Agbriefings October 2018

Jurisdiction Updates October 2018 Edition

In focus pg.28

Sports betting

Market openings, overhauls and Asia trends

Macau

Retail renaissance pg.6

Cambodia

China FDI tensions pg.24

AUSTRALIA

Star counts on tourism pg.40

PHILIPPINES

POGOs push property pg.16

G2E 2018 SUPPLIER SPECIALS pg.46

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MESSAGE 3

Sports for all

O

ne of the biggest news events of the year in the

considering revisions to its casino decree as part of plans

gaming world was the US Supreme Court’s decision

to slash the red tape seen as hindering the development

to allow legal sports betting across the country.

of a large range of industries.

We review the momentous changes likely to

On the online sphere, growth in online gambling in

happen in the U.S. as a result of the PAPSA ruling and

the Philippines is driving a real estate boom in Manila,

what opportunities may open up for global sports betting

which is now spilling over to the island of Cebu, as

companies, many of which already have a significant head

operators seek more space and cheaper prices. India’s

start on U.S. competitors given their longer history in

online gaming sector has seen a spate of acquisitions

legal markets, such as Europe.

in recent months as operators position themselves for

We ask in particular, what kind of opportunities may

strong projected growth, despite the ongoing regulatory

emerge, either for Asian providers to offer their services, or

uncertainties.

for companies seeking to target the Asian market in the U.S.

Down under, we report on how Star Entertainment Group

Global Market Advisors Managing Director of Sports Betting

and its Asian partners are carrying out one of the largest

& Technology, John English, likens this change in regulation

investment and refurbishment programs in Australia’s

to the California Gold Rush of 1849, when thousands of 49’rs

integrated resort market, amidst projections for surging

raced to California to seek their fortunes.

inbound tourism.

On the other side of the coin, major Asian-based foreign

We dedicate the edition’s Supplier Special Report to

investors are joining the queue to capture part of a

Global Gaming Expo (G2E), arguably the world’s largest

potentially lucrative market, with jurisdictions such as

gaming trade show, returning to Sands Expo in Las Vegas

Vietnam, embarking on major sports betting reforms.

on October 8-11, 2018, showcasing the latest tech in the

Also, we look at how Asian sports books are adding more

gaming industry. Throughout our Special Report we lift

content in response to demand from local gamers, with

the veil into what you can expect to see in the show floor.

betting on smaller, local sports, now growing at a faster

Asia Gaming Brief will be attending to cover all the latest

pace than punting on the European big leagues.

industry developments and innovations. Reach out to

In these pages you’ll also find the most relevant updates

g2e@agbrief.com to book a meeting.

across the Asia region:

See you in Vegas!

Rosalind Wade

Luis Pereira

In Macau, alongside a rebound in gross gaming revenue, Connect with us:

the city is enjoying a boom in retail sales, with operators seeking to drive further growth through innovative

@agbrief

concepts, such as pop-up shops and retail cafes.

Across to Indochina, foreign direct investment continues

Asia Gaming Brief

to flood into Cambodia, led by Mainland China, though some areas of the country are beginning to push back

Asia Gaming Brief

On behalf of Asia Gaming Brief

against rising Chinese dominance.

Rosalind Wade & Luis Pereira

Meanwhile, neighbouring Vietnam is reportedly

Publishers

www.agbrief.com

OCTOBER 2018 EDITION Series II • Issue XIX

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AGBRIEF PARTNER EVENTS

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Asia Gaming Briefings | October 2018

CONTENTS 4

GREATER CHINA

NORTH ASIA

6

MACAU

INDOCHINA

22

CAMBODIA

24

Asia Gaming Briefings | October 2018

JAPAN

10

PHILIPPINES

16

SOUTH KOREA

12

SINGAPORE

20

RUSSIA

14

SOUTH ASIA

VIETNAM

special focus

SOUTH EAST ASIA

28

INDIA

SUPPLIER SPECIAL REPORT

AUSTRALASIA

26

46

NEW ZEALAND

38

AUSTRALIA

40

CNMI

42

INDUSTRY OPINION

68

LAST WORD

70

APPROVED NOW

6

GREATER CHINA

6

MACAU

Operators eye innovation as retail pops Alongside a rebound in gross gaming revenue, Macau is enjoying a boom in retail sales, with operators seeking to drive further growth through innovative concepts, such as pop-up shops and retail cafes.

Asia Gaming Briefings | October 2018

I

n the second quarter of this year, retail sales gained 23.6 percent, adding to a revised 25.9 percent gain in the first three months, with nearly all retail categories gaining, according to government figures.

A return of the high rollers has helped to drive luxury spending, although the visitor profile to Macau has also changed, with higher spending overnight visitors accounting for more than 50 percent of the visitor base.

Visitors to Macau spent MOP16.5 billion ($2 billion) on items other than gaming in Q2, up 20 percent year-on-year, according to the latest visitor expenditure survey released by the city’s Statistics and Census Service. Overnight visitors spent more than four times as much than same-day ones. Their per-capita spending was MOP3,012, while the per-capita spend of same-day visitors stood at MOP819.

Shopping remained the largest-single category for Macau visitor non-gaming spend in the second quarter, accounting for 46.3 percent of the total.

The figures suggest the government’s efforts to push Macau to diversify its revenue sources away from gaming may be gaining traction, creating opportunities for operators to introduce new retail names across different price points and new experiences.

Galaxy Macau held a pop-up Prada event in December, featuring a mock railway carriage, in a metal shell reminiscent of the American Streamliners of the ‘30s and ‘50s, with a floral patterned red silk brocade interior.

Christmas versions of life-sized Prada Robots acted as porters pushing luggage trolleys, and the ticket kiosk hosted a concierge to organise visits to the pop-up store and deliver purchases.

GREATER CHINA 7

More recently, the resort hosted a popup from SmileyWorld, which sells a series of products featuring the smiley emoji.

Melco Resorts & Entertainment has also been seeking to push the envelope when it comes to its retail spaces.

“We believe retail can be an attraction, but also that it is a key component of our offerings to guests,” Frederic Jean-Marie Winckler, executive vice president, chief marketing and brand officer, said in an email. “And that as they travel and develop, they will demand more from stores and services. Retail is a strong source of revenue, and has the potential to continue increasing significantly.”

“We believe retail needs to offer clients both a selection of the brands they know and new and exciting ones, while giving them an experience that is totally unique. Today, nothing looks more like a retail mall than another retail mall. While the big brands do a brilliant job at creating products and environments, there is a huge gap to a more adventurous offer in Macau. That is especially true of smaller brands and products from around the world. We have brought in a team of curators who scout the globe for the coolest brands to offer our clientele. We showcase these in a space that constantly changes in weekly cycles. Finally, we are dialing up personalization services for our guests.”

Melco reported higher non-gaming revenue in Q2 at City of Dreams Macau and Altira Macau, though saw a dip at its Studio City property. It didn’t provide figures for retail alone.

Sands China recently added almost 100,000 extra square feet of retail space at its Shoppes at Cotai Central, together with more than 25 new stores, including Macau’s first Apple Store. Many

of the shops are high-street names reflecting a shift towards the mass market “We believe it is vital to continue to develop and evolve the shopping experience, to introduce new brands to the market,” said David Sylvester, executive VIP of global retail.

“We do this by constantly evaluating the retail mix at Sands Shoppes Macao and adjusting whenever needed, and by creating interesting and valuable campaigns to improve and add value to the customer experience.”

Last year, the resort hosted the first Sands Macao Fashion Week, which is set to return on October 18-24, 2018.

Mall revenues for Sands China for the six months ended June 30, 2018 were $233 million, slightly lower than the $235 million for the six months ended June 30, 2017.

Steven Kwok, associate partner at OC&C Strategy Consultants agreed that the gradual increase in the non-gaming side of Macau was helping to draw in new brands. Though he was sceptical that Macau could become a shoppers paradise.

“A large portion of revenue today still comes from the gaming segment of operators in Macau, typically making up about 88 percent of total revenues, much higher than Marina Bay Sands in Singapore at c.74 percent and Las Vegas at c.65 percent,” he said. “While this has decreased slightly over the past few years, it has been driven more so by the downturn in gaming rather than aggressive growth in non-gaming segments.”

Despite attempts by the operators to bring a more imaginative approach to their retail offerings, Kwok said the majority still focus on the high end of the market.

GROSS GAMING REVENUE GGR 2017

+19.1%

Q1

+21%

Q2

+17.2%

Aug

+17%

GGR 2018E Fitch Ratings

+13%

Morgan Stanley

+16%

Union Gaming

+16%

Deutsche Bank

+12.9%

Asia Gaming Briefings | October 2018

GREATER CHINA 8

Sands China Sands China (1928:HK) has five properties in Macau. The $3 billion The Parisian opened in September 2016 and is now a key driver of group results. It features a scale replica of the Eiffel Tower, nearly 13,000 hotel rooms, two million square feet of retail-mall offerings and two million square feet of MICE capacity. Sands China reported a 25 percent gain in adjusted property EBITDA to $750 million in 18Q2, helped by strong VIP growth. The results came in line with analyst expectations, with total net revenue increasing 18 percent to $2.1 billion and net income increasing 30 percent to $427 million in the quarter. According to a note from Union Gaming, net income was negatively impacted by a non-recurring write-off of disposal assets, largely from the Four Seasons.

Sands outperformed the market in VIP growth, up 30 percent year-on-year (compared to 18 percent growth), but had slightly lower mass growth of 18 percent year-on-year (compared to 20 percent). Rolling volumes were up 44 percent, while non-rolling drop grew 32 percent.

Morgan Stanley analysts noted that strong performance at Venetian, with EBITDA up 29 percent year-on-year, suggests the recent renovations have had a positive impact.

The company is seeking a license in Japan.

Galaxy Entertainment Group Galaxy Entertainment Group (27.HK) has three main properties and runs three City Club casinos inside hotels. The company’s Galaxy Macau Phase 2 and Broadway at Galaxy Macau opened on May 27, 2015, almost doubling the capacity of the resort. For H1, the company posted strong results, though they were in line with expectations. It continues to be one of the best performing operators in Macau. Group net revenue reached HK$28.1 billion in the six months ended June 30, up 25 percent year-on-year, while net profit rose 56 percent year-on-year to HK$7.2 billion.

Group adjusted EBITDA rose 34 percent year-on-year to HK$8.6 billion. The results were driven mainly by earnings from Galaxy Macau, its flagship casino.

Net revenue at the property rose 25 percent year-on-year. However, Galaxy said it experienced bad luck in its gaming operations which decreased Adjusted EBITDA by approximately HK$302 million in the half year, reaching HK$6.2 billion. Galaxy Macau VIP rolling chip volume was up 56 percent,

Asia Gaming Briefings | October 2018

mass gross gaming revenue was up 17 percent, while electronic gaming performance was up 10 percent year-on-year.

The company is seeking a license in Japan and also wants to build an IR on Boracay in the Philippines, though President Rodrigo Duterte has said he will not allow that to proceed.

MGM china MGM China (2282:HK) is operating two casinos, with its MGM Cotai IR opening in February. The IR, with its jewellry box design, is already contributing to group results. The HK$27 billion IR features 1,400 hotel rooms and suites, meeting space, high end spa, retail offerings and food and beverage outlets as well as the first international Mansion at MGM for the ultimate luxury experience. MGM China Holdings Limited said its H1 revenue rose 30 percent, helped by the February opening of its new Cotai resort. For H1, total revenue came in at $9.1 billion, while adjusted EBITDA edged up to $2.3 billion from $2.2 billion a year earlier.

Main floor table games win for the group increased 31 percent year-on-year to $5.2 billion and slot win increased 65 percent to $1.1 billion. VIP table games win was up

11 percent to $4.5 billion. At its peninsula property, MGM Macau, main floor table games win slipped 8 percent on a lower hold of 17.9 percent from 20.8 percent a year ago. Slot win was up 16 percent and VIP table games win grew by 7 percent.

For the period, MGM Cotai recorded property EBITDA of $261 million on hotel occupancy of 88.6 percent.

Wynn macau Wynn Macau (1128:HK) operates two resorts, with its $4 billion Wynn Palace opening in 2016. The company’s original property is on the Macau Peninsula. The Wynn Palace has 1,700 hotel rooms and 90 percent of the resort will be non-gaming. The resort has two further plots of land available for development and the company is considering adding more non-gaming attractions. It may consider virtual reality or alternative reality concepts to drive visitation, although there are no current plans.

For Q2, Wynn Palace continued to drive group results. The company posted a 56.2 percent rise in net profit to $160.3 million, while total operating revenues reached $1.2 billion, up 12.5 percent year-on-year compared to the prior year period.

GREATER CHINA 9

The positive results was brought on by strong revenue growth across the board from Wynn Palace, with casino revenues up 62.4 percent to $525 million.

This was offset by a 18.1 percent dip in casino revenue from Wynn Macau, caused by a 13.1 percent drop in VIP revenue, but an increase in mass table and slot machine revenue.

Adjusted property EBITDA for Wynn Macau reached $382.8 million, while Wynn Palace was $391.2 million.

SJM Holdings SJM Holdings (880:HK) has 22 casinos in Macau, though the former monopoly has been losing market share to new IRs on Cotai.

SJM reported an almost 10 percent increase in net revenue for the first half of this year, though its share of the Macau market slipped in all categories from last year. In Q2, revenue came it at HK$17.2 billion ($2.19 billion), while gaming revenue climbed 9.6 percent to HK$16.8 billion. Net profit attributable to shareholders gained almost 57 percent to $1.49 billion, while adjusted EBITDA gained 29.9 percent to $1.95 billion.

The former monopoly holder said its share of overall gaming revenue slipped to

15.1 percent compared with 16.7 percent in the same period a year earlier.

Mass gross table revenue was up by 13.3 percent, while VIP revenue was up 1.4 percent from the same period last year. Slot revenue gained 12 percent.

SJM said it had a 12.2 percent share of VIP GGR, down from 14.2 percent a year earlier, while its share of the mass market was 20.2 percent, down from 21.4 percent.

It accounted for approximately 7.9 percent of total slot machine revenue in Macau, compared to 8.5 percent in the corresponding period last year.

Bernstein Research in a note said that the results were in line with market consensus, though above its own estimates, helped in part by a strong performance in July. Although market share was down year on year, it did improve sequentially quarter on quarter.

Melco resorts & entertainment Melco Resorts & Entertainment (6883.

HK) has three casinos and the Mocha Clubs.

The company operates the City of Dreams and Studio City in Macau and the City of

Dreams Manila.

In Q2, Melco reported an 8 percent gain in adjusted property EBITDA driven by its City of Dreams Manila and Altira properties, though its results were hit by bad luck and a change in accounting practices for revenue. Overall net revenue was $1.23 billion, down 5 percent. Without the new reporting standard, revenue would have gained 3 percent.

Adjusted property EBITDA was US$355.5 million compared to US$329.5 million in the second quarter of 2017, while net income rose to $57.3 million from $36.5 million a year earlier.

The company said it expected the new Morpheus to help mark a new beginning for City of Dreams Macau and it was already beginning to see higher volumes in July.

The company also said it plans to get to work on plans for the Phase 2 expansion of Studio City in the second half.

Analysts at Bernstein say the stock is undervalued compared with other Macau operators.

The company recently confirmed that it is preparing for an initial public offering for the joint venture company through which it owns Studio City, saying it will proceed once market conditions are conducive.

Locals gambling less, study finds Gambling participation amongst Macau locals has decreased over the last 15 years, according to a government study. Published jointly by the Gaming Inspection and Coordination Bureau, Social Affairs Bureau and the University of Macau, the responsible gambling work report shows a fall in the gambling participation rate amongst locals from 67.9 percent in 2003 to 51.5 percent in 2016. Since the launch of a responsible gambling promotion campaign in 2009, participation in casino gambling fell from 20.7 percent in 2010 to 10.4 percent in 2016. The survey also found a slight increase in people registered with the IAS central registration system of gambling disorder, reaching 157. This was compared to 141 and 147 in 2016 and 2015 respectively. A total of 376 people were banned from entering casinos in 2017, either from self or third-party exclusion.

Typhoon Mangkhut to clip GGR Super typhoon Mangkhut, which swept through the territory in September, was expected to clip gross gambling revenue for the month after casinos were ordered to close for the first time since the concessions were awarded in 2002. Although the storm was more powerful that Typhoon Hato, which hit in August 2017, Macau authorities were better prepared and the operators said they suffered only minimal damage. The operators mobilized staff to help with the clean up efforts and deliver food and aid to the elderly and those in need. Union Gaming said it expects somewhere between MOP1.1 billion and MOP1.5 billion in GGR would be lost as a result of the casino closures.

Asia Gaming Briefings | October 2018

NORTH ASIA

10

JAPAN

Operators woo local governments With the basic legislative framework now in place and the Japanese central government bureaucracy beginning to fill out the policy details, the season has come for the sixteen or seventeen interested IR operators to concretely develop their strategies to woo local governments and to position themselves to be chosen as partners.

NORTH ASIA

S

11

ome operators are clearly farther along than others. Some have functioning ground games and expanding local networks, while others seem to have progressed little beyond the embryonic stage, waiting for the IR Implementation Act to be passed before committing significant resources to Japan.

The non-Japanese major market players that already have substantial offices of their own in Tokyo are Caesars Entertainment, Galaxy Entertainment, Genting, Melco Resorts & Entertainment, and MGM Resorts. Each of these companies—save the tight-lipped Genting—hold their own company events to explain to the Japanese media and elements of the business community the special features of their brands.

Caesars has probably done the best job among the operators to underline their commitment to responsible gaming, with Jan Jones Blackhurst, executive vice-president of public policy & corporate responsibility, and her team frequently participating in roundtables and lectures about gambling addiction countermeasures. Caesars has also highlighted its entertainment credentials by sponsoring a Celine Dion concert in June.

Galaxy has held events emphasizing its partnership with Société des Bains de Mer and the Principality of Monaco, declaring that they are poised to deliver the “the best of the East and the West” should they win a bid. Galaxy is poised to clarify other aspects of its campaign in the months ahead.

Melco has opened offices in both Tokyo and Osaka, where it conducts tours exhibiting handsome scale models of its IRs in Macau and Manila, and showing off its MelGuard casino

entry system, meant to convey both the company’s cutting edge technology and commitment to security. Chairman and CEO Lawrence Ho states that he wants to make Japan his company’s global headquarters and that the sky is the limit on how much money he is willing to invest.

MGM arguably has the best established ground game in Japan, having spent years talking to local governments and the business community. They are most visible in Osaka, now routinely participating in major local festivals, not only introducing themselves to officials and potential business partners, but engaging with the general public as well.

International major market players not on this list are Las Vegas Sands, Wynn Resorts, and SJM Holdings.

Sands is almost universally regarded as top contender for one of Japan’s major market IR licenses, but their ground game is not as apparent as some of the others. They have not established their own Japan representative, and are instead running their campaign out of Singapore.

Last October, however, Sands did on one occasion unleash its star power, bringing David Beckham, Joe Walsh, and others to Tokyo and Osaka. It was almost certainly the single-most expensive and luxurious event put on to date by an international IR operator.

As for Wynn, they do appear to be sincerely interested in Japan, but have been content to wait until the national legislation was in place before assembling their local team. It probably won’t be too long before they become more active and visible.

For its part, SJM has recently proclaimed

Yokohama survey reveals strong IR opposition

IR LOCATION CANDIDATES

Rusutsu

interest in a Japanese bid, but its not clear whether or not they will make any serious effort in this direction.

Hard Rock is probably in a category of its own. Although they have the financial muscle to contend for a major market, they instead have decided to focus on one of the most promising local locations—Tomakomai, Hokkaido. Indeed, they are about to open an office in that city. Music and entertainment, clearly, take the lead in their wooing strategy. Last November they sponsored a rock concert in Yokohama.

Next comes the smaller IR operators who are bypassing the major markets in hopes of convincing a smaller local government that they will be a loyal and reliable partner, more committed to the local community than the larger corporate enterprises. In this category are 500. com, Barrière, Bloomberry Resorts, Clairvest, Mohegan Sun, and Rush Street Gaming.

A final category to be noted are the Japanese players: Heiwa, Sega Sammy, and Universal Entertainment. Heiwa tried and failed to convince the local government in Kitahiroshima, Hokkaido, to make an IR bid. Similarly, Sega Sammy failed to entice the governor of Miyazaki Prefecture into supporting a bid built around its Phoenix Seagaia Resort. Universal’s local IR strategies appear to have been disrupted by the messy situation surrounding former Chairman Kazuo Okada.

Some of these operators are betting big on Japan, but with only three IR licenses available in the first round, there will be more of them walking away empty-handed than with a firm grasp on the prize.

Kushiro Tomakomai (Uenae)

The Yokohama municipal government revealed the results of its public comment period regarding its urban development plans, and in the process admitted that it had received an avalanche of opposition to the notion of building an IR in the city. About 20 percent of all the public comments that Yokohama received touched on the casino issue, and among those, 407 of the 433 related comments, or about 94 percent, expressed opposition. The reasons cited ran the gamut from fears of gambling addiction and crime to the notion that Yokohama is a city of high culture that doesn’t need a casino. In the survey, a total of 830 individuals and organizations provided their feedback on 2,129 matters.

About 40 municipalities mull IR bids Sasebo (Huis Ten Bosch)

Nagoya Tokyo

Japan

Yokohama (Yamashita Pier) Tokoname (Airport Island) Wakayama (Marina City)

Oosaka (Yumeshima)

Nearly forty municipalities are considering IR bids, according to a report in the Nihon Keizai Shinbun. The report revealed that the Cabinet Office held an “IR Explanation Meeting” in early August with the tourism officials of local governments. Almost forty local governments chose to participate and to hear what the cabinet officials had to say. One of the central messages was that the central government wanted to quickly select the three municipalities that would be given licenses in the first round, so any local government wanting to be part of the process shouldn’t delay their preparations.

Naturally, only a fraction of those municipalities that sent officials to the meeting will choose to make serious bids, but it was not previously known that so many local governments were collecting information about the process.

Asia Gaming Briefings | October 2018

NORTH ASIA 12

SOUTH KOREA

Projects progress as revenue picks up South Korea’s foreigner-only casinos have seen revenue improve in the first half, with progress made on IR plans, though there are still hurdles on the road ahead.

P

a r a d i s e S e g a S a m my o p e n e d new facilities at Paradise City in September, with a greater emphasis on entertainment, completing the first phase of the development.

Paradise City, South Korea’s first full integrated resort opened in April 2017, with a strong focus on art. The property, near the Incheon international airport, is a joint venture between South Korea’s Paradise Co. and Japan’s Sega Sammy.

The facilities developed under Phase 1-2 feature 110,000 m2 of floor area and are comprised of a boutique hotel, Art Paradiso; a premium

Asia Gaming Briefings | October 2018

spa, Cimer; a club, Chroma, which will be the largest in Northeast Asia; an art gallery, Paradise Art Space; an event-type shopping mall, Plaza; a cutting-edge film studio, Studio Paradise and an indoor family entertainment facility, Wonderbox, together with other facilities.

“The opening of the facilities developed under Phase 1-2 marks the end of development for Phase 1 and completion of PARADISE CITY as a genuine art-tainment resort where healing and play can be experienced at a single site,” it said.

Paradise reported an almost 20 percent gain in casino revenue in the year to August, marking a sharp recovery in fortunes after a

political spat between Beijing and Seoul hit sales at South Korea’s foreigner only casinos last year. Table games were up 19.9 percent year-to-date, while revenue from machines gained 16.9 percent.

For August alone, there was a 2 percent dip in revenue, pulled down mostly by a 13 percent drop in machine sales.

Rival operator Grand Korea Leisure, which operates three casinos under the Seven Luck brand, posted strong August figures, though its results year-to-date have been lacklustre.

Casino sales rose 21.8 percent in August to approximately KRW50.7 billion (US$45.3

NORTH ASIA 13

GROSS GAMING REVENUE

Jeju teens have a gambling problem

Annual Casino Sales (in hundred million won) Only for foreigners

Kangwon Land

17.000 16.000 15.000 14.000 13.000 12.000

2013

2014

2015

2016

2017

(Source: National Gambling Control Commission)

High school and middle school students on Jeju Island are at a high risk of gambling addiction, a new survey has found. According to the survey, 11.9 percent of high school students and 5.4 percent of middle school students are at a high risk of gambling addiction. The survey looked at 671 middle school students and 328 high school students ranking them from low to high risk. One teenager surveyed said he had lost KRW 10 million on sports betting and other forms of gambling, and has stolen money from friends and parents to fuel the addiction.

Another Kangwon CEO caught in corruption net Former head of Kangwon Land, Ham Seung-hee, has been accused of corruption, after unionized employees of the casino reported him for using millions of dollars worth of company funds for his own personal use, Korea Herald reports. Ham, who was once a well-known prosecutor and lawmaker, is suspected of charging around KRW 70 million (US$63,100) to the company’s corporate credit cards for personal use. Lawmaker Song Ki-hun of the ruling Democratic Party said that Ham used corporate credit cards 636 times during his time as CEO from 2014-2017, and alleged that nearly half of the transactions were made at businesses only minutes away from the residence of a woman that he was suspected of having an affair with. “We want the truth to be revealed on every single corruption allegation made against Ham,” said the union members in a statement.

million) for that month. For the first eight months, sales grew by 1.9 percent year-on-year, to approximately KRW326.4 billion. Table game sales for the January to August period rose by 4.8 percent from the prior-year period to about KRW288.4 billion. Machine game sales declined 16.2 percent in the eight months to August 31, to nearly KRW37.8 billion.

Much of the focus so far this year has been on developments on Jeju, an island off the south of the country popular with South Korean honeymoon couples.

Construction at Lotte Tour Development’s Jeju Dream Tower is making significant progress.

The company recently bought Paradise’s Jeju Lotte Casino for $39 million and had been expected to transfer that license to its new IR on completion next year..

However, Jeju’s governor noted in September that he may seek legislative changes to block the transfer of gaming licenses from one property to another.

When this “ integrated resort

opens by October of next year, 3,100 new jobs with the highest average income in Jeju will be created.

”

Lotte is seeking to raise KRW240 billion in a rights offering to complete construction of the project, which will be Jeju’s second IR. Once completed, Jeju Dream Tower is set to be the tallest and largest landmark on Jeju island, at 169 meters in height with 38 floors.

“Now that mid-payments are fully financed with the rights offering, the last pieces of the puzzle in Jeju Dream Tower Integrated Resort construction are coming together,” said Lotte Chairman Ki-Byung Kim. “Jeju Dream Tower Integrated Resort is currently constructed up to 20th floor. When this integrated resort opens by October of next year, 3,100 new jobs with the highest average income in Jeju will be created.”

Lotte Tour Development plans to relocate its headquarters to Jeju once the resort opens, becoming the largest local company and contributing the most tax.

Jeju has eight operating casinos, including Landing International’s Jeju Shinhwa IR. Landing International, which operates Jeju Shinhwa, says its chairman went missing in August and it has not been able to contact him, prompting regulators on the island to say they would monitor the casino on a precautionary basis.

Asia Gaming Briefings | October 2018

NORTH ASIA 14

RUSSIA

Russia tackles illegal gambling as tax revenue drops Russia is getting serious about cracking down on illegal gambling, which is having a significant impact on the development of the country’s gambling zones and the amount of tax raised for government coffers.

T

he clampdown, both land-based and online, comes almost a decade after Russia restricted all gambling to four designated zones, which were designed to become Las Vegas-style hubs. However, data shows that they are generating far fewer profits than before and illegal activity is one of the key factors.

According to the Federal Tax Service, in 2008, some 5,700 gambling tables and 257,000 slot machines existed in Russia. The first brought RUB5.7 billion ($83.7 million) and the second RUB27.7 billion roubles to the state budget.

Asia Gaming Briefings | October 2018

Back then, there were just four totes, which paid some RUB4.3 million in tax and 29 bookmakers, which paid RUB34.2 million.

In 2017, the government received a fraction of the prior revenue – just RUB976 million – with commentators pointing out that it’s not an indicator that fewer people gamble, but that they do it illegally.

Last year, 255 gambling tables across the country brought to the budget some RUB344.2 million; 2,705 slot machines took in RUB247.8 million, betting shops brought in RUB341.5 million; 33 online bet processing centers

for bookmakers generated RUB33 million.

Other tax revenue was generated from betting processing centers and shops for totes.

The Russian authorities have been warning about illegal activities for some time. In 2010, an official in Russia’s Krasnodar Region, Pavel Ivakin, said that the abundance of illegal gambling facilities, which masquerade as cyber cafes. would hinder Azov City’s development. He said after the 2009 ban Russia “was swamped by the opening of new illegal gambling facilities.”

Since 2009, Russian law-enforcers have

NORTH ASIA 15

uncovered over 71,000 illegal gambling venues countrywide, though in more than half of those — 47,000 cases — organizers got away with fines as small as $150.

But this year the tide appears to have turned, with a Vladivostok resident being ordered to pay the state about $6 million dollars of profit from organizing illegal gambling activities.

While the adoption of some gamblingrelated bills usually takes years, this time it took the Russian parliament less than two weeks to pass a new bill toughening penalties for organizers of illegal gambling activities in July. It’s not really known why there was such a rush in pushing it through, as it was passed after the World Cup was already over.

The bill sets fines for organizing illegal gambling activities, both online and offline at RUB300,000 to RUB1.5 million ($4,800 – $23,000) depending on the number of people involved and the amount of revenue generated.

Carrying out unlicensed gambling activities in a betting shop, or tote, is punishable by up to six years imprisonment for both its owners and even landlords.

When it comes to the geography of illegal gambling activities, judging by police reports,

Moscow, St Petersburg, Bashkiria, and Perm Region are among areas where most illegal casinos are detected.

Law-enforcers also continue to provide cover to such activities. Back in 2011, there was a very prominent case, involving a group of police officers and prosecutors who gave cover to an illegal gambling network in

“

(Russia) was swamped by the opening of new illegal gambling facilities.

”

the Moscow region, whose annual profits amounted to $10 million.

In Autumn 2017, Moscow police busted another illegal network, which included a police officer. The group was active for two years, mainly in Moscow and Mordovia, and managed to rake in RUB66 million.

Its equipment was placed in entertainment centers and shopping malls, disguised as

self-service payment terminals.

Former senior investigator Yevgeni Mislovsky said in a 2011 interview to state broadcaster Rossiya 24 that any profitable shadowy business is always covered by lawenforcers. It may vary from police, as they are the first to discover the rings, through to a higher level of the Prosecutor’s Office, or even the FSB. This was confirmed by an AGB source in the FSB, who said that it depends on the scale of the business.

A relatively new scam is to take bets on fake events, for instance, fake trade of securities at a very high speed (every 2-10 seconds).

Russia also appears to have intensified its efforts to tackle illegal online betting websites registered outside of Russia. For this, the Russian Federal Tax Service will compile and update a blacklist of illegal casinos and bookies.

On 27 May, in the run-up to the World Cup in Russia, a law came into effect prohibiting Russian credit organizations and payment systems from making payments to organizers of illegal gambling activities. But it doesn’t stop some companies, like gambling software provider Slotegrator, from offering solutions to circumvent the ban.

GGR: TIGRE DE CRISTAL Mass table drop

Rolling chip turnover Q1 2017

Q1 2017

3,438

Q2 2017

4,965

Q3 2017

5,570

Q2 2017 Q3 2017

Q4 2017

4,818

Q4 2017

FY 2017

18,791

FY 2017

FY 2016

14,081

FY 2016

132 127 155 163

577 496

(Source: Summit Ascent)

Korean investor eyes Primorye A Korean company is in talks with the Primorye Development Corporation about a possible RUB18 billion (US$263.6 million) entertainment project in the local gaming zone. The Russian corporation has had negotiations with K International Inc, which wants to build a hotel and entertainment complex with a casino, a shopping centre and a Duty-Free area. “We have been engaged in negotiations since the beginning of this year. The company accepts the terms of cooperation and is ready to sign the contract. For the implementation of the project, it considers a 20-hectare site with a fairly flat landscape,” Primorye Development Corporation head Igor Trofimov said.

Mass overtakes VIP at Tigre de Cristal Hong Kong-listed Summit Ascent Holdings, the operator of Tigre de Cristal, swung to a modest profit of HK$2.6 million in 18H1, compared to a loss of HK$5.4 million in the prior year period. Group total revenue reached HK$207.8 million, up 2 percent year-on-year, while EBITDA generated by Oriental Regent Ltd was HK$66.8 million, up 17 percent year-on-year. Summit Ascent said that the mass market saw significant improvement, with mass table revenue up 47 percent year-on-year to HK$83.5 million – replacing VIP business as the main revenue contributor. Rolling chip turnover at Tigre De Cristal fell 23 percent year-on-year in 18H1. Summit Ascent said this was a result of efforts to develop the premium mass segment targeting Asian players, as well as increased flight connectivity and increasing awareness of the property among its target feeder markets.

Asia Gaming Briefings | October 2018

SOUTH EAST ASIA

16

PHILIPPINES

POGO boom drives real estate prices Growth in online gambling in the Philippines is driving a real estate boom in Manila, which is now spilling over to the island of Cebu, as operators seek more space and cheaper prices.

T

he ascent to power of mercurial President Rodrigo Duterte in 2016 cast a shadow over the country’s online gambling industry, amidst threats of a shutdown. However, instead a new licensing regime was put into place, allowing land-based regulator, the Philippine Amusement and Gaming Corp, to offer licenses and to compete with the existing licensor, First Cagayan.

The upheaval and uncertainty lead to First Cagayan losing more than half its licensees, dropping to less than 80 from more than 200 before the changes. Many online firms also relocated to neighboring jurisdictions, such as Taiwan and Cambodia.

However, real estate figures suggest the online market in the Philippines is still alive and thriving.

Most of the online gaming companies that have set up in the Philippines originate from China. About 200,000 mostly Chinese workers have arrived in the country since late 2016, after licenses were awarded to more than 50 offshore gambling companies that cater to overseas Chinese gamblers.

According to a report by Colliers International, sales to Chinese nationals have risen in 2017 and continued into 2018 due to the influx of POGO operators. These clients tend to buy multiple floors or in bulk which has sustained the office market and impacted residential sales as POGOs often supply housing for their staff.

Online gaming firms were reported to prefer offices in Bay City, a rising business district by the Manila Bay. Typically they require 80-100,000 sq meters of space. Office occupancy in POGO buildings now stands at 95 percent, with secondary condos near POGO licensees at 100 percent occupancy.

Real estate consultancy, Leechiu said it has leased more than 2 million sqm of office

SOUTH EAST ASIA 17

space and sold over P100 billion ($1.87 billion) worth of real estate in 2017.

It’s not just Manila experiencing the boom, Colliers International reported that online gambling operators’ demand for Cebu office spaces grew by 25,700 square meters in 2017, accounting for a quarter of recorded transactions last year.

“With a more conducive local regulatory environment, we expect offshore gambling to become a major contributor to office take up in Cebu,” Colliers reported.

“

With a more conducive local regulatory environment, we expect offshore gambling to become a major contributor to office take up in Cebu.

”

“After Manila which is a little congested, many are now looking into Cebu. It’s a very nice place to start a business, everyone is friendlier, the cost is lower and of course there is a lot of manpower in Cebu,” said Miggie Lopez, head of sales and marketing, for Cebu-based Blue Frog.

Blue Frog obtained a POGO license last year after having been regulated for the prior four years by First Cagayan.

POGO licensees are only able to offer their services to players outside of the Philippines,

but can be situated anywhere in the country.

Under a First Cagayan license, companies are required to be physically present in the Cagayan Special Economic Zone.

Although this had always been the law, most licensees had their back office systems and workers in the capital due to the remoteness and inadequate infrastructure in the zone. Duterte’s clampdown sought to close this loophole.

Blue Frog’s Lopez says she prefers the transparency provided under PAGCOR. “I think it’s going to be fair for everyone that illegal operators are being cracked down on and it’s fair that the government is closely regulating the industry because it will pull the whole industry down if there are so many illegal operators,” she said.

As well as bringing in more money, POGOs were also created to establish more regulations on what PAGCOR head, Andrea Domingo termed “fly-by-night” operators who would simply close shop and “disappear” whenever they were unable to pay clients’ winnings.

Under the new system, regulators will have a stronger ability to monitor for fraudulent behavior and be able to remove the license of any POGO operator found to have violated operating procedures. Previous administrations had failed to capitalize on the lucrative online gambling industry because of this proliferation of unregulated operators.

PAGCOR has said that it expects the state’s revenue from online casinos to double this year as more licensees come online, boosting the estimated income to about P6 billion in taxes.

PAGCOR issued POGO licenses to at least 45 online casino operators and 10 sports betting operators. But with so many new applications, the regulator has rejected several applications, and is thinking of limiting the number to just 50 operators to prevent “oversupply.”

Asia Gaming Briefings | October 2018

SOUTH EAST ASIA 18

Tiger Resort, Leisure and Entertainment Okada Manila, owned by Japan’s Universal Entertainment, is the largest resort in Entertainment City and the last to enter the market, with a soft opening in 2016. In the first half, the casino generated revenue of Y21.6 billion ($193.8 billion), with sales accelerating in the second quarter by Y3.8 billion. It said revenue had already surpassed its forecasts and the resort is profitable in terms of quarterly EBITDA. It says the volume of the mass market has been climbing steadily and it has added further junkets, which are expected to increase VIP revenue. The hotel occupancy rate stood at 98 percent in Q2. The property spans 44 hectares and at the completion of Phase One, Okada will have 994 hotel rooms and operate 500 tables and about 3,000 slots. Its centrepiece is the world’s largest coloured fountain, as well as a giant inner city beach complex, known as “Cove Manila.”

City of Dreams The $1.3 billion City of Dreams Manila is owned by Belle Corp and Melco Crown Entertainment’s local unit. Melco has decided to delist Melco Resorts & Entertainment (Philippines) due to the high costs of maintaining a listing.

It says it hasn’t performed as well as expected in capital raising in recent years. In Q2, City of Dreams Manila’s revenue slipped, though its adjusted EBITDA rose to $87.3 million from $62.8 million in the comparable period of 2017. The property was one of the group’s main EBITDA drivers. City of Dreams Manila has six hotel towers with approximately 950 rooms in aggregate, including VIP and five-star luxury rooms and high-end boutique hotel rooms, a wide selection of restaurants and food & beverage outlets, a 4,612.44 square meters family entertainment center in collaboration with Dreamworks Animation, a live performance stage, two international nightclubs and a multilevel car park. It includes an approximately 260-room Crown Towers hotel, Hyatt City of Dreams Manila, a 365-room hotel managed

by Hyatt International Corporation and Asia’s first Nobu Hotel with 321 rooms.

Bloomberry Resorts Bloomberry Resorts’ Solaire was the first IR to open in Entertainment City and is now planning a second IR to the north of Manila to cater for the local mass market in Quezon City.

“The mass market segment is a fast growing

Asia Gaming Briefings | October 2018

segment of the Philippines gaming market therefore I believe the gaming pie is only getting bigger and will be able to support the growth of existing casino operators and the planned casino in Quezon City,” says Richard Laneda, senior research manager at Col Financial. “In addition to more local players, an influx of Chinese tourists and those who are working in POGOs have also helped boost the mass market segment,” he added, referring to the Philippine Offshore Gaming Operators.

Bloomberry has posted strong results, with record profit of P5.3 billion in the first half. Net revenue increased 20 percent to P22.1 billion, while consolidated gross gaming revenues (GGR) reached P25.1 billion, up 14 percent year-on-year.

Solaire is a 16-hectare integrated resort. The Bay Tower of Solaire consists of a casino with an aggregate gaming floor area of approximately 18,500 square meters (including 6,000 square meters of exclusive VIP gaming areas), with about 1,400 slot machines, 295 gaming tables and 88 electronic table games. Bay Tower has 488 hotel rooms and 15 specialty restaurants.

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

Resorts World Manila Travellers International Hotel Group, a joint venture between Genting Hong Kong and Alliance Global, is the owner and operator of Resorts World Manila. In H1, Travellers reported EBITDA of P1.6 billion, down 28.2 percent from P2.2 billion in the prior year period. Gross revenues for the six months amounted to P11.1 billion, down 1.5 percent from the prior year period. Travellers said the decline in gross revenues was due to the closure of the second-floor gaming area as a result of the June 2 attack in 2017. VIP drop increased by 4.1 percent, however, mass tables and slots fell slightly in the half year.

The hotel room count for the group’s three hotels (Maxims Hotel, Remington Hotel, and Marriott Hotel Manila) remains at 1,226. The property is currently in the third phase of its expansion. The new Grand Wing will have three international luxury hotels – Hilton Manila, Sheraton Manila Hotel, and Hotel Okura Manila, adding approximately 940 rooms. It will also include new gaming and retail spaces, as well as six basement parking decks.

Further down the road, it will open the fourth and final IR planned for Entertainment City, which is scheduled to open in 2020.

GROSS GAMING REVENUE 2016 2017 2018E

$2.81b $3.19b $3.83b

2019

$4.52b (Source: Morgan Stanley)

DOJ recommends cancellation of Landing lease contract The Department of Justice has recommended the cancellation of the Nayong Pilipino-Landing lease contract, after conducting a review over the legality of the deal, local media reports. “According to the Secretary of Justice, the contract between Landing with Nayong Pilipino is a Build-Operate-Transfer [BOT] contract disguised as a lease contract. Because it is a BOT project, it should have complied with the BOT law, including public bidding,” Presidential spokesman Harry Roque said in a news conference. Roque said that the DOJ concluded that NPFI’s lease contract with Landing has no legal effect as it was void from the beginning.

Okada Manila operator plans backdoor listing Universal Entertainment’s Philippine unit, the operator of the Okada Manila, is planning a backdoor listing through the takeover of Manila-traded Asiabest Group (ABG). Tiger Resort Asia has reached an accord with a group of shareholders to buy 200 million shares in ABG for PHP646.5 million ($12 million).

The transaction represents two thirds of Asiabest’s outstanding share capital and will take place through a block sale on Nov. 12, ABG said in a statement to the stock exchange. Subsequently, Tiger is expected to make a tender offer to buyout minority shareholders. Neither Tiger, nor Universal have issued a statement commenting on the transaction.

SOUTH EAST ASIA 19

Asia Gaming Briefings | October 2018

SOUTH EAST ASIA 20

SINGAPORE

Tourism spending points to promising trend Singapore tourism arrivals are up just over 7 percent in the year to July, but a closer look at the detailed breakdown provided for Q1 shows that for the second consecutive quarter, visitors spent more on gaming, sightseeing and entertainment than in its glitzy shopping malls.

S

ingapore welcomed 4.6 million visitors in the first quarter of 2018, however despite a rise in overall numbers, tourist spending fell half a percent to S$6.7 billion (US$4.9 billion).

That was due to a 9 percent drop in spending on shopping; a 13 percent decline in accommodation and a 16 percent fall in F&B. There was however, an increase in spending on sightseeing, entertainment and gaming – increasing 6 percent year-on-year to S$1.5 billion. That adds to a 2 percent gain seen in spending in the sector in the fourth quarter of the previous year, marking just the third time in the prior eight quarters when tourists have spent more on gaming and entertainment.

China, Indonesia and India remained the biggest source of both visitor numbers and spending in Q1, with almost a million Chinese visitors spending S$1 billion, excluding sightseeing, entertainment and gaming. The Singapore Tourism Authority

Asia Gaming Briefings | October 2018

doesn’t provide a breakdown by nationality of how much was spent on the sector.

In recent reporting quarters, management has struggled to explain why the record number of visitors to Singapore weren’t spending on gaming and entertainment, leaving the resorts to squeeze out EBITDA from virtually flat revenue.

The most recent figures show an encouraging trend, though it remains to be seen whether there will be a boost to growth at Marina Bay Sands and Genting Singapore.

The latest results were mixed.

Genting Singapore recorded a 3 percent year-on-year rise in net profit attributable to ordinary shareholders of the company in 18Q2, but saw a six percent slide in revenue on bad luck.

Net profit came in at S$177.6 million (US$129.9 million), while revenue reached S$560.3 million.

Bernstein analysts said the revenue, net income and EBITDA all missed analyst

consensus, largely due to the low VIP win rate and mass hold.

However, the company said VIP rolling volume showed encouraging year-on-year growth in the quarter, despite bad luck.

The company said it continued to extend more credit to VIP players in the quarter, with VIP GGR up 10 percent year-on-year.

Mass table drop was up 11 percent year-onyear and slot handle up 6 percent year-on-year.

“Genting gained VIP share (on poor volumes at MBS) even with low hold, but mass share declined in Q2 as MBS remains a tough competitor in the Singapore market,” Bernstein said.

Results at MBS were also disappointing, coming in below consensus expectations, this time mostly due to poor VIP results, with rolling volume down 35 percent year on year in one of the worst performances on record.

Mass did grow year-on-year gaining 6 percent, though both mass revenue and the slot handle were down sequentially.

SOUTH EAST ASIA 21

According to Union Gaming, management’s explanation for the poor VIP volume was volatility due to a relatively small customer base that does not have consistent visitation.

“The VIP business at Marina Bay Sands is

highly concentrated and it’s not uncommon to see large swings in volumes quarter-to-quarter,” it said in a note. “However, 2Q18 volumes dipped to the lowest quarterly level on record, below $6bn. This comes after four consecutive

quarters of strong VIP hold at MBS, and it could be possible some of the VIP players could be cooling off after a long streak of bad luck.

We expect the VIP business in Singapore will normalize in the coming quarter.”

TOURISM RECEIPTS Shopping S$1,467m

Sightseeing, Entertainment & Gaming S$1,498m

-9%

+6% Percentage of share

Accommodation S$1,334m -13%

Food & Beverage S$589m

Other TR Components S$1,801m +22%

-16% (Source: Singapore Tourism Board)

MBS introduces learning leave Marina Bay Sands will implement a two-day ‘learning leave’ initiative for its workforce. The initiative is believed to be a first in the hospitality industry, a scheme which allows all full-time staff to take paid leave to attend courses related to language, communication, service excellence and information technology. MBS said it has spent close to S$12.2 million (US$9 million) on various training initiatives over the years, including learning sponsorships, e-learning courses and internal certification programs. “Empowering our staff through training and skills development is key to their long-term progression within the company,” said Chan Yit Foon, senior vice president of human resources.

Genting Singapore quietly builds Japan presence Genting Singapore said it had incorporated five new Japanese subsidiaries as part of its stealth bid to win one of the three IR licenses that are up for grabs now that the IR Implementation Act has become law. The five new subsidiaries have suggestive names: Genting Japan Co., Ltd.; Genting Tokyo Co., Ltd.; Genting Osaka Co., Ltd.; Genting Yokohama Co., Ltd.; and Resorts World Yokohama Co., Ltd. The clear inference of the subsidiary names is that the company is interested in bidding for major urban markets such as Tokyo, Yokohama, and Osaka. Genting has been the most tight-lipped of all the major operators interested in the Japanese market, offering no explanations to the media about their purposes and strategies for Japan, but simply issuing occasional press releases. Nevertheless, some analysts have ranked them as major contenders. In April, a Nomura analysis described Nagasaki as a location where “Genting appears to have the edge.”

Asia Gaming Briefings | October 2018

22

INDOCHINA

22

VIETNAM

Simpler rules to spur investment Vietnam is reportedly considering revisions to its casino decree as part of plans to slash the red tape seen as hindering the development of a large range of industries.

Asia Gaming Briefings | October 2018

INDOCHINA

T

23

he Ministry of Finance intends to cut 51.4 percent of the total number of business investment conditions that come under its remit and will amend or supplement 16 decrees. As well as gaming, the sectors include insurance, customs, accounting and securities, local media reports.

According to Vietnamnet Bridge, the MoF will cut eight conditions relating to lottery and electronic games and simplify a further two.

Electronic gaming services will see three fewer conditions, while casinos would be subject to one fewer, with a further regulation simplified.

In addition, horse and dog racing would see two conditions removed and four simplified.

It gave no further details of what the government is planning.

“This is, of course, good news for us,” said Hong Nam Pyo, CEO of Gomax, which has applied to invest in an international standard racing facility in the north. “It has not been specified what obstacles could be eliminated or amended. However, the simple fact that the MoF wants to make monumental changes is a step in the right direction,” he was cited as saying.

Any efforts to reduce bureaucracy are likely to be warmly welcomed by potential investors to Vietnam. The country is seen as one of the most promising emerging markets in Asia, with the government recently introducing legislation to bring rules more in line with international standards.

Those rules have allowed Vietnamese residents to gamble in two IRs for the first time as part of a pilot scheme for three years. The government is hoping to repatriate some $800 million estimated to be wagered by Vietnamese

outside the country each year.

International tourist arrivals are growing strongly, gaining almost 23 percent in the first eight months of this year, with arrivals from China up 28 percent. Visitor numbers from South Korea surged 52.4 percent. The gains add to a healthy 29 percent increase in arrivals in 2017.

Development of IRs in the country is continuing, with the country’s first and biggest announcing the addition of a new hotel brand.

“

However, the simple fact that the MoF wants to make monumental changes is a step in the right direction.

”

The owner of the Grand Ho Tram, says Wyndham Hotels and Resorts will build a 12-storey hotel on the Ho Tram Strip under its Ramada brand. The facility will be an uppermidscale seafront hotel and is expected to open in late 2019. The hotel will feature 198 rooms, including seven two-bedroom penthouses and 36 three-bedroom villas.

It’s located less than two hours from the nation’s largest metropolis, Ho Chi Minh City, and Tan Son Nhat International Airport. It will also be just 60km from the planned Long Thanh International Airport, set to become a major

TOURISM ARRIVALS

Total

Fastest growing tourism markets through to August

Korea +52.4%

Finland +34%

gateway for Vietnam and the ASEAN region.

“Vietnam is one of the world’s most dynamic tourism destinations. The country attracted 7.9 million international visitors in the first half of 2018, putting it firmly on course for yet another record-breaking year – potentially exceeding the previous record of 12.9 million visitors achieved in 2017. To cater for this strong demand, impressive new developments are rising all across the country, including the Ho Tram Strip – Vietnam’s first and largest integrated resort,” said Joon Aun Ooi, president and managing director, Wyndham Hotels & Resorts, South East Asia and Pacific Rim. After several delays, in August, Macau’s largest junket operator SunCity Group confirmed it had completed its acquisition of a 34 percent stake in the $4 billion Hoiana IR, which is being developed in central Vietnam and seen as one of the locations with the greatest potential.

The group purchased the entire equity interest in and shareholders loan to Star Admiral Limited, a company involved in the IR project.

The deal was originally scheduled to close on May 31, but was pushed to August 31 after the company requested more time to fulfil certain conditions and to receive approval from a Vietnam-based commercial bank.

Hoiana is expected to open in mid-2019 with entertainment and retail facilities, a casino with 140 tables and 1,000 slot machines, a golf course clubhouse, a mass market hotel with 313 hotel rooms, an all-suite hotel with 136 suites, a hotel villa resort with 70 units, as well as 30 villa units for sale and timeshare rental, and a condo-hotel with 236 rooms for sale and timeshare rental.

Hong Kong +30%

+22.8%

China +28.2%

Taiwan +14%

(Source: Vietnam Ministry of Culture, Sports & Tourism)

Aristo sees non-gaming gains Donaco International’s Aristo International resort in the far north of Vietnam saw an 11 percent decline in gaming revenue in fiscal 2018, though nongaming sales rose almost 13 percent and account for 46 percent of the total following a management push to diversify the business. Visitation was down 12 percent to 153,000 after the cancellation of some marketing initiatives, which weren’t meeting objectives. VIP table game turnover put in a strong performance, rising 46 percent, helped by new junkets. But the win rate was just 1.91 percent, below the theoretical 2.85 percent. The VIP win rate has stabilised in recent months, the Australia-listed company said.

Formula One gets backing for Hanoi race The Vietnamese government has said it supports the idea of staging a Formula One race in the capital Hanoi.

“All (government) ministries and agencies support the idea to create a new attraction for Hanoi,” Mai Tien Dung, chief of the government office, was cited as saying. He gave no details on when the first race might take place.

The race is likely to take place in the My Dinh Sports Complex after earlier proposals for the challenge to take place around a central lake and nearby streets were rejected. The prime minister has asked that Hanoi uses only private funds to host the race.

Asia Gaming Briefings | October 2018

INDOCHINA 24

CAMBODIA

China funds fuel tension Foreign direct investment continues to flood into Cambodia, led by mainland China, though some areas of the country are beginning to push back against rising Chinese dominance.

A

ccording to the semi-annual report by the National Bank of Cambodia, FDI inflows into the country were $1.32 billion in the first half of this year, up 14 percent on the same period of 2017.

For all of 2017, FDI was $2.8 billion, up from $2.4 billion in 2016.

The majority of the investments have been into finance and real estate, with Chinese FDI last year surpassing all other sources combined, according to figures from Banco Santander.

Cambodia has been benefiting from investments under China’s “one belt, one road” project, which has fuelled a real estate and casino boom.

About 184 casino licenses have now been issued in the country, with 100 of them granted in the past year. Much of the attention has been focused on the coastal town of Sihanoukville, which is now home to some 42 casinos, with plans for one large-scale IR. However, the influx of Chinese is stirring local resentment. Home now to about 100,000 Chinese nationals, that figure is expected to treble over the next few years, pushing up real estate prices, swamping the local culture and providing few opportunities for residents.

It has also had an impact on crime rates, forcing the government to set up a task force aimed at cracking down on crime and restoring security, Khmer Times reports.

Interior Minister Sar Kheng has said he will provide additional support to provincial authorities to bust crime in the Preah Sihanouk province, including murder, drug trafficking and gambling, leading to extortion and kidnapping.

“It’s very typical that there are good people and bad people of all nationalities. Because the area is not well managed, it is prone to anarchy.

So the team must restore the situation and tackle the problems to ensure that this popular tourist site is of good security,” said Kheng.

Cheat Sotheary, who leads a rights group called Adhoc in the province, said that authorities need to set tougher conditions on foreign companies and take serious actions against foreign nationals to curb crime.

“The mushrooming of Chinese businesses has disgruntled some local business people so I think it’s important for the companies to facilitate that local businesses stay open. The authorities should be enforcing the immigration law strictly and suppressing all crimes.” Earlier this year, local Governor Yun Min wrote a letter to the central government warning China’s increasing involvement and investment in the Sihanoukville Province has pushed up the crime rate and brought instability to the province.

The three-page letter, which was sent to the interior minister, said that the influx of Chinese investors had “created opportunities for Chinese mafia to come in and commit various crimes and kidnap Chinese investors, causing insecurity in the province.”

Still, there is no sign of investment slowing into the country’s casino industry.

In September, China’s Tianjin Union Development Group, presented plans for a $1.2 billion Tourism Vacation Town in Koh Kong province. The details were revealed on the Cambodian Ministry of Commerce’s Facebook page for a resort that will feature a

The mushrooming of Chinese businesses “ has disgruntled some local business people so I think it’s important for the companies to facilitate that local businesses stay open.

”

Asia Gaming Briefings | October 2018

“luxury city” featuring high-end hotels and theme parks.

It’s the second major tourism venture in the area for UDG, which was granted a 99-year lease on about 40,000 hectares of national park land in the province in 2008. Its other resort is a $3.8 billion mega project known as Dara Sakor, about an hour from Sihanoukville, whose current status is unclear. Gaming Concepts, which says it has developed two studies for the group along with Brad Gordon & Associates and Intelligence Macau, said on its website that construction and master planning began in 2011 and is ongoing.

The project was to include such attractions as multiple golf courses, 1000’s of villas targeting the Chinese market, several hotels and multiple casinos. Although a June report from Reuters suggested the project had stalled, with little progress having been made for three years and risks becoming a white elephant.

INDOCHINA 25

GROSS GAMING REVENUE Non-gaming

VIP Market

25% US$101.8m

52% US$210.5m 1H2017

19% US$74.5m

Mass Market: Public Floor Tables

4% US$14.8m

Mass Market: Electronic Gaming Machines

14% US$59.9m 1H2018

14% US$101.2m

75% US$552.8m

3% US$19.1m (Source: Nagacorp)

Suncity enters consultancy accord with local operator Suncity Group Holdings has entered into a strategic partnership agreement to provide consultancy services with a Cambodian casino operator. Under the agreement, Suncity will provide consultancy services to a planned $360 million integrated resort, which is to be opened by local company Golden Sun Sky. The resort is expected to have a gross floor area of 650,000 sqm with “certain gaming facilities� and is to open by the end of 2019, according to a filing.

Naga appoints non-exec. director NagaCorp has announced the appointment of Leong Choong Wah as an independent non-executive director of the company from September 10, 2018. Leong, has worked in a wide range of industries including property development, plantation and manufacturing, with cross-border experience in Indonesia and China.

He has been overseeing the Finance and Corporate Services Division of HCK Capital Group Berhad since May 2015 and has been appointed as an executive director of HCK since October 2015. Prior to joining HCK, Mr. Leong was the senior business controller of Agrindo, an Indonesian palm oil plantation group based in Jakarta, Indonesia from February 2013 to December 2014.

Asia Gaming Briefings | October 2018

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SOUTH ASIA

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INDIA

Growth expectations fuel online M&A India’s online gaming sector has seen a spate of acquisitions in recent months as operators position themselves for strong projected growth, despite the ongoing regulatory uncertainties.

Asia Gaming Briefings | October 2018

SOUTH ASIA

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n September last year Delta Corp, India’s legality of games such as fantasy sports, rummy largest hospitality and gaming company, and poker, has been challenged in various states acquired Adda52, also a top-ranking across the country and the regulatory sands company when it comes to the Indian shift frequently.

Ranjana Adhikari, a lawyer with Nishith online gaming market.

PokerStars, the biggest online poker Desai Associates, which advised parties in all company, owned by Canada-based Stars three of the deals mentioned in this article, said Group, has partnered with Sachar Gaming, a under India’s foreign direct investment policy, unit of the Sugal and Damani Group, for a site technological collaboration, or investment in exclusively for Indian players, which became the gambling industry is not allowed.

But individual state laws distinguish operational earlier this year. While, UK-based Stride Gaming acquired a 51-percent stake in between gaming and gambling, and allow Rummy Passion, an Indian company based out certain skill-based games. “For a game of skill, even accepting wagers, amounting to gambling of Chandigarh in January.

“The growth seen in the business has in the traditional sense, is allowed in the statesurpassed the growth seen prior to the merger wise laws,” she said.

As far as sports betting is concerned, Adhikari significantly,” Mohit Agarwal, co-founder of maintained that it does “pass muster” when it Adda52 told AGB. For the 2016/2017 financial year, the company comes to being a game of skill. “It (sports betting) posted revenue of 87.08 crore. In 2018, year-to- is very, very similar to horse racing. Since the date, revenue stands at 123 crore ($17.9 million), Supreme Court believes horse-racing is legal, sports betting should also be legal. But in India, and could be almost double the prior year.

“All the ingredients of explosive growth in the problem is moral sanctions, the taboo of gaming are present in the country – be it the being immoral and being perceived as illegal.”

In poker, the two variations recognised as demographics, the internet penetration or the smartphone penetration. The digital payment games of skill are Texas Hold’em and Omaha infrastructure in the country is superb. Once the Hold’em, Adhikari noted. “However, we all know that foreign direct advertising framework investment policies are a for real money gaming matter of interpretation matures, the business and government policy should see significant You don’t need decisions. Tomorrow, if growth,” he said. to be a statistician they want to change them, According to Delta it is up to them… like it Corp, the current size to decipher those happened with the retail of the online gambling numbers, even in and e-commerce boom.” industry is about $100India where most Agarwal added that $125 million a year. a recent report from the However, it’s the fastest forms of gambling Law Commission of India growing sector of the are illegal. about regulating gambling Indian market, which is instead of banning it estimated at $60 billion outright has opened up overall, if you include the situation legally. illegal operations.

“The recent law commission report talks QTech Games CEO Jonas Alm also sees strong potential in the Indian market. The about regulating games of skill as well. This country has a population of 1.3 billion and should be a welcome move. I feel that the actual according to the World Bank will have one of implementation of the LCI recommendation the world’s top performing economies this year, will take a few years. Till that happens the larger operators are continuing to deploy best while 87 percent have access to 4G. “You don’t need to be a statistician to practices and self-regulate to improve trust in decipher those numbers, even in India where the ecosystem.”

“Since all transactions happen online and most forms of gambling are illegal,” said Alm. “It’s a potential treasure trove, albeit one shrouded the games are available for review, the system with a patchwork quilt of diverse legal and is fairly transparent.”

The Law Commission report generated consumer sensitivities.”

Casino gambling is banned apart from excitement in India’s gaming circles, especially Goa, Sikkim and the union territory of Daman, with regards to sports betting. However, the law although skill-based gaming is not. That said, the body subsequently put out a clarification stating

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it had not recommended legalizing gaming at present, but said it may ultimately be the only way to stamp out rampant illegal gambling.

“At QTech Games we remain mindful of the complexity, but not daunted by it,” Alm said, regarding the regulatory environment.

Meanwhile, Adda52 continues to expand.

“Over the past year or so, we have made tremendous strides towards live streaming, presenting poker on TV as well as evolving a 360-degree complete offering of poker together with an offline poker offering.”

GROSS GAMING REVENUE GGRE $60b Casinos $100m - $125m Lottery $12b - $14b Horse Racing $250m - $400m (Source: Delta Corp.)

Bombay High Court seeks clarity on service tax The Bombay High Court is demanding Goa’s tax department to explain why it imposed a service tax on casino license fees. The move follows a written petition from Abhishek A Rastogi, partner, Khaitan & Co, earlier this year. He argued that the license fees are a statutory levy, not fees for services rendered by the state government – meaning they should be outside the scope of service tax. “Demanding tax on statutory license fees is absurd. It’s like demanding a tax on passport fees paid to the government. Based on a circular, the DRI has initiated an investigation for applicability of service tax,” said Rastogi.

Cruise ship association wants onboard casinos India’s newly formed cruise ship industry body has urged the government to allow casinos on cruise ship vessels in order to promote and nurture the shipping industry, Glaws reports.

The India Cruise Lines Association (INCLA) made the recommendations in a whitepaper during a Global Cruise Conclave held in Mumbai, which was handed to Union Minister for Shipping, Road Transport, Highways, River Development and Ganga Rejuvenation, Nitin Gadkari. In the past, Gadkari, one of the senior BJP leaders in the country, has opposed the idea of having casinos in India.

Asia Gaming Briefings | October 2018

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Sports betting: New markets, emerging trends and overhauls One of the biggest news events of the year in the gaming world was undoubtedly the U.S. Supreme Court’s May decision to strike down the Professional and Amateur Sports Protection Act, paving the way for legal sports betting across the country.

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lthough the ruling dominated the headlines, there have also been other changes in sports betting legislation around the world, from Vietnam to New Zealand, which will also have a major impact in their respective jurisdictions.

Therefore our focus for this G2E edition of the Asia Gaming Briefings magazine is of course dedicated to sports betting.

We review the momentous changes likely to happen in the U.S. as a result of the PAPSA ruling and what opportunities may open up for global sports betting companies, many of which already have a significant head start on any U.S. competitors given their longer history in legal markets, such as Europe. We ask in particular, what kind of opportunities may emerge, either for Asian providers to offer their services, or for companies seeking to target the Asian market in the U.S. We also take a broad brush look at some of the trends in the Asian market when it comes to sports betting, where local punters are driving a strong demand for a wider variety of content, especially when it comes to second-tier sports. According to experts, a conservative amount for the level of credit extended on a weekly basis in the Asian sports betting market is between US$10 billion and $50 billion.

With such large amounts at stake, companies cannot

Asia Gaming Briefings | October 2018

afford to ignore the emerging trends.

Among individual jurisdictions, we study the recent amendments to Vietnam’s sports betting laws. The latest regulation, which comes into force next year, goes some way to providing clarity for the investors keen to enter the market, but industry experts argue there is still more to be done, in particular when it comes to betting options.

Still, firms from Singapore, Hong Kong, South Korea and Malaysia have already expressed an interest in entering the market, in particular in the field of horse racing.

Lastly, we go to New Zealand, where the country’s coveted racing industry has been shaken to the core by a proposed revamp of the sector in a report by an Australian expert.

The study recommends closing more than half of the country’s race courses and leasing out the Totalisator Agency Board to an Australian operator.

The premise of the report is that the industry is in a state of serious malaise, putting at risk the many jobs dependent on the sector.

Given the relatively small size of both the New Zealand market and its population, economies of scale are difficult to achieve, but highly necessary.

Needless to say the proposed overhaul has raised more than a few hackles in the horse racing world.

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Asia Gaming Briefings | October 2018

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Local gamers drive content demand Asian sports books are adding more content in response to demand from local gamers, with betting on smaller, local sports, now growing at a faster pace than punting on the European big leagues, experts say.

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ootball is the predominant factor in Asia. I would say 95 percent, if not more is football alone and that is both for cash and credit,” says Jesper Jensen, director iGaming Asia, who says a conservative estimate for the amount of credit extended per week in Asia is US$10 billion to $50 billion.

However, the Asian punter is looking for more betting opportunities than just on the major soccer leagues. Thomas Klingebiel, commercial director, Asia Betgenius explains: “Most operators see 10 percent of betting from the top divisions in Italy, France, Spain, Germany, England. The other 90 percent of turnover is from other, less prominent football leagues. So while the top leagues and countries make up around 5,000 events annually, we are seeing strong appetite in the market for more content – with around an additional 75,000 events available annually.”

Some examples are the Chinese Super League and the Indonesian Leagues. “This is a trend that you find with other sports as well, and the appetite for other sports outside of football is definitely growing in Asia,” adds Klingebiel.

The number two sport in terms of turnover is basketball, which is dominated by the National Basketball Association.

“There is huge demand for basketball in other countries around the world,” says Klingebiel. “NBA is the second most important league after the English Premier League when it comes to betting in Asia as it attracts more attention than Spanish La Liga and Italian Serie A football leagues.

But while the NBA offers between 1000-2000 matches per

Asia Gaming Briefings | October 2018

year, it has a significant off season. This has seen a trend of growing desire for more basketball content – with operators wanting a 24-hour, 365-day proposition to offer to clients. To meet that need we are offering trading on an additional 25,000-30,000 basketball matches per year, with lots of exclusive content available to our partners.”

In The Philippines, basketball is the number one sport, while in China it is on a par with football, attracting a lot of interest in local matches.

“Across Asia, tennis is something that has been holding a pretty good position for the last three years,” continues Klingebiel. “Tennis is popular as it has huge in-game betting opportunities. It is also played around the world in different time zones. There is not the same focus on the top tier of competitions, with a great deal of interest in challenger events which take place all year round. Some golf betting propositions are beginning to develop but the level of interest is below that of badminton and volleyball.

Badminton is quite popular in Asia and operators offer a significant range of games while volleyball is particularly popular when there are local teams playing.”

Another area to watch is the eSports industry, which some say may end up giving some traditional sports a run for their money when it comes to viewership and player numbers. “ESports is moving real fast and will overtake the NBA in terms of viewership and worldwide players, tournaments, branding, and offerings,” says John English, partner at Global Market Advisors and managing director

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of Sports Betting & Technology. “There are so many games but the popular ones we play here in the US: League of Legends, Dota 2, Fortnite, Call of Duty, Players Unknown Battleground, and even sporting titles like Madden Football, are growing at breakneck speed in popularity in Japan, China and throughout Asia.”

The entire eSports industry is expected to grow over the coming years with worldwide revenues projected to reach $1.07 billion in 2019. In 2017, the eSport market revenue in Asia was estimated at $406 million, compared with $392 million in North America, $298 million in Europe and $29 million for the rest of the world, according to figures from Statista, The Statistics Portal.

“The eSports phenomenon has gained in popularity in the Asian market for sure,” continues English. “It is a given just as it is in the U.S and around the world. It is catching the attention of all the bookmakers. The social sports and skill games games do very well online on game streaming sites like twitch, gaming consoles, as well as television and mobile phones. Of course, at the moment Soccer and the NBA is where the audience currently resides but that is rapidly changing,” he adds.

ESports is also no longer just a form of entertainment, it is becoming a profession for many players. Gamers around the world are enticed to compete in numerous tournaments with the promise of a sizeable profit. In 2015, the combined annual eSports prize pools worldwide amounted to $74.8 million, the Statista figures show. However, the data shows that ticket sales and prize pools account for only a fraction of the eSports market revenue.

The majority of the global revenue the industry generates comes from sponsorships and advertising. It is estimated that in 2020, brands will spend approximately $1.2 billion on eSports sponsorships and advertising, up from the $517 million that was projected for 2017.

“From the in-game perspective, those that book eSports have a large opportunity to capitalise on the plethora of game outcomes during a single match. There are some concerns that still need to be ironed out, mostly regulatory issues of match fixing, doping and how to unify and control the massive amount of games and teams being created. Traditional sports have enjoyed a long and storied history and they are not going anywhere anytime soon, however, innovations in game development, mobile technology and speed, virtual reality, augmented reality and blockchain technology are changing the course of the games we play, what we view and what we wager on.”

Asia Gaming Briefings | October 2018

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John English*

Will Asia join the U.S. sports betting gold rush?

Four months after the U.S. Supreme Court repealed a federal law limiting sports betting to just four states, there has been a mad dash by bookmakers and system providers from all over the world to descend on U.S. soil and plant their flag.

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his change in regulation can truly be likened to the California Gold Rush of 1849, when thousands of 49’rs raced to California to mine the tons of plentiful gold and create immense wealth for their families.

Behemoths like William Hill and others have positioned themselves early on. Paddy Power after merging with Betfair has a strong U.S. presence with their TVG horse racing network and with the recently acquired FanDuel, a dominant fantasy sports provider; MGM has partnered with Boyd Gaming and with the NBA, WNBA, and European gaming giant GVC. That’s just to get started.

Asia Gaming Briefings | October 2018

There is still plenty of room, as only a small handful of states have gone live so far and approximately seventeen have legislation in the works. States like New Jersey, which deserves a huge amount of credit for challenging PASPA to begin with, has been very progressive in moving forward with casino and mobile offerings to accompany their sports betting and are also allowing licensees to have multiple skins for sports betting.

So, although the rush is underway there is room for much more, particularly with the expansion of mobile betting technology and content such as eSports, which has global appeal and reach especially in Asia.

It is important to note that historically sports betting

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is a high-volume, low margin business and after 50 years of operation all the sportsbooks in Nevada generate approximately $5 billion in bets annually, with an average 5-6 percent win rate.

New bettors will need to be developed through innovation and creativity, and illegal or offshore punters will need to be wooed back home to create a truly explosive marketplace.

Many sports enthusiasts are Asian and it would make sense to have either wagering operations or branding that relates to the culture and appeals to the betting style they are accustomed to. Asian handicapping methods are also very popular in various parts of the world and have taken hold with some U.S. operators.

Although there is strong argument for those to enter the U.S., the market needs time to find its own footing. Regulations, compacts, lobbying and lawmaking need to come first.

Unlike the California Gold Rush, the State of California has yet to agree on an online poker bill that has been in the works for a decade.

We’ll see soon how they do with sports.

For the most part, to operate a sportsbook or to supply systems in the U.S requires extensive licensing, laboratory approved technology, and a very strong marketing effort. It’s going to

get very complex and competitive, especially with state by state laws to follow and no federal all for one rule.

Some jurisdictions will only allow for casinos, race tracks or current licensed gaming establishments to offer sports wagering, some may not allow mobile or online wagering, some have onerous tax rates and buy in fees, and some will just get it right from the get go.

The largest issue that all comers need to understand is that realistically this market is only a very small percentage of what is bet on sports offshore. Just being legal may not be enough to break a long-term bond with their current bookmaker. After all, they’ve been in business for years, they can offer competitive pricing, a wide variety of wagering options, credit, and cash back. Often they have no licensing fees and don’t pay state taxes.

Customer acquisition, or transition will be a battle for the ages, so bring on the massive marketing efforts!

Europe, India, Israel, LATAM, and Asia are all are cutting edge in gaming technology and content development. The United States is new outside of Nevada to legal sports betting, so it’s an open market for all comers who are

willing to face state by state licensing scrutiny and feel that they have a competitive product.

At the time of going to press, each state and most tribal nations are developing their own set of regulations or standards, so for any outside jurisdiction, including Asia, it would be wise to prepare for intense examination and suitability requirements. For the product requirements, it would be highly recommended to seek counsel familiar with the landscape and perform focus studies to determine if your offering has competitive potential in the marketplace.

Specifically, with Asian-facing companies, few have made a U.S.-facing branding effort with their casinos or suppliers and could look to start there. Partnering with well-known, large-scale brands, such as Wynn Resorts, Las Vegas Sands, Genting, or a strong tavern, or restaurant brand such as Buffalo Wild Wings or Hard Rock Cafe, which many operators are doing now, could possibly be a solid option for those Asian companies looking for a familiar connection with the American public.

For Asian companies that already have strong global branding, simply licensing their brand to a regulated risk management group would allow their presence to grow in the U.S. sports betting market in a shortened time frame. Asian companies have had their own limitations, in Mainland China, sports betting is limited to the sports lottery, which is state owned. In Macau, there is only one operator, while in Singapore, Singapore Pools has a monopoly. There is a limited, but growing offering in the Philippines.

Without doubt, just like there is in America, a massive black market utilizing large networks of agents or proxies to assist in their betting activity exists.

I see that the Asian market, much like the Europeans, will find their fit in either the technology side, or with seasoned operating partnerships and will have the ability to access the public and to prosper.

After 25 years of waiting for this to happen, it sure is happening fast and furious and the media and public excitement is completely focused on sports betting. With good intent, strong relationships, and reasonable expectations the U.S. will be a viable market for Asia and those around the world looking to get in the game. *John J. English is a Partner, Managing Director of Sports Betting & Technology Global Market Advisors

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Investors at starting gates Vietnam has embarked on major reforms toward opening the country to sports betting, with major Asian-based foreign investors joining the queue to capture part of a potentially lucrative market.

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he moves, launched in the past two years by way of an initial decree, and set out in a parliamentary bill this year, hope to capture a portion of the multi-million-dollar underground sports betting market and lure back overseas spending estimated at around US$800 million a year.

Analysts welcome the moves, but say there is still some way to go for investors, including a lack of infrastructure and high charter capital requirements that are likely to mean that interest will be focused only on major cities.

Maxfield Brown, manager business intelligence

Asia Gaming Briefings | October 2018

with Ho Chi Minh-based consultancy, Dezan, Shira and Associates, says the moves mark an “important step towards opening the industry to foreign investment and increasing state revenues.”

“Legislation surrounding gambling in Vietnam is still in the early stages of the legislative process,” Brown told AGB in an email. “Vietnam has provided clarification to date on horse racing, greyhound racing, international football, and physical casinos,” he said.

So far, urban centres, such as Ho Chi Minh City, Hanoi, Da Nang and the surrounding provinces are targets for investment. “Investors in these locations benefit from

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higher levels of income among residents and also attract higher net worth tourists,” he said.

“Investors will benefit from rising wages and steady increases in gambling spending that is estimated to be growing by around 12 percent annually.

“The underground gambling market in big cities and tourist destinations will take a big hit as large investors displace smallerscale underground operations,” he said.

The sports betting bill is set to come into effect from the start of 2019, although some football game bets were cleared from April 2018 to coincide with the FIFA World Cup. The bill, passed by Vietnam’s National Assembly in June this year, followed that of a 2017 decree, which introduced a five-year pilot program setting out “strict conditions for firms involved in betting activities.”

According to Dezan Shira these include charter capital of $44.2 million for horse

racing and football and $13.2 million for greyhound racing.

But the consultants noted there remains a lack of clarity in several areas, including categories of sports being included, and how the government will implement the bill’s guidelines.

The imposition of high capital requirements was seen as a deterrent to invest elsewhere in the country. “Rural locations with established underground gambling organizations and relatively low investment are not expected to see significant [activity],’ Brown said.

For football, the government will allow betting only on international games recognized by FIFA, the global governing body, which includes the World Cup, the Confederations Cup, Copa America, the Champions League and the Europa League.

This means, popular football competitions from the English Premier League, Spain’s La Liga, and Italy’s Serie A are excluded.

Dezan Shira and Associates say this has created a dilemma. Vietnamese citizens are not allowed to legally bet on these league matches, while betting operators are reluctant to get involved for events held only once a year, or every four years.

Other guidelines include the fact that all players must be at least 21 years of age, while the maximum bet amount is set at one million VND ($44) per day with a minimum of VND 1,000 (4.42 cents) Foreign investors leading the charge to invest in the new betting climate include companies from Hong Kong, Singapore, South Korea and Malaysia.

In early April, SGX Catalist-listed Amplefield Ltd. signed a memorandum of understanding with horse breeders Equine Sanctuary (Sdn Bhd) (Malaysia) to enter a joint venture to provide design and consultancy services and to oversee construction of a racecourse and racetrack in Ho Chi Minh City.

The proposed development covers 300 hectares of land in Le Minh Xuan Ward in Ho Chi Minh City for the racecourse and race track and form part of the Sing Viet City development.

The development includes 16,000 residential units, along with a resort covering horse racing, gaming and golf facilities.

Amplefield executive director, Yap Weng Yau, in media comments, called the MOU “a first step towards the development of “racino’ facilities,” with “tremendous potential” that would be a huge draw for both tourists and locals and stimulate further development.

Other investors include gambling operator Golden Horse from South Korea, with announced plans to set up a subsidiary company in Vietnam backed by an investment of $500 million, with proposals set to be submitted to the Vietnamese Authorities by October.

Choi Hak Soo, president of Golden Horse met in July with local leaders of Bac Ninh province and said that the investment plans for the 400-hectare entertainment complex included a horse racing course, a resort, and residential area, with the creation of up to 10,000 jobs.

But there remain calls for the government “to do more” to spark further interest from operators and investors.

The Government has already taken the necessary steps to legalize betting, but it needs to provide further clarity in the bidding process and increased options for betting operators, the consultants added.

Asia Gaming Briefings | October 2018

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New Zealand Racing overhaul stirs controversy Opponents of the sweeping changes proposed for the racing industry in New Zealand are questioning whether the reforms are legally and practically possible.

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he changes proposed in a government commissioned review of the industry by Australian racing identity Joe Massara cover the structure, finance and legislation governing the industry, the system of betting and the industry-owned monopoly operator, the Totalisator Agency Board (TAB), as well as the racing clubs, race courses and prize money.

He recommends a sweeping series of changes including stripping the New Zealand Racing Board of most of its powers, leasing out the TAB to an Australian operator, closing 28 of the country’s 48 race courses, turning the NZ Racing Board into a Wagering Board

Asia Gaming Briefings | October 2018

responsible only for broadcasting and betting, and devolving power to run thoroughbred harness racing and greyhounds to the respective codes.

He is also seeking changes to the taxation regime to cancel the gambling levy (worth NZ$13 million a year ($9 million) and using this to boost stake money.

Messara finds that “on any test, the thoroughbred racing industry in New Zealand today is in a state of serious malaise.�

Thoroughbred racing accounts for two thirds of the jobs, turnover, and economic benefits generated by the racing industry.

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A study by an economic consultancy carried out as part of the Messara review says the racing industry contributed $1.63 billion to the economy, with over 14 000 direct and indirect full-time equivalent positions with an average of eighteen race meetings a week (across all three codes).

However, Messara says that overall the industry lost money and had done so for many years. The foal crop was falling, and wagering was static. There were too many race tracks, many needing substantial upgrades.

Owners’ costs in 2016/17 are calculated at $199.3 million and prize money (after payments to trainers and jockeys) at $45.6 million “leaving a collective deficit met by owners of $153.7 million.”

“This is a return of 22.9 percent, which compares poorly with the 48.1 percent (return achieved) in New South Wales.”

His core recommendation is a pool of prize money of at least $100 million which would improve the return to owners to 42.6 percent. He recommends increasing minimum stakes across all classes of races by

between 67 percent and 150 percent, which would, for example, double the minimum stakes for Group One races to $400,000.

However, his plans for achieving this pool of prize money are contentious, and the details are sometimes sketchy.

For instance, neither the Racing Board nor the government has the power to compel racing clubs to close. Moreover, the idea that the government can somehow command the handover of racing club assets has left many in the industry scratching their heads about how this might be done should clubs dig their toes in and decline to co-operate.

Hence Messara’s recommendation that the government pass legislation to transfer the assets from the clubs and their mixture of owners to thoroughbred racing has created considerable concern and controversy.

Under the Messara plan this body (with strong owner and breeder representation) could, and likely would, dispose of the land and use the capital to invest in upgrading courses and to provide increased stakes. He is very firm that the prize pool must go up

and should reach $100 million over five years.

His other core recommendation involves the leasing of the TAB to an Australia operator.

This is justified mainly on grounds of scale.

“Under the current structure, the NZRB will be unable to deliver the sustainable level of funding required to revitalise the New Zealand Racing Industry and lift TAB operations to a basis of efficiency required to be competitive against international wagering operators of scale.

Messara goes on to recommend “a full operational outsourcing of all domestic wagering, broadcast and gaming operations, to a single third-party wagering and media operator of international scale, under a long term contract, with the NZRB holding the licence.”

He regards the issue of scale as “insurmountable” and points out the average Australian aged over 18 wagers 2.5 times as much as the New Zealand equivalent, which combined with a population only a fifth of that of Australia means “the NZRB can never realistically meet or maintain market and customer expectations.”

Asia Gaming Briefings | October 2018

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NEW ZEALAND

Management sees clear skies, analysts more cloud SKYCITY Entertainment CEO Graeme Stephens is optimistic about the group’s prospects, helped by expansion in Auckland, a planned venture into online gaming and a rebound in international VIPs, although analysts remain cautious.

Asia Gaming Briefings | October 2018

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ew Zealand’s only listed operator posted record profit of NZ$170 million ($113 million) for the 2017/18 financial year. The company improved its operational performance at all its properties, with a 39 percent jump in international business to $11.9 billion ($7.9 billion).

Stephens said he was “really pleased” with the result, which was a record for the company both in terms of operating earnings and net profit.

He told AGB that the result was probably a bit better than either the market or the company had expected.

“I’m particularly encouraged by both the strong rebound in our international business and a return to earnings growth in Adelaide and Darwin on a like-for-like basis.”

Karl Williscroft, an analyst at Craigs’ Investment Partners said the results were solid and “well-received” by the market, with the share price moving higher.

He said the results were driven by a good last quarter from the international business, but also a stronger-than-expected showing from Auckland and Adelaide electronic gaming machines, and a good second-half performance in Hamilton and Queenstown.

Despite the strong results, SKYCITY doesn’t appear to have won over market analysts.

Some have questioned the company’s reliance on casino and hotel operations in Auckland, with Craigs’ writing in a research note earlier this month, that “other than good international business performance there appears to be few catalysts (to growth) in the medium term. We think the market will want evidence of project upside before these are factored into the share price.”

Stephens rebuts this assessment saying that analysts typically had a short term focus aimed at driving sales while the company was clearly focused on the creation of medium and long-term value.

“I’d point to the long term nature of our licences and exclusivity, which make us a stock which has significant downside protection. Our shareholders would prefer us not to risk this in pursuit of short term upside.”

The company regards both the opening of the NZ International Convention Centre in Auckland in early 2020 and the completion of the Adelaide Casino expansion later that same year as two medium-term catalysts for the growth of the company.

“In terms of the immediate future, I’d say SKYCITY offers modest growth and relative share price stability with a good dividend in

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an industry that can still be expected to grow.”

He told AGB that “the hotel sector offers good opportunities for the company to incrementally grow its earnings within Australasia and I’ve made it clear SKYCITY is interested in partnering with others in this area to expand the properties we have not just in Auckland, but in Hamilton, Queenstown, and Adelaide as well.

“We’re also working on a number of non-gaming, family-friendly entertainment opportunities on Federal Street in Auckland, which will expand our appeal and diversify our revenue base, and I should have more to say about those in the coming months.”

The Darwin business is up for sale and the company has received indicative bids above book value. “A couple of companies have been through and done their due diligence, Stephens said. He wouldn’t give numbers except to say that there were more than two bidders involved.

He said he was relaxed about “whether or not we sell the Darwin property.”

“I’ve always said it would have to be to the right bidder at the right price. This is certainly not a crisis sale – Darwin remains a quality, cash-generative operation for SKYCITY and if the sale doesn’t happen then I’m entirely comfortable with that.

“But we’re still going through the process, although I can honestly say I don’t know how it will turn out, we should have an answer within the next two months.”

Excluding international business, Auckland’s casino accounts for 90 percent of the casino EBITDA, earning $261 million of the total $289 million across the group.

Profits from the other five licences held by the group in Hamilton, Queenstown (two licences), Adelaide and Darwin are miniscule, although all the licences improved earnings apart from Darwin, which was affected by having three Keno 10 jackpots in the year compared with none the previous year.

Other factors considered important are that there have been significant changes at both the board and management level. The two parties now seem to be in greater accord, and the group strategy has been “refreshed”, and new in-house initiatives adopted.

The “capital lighter” approach is one example. The car park in Auckland’s Federal Street has been sold: the company is looking to sell more car parks in Auckland and around its Adelaide operation.

The two casinos in Queenstown will be upgraded to enhance the visitor experience, and a contract has been let for the redevelopment of the Adelaide hotel and casino with 90 percent

of the $330 million investment being covered by a fixed price contract.

Among other changes are a much stronger emphasis on corporate social responsibility, what Stephens calls its “social licence” to operate, and on environmental issues and people and culture.

GAMBLING EXPENDITURE 2015/16 NZ Racing Board (Tab)

2016/17 $342m $338m

NZ Lotteries Commission

$437m $555m

Gaming Machines (Outside Casinos)

$843m $870m

Casinos

$586m $572m

Total

$2,209m $2,334m (Source: NZ government)

Anti-corruption probe snares harness racing Eleven people have been arrested and charged with race fixing and drugs offenses as part of an anti-corruption probe into the harness racing industry. Those detained variously faced race fixing and drugs charges and were remanded on bail. In addition to the arrests, the Racing Integrity Unit has exercised its statutory powers to prohibit all those charged with offenses from entering any race course or taking part in any on-track activities. The investigation has roped in the New Zealand Derby, one of the richest races on the New Zealand harness racing calendar.

Pokies clubs agree to one-hour pause Pokies in New Zealand agreed to ‘pause’ for one hour during Gambling Harm Awareness Week, held from September 3-9, 2018. Over 70 pubs and clubs in the country agreed to be part of the ‘Pause the Pokies’ initiative, coordinated by the Problem Gambling Foundation (PGF), Mapu Maia (Pacific Counselling Service), and Asian Family Services in New Zealand. “We are hoping that pausing the pokies will also allow gamblers to think about their gambling and it may lead to people seeking help from a local service if they are experiencing harm or know someone that is,” said Andree Froude, Director Communications at the Problem Gambling Foundation.

Asia Gaming Briefings | October 2018

AUSTRALASIA 40

AUSTRALIA

Star eyes tourism to propel growth Star Entertainment Group and its Asian partners are carrying out one of the largest investment and refurbishment programs in Australia’s integrated resort market, amidst projections for surging inbound tourism.

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he company, along with Hong Kong- own and international hotel brands to cater listed Chow Tai Fook Holdings and for different sectors of the market.

The Queen’s Wharf project is currently Far East Consortium, is investing at least $3.6 billion ($2.6 billion) to in the excavation stage, which is expected redevelop the Queen’s Wharf area in Central to continue until August next year. The first Brisbane, while it has also spent $850 million stage of the resort, which will feature hotels, on upgrading and expanding the Star Gold bars and restaurants is on track to open in late 2022. An upmarket Rosewood Hotel is Coast, formerly known as Jupiters.

This week, Star also announced it has formally scheduled for completion in 2023, while a applied for permission for a $500 million project plan to upgrade the heritage buildings on to bring a Ritz-Carlton Hotel to Sydney on the the site and open a new Ritz-Carlton hotel and retail mall in the Treasury Brisbane will site of its existing property in the city.

“Our focus is on partnering with the state be finished in 2024. In total, the complex government to drive domestic and international will house five hotels, increasing capacity by tourism to Queensland and Australia,” Geoff about 1,000 rooms.

“The key with an IR is to have a range Hogg, managing director Queensland for Star, said in an interview with AGB. “There is of partners, it’s about a range of brands that currently not so much growth of the domestic complement each other and don’t compete,” market, but we are expecting a lot of growth for he said, adding that each hotel group caters to a different segment the state from overseas,” and is able to leverage he said. its own loyalty programs Total gambling to bring in customers. expenditure in AusThere is currently The existing casino tralia for 2017 was up not so much growth in the Treasury Brisbane 3.9 percent at $23.65 will be transferred to billion, though casino of the domestic the new IR. revenue was largely flat, market, but we are Hogg says the new up just 0.4 percent at casino floor will be very $5.19 billion. expecting a lot of different from the feel Unveiling plans growth for the state of the existing property, for the Ritz-Carlton from overseas. which contains small Sydney project, Star rooms split on two CEO Matt Bekier noted floors. The new main that Australia gets about floor will be open plan 8.5 million tourists a year now, though that figure is projected to and all on one level. It will have about 2,500 rise to 15 million within a decade, led by the gaming machines, an increase of about 5 rapidly expanding wealthy Chinese middle percent from now and expects to have about class. China arrivals to Australia last year 250 table games, although there is no cap.

The property is expected to cater for a higher were up 12 percent to 1.3 million.

Hogg said the new properties will help the number of tourism arrivals, but the company group meet this demand with a range of its also expects support from the local community.

“

”

Asia Gaming Briefings | October 2018

“The key is that what tourists are looking for is to engage in experiences that locals enjoy,” he said. “Therefore, there will be a significant focus on local food and wine and cuisine.”

Hogg said the revenue split between VIP and mass and overseas and local is continuing to evolve “and will evolve a lot more once Queen’s Wharf opens up.”

Rival Crown Resorts reported its results in August, showing a strong rebound in VIP program play turnover, which gained 54.4 percent.

Visitor access to Queensland is expected to improve with the opening of a second runway at Brisbane airport in 2020, which Hogg says will give it the same capacity as Hong Kong, with no nighttime curfew on flights.

“Brisbane will be the gateway to Australia,” he said.

Given the optimistic outlook for growth, the Queensland government may seek to capitalize with the issue of two further IR licenses. The tendering process is already underway for a project in Cairns, with shortlisted candidates due to provide their detailed expressions of interest proposals this month.

The government has said multiple national and international firms are involved in the process, without giving names.

AUSTRALASIA 41

GAMBLING EXPENDITURE Total in 2017 $23.65b

+3.9%

Casinos $5.19b

+0.4%

Gaming machines $12.07b

+4.2%

Sports betting $920.6m Racing $2.94b

+13% +4.1%

Ainsworth says performance improving after 2018 profit drop

There has been considerable media talk about another new license for a project on the Gold Coast, though that has not yet progressed.

Hogg said the government will need to consider carefully whether South East Queensland, where Star already has two IRs within an hour of each other, would be able to support a third.

The government has already said it doesn’t want any more slots, so if there was another IR, it would likely be tables only, he adds.

Industry experts say the Gold Coast could probably support another IR, which would provide stiff competition for Star, despite the recent upgrades.

“Gold Coast, where Star currently operates in, presents the best opportunity for an additional integrated casino resort. The local and regional day-trip market along with the overnight tourism market are large enough to support a second resort,” said Andrew Klebanow, senior partner at Global Market Advisors.

“Cairns is a third proposed location for an integrated casino resort. Unfortunately, there already is a casino in that market, operated

by Casinos Austria. The local population is not large enough to support a second casino so any developer would have to create a new market comprised of foreign visitors. A modern

integrated casino resort would probably force The Reef Casino to close.”

“Any casino developer that chooses to enter these markets must also understand that the local population is already well served by a number of gambling options. Slot parlors and RSL’s can be found throughout Queensland and their customers are loyal.

Those competitors must be factored into any analysis.”

As well as expansion, Star is also studying ways to improve operational efficiencies, including leveraging new technologies to better analyse casino data and improve on energy efficiency and recycling in its hotels.

The group is currently trialling a range of options, with some close to the implementation stage. Hogg said the technical division is currently focusing on the potential of RFID technology.

“Table games have always relied on people.

Automating that process is a very effective tool.”

At the Star Gold Coast, work on a third hotel tower to house a Dorsett Hotel gets underway in the next few weeks, adding to the luxury Darling Hotel and the Star Grand.

Once completed, “they will be two great assets working together,” Hogg said of the Queensland properties.

Gaming manufacturer Ainsworth Game Technology Ltd profit after tax fell 15.8 percent in the 2018 financial year, due to a decline in Australia, Asia and Europe sales.

Profit after tax for the year was recorded at A$31.9 million (US$23.3 million), down from A$37.8 million in FY17. Ainsworth noted however that it saw much improved second-half performance, with profit before tax (PBT) up 68 percent compared to the first half of the year. The second half results were slightly ahead of Ainsworth’s upgraded guidance, said chief executive officer Danny Gladstone. “Our performance continues to show signs of improvement and is a direct result of the strategies implemented to expand our international footprint, invest in technology to enhance our product suite, and build our participation fleet to improve the quality of our earnings.”

Crown profit shines on VIP play Crown Resorts reported an almost 13 percent increase in normalized profit after tax for the year ending June 30th, fuelled by a 54.4 percent surge in VIP program play turnover. Normalized profit was $386.8 million ($286.7 million). “Crown’s full year result reflects a solid performance from our Melbourne operation and continued subdued trading in Perth,” Crown Executive Chairman John Alexander said in a statement to the Australian Stock Exchange.

“Total normalized revenue across Crown’s Australian resorts increased by 10.6 percent on the prior comparable period. Main floor gaming revenue increased by 1.5 percent, with modest growth in Melbourne offset by softness in Perth. VIP program play turnover in Australia of $51.5 billion was a pleasing outcome, particularly at Crown Melbourne (up 73.9 percent), given the difficult trading conditions in the pcp.”

Asia Gaming Briefings | October 2018

AUSTRALASIA 42

CNMI

IPI gets project extension as profit/revenue plunge Imperial Pacific’s luxury casino project on the island of Saipan continues to struggle, with early excitement generated by staggering levels of VIP turnover fizzling amidst customer debts and construction delays.

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PI opened its new casino last year, moving operations from a temporary facility that had been operating out of a shopping mall.

From a handful of tables in the mall, the company was averaging monthly VIP rolling volume of more than $2 billion. At the end of its first full year of operation in 2016, it reported $32.36 billion in rolling volume, more than the $28.8 billion reported

by Sands China’s flagship Venetian Macau the same year.

Asia Gaming Briefings | October 2018

The Hong Kong-listed company was counting on the draw of an idyllic South Sea location, visa-free access for Mainland Chinese and relative proximity by air to Japan, Korea, China and Hong Kong to pull in the big spenders. And for a while, it appeared to be succeeding.

However, a series of factors, including a devastating typhoon and a shortage of workers, led to construction delays. Its hotel was scheduled to have opened in the second half of last year, though was still only about

69 percent complete as of the revised deadline of end-August.

It has now been granted an extension to complete the initial gaming facility to no later than February 28, 2021.

IPI blamed the “drastic reduction and non-availability of sufficient skilled and qualified construction labor, locally in Saipan and mainland USA.” In return for the extension, IPI has agreed to submit a Construction Milestone Schedule, a list of pending tasks and projected

AUSTRALASIA 43

Alter City license suspended Alter City Group, which was planning to build a resort on the island of Tinian, has had its license suspended due to a failure to pay the annual fee, local media reports.

Under the casino license agreement, ACG is required to pay a license fee of $500,000 every year for 40 years, Tinian Casino Gaming Control Commission Executive Director William Cing was cited as saying. The company “has not done anything yet on the property since they broke ground years ago,” he added. The company is having difficulty in raising finance to complete the billion dollar project, according to the reports.

completion dates, as well as quarterly reports on detailed progress.

The company has also promised to give a US$500,000 donation to the Commonwealth Healthcare Corporation in consideration for the revised Implementation Schedule.

Furthermore, should IPI miss the 2021 deadline, the company will be required to pay liquidated damages of US$5,000 per day for each day the project is past the deadline.

While it struggles to complete the project, its balance sheet has also turned sour. Cracks appeared in its 2017 results, when strong top-line growth was undermined by sharply rising bad debts, to which it was fully exposed due to direct credit extended to VIP clients.

Its most recent set of results show efforts to tighten its credit policies, though at a cost.

For the six months to end June, IPI’s profit plunged 91.3 percent to HK$79 million (US$10.1 million), with revenue dropping from HK$4.5 billion in 17H1 to HK$2.2 billion in 18H1. VIP table games rolling fell

48.9 percent to HK$100.3 billion.

The company blamed the impact of the FIFA World Cup and the tightening of marker credits.

Tourism numbers to the South Pacific islands were also lower in the period, falling 8.8 percent to 304,640 due to a temporary schedule adjustment of flights from Japan and Korea.

Koreans account for 48.4 percent of total visitors, with Mainland China making up 38 percent, with growth of 5.2 percent in the first half.

The rapid completion of more and higher end accommodation is seen as key if IPI is to attract the economies of scale to drive revenue. IPI is currently putting up high rollers in villas and yachts, while pushing to finish its hotel.

The company has hired nearly 600 foreign construction workers from the Philippines and has added a night shift in an attempt to speed progress, which it says is better than it was in the second half of last year.

CNMI to use casino tax to replace Medicaid The Commonwealth of Northern Mariana Islands is planning to use a chunk of the revenue it obtains from its casino industry to replace the Medicaid program once it expires. According to House of Representatives vice speaker Janet U. Maratita (R-Saipan), she recently introduced a bill that would allocate 10 percent of the Casino Business Gross Revenue Tax to keeping local Medicaid alive. Maratita said she is aware of how vital the Medicaid program is—how many families rely on it—and intends to plan ahead.

GROSS GAMING REVENUE IPI VIP rolling volume 2016

$32.36b

2017 H1, 2018

$49.1b $12.7b

Asia Gaming Briefings | October 2018

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Asia Gaming Briefings | October 2018

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Asia Gaming Briefings | October 2018

SUPPLIER SPECIAL REPORT 46

G2E 2018

Technological breakthroughs to be showcased in Las Vegas Global Gaming Expo (G2E), arguably the world’s largest gaming trade show, comes back to Sands Expo in Las Vegas on October 8-11, 2018, showcasing the latest tech in the gaming industry.

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his year, the show introduces its first ever “Sports Betting Symposium,” following a U.S. Supreme Court ruling that has opened up sports betting opportunities across the United States.

The symposium will gather experts from around the world to prepare gaming professionals at all levels for growth opportunities in the U.S. sports betting sector. Symposium participants will also receive an expert-led tour of sports betting solutions providers in the comprehensive expo hall.

“In the wake of the Supreme Court’s decision, there is no better place than G2E to launch this Sports Betting Symposium,” said Geoff Freeman, president and CEO of the American Gaming Association.

Korbi Carrison, the Reed Exhibitions/G2E Event Director, said that the show floor will also see an expanded presence from companies supporting sports betting.

“We’ve put a major focus on the evolution of G2E to ensure it is staying ahead of the curve as the gaming industry changes. The expo hall will feature highly anticipated offerings from across the core gaming sector, along with exhibitors presenting their products in sports betting technology, iGaming, integrated resort products and other non-gaming amenities, ” she said.

In addition to the Sports Betting Symposium, attendees will be able to attend education tracks covering Gaming Leadership & Career Development, Global Gaming Women, IAGA Best Practices Institute,

Asia Gaming Briefings | October 2018

iGaming Congress, Integrated Resort Development & Management, Marketing & Analytics: Customer Acquisition & Retention, Non-Gaming Growth Opportunities, Non-Gaming Growth Opportunities in Esports, Optimizing Gaming Operations: Guest Service & Experience, Security, Surveillance & Compliance, and Tribal Gaming,.

G2E’s Innovation Lab also makes a return this year, showcasing new technologies shaping future of casinos and sports betting, and takes place on Tuesday October 9 to 11.

“The first two years of the Innovation Lab have been met with positive feedback as a space for innovative concepts for the gaming industry to come to light, and we’re excited to bring it back for G2E 2018,” said Allie Barth, vice president of industry relations for the American Gaming Association.

“This year’s Innovation Lab will feature a wide array of perspectives on how the industry can advance into the future both through gaming and broader resort management.”

The AGA’s Innovation Lab serves as a centralized hub for innovation relevant to the gaming-entertainment industry. It hosts a collection of fifteen-minute TED-talkstyle sessions designed to foster conversation and inspire innovation among the gaming industry. In addition to leaders in the gaming industry, Innovation Lab 2018 will also feature speakers from outside companies such as Microsoft, Allied Esports and others.

SUPPLIER SPECIAL REPORT 47 AGS

Accelerating player experience

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GS will showcase more than 82 slot and table games designed to deliver an exceptional player experience and help gaming operators boost their bottom line at G2E this year.

Taking center stage will be AGS’s newest cabinet innovation – the Orion Upright.

This sophisticated new platform features the distinctive Orion starwall design, highlighted by 420 game-synchronized full-color LED lights for an innovative gameplay celebration. AGS is launching the Orion Upright with a library of exclusive new titles and ICON greatest hits.

For its Orion Slant platform, AGS will highlight the Fai Cai Shu family of four games, featuring nudging wilds, multiplier wilds, a pick bonus, and three linked progressive jackpots.

For its high-performing Orion Portrait platform, AGS will showcase nine new game titles, including the Diamond Streak family, Crystal Magic, and six new Xtreme Jackpots games.

In table games, AGS will showcase a host of proprietary table games and table solutions.

Poker fans will love Vega$3, a new twist on a

house-banked three-card poker-style game. Pai Gow Linx adds new dimensions to the traditional table game pai gow, and Lucky 21 Bacc combines the excitement of baccarat and blackjack.

From its table solutions lineup, AGS will showcase the Dex S single-deck poker shuffler, featuring a streamlined design that is attractive, economical, and exceptionally functional.

One of AGS’s must-see attractions is Bonus Spin Xtreme, a progressive side bet for blackjack featuring three virtual wheels which will generate multiple winners at the same table with each spin.

G2E visitors can experience AGS’ groundbreaking Social White-Label Casino, the industry’s only B2B mobile solution that offers powerful Live Ops features to add new levels of excitement to online casino-branded social games. Also on display – AGS’ real-money gaming solution which delivers the industry’s best game content to global online operators through AGS’ robust aggregation platform.

See the team at AGS at stand 1253 at G2E Vegas.

Alphaslot

Exciting interaction

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ounded by global casino gaming veterans, blockchain technology experts, and academic professionals, Alphaslot Lab aims to enhance the fun of winning in traditional casinos worldwide.

The organization is working on building Asia’s first blockchain protocol, enabling a new entertainment world where the constraints of the centralized world give way to an open ecosystem that allows consumers, game developers, casinos and other offline entertainment to interact in new and exciting ways.

Alfastreet

Revolutionary novelties

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lfastreet will be announcing important novelties and game evolutions for the second part of the year at G2E Las Vegas, preparing the ground for future trends that will see the introduction of radically advanced machines in 2019.

Among a rich pack of novelties that will entertain visitors, there’ll also be a freshly redesigned Multi-touch automated electronic Roulette table with 8 play stations and the live wheel.

The table has been the leading product of its kind for the last 2 years and is a faithful electronic emulation of a classic live Roulette table.

Also on display will be the Lucky 8 compact electronic Roulette that is complementing the standard setting R8 machine.

Both automated roulettes are getting an overhaul of their user interface and a brand new Jackpot solution that will made them even more attractive to the players worldwide.

As an addition to its well-known electronic horse game Royal Derby, Alfastreet has also prepared a new and exciting version of it for all racing lovers.

Alfastreet will present the Car Race machine, combining the sleek design and excitement of a

racing track. It will be displayed with the evolved version of the “Felix T” terminals, which have been optimized since the unveiling for even better player comfort and performance.

The Blackjack and Baccarat combination table with the new look will attract players who like traditional games but still appreciate a modern design that can perform two in one.

Felix Slot machine brings big novelty for the end of 2018 in shape of an extremely entertaining game called “Fish Hunter”, a game that has already captured the attention of the operators and the fantasy of the players at the G2E show in Macau.

The game represents a revolutionary form of a slot game bringing a fresh breeze to the industry with big potential for further development and market.

Since there are a lot of venues with limited space availability, Alfastreet designed a Bar Top with multiplayer option compatible with all games from its extensive catalogue.

A compact, yet powerful and versatile machine can save space and provide easy expansion of the gaming floor.

See Alfastreet on stand number 2448 at G2E Las Vegas.

Asia Gaming Briefings | October 2018

SUPPLIER SPECIAL REPORT 48 Ainsworth

APEX PRO GAMING

EVO makes US debut

Gaming to the next level

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PAC-MAN™LINK&©2018 BANDAI NAMCO Entertainment Inc.

A

insworth Game Technology will showcase an array of fresh content and its upgraded EVO cabinet at G2E. In total, Ainsworth will display more than 130 games -- including titles encompassing the company’s Class II, Class II, Washington State and Historical Horse Racing product lines. Additionally, visitors to the Ainsworth display will have the opportunity to get hands on with new Linked Progressive brands, iGaming content and sign packages designed perform in casinos across world.

The booth will include the North American trade show debut of the EVO cabinet, Ainsworth’s newest dual screen offering. This upgraded cabinet features twin 24-inch high-definition monitors, an LCD touchscreen button deck and sleek edge lighting. The EVO will shine brightly on casino floors with exclusive content that includes the new four-game PAC-MAN Link series and hot Top Pays 30-Line Multi-Denom games.

The EVO will be available soon to gaming operators in all markets.

Asia Gaming Briefings | October 2018

Casino operators will get their first look at three new QuickSpin titles. Super Money 7s and Super Crystal 7s feature the giant wheel that made the initial Quickspin games among Ainsworth top performing for the past year. Plus, Super Charged 7s MultiPlay will give players the chance to play four reels of Quickspin – with every reel set giving the chance to win a spin on the wheel.

Also on display on the A640 will be: Galaga, part of Ainsworth’s partnership with BANDAI NAMCO Entertainment Inc. This new slot offers players a chance to experience the classic arcade game in a new way, complete with thrilling bonuses that pay homage to the original game.

Elsewhere in Ainsworth’s space will be several promising A640 titles including: Triple Challenge; Multi Win 7, a top performing High Denon title now available in a new format; and Redbeard’s Riches and CashO-Tron, a pair of games with a new Symbol Collection bonus.

See Ainsworth at booth #1529.

pex gaming will again be taking a major presence at the G2E Las Vegas show to showcase its ever-growing range of gaming solutions.

Introduced only 18 months ago, the Apex Pinnacle Premium Jackpot Island solutions have enjoyed strong demand from operators around the world.

In this short period of time, the Apex team has created eight different versions already.

Visitors will be able to see the latest game specially created for this solution – Clover Link, a great addition to games such as Dragon Egg and Leonardo’s Code.

The two individual island versions are called the Apex Pinnacle Premium L Jackpot Island and Apex Pinnacle Premium XXL Jackpot Island.

Both are available with either the Pinnacle Premium Curved slots or the Pinnacle Premium SL slots. New for the G2E Las Vegas is the introduction of the Apex Pinnacle Premium XL – for wall-mounted assembly.

“There are a great many reasons to explain why the Apex Jackpot Islands are in strong demand”, explained Kubilay Özer, global sales director at Apex gaming. “The linked jackpot can be won in 16 different ways, making it exciting for all types of players, including the high rollers. The design with large top and side screen displays are a great way to portray the game. They can alternatively even be used for specific customer advertising, opening a new way to target customers. The fantastic sound heightens the player experience.”

See the APEX team alongside local partner Apogee Gaming at booth #3359.

SUPPLIER SPECIAL REPORT 49

Highest accuracy with no changes to layout, chips, dealer or player behaviour

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140

140

lift your game SenSen Networks SenGAME 3.0 delivers the highest accuracy of mixed stack height valuation including back betting. It is a plug and play solution which retrofits to existing tables that does not require changes to layouts, chips, dealer or player behaviour. It is inconspicuous and cost effective which is easy to install, calibrate and maintain.

Visit us during G2E Vegas at Stand #2236 for a live demo

Asia Gaming Briefings | October 2018

SUPPLIER SPECIAL REPORT 50 ARISTOCRAT

Commitment to core products

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ristocrat is demonstrating its deep and continuing commitment to core products that are popular with players and operators at G2E Las Vegas 2018.

This year the Aristocrat booth will be brimming with the latest innovations that give robust support to each of its cabinets along with further extensions of legendary, proprietary titles including Buffalo, Gold Stacks, Wonder 4, and Sun & Moon.

Aristocrat will show a new spin on innovative play including Metamorphic Wheels, Hold & Spin Multiplay, and persistent wilds.

Top products include Wonder 4 Spinning Fortunes in the Helix Tower, Mighty Cash – Double Up, Ultimate Wheel Blast with its industry first “metamorphic” wheels, Really Wicked Winnings, and Sun & Moon Gold.

Announced last year, WESTWORLD slot game bursts onto the scene in the flame55 cabinet, with a unique play experience that allows players to play two separate base games simultaneously or an integration of the two games. The flame55 will also be home to two top pop-culture brands

that will be revealed at G2E. North America’s most popular game, Buffalo, is celebrating its 10th anniversary, and an all-new Buffalo Diamond 10th Anniversary Edition will be revealed at G2E. The exciting Edge X and Edge XL demonstrates how the future of large-form cabinets will be shaped by this innovative product, and the RELM XL 3 and 5 reel stepper will showcase new to-be-revealed pop culture titles along with new Liberty Link titles.

The legendary Lightning Link slot game is the inspiration for the all-new Dollar Storm, with a first-of-its kind multi-level progressive action game that combines with a $100,000 MSP jackpot.

Oasis 360 system solutions innovations include the multi-site single card advanced marketing solution, Oasis Loyalty; the floor-wide bonusing, media, and progressive management solution ONE LINK; the advanced drink ordering system; Drinks On Tap; and Oasis 360 Loyalty Kiosk.

See the Aristocrat booth at G2E Vegas, stand 1141.

ARUZE

Reducing staff costs

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ruze’s Electronic Table Games will be the centerpiece of the booth with Lucky Roulette, Super Big Wheel, Omni Table, RFID technology, a unique Live ETG product, and Roll to Win Craps.

Roll to Win Craps is a hybrid dealerassisted ETG that combines the excitement and attributes of live table play with the operational efficiencies of modern technologies. Where tradition and technology merge - a dealer calls and directs the gameplay, while up to 10 players can place their bets electronically, shoot the dice across a standard sized craps table made of LED panels, and enjoy the spectacular animations designed to inform and entertain.

A true benefit to casino operators will be the staffing that is involved in operating the craps table. By removing all physical chips, only one employee is required to run the table game. This reduces the staffing needs from three to one, depending on property and regulatory policies. On the interior side of the craps table wall, a section is dedicated to streaming advertisements that can be used for casino property promotions or focused on

Asia Gaming Briefings | October 2018

external advertising partnerships. A year has passed since the first public viewing of Roll to Win Craps, but it is evident that Roll to Win Craps has evolved into a “must play” experience.

On the slot side, the unrivaled design of the Muso Triple-27 cabinet will be scattered

throughout Aruze’s booth. Aruze designed Muso Triple-27 with an LED backlighting that gives a 360-degree presence on the casino floor.

At G2E, some 25 titles will be displayed on the Muso Triple-27.

Visit Aruze at booth #2659.

SUPPLIER SPECIAL REPORT 51 BBTECH

Turnkey solutions for Asia

B

BTech, an Asian gaming industry pioneer, is offering turnkey gaming solutions designed and developed with the Asian market in mind.

With their slot games using superior logic and math, coupled with a design philosophy that appeals to Chinese and other Asian players, online and land-based gaming operators can expect to hit the ground running and quickly build a loyal player following.

With BBTech’s game offerings, your players can enjoy countless hours of fun and entertainment, ensuring player retention is maximized. The e-wallet software allows

you to accept any currency and support any business model, whether it be real money, virtual points or otherwise. Other features such as unlimited add-ons and an easy to use control panel, make day-to-day operations a breeze.

BBTech’s games are device agnostic.

This means that your players need not download and install cumbersome mobile apps that take up space and clutter their devices. Using the latest technologies in software development such as HTML5, BBTech’s games are created with the player’s convenience and enjoyment in mind.

Regardless whether they are using an iOS or an Android device, even if they are playing on their mobile phone, tablet, laptop or desktop computer, BBTech’s games are guaranteed to deliver the same user experience and enjoyment to your players.

BBTech has pre-configured their system to integrate with the most popular providers in the gaming industry. This cuts down the time to launch your business and start generating revenue.

Some popular games are also distributed only through BBTech.

Betradar

Comprehensive turnkey solutions

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etradar is the number one turnkey-solution provider in the industry, offering all the services necessary to run a successful bookmaker operation. This includes fixtures, results, odds suggestions, trading tools, in-running services, risk management, betting stimulation tools, live streaming, gaming solutions and esports betting services.

Being the only supplier in the market controlling the entire chain of its in-running offer – from data collection at the venue, to the compilation and delivery of odds – we provide the most comprehensive and reliable Live Odds & Live Data service. Our coverage, which includes more than 25,000 live events

across over 20 sports each month, creates 600+ unique odds types.

Operators looking to offer bets around the clock, across multiple channels can make use of Betradar’s Virtual Sports portfolio, featuring football, tennis, basketball, horse racing and dog racing, to add additional incremental revenue. Out latest innovation, Virtual Tennis in-Play, gives punters the opportunity to place live bets on full, continuous matches in any way they want For those wanting a proven method of retaining customer attention, Betradar’s awardwinning Live Channels, available for online and retail, provide over 38,000 events per year

to bookmakers. With the largest portfolio of media rights in the industry, this dedicated, 24/7 live-streaming product seamlessly fulfils customer demand for live visualisation and betting stimulation. Additionally, the new Live Channel Trading enables bookmakers to operate their own in-running trading faster than anyone else in the market.

Betradar’s market-leading Esports Betting Service presents 11,000+ pre-match events per year and 4,500+ live odds for the most popular games – making it the broadest and most credible range of pre-match and live betting markets available.

See Betradar at booth #4023.

Asia Gaming Briefings | October 2018

SUPPLIER SPECIAL REPORT 52 BMM Testlabs

Continent 8 Technologies

B

N

Global testing

MM Testlabs, the longest established and most experienced test lab and technical consultancy in the world, is pleased to be exhibiting at the upcoming G2E 2018 in Las Vegas.

Founded in 1981, BMM employs over 340 qualified staff in 14 offices with 12 test labs, and is licensed or approved to test in over 440 jurisdictions globally.

BMM experts will be in attendance to provide information on Compliance and Testing S er vices: iGaming Testing Services: System Testing: Operator Services: Regulatory Services: Training & Education and Security.

Please find BMM at booth #2230.

Atlantic City data hub

ew Jersey-licensed Continent 8 Technologies, the world’s largest iGaming data center and global network solutions provider, is opening a new data center at the Atlantic City Convention Center in partnership with the CRDA (Casino Reinvestment Development Authority). Designed to Tier 3 standards, the data center will help make New Jersey the largest hub for online gaming, sports betting, and eSports in the United States.

This expansion fortifies Continent 8’s commitment to Atlantic City and fulfills their pledge to create an online gaming hub designed for real-time data exchange. It will provide direct connectivity to their private global network spanning over 30 locations across Europe, Asia, and North and South America.

In addition to increasing capacity in New Jersey, the new data center will include connectivity to Mississippi, Nevada, New York, Pennsylvania and West Virginia locations, as well as providing a secure data redundancy and disaster recovery facility from which to host online gaming operators’ most critical online operations. Operators seeking to enter the New Jersey and broader US market will

benefit from this Atlantic City online gaming hub, its connection to the largest online gaming global network, and Continent 8’s cyber security services.

Continent 8 is the only independent information technology provider licensed by New Jersey’s Division of Gaming Enforcement to supply data center and network services to online gaming licensees. Interested online gaming operators are encouraged to contact Continent 8 to speak with their team of global experts and secure capacity before the market becomes saturated.

DIGITAIN

Easing market entry

D

igitain the multi-channel sports betting platform provider will be showcasing its latest sportsbook API solutions at the Global Gaming Expo (G2E). With sports betting the hottest ticket in the USA, why not reach out to our team of advisors and discuss how Digitain can assist you with your technology and business strategies for the rapidly expanding sports betting market?

Digitain’s Sports Betting and Gaming Platform provides a comprehensive multilingual, multi- currency customisable interface that can easily integrate using API’s with an

Asia Gaming Briefings | October 2018

existing platform, whether you are a land-based casino or online operator. It can provide a frictionless turnkey or white-label solution in which bespoke APIs allow the integration of a sportsbook, casino, live dealer, and virtual sports modules. The API also provisions the ability for the client to customize the frontend user journey and user experience and allows the brand to be agile and flexible, and in control of the product roadmap to adapt to fast-changing market conditions. With an extensive payment gateway, bonus engine, CRM system, and dedicated customer support 24/7,

provides everything needed for fast market entry for clients.

The sportsbook product covers 30,000 live events each month, across 65 sports taking in 7,500 leagues, and more than 3,000 betting markets, with features that include cash out, edit my bet, express bonus and the latest promotional tools for player marketing acquisition and retention needed in today’s fast moving markets. The casino solution has 3,000+ games from major digital casino content providers; NetEnt, Microgaming, and Playson and many more.

Meet Digitain at booth #4823.

SUPPLIER SPECIAL REPORT 53

Asia Gaming Briefings | October 2018

SUPPLIER SPECIAL REPORT 54 Gamblit gaming

PAC-MAN Cash Chase

G

amblit gaming will be unveiling innovative, soon to be announced hardware and several exciting new game titles, playable at its booth on the show floor at G2E Vegas 2018.

In partnership with Bandai Namco Amusement, the developer behind the iconic arcade game PAC-MAN, PAC-MAN Cash Chase will be available on Gamblit’s TriStation game machine and will make its world debut at G2E. Gamblit’s engaging single-player TriStation hardware, now officially launched on casino floors, will offer G2E attendees a first look at brand new game titles including: • Road Redemption: The hit PC & console beat ‘em up racer from EQ games makes its exclusive debut on the TriStation platform • Doodle Jump: The 250mm downloaded classic high-flying platform game, developed with Lima Sky lets players hop, skip and jump their way to success • Brew Caps: Lets players put their eyes to the test by matching bottle caps as fast as they can in this Gamblit game • Dice Arena: Players roll the dice, hack and slash in this Gamblit developed fantasy themed fighting game • Squadron Commander: A Gamblit original where players bring their best warships and fire away to take out the enemy squadrons • Cover Fire: Developed by Genera Games, this hit fast paced arcade shooter lets players win cash for taking on the oncoming robot army • Deal or No Deal Poker: In collaboration with Endemol Shine Gaming, this title brings all the excitement of the international hit game show to casinos like never before!

Deal or No Deal Poker Special will also be showcased on Gamblit’s Model G interactive game tables.

PAC-MAN Battle Casino will also be featured in the Gamblit booth as it nears its fall launch into casinos, allowing players to battle it out for a cash prize where the last PAC-MAN standing wins.

See Gamblit’s latest titles and try them out at booth # 4423 at the show.

GANAPATI

G8C blockchain innovations

W

ith the phenomena of cryptocurrency and blockchain making waves around the world in recent years, it was only a matter of time before they reached the online casino industry.

GanaEight Coin Limited, part of the Ganapati Group, is looking to be at the forefront of this movement. The group has already made a name for itself this year in the iGaming industry with its distinctive Japanese slot games and is building on this success by developing its own ICO, known as the G8C token.

Asia Gaming Briefings | October 2018

The G8C token represents an innovative way of bridging the gap between virtual assets and online casinos, with the creation of its own blockchain online casino platform on which it can be used. Where the G8C differs from other legal currencies and cryptocurrencies is that it does not need to be exchanged into chips to be bet on a casino site, making betting direct, quick and easy. This is reinforced by the lack of GAS transmission fees – players will not be charged to bet with G8C on its original blockchain.

A further noteworthy feature of the

G8C platform is the offline function – an advanced function not yet available in existing online casinos, enabling play at any time, in any place.

In this initiative, the Ganapati Group endeavours to apply both its in-depth knowledge of blockchain technology and unique approach to the online casino world, whilst ensuring complete compliance with local legislation. This has been guaranteed by the appointment of certified lawyers, Hayato Terai and Dr Kristina C. Deguara, as co-CEOs of GanaEight Coin Limited.

SUPPLIER SPECIAL REPORT 55 GameCo

GLI

Story began 30 years ago

T Stepping up the pace

G

ameCo LLC, creator of the world’s first Video Game Gambling Machine, will showcase a key innovation whereby their games can achieve a similar pace of play as traditional slot machines, providing an increased level of Coin-In as well as a much greater degree of player engagement.

The first “GEN 3” title, which launched recently in New Jersey and Connecticut, is an updated release of “Nothin’ but Net”, a fast-paced realistic 3D basketball game. In “Nothin’ but Net 2” players take multiple shots on basket, each shot corresponds to a single bet with denominations comparable to a slot machine spin. If a player makes 10 out of 15 baskets, they enter the bonus round where they have a free chance to win a Progressive Jackpot.

GameCo will also debut its new Multiplayer Challenge Mode, The pioneering new multiplayer system will allow up to 64 players to compete head-to-head in video game gambling competitions on the casino floor.

Complete with a leaderboard system for tracking results and payouts, the Multiplayer Challenge Mode brings a true esports-style experience to land-based casinos. From action and fighting games, to sports, racing, and casual games, GameCo titles will now be supported in multiplayer formats.

Find GameCo at booth # 5034.

he Gaming Laboratories International (GLI) story began nearly 30 years ago with a unique vision to provide a new standard of innovative, reliable, and costeffective testing, assessment, and certification services.

Today, GLI is the respected global leader in independent testing and certification with 23 locations strategically located on six continents serving more than 475 jurisdictions.

As the world’s leading “regulation-ready” testing and certification lab, GLI is the export-driven expert, giving clients total access into both mature and emerging land-based, iGaming, and sports-wagering markets to help suppliers get their products anywhere they want them to go with consistency, speed, and accuracy.

GLI tests, inspects, and certifies an incredible range of gaming devices and systems for virtually every jurisdiction in the world, using such innovative tools as test automation that works 24/7 with more quality, consistency, accuracy, and reliability.

GLI also offers a wide range of world-class educational resources through its renowned GLI University®. Plus, its signature gaming technical standards are relied upon by gaming regulators, operators, and suppliers the world over.

Visit GLI to learn more at stand 4430 at G2E Las Vegas.

Asia Gaming Briefings | October 2018

SUPPLIER SPECIAL REPORT 56 INTERBLOCK

IOVATION

Live Craps table

E

lectronic table game (ETG) industry leader, Interblock, will present its comprehensive portfolio of automated, video and dealer assist product lines at the 2018 Global Gaming Expo.

Interblock’s award-winning Stadium configurations will be one such product demonstrating the company’s latest enhancements.

Its Live Craps table, launched at G2E 2017, allows a player to throw the dice on a craps table within a Stadium environment. Tournamentmode will also be active on various game types within the Stadium.

Interblock’s number-one selling product-line, MiniStar, will launch new game forms and features at G2E on its blackjack, craps and roulette games.

The compact ETG provides all of the feature and functionalities available on Interblock’s Diamond product line in a smaller footprint and a lower price point. MiniStar Roulette will feature a new ball-chasing light and sound effects designed to

Asia Gaming Briefings | October 2018

elevate the player experience. LED lights on the wheel and amplifying sound effects will chase the ball until it drops into a pocket.

The IBX eTABLE is a cashless video gaming table that can integrate with existing Hotel and Cruise ship systems, VLT casinos and can easily be upgraded to a full casino machine. It offers roulette, baccarat, multi-hand blackjack, Texas Hold’em and tournament mode for Texas Hold’em games. The IBX eTABLES can also connect online players to the same platform via the Internet through their PC or mobile device.

Interblock’s breakthrough form-factor, Universal Cabinet, is a standalone unit with slot-like hardware designed to support a variety of games. Available in both video and automated formats, the product will demonstrate craps, roulette, blackjack and baccarat games and its ability to connect to external Interblock generators.

See Interblock at stand 1239 at G2E Vegas.

Delight players, deny fraudsters

P

layer experience and fraud detection go hand in hand. iovation’s devicerecognition technology offers powerful tools to enter the market safely.

To shut out fraudsters and cheaters, online gambling operators around the world have come to rely on FraudForce and SureScore. The former details the user’s device by considering context, behavior, and reputation. It stops fraud in real time with help from a global network with over 50 million confirmed fraud cases. The latter, SureScore, applies machine learning to dozens of indicators to predict the outcome of any given online transaction, even without any prior history with the particular player involved.

Similar technology has been improving millions of players’ experiences across the Internet. ClearKey helps to welcome players with an invisible, hassle-free authentication experience by recognizing and using their device as a second factor of authentication. ClearKey works alongside existing systems to reduce the number of challenges put between players and their gaming experiences. LaunchKey leverages adaptable, risk-based multifactor authentication to secure players’ accounts.

It strengthens security for operators while delivering authentication that players actually like to use.

All of these tools will be invaluable to operators’ pursuit of VIPs. These high-value customers will receive plenty of incentives to move their play from operator to operator. Identifying and retaining them quickly and confidently will have an outsized impact.

We’ve been catching bad devices since 2004 and seen over 4 billion gambling transactions since. We know how players use their devices. iovation increases your fraud catch and improves your trusted players betting experience whilst helping problem gamblers self exclude.

Find iovation at booth #4203.

SUPPLIER SPECIAL REPORT 57 KONAMI

Deliver new entertainment

K

onami Gaming is bringing a vibrant mix of Ultra HD game cabinets, popular progressive jackpot features, proven bonus play mechanics, and cardless player loyalty solutions set to debut at the Global Gaming Expo (G2E) in Las Vegas.

With momentum from popular game series such as Star Watch and Celestial Sun/Moon Riches, Konami is leveraging proven game play features and bonus mechanics to deliver new entertainment for today’s players on every Concerto cabinet from the original upright to the new 65-inch 4K Ultra HD Concerto Opus. In addition to record expansions to the Concerto Collection game library, Konami will premiere an entirely new 4K video cabinet called KX 43, with an impressive 43-inch edge-lit single screen, relaxed slant top, lighted dash interface, and exclusive 4K game content.

Konami’s award-winning SYNKROS casino management system will debut its “cardless” player loyalty solution SynkConnect, which offers players a variety of convenient methods to login to their account at the game machine.

“From top game play features to leading-edge systems technology, Konami is always creating new opportunities for casino players and operators to enjoy lasting engagement and memorable

entertainment,” said Steve Walther, senior director, marketing & product management. “This year’s G2E lineup is characterized by continued growth and innovation across an array of original Konami releases, which we look forward to sharing with over 25,000 gaming executives and professionals from around the world.”

Konami’s latest cabinet, KX 43 is among the key releases, and will be arriving to the event with nearly a dozen exclusive game themes in 4K Ultra HD resolution. Its 43-inch portrait screen features four-times the pixel depth of standard HD, with custom-programed graphics interacting between the game screen and the LCD button panel. With a standard USB charging port, double cup holders, and classic bash button, the KX 43 is designed with the core comforts and conveniences for today’s players.

“KX 43 delivers a unique gaming experience through its 4K-resolution game content and provides just the right combination of premium and practical,” said Walther. “It is designed with a lean frame and standard base width for any area of the floor and comes with a competitive lineup of premiere titles, from symbol-driven linked progressives to original jackpot bonuses.”

The company’s 2018 display will also carry

a broad variety of top-quality game content for each cabinet in the Concerto Collection.

Konami’s 65-inch 4K Concerto Opus will debut a unique linked progressive called Treasure Ball, which rewards players with mystery jackpot prize balls in greater numbers and sizes as they increase their bet. Agent: Magnifying Jackpots and Inspector: Sign of the Jackpots continue the success of Konami’s Strike Zone™ mechanic on the curved Concerto Crescent and Stack cabinets with scaling multi-denom standalone jackpots.

Other must-see progressives including Solstice Celebration Triple Sparkle, Matsuri Kojiki Moon, Sparkling Roses Color Bloom, the Golden Blocks series, and Jackpot Streams Evolution.

See Konami at booth #1154.

printer, and with its faster CPU and faster print speed, it has the flexibility to print TITO and promotional tickets, and various wager tickets and templated promo coupons.

When paired with iVIZION and GEN5, JCM’s patented FUZION technology creates the possibility for each slot machine to become a multi-line profit center with the current potential

to vend and redeem race & sports betting, vend and redeem lottery tickets, facilitate Daily Fantasy Sports (DFS) wagering, conduct cross-enterprise promotional couponing for carded and uncarded players, enable real-time currency exchange and streamline tax forms processes.

JCM’s sports book products and others will be showcased at stand 4039 at the show.

JCM GLOBAL

Sportsbook products

J

CM is ready to support operators with products to create the perfect sports book setting and deepen connections with customers.

To this end, JCM is introducing JCMedia.

From PixelPro displays that can be built to essentially any size and shape, to the immersive visual fidelity of 4K Ultra HD and beyond — JCMedia delivers display and content solutions to give patrons a brilliant sports book experience.

JCMedia’s PixelPro Max displays have HD and UHD frameless LED screens allowing spectacular images and video on a curved or flat wall, indoors and outdoors, giving operators the ultimate in flexibility to deliver sports books anywhere and everywhere across the entire property.

JCM’s line of award-winning help keep transactions secure and convenient. Leading the way is the iVIZION bill validator. Its CIS technology scans the entire note or ticket, reading more than 9.5 million data points on every note, more than twice that of the nearest competitor. iVIZION’s partner is the GEN5 thermal

Asia Gaming Briefings | October 2018

SUPPLIER SPECIAL REPORT 58 MATSUI

UV Marking

NOVOMATIC

Winning technology for US markets

M

atsui will be showcasing their newly designed gaming chips and security features at G2E Las Vegas 2018.

Adding to the traditional security features such as UV marking, Matsui introduces its exclusive MG EYE security, MG Eye Edge, Laser Trace and RFID technology this year.

Their new casino chip series, including Heavy Weight Inner Ring Style decal chips, will also be introduced at the show.

Shigeki Machida, director of Matsui Group commented; “We are very excited to introduce these new gaming chips as well as our other core products such as highly durable heavyweight layouts to our customers at G2E 2018. We will also provide demos of our security innovations such as RFID. We believe that these new developments will provide even more choices and safety for our customers.”

In response to the high demand for Matsui’s gaming chips and table layout, the company has expanded its production facility with new machinery and equipment to further speed up the production.

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

Visit Matsui at stand 4109 at G2E 2018.

A

n extensive NOVOMATIC product range that features brand new games and game mixes, a series of advanced cabinets, progressive jackpots, ETGs, sports betting and system solutions, and online gaming developments will be on full display at G2E 2018.

The NOVOSTAR V.I.P. 3.50 cabinet with Python Chair delivers the next level of player immersion and will present a new IP title for casino markets – MacGyver. Based on the iconic TV show of the 80s, players join Richard Dean Anderson and the lead cast on an explosive adventure as they use paper clips, duct tape and chewing gum to collect prizes and unlock progressive jackpots.

Returning to G2E will be From Dusk Till Dawn – and both IP titles will also be presented in a compact style on the V.I.P. Lounge 2.32 cabinet.

Spearheaded by the PANTHERA 2.27 twin screen cabinet, and the PANTHERA 1.43 and V.I.P. Lounge1.43 that feature curved screen 4K displays, various cabinet series for all-sized venues will showcase a selection of new single games – featuring Dragon Hits, Prize of the Nile, Prized Panda, Princesses of War, Riches Ahoy! and Great American Wilds – from the NOVOMATIC Americas Mount Prospect studio and the Winfinity Games and 707 Games studios in Austria. The Enchanted Fortunes Linked Jackpot will show progressive themes from the Fortunes series, new Otium bingo games will be on display, and leading multi-game mixes will be presented – with new mixes for Illinois and Pennsylvania VGT markets, and a newly designed mix targeting Latin America.

Electronic Table Games based on the internationally renowned NOVO LINE Novo Unity II platform have been growing their US footprint, and at G2E, automated, virtual and live versions of popular table games will be presented.

See Novomatic at booth #1259.

Asia Gaming Briefings | October 2018

SUPPLIER SPECIAL REPORT 59

Undisputed Visit us at G2E Las Vegas Stand 4023

Betradar Betting Services More than 600 bookmaker clients and 30+ state lotteries, in over 80 countries across five continents all rely on our award-winning data depth and quality.

betradar.com

Asia Gaming Briefings | October 2018

SUPPLIER SPECIAL REPORT 60 Play’n GO

WE. ARE. GAME.

A

llow us to introduce ourselves…we are Play’n GO. We are dedicated to pushing the boundaries of what’s expected from a supplier by creating and developing some of the most entertaining, award-winning slot titles in the market. The industry’s becoming increasingly competitive and we are game for the challenge.

Since 2005 we have been gaining the experience and knowledge that allows us to create the products and services to satisfy the needs of operators around the world. With over 150 titles available on both land-based and online channels, our portfolio is suited to any casino brand looking to entertain players

and offer the best titles to their customers.

The industry’s non-stop demand for creativity drives our entire team and fuels our ambition to be the best.

We are not afraid to stick our necks out and lead the way. We were the first company to realise the significance of mobile gaming and as a result are the leading mobile gaming suppliers in the world, and everybody else is just catching up. Our innovations are recognised by our clients and appreciated by the players, but we don’t rest on our laurels; we sit in the driving seat and push ourselves forward.

No one can hide behind game characters.

We don’t. It’s people with passion and precision who keep delivering innovative, world-class entertainment anywhere, anytime, who give us an edge. But it doesn’t stop there. We provide the game management tools that allow brands to carefully cultivate their businesses. Whether it’s through supporting their growth strategy via our flexible casino platform or our server based-gaming solution OMNY, Play’n GO have all you need to thrive in the casino industry.

Contact the team at sales@playngo.com

Quixant

Gaming Ecosystem in focus

Q

uixant, the world’s leading supplier of PCbased hardware specifically designed for the industry, will once more bring a versatile mix of reliable mainstays, innovative new releases, and groundbreaking concepts to G2E. A significant focus for 2018 is on its Gaming Ecosystem, an expansive array of differentiators based in hardware, software and support, which has already received many plaudits from the market. With the goal of accelerated market penetration becoming increasingly vital in today’s ultra-competitive gaming landscape, the Gaming Ecosystem provides Quixant customers with the tools to execute this objective in record time.

The pioneering hardware solutions that complement this varied feature set will also be as present as ever; alongside the greatly renowned QXi-307, QXi-400 and QXi-6000 all-in-one gaming platforms and QX-60 - a high-powered, modular, Windows 7-compatible controller, Quixant’s exciting, contemporary monitor portfolio takes centre stage.

Mirroring the global trend towards slimline,

Asia Gaming Briefings | October 2018

flexible cabinet design, a fundamental new development in this range is the introduction of cutting-edge external “floating” designs with bespoke integrated LED arrangements and multiple touch technology options.

A first G2E showing for QMax-2 and QXi-7000, Quixant’s new generation of controllers harnessing AMD’s unprecedented Ryzen™ Embedded APU processing power, will also add to the multitude of attractions.

“We are no longer just a specialist in PCbased hardware solutions; over the past few years we have diversified into other physical product lines - which is where our gaming monitors have entered the equation - alongside promoting and painstakingly developing the huge range of additional differentiators provided by our Gaming Ecosystem” comments John Malin, Global Sales Director for Quixant.

Visit Quixant at booth #2040.

SUPPLIER SPECIAL REPORT 61 SBTech

Adding sporting value

S

BTech is an industry-leading software provider of sports betting and iGaming software and services to operators in regulated markets.

The group supplies highly flexible betting and gaming solutions to partners looking for speed to market and exceptional configurability, helping them achieve a competitive advantage through leading-edge technology, constant product development and game-changing innovations, all backed up by the best business intelligence and reporting capabilities in the sector.

SBTech recently released an array of mobile-focused in-running features such

as Add2Bet, Action Betting and Pulse Betting, all designed to attract new players and maximize value by enhancing the user’s journey, range of options and potential winnings.

The complete offering includes the Seamless Sportsbook, the Chameleon360 iGaming Platform, a suite of managed services, plus on-property and omnichannel solutions providing players with constant access to sports and casino products across all touchpoints.

With unrivaled know-how across trading and risk management, KYC, AML, acquisition and CRM, SBTech enables its partners to consistently achieve rapid growth, enhanced brand loyalty and peak profitability.

SBTech’s solutions are already live in the USA (Mississippi and New Jersey) with Churchill Downs, Golden Nugget and Resorts Casino.

SBTech can be found at booth #4211.

Scientific Games

The future is now

V

isitors to Scientific Games’ booth at G2E Las Vegas will not only see cutting-edge products, but also products of the future, available now.

SG’s Casino of the Future will showcase how the traditional casino can be turned into a dynamic environment through the offering of offering unique social experiences, fostering player interaction and creating immersive environments.

Also on display will be SG’s latest Sports Wagering Solutions, innovative new Systems offerings, and hot new Table Games and Utilities, such as I Love Suits Poker and Vegas Blackjack Fever. Slot games featuring the hottest entertainment brands, presented on the industry’s most innovative cabinets

will also be exhibited, as well as games featuring celebrated, player-favorite themes developed by our own talented studios.

In partnership with Warner Bros., SG is debuting two new games based on iconic classic movies: Munchkinland featuring The Wizard of Oz, and Willy Wonka Loompaland starring the Oompa Loompas of Charlie and the Chocolate Factory. New titles in the exciting James Bond Game Series will also be appearing, including DIE ANOTHER DAY, GOLDENEYE, and LIVE AND LET DIE. Scientific Games is also introducing the much anticipated TwinStar Wave XL, successor to the revolutionary Pro Wave cabinet. The stunning TwinStar Wave XL promises to build on the original cabinet’s legacy, offering a bigger and better player experience, showcasing a dynamic, curved, 49-inch, 4k, UHD display, generating the kind of stunning graphics only seen in high-end home theatres.

See what the future has to offer at Scientific Games booth, stand 1126.

Asia Gaming Briefings | October 2018

SUPPLIER SPECIAL REPORT 62 SPintec

Karma GEN2

TCSJOHNHUXLEY

Celebrating 45 years

2

S

pintec will be introducing its new product line, Karma GEN2 at G2E Las Vegas.

The goal of the new product line is to enhance its existing solution Karma and make it more attractive.

When developing Karma GEN2, Spintec’s research and development team was focusing on establishing longer gaming sessions together with state-of-the-art design.

However, player comfort is at the forefront of development, so the spacious design was maintained with lots of legroom, softly padded armrests, place for drinks and their belongings.

These features enable casinos to attract even more players to the game floor and make playing more appealing.

The new Karma GEN2 is entirely customizable and can be tailored to operator’s needs. With its spacious yet compact and modular design, Karma GEN2 brings a multitude of solutions – all it takes is adding or removing individual gaming stations.

Alongside Karma GEN2, visitors will also be able to marvel Spintec’s Aura amphitheatre line, featuring an ergonomic design and virtually endless customization options.

See Spintec’s all new Karma GEN2 at stand 2046 at G2E Las Vegas.

Asia Gaming Briefings | October 2018

018 continues to be an important year for TCSJOHNHUXLEY as the company celebrates 45 years as a premier manufacturer and supplier of live table gaming products and services.

The company will showcase new table game technologies including a new addition to its Gaming Floor Live platform.

GFL Bonusing Rewards features an innovative multi-level award system funded by the casino’s marketing budget that allows players to enjoy the excitement of winning jackpot prizes, without the need to place a separate side bet.

The awards can be configured by a percentage contribution based on the table minimum, with players enrolled in the chance to win a prize just by participating in the hand.

The only operational requirement is for the dealer to register players, via a dealer console and they are confirmed as taking part with the player position indicated on the display. With no additional steps, game speed and player experience are not affected.

As part of the 45th Anniversary celebrations, the company will showcase a selection of its benchmark range. The latest addition to the portfolio is the Saturn Triple Zero Roulette wheel which incorporates a unique thirty-nine pocket design, providing an exciting additional bet for players and a higher house edge for operators. The higher hold of the Triple Zero wheel allows operators to offer a lower minimum bet whilst still keeping the game profitable.

Casinos are also able to customise the Triple Zero wheel by adding a symbol or casino logo in place of the 000.

Another of the company’s most significant products will also make its debut at the show. The all new Chipper Champ Pro features a range of key upgrades that will provide operators with improved productivity, security and reliability. The Chipper Champ Pro now incorporates a built-in camera and unique fold-away digital screen that can display chip column counts, Wheel Bias and Inclinometer at the touch of a button.

Tristan Sjöberg, executive chairman comments, “Our 45th anniversary year has been a time to celebrate our heritage and acknowledge our stakeholders, but we are also looking firmly to the future as we continue to innovate and lead the industry with our strong portfolio of products. Our offering at G2E reflects the ethos of TCSJOHNHUXLEY, fusing high quality craftsmanship, creativity, technology and enterprise which drives the success of our business and that of our customers.”

Visit the team at TCSJOHNHUXLEY at stand 4439 at G2E Las Vegas.

SUPPLIER SPECIAL REPORT 63 Tangam SYSTEMS

TYM Performance

T

his year at G2E Las Vegas, Tangam will be unveiling TYM Floor Performance, a new product which revolutionizes how data is utilized by stakeholders to improve table games performance.

TYM Floor Performance is the first in the industry that provides executives with unprecedented insights to gain transparency into table games’ operations directly on the floor map.

Having access to the KPIs that matter, in real-time, rather than days or weeks, gives executives the ability to answer any operational questions at any time when the opportunity is present.

The product can be used in war-room analytics meetings, where performance KPIs can be easily visualized or distributed via printing regular or life-size floor maps, and rapid decisions can be made without a lag.

TYM Floor Performance revolutionizes how operators use data to

make better decisions, with intuitive designs, always available dashboards and enabling improvements to the guest experience and the casino’s bottom line.

The TYM product suite helps casinos increase productivity and provide better table game offerings (both game types and minimums) based on demand, which Tangam says can increase the bottom-line of casinos by 10-15 percent.

This transformative technology is a game changer and has increased customer profitability by over $397 million since inception.

Tangam can be found at G2E Las Vegas at stand 1735.

ZITRO

Link King

S

ince the beginning of this year, Zitro has successfully expanded into more markets and launched more products than ever before.

“We started expanding in Latin America, launching outstanding products such as the Power Bingo Link, and the now tremendously popular progressive bank multigame video slot with panoramic sign, Link King. We’re also quickly deploying our product range all over Europe, and we now have our eyes set on Asia”, said Johnny Viveiros Ortiz, Founder of Zitro.

Power Bingo Link and Link King are just examples of the fast-growing product portfolio of video bingo and video slot games. “At G2E, we will be world-wide debuting our brand new games, as well as showcasing all our successful products.” he added.

Within the BRYKE Video Slot product range, the company will exhibit the standalone multigame line, including the recently launched Spin Hit which features nine hot new games that are designed to offer the experience of a traditional slot game, together with players’ favorite Hot Deal set and the award-winning Pick & Win packages. Added to the standalone multigames is the Smart Spins collection, featuring the first multigame package that includes new and exciting functionalities such as 4x5 Reels, sticky wilds, and tons of multipliers, packed into six innovative game with a re-designed interface.

At G2E, Zitro will showcase for the first time ever, the hot new LAP, Hit me Up!, a Local Area Progressive game with no less then 6 jackpots that cumulate in explosive sound and visual effects that will raise a player’s adrenaline to heightened levels.

To be featured at Las Vegas is also the proven Multigame LAP product line that includes Blazing Pearls LAP and the Guns & Gold LAP. Sharing the floor will also be the extremely successful Link King Multigame from the progressive links with panoramic sign product line. Link King is proving to be a real game changer that, thanks to its stunning bank presentation and beautiful graphics, stand out on every casino floor. Visitors will also be able to play the spicy Link Me progressive Link, which will catch players attention thanks to its juicy and exciting strawberry-bite feature.

As a leader in Video Bingo, Zitro is once again bringing a new twist to video bingo with its Power Bingo Link, a linked Video Bingo LAP with a 4-level progressive jackpot and innovative game mechanics that

differentiate it from the traditional Video Bingo games, without losing the essence of what players look for in this category. Zitro will also showcase it’s updated Video Bingo games library that includes thrilling brand-new titles such as Fireworks, Lucky Children and Maximus, with impressive and unique Bonus features.

Zitro Interactive will have its special place at Zitro’s booth showcasing products for both B2C and B2B. For direct end users, on display will be the leading mobile freemium application World of Bingo with more than 2 million installations, and for B2B business will be Bryke’s most popular Video Slot games, which are now available for online casinos, adding to growing Video Bingo games catalogue that is already available on multiple online casinos world-wide.

“Our expansion is happening well above our expectations, and thanks to the extraordinary team of creative and passionate people at Zitro, our product portfolio is growing exceptionally fast and well, providing us and our customers with all we need to keep the momentum going. We are on a roll and we are proud to show it to the world at G2E Las Vegas”, commented Sebastián Salat, CEO of Zitro.

Zitro will be at stand 2440 at G2E Las Vegas. Be sure to visit the team.

Asia Gaming Briefings | October 2018

CALENDAR OF EVENTS 64

2019

October Global Gaming Expo 9-11 October 2018 Las Vegas Sands Expo & Convention Center, Las Vegas http://www.globalgamingexpo.com/

NOVEMBER Asia Gaming Summit 6-8 November 2018 W Taipei, Taiwan https://taiwan.asiagamingsummit.com/ Macao Gaming Show 13-15 November 2018 Venetian, Macau https://10times.com/mgs SIGMA 2018 28-30 November 2018 Malta https://sigma.com.mt/

https://sigma.com.mt/

FEBRUARY

ICE Totally Gaming 5-7 February 2019 ExCel London https://totallygaming.com/eventblog/ice-live-2018/savedate-ice-2019 Spice India (Strategic Platform for iGaming Conference and Exhibition) 26-27 February 2019 Goa, India http://affiliatesummit.com/events/asapac18/

MARCH Betting on Football 12-22 March 2019 Stamford Bridge, London https://www.sbcevents.com/betting-on-football-2019/

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Asia Gaming Briefings | October 2018

APRIL Betting on Sports America 23-25 April 2019 New York https://sbcevents.com/betting-on-sports-america2019/#venue

MAY Japan Gaming Congress 10-11 May 2019 Conrad Hotel, Tokyo http://www.japangamingcongress.com/

CALENDAR OF EVENTS 65

Asia Gaming Briefings | October 2018

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Asia Gaming Briefings | October 2018

INDUSTRY OPINION 68

Sudhir H. Kalé*

CEO face time needed to improve customer experience In my visits to casino properties in Macau, Philippines, and Singapore, I find that top executives are ensconced out of the public eye, their offices sometimes located in the basement or in a building away from the casino premises. Consequently, they have little contact with their customers. Sure, they may make an appearance at one or two functions a year and subject the audience to platitudes about how important customers are and how grateful the company is to have these valued customers; these remarks are just, you guessed it, platitudes.

W

hen direct, regular, face-to-face contact with customers is missing, the CEO makes vital decisions impacting customers on the basis of second- or third-hand information.

These decisions have a far-reaching impact on the survival and growth of the casino property and may cost millions by way of implementation and impact. Decisions such as setting up a customer management system (CMS), implementing customer relationship management, introducing a new customer loyalty program, and designing the customer journey are just a few examples.

Customer aversion among CEOs and other top executives is not unique to the gaming industry. In the July-August 2018 issue of Harvard Business Review, Professors Michael Porter and Nitin Nohria report that the average CEO spends only 3 percent of his or her time with customers. That equates to under two hours a week. While we have no specific comparable data from within the gaming industry, I’d venture to say that gaming CEOs typically spend far less than two hours a week on customer interactions.

I find that CEOs would rather spend time with investors and financial analysts, trying to shore up the stock price.

Porter and Nohria warn against cozying up to investors, arguing that too much time with investors can detract

Asia Gaming Briefings | October 2018

CEOs from the business at hand. They write, “Too many meetings with investors can easily become a time sink and can draw the CEO into trying to manage the stock price rather than focusing on business fundamentals.

Staying in touch with a few key buy-side investors, doing quarterly calls, and holding an annual investor day may be all a CEO needs to do…”

The CEO’s face-to-face dealings with customers sends a strong signal to the rest of the workforce about customer primacy within the organization. CEO’s actions set the tone for corporate culture and the level of customer-centricity within the culture. When CEOs are seen spending their most scarce resource—time—to be with customers, they are, through their actions, inspiring employees to do whatever it takes to delight customers.

To underscore the importance of customer delight across the organization, some companies require that a percentage of everyone’s bonus be tied to customer retention numbers and to the Net Promoter Score (NPS).

Unlike fast moving consumer goods businesses, where the number of end customers worldwide are scattered all over the globe and can run into billions, the gaming industry is compact. Customers transact with us in our storefront, providing us with real time information on their spending amounts and a window into their behaviors. By

INDUSTRY OPINION 69

avoiding customer contact, CEOs are depriving themselves of vital first-hand access to the Voice of Customer (VoC).

With rising competition from jurisdictions such as Japan and Vietnam, revenue growth in markets such as Macau and Singapore will likely decelerate. Establishing a strong customer franchise, regardless of jurisdiction, will increasingly depend on not how fast operators can build their properties or expand the facilities, but on how well operators understand the mindset and motivations of their valued customers.

Many gaming organizations strive to enhance customer retention through elaborate loyalty programs costing millions of dollars.

However, most loyalty programs suffer from fundamental inadequacies. For instance, the measure of customer-spend employed by most loyalty programs is not forward looking.

Customers are rewarded for their actions committed today or in the recent past. Such approaches rarely consider the future potential of the customer. Research indicates that customers who have performed well in the past need not perform similarly in the future. Customer burnouts and defaults on extended credit are far too common in our industry. The basis of customer retention is not the loyalty card, but the customer experience. As one seasoned executive put it. Customer experience is the cake. Loyalty programs are nothing more than the icing on the cake. Without the cake, the icing serves no purpose.

CEOs and other top executives need to spend at least a couple of hours each day walking the gaming floor, interacting with their customers and frontline employees. It is only by observing customers and interacting with them that executives will develop a gut-level understanding of the customer journey.

Direct customer understanding is the reason that Amazon’s CEO Jeff Bezos has every new employee across all levels of the organization attend two days of call-center training. This induction ensures that everyone in the company is committed to listening and acting upon the needs of their customers – not just frontline customer service employees.

True understanding of customer motivations and expectations can only emerge through direct contact with customers, supplemented by rich qualitative research. *Sudhir H. KalĂŠ. Ph.D., is Honorary Professor of Marketing at Bond University and the CEO of GamePlan Consultants. You can contact him at skale@gameplanconsultants.com.

Asia Gaming Briefings | October 2018

LAST WORD 70

Sharon Singleton

Managing Editor, AGB

Time to move the regulatory goalposts There is no question that the global sports betting market is massive and growing fast.

According to figures from respected statistics company, Statista, the global gross gaming yield now stands at about $400 billion, with the majority of that generated in Asia.

H

owever, given the lack of reliable reporting parliamentary bill passed in June. The legislation is in and extent of the illegal market, that figure its early days and there have been numerous complaints is likely to be a drop in the bucket of the about the lack of clarity and the limited scope of the real total, with some estimates running regulations, however, it’s a solid start and there has already been interest from foreign investors keen to participate into the trillions of dollars.

So, we’ve said it before and we’ll say it again -- this in projects, such as building horse racing facilities.

India is another highly promising market. The Law represents an enormous missed tax opportunity for Commission of India published a report earlier this year governments across Asia.

Introducing regulations to legalize sports betting would suggesting regulation may be the most effective way to not only pad government coffers, it would help authorities stamp out rampant illegal gambling and the associated to combat match fixing by improving the visibility of money match-fixing scandals that have tarnished Indian cricket.

The report, titled “Legal Framework: Gambling and changing hands. It should also generate employment opportunities if wagering companies were allowed to Sports Betting including Cricket in India,” leaves the final call to Parliament and the state legislatures, and recommends legally establish a presence in various jurisdictions.

Many European sportsbooks are chomping at the bit various ways to regulate the betting market. The commission concludes that such a move will to get a slice of the Asian pie, but generate immense revenue which are prevented from doing so by can be used for social welfare, to the grey, if not downright black Introducing curb underworld influence, and nature of many of the markets. regulations to legalize restrict black money and money Some industry commentators laundering. are pointing to the U.S. Supreme sports betting However, political opposition Court’s decision to strike down would not only pad is strong and legal experts say a ban on sports betting as being don’t hold your breath while likely to unleash a tsunami of government coffers, it waiting for legislation. regulation in other jurisdictions. would help authorities Elsewhere in Asia, limited It is certainly a possibility, forms of sports betting are and in Asia there is already to combat match available, even in countries with some movement. fixing by improving a strict ban on gambling. China’s In the Philippines, sports sports lottery is thriving, despite betting is legal and is growing the visibility of money a ban on online sales, generating fast. Manila’s casinos have been changing hands. $32.8 billion last year, a gain of adding sports betting products to 11.4 percent. their mix due to popular demand The Hong Kong Jockey Club from clients. For example, earlier this year platform provider FSB, teamed with Paddy Power also reported a bumper year, with turnover up 8.1 percent and Jade Entertainment to provide over-the-counter sports to a record high of HK$234 billion ($29.8 billion) in 2017/2018. This meant a $22.6 billion boost to government betting facilities in Okada Manila.

Basketball and boxing are hugely popular choices, coffers, while charitable donations hit a new record of $4.2 billion. Despite its strong performance, HKJC officials especially when home-grown players are involved.

According to Grant Thornton, about 10 online have regularly complained about the impact of rampant sportsbooks had been given Philippine Offshore Gaming illegal gambling on their business.

So, taking the old adage of if you can’t beat them, join Operator licenses as of the second quarter, with market regulator, PAGCOR, expecting to generate some P6 billion them. It may be time for Asian governments to follow in additional income this year from its 55 online licensees. the lead of the U.S. in legalizing sports betting to claw Vietnam has also moved to legalize sports betting, back some of the funds their citizens are funnelling into introducing a decree last year that was fleshed out by a illegal operators.

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Asia Gaming Briefings | October 2018