currency,” said Alidad Tash, managing director of 2NT8, referring to the potential introduction of a digital RMB in Macau. Although such a move would create considerable short-term headaches, especially for the U.S. operators who need to bring funds out of Macau, it may ultimately be the one bright spark in an otherwise fairly bleak outlook. A digital currency would make capital flows far more transparent, which may make Beijing more comfortable. It would also potentially fully open Macau to China’s mass market.

MONTHLY GROSS REVENUE 2020

2021

(units in MOP million)

25,000 20,000 15,000 10,000 5,000 0

January

February

March

April

May

June

July

August

September

October

November (Source: DICJ)

Asia Gaming Briefings | December 2021

GREATER CHINA 8

The setting Sun Ben Lee

Managing Partner, IGamiX Management and Consulting

Macau’s arrest and detention of Alvin Chau, head of the Suncity Group, is expected to accelerate the demise of the junket industry that helped to create the world’s largest gambling hub. Ben Lee, managing partner of IGamix Management & Consulting, details some of the highs and lows of the junket industry and looks at what’s next for Macau.

ince the mid-80s, junkets have played a pivotal part in Macau’s gaming industry. The first junket ever to operate a fixed VIP room in the Lisboa was the Diamond followed soon after by the Golden Group. Conditions were very different in those early days. The junkets were allocated a bare concrete shell and had to pay for the interior decoration as well as monthly leasing fees. STDM, which then morphed into SJM, took 40 percent of the revenue, ergo the 4:4:2 axiom that ruled the industry. The government took another 40 percent leaving the junkets with just 20 percent, although there were some complimentary ferry tickets and hotel room rebates that were given by SJM, worked back in on top of the junkets’ 20 percent. If you can’t stand the heat Enter Sands China and Galaxy Entertainment in 2004 with a new model, one where the casino operator did up the rooms and charged no rental. Galaxy came in with a souped up SJM model, with junkets powering their first property, the Waldo. Whilst Sands did well in the mass market, they struggled to penetrate the VIP segment. Galaxy’s Waldo outperformed Sands in GGR at one stage, despite being a refurbished commercial building, compared with Sands’ new build. Faced with losing his key junket operators as competition intensified, Stanley Ho embarked on a “surround them” strategy, letting his junket operators convert/upgrade/build satellite casinos all over the peninsula, becoming casino owners and eventually managers in their own right under a reverse 4:2:4 arrangement, with the junkets getting 40 percent in return for laying out the capital and taking over the operating costs. That figure eventually rose above 50 percent as competition became even more cutthroat when Wynn opened its first property. Responding to taunts of “If you can’t stand the heat, leave the kitchen” from US mogul Sheldon Adelson, Ho flexed his muscle by permitting junket commissions to rise to 1.5 percent before the Macau government stepped in to cap it at 1.25 percent. Even then, Ho managed to keep the revenue sharing arrangement out of the cap, which to this date has formed the majority of arrangements between casinos and the junkets, with 47-48 percent (equivalent to ~1.4 percent commission) being common for the top 4-5 junkets.

Asia Gaming Briefings | December 2021

Suncity, as Macau’s top junket, had a market share of just under 50 percent in 2018, rising to mid-50s in 2019 and peaking at 75 percent in the middle of 2020. Their GGR before Covid was often greater than two out of the six concessionaires. The junkets were kings of the hill in 2013 when Macau’s GGR topped US$45 billion, and buckled in 2014 not due to China’s anti-corruption campaign nor the anti-ostentation campaign that followed soon after, but because of a sub agent named Huang Shan, who disrupted the industry by bilking HK$1.3 billion. Premium Mass A new sexy term was adopted by the casino operators in 2014 when some of the VIP players started spending more time hiding in the main floor, so called “premium mass,” which is essentially a conflation of rebadged VIP direct and loyalty program carded mass players. By denominating them as mass, the operators were complicit in hiding the players from the prying eyes of the authorities. We hear of so-called “premium mass” players who could lose up to US$500,000 and more in one day. By calling them mass, it provided the government with the excuse that the industry was evolving away from the

GREATER CHINA 9

politically unsexy VIP business. This, however, is contradicted somewhat by the gaming regulator’s steadfast refusal to recognize this category, leading to a glaring discrepancy between the official gaming revenue figures and those published by the publicly listed concessionaires. And foremost with the mass label, it implies a high EBITDA margin, figures of 37 percent oft thrown about despite the fact that the players that generate the bulk of the revenue in question are most certainly sophisticated regular players who play off the casinos against each other for the highest offers. Industry chatter has player reinvestment as high as 50 percent previously offered by one particular Cotai operator. Although the competition quietened down in 2019, the player reinvestment rate surged again recently rising to 40 percent thanks to another Cotai operator. Where the EBITDA margins appeared to have remained high, credit was the tool to increase volume without sacrificing margins… until a couple of years down the track, but that’s somebody else’s problem. When asked the question of how these rebadged VIP players get their funds out of China, glib responses of “they already have their money out in Hong Kong” or “they get financing from the junkets” are often proffered. And exactly how do the premium mass marketing executives get their players to come to their property? Waiting for a flood of clients to drop into their arms is a marketer’s dream. Speaking to a couple of casino marketing executives who have since been barred by their casinos from going into the mainland, cold calling was the new pandemic norm.

Competition is described as ridiculous to the point where a player can now qualify to be “premium mass” with an ADT (Average Daily Theoretical Win) of a mere HKD1,000 for a brand-new property in Cotai. A far cry from the HK$250,000 to $500,000 of 2014. While there is no longer any question about the interpretation of the amended law that stipulates a “maximum of 10-year prison term for anyone who organizes mainland Chinese to gamble,” the only pedantry left to quibble about is the definition of “serious amount of money involved.” Even the cold calling across the border has now stopped after the Alvin Chau/Suncity development, from what we hear. Dismantle to rebuild Every argument that has ever been voiced for why Beijing would not disrupt Macau’s pillar industry and its relatively harmonious society is now out the window. It is clear that what used to be tolerated will no longer be. We have seen glimpses of what could be in store with the initial briefing prior to the public consultations on the gaming concessions. A Macau gaming icon who also happened to be a former member of the Guangdong chapter of the CPPCC is now in detention. Thousands of locals are out of jobs. Billions of patacas will no longer pour into Macau’s public coffers. Macau will not be opening its border to anywhere outside of greater China anytime soon. The news is all doom and gloom. Yet, there is a glimmer in the distance. Hengqin island has been offered as the solution

to Macau’s dilemma. The default currency there will be RMB. Macau’s society has already been socially conditioned to accept digital payments as a norm. The demographics of the Chinese visitors to Macau are changing, probably the result of a deliberate strategy to target younger non-gambling mass. Hong Kong is already trialing the E-CNY and Ho Iat Seng, Macau’s CE, is already starting to talk up its eventual introduction in Macau. There is chatter that it could be as early as the end of 2022, although we think 2023-24 is more likely. The replacement of the HKD with the RMB in Macau will fold the SAR into a single currency jurisdiction with the mainland and it will finally be able to treat the latter as its domestic market. Capital and forex constraints will be elevated from the retail to the concessionaires, but that in turn will give the central authorities comfort in allowing more mass into Macau/Hengqin. The new concessionaires will have to really invest and develop non-gaming amenities instead of just paying lip service. Gaming revenue will probably be allowed at an encouraging level to bring the new concessionaires along. Former gaming space will have to be rethought and new usage developed. The market will probably remain focused on the mainland as this will align with China’s current pivot towards domestic self-reliance. The operators will have to become more “sinified” as the “international talent” that authorities talked about attracting to Hengqin has since been clarified as “mainland Chinese talent”. The only question that remains now is who will be worthy of getting a new concession.

Asia Gaming Briefings | December 2021

GREATER CHINA 10

Regulatory uncertainty affecting ratings outlook: Fitch Las Vegas Sands and SJM Holdings have been placed on Rating Watch Negative, while MGM China will also retain that status, due to the uncertainty in Macau ahead of next year’s concession re-tendering process, Fitch Ratings said. The Ratings Watch Negative also affects Las Vegas Sands’s Marina Bay Sands unit in Singapore and its Sands China business. The firm said the ratings actions reflect the more imminent regulatory risk relating to the concessions, which are set to expire in June of next year. “Near-term credit risk has increased with limited visibility into the re-bidding procedures, how the future regulatory and operating environment will impact cash flows and leverage, and the likelihood and consequences of incumbent operators’ ability to secure a new gaming concession,” it said. Fitch said it believes the likelihood of the current concessionaires failing to obtain a new license is low, but should not be ignored.

Wynn a special situations opportunity with “saleable” assets CBRE Securities has resumed coverage on global gaming stocks, saying it favours Wynn Resorts as a unique contrarian play and a potential special situations opportunity should it put its Macau assets up for sale. The operator is seen as the most exposed to Macau’s battered VIP market, but CBRE said its assets in the city are among the best and will be repositioned to be extremely competitive in the mass and premium mass market. The operator has the Wynn Macau resort on the peninsula and Wynn Palace on Cotai. The stock has been penalized for its perceived exposure to VIP, however, assuming it won’t be able to compete in the mass market is flawed thinking, the report notes.The report said that Wynn has ways of creating value outside of Macau, but “if that doesn’t work, we believe the highly coveted Wynn assets could finally be saleable with a complete changing of the guard following the departure of outgoing CEO Matt Maddox.”

Asia Gaming Briefings | December 2021

SOUTH EAST ASIA

PHILIPPINES

New resorts on track for opening as outlook improves The Hann Casino Resort in Clark City held a soft opening in mid-December, while the NUSTAR Resort on Cebu is on track for a March debut as the Philippines emerges from lockdown.

SOUTH EAST ASIA

fter another tough year in 2020, help operations just about keep their heads the Philippines’ gambling industry above water.” In Q3, the Philippines gaming industry is hoping for brighter times as vaccination rates increase and locals generated PHP26.9 billion ($533 million) in gross gambling revenue, taking the total for the resume travelling. The Hann Casino Resort is an expanded year so far to PHP77.8 billion. That’s a significant and rebranded version of the Widus Resort improvement from the PHP17 billion reported & Casino in the Clark Freeport Zone. The $1 for the same period of the prior year. Nearly all segments performed better, billion, 19-story property, is located next to the Clark Marriott Hotel. The property was set to though the biggest recovery was in casinos open with 380 rooms and five-star facilities, in Manila’s Entertainment City, which posted revenue of PHP19.3 billion, up from PHP12.9 including event venues, retail and F&B. “Despite the disruption the pandemic billion a year earlier. Angel Sueiro, chief operating officer of PH caused, our vision of creating the ultimate millionaire’s playground in Clark remains Resorts Group, also said he expects a strong the same. We are set to open the first fully rebound of the domestic market in December integrated resort in phases, and guests can and sees this as being sustainable. “Unfortunately, it’s becoming impossible expect only the finest in hospitality and entertainment,” Daesik Han, president and to predict what will happen next year for the CEO of Hann Philippines, said in a statement. foreign, but based on the actual vaccination rates Universal Hotels & Resorts also intends to and the government’s efforts to establish ‘travel bubbles’wehopethatsome move ahead with the of the strategic markets opening of its NUSTAR will reopen again, for Resort, which will be the example, South Korea.” first upscale IR on Cebu Despite the The South Korean in a sign of confidence traveller is seen as being in about the prospects for disruption the hot demand around Asia, the industry. pandemic caused, with many jurisdictions NUSTAR will be around the region seen opened in phases with our vision of the nation to about 101 tables and creating the ultimate ashelptargeting plug the gap from the 800 slots when it debuts. millionaire’s absence of the Chinese. The second phase will be Beijingisnotexpected rolled out from December playground in Clark to reopen its borders in the 2022 with more tables, remains the same. near future and even when slots and the introduction it does, it remains to be of junkets. seen whether the Chinese The government has will travel to gambling delayed plans to reopen international borders, due to the spread of the jurisdictions given an ongoing crackdown on Omicron variant, but national lockdowns are capital outflows for gambling purposes. Beijing has a blacklist of jurisdictions it sees easing and vaccination rates are rising. The government is aiming for a 70 as enticing its citizens to gamble and although percent vaccination rate by the end of the the list isn’t public, the Philippines is widely year, though that level is already much higher expected to be on it. “The impact of the China traveller restrictions in the Metro Manila area. “Referring to the last 18 months as will be significant and will force the operators challenging would be a gross understatement to look for new players in other countries, with to say the least, with the closing of borders, increased efforts on Korea, Japan, Indonesia repeated lockdowns and local restrictions and expat Chinese living in Malaysia and causing significant disruption to all businesses, Singapore,” Sueiro said. “There will also be an increased focus to especially hospitality,” said David Lawrence, casino general manager at Thunderbird maximise revenue coming from mass and Resorts. “The Philippine casino industry has premium mass and to translate the land-based been severely affected, the same as all other experience to the online space.” South Korea was already the largest source licenced jurisdictions across Asia. The only saving grace is that the Philippines has a very market for the Philippines, although China was strong local market, which has managed to the fastest growing.

“

”

GROSS GAMING REVENUE (units in million)

30,027 20,875

62,038

26,942

Total licensed casinos (Source: PAGCOR)

Suntrust says Chau arrest has no impact on Westside project Suntrust Home Developers said the arrest of Suncity CEO Alvin Chau is not expected to have a direct impact on its business and will not affect the timeline for construction of its Westside City Project in Entertainment City, Manila. In a statement to the Philippines Stock Exchange, Suntrust said as of Sept. 30, it had cash and cash equivalents of about PHP7.7 billion ($152.2 million), which is enough to support the immediate construction and working capital requirements. Suntrust is the Philippines unit of Hong Kong-listed Suncity Group Holdings. Chau, who was CEO of the group and head of the Macau junket of the same name, was arrested at the weekend on accusations of money laundering and organizing illegal gambling.

AMLC revokes POGO license of Smarc Group The Philippines Anti-Money Laundering Council (AMLC) added Smarc Group International, a POGO operator, to its list of uncooperative covered persons, which will see the company have its registration revoked. As of November 16, 2021, there are three Philippine Offshore Gaming Operators (POGOs) that have had their licenses revoked for failing or refusing to cooperate with the AMLC. Last year in March, the AMLC called for a review of all existing POGO licensees and service providers, amid an increasing threat to money laundering and other fraudulent activities. According to a study entitled “Understanding the Internet-Based Casino Sector in the Philippines: A Risk Assessment” there are a high number of unregulated or unsupervised service providers in the POGO sector. The study also found that much of the information given by POGOs to PAGCOR such as their office address and the details of their compliance officer has been incorrect.

Asia Gaming Briefings | December 2021

SOUTH EAST ASIA 14

MALAYSIA

Genting outlook brightens as SkyWorlds opens The crown jewel in Genting Malaysia’s $2.4 billion revamp of Resorts World Genting is making its debut this month, with analysts expecting the attraction to deliver a significant boost to visitation.

he long-delayed SkyWorlds theme park consists of nine themed worlds. It was originally intended to be a venture with 21st Century Fox, but the U.S. studio pulled out in 2018 saying connections with a gambling operator didn’t sit well with the family-friendly brand of its parent, Disney Corp. The withdrawal sparked a messy round of litigation, which was eventually settled in 2019. Genting expects the park to drive annual visitation to the Genting Highlands resort up to 30 million in the longer term, compared with its 24 million level prior to the pandemic. Maybank analyst Samuel Yin Shao Yang told local media that he’s slightly more conservative and sees visitors of about 26 million to 27 million a year. He estimates that the extra visitation will drive mass market gaming revenue and has the potential to add between MYR120 million and MYR180 million to annual EBITDA. The firm managed to stay in the black at the EBITDA level in 3Q21, but its earnings were severely hit by Malaysia’s lockdown, with the domestic resort only open for one day in the quarter. Still, earnings are likely to improve in 4Q21 and next year, after a “blip” in the third quarter, as the new theme park comes online and borders reopen, Nomura said. The Malaysian operator reported a 42 percent drop in 3Q21 revenue to MYR826.3 million ($194.8 million), while its net loss narrowed to MYR289 million from MYR705 million a year earlier. The group got strong support from its overseas operations, but Covid lockdowns at home pushed its Malaysian operation to an EBITDA loss of MYR165 million from a profit of MYR425 million a year earlier. The group as a whole was EBITDA-positive at MYR62 million, down from MYR301 million a year earlier.

Asia Gaming Briefings | December 2021

The “3Q21 numbers were better than 2020’s worst quarter (2Q20), when even the overseas operations were shut and the cost base was higher,” Nomura said. “We remain positive on GENM, as we believe that investors are likely to look beyond the 3Q21 blip towards a brighter 4Q21F and FY22F, led by the opening of the resort, new attractions, and gradual international border reopening for Malaysia.” Nomura said it was maintaining its buy recommendation on the shares with a target price of MYR3.50. The resort has seen a strong recovery since reopening in October, with visitation particularly strong at the weekend. Nomura said management appears to be targeting a year-end opening for its new outdoor theme park, which is expected to be a key driver for growth. In 3Q21, the U.S. operations were the best performers, with all of the properties open during the quarter. Revenue from the U.S. and Bahamas, where the group operates Resorts World Bimini, soared 421 percent to MYR364 million. Resorts World New York City reported gross gambling revenue of $230 million, stable from the prior quarter, while the share of its loss from its Resorts World Catskills property narrowed to MYR30.9 million, compared with MYR62 million in the prior-year period. Nomura said New York State may be willing to entertain having casinos downstate and has called for a request for information from interested parties. This process will be wrapped up by mid-December, however New York can only issue licenses from 2023. Genting is likely to bid aggressively if the opportunity arises to turn Resorts World New York, which only offers electronic games, into a full-fledged casino. Revenue from the U.K. and Egypt was up 209 percent from the prior year at MYR406 million and up 119 percent sequentially.

SOUTH EAST ASIA 15

GENTING MALAYSIA 3Q21 Operating revenue Malaysia MYR18m

-99%

U.K. & Egypt MYR406m

+209%

U.S. & Bahamasa MYR364m

+421%

Malaysia mulls online gambling to boost tax revenues Malaysia is considering regulating online gambling in a bid to raise revenue from the industry. Speaking in parliament in November, Malaysia’s Deputy Communications and Multimedia Minister, Datuk Zahidi Zainul Abidin, said the Communications and Multimedia Ministry had sent a proposal to the Ministry of Finance to make relevant amendments to the Common Gaming House Act 1953 to cover the online industry. “If we do not license, then individuals in Malaysia who are gambling with these foreign sources, we cannot tax them,” he was cited by local media as saying. “That is why we are proposing to the MoF to draft a law or a new Bill so that we can license it. We have to give it a license so that we can monitor it and we can generate income which then can sustain us by regulating it.”

International travel to resume from Jan. 1st Malaysia is considering opening its borders to international travellers on January 1 next year in a bid to accelerate the country’s economic recovery. Malaysia’s National Recovery Council chairman Tan Sri Muhyiddin Yassin said the Special Committee on Pandemic Management will identify countries with high vaccination rates against Covid-19 and will permit its citizens to travel to Malaysia. He said the decision to reopen the borders is due to Malaysia’s high-immunisation rates with 95 percent of the adult population now fully vaccinated. “Our tourism sector will suffer losses of almost RM90mil if the borders were to remain closed. That is how much revenue the country can generate from the tourism industry,” he said. The country has already opened an international travel bubble for Langkawi, home to Genting’s Resorts World Langkawi. This allows fully vaccinated foreign tourists to enter the island and holiday without the need for quarantine.

Asia Gaming Briefings | December 2021

SOUTH EAST ASIA 16

THAILAND

Could the Thai IR dream come true this time around? While the industry isn’t waiting with baited breath, there was a rare piece of good news to emerge recently that Thailand’s government is prepared to take another look at introducing regulated casinos.

he country has long been considered one of the most promising in the region by foreign casino investors, however, unsuccessful efforts by consecutive governments to overcome deep-seated conservative and religious opposition have meant the plans have failed to materialize. This time around it’s the devastation wrought by Covid that has put the issue back on the table. The Thai government is planning a threemonth study into the potential of establishing integrated resorts with a casino in the country to help to rebuild its battered tourism economy. Parliament voted overwhelmingly 310 to

Asia Gaming Briefings | December 2021

nine in favour of setting up an extraordinary committee to look into the proposal. The committee will have 60 members, with 15 representatives from the cabinet and 45 from other political parties. It is expected to take 90 days. Deputy Prime Minister Wissanu Krea-ngam was cited as saying by the newspaper that the proposal hasn’t materialized in the past as it’s a delicate issue that pits moral values against economic considerations. He said the committee will need to study these moral issues, as well as an appropriate legal framework to ensure the industry is properly regulated and taxed. Mongkolkit Suksintharanon, an MP

and leader of the Thai Civilized Party, will reportedly set up four sub-panels when the extraordinary committee convenes. The panels will study the operating and regulatory models in other countries. Thailand’s economy is one of the most tourism-dependent in Asia, ranking eighth in total tourism arrivals in 2019, with a record high of 40 million visitors. Although the government has been seeking to promote domestic tourism to keep the industry afloat, domestic travellers are estimated to spend about $152 a head compared with $1,543 for international travellers, according to a McKinsey report.

SOUTH EAST ASIA 17

TOURISM SPENDING 2019 Domestic (units in $ billion)

International Spending of international tourists in Thailand

61.6

34.8

10.3

Spending of Thai tourists in Thailand Spending of Thai tourists abroad

(Source: McKinsey)

Police detain human trafficking leader Thai police in December detained a woman thought to be a key leader in a gang smuggling women into Cambodia to work in online gambling firms. A suspect, identified only as Ms Chusri but going by the alias “Je Pla”, was arrested at an apartment in tambon Nong Waeng of Khok Sung district. A mobile phone, two passbooks and a pickup truck were also seized, local media reports. The gang was placing ads in Facebook promising high-paid work in a gambling operation. Upon arrival in Cambodia, the women were detained in a building by a Chinese gang for up to five months and urged to dupe other Thais into investing into an application named as “Spell.”

At present, gambling is strictly forbidden in Thailand, apart from the state lotteries and on horses through the Bangkok Turf Club. However, illegal gambling is rampant. Sungsidh Piriyarangsan, dean of Rangsit University’s College of Social Innovation, released research in 2016 that put the turnover from illegal casinos at between $17.78 billion and $22.78 billion a year. He estimated that legal casinos could generate about $2.78 billion in tax revenue. Prime Minister General Prayut Chan-o-cha said in January that he was willing to look at the pros and cons, even though he is personally opposed to the idea. The political leadership under Prayut is more stable than it has been in recent years, with the military-backed government cementing its hold on power since elections in 2019. The new king, who took over following the death of his father, King Bhumibol Adulyadej in 2016, is also thought to hold more liberal views on the industry. Thailand has long been seen as one of the most promising destinations in Asia when it comes to the potential for integrated resorts given

“

Prime Minister General Prayut Chan-o-cha said in January that he was willing to look at the pros and cons,

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its strong tourism market and infrastructure. Las Vegas Sands has made several attempts to enter the market. In 2015, LVS Chairman Sheldon Adelson and Marina Bay Sands President and CEO George Tanasijevich, held talks on a proposed resort in Bangkok. The group offered to spend up to $6.0 billion on a 450-room entertainment and casino complex to be built on land owned by the Finance Ministry and the State Railways Authority of Thailand.

Thailand sees slow tourism recovery with just 6m arrivals for 2022 Thailand expects to welcome 6 million foreign tourists next year, rising to 7 million if Chinese are allowed to travel, a fraction of the pre-pandemic levels. The country reopened to tourists on Nov. 1st and logged 50,000 arrivals in the first three weeks, about half of all reported arrivals for the year. Most of those were from the U.S., followed by the United Arab Emirates and Germany. The encouraging early numbers prompted government officials to revise their tourist arrival forecast for this year, from 180,000 to 200,000. In 2019, Thailand welcomed 40 million foreign tourists, making it one of the top travel destinations in Asia and one of the most highly dependent on the tourism industry for economic growth.

It wasn’t the first attempt at entering the market by the U.S. entertainment group, which held talks over the past decade with several government administrations dating back over 10 years with then Prime Minister, Thaksin Shinawatra. This prior proposal under the Thaksin Government was for a casino in the seaside resort of Pattaya, 150 kilometres from Bangkok at the Ambassador City Jomtien Resort. But this plan failed after Thaksin was deposed by the military in September 2006. Although the appeal of the market is clear, there are multiple potential pitfalls even if legislation is approved and moves ahead. Japan is an example in point. The country was viewed as the golden goose of Asia’s gambling industry, generating excitement among all of the world’s major casino groups, however, most have now dropped out due to onerous regulations. There is also the question of whether locals will be allowed to gamble, or whether it will become another of Asia’s higher-risk jurisdictions that have no support from the domestic market.

Asia Gaming Briefings | December 2021

INDOCHINA

CAMBODIA

Cambodia bucks regional trend, pushes ahead with reopening Cambodia is bucking the regional trend in pushing ahead with the reopening of its international borders, despite the Omicron variant, although another threat has emerged in the form of increased scrutiny of visitors from China. Asia Gaming Briefings | December 2021

INDOCHINA

ambodia has one of the highest no harm in China’s strict controls on those vaccination rates in Asia and exiting the country if they are going overseas announced it was fully opening for illegal activities, such as online gambling. “Many Chinese compatriots in Cambodia its borders for quarantine-free travel for vaccinated visitors from Nov. 1st. also said that some Chinese people are Just a few short weeks later, South Africa engaged in illegal activities such as online announced the discovery of a heavily mutated gambling, kidnapping, extortion, and murder variant that it believes to be more transmissible in Cambodia, which not only damages China’s than the Delta variant, the current dominant image, but is also detrimental to the business strain of Covid. Concern about its spread has and living environment of Chinese compatriots forced several jurisdictions around Asia, such in Cambodia. Therefore, the relevant policies as the Philippines and Thailand, to backtrack are absolutely supported,” it said. The report cited a passenger named as Mr on their border reopening plans. Cambodia announced a travel ban on Guan, who was returning to a food business some of the worst-hit countries in Southern he runs in the capital Phnom Penh. Cambodia announced a ban on online Africa, but lifted that restriction just five gambling in 2019 following pressure days later. Although it’s open for business, its from China. That ban took effect in 2020, tourism sector is likely to remain without although online gambling is still rife across the country, including in its key Chinese visitors Sihanoukville, which was for the foreseeable future the hub for the country’s as Beijing maintains a online gambling industry. zero tolerance policy. The increase More recently, China However, the country has in properties has stepped up the pressure a large Chinese expatriate again for Cambodia to community, many of has outpaced stamp out the practice, whom returned home regulators’ warning of damage to during Covid, but are bilateral relations if action now reportedly facing abilities to isn’t taken. increased scrutiny as they monitor and The U.S. has also go back to their businesses weighed in with its concerns in Cambodia. police them. about Cambodia’s gambling There have been media industry. In a recent report, reports of passengers the U.S. State Department being refused permission to board after invasive questioning on the warned companies considering investing in part of Chinese border officials. On a recent Cambodia that there is a high risk of money flight from Guangzhou to Phnom Penh, about laundering, corruption and human trafficking half of the passengers were denied passage. in sectors such as casinos and banking. In reference to casinos, the advisory notes The report cited an interview with a passenger who said he was asked for mobile that the number of licenses issued between phone data, including his recent WeChat history. 2014 and 2019 surged by 263 percent with The interviewed passenger added that much of the activity centred on Sihanoukville. The ban on online gaming, which came “as long as you act right and straight, don’t engage in pornography, gambling and drug into effect at the beginning of last year, has industry in Cambodia, especially illegal helped curb the growth, but the increase in activities such as online gambling, basically properties has outpaced regulators’ abilities don’t be afraid, because the Chinese police to monitor and police them, it said. As a result, they have attracted organized will never deliberately make things difficult.” Beijing has been clamping down on crime elements, which have invested in casinos capital outflows and has repeatedly warned specifically to launder money. The Cambodian government has recognized its nationals not to travel overseas to gamble. The government has also drawn up a black list these risks and has set up an inter-ministerial of countries targeting Chinese for gambling, task force to investigate claims of money although it has never been made public. The laundering and human trafficking in Preah Sihanouk province. However, the task force list has now been updated three times. The Chinese media report, which could had not issued its findings as of October this not be independently verified, said there was year, the advisory said.

“

”

NAGACORP AVERAGE DAILY GGR 9-months to end-Sept. (units in US$’000) 2021 Mass Tables EGM

2020 415 655 294 320

Premium Mass Referral VIP

285 309 814 2,161 (Source: Nagacorp)

Cambodia blocks 79 online gambling websites Cambodia’s Telecommunications Regulator in November said it has blocked 79 websites that it says were offering illegal online gambling services. The TRC said it was working with the General Commissariat of National Police of the Ministry of the Interior and would continue its crackdown. “Such operations affect the security and public order in society,” it said, urging the public to report illegal sites. Cambodia announced a ban on online gambling in August of 2019, which came into force as of 2020. However, industry insiders have noted that online gambling is still widespread, although not as highprofile as it had been in the past.

IGamiX sets up new Cambodia unit, with Daniel Li as head IGamiX Management and Consulting Ltd (Macau) has announced it has set up a new Cambodian subsidiary, which will be headed by Regional Director Daniel Li. IGamiX Management & Consulting Ltd (Cambodia) will have its head office in Phnom Penh. Li, a seasoned veteran of the Indo-China gaming industry, has spent the majority of his professional career in Asia. During this time, he has worked in various industries – Banking, Education, Gaming and Hospitality. He has served as Vice President of Nagacorp Ltd, assisting its CEO on corporate affairs, investor relations, licensing, and government relations. Daniel was also appointed as a consultant to the Cambodian Ministry of Tourism, assisting them with their national tourism promotion strategy.

Asia Gaming Briefings | December 2021

21-23 March 2022 Shangri-La at the Fort Manila, Philippines

a sea n ga m in g.co m

Asia Gaming Briefings | December 2021

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Focusing on the future, learning lessons from the past In what has now become an Asia Gaming Brief tradition, the Focus Section of our December magazine takes a look at the year in review and asks for forecasts on how the year ahead may evolve. In the following pages you will find those predictions from a selection of leading figures in Asia’s gaming industry.

e also focus on some key themes that have emerged throughout the year and look at how they may impact the industry moving forward. As the region starts to reopen to international tourism, the industry is likely to be facing a giant Chinashaped hole in its visitation numbers and spending. China is doggedly sticking with its zero-Covid policies, which also encompass Hong Kong and Macau, and no change is expected in the first half of 2022 at the very least. Some predictions are for Chinese borders to remain closed for the better part of next year. The travel restrictions are also likely to be masking what may be a much longer-term issue and that’s China’s ongoing and increasingly determined crackdown on its nationals travelling overseas to gamble. We ask what strategies regional operators could adopt to make up for the loss of the China market,

Asia Gaming Briefings | December 2021

especially given that many of the region’s mega resorts were built with the Mainland VIP in mind. It seems there is no easy fix to this problem. We also take a timely look at regional AML issues. Fred Gushin and Paul Bromberg from Spectrum Gaming are urging regional governments to take a more proactive approach, especially when it comes to junket operations. The Philippines and Cambodia are on the FATF grey list and risk serious reputational damage if they don’t tackle the issues. The “great resignation” was another theme to emerge this year and in some jurisdictions it’s causing a serious crisis in the hospitality industry. Sudhir Kale, founder of GamePlan Consultants and Brett Jones, CEO of Bullseye CX, throw the spotlight on the problem in Australia’s bars and clubs. They survey managers across the industry and find that companies that don’t pay greater attention to the employee experience are likely to be in serious trouble.

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Asia Gaming Briefings | December 2021

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Asia Gaming Briefings | December 2021

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Hopeful for recovery, but caution abounds Looking back at last year’s predictions, few were super bullish about a quick snap back in Asia, although no one anticipated the devastating impacts of the new variants either.

fter a few brief months of opening at the beginning of the year, most countries around the region have been back in varying degrees of lockdowns, with their casinos shuttered for months on end. Even when they have been able to open, there has been a complete lack of tourism traffic for a second year, once again highlighting the problems of operating in jurisdictions where there is no support from the local market. In some countries, such as South Korea, the industry is pushing hard for relief and to at least allow locals into the casinos on Jeju island. Industry commentators say this would be a watershed moment for the industry. Towards the end of 2021, many Asian nations had begun to flirt with the idea of some kind of border reopening. Cambodia, which has one of the highest vaccination rates in the region, is one of the most open, whilst others began with experiments to a limited number of destinations, such as some islands in Thailand and Malaysia. However, now we have Omicron. At the time of writing, scientists are still trying to assess just how infectious the variant is and whether it has the capacity to evade the available vaccines on the market. While we wait for answers, the immediate outlook for a reopening to tourism in Asia looks uncertain to say the least. Not surprisingly, many of our commentators cited vaccine rollout and virus variants as being two of the themes that are once again likely to dominate in 2022. There is a cautious sense of optimism that things will be better, but uncertainty dominates. China is expected

to stick with its zero-Covid policy, and while that may favour Macau, other jurisdictions will be dealing with a major hole in their tourism markets. In Macau, I can safely say that no one predicted the year-end bombshell in the form of the arrest of Suncity CEO Alvin Chau. The shockwaves from that event will continue to be felt throughout the industry next year, with the junket industry now predicted to collapse. Although the loss of the VIP segment won’t necessarily dent the operators’ bottom lines too heavily, it will have a major impact on the government, which derives its tax from gross gambling revenue. This provides a serious incentive to really push for meaningful economic diversification. Despite the upheavals in Macau over the past few months - first the gaming law amendments, then the junket crackdown - most still predict that the same six concessionaires will still be on the scene following the new bidding process. Another key trend predicted for 2022 is the continuation of the wave of mergers and acquisitions we have seen in 2021. Globally, the convergence between online and land-based is expected to continue, although analysts are beginning to raise red flags about lofty valuations. Down in Australia, an expected regulatory avalanche in the wake of the Crown Resorts and other inquiries is set to push up compliance costs, which may be a driving force for consolidation there. We’ll be sure to check in again next year to see how predictions stack up to reality.

Asia Gaming Briefings | December 2021

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No changes for Macau Alidad Tash

Managing Director, 2NT8

Danny Too

General Manager, Cherry Interactive

The much-anticipated revealing of new Macau concessionaires will not bring a change in operators, argues gaming analyst Alidad Tash.

he most significant development of 2021, worldwide, was the vaccine race, the Delta Variant (from June) and Omicron (November). In Macau, it was the year-long implementation of a zero-Covid strategy and the arrest of Alvin Chau, which led to the demise of junkets. What to look out for in 2022: Worldwide: look for

more booster shots, more variants and more economic recovery in more nations. Macau-wide: Look for the revealing of the muchanticipated new concessionaires (no change from before), more strict capital outflows from China (affecting Premium mass and premium direct), and opening to Hong Kong in early 2022 and outside greater China as the year progresses.

More online regulation and more mergers Dany Too suggests three themes for next year: countries will start “regulating” online, more mergers will follow and convergence will be the key in consolidation.

he most significant development of 2021 was the legalisation of PIGO in the Philippines, which is a significant and yet strange one at the same time. The Philippines has been hell bent all these years to disallow locals from participating in gambling activities via the Internet. Nevertheless, when push comes to shove, people tend to conveniently forget what they initially fought for. Three points to look out for next year: There will be more mergers and acquisitions - Evolution Gaming started the ball rolling and Aristocrat followed suit. There will be a “convergence” of the land-based and online gaming world. The big boys will likely “eat” up

Asia Gaming Briefings | December 2021

the smaller boys and that is not a very good thing for creativity and healthy competition. Many Asian countries will want to start “regulating” the online gambling industry as they want to tax more effectively and try hard not to allow the illegal online casinos to prosper. More sophisticated payment solutions are likely to emerge as Big Brother China is cracking the whip really hard on the gambling sector. Operators and entrepreneurs tend to prosper in these sorts of conditions. They somehow thrive under pressure and many “creative” ways for payment solutions will emerge as a result. As the adage clearly says, “There are many ways to skin a cat.”

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Extension forecast for Macau casino re-tender

David Green

For David Green, principal of Newpage Consulting, 2021 featured some watershed events for the industry, including the probes into Crown Resorts and the arrest of Alvin Chau.

t was a surprise to many that Crown Melbourne retained its casino licence, albeit with a special manager appointed by the government to oversee its journey towards suitability over the next two years. Crown is probably the largest gaming company ever to be found unsuitable. The fact that it required a Royal Commission, rather than a regulator-initiated inquiry to arrive at that result will provide something of a wake-up call for gaming regulators across the globe. The arrest of Alvin Chau was another key event. While he is entitled to the presumption of innocence, mainland authorities have periodically telegraphed their concern with the junket operations of the Suncity group, and their proxy betting activities in the Philippines. While Suncity has moved forward to integrate into casino operations in Vietnam, the Philippines and Russia, it has continued to operate the businesses which attracted official attention. Mr. Chau and Suncity were also tainted by the Bergin Inquiry into Crown Sydney’s suitability to hold a casino licence. Closing down VIP rooms after the event may be a classic case of shutting the stable door after the horse has bolted. The implications of the case against Mr. Chau and his associates in Macau are potentially far reaching, and represent an existential threat to the future conduct of junket businesses. A worst case scenario would see the People’s Republic of China’s criminal law revision treat Macau in the same way as other cross-border destinations for Chinese gamblers, a position which will severely crimp the recovery of the gaming business in Macau post-Covid. Another key event was the result in the Dore case, which found Wynn jointly liable for losses occasioned to

Principal, Newpage Consulting

third parties by the theft from Dore. The case highlights the fact that operators should not rely either solely or principally on the fact that a junket is licensed under AR 6/2002 when making a decision as to whether they ought to contract them to run VIP rooms in their casinos. Amendments to AR 6/2002 may be expected, but I doubt they will do much to shield casino concessionaires from such risks. It may not matter too much; the era of the traditional junket operation may well have been flagged with Alvin Chau’s apprehension. Looking ahead, Macau in 2022 will be a very different place. I think it unlikely that the concession re-tender will be undertaken during the year, more likely a 6-12 month concession extension, with a start to the process early in 2023. The government may need to rethink its expectations for bids for the new concessions; the greenfield/blue sky opportunity offered in 2001 is nothing like the scenario that confronts potential bidders currently, or will likely be when the tender is opened. Competition is unlikely to be the issue. Japan is still some way off getting its IR developments awarded, much less built and opened. Other China-facing jurisdictions, such as Cambodia and Korea will probably see much of that business atrophy. Rather, it will be the structural change in the industry, away from junkets and more towards the lower volume mass and premium mass market segments. All is predicated on the absolute uncertainty of the future impact of Covid and its various strains and mutations. It is not a cocktail which bodes well for the government if it is seeking shorter concession terms, more concessions, or substantial investment or front-end premiums for the grant of the new concessions.

Asia Gaming Briefings | December 2021

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David Lawrence

Casino General Manager, Thunderbird Resorts

Looking forward to a better new normal The ramp up of vaccinations and ease of restrictions contribute to David Lawrence’s confidence that the industry will see recovery in 2022. The casino general manager expects pent up demand to follow.

ike all other gaming jurisdictions, the Philippines has been adversely impacted by the effects of the Covid-19 pandemic starting Q1, 2020 and continuing through to the present. While there is still a degree of uncertainty moving towards 2022, we believe the ramp up of vaccinations, especially in the second half of 2021 has been the most significant development as this has resulted in a reduction in cases and the gradual easing of restrictions. While this easing has not yet included international travel, we are confident that as long as this decline continues, our industry will finally see some kind of recovery. For 2022 my points to look out for are as follows: Pent up demand – We think that as restrictions ease further, both locally and internationally, there will be pent up demand from both markets, this will be true regardless of geographic location.

Asia Gaming Briefings | December 2021

New normal – All businesses have had to implement mandated protocols, with the gaming industry requirements being among the strictest. Even as we move towards the new normal, we have to continue to adapt operations to cater for not just these requirements, but our guests’ changing expectations. Thinking outside the box – We have learned during the pandemic that by necessity we have to change the way we operate our business. Moving forward, we should be mindful that the dynamics of our industry have changed and we should strive to adapt quickly to new expectations and requirements. This I think applies to operators, suppliers and regulators in equal measure. Most of all for 2022, we are hoping that all of us can see the situation improving and things returning to a better ‘new normal’ for us all.

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Robots, NFTs and culture clashes

Earle Hall

Futurist Earle Hall predicts the robotization of the large scale chains and a corporate culture clash when dealing with the revamped WFO policies. On the flipside, blockchain finds its purpose.

021 was marked by sustained change due to the global pandemic. 2022 will be the start of the longterm recovery. However, the world has changed. Here are my predictions for 2022:

from unsecure, easily copied mediums to the blockchain. From fashion to real estate and from digital music to virtual cemeteries, the migration to NFT will be fast and furious, sparking an intellectual property revolution.

1. Where did all the people go ? (prediction: Robotization)

3. Remote Work gets lonely (prediction: Corporate Culture War)

A general theme around the globe over the past year is that many segments and industries are missing too many people. It seems the great resignation is a generalized trend and this is affecting the base of our society. There are not enough hospitality and restaurant, trucking, logistics, IT professionals and the endless list goes on. Large chains such as McDonald’s are suffering. Thousands of sea containers sit in ports and ships are anchored offshore because transportation is not available and the global supply chain is compromised. What is the solution? Simple and accelerating robotization. 2022 will see a massive acceleration in robotization to compensate for the great resignation. 2. Blockchain Revolution (prediction: NFT) A technology only finds traction when it finds purpose. Blockchain has found its purpose: NFT. 2022 will see blockchains accelerating as NFT digital assets are migrated

CEO , AXESnetwork

2022 will see the genesis of the corporate cultural divide. As employees divide into three categories, (1) mostly at the office; (2) rarely at the office; and (3) never at the office, new cliques will emerge to forever change the corporate culture. Remote workers will begin to complain that they are isolated from “the mostly” at the office and that the decisions, power and influence are happening inside “the mostly” at the office group. This is a natural occurrence according to the principles of herd theory, as the members of the herd instinctively band together for safety and security and organize themselves from the most dominant. As this natural occurrence emerges, the “never at the office” will feel isolated, ignored and out of the know. The “rarely at the office” will either disengage and continue to fuel the great resignation, or shift to the “mostly at the office” to ensure their ranking in the herd.

Starting on the backfoot Tourism analyst Gary Bowerman expects much of the first half of 2022 to be about rebuilding the newly lost confidence, as the much hoped-for rebound at CNY seems further away.

he outlook for 2022 depends not only on Omicron, but also on the scale of new waves of the Delta variant taking hold in some countries. Several governments in South East Asia have introduced harsh, short-term border closures, lengthier quarantines and selected flight bans - these are designed to deter travel, rather than ban it, as more scientific assessment is made regarding Omicron. Unfortunately, this has curtailed momentum that was gradually building, and has dealt another heavy blow to travel confidence.

Gary Bowerman

Two weeks ago, the 2022 Lunar New Year period appeared as if it might kickstart a fledgling recovery in parts of the region. That looks impossible now, and that means another year starts on the back foot. Talk for much of the first half of 2022 will be about rebuilding the newly lost confidence from Omicron and Delta. Governments also have a monumental challenge ahead to persuade sufficient proportions of populations to get a third jab, as hesitancy at the moment appears pretty high in some countries of South East Asia.

Tourism analyst, Asia Travel Re:Set

Asia Gaming Briefings | December 2021

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Jamie Nettleton

Partner, Addisons

Regulatory shakeup to trigger consolidation The introduction of deeper layers of regulation will result in a number of gambling operators ceasing to conduct business or merging operations in 2022, legal expert Jamie Nettleton argues. Regardless of the many trials, Australia is to remain an attractive market for local and international operators.

uch about the gambling sector in Australia in 2022 can be predicted from events in 2021. The turbulence facing Australia’s largest gambling company, Crown Resorts, will continue. With an almost complete change in senior management and board as a result of the inquiries in Sydney and Melbourne, it is likely that there will be further changes in 2022. Even with the outcome of the Western Australian Royal Commission, there will still be a Crown Casino – it is very likely that it will continue to be in business in all three states. Having said that, there are likely to be material changes at the regulatory level, with new casino regulators in each of New South Wales and Victoria and, we predict, fundamental changes to the casino regulator in Western Australia. But then, there may well be a new owner of Crown Resorts. Money laundering inquiries will continue to result in fundamental changes to the conduct of gambling, and its regulation, in Australia. Expect an announcement concerning the results of AUSTRAC’s inquiry into the practices that took place at Crown, which were highlighted in the various inquiries and which will be further discussed in AUSTRAC’s report. No doubt a considerable number of recommendations will be made about the processes that should be put in place in a gaming venue to minimise

Asia Gaming Briefings | December 2021

the risk of money laundering. Some of these, such as the introduction of a “source of funds” declaration as well as increased calls for the introduction of cashless gaming, are likely to result in change. These are likely to be implemented in all areas of the gaming sector, ranging from casinos to other gaming venues to online. However, similar measures are also likely to be introduced as part of the implementation of the final stage of the National Consumer Protection Framework (NCPF) which applies to the conduct of betting by licensed Australian operators. Expect much tighter KYC processes, and the potential for verification to be required to be conducted in advance of any betting taking place. We would not be surprised if this requirement is implemented by the end of next year, if not in law, then at least in practice. Part of this is likely to arise as a result of the introduction of the National Self-Exclusion Register (NSER) which will mandate that matching take place of those persons whose details are recorded on the NSER in advance of any betting taking place to ensure they are executed. The remaining measures of the NCPF will also be implemented in 2022 – at last, there will be common messaging requirements to be met as well as the introduction of a standard form activity statement for betting customers. Despite the implementation of these measures, which are intended to be consistent across

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the country, expect teething pains and differences. It can already be seen through the manner in which the advertising measures forming part of the NCPF have been implemented, that various jurisdictions will take different approaches. This is also likely to continue to be the case for these measures. The introduction of these further layers of regulation in 2022 will cause compliance to be of even greater relevance for all gambling operators. A failure to put in place appropriate compliance measures is likely to attract the attention of authorities with ever stricter enforcement measures being taken, resulting in disciplinary action under licences and the imposition of fines.

These steps are likely to result in a number of gambling operators ceasing to conduct business or merging operations. In any event, we anticipate the number of corporate transactions involving gambling operators to continue with mergers, demergers and acquisitions continuing to take place. Despite many of the difficulties and regulatory changes highlighted above, we anticipate that Australia will still be an attractive gambling market and many overseas businesses will look to Australia as a natural extension of their global operations. As I have mentioned, trends which have occurred in 2021 will continue through 2022.

Tax and legal clarity to emerge Independent gaming Lawyer Jay Syata expects the rate of GST on online gaming and casinos to be clarified. Chances are the rate will likely be increased in 2022 causing industry headwinds.

021 has been the year of post-Covid recovery as far as the brick and mortar casinos are concerned, with state governments in Goa and Sikkim (the two states where casinos are licensed and permitted) giving approval to restart operations after the deadly second wave of the virus subsided. The year has also been marked with clampdowns, restrictions and lawsuits on online ‘skill-based’ games with the state of Karnataka in Southern India (the state amounts to upwards of 10 percent of total users and revenues of online gaming companies) being the latest state to pass legislation to ban all kinds of wagering or betting on online games, including skill-based games. Petitions against this ban have been filed in the Karnataka High Court and petitions are also pending in High Courts of Telangana and Andhra Pradesh, where state governments have imposed similar bans.

An appeal has also been filed by the Tamil Nadu government in the Supreme Court against an order of the Madras High Court that ruled bans on online skill-based games are unconstitutional. The Supreme Court is likely to hear the matter in 2022 and provide an authoritative verdict on online skillbased games played for stakes and its legality in the coming months or years. Next year, we are also likely to have clarity on the taxation for online gaming, casinos and horse racing as the Goods and Services Tax (GST) Council, the apex constitutional body comprising of centre and states deciding the country’s indirect tax policy, is likely to decide the manner and rate of GST for gambling and betting, including online gaming. The rate of tax on online gaming and casinos is likely to be increased, which may cause headwinds to the industry.

Jay Sayta

Gaming Lawyer, Independent

Asia Gaming Briefings | December 2021

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Joe Pisano

CEO, Jade Entertainment and Gaming Technologies

Year of the gaming metaverse The convergence between land-base and online gaming will continue apace next year, Joe Pisano, CEO of Jade Entertainment and Gaming Technologies predicts. This will likely lead to more consolidation.

021 was a year of great change for Jade, adding two new verticals to our business strategy, Jadesportsbet.com and Jadesabong.com. Both products are available via retail outlets and online and we see the bridge between land and online as an essential business strategy to any gaming company as we move forward with the new normal. 2022 will be the year of blockchain, Crypto will be embraced by the industry, NFTs will be embedded into games and we will see the start of the gaming metaverse. Remote gaming, which is the extension of land-based gaming into the online space, is a must for any gaming

2022 will be the year “ of M & A, we will see mega mergers between online and bricks and mortar operators.

”

operation as it provides the business continuity solution during disasters. In 2022, payment solutions, digital wallets, mobile gaming, geo-compliance and marketing solutions will be the drivers to ensure the success of any gaming operation whether land-based or online. For land-based properties, remote gaming will become an essential marketing tool. 2022 will be the year of M&A, we will see mega mergers between online and brick and mortar operators. We will see manufacturers acquiring online and sportsbook platforms and payment solutions. I predict Apple will emerge as the major player in the metaverse. For Jade in 2022, our strategy will be to continue to source products and solutions that will drive our business in the year ahead and set a strong foundation for the decade ahead with blockchain, digital payments and mobile being at the core of our business strategy. During 2022, Asian casinos will reevaluate their business strategies to combine remote gaming into their product offerings, Macau will reinvent itself as a

Asia Gaming Briefings | December 2021

family destination and I expect, as borders open, that we will see the events industry grow in Macau. For the Philippines, PAGCOR has shown great initiative to lead the way in Asia with regulation that supports the new technologies and integration of remote gaming. We will see the foundation that has been laid out over the past year drive the Philippines into becoming the major tourism and entertainment destination in Asia. Overall 2022 will be a very good year for the gaming industry. We will see the integration of new technology and we can look forward to a boom year in 2023.

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Climate a bigger problem than Covid

Prof. Dr. Wolfgang Georg Arlt

Prof. Wolfgang argues that climate change, not the virus will be the challenge for the coming decades. The head of COTRI expects the end of the pandemic in 2022 or else...

he Year of 2021 obviously belied expectations, a year of never-ending disappointment in the hope for an imminent end to the nightmare. All the yearning for business and for hugs remained unfulfilled around the world, and in the Asia-Pacific region the Zero-case policies of the governments of China, Australia and New Zealand added insult to injury. The Year of 2022 will see the end of the pandemic. It simply cannot develop in any other way or else mankind will go mad. Some colleagues already lost their nerves and declared the end of tourism, the end of mobility

CEO, COTRI

even. But to keep things in perspective: More than five million human beings have died from Covid-19, which is awful and heart-breaking. However, more than 30 million died in the Great Famine at the end of the 1950s in China alone; the Second World War ended the lives of at least 70 million people prematurely, most of them young. There is no reason to believe that the pandemic will in the long run stop people from travelling, from mobility, or from gaming. The Year of 2022 will, however, see again unprecedented floods and droughts, record-breaking heat waves and

The Year of 2022 “ will see the end of the pandemic. ” snow storms, reminding us that the main challenge for the coming decades is not the virus, but the unstoppable climate change. Looking realistically at the non-linear climate change processes which have already been triggered as of today, it seems inevitable that the vast majority of all human beings born after the year 2000 will die not from natural causes, but prematurely from a lack of clean water and clean air, from extreme weather events, from diseases connected to climate change or from violent conflicts between and inside countries over scarce resources and forced migration. It can be expected that it will become clearer in the Year 2022 to the “Greta” generation that their demand of the politicians to “do something” is right, but comes at least ten years too late. One of the big questions of the year will therefore be how, especially younger people, will react when they finally realize that the Titanic has already hit the iceberg, with denial, suicide cults, extreme hedonism, cocooning and ncreased competitiveness trying to belong to the minority of survivors. The motto of the Year 2022 will be the same as is written in invisible paint over the entrance to any casino in the world: Carpe Diem!

Asia Gaming Briefings | December 2021

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Roland Landers

CEO, All India Gaming Federation

Bright future seen for India skill games India will continue to be an attractive online gaming market for investors. Roland Landers expects to see more M&As in the sector as the regulatory landscape evolves.

021 was a good year in terms of performance, with the number of gamers hitting 400 million and total turnover of $1.5 billion. Despite the recent ban in Karnataka, almost 85 percent of the Indian market is open for online skill gaming customers. There were also positive judgments from the Madras and Kerala High Courts. Playing online skill games for stakes is a legitimate business activity. Looking ahead, India will continue to be an attractive online gaming market for investors due to consumer traction and successful business models. India is one of the highest game download markets with about 7.3 billion downloads. There is huge growth in internet and mobile penetration, with 700 million plus in both categories. The regulatory landscape is also evolving, with positive outcomes and judgments expected from states.

Asia Gaming Briefings | December 2021

Online gaming companies are likely to shift to multi-game formats, while augmented reality and virtual reality will boost casual gaming platforms in improving customer experience. We’re likely to see more joint ventures and mergers & acquisitions in this sector. There is also huge scope for esports to grow and contribute.

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India is one of the highest game download markets with about 7.3 billion downloads.

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Strong growth projected as pandemic eases The Philippines is expected to be one of the best-performing jurisdictions in Asia, with GCG Gaming Advisory Services’ Executive Director Scott Feeney projecting a $10 billion market within five years.

or 2021 we are estimating that gross gambling revenue (GGR) will close out at US$2.4 billion. For 2022 we are estimating the GGR to be in the US$3.6 to US$4.4 billion range, with strong growth in eSabong and in particular in Clark with the opening of HANN casino in December and ROYCE in June. The opening of NuStar in Cebu in 2Q22 will add vital GGR to the overall Philippines figures. We project the Philippines to grow steadily to a $10 billion market by 2026-2027. The Philippines’ primary advantage is that locals can enter the casinos. This advantage has clearly benefited the Philippines over other countries, including South Korea, Vietnam and Cambodia that have relied on foreign visitation during this last 20 months. The Philippines has a robust and growing middle class and with few alternatives, the integrated resorts are seen as the best high-end option for dining, entertainment, events, shows and gambling. Gaming was established well before the integrated resorts in Manila opened up from 2009 (RWM) and as such the local customer base is very well established and there are ample mature mid to high-end customers. Foreigners based in Manila and Clark are a major contributing factor to the casinos doing relatively well during this pandemic. The government has done a reasonable job controlling the virus within the gaming industry, whilst allowing the casinos some level of operations for the most part. We have been recommending the Philippines as the best location to invest for at least the last decade and we have also been advising clients for several years, well before the pandemic, to work their business cases on no junket activity. Fortunately the casinos have a strong business case without the junket revenue. 3Q21 results for Entertainment City surprised on the upside with a 32 percent increase in GGR compared to 2Q21. With a large part of the quarter seeing casinos closed, either fully or partially, it shows strong evidence that the high-level ‘invited’ premium guests are very much cashed up and willing to gamble when the opportunity arises. Clark was fairly flat 3Q21 over 2Q21, with a GGR of US$46 million, but this was still higher than 2Q19 2019, revealing tremendous underlying growth, and we are forecasting that Clark will exceed its 2019 GGR in 2022, even with international borders to remain mostly heavily restricted in the first half. Another major advantage of the Philippines is that the three major casino locations have a completely different offering. Clark, with its brand new airport,

offers golf courses, mountains and scenery and is also within 45 minutes of Subic Bay. Cebu, also with its new airport, offers its beaches and smaller idyllic islands, and of course Entertainment City is in the city area and now connected to the international airport, with an offering mostly on par with Macau. Next year we will see the drive from Manila to Clark reduced to an acceptable one hour on the new tollway, giving international visitors a far greater opportunity to visit Manila and Clark over one trip. There are many key drivers to each of these three locations that will entice visitation both domestically and internationally. The new NUSTAR and Emerald resorts will be world-class destinations, but will take some time to establish themselves. We estimate US$100 million GGR in the first full year of operations of both casinos, which should be 2024. The casinos in the Philippines derive approximately 35 percent of their GGR from EGM’s, which is another positive and levels out the risk of relying on table games and inherent risk with the premium business when factoring in the likelihood that the casinos are offering direct credit. There is little reliance on the low-return junket markets. The growth of GGR is more directed at premium play foreigner markets such as the Koreans and Chinese living in the Philippines, with foreign visitation from abroad not being a huge priority and effectively just another revenue stream over and above what is derived from its internal markets. For online betting (PIGO), the larger operators (COD, Solaire, RWM, Okada) will initially take some time to fully embrace this. Similar to sports betting, it is something that takes some time to conduct correctly and within the regulations. History would remind us that the regulations do get changed often and that will see a very cautious approach. Case in point are the various rules and taxes applied to the POGO online studios, which have been causing concern to those operators for the last 4-5 years. Of course the large operators will take it slowly and see what transpires this coming year. The PIGOs, as they are named, are strictly for casinos and their local customers. I am not sure that this can be truly controlled by the regulator and may be a case of self-regulation, which would be expected of those operators in any case. Online puts the operators in a difficult situation if players from, for example China, work their way into that system. The casino’s licensees would depend upon this not occurring and it is a further reason to proceed with the greatest caution.

Scott Feeney

Executive director, GCG Gaming Advisory Services

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Online to gain more traction Sudhir Kale

Founder and CEO, GamePlan Consultants

While the land-based industry’s online presence will take some time to bear fruit, gaming consultant Sudhir Kale predicts online will achieve unparalleled significance in 2022 and beyond.

021 was a unique year, not just for the gaming industry, but for all businesses large and small. Pretty much every casino was shut down some part of the year, with many facing multiple closures. Macau was expected to recover faster than most markets in Europe and North America, but we witnessed the exact opposite. With Macau, most observers are, in hushed tones, echoing Merle Haggard, “Are the good times really over for good?” Ironically, at a time when the world was grappling with Covid in its multiple avatars, casinos on the Las Vegas strip and some clubs with gaming machines in Australia registered record revenues in certain months. “The Great Resignation” hit the gaming industry like it did many other businesses, with the hospitality industry

Asia Gaming Briefings | December 2021

being the most impacted. Large casino companies showed unprecedented interest in online gaming, including Las Vegas Sands, whose founder was dead set against online gaming and spent millions rallying and lobbying against legalizing online gaming. While these efforts to establish a solid online presence will take some time to bear fruit, the writing is on the wall: Online gaming will achieve unparalleled significance in 2022 and beyond. So, what does the future hold? I feel Macau will lose some of its lustre as the world’s gambling Mecca. Mainland China will continue its tight monitoring of overseas gambling among its citizens. Access to gambling funds among Chinese citizens will become even harder, and with the arrest of Alvin Chau, the death

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Keeping it local 2022 will be the year of the local casino club market in Asia Pacific, Tim Shepherd reckons, as larger operations will struggle to recoup their investments into VIP.

Tim Shepherd

Director, Fortuna Investments

hina’s Belt and Road initiative, now well underway, will continue to provide massive loans to poorer governments around Asia. Those loans are accompanied by plane loads of businessmen and labour who will take over land and factories and build strong, vibrant mainland Chinese communities, supported by Chinese banks locally licensed and operating, wherever they go. This is already well underway in Laos and Cambodia. These are facts. The West-driven propaganda move for multinationals to move investment into manufacturing ABC (Anywhere

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Lastly, the days of mainland Chinese traveling long distances to gamble is over,

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knell has been sounded for the hitherto permissive and secretive junket business. Just a few years ago, I had written that Macau’s casino companies need to look at markets beyond China. Not many people took this suggestion seriously. I am sure that many now wish they had. I believe the Philippine casino business will grow at a decent pace, given its diverse customer base, and proximity to many markets. Japan will continue to disappoint many with the likely developments for 2022. Regulators will get serious about enforcing regulations in Australia, though I do not think the industry will be able to change its culture and its approach to risk management without intervention from outside experts. Companies operating in Vegas should do well, buoyed mostly by non-gaming revenues and the pent-up demand for travel among Americans. My hopes for 2022? I believe they are best expressed in Emergen-C’s, “A Love Letter to Normal Life.” “I look forward to the day where a hug is just a hug, where a crowded bus or a crowded street or crowded park is welcome relief. A world where we can’t wait to wait in line again…”

But China) can only benefit Southeast Asia and South Asia. Every Samsung factory comes with hundreds of parts manufacturers, suppliers and consultants as well as entrepreneurs opening restaurants, KTV and more. The casino industry loves regulars and everything is set up in SE Asia for the local clubs and smaller casinos to make big returns from that sector, while the bigger ones will struggle to realign their expensive investments into the VIP sector into any decent return overall. Lastly, the days of mainland Chinese traveling long distances to gamble is over, (remember CLSA predicting 200m a year outbound?). Casinos and clubs close to the Chinese border will succeed, providing post Olympics China accepts the need to allow its citizens to cross land-based borders to trade and that those casinos and clubs have other attractions and do not chase players inside the country. Those players and tourists will experience travel as before, but be close enough to home to bolt back if the situation deteriorates quickly, as the last two years has proven it can. Conclusion? In terms of returns on investment in 2022, smaller and local will win the day across the region.

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Can Asia’s operators fill the China tourism hole? China’s outbound tourism market is unlikely to return to pre-pandemic levels until at least 2024, the Economist Intelligence Unit predicts, leaving a giant hole for Asia’s gambling jurisdictions and a headache for executives as to how to fill it.

ccording to the United Nations World Tourism Organisation, Chinese tourists spent $254.6 billion overseas in 2019, which was a fifth of total tourism spending. It had also been the fastest growing segment of the market, expanding by about 12.8 percent a year on average from 2009 to 2019, compared with the global average of 5.1 percent growth. In addition to the dent to travel from Beijing’s zeroCovid policies, Asia’s gambling jurisdictions are also yet to assess the impact from its concerted crackdown on money flowing overseas for gambling purposes. As a result, there’s a major question mark over where they may travel once the borders do reopen. “The recovery would most likely be slow,” said Michael Zhu, a partner with the Innovation Group, referring to prospects for 2022. “Frankly, given what is going on and can be expected in the near future, I would consider

Asia Gaming Briefings | December 2021

it fortunate to see gross gaming revenue in the APAC region reach more than half of the pre-pandemic level.” Countries where locals are allowed to gamble, or where governments are less focused on a zero-Covid approach, are likely to be the most resilient. Some have already begun opening borders and establishing travel bubbles for vaccinated travellers, although the emergence of the Omicron variant may further delay this process. “While no market can fully recover without Chinese tourists, several should be able to perform well,” says Andrew Klebanow, co-founder of consultancy group, C3 Gaming. “Singapore remains the most popular vacation destination in the region. The mass market will flock there as soon as vaccine travel lanes are established and testing protocols are relaxed. The Philippines is another market that is not wholly reliant on Chinese players. Their primary market is South Korea and rest assured, as soon as they can, Koreans will head to the Philippines

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to avail themselves of all that the country has to offer including golf and gambling.” However, much of the rest of Asia will struggle to replace the Chinese tourist dollar, with South Korea and Vietnam named as the two most likely to struggle. Macau is open to Chinese travellers, but it also has its own set of challenges due to the increased scrutiny of Beijing on gaming, which has added to the stop/start nature of its recovery. “Not only were Chinese travellers the number one source market for most countries in the region, Chinese airlines supported airport growth, ensured slot fees etc, while Trip. com and the other Chinese booking engines delivered large, year-round hotel bookings,” said Gary Bowerman, founder of Asia Travel: Re-set and a regional tourism consultant. “Without China, Asia Pacific’s entire travel economy will shrink significantly.” “Another point often overlooked about China is the investment deals and volumes that track Chinese travellers - this is hugely in doubt, not only because Chinese aren’t travelling, but because Chinese companies are retrenching, the government is checking outbound capital flows and the real estate sector is facing immense challenges.” Lorien Pilling, director of Global Betting & Gaming Consultants, said he has been warning for several years against over-reliance

on China due to volatile geo politics. “Without Chinese tourists, there is no easy answer as to where to find customers to replace them. They were the main source of visitors for many casinos in the region. Those jurisdictions which currently restrict casino access to foreigners could even consider opening their casino resorts to domestic customers,” he said. “Some non-gaming resorts in Thailand are reportedly looking to Europe and the Middle East for new customers. But the Covid-19 situation across much of Europe in December 2021 could mean that travel restrictions are imposed again in 2022.” In the absence of China, the key source market most destinations are likely to pivot to is South Korea. Although nowhere near the size and scale of China, South Korea’s outbound tourism market is growing fast. In 2019, 28.7 million Koreans, or about half of its population travelled overseas and they have a high propensity to gamble. The growing middle-class travellers in India, Thailand and Indonesia are also likely to be in the cross hairs of casino marketing departments, although again will not be able to make up for the sheer volumes left by China. “Gaming operators in the region need to rethink their marketing plans and aim at a wider and more diversified base of perspective guests, and they probably need to create more add-on

services and values to make their properties more appealing and more competitive,” Innovation Group’s Zhu said, adding that operational excellence and cost controls will also be key. Industry insiders say that regional governments may need to take more proactive measures towards helping to support their local industry. Zhu suggests that some may consider reducing high tax rates, while others say opening gaming to local residents is the way forward. “East Asian countries that consider casino resorts an important component of their tourism industry and currently prohibit their residents from gambling in those casinos need to re-evaluate those policies,” said Klebanow. “Regulators in South Korea recently indicated that they would consider allowing citizens from other parts of the country to gamble in Jeju. That would be a watershed event that could quickly turn around the fortunes of that gaming jurisdiction.” Vietnam has also begun a pilot program allowing locals to gamble in two resorts - one of which has yet to open. However, Klebanow said he doesn’t expect the central government to alter its policy or timetable in 2022. Weaning dependence from China may drag on growth in the short-to-medium term, but may lead to a more diversified and sustainable industry in Asia for the future.

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Fred Gushin*

SE Asia needs to step up AML actions, focus on junkets Jurisdictions in South East Asia need to become more proactive in their anti-money laundering efforts to avoid reputational damage from being placed on “grey” or “black” lists.

Paul Bromberg**

his article focuses on the interrelationship between countries being placed by the Financial Action Task Force (FATF) on their “grey” or “black” lists of money laundering countries and certain practices which appear to be all too common in certain Southeast Asia gaming jurisdictions. The FATF is the global money laundering and terrorist financing watchdog created by the G-7 countries in 1989. Casinos were deemed financial institutions in 1985 and therefore came under increased scrutiny. The vulnerability of casinos and other gaming entities to exploitation from criminals has long been recognized by law enforcement and financial regulators across the world. Numerous countries and international organizations, including the United States (“US”), the European Union (“EU”), the FATF, the Asia/Pacific Group on Money Laundering (“APG”) and others, have issued regulations, recommendations and guidance documents regarding these vulnerabilities and how to mitigate associated risks. International standards and best practices have been

Asia Gaming Briefings | December 2021

developed over time for creating structures and systems to regulate and enforce Anti-Money Laundering and Counter-Terrorism Financing (“AML/CTF”) activities at casinos while minimizing the potential negative impact on their ability to function legally and operate profitably. The purpose of enacting the worldwide AML program was to establish a risk-based system with international benchmarks. Countries in Asia are periodically reviewed by the APG, and reports are issued outlining the results of these reviews. The rationale for this approach is that it is unfair for some countries to comply with these rules and guidelines while other countries fail to do so: the failure to implement and enforce effective AML procedures constitutes unfair competition. As it relates to gaming, the issues that constantly get countries into trouble with the FATF are junkets, money laundering and corporate governance in terms of how casinos and other forms of gaming tackle these issues. Online gaming is now a concern in some jurisdictions as well.

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In June 2021, the Philippines and Cambodia were both placed on the “grey list” by the FATF. Scrutiny of the Philippines’ gaming industry by the APG increased after the theft of US$81 million from the account of the Central Bank of Bangladesh at the Federal Reserve Bank of New York in 2016. The funds ended up in junket accounts at one of the Entertainment City casinos. As a result of this incident, the Philippines modified its AML rules, for the first time including casinos in their AML regime and a requirement for casinos to record and verify the identity of patrons. However, junkets were not included in the list of “covered persons” under the legislation. The FATF noted that the Philippines “needs to do more to prove effective risk-based supervision” associated with junkets. Cambodia also made a commitment in 2019 to work with the FATF and APG to strengthen the effectiveness of its AML/CFT regime, especially as it relates to its gaming industry. Although the country closed down all online gaming operations at the end of 2019 and promulgated new gaming legislation a year ago that established a new gaming regulator, the Gambling Management Committee (GMC) under the Ministry of Economy and Finance, the GMC has not yet set up a website and it is not even clear if it is presently active. While

there are a number of deficiencies in its full action plan still be addressed, there have been media reports that the online gaming industry is operating again out of Sihanoukville. Given that insufficient progress has been made in either country, they have each been identified by the FATF as a “jurisdiction under increased monitoring” to address strategic deficiencies. Proper licensing investigations, ongoing regulatory oversight, meaningful risk assessments and proactive measures to stop money laundering are essential elements of effective gaming control over all forms of gaming. It has been our view for over twenty years that junkets are on the wrong side of history. The junket model used throughout Asia, but primarily based on practices in Macau, is under assault. Why? Because the junket business has been based on circumvention of gaming and other laws, and has consistently involved money laundering, breaches of currency control regulations, beneficial ownership by unknown entities, and the intrusion of Triads and other undesirables in the operation and ownership of junket businesses. As noted in our previous article for AGB on March 29, the junket industry in China is facing major challenges as a result of a series of measures implemented by the government to curtail and control this form of enterprise. These efforts, over the last five years, have

significantly reduced junket play in Macau. As a result of these restrictions, the number of licensed junkets in Macau has decreased significantly and some of the major junkets, including SunCity have attempted to move their operations to Vietnam, Cambodia, the Philippines and even Saipan, or have allegedly expanded into online gaming which is essentially unregulated across Asia. While the struggles of IPI in Saipan are well known to the readers of AGB, Cambodia and the Philippines are now facing intense scrutiny related to their junket and online gaming activities. SunCity, the largest junket operator in the world, was identified negatively in the recent hearings held in New South Wales and Victoria, Australia, related to the suitability of Crown Resorts to keep their gaming licenses in those states. Those cases found Crown unsuitable to hold a casino license and the findings were based in large part on marketing gaming activities to Chinese citizens, junket practices, money laundering and corporate governance issues. The recent arrest of Alvin Chau, the founder of SunCity, and the investigations into the SunCity business by Chinese and Macau law enforcement authorities, further demonstrate the ongoing scrutiny junket operators are under. It is time for countries in Southeast Asia to follow other countries around the world in taking proactive measures to combat money laundering and terrorist financing. We understand that financial issues are involved in the decision-making process to permit or expand casinos. Some countries have become addicted to revenues that, in part, are based on questionable junket play. It takes governmental will to regulate these activities effectively. However, in our view, countries have to think about broader issues, including reputational damage and being placed on international “grey” or “black” lists, which can impact banking relationships with corresponding banks and international financial institutions. *Fredric Gushin is Managing Director of Spectrum Gaming Group, an international gaming consultancy. Spectrum is US based and provides a wide range of services to a variety of governmental and private sector clients. Gushin has managed Spectrum’s engagements throughout Asia and Australia. **Paul Bromberg, based in Bangkok, is Senior Vice President of Investigations (Asia) for Spectrum Gaming Group. He has worked in Asia for over 30 years.

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Sudhir Kale*

Brett Jones**

Hospitality staffing headaches seen reaching crisis levels in 2022 After months of shutdown, the global hospitality industry is finally starting to show signs of a rebound, with hundreds of thousands of hotels, restaurants, pubs and clubs reopening for the first time after a very long hibernation.

he rebound, however, is nowhere near as smooth as the industry had hoped for, with many businesses realising that recovering lockdown losses isn’t something that can be achieved in a matter of months, let alone years. Even more worrying has been the industry’s struggle to find enough staff to continue operating at all, finding themselves victim to a recent phenomenon known as “The Great Resignation.” It’s a term coined by Texas A&M University Professor and Psychologist Anthony Klotz in late 2020, explaining the predicted mass exodus of workers across all industries, around the world. According to recent research by Microsoft, more than 40 percent of the global workforce is considering leaving their employers this year. Some observers blame the Covid-19 pandemic, whilst others argue that this phenomenon was in the making before the first Covid case was even detected.

Asia Gaming Briefings | December 2021

One thing is clear—the phenomenon has impacted diverse economies ranging from Thailand to Ireland, and from the United States to Germany. It is also clear from extant data that the hospitality industry is the one worst hit by The Great Resignation. How will Australia be impacted by The Great Resignation? Behavioral scientist Aaron McEwan, from global research and advisory firm Gartner, predicts that we will see The Great Resignation in Australia come March 2022. It appears, however, that for some industries—including gaming—The Great Resignation has already established a strong foothold in the Land Down Under. The Australian gaming industry The Australian gaming industry is like no other in the world. Total gaming revenues in Australia prior to the pandemic totaled around $20 billion, the majority (around $12 billion) comes from thousands of clubs and

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pubs strewn all over the country, all of which offer slot machine play. The number of slot machines (referred to as “pokies” in Australia) represents 76 percent of the world’s slot machines stationed in nongaming venues. In New South Wales alone, there are 95,000 such machines. We therefore decided to investigate The Great Resignation in Australia’s gaming industry through the vantage point of the clubs in Australia. We approached CEOs and HR heads of six clubs in New South Wales, based both in metropolitan cities as well as regional areas. The focus of our interviews was to assess the extent of labor shortages in the club industry and to gather senior leadership’s perceptions on the causes and consequences of this conundrum. A few executives spoke to us under the condition of anonymity, while most others consented to their views being quoted. Labor situation in Australian clubs The Australian club industry has been hit hard by labor shortages. And it seems the regional clubs are not immune from its impact. Every CEO and HR manager that we reached out to, regardless of location, said that they have been experiencing labor shortages since the last few months. We further asked the level at which the

worker shortage was most acute—frontline staff, supervisory level or managerial level. Our interviewees were equally split in response to this question. Three managers indicated that the shortage of workers was evidenced mostly at the frontline level while the other three said that the shortage of workers was felt at all levels. We then asked our respondents what they thought were the causes of employee scarcity. Several reasons were offered, including government policy, attitude of Gen Z workers, fear arising from the pandemic, and abundance of jobs available outside the industry. Debbie Condon, HR manager of The Ary Toukley had this to say, “Covid has changed many people’s views on their choices, they no longer feel safe and secure working in hospitality… Working nights and weekends [is] also having an impact. Being subservient to entitled customers who are at times extremely rude is another reason many do not see it [club employment] as an attractive career opportunity.” Another executive of a regional club employing around 250 staff also puts the blame on Covid-19, “The pandemic hit hospitality hard—industry wide closures meant jobs were not as secure as jobs where you could work from home. Lack of skilled international workers has affected the industry as well.” Paul Cousins, CEO of Cessnock Leagues Club also points the finger at opportunities outside of the club industry, “Flood of job opportunities that fit regular working hours, as opposed to hospitality hours is one of the main reasons. Lockdowns disturbed the regular working routines of hospitality staff.” Chris Dunn, general manager of Strathfield Sports Club feels that the labor shortage is temporary. He attributes the labor scarcity to additional tasks employees are required to perform such as double vaccination checks on customers for entry into the club, or to the sporting fields. He argues that the staffing levels will be manageable once these restrictions have eased. What They’re Doing About It We asked club managers what they are doing to combat the current labor shortage. Tony Casu, CEO of the Narooma Group, had this to say, “We are currently employing anyone who asks for work, we are currently running with little or no experienced staff and middle management. At present, we are struggling to provide good [customer] service.” Dave Hart, the CEO of Deniliquin RSL Club points to a broadened net to recruit employees. “We have gone to schools, used Sureway (an

employment and training agency) and used [job] signage at the front counter. We are also looking at shutting sections of the club and multi-skilling staff.” Paul Cousins echoes Tony Casu’s sentiments. “We are constantly in recruitment mode. We recruit staff even if there is no vacancy, but that rarely happens these days. We now happily take on recruits with zero hospitality experience.” One COO of a regional club indicated that the club had reinforced the “carrot approach” to attract and retain staff, “We obtained rental properties to assist attracting staff, we increased our focus on rewarding key staff including retention bonuses [based on] length of stay and carried extra staff during Covid disruptions to encourage loyalty and hopefully keep staff long-term.” The Future The dire situation with staff availability for Australia’s farming industry is set to continue. About one in four Aussies are job hunting, according to a Gartner survey of more than 1,500 Australians. Hays’ 2021 salary guide puts this number even higher, suggesting that nearly 40 percent of Australians are seeking a different job this financial year. If the gaming industry is to attract and retain the workforce it needs to continue its operations and offer a certain minimum level of customer service, employee experience should become its number one priority. The employee value proposition (EVP) offered to employees should resonate with the needs and aspirations of the labor pool and be based on solid research, not what management thinks workers need. There needs to be an ongoing focus on employee sentiment, and a commitment to the wellbeing of employees needs to be solidly ingrained as a part of the club’s culture. Clubs that refuse to take employee experience seriously will have a hefty price to pay. Tony Casu expresses this bleak view of the industry’s future, “Heaven help the Australian hospitality industry over the next few years. It appears that no one wants to work moving forward these days. Everyone seems a little too precious after two years of lockdowns and government handouts.” *Sudhir H. Kalé, Ph.D., is the Founder and CEO of GamePlan Consultants and a Senior Advisor at Bullseye CX. **Brett Jones is the Founder and CEO of Bullseye CX, a firm that provides specialized marketing and customer retention services to the gaming industry.

Asia Gaming Briefings | December 2021

NORTH ASIA

KOREA

Smart Racing Park to boost Incheon visitation

Paradise SegaSammy’s Phase 2 development will include the development of a “Smart Racing Park,” with Incheon International Airport, which is expected to provide a significant boost to visitation of the zone. Asia Gaming Briefings | December 2021

NORTH ASIA

he Smart Racing Park is a theme park that will use advanced technologies, like augmented reality, to deliver experiences such as gravity racing. The park will cover an area of 73,600 square metres and will also involve an investment of $71 million from a company named Monolith Incheon Park. The Incheon International Airport Corporation said it expects the high-tech theme park to boost visitation by about one million annual arrivals a year once it’s fully operational in 2025. “I expect the smart racing park will not only generate new air travel demand, necessary for overcoming the current crisis but also provide overseas and Korean tourists with the innovative entertainment only available at Incheon Airport,” Kim Kyung-Wook, President & CEO of Incheon International Airport Corporation was cited as saying in local media. There was no information provided as to Paradise SegaSammy’s input. The Incheon area was envisaged as a leisure and entertainment hub, including multiple integrated resort projects. To date, only Paradise SegaSammy’s Paradise City is operational, with other plans stalled. However, in late November, Mohegan Gaming & Entertainment said it has put in place

3Q21 EARNINGS

$1.55 billion in financing to enable it to move forward with its resort, which it now expects to open in 2023. The resort is known as Inspire Korea. The Phase 1 resort development includes three 5-star hotel towers, a 15,000-seat multifunctional professional performance arena, a foreigneronly casino, the largest convention facility in the Seoul metropolitan area, a world class retail offering, a year-round indoor water dome experience and a large outdoor thematic space, known as the “Family Park.” Mohegan said it now has the financing to complete the project. It has contributed $300 million in equity, with a further $275 million in equity from private equity funds. There is also a project finance loan of about $890 million from a three-bank Korean consortium. Mohegan got permission to extend its construction deadline in April this year due to Covid delays, with the date for opening pushed out to the first half of 2023 from 2022. The company also tweaked its plans to include facilities such as an outdoor activity park. At present the resort is 12 percent completed. “We anticipate a significant rebound in the tourism and leisure industry following the pandemic, and we look forward to contributing to the Korean economy while at the same time

Jeju Shinhwa pledges to mend staff relations

(units in KRW)

Paradise Co.

3Q21 +4.8b 3Q20

-31.9b

Jeju Dream Tower 3Q21 casino sales $10.3m

GKL 3Q21 -31b 3Q20 -31b

Kangwon Land

3Q21 +24b 3Q20

-64.9b

opening and operating a successful, state-of-theart resort. I’m thrilled to see our international vision for IR development reach this important milestone,” said Bobby Soper, International President for MGE. Mohegan recently said it was pulling out of the bidding for a resort in Greece to focus its resources on South Korea. Its plans to compete for a license in Nagasaki Japan were thwarted when partner Oshidori Corp announced it was pulling out, claiming the bidding process was flawed. Another project in the Incheon Zone may be stalled indefinitely, with Chinese property developer, R&F Properties, saying in July that there was no clear path forward to completion. Its partner, Caesars Entertainment, pulled out earlier this year and told analysts on a call that it had sold its investment for the price of some “barbecued pork.” Industry analysts are downbeat on the prospects for South Korea’s foreigner-only casino market in the short term, due to the Covid crisis and doubts on whether Chinese tourists will return. Mohegan in the past has stressed that its project will have a large non-gaming offering to which it hopes to attract clients from the Seoul Metropolitan area.

Jeju Dream Tower posted total casino sales of KRW12.3 billion ($10.3 million) in 3Q21. Lotte Tour Development, which owns the Jeju Island resort, said casino rolling chip volume was KRW171.8 billion, up 78 percent, while mass was up 22 percent from the same period last year. Total casino sales were KRW12.3 billion, with KRW4.3 billion for the VIP sector and KRW8 billion for the mass market. In the third quarter of 2021, the average daily number of visitors to the casino was 250, and the average monthly sales in the third quarter was approximately KRW 4 billion.

The operator of the Jeju Shinhwa World casino said it’s no longer offering voluntary retirement, or asking staff to take unpaid leave and has instead agreed to work to stabilize relations between staff and management. According to media reports, the local unit of Landing International said it stopped accepting leave and retirement requests on Nov. 22. The company had twice called for volunteers and received about 100 applications out of its 400 employees. “Although the financial burden has been somewhat reduced through voluntary retirement, the operating company’s financial difficulties are not in a situation that can be immediately escaped,” the reports cited a company statement as saying. “We are also aware that if self-help efforts through manpower reduction are prolonged, concerns of local communities about employee fatigue and corporate stability may increase.” The company came under fire from unions in October for pushing its staff to accept retirement packages and unpaid leave. The eight casinos on South Korea’s Jeju Island have been hard hit by the crisis due to the closure of international borders. Locals are not permitted to gamble and the casinos on the island do not have the same level of support from expatriates and Koreans with foreign passports as the properties in larger cities such as Seoul and Busan.

Asia Gaming Briefings | December 2021

SOUTH ASIA

INDIA

AIGF urges states to work with industry as court cases grind on The All India Gaming Federation (AIGF) is urging state governments to work with the skill-based online industry to develop a regulatory framework that will benefit all stakeholders.

Asia Gaming Briefings | December 2021

he call comes as the skill-based gaming industr y once again faces a series of challenges in regional courts and a petition to the Supreme Court itself. “We can say that India is witnessing an evolving regulatory environment and 85 percent of the market is open for online skill gaming,” AIGF Chairman Roland Landers said. “Our belief is that the state governments should look at this sunrise sector in the right perspective and partner with the Skill Games Council and the AIGF to support the existing self-regulatory frameworks and jointly develop a regulatory framework where all stakeholders benefit socially and economically.” The Madras High Court in August overturned an online gaming ban that was imposed by the Tamil Nadu government, while the Kerala High Court overruled the local government in September. There are also petitions pending in the High Courts of Karnataka, Telangana and Andhra Pradesh. The Karnataka case is seen as particularly significant as the Southern state accounts for about 10 percent of users and revenues in the country’s online gaming industry. The AIGF has argued that the ban will harm state capital Bangalore’s image as a start-up hub and will have huge economic repercussions. There are 92 online gaming companies registered in Bangalore, employing more than 4,000 people,

SOUTH ASIA 47

according to local media reports. The Tamil Nadu government has chosen to challenge the Madras High Court ruling in the Supreme Court, which could set a key legal precedent for India’s developing industry. That case is expected to be heard next year.

“

Gambling is totally prohibited, but by way of some exceptions a certain class of places and people are exempted from such prohibition.

”

In India, gaming legislation is decided at the state level and there is no national regulatory framework. In 1957, the Supreme Court ruled that playing games of skill, even for money, did not constitute gambling and was not illegal, enshrining the right to play such games as rummy and poker. That ruling has been challenged on several

occasions in the past and has stood, but further affirmation may help end the constant legal merry-go-around. Even India’s land-based world has found itself in the courts recently, with a petitioner in Goa seeking to overturn a ban on locals gambling in the state’s casinos. However, the court backed the government ban. “Gambling is totally prohibited, but by way of some exceptions a certain class of places and people are exempted from such prohibition,” the ruling states. “The object of the State is naturally to prevent the person domiciled in Goa to be lured into such chance games and to suffer poverty and mental trauma for their families. “The classification is founded with the object of preventing the spread of gambling and transforming the exception into a rule.” The Goan government first promised to keep locals from the state’s casinos in 2012, however a ban didn’t come into effect until February last year. Despite the ban, there is still no law setting out the rules to implement the prohibition order. The ban extends to the six floating casinos, as well as the land-based slot parlours in five-star hotels. Goa’s casinos reopened in September after a four-month ban as India battled a new outbreak of Covid. The casino industry is asking the government for a waiver of its annual fees due to the shutdowns.

Delta says revenue improving after Covid lockdowns

India’s first gaming Unicorn raises $840m in new funding round

Delta Corp saw a sequential uptick in income from gaming operations in 3Q21, reaching 32.6 crores (US$4.3 million) as casinos reopened. The figure was up from 28.5 crores in the three months ended June 30, 2021. The company, however, was not able to provide any comparisons to the same period in 2020, as the company’s operations were suspended between March 2020 to October 2020 as a result of the Covid-19 pandemic. Delta Corp said that its casinos in Goa operated at 50 percent capacity in April 2021 and from 20th September 2021, whilst its casino in Sikkim operated at 50 percent capacity from April 2021 and part of May, as well as from August 16, 2021. Delta Corp says that it, and the entire casino industry in Goa, is now seeking a waiver/ reduction of casino license fees for the period it was shut down and noted that it has paid 16.67 crores for the six months ended September 30, 2021. “Due to the pandemic situation, the stress on the operations and representations made, the management is hopeful that the government of Goa may consider its request favorably,” it said.

Dream Sports, the parent company of Indian fantasy sports group Dream11, said it has raised $840 million in a funding round, giving it a valuation of $8 billion. The fundraising was led by Falcon Edge, DST Global, D1 Capital, RedBird Capital and Tiger Global. The round also saw participation from existing investors like TPG and Footpath Ventures, making it amongst the largest investments globally in the sports tech sector. “Our vision and mission is to create an entrepreneur-led virtuous cycle of investment, innovation and wealth creation for all stakeholders in the sports ecosystem, from fans to athletes, teams and leagues,” CEO and founder Harsh Jain said. “Our investors have deep experience in developing sports ecosystems globally, and we are fortunate to have their guidance to ‘Make Sports Better’ for 1 Billion Indian sports fans.” Dream Sports said it has a user base of 140 million, its brands include Dream 11, the world’s largest fantasy sports platform.

Asia Gaming Briefings | December 2021

AUSTRALASIA

AUSTRALIA

Pubs and clubs in cross hairs after latest AML accusations Australia’s gambling industry is heading into the New Year with no signs of an end to regulatory upheavals, as pubs and clubs come under the money laundering spotlight.

Asia Gaming Briefings | December 2021

AUSTRALASIA

ew South Wales (NSW) gaming drug trafficking and human slavery,” he said investigator David Byrne has said in a statement. “Neither side of politics can any longer as much as A$1 billion ($714,000) may have been laundered through credibly claim an inquiry is not needed.” He called on Clubs NSW and the Australian Australia’s casinos, pubs and clubs. His revelations in an interview with the Hotels Association to back an inquiry. “If they don’t they will be putting ill-gotten same investigative news teams that uncovered the problems at Crown Resorts and Star profits ahead of the public interest and patron Entertainment, has led to calls for an independent safety,” Mr Field said. Investigation from state and federal agencies inquiry into gambling in pubs and clubs. Byrne said during the first four weeks after suggest that pubs and clubs have been underthe end of Covid-19 lockdowns in NSW, the reporting suspected money laundering, with department identified 140 pubs and clubs and only 5.5 percent of venues having submitted a more than 130 individual gamblers associated suspicious transaction report since January 2018, with money laundering activity – just in the despite evidence and intelligence suggesting this should be much more. Sydney metro area alone. Australians spent $12.7 billion on pokies CCTV footage obtained by the media showed a criminal group operating in several in the financial year through to end-June 2019, venues across the east coast feeding thousands according to gambling statistics prepared by the Queensland government. of dollars into pokie That’s roughly half of machines which are then all money spent on all cashed out as “clean” forms of gambling in gambling winnings. The Australian the year. Byrne said it was The country was almost certain that other Transaction Reports estimated to have 192,800 pokies states in Australia and Analysis Centre machines installed in faced similar issues, 2019, with the majority and said the scrutiny (AUSTRAC) has in pubs and clubs. placed on small pokie also launched its Even before the latest venues should be the revelations, industry same as being applied to own investigations insiders said they Crown Resorts and Star into money expected the Crown Entertainment Group. case to change the Crown has been the laundering activities face of regulation in subject of the Bergin in Australia’s Australia. Already, the Inquiry in New South casinos. regulatory authority Wales and two Royal in Victoria has been Commission inquiries reorganized to strip in Victoria and Western out responsibility for Australia. Star is facing the prospect of regulatory probes after the liquor to allow for a greater focus on casinos. The new structure was announced in news team unveiled similar problems as August and followed an independent review those at Crown. The Australian Transaction Reports and from policy reform expert Deborah Cope. Analysis Centre (AUSTRAC) has also launched The Victoria Gambling and Casino Control its own investigations into money laundering Commission will oversee all gambling from pokies through to the casino. A dedicated activities in Australia’s casinos. Independent NSW MP Justin Field called casino regulation division will sit within the on Premier Dominic Perrottet to establish a new gambling regulator and focus solely on special, independent inquiry to investigate the casino operator. Crown was found to be unsuitable to the latest allegations regarding pubs and clubs and advise the government on reform hold its license in Sydney and Melbourne and is still waiting for the outcome of a Royal to clean up the sector. “The implications of recent media reporting Commission probe in Western Australia. Following the Victoria hearings, the company is clear: a significant portion of the profits enjoyed by clubs and pubs and of the gaming was told that a special manager will be appointed tax collected by the NSW Government is the to oversee all aspects of the company’s business proceeds of organised crime including likely as it restructures to regain suitability.

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”

GROSS GAMING REVENUE Crown Resorts Year ending June 20, 2021 Revenue $1.53b EBITDA $114.1m NPAT $261.6m vs $79.5m

-31% -77%

Star Entertainment Revenue $1.55b EBITDA $427m NPAT $58m vs -$95m

-11% +51%

Ainsworth sees 1H22 profit as N.America, LATAM drives revenue Ainsworth Game Technology expects to deliver a 1H22 profit before tax and items of about A$10 million as revenue momentum builds. Speaking at the company’s annual general meeting, new CEO Harald Neumann said the company’s financial position has strengthened since the close of the prior financial year on June 30th. The company received a $5 million initial payment from GAN Ltd as part of a distribution accord in real money gaming, while Churchill Downs paid $9.4 million for the sale of 400 participation machines in July. As a result, it has been able to repay $18 million in borrowings. Revenue for the first half of FY22 is expected to be ahead of both the prior corresponding period and the previous six months, Neumann, who took over the reins on Oct. 1st, said.

Russell Shields takes chairman role at Aquis Aquis Entertainment Limited, the operator of Casino Canberra in Australia has confirmed the appointment of Russell Shields as chairman of the board of directors, following his acceptance of the offer and receipt of the necessary regulatory approval. Shields has been a senior non-executive director of the company since July 2015. He has more than 35 years of experience in the financial services industry and was chairman of Queensland and Northern Territory of ANZ Bank for six years. His appointment comes after the retirement of Tony Fung as chairman, which occurred in late August.

Asia Gaming Briefings | December 2021

SUPPLIER SPECIAL REPORT 50

Recovery patchy, but better for most It’s been an uneven recovery in the gaming world. Asia remains mostly closed for all but essential travel, while Europe and North America are back in full swing.

ent-up demand has been strong, pushing U.S. gaming revenues to record levels, with no real sign of a slowdown, while activity in Europe has also picked up as countries reopened for business. The U.S. sports betting potential continues to capture the imagination of both the land-based and online spheres, driving mergers & acquisitions, as well as partnerships with sporting leagues. In our final Supplier Special Section of the year, we hear about some of the key highlights from 2021 and what the New Year is likely to have in store for the industry. The online sector has boomed and is expected to continue to do so, with ongoing restrictions on movement in many countries fuelling the trend towards all things digital. Companies have spent

Asia Gaming Briefings | December 2021

the year improving their offerings and introducing more and better content. In the land-based world, new product offerings have focused on optimizing gaming machines to comply with the “new normal.” Standalone electronic table games in particular have seen strong growth, allowing the thrill of the table in a less crowded environment. Suppliers also tell us about their enthusiasm for the return of live events and being able to mix with colleagues and make new contacts. Barcelona, Las Vegas, Amsterdam and Malta were just a few of the venues hosting conferences and exhibitions. Asia Gaming Brief is planning on adding Manila to that list in March with the return of the ASEAN Gaming Summit and we hope to see as many familiar faces as possible there.

Asia Gaming Briefings | December 2021

SUPPLIER SPECIAL REPORT 52 1XBET

Big plans for 2022, more Asia presence

xBet is one of the fastest-growing betting brands in the world. Since its inception in 2007, the company has come a long way, achieving new successes each year and 2021 was no exception - here are just some of 1xBet’s achievements: • Victory in the International Gaming Awards “Live Casino of the Year” category; • 7 SBC Awards nominations, the results of which are to be announced on December 14th in London; • An extension of the agreement for the presence of brand advertising at La Liga and Spanish Cup matches; • Signing of a partnership agreement with FC Olympique Lyonnais; • Cooperation with top esports organisations ESL and WePlay. The company has also achieved particular success in Asia, which it considers to be one of the key markets. An agreement was signed with renowned cricketer Dwayne Bravo, who became the first brand ambassador in India, and a sponsorship agreement was signed with esports team Yangon Galacticos from Myanmar. The Kazakhstan football club Kairat, whose title sponsor is 1xBet, became the winner of the national championship and, for the first time in history, took part in the group stage of the Conference League. As always, 1xBet continued to actively work on the quality of the product and service for its customers. Innovations include the launch

of a new, light version of the bookmaker’s website, which allows players to bet even with a slow internet connection. We also updated the 1xBet Telegram bot, thanks to which you can register, place and withdraw funds directly through the popular messenger. Wel also have a new online consultant on the 1xBet website, where you can find an answer to any question of interest, even without chatting to the support service.

Football NFTs (non-fungible tokens), which are hugely popular among fans, added to available payment methods, while there are dozens of new exclusive games in the 1xGames section! 1xBet has big plans for 2022. The company intends to develop its presence in the Asian market further. That means even more new activities and options await players, enabling them to earn money with a reliable bookmaker.

APE

New opportunities for EGEs

he number of closures of VIP junket rooms in Macau is going to be large. Prior to COVID-19, VIP gaming accounted for more than 46 percent of Macau’s $36.4 billion in 2019 gross gaming revenue (GGR). Casinos share 39 percent of their GGR with the Macau government. It is believed that this will have a significant impact on the casino floor’s product mix. From a positive view, the floor may open up to more EGEs. Asia Pioneer Entertainment (APE) sees an opportunity to put more EGEs on casino floors in the coming year. In fact, some of the operators have already started restructuring their floor plans to make space for more table games, ETGs and EGMs and to do so in a way that all inactive machines are fully utilized too

Asia Gaming Briefings | December 2021

(obeying the social distance requirements). “With the new “Electronic Gaming Machine Technical Standards version 2.0” standards that are a must by the end of 2023, we foresee an increase of products that comply and the “replacement” of those that do not, for which we are now fighting very hard and are confident to be part of,” says Maria Garcia, business development consultant at APE.

Feedback from the operators was positive, while APE is also working hard with our EGE manufacturer suppliers to meet 2.0 standards at an early date. Despite the unprecedented impact of Covid on Macau’s gaming industry, we are optimistic about the sales for 2022-2023 and business will be back to normal as travellers return to Macau.

SUPPLIER SPECIAL REPORT 53 ARISTOCRAT

Changing the game with synchronized releases

e are grateful to our people and to our customers for making 2021 a landmark year for Aristocrat Gaming, says Hector Fernandez, president of the Americas and EMEA. Our commitment to being bold resulted in inventive games, leading customer experience solutions, groundbreaking cabinets, and innovative partnerships. We started 2021 by releasing what turned out to be the year’s biggest game, Buffalo Link, which took the industry by storm, broke sales records, and was named Slot of the Year at the Global Gaming Awards. In a first that changed the gaming industry forever, we released the specialty Dune slot game in sync with the U.S. theatrical release of Warner Bros. Pictures and Legendary Pictures’ Dune film. This new game development of a release timed to a major film’s theatrical release was a landmark in entertainment and further demonstrated

Aristocrat’s leadership and commitment to innovation. It meant casino guests could see the movie, and then continue their experience on the game immediately afterward. We set another first when we announced our partnership with the National Football League (NFL) to create NFL-themed slot games. This was another bold step forward for our company and for the gaming industry and is another example of how our innovative thinking is more than product – it’s game-changing ideas. We expanded our commitment to our customers in Oklahoma by opening a new manufacturing facility in Tulsa, moving the Class II industry forward. We recognized the way people want to work has changed, and we pivoted to a permanent, hybrid flexible work model called “all.flex.” This helps us to ensure we can continue to deliver our ambitious growth strategy, while also emphasizing

our people-first commitment and deepening our focus on inclusion. We’re just getting started. With the best people making the best products for the best customers in the world, we’re excited for 2022, and we wish everyone a happy and successful year.

BBIN

Balancing profit and sustainability

BIN is returning to live events and looking forward to a reunion with the industry in 2022, revolving around the theme of “the Gaming Beat.” “The Gaming Beat” resonates with the original intention of leveraging corporate sustainability and driving business performance since the establishment of the TGB Charity in 2018. BBIN marks a new phase in its charitable endeavors by

taking a holistic and interconnecting approach to accentuate the positive impact internally in its enterprise and externally to the industry and the iGaming ecosystem. In practice, we are noticing the Covid19 challenge has accelerated technological innovations and developments. As BBIN constantly adapts to the world situation and pours investment into frontier technologies, BBIN also highlights

the importance of a balanced pace that can enable more sustainable patterns of growth and mitigate environmental degradation or create new inequality issues. In short, BBIN pursues inclusive and sustainable outcomes through purposeful efforts, encapsulated in its past and upcoming “The Gaming Beat” programs. In 2021, BBIN collaborated with organizations and institutes around the world in several focus areas, including education, environmental protection, and wildlife conservation. The collaboration with PoH (Playground of Hope) in Japan helped the underprivileged groups of an earthquake-affected community, while the Saath program in India promotes the importance of sanitary education and provides essential resources to improve the local living quality. In the latest program for saving wildlife, BBIN has interconnected with six animal charities around the world to address the complexities of biological diversity and urgency of wildlife conservation. BBIN has conducted these programs from a long-term perspective in order to measure the effectiveness and embed these values into the core of its business. We believe these meaningful endeavors and longterm focus will eventually navigate us through the transition period and finally arrive at a new-normal era, where a prosperous and sustainable future is perfectly balanced.

Asia Gaming Briefings | December 2021

SUPPLIER SPECIAL REPORT 54 BETCONSTRUCT

Spring Becomes Platform of the Year at SiGMA

he complete gaming and sports betting platform provider BetConstruct received the title of the best platform at the SiGMA awards. This November BetConstruct’s visit to Malta proved a great success with the SiGMA Europe expo. It was one of the most joyful occasions to see the industry come back together. Taking the chance, the software provider let its Winning Formula campaign truly shine during the event; the inviting stand welcomed every visitor offering the most personalized approach in igaming. Sportsbook, data feed Solutions, slots, casino games, live casino, skill games and every imaginable sports betting and gaming services - BetConstruct provides it all for an operator of any size and scale to mix and match and achieve the ultimate success in this industry.

All this assortment robustly sits on the Spring Platform, an all-rounder backbone of BetConstruct that caters to all of its

300+ partners. During the SiGMA awards ceremony the platform received the Platform of the Year title.

BMM TESTLABS

Asia compliance service demand increases

MM Testlabs, the world’s original gaming compliance testlab, is pleased to provide an update on the company’s operations in Asia. Kirk White, EVP and General Manager, APAC and Africa, commented, “We are very pleased to see the increase in Asian project activities in both iGaming and land-based markets in the second half of 2021. This shows positive sentiment and market recovery across Asia now and leading into 2022.” White added that BMM Testlabs’ Singapore and Macau offices have recently expanded their premises and strengthened their teams to support the increased demand for compliance services. “We have a high demand for our specialized

Asia Gaming Briefings | December 2021

expertise in compliance consulting, testing, certification, RNG & RTP evaluation and QA services across Asia. We also have a strong focus on supporting Asian manufacturers, content providers and operators expanding to global regulated markets, such as the U.S., Europe, Asia, and Africa.” Jeffrey Fong, VP Business Development, Asia, added, “PAGCOR’s remote betting initiative that allows integrated resort operators or POGOs and eCafes to offer online betting to players in the Philippines will be a game changer. The initiative is also creating great opportunities for casino operators, system/content providers and manufacturers around Asia.”

Fong emphasized that, “BMM Testlabs is the only global testlab with local presence supporting the gaming market in the Philippines through a localized engagement service. BMM Testlabs tests and certifies IP blocking, sports betting platforms and games, and live slot and table solutions specific to the market, while also providing the best customer experience for on-time certification that is in-budget in the region.” BMM Testlabs remains the testlab of choice throughout Asia with its unmatched understanding of the region’s technical compliance requirements, along with its high-quality product testing and customer support services.

SUPPLIER SPECIAL REPORT 55 CONTINENT 8

Data breaches, cyber attacks a rising threat

ue to the pandemic, business analysts agree that digital adoption and transformation has accelerated - up to seven years according to McKinsey & Company. Providing reliable managed hosting, security and network solutions to the eGaming industry, Continent 8 is well versed in moving with speed and agility to meet the urgent and ever-changing technical and regulatory needs of our clients. In 2021 Continent 8 opened over 20 new physical locations offering full-service availability, extending our global footprint to over 80 locations. It is our commitment to the eGaming sector to provide service availability in all globally regulated and non-regulated eGaming markets. A notable trend witnessed during the pandemic was the exponential growth in cyber-attacks and data breaches. Continent 8 has seen sophistication increase, often crippling the businesses of those unprepared. Continent 8 has been successfully protecting businesses against cyber-attacks for

over 20 years through continued and extensive investment. 2020 saw the launch of a new suite of security services under the C8 Secure division. In addition to traditional DDoS mitigation, Continent 8 now offers Web Application and API Protection (WAAP) along with a full suite of Managed Security Services - namely, Endpoint Detection and Response (EDR) and Managed Detection and Response (MDR). Continent 8 no longer just protects your internet traffic, websites and applications, we now protect your security perimeter and data through pro-active 24 x 7 monitoring and remediation from our global security operations center (SOC). Continent 8 has increased staff headcount by 30 percent and has broadened its service offering to establish us as a full Managed Security Service Provider (MSSP) to the eGaming industry and beyond. The experience and knowledge gained through facing challenges with our clients has facilitated our transition to advanced levels of

service capability and global reach. In 2022, we predict to see growth in data breaches and cyber-attacks as the largest threat to the sector. We would recommend that businesses carry out vulnerability and penetration testing to assess weaknesses and potential remediation possibilities. We look forward to working with our clients and partners and wish the sector every success in 2022 and beyond.

G&D

Accuracy and efficiency in cash handling

iesecke & Devrient, as a long-term business partner with casinos, is continuing to support customers, helping them to maintain banknote processing and to secure accuracy and efficiency. We are looking forward to a better year in 2022. G+D have a wide range of products and solutions, from high speed to desktop equipment, to suit the different requirements of global casinos. Our casino solutions optimize the flow of banknote and data processing, as well as minimizing manual handling. The BPS M5 is the system for commercial applications in G+D’s High-Speed World for high-volume cash processing, with 22 banknotes

per second and modular of up to 20 stackers. It processes mixed denominations of banknotes with different formats and substrates, as well as processing TITO tickets. With header card processing, automatic banding and bundling, it achieves true continuous processing and high efficiency. Additional efficiency and security gains can be achieved by automating the banknote processing steps at the start and end which still involve the manual handling of cash. NotaTracc and NotaPack are two building blocks that are ideally suited to streamlining processes for the High Speed World.

The BPS C5 has been developed to meet the needs of small and medium-sized casinos and count rooms. The solution from G+D is a modular, scalable system that fulfills all process requirements with the greatest reliability, efficiency, and user-friendliness. A high nominal throughput of up to 63,000 banknotes per hour, with up to 25 output stackers, state-of-the-art sensors, and a multitude of software options combine to offer significant competitive advantages. The BPS C2 family offers efficiency in its most compact form. It offers an array of options for sorting, such as by denomination, orientation, or fitness and if needed tickets for casino application. What’s more, the best sensors in their class guarantee maximum reliability for authentication. Consistent high speed of 1,050 banknotes per minute ensures superior productivity and best-in-class sensors guarantee maximum reliability during authentication and even reading serial numbers. G+D, as a global leader in the digitalization of currency, has created a software suite to enable casinos to optimize their operations with data intelligence, automation, and best practices. G+D’s software suite also allows casinos to optimize the performance of machines and count rooms with tools that improve accuracy and reduce costs.

Asia Gaming Briefings | December 2021

SUPPLIER SPECIAL REPORT 56 GARY PLATT

Bringing comfort to hospitality

021 was a monumental year for Gary Platt Manufacturing, with landmark innovations that helped our customers provide their guests with the most comfortable experiences ever in the casino, hospitality areas, and in office situations, said CEO Joe Esposito. We created a new collection of performance casino seating for the Strip’s newest casino resort, Resorts World Las Vegas. Our design and engineering teams worked closely with Resorts World Las Vegas to create a unique collection – one where Gary Platt’s legendary, unsurpassed comfort meets ingenious designs with inspired innovations, revolutionary ergonomics, and details for the modern consumer. Our Collection for Resorts World Las Vegas consists of four new models: Aurora for the main casino floor, Dakota for high-limit areas, Ezra for tables, and Zephyr, designed especially for Baccarat players. We recently made the collection available for all customers, and the response has been fantastic. We were thrilled to finally deliver a longoverdue end-of-life notice to uncomfortable hospitality seating with the launch of our Sierra

Nevada Hospitality line. This extensive portfolio brings the unsurpassed comfort that we are known for to hospitality seating, charting a new course for the hospitality industry. Beyond function, chairs from Sierra Nevada Hospitality are highly customizable, from seat to back shape, leg design and color, fabrication, and materials. Sierra Nevada Hospitality has more than 100 different banquet, convention, bar, and restaurant seat designs available. As part of the launch, we supplied nearly 15,000 stackable, banquetstyle chairs to Caesars Entertainment for its new Caesars Forum event space. Our design team achieved another milestone when our new Maximus office chair earned BIFMA x 5.11 certification for large occupant seating and passed BIFMA testing up to 500 pounds. As we look to 2022, we will continue to innovate for our customers, paving new ways, keeping the tradition Gary Platt himself started when he visited a casino in Las Vegas in the 1960s and asked, “why is everyone standing?” Here’s to a happy 2022!

HABANERO

Keeping it simple for success

abanero’s impressive commercial performance over the past year has enabled us to reinforce our position as market leaders as we continue to grow globally, agreeing exciting operator deals with the likes of 888, Codere, Betway and LeoVegas. The key to Habanero’s success throughout 2021 has been keeping things simple. From the final product all the way back to the internal team, it’s all about being as dedicated and efficient as possible without making things unnecessarily difficult. Everything we do is streamlined and we believe our partners know they’re getting the best without making things too complicated. In recent months, we’ve been able to attend the SBC Summit Barcelona, iGB Live! in Amsterdam and most recently, SiGMA Malta, where we were able to catch up with old friends and interact with our network of operator partners. We are recognised as leaders in how we support our players and partners, and we’re always available to assist, which helps us to really maximise our product performance and

Asia Gaming Briefings | December 2021

ensure that revenues are always ticking over. Producing roughly one new release a month, with help from a workforce that is dedicated to delivering the very best user experience, we ensure that the maths being utilized is entirely original and delivers exciting experiences to players. Technology also offers plenty of opportunities, which we already see reflected in the momentum and growth of gamification in the industry, influencing the recent launch of our revamped tournament and gamification widget “Up”, which has gone down a treat with partners and players alike. Christmas is a great month for igaming, and we like to think that seasonal games are very much a signature part of our offering. Habanero is renowned for its Christmas and New Year-themed slots as they always perform strongly, especially Santa’s Village, which performs consistently well throughout the rest of the year. To tie up the year and the New Year’s celebrations, we will be hosting a worldwide party to honour the launch of upcoming slot

title, New Year’s Bash. Celebrations will be taking place in New York, London, Sydney, San Francisco, and Dubai, with fireworks and good music to entertain all those who participate. Looking ahead to 2022, it’s all going to be about pushing our status in regulated markets, such as Holland, Belarus, Argentina, and Panama - they are all on our radar, as well as moves in plenty of other global jurisdictions as they continue to grow and come online.

SUPPLIER SPECIAL REPORT 57 JADE ENTERTAINMENT

Passing GLI evaluation with flying colors

s the world continues to adapt and embrace the so-called “new normal,” we are at the stage where technological advancement is taking off and it is no secret that the gaming industry is capitalizing on it. Throughout the pandemic, we have seen an overwhelmingly positive response to remote gaming. And being one of the major players in the industry, JADE Entertainment and Gaming Technologies is constantly living up to the promise of delivering an improved personalized gaming experience. With more than 10 major sports events happening right now, NBA and PBA ongoing, Jade SportsBet will only keep growing thanks to the retail outlets resuming operations as the cities open up and the mobile technology that allows players to enjoy remote play. Just this month, Jade passed the Gaming Laboratories International (GLI-UK) evaluation with flying colors and received its GLI-33 certification for both verticals, SportsBet and Sabong. Following the accreditation, Jade will become more aggressive with its Sabong offering, introducing a shift in the

betting market with exotic jackpots. Jade is optimistic about the coming year, which is expected to be a year of product innovation and system upgrades. New payment gateways will be introduced giving players more options to enjoy an uninterrupted gaming experience. While the business goal is to expand operations and attract new players, Jade is also

committed to preserving the wellbeing of its patrons and has strengthened its Responsible Gaming campaign with self-exclusion tools maintaining its social responsibility. While the country is leading to an election year, we are all looking forward to the post-Covid era and participating in the Asian Gaming Summit in Manila in March.

Dave Kubajak, senior VP of sales, marketing and operations. Our creative and dedicated global engineering team released innovations that further helped our customers enhance their guests’ experience, increase efficiencies, and boost security. This year we celebrated the world’s first floor-wide deployment of our landmark FUZION systems technology at Hard Rock Hotel & Casino Sacramento at Fire Mountain and Nevada’s first floor-wide deployment at Resorts World Las Vegas. After these wins, we were thrilled when FUZION received the 2021 Innovation Award from the G&L Gaming & Hospitality Annual Industry Awards, recognizing how, with FUZION, JCM again demonstrated original thinking in solving one or more business problems. We were also excited to mark the public debut of our new ICB ASAP system at G2E. ICB ASAP brings robotic automation to the count room, enhances productivity, reduces human contact, boosts security, improves throughput, and increases reliability. It is the first and only automated secure asset

processing solution available in the market, and we were honored when ICB ASAP was shortlisted in the Global Gaming Awards. For 22 years, we have produced the AGEM/AGA Golf Classic as a fundraiser for the International Center for Responsible Gaming (ICRG). Thanks to the generous support of sponsors and players, the event was a huge success and raised $104,000. Including this year’s total, the event has now raised more than $2.3 million for the ICRG and its important research into problem gambling. Turning our eyes to 2022, we will be helping customers of all sizes with their technology roadmap. As a leader in the global gaming industry, we will double-down on our efforts to connect, listen, and partner with our customers, helping them to create a technology roadmap that will enhance the guest experience, increase efficiencies, and boost security today, tomorrow, and for years to come. From all of us at JCM, best wishes for a successful 2022!

JCM

Putting customers first

s the JCM Global team looks back on 2021, our proudest achievements are what we have done for our customers, says

Asia Gaming Briefings | December 2021

SUPPLIER SPECIAL REPORT 58 JUMBO

Going fishing with Gaming Arts in N. America

aming Arts is pleased to announce it has entered into a distribution partnership with Jumbo Technology Co. Under this agreement, Gaming Arts will be the exclusive distributor for certain Jumbo casino games in North America. Headquartered in Taiwan, Jumbo has been a major force in the gaming space across Asia for over 25 years. The first product to be launched is the amazing Ocean Phoenix multiplayer fishing game display at G2E 2021. This game has taken Asia by storm with game mechanics never before seen in North America. The platform for Ocean Phoenix is the massive ARK-65 six-seater gaming cabinet.

“We believe the Ocean Phoenix fishing game will be in casinos, combining theme activities for every casino to enhance players’ entertainment experience. We are very excited to partner with Gaming Arts and we are ready for the North America market,” according to Millie Chiang, marketing manager at Jumbo. “This is an exciting announcement for Gaming Arts,” said Mike Dreitzer, CEO of Gaming Arts. “We are honored to partner with our friends at Jumbo, as we bring their product into the North American market. The Ocean Phoenix game is an extraordinarily fun and unique game that is unlike any other, so we are eager to get customer feedback,” Dreitzer concluded.

PARADISE

MGS highlights industry concerns, promotes information exchange

lthough 2021 continues to be a challenging and turbulent year, with the evolution of Covid-19 and the recent emergence of the Omicron variant, Paradise Entertainment is pleased to showcase some of our finest achievements of the year: Participation in MGS In 2021, the MGS event was organised by the Macau Gaming Equipment Manufacturers Association (MGEMA) and was held online on 17th November. MGS is dedicated to promoting industry development, with its unique platform of showcasing business and listening to voices of concern. Through MGS, industries can seek innovation and explore business recovery with a focus on higher risk-preventing capabilities and diversification. As one of the leading gaming equipment suppliers, Paradise actively participated in and contributed to the event. Jay Chun, chairman and managing director of Paradise and chairman of MGEMA, said: “MGS continues to be a profound and professional entertainment show, which provides the latest insights and networking and is one of the “one stop” entertainment business hubs across the continent. We believe that networking, communication and information exchange is necessary for the development of the industry under all circumstances, which is why we insisted upon holding MGS in summit format as an industry platform this year.” MGS focuses on the most relevant issues during these unprecedented times, from economic

Asia Gaming Briefings | December 2021

topics such as the Digital RMB, the Hengqin Deep Cooperation Zone and electronic payments to up-to-date gaming issues such as public gaming policy, tourism and business recovery, sports betting and casino concessions.” North America slot market debut Our recently self-developed slot machines were characterized by popular games which are straight-forward, simple and perfectly suited for high denomination areas with non-progressive, standalone progressive and linked progressive options. Since the debut and the launch of our self-developed slot machines in the overseas market in late 2020, we have received positive feedback, contract orders and reorders from customers. Our group is dedicated to continuous innovation in the gaming equipment industry using top-notch and innovative technology to create more good gaming products that align well with casinos of mass market worldwide. Solid LMG performance In view of the increasing awareness of health issues, we were delighted that the distinctive features of our innovative flagship patented products, the Live Multi-Game (LMG) machines, have continued to perform well. LMG provides gaming patrons a more private, spacious and safe environment which is well aligned with the specific safety measures and requirements imposed by the relevant authority to maintain a safe distance between gaming tables, and between

gaming machines. The outperformance of the LMG has highlighted the importance of taking the prevailing health issues into account when designing and developing gaming products as well as on casino management strategy, where technology can facilitate such attainment. Our group will continue to invest in research and development and other costs on electronic gaming equipment and systems. We believe such an investment strategy will create a solid platform for our future growth in both Macau and the global markets in the long run.

SUPPLIER SPECIAL REPORT 59 PLAY’N GO

The fun has only just begun

hat a year it’s been for Play’n GO, well, for all of us. Looking back at the events of the past couple of years, as much as it has been a time of chaos and contempt, it’s also given us a chance to slow down and take a second to think, reflect, and re-envision – what is it we’re really doing here? Our conclusion – we’re here to entertain you. We want to do more than release a record number of premium games each year (we’ll still do that too). But we’re entertainers first and foremost; fun is at the heart of everything we do, say, and create. And this couldn’t be truer of the games we’ve got lined up for the new year. At Play’n GO we’re renowned for our rich narratives, dimensional characters, and epic audiovisuals, but there’s more to the story than plucking an idea out of thin air. We research. Take Tale of Kyubiko, which is due to be released at the very beginning of the year. Our game designers have delved into the realms of Japanese mythology to develop this beautiful game. The game centres around the goddess Inari. Locals share stories of a mischievous spirit that appears to late-night travellers and coaxes them to her lair. But who is this wily creature? This is the illusive Inari, a shapeshifting goddess who

can take on the form of both a human and a fox. This kind of attention to detail fuels every game we make – and we mean every game. We’re excited for the year ahead. You can expect

edge-of-your-seat fun, unmatched quality, and an array of games that are in a class of their own. Watch this space – it’s going to be a good, no, a great year.

SEGA SAMMY

Covid drives stand-alone ETGs

n these challenging times, with the ongoing fight against COVID-19, SEGA SAMMY CREATION has built a strong presence in the Asian market with our flexible configuration standalone ETG “Baccarat Maximum Fortune”. It features a Quick Result Display function

that allows players to quickly see the result of games without placing bets and an exciting Card Squeeze function. “Even during the turbulence of the pandemic, we have seen promising performance from our Baccarat games,” said Masahiro Kurosaki,

Managing Director at SEGA SAMMY CREATION. “With its advantage of being a stand-alone ETG, many operators easily achieve social distancing requirements by banking in creative ways. This allows more product to be activated and that maximizes performance.” “There is no doubt that during these times, player preferences have shifted to playing stand-alone ETGs from table games for the purpose of keeping physical distance from other players,” explained Kurosaki. “We have also seen a lot of success with operators placing our machines nearby live baccarat pits to provide a lower price-point option.” “We expect the demand of ETGs is going to grow, especially when the COVID restrictions are eased in Asia. We take this circumstance as an opportunity to bring our ETG series with all its unique functions into the various Asian markets next year.” See: https://www.segasammycreation. com/baccarat-maximumfortune/en/

Asia Gaming Briefings | December 2021

SUPPLIER SPECIAL REPORT 60 PRAGMATIC PLAY

Christmas comes early

ragmatic Play, a leading content provider to the iGaming industry, continued to go above and beyond for its clients over the festive season, as with the Christmas Operator Tournament that ran from the 8th to the 19th of December. The free-to-play tournament was open to employees of Pragmatic Play partners and the powerhouse provider gave away 100 cash prizes, worth a total of €100,000, in what was arguably the largest operator tournament of its kind. Of all participants, the one who got the highest total win while playing Christmas Big Bass Bonanza took home an early Christmas present, a massive top prize of €50,000 in cash! Prizes were distributed to the top 100 players based on the total win amount in descending order from highest to lowest.  Players were able to get a feeling of friendly and fair competition as their overall position on the leaderboard is visible on the right side of the screen. Players could easily access the tournament as part of a simple registration process and the entire flow of the tournament was smooth and seamless, highlighting the resources and effort that Pragmatic Play put into going the extra mile for its clients.

The Christmas Operator Tournament is an extension of Pragmatic Play’s free-to-play Social Tournaments, which run throughout the year. By the end of 2021 Pragmatic Play will have given away €130,000 to operators. Yossi Barzely, Chief Business Development Officer at Pragmatic Play said, “We’re delighted to deliver an operator tournament on such a large scale. We pride ourselves on being a pleasure to do business with and hope this

giveaway can bring some festive cheer to the employees of our valued partners. Alongside these Social Tournaments, there is also the player focused Drops and Wins promotion, where we give away €1,000,000 each month to players in a move that massively aids operators’ retention strategies. These innovative promotions represent our mission to be the provider that every operator wants to work with.”

SIMPLEPLAY

Looking forward to adding table games

lot supplier SimplePlay has launched a handful of excellent games in 2021. In the year ahead, there will be some major changes to the platform supplier. To warm up the market in the winter season, an Asia-themed slot game will be released in 1Q22. It will feature a goat-like mythical creature that protects Asian cities from fire disasters. With a great team of artists and product developers who are very familiar with Asian culture, this game brings ancient Asian cities back to life, and of course the mythical creature and the fire beast. Free Games are triggered by collecting a required amount of Scatters, either of the mythical creature, or the fire beast. After the slot game, SimplePlay will launch a product that will be a milestone in the company’s timeline. Table games, which are a brand new game type for the supplier, will be launched. SimplePlay’s ambitious

Asia Gaming Briefings | December 2021

product managers and diligent developers have been eager to bring casino tables, gorgeous dealers, and glamourous lobbies to the platform since the establishment of the brand. After thorough market research, the product team has worked out the maths and product development. Together with the developers, the team worked out the game flow from a technological perspective. It has adopted encryption to make sure every game is played fair and square. Meanwhile, designers have worked hard on graphics and UI design, so usability is maximised while effort is minimised. It is truly a oneof-a-kind masterpiece compared to existing counterparts in the market. SimplePlay’s table games are scheduled to be released in 2Q22. Baccarat, the king of Asian table games, will be the first to meet the market. The e-Game Lobby will

support functions like avatars and major wins. It will be followed by more popular table games, and of course awesome features will be added to the main game of Baccarat. This has to be one of the most anticipated products in 2022.

SUPPLIER SPECIAL REPORT 61 SCIENTIFIC GAMES

Kascada launch an Asia highlight

ne of the highlights for Scientific Games in Asia in 2021 is the launch of the new Kascada cabinet, the company’s first fully international cabinet and the most-awaited game theme, Coin Combo. Built by an award-winning research & development team, with members located across the globe, Kascada boasts an ultrahigh-definition 4K graphics display on a 43-inch, innovative curved monitor and features an exciting new lighting package. To continue with the tradition and culture of player-favorite games, Kascada is launching in Asia with Coin Combo. This game theme is a progression of the

internationally successful Duo Fu Duo Cai and Jin Ji Bao Xi families of games with some of the familiar elements that players love, including the Fu Babies, wealth pots, free games and jackpot features with new and exciting enhancements. Initially launched in North America earlier this year, Kascada and Coin Combo will now be available for players in Asia. Kascada and Coin Combo are set to hit Asian casino floors in late 2021. For additional information on Scientific Games’ latest cabinet and game innovations, contact your account manager today or visit scientificgames.com/ games.asia

SPORTRADAR

Expanding after IPO

uided by its vision to enable more immersive experiences for sports fans and bettors, Sportradar, the leading provider of technological solutions to the global sports betting industry, has had a year packed with significant milestones. Sportradar successfully launched its IPO on NASDAQ (SRAD) in September, underscoring its commitment to innovative products and solutions that drive fan engagement and propel the digital transformation of the sports ecosystem. Following its public listing, basketball legend Michael Jordan increased his investment in Sportradar and joined as a special advisor to its Board of Directors. During the year, Sportradar expanded its industry offerings with several acquisitions including the leading US college sports data and video analytics provider Synergy Sports and the leading cricket data and content provider, InteractSport. These acquisitions are part of the company’s efforts to provide new product and data capture capabilities to partners and will form a new business vertical called Sports Solutions from January onwards. The focus on development of new technology also continued at pace with Sportradar conducting trials at Wimbledon of its new Computer Vision system, enabling the capture of thousands more data points on any match. Reinforcing its position as an industry leader in sports betting, Sportradar also signed several multi-year global deals which provided opportunities for the organisation to bring value to the marketplace with wide-ranging products, solutions and services. These are partnerships

with leading leagues and governing bodies across some of the world’s most popular sports including the Union of European Football Associations (UEFA) as its first-ever exclusive betting data provider, won after a competitive tender for the most bet-on sport in the world; an eight-year extended agreement with the National Basketball Association (NBA) - in addition to two remaining years, which gives the company 10 years to develop technological solutions for the sport; appointment as the data and streaming rights partner of International Cricket Council

(ICC), the governing body of the world’s second most popular sport with 2.5 billion fans globally; extension of its long-standing relationship with the International Tennis Federation (ITF), as well as a long-term partnership with the National Hockey League (NHL). As one of the world leaders in sports integrity solutions, Sportradar offered its proven betmonitoring solution, the Universal Fraud Detection System, free of charge from October, making the system accessible to any sports federation or league in the world that want to use it.

Asia Gaming Briefings | December 2021

SUPPLIER SPECIAL REPORT 62 SPINTEC

Opening doors in new markets

nother challenging year is behind us as the aftershocks of the pandemic are still impeding regular operations in the gaming industry. Despite the challenging circumstances, Spintec managed to surpass all expectations and make some important strides ahead as one of the most important ETG suppliers in the world. The year 2021 marks a historical moment for Spintec in two extremely important markets. Based on their partnership with Mascot SFM, Spintec has successfully achieved certification in France. This opens the doors to the largest casino market in Europe and supports the objective of major growth in 2022. What is more, Spintec’s exclusive long-term distribution agreement with Dynamic Gaming Solutions has expanded their presence in the USA and enabled a presence in eleven US states, adding three more states next year. Spintec are pleased to report that they have achieved several new and upgraded certifications this year. Among the most important are the ones in Switzerland, Macau, France, and Oklahoma. Major software upgrades were certified in the Netherlands and Belgium, while the latest versions of Baccarat and Sic Bo were certified in the Philippines. Game enhancements also received upgraded GLI

certifications, like the Crown and Hotspot and the Multilevel progressive game for roulette, Sic Bo with win-multipliers, and the attractive new side bets for Baccarat and Blackjack. The year 2021 also brought installations in several extremely prestigious locations like Swiss Casinos and Grand Casino Monte-Carlo, and

a first installation in Canada. Spintec has also launched a variety of new games, which bring more excitement to existing games like bet multipliers and progressive jackpots for Roulette and Sic Bo, new Baccarat squeeze features, and a hugely exciting, entirely new and immersive game Wheel of Diamonds.

TRAFFGEN

Opportunities in the post-junket world

o repeat a phrase that has been said many times, by many people, 2021 has been a challenge. The challenges have been felt far and wide and have touched everyone personally, professionally and reshaped many aspects of the gaming industry. As a business, Traffgen Asia has been providing our client base, which includes Wynn Group Macau, all Melco Properties in Macau, Naga Corporation in Cambodia and Hann Group in the Philippines, with cutting-edge, AI-driven technology that empower hosts. It provides operators with tools to manage and measure staff accountability and provides security & retention tools with real-time targeted marketing in-property, in real time. The highlights for 2021 have been based around the fact that although all markets we are supplying our services to experienced severe downturns, Traffgen Asia was able to retain and extend all contracts.

Asia Gaming Briefings | December 2021

NOT being the typical technology supplier and sticking to our core offering of developing and supporting our clients with on-going development and improved support systems, which allows operators to change as and when the business environment changes, without high costs or long turn-around times, has allowed us to meet all the challenges 2021 has presented to the business. As 2021 closes out, we are continuing to pivot our business as markets change and evolve and we believe 2022 will present significant opportunities to expand our presence, as markets like Macau move away from the junket model and into mass market and direct VIP management. In today’s and tomorrow’s operating environments, I believe, the new norm is being different. Traffgen approaches markets and operators very differently and has built success through our different methods, in many markets around the world.

If 2022 is the year you need to step outside of the norm, please contact Chris Rogers: chris@traffgenasia.com

SUPPLIER SPECIAL REPORT 63 ULTRAPLAY

Esports power ahead

021 was a great year for UltraPlay. It was a year full of new challenges but huge opportunities and big achievements too. The hard work of the team and the long professional experience were rewarded with a series of awards. The team grabbed its second IGA Esports Betting Software of the Year Award and The WIG Diversity Awards in the Best Use of Technology category. Another great recognition for UltraPlay’s efforts was its first SBC Award Latinoamérica – Esports Supplier of the Year. All these prizes are proof of the team’s efforts to make its eSports product even better. And indeed, Ultraplay’s esports product is having a record-breaking year in terms of profitability due to strong trading results in top-tier tournaments played in League of Legends, Dota 2 and CSGO. While focusing on product performance, the team has also managed to add a few new titles to its games portfolio, which now involve Wild Rift, PUBG Mobile and Age of Empires IV. The Asian market is well known for its focus on mobile games and by adding Wild Rift and PUBG Mobile, Ultraplay is following the trend in the gaming industry. The initial player response has been very encouraging, both

in terms of engagement and as an acquisition tool for new players. Ultraplay’s focus for 2022 will shift towards adding more game titles in its esports portfolio, but this time from game genres that the betting industry has never looked into before. Esports’ popularity will continue to grow

in 2022. In Asia, esports are deeply connected to people’s lifestyle and they spend a lot of their time playing games. That’s one of the reasons why there is a great interest in UltraPlay’s esports product. This is a trend that is expected to continue in the following years.

WDTS

Perfect Pay Baccarat debuts at RWLV, more milestones ahead

DTS achieved significant milestones in 2021 despite the continued uncertainties in gaming. An important achievement was the first North American implementation for WDTS’s Perfect Pay Baccarat platform at Resorts World Las Vegas. The full-floor implementation includes WDTS-supplied components for RFID gaming chips, chip trays, table game bet tracking, and dealer and casino cage efficiencies. Neil Crossan, Chief Commercial Officer at Walker Digital, called the Resorts World opening a “high point,” adding, “We expect to continue expansion in North America while adding regionally important features such as cashless support and advanced AML capabilities.” Additional momentum was generated by Beach Point Capital’s $35M investment in WDTS, reinforcing the importance of automated table games systems as a critical capability for table games operators. CEO Stephen Moore observed “Ten years ago,

WDTS was one of only a handful of suppliers talking about table automation. Today, these products are an established and necessary part of the casino floor.” 2022 will be an exciting year starting in January with the release of Perfect Pay 2.0 This version features a lightweight, scalable architecture suitable for casinos of any size. The 2.0 Perfect Pay platform also introduces a new RFID bet tracking design that takes our feature rich system to all other blackjack and poker-style games. With this innovation,

the operator has the flexibility to configure all games and side bets with no changes to the table game equipment. Perfect Pay’s full-floor coverage will be complimented by the release of Perfect Cage 1.0, also coming in 2022, and extending the operational efficiencies and security of Perfect Pay into cage operations. Emily Io, SVP Sales at Walker Digital, is ready to move forward, “The New Year is a great opportunity to introduce these new product lines to our existing and prospective customers – see you at ICE in February!”

Asia Gaming Briefings | December 2021

CALENDAR OF EVENTS 64

2022 JANUARY BIG AFRICA SUMMIT 17-18 January 2022 Emperor’s Palace, Johannesburg https://www.bigafricasummit.com/

FEBRUARY

MARCH

MAY

ALL-IN GAMING UKRAINE SUMMIT 3-4 March, 2022 Kiev, Ukraine https://www.eventus-international.com/all-in-gaming

SIGMA ASIA GAMING AWARDS 26 May 2022 Conrad Hotel/Manila https://sigma.world/en/asia/asia-gaming-awards/

REGULATING THE GAME 7-11 March 2022 ICC Sydney, Australia https://www.iccsydney.com.au/whats-on/Regulating-theGame-2022

SIGMA ASIA 27 May 2022 SMX Centre, Manila https://sigma.world/en/asia/

ICE LONDON 1-3 February 2022 Excel London, UK https://www.icelondon.uk.com/

ASEAN GAMING SUMMIT 22-23 March 2022 Shangri-La Hotel, Manila https://aseangaming.com/

IGB AFFILIATE LONDON 2-5 February 2022 Excel London, UK https://london.igbaffiliate.com/

SPICE INDIA 23-25 March 2022 Goa, India https://www.sportsbettingevents.com/spice-india

JULY SPICE SRI LANKA 27 July 2022 Colombo, Sri Lanka

AUGUST G2E ASIA 30 August - 1 September 2022 Venetian, Macau https://www.g2easia.com/

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Gaming Briefings | December 2021

LAST WORD 66

Time for legal clarity It’s been a bombshell end of year for Macau and not in a good way.

Sharon Singleton

Managing Editor, AGB

This is a risky and grey area for the operators he arrest of Suncity CEO Alvin Chau at the end of November saw the city’s VIP when it comes to their marketing activities in China. And then there are the amendments to the gaming and junket industry unravel at breakneck speed. Suncity is winding up its operations, law, which had spooked the market a couple of months at least three operators have terminated their accords prior to the latest developments. Proposals included with all junkets, and VIP rooms are being shuttered potential restrictions on the distribution of capital, which could be particularly problematic for the U.S. across the gambling hub. Although the loss of VIP comes at a terrible time operators. There is concern about greater operational for Macau’s casinos, given another year of Covid-hit supervision at the board level as well as the need for revenues, analysts ultimately aren’t too concerned about greater local representation. All of this has created a sea of uncertainty in the the loss of the top end of the market. It accounted for about a third of total revenue in recent figures, but made world’s largest gambling hub, which legal experts and up a much smaller proportion of profit, as the perks and industry insiders say needs to be cleared up as soon giveaways to high rollers made it a low-margin business. as possible. It is now clear that Beijing has lost patience with Operators had been weaning themselves off this Macau’s foot dragging on its sector for sometime, with most economic diversification and turning their sights to the muchover-reliance on the gambling coveted premium mass sector, industry for 80 percent of its which can have margins of about Beijing has tax revenue. It’s quite willing to 37 percent compared with 10 to also signalled wield its sledge hammer to force 20 percent for VIP. an economic restructuring along It’s here that things get sticky that Macau is not lines that are more in tune with for Macau. exempt from its its vision of what a world centre Although not junket play, these for tourism and leisure should be. visitors shelled out a lot more in a crackdown, as Part of this will undoubtedly single day than the $50,000 total had widely been involve the need for operators permitted to be brought out of to invest in more non-gaming Mainland China in an entire year. believed. amenities and to participate in So how will these players gain the Mainland’s plan for greater access to funds? integration amongst the Greater It’s hard to see that China will turn a blind eye to any potential loopholes, such Bay Area cities and the development of Hengqin Island. While this may be beneficial for Macau in the as the use of multiple China UnionPay cards, or the cashing in luxury items such as jewelry and watches long term, it may mean a world of short-term pain for the city as it goes through a period of economic in Macau’s pawn shops. Local regulator, the Gaming Inspection and adjustment. The government may lose about a third of Coordination Bureau, has also told the local junkets its tax revenue from the loss of VIP and it has already that they can no longer extend credit to players. That’s conceded that unemployment will rise as a result of despite it being a legal practice in Macau and no formal the junket closures. The city is brimming with VIP-focused services, amendments having been made to any law. All of this raises significant questions for the future Michelin-starred restaurants, high-end designer retail not just of VIP, but for a large and profitable segment and luxury hotels. Presumably this offering will need of the market. In singling out Chau and his junket to be adjusted. As it goes through the process, the operators activities, which included enticing Mainland Chinese across the border to gamble, Beijing has also signalled deserve a lot more clarity from the government about that Macau is not exempt from its crackdown, as had the future direction and how the rule of law will be applied. So far it’s sadly lacking. widely been believed.

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Asia Gaming Briefings | December 2021

Congratulations on the

MACAU SPECIAL ADMINISTRATIVE REGION’S 22nd ANNIVERSARY

Asia Gaming Briefings | December 2021

AGBriefings December 2021 Edition

Articles inside

LAST WORD

SUPPLIER SPECIAL REPORT

AUSTRALIA

INDIA

KOREA

FOCUS

CAMBODIA

THAILAND

MALAYSIA

PHILIPPINES

MACAU

WHAT'S NEXT FOR ASIAN GAMING?