Jurisdiction Updates August 2019 Edition
In focus pg.32
Trending: electronic gaming
CNMI
Saipan bets on online gaming pg.18
Vietnam Growth continues with IR debuts pg.28
AUSTRALIA Trade tensions topple VIP business pg.16
Philippines Pagcor ponders POGO problems pg.22
AGE 2019 SUPPLIER SPECIALS pg.50
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MESSAGE 3
Stirring the pokie pot
F
or this edition of Asia Gaming Briefings, which
Gaming Summit in Phnom Penh later next month, is
coincides with the Australasian Gaming Expo, we
developing as expeditiously as it is allowed.
are dedicating our focus section to trends in the
In Vietnam, the second major IR debut is expected late in
electronic gaming sector.
the year, with the first phase of the $4 billion Hoiana resort.
Gaming machines are gaining traction across the region,
While the country’s expansion has not been at the rapid
especially in jurisdictions such as the Philippines,
pace of neighbouring Cambodia, many foreign investors
where the regulator and some of the operators are more
view Vietnam as a highly attractive market, with better
accommodating than most about trialling new products.
controls and regulation.
Australia has for decades been the world’s largest slot
Meanwhile, breakneck expansion of Cambodia’s casino
machine market, but industry insiders lament that there
industry has raised concerns that construction and
is a lack of innovation to drive growth. We look at this
environmental standards are being ignored. The government
delicate balancing act between breathing new life into the
is now taking action, though industry insiders question
market, without creating harm to the consumers. We also
whether they have the resources to monitor developments.
take a look at some of the ways live casino operators are
Coming full circle, AGB will be in Sydney for the Australasian
introducing innovations to differentiate their services to
Gaming Expo (AGE) which will be celebrating its 30th
stay ahead of the competition and we examine trends in
anniversary over three days from 13-15 August 2019.
online slot machines as game developers are being forced
As the most significant gaming industry event in Australia,
to pay even closer attention to the preferences of individual
and arguably one of the world’s largest hospitality and
Asian markets. For our last article in this section, we talk to
gaming trade shows, the event will host as many as 200 of the
Gamesource Managing Director Iao Lam, who aims to shake
world’s best gaming and hospitality equipment and service
up the slot machine market with new types of games that
providers, with more than 8,000 industry executives from
will potentially appeal to that key millennial audience and as
around the region expected to attend.
Lam says to “bring in new blood.”
AGE will also host its third annual AGE Seminar Program,
In these pages you’ll find the most relevant developments
co-produced by Asia Gaming Brief. The seminars gather
across the region in our Jurisdictional Reports.
regulators, operators, and suppliers, providing insights
Starting off, Macau’s reputation as the go-to destination
through a meticulously developed program to help hotel,
for casino VIPs is under threat. With potential returns for
clubs, and casinos plan for the year ahead.
junkets having diminished in Macau, new locations are
To book a meeting at Asia Gaming Brief during the show,
becoming more attractive.
email us at AGE@AGBrief.com.
Further afield, Saipan is considering online gaming.
Rosalind Wade
Luis Pereira
On behalf of Asia Gaming Brief
So far, the region’s experience with gaming has been a
Rosalind Wade & Luis Pereira
rollercoaster ride: a near-vertical climb, followed by a
Publishers
precipitous drop. Some in the industry are sceptical its chances online will be more favourable.
Connect with us:
Meanwhile veteran online regulator/ operator PAGCOR grapples with POGO concerns: It’s trying to enforce the rules without killing the goose that lays the golden egg.
@agbrief
Asia Gaming Brief
Asia Gaming Brief
The Mekong region, the focus of AGB’s upcoming Mekong
www.agbrief.com
AUGUST 2019 EDITION Series II • Issue XIX
PUBLISHED BY Blue Sky Venture Ltd. 16/F China Law Building, 409 Av. da Praia Grande Macau SAR | P.O. Box 1139 t. +853 2871 7267 f. +853 2871 7264 e. enquiries@agbrief.com ADVERTISING ENQUIRIES advertising@agbrief.com SUBSCRIPTION ENQUIRIES memberships@agbrief.com EDITORIAL ENQUIRIES editorial@agbrief.com
PUBLISHERS & MDS Rosalind Wade, Luis Pereira MANAGING EDITOR Sharon Singleton ASIA EDITOR Felix Ng DESIGN Liane Honda PHOTOGRAPHY Agencies PRINTING Hop Sze, Hong Kong
DISCLAMER All rights reserved. No part of this publication may be reproduced or transmitted in any shape or form, or by any means, or stored in any retrieval system of any nature, without prior express permission. The publishers accept no responsibility for loss or damage to any materials submitted for publication. The views expressed within are not necessarily subscribed by the publishers. For more info, please visit our website www.agbrief.com.
AGBRIEF PARTNER EVENTS
› ICE Totally Gaming › ASEAN Gaming Summit › Japan Gaming Congress › G2E Asia › Russian Gaming Week › iGB!Live › World Gaming Executive Summit › Australasian Gaming Expo › G2E Las Vegas › European iGaming Congress › IAGR Annual Conference › MGS Entertainment Show › SiGMA
Asia Gaming Briefings | August 2019
CONTENTS 4
AUSTRALASIA
GREATER CHINA
12
MACAU
AUSTRALIA
16
PHILIPPINES
22
CNMI
18
MALAYSIA
26
20
NEW ZEALAND
INDOCHINA
SOUTH EAST ASIA
SOUTH ASIA
NORTH ASIA
VIETNAM
28
SOUTH KOREA
42
CAMBODIA
30
RUSSIA
44
JAPAN
46
32
special focus
SUPPLIER SPECIAL REPORT
50
INDIA
48
INDUSTRY OPINION
64
LAST WORD
66
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Asia Gaming Briefings | August 2019
25/7/19 12:45 pm
6
Aristocrat’s latest milestone hardware offering, Mars-X™, is now available to order for venues across the Asia-Pacific region.
Casino players can “Xperience the Difference” through the latest dual-screen gaming sensation from Aristocrat. The company’s new innovation, MarsX™ gives operators an entirely new way to elevate their venue’s gaming experience and is offered with market defining, cutting-edge game concepts. For players, MarsX™ features two 27” 4k displays paired with new Gen 9™ internal components driving performance and allowing uninterrupted, crisp game-play. At their fingertips, a premium virtual button deck offers a high definition and sleek way to play. Incorporated into the button deck is a wireless charging station, giving players the option to charge their phone while they play. A 4:1 speaker system projects audio from around the displays, providing rich and balanced sound. Game-driven synchronised edge lighting creates a unique play environment, and while brightness can be configured by player, this configuration is ultimately controlled by operators. Adding to the atmosphere, LCD toppers are supported with game-driven content for added entertainment. Sleek, modern, and inventive, the MarsX™ cabinet delivers on the promise of a differentiated cabinet. Flush with aesthetically pleasing curves and high-end design, when placed back-to-back, its unique shape opens sight lines and improves flow across the casino floor. MarsX™’s design compliments existing floor layouts. With the same footprint as its predecessor cabinet, the Helix™, bases and peripheries are also reusable. Its modular design offers a wealth of benefits, such as a cash box that can be accessed without opening the machine. Additionally,
Asia Gaming Briefings | August 2019
7
“Flush with aesthetically pleasing curves and high-end design, when placed back-to-back, its unique shape opens sight lines and improves flow across the casino floor.”
its ergonomic design provides more efficient accessibility for field service technicians, streamlining maintenance and operations. Plus, its internal edges are rounded and designed with serviceability and staff in mind to support positive health and safety outcomes. MarsX™ brings top-performing Aristocrat titles to life on an interactive and entertaining canvas. Fu Dai Lian Lian™ is the first family exclusively designed for MarsX and is joined by classic Aristocrat favourites, as well as the recently released Ba Bao Huang Long™ family. Fu Dai Lian Lian™ builds on the trend of metamorphic indicators with three bags in top screen tied to three unique features. The Jackpot feature, and two differentiated Free Games features, are triggered by landing corresponding coins that grow each of the three bags until triggered. Two or more Free Games can be triggered at the same time to create a Super Feature, stacking the Free Games elements into the same session, providing diversity in game-play and ensuring your player’s experience is always fresh. When wagering up through the multipliers, both Mini and Minor will scale accordingly. The game’s three metamorphic bags, allows players to select machines based on the metamorphic state and the feature they favour, spreading utilisation across machines. Leveraging the impressive MarsX™ hardware, edge lighting and VBD deliver synchronised light displays corresponding to game events combine to provide a theatre quality play experience. © 2019 Aristocrat Technologies Australia Pty Ltd Asia Gaming Briefings | August 2019
8
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Visit SGgaming.com for more information. The look and feel of the game(s) described and/or displayed herein and the individual components and displays of such game(s) are trade dress of Scientific Games Corp. and its Subsidiaries. ©2019 Scientific Games Corp. and its Subsidiaries. All rights reserved. Asia Gaming Briefings | August 2019
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Asia Gaming Briefings | August 2019
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Asia Gaming Briefings | August 2019
12
GREATER CHINA
12
MACAU
Macau’s VIPs spread their wings Macau’s reputation as the go-to destination for casino VIPs is under threat as facilities improve in other regional destinations that offer lower tax rates and better junket margins.
Asia Gaming Briefings | August 2019
A
ccording to Union Gaming, Macau leaked $1.4 billion of VIP gross gaming revenue (GGR) last year to its four geographically closest rival markets – Cambodia, Korea, Philippines and Vietnam – with Cambodia and Vietnam accounting for $1 billion of that amount. This year, the total lost by Macau to the quartet is predicted to rise to $2.6 billion and the competing territories could generate VIP GGR totalling $6 billion within the next two years. The four neighbours enjoyed a 57 percent rise in VIP GGR in 2018 in comparison with a modest 10 percent rise in Macau, where the total is expected to slump by 15 percent this year before recovering slightly in 2020. It is a striking development for operators. However, with an effective tax rate of 39 percent on VIP GGR, it is easy to see why Macau is haemorrhaging the high rollers to rival casino jurisdictions. Of the region’s main markets, South Korea (20 percent) offers the next highest effective tax rate, followed by the Philippines (15 percent), while Japan’s rate will be 30 percent when the first integrated resort opens in the second half of the 2020s. Vietnam’s rate is approximately 14 percent when commissions are deducted from the statutory rate of 35 percent, followed by Singapore, which will shift from 12 percent to 15 percent in March 2022. The rate in Cambodia and Vladivostok in eastern Russia is currently 0 percent, although the latter demands a monthly $2,000 fee per table. Without tax reform in the region’s established number-one casino market, Union Gaming predicts that the flow of VIP GGR out of Macau and into rival markets could extend from its current ‘trial’ status up to as long as a decade, or more.
GREATER CHINA 13
“I think a lot will depend on whether or not Macau responds with a regulatory change – for example, a lower tax rate – that will cause much of this trialling to be repatriated,” Union Gaming Managing Director Grant Govertsen says. “If not, then we think that given the massive regional pipeline, the trialling period could become something more permanent.” The tax issue is just one part of the cocktail that is leading to such a significant shift.
The tax issue “ is just one part of
the cocktail that is leading to such a significant shift.
”
Convincing VIPs to try out casinos in new jurisdictions is not new. For example, it is nearly five years since Naga announced grand plans to build a $15 million VIP terminal at Phnom Penh International Airport and launch its own fleet of aeroplanes to carry customers to and from luxury casino destinations. However, whereas previously VIPs may have explored new destinations before being tempted back to the higher-quality establishments in Macau, the improving standards of facilities elsewhere in the region is adding a fresh dimension. Another dynamic is the role of the junkets themselves, who are transitioning from an agencytype role to that of a casino principal, primarily
with the aim of maximising their margins. With potential returns for junkets in Macau having diminished, new locations are becoming more attractive, with Cambodia and Vietnam again proving to be the primary beneficiaries. “There are numerous factors, of which the tax rate is one of the most important,” Govertsen says. “This is especially true given the weaker macro environment, which is causing VIP junkets to seek better economics elsewhere. “The fact that infrastructure improvements have made it easier to reach these other markets matters too. As does the fact that regional casinos are of much higher quality than ever before. When you combine all of these factors, you get the current dynamic of VIPs migrating overseas.” It is worth remembering that VIP GGR currently accounts for less than 15 percent of GGR for most casinos in the region, with the mass market remaining by far the most important source of income. However, the scale of future casino developments in the region is moving the goalposts. To justify the planned $44 billion worth of new casino developments outside Macau in the region over the next five years, World Bank figures suggest that the cumulative GDP in Cambodia, China, Hong Kong, Indonesia, Korea, Malaysia, the Philippines, Singapore, Thailand and Vietnam needs to double by 2025. This clearly unrealistic prospect means that the proliferation of new facilities will dilute mass-market GGR, increasing the importance of VIP-related revenue in the process. In an increasingly crowded landscape, and in the absence of any likely legislative changes in Macau for the coming years at least, the junkets are likely to hold the key to the impending survival of the fittest for casinos across the region.
Asia Gaming Briefings | August 2019
GREATER CHINA 14
Sands China Sands China (1928:HK) has five properties in Macau. It is currently upgrading its Sands Cotai Central property to a London-themed resort. The company has 12,000 hotel rooms and suites, making up for 48 percent of hotel rooms run by casino operators in Macau. Sands is promoting the Londoner resort with footballer David Beckham as brand ambassador. Construction work on the project has already begun. Analysts continue to see Sands as the best placed when it comes to non-gaming offerings and appealing to the mass market. It has the largest room inventory in Macau.
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. The opening of its $4.6 billion Lisboa Palace resort was scheduled for later this year, though analysts expect it to be delayed until next. The company recently signed a binding accord with China Duty Free Group to open a flagship outlet at the resort. CDFG’s off-airport outlet will cover approximately 7,500 square metres on the first floor of the retail mall at Grand Lisboa Palace, and will offer a diverse mix of perfumes, cosmetics, watches and jewellery, apparel, shoes and accessories, grocery and travel items. Grand Lisboa Palace will offer approximately 1,900 guest rooms and suites in the Grand Lisboa Palace Hotel, Palazzo Versace Macau and Karl Lagerfeld Hotel. Other features will include a Wedding Pavilion for celebrations and events, a multi-purpose hall and entertainment and leisure facilities.
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. The company recently bought an almost 20 percent stake in former joint venture partner Crown Resorts and says it would be
Asia Gaming Briefings | August 2019
interested in further increasing its position in the Australian operator. “The acquisition of Crown Resorts will enhance MLCO’s business position, in our view,” ratings agency Standard & Poor’s says. “Crown Resorts owns high-quality casino assets that generate strong operating cash flows in a favorable regulatory environment. The immediate financial benefits of MLCO’s shareholding in Crown Resorts will be a stream of stable dividend income,” it added. Melco is pushing hard for a license in Japan and says it will move its headquarters there should it prove successful.
MGM china MGM China (2282:HK) is operating two casinos, with its MGM Cotai IR opening in February last year. 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. The ramp up of MGM China’s property on Cotai has expanded the operator’s footprint in Macau significantly, though ramp up has been “very slow,” according to analysts at Bernstein Research. “We rate MGM China Market-Perform as it is unclear to us what the company’s strategy is to gain a foothold in the Cotai market, which has proven to be ver y competitive,” Bernstein said in a note. “While MGM Cotai will continue to ramp-up and see meaningful increases in profits (albeit at the risk of incurring cannibalization at MGM Macau), meaningful upside (aside from overall Macau stocks rebound) is more limited at this stage.”
Galaxy Entertainment Group Galaxy Entertainment Group (27.HK) has three main properties and runs three City
GREATER CHINA 15
Club casinos inside hotels. The company’s Galaxy Macau Phase 2 and Broadway at Galaxy Macau opened on May 27, 2015, almost doubling the capacity of the resort. The company has the largest contiguous land bank in Cotai and intends to expand its non-gaming footprint with Phases 3 & 4 of the resort. Earlier this year, the company signed a cultural exchange accord with Monaco’s Societe des Bains de Mer, with whom it is also teaming for an IR license bid in Japan. As part of the program, the company has brought the GRACE KELLY: From Hollywood to Monaco exhibition to Macau. The exhibition, located at the Crystal Lobby of Galaxy Macau, will be opened to the public for free between May 16 and August 28. Featuring the collections and archives of the Prince’s Palace of Monaco and an array of art pieces, the exhibition traces the story of legendary movie star Grace Kelly, from her Hollywood days as an Oscar-winning actress, to becoming Princess of Monaco.
Wynn macau
GROSS GAMING REVENUE
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. A Macau appeals court recently upheld a ruling that sees Wynn Macau acquitted of a MOP8.2 billion (US$1 billion) compensation claim made by Japanese gaming mogul Kazuo Okada. Okada was removed from the Wynn’s board of directors in 2012 after the firm claimed he was “unsuitable” and a risk to its licenses. He had filed a lawsuit against Wynn Macau and its founder, Steve Wynn who had voted to cancel his 20 percent stake in the group. In his lawsuit, Okada claimed that in 2005 to 2008, Wynn Macau had “tortuously” paid an amount of US$35 million to obtain a concession for a land plot in Macau.
2018 MOP302.8b
+18%
Q1 GGR MOP76.2b
-5%
2019E
-1%
Mass Market
+10%
VIP
-14% (Source: Morgan Stanley)
Beijing-backed Ho declares CEO candidacy Ho Iat Seng, the main contender in the elections to pick Macau’s chief executive, has formally declared his candidacy, holding a press conference in which he commented on the importance of the healthy development of the gaming industry. Ho is head of the Legislative Assembly and Beijing’s favored candidate for the CEO position, which has a five-year term. There are currently no other declared contenders for the post. “Although the gaming industry is the most important support for the Macau economy, it also pressures small-medium enterprises on human and land resources, […] the only direction is a healthy development of the gaming industry,” Macau Business cited Ho as saying.
Emperor eyes premium mass for growth Emperor Entertainment Hotel, the gaming arm of Emperor Group, said it will be looking to expand its share of the premium mass market segment, after posting a fall in revenue and profit for the year ended March 31, 2019. Emperor, which operates the Grand Emperor Hotel in Macau, saw revenue fall 7.8 percent to HK$1.4 billion (US$179 million), while profit fell 6.6 percent to HK$367.5 million in the year. “Though there is positive growth in Macau tourism, the development of Cotai casino resorts has started to mature and this, coupled with the volatile global economic environment and intensifying control of capital flows in mainland China, has resulted in slower growth of Macau’s gaming market,” it said.
Asia Gaming Briefings | August 2019
16
AUSTRALASIA
16
AUSTRALIA
Trade tensions shrink VIP business Australia’s casinos are once again feeling the fallout from an economic slowdown that’s out of their hands, with VIP gamers from China staying for shorter periods and spending less, according to one of the country’s leading operators.
Asia Gaming Briefings | August 2019
I
n June, the Star Entertainment Group said it was cutting its EBITDA forecast for fiscal 2019 after VIP revenue continued to decline in the second half. It warned that it was not seeing any signs of an imminent pick up. The group reported that turnover in its international VIP business had slumped about 31 percent from January to early June compared with the same period a year earlier. The China-U.S. trade tensions and subsequent slowdown in Mainland China’s economy are hitting sentiment among high rollers with many pulling in the purse strings. Despite a large domestic base, Asia and in particular Chinese gamblers, have been the main engines for growth. Performance figures had just been recovering following a disastrous drop off in late 2016/2017 in the wake of the arrest of Crown Resorts’ employees in China on gambling-related charges. Analysts don’t expect the fallout to be limited to Star this time around either, with casinos across the region seeing a dropoff in VIP business. Crown Resorts, which is building an ultra-luxury property in Sydney targeting Asian gamers, is also forecast to feel the pinch. Adding to the pain, Star said it was seeing a slowdown in its domestic business, with revenue growth in the second half slowing to just 0.3 percent. As a result, it now expects full-year normalised EBITDA to be in a range of $550 million to $560 million, down from $568 million in the prior year. That’s some 3 percent below its original forecasts. “The slowing of domestic growth in 2H FY2019 reflects a combination of more challenging macroeconomic conditions across our markets, lower hold rates on table games in private gaming rooms and the impact of disruption from capital works at The Star Sydney,” the company said in a statement. Star CEO Matt Bekier was cited by local media as saying the VIPs were only spending a couple of days at the casino, rather than the week they may have spent beforehand. “The positive is the customers are still coming,” Bekier was cited as saying in the Sydney Morning Herald. “They just don’t spend as much and take as many risks as they did in the past.” To mitigate the impact of the slowdown, Star said it would accelerate a package of already planned cost cuts. It aims to shave $40 to $50 million off expenses, with three quarters of the cost benefits being in place by the September quarter. Part of the measures will include the loss of about 300 to 400 non-consumer facing jobs.
AUSTRALASIA 17
Star owns properties in Sydney, Brisbane and on the Gold Coast and is in the process of a major development project in downtown Brisbane together with a consortium of Asian investors, including Hong Kong’s Chow Tai Fook Holdings. Meanwhile, after untangling itself from its Asia ties just two years ago, Crown Resorts is back with former joint venture partner Melco Resorts & Entertainment. Billionaire James Packer sold an almost 20 percent stake to Melco for AS$1.75 billion ($1.2 billion),
GROSS GAMING REVENUE Casinos $5.19b
+0.4%
Gaming machines $12.07b
+4.2%
Sports betting $920.6m Racing $2.94b
+13%
+4.1%
Total gambling expenditure 2017 $23.65b
+3.9%
(Source: Queensland Government)
with the Macau operator indicating it would be keen to increase its holdings still further. “The 20 percent acquisition is not the end goal, but most likely a first step in MLCO eventually taking a controlling ownership stake and potentially an outright acquisition of CWN,” Bernstein wrote in a note. “A full acquisition of CWN would have solid strategic rationale as it would allow MLCO’s junket relationships and customer database to strengthen the Australian business’ highend operations.”
Spintec debuts in Australia Spintec, a maker of electronic table games, is planning further expansion in Southeast Asia this year and made its market debut in Australia in May. Primoz Krsevan, Spintec’s regional sales manager, said in an interview at G2E Asia in Macau that Spintec has just installed its first product in Australia in the Epping Club in Sydney, which he says will be an interesting market for the company. The property was founded in 1919 as a social club by ex-servicemen returning from World War 1. “It’s a very big market and not many producers are there because it’s very specific and it took us quite a while,” he said. “We’ve been working on the project for almost two years…roulette and baccarat for now and slowly we will add games.”
Aristocrat six-month profit gains on U.S., digital business Aristocrat Leisure reported a 16.8 percent increase in NPATA in the six months ended March 31, 2019, driven by strong growth in the group’s Americas and digital businesses. Normalized profit after tax and before amortization (NPATA) reached A$422.3 million in the period, compared to just A$361.5 million in the prior year period. The company said the results were also helped by a further lift in performance across the Australia and New Zealand region. Total revenue increased 35 percent, reaching A$2.1 billion.
Asia Gaming Briefings | August 2019
AUSTRALASIA 18
CNMI
Online Gaming: Bad Bet for Saipan? So far, Saipan’s experience with gaming has been like a rollercoaster ride: a near-vertical climb, followed by a precipitous drop. Now the remote island group may double down on gaming—this time online—as a much-needed revenue source.
I
n 2015, Hong Kong-listed Imperial Pacific International, opened a temporary property in a local shopping mall. By 2016, the casino called Best Sunshine Live, reported rolling chip revenues of more than $32 billion, rivaling even the Venetian Macau for VIP turnover. Then the house of cards tumbled. In April 2017, IPI faced charges that it had imported illegal Chinese workers to build its $3.1 billion beachfront resort (originally scheduled for completion in 2017, it is still unfinished). In 2018, reports emerged that
Asia Gaming Briefings | August 2019
the company was carrying billions of dollars in uncollected debt. Negative headlines kept mounting up: about missed payroll, unpaid contractors, fleeing executives, and a 70 percent drop in contributions to the local government. Despite that dismal track record, some lawmakers in the cash-strapped commonwealth want to up the ante. In April, the House Committee on Gaming voted 3-1 for a measure that would introduce online gaming; that bill is now under review by the
legislature’s House Committee on Gaming. Presumably iGaming could be run by IPI, which holds a 25-year gaming monopoly on Saipan, but in an email to Asia Gaming Brief, Commission Executive Director Edward Guerrero wrote, “Depending on the final language of the bill, it would be feasible to open up this market to multiple operators.” But will anyone bite? According to Ben Lee, managing partner of Macau-based consultancy iGamix, iGaming is unlikely to succeed due to an unreliable connection.
AUSTRALASIA 19
Laos casino investors eye Vanuatu
GROSS GAMING REVENUE 2018
2017
VIP table games rolling (in HK$’000) 126,262,045 385,855,800
Mass game drop (in HK$’000) 660,546 926,906
Slot machines and ETG handle (in HK$’000) 885,307
Vanuatu may be setting up its fourth land-based casino after receiving interest from investors in Laos, local media reports. Deputy prime minister Bob Loughman confirmed the news and said that a group of investors from Laos would visit Vanuatu in July to continue discussions. Vanuatu currently has three land-based casinos located in the capital of Port Vila, including Club 21, The Palms Casino, Grand Hotel and Casino. Loughman said Port Vila and Luganville on Santo in the north would be excluded as locations as there was a need to boost growth and jobs on other Vanuatu islands.
847,511
IPI gets $500m Japanese investment
Average number of tables and slot machines VIP gaming tables Slot machines and ETG
28 23
Mass gaming tables
45 39
262 165 (Source: IPI annual report)
As part of the Commonwealth of the Northern Mariana Islands, a U.S.-governed territory in the remote western Pacific, Saipan once was linked to the wider world by an undersea cable route that transmitted 98 percent of electronic communications. In 2015, that cable snapped during Typhoon Soudelor, “and the whole island was without internet, cable TV or any form of communication with the outside world,” Lee says. In August 2017, a second cable line became operational, creating a backup and a measure of “redundancy,” says Lee. But as part of Typhoon Alley, the busiest spot for tropical cyclones in the world, the CNMI’s telecommunications infrastructure “remains vulnerable to interruptions,” says Andrew Klebanow, partner with Global Market Advisors. Last October, for example, Typhoon Yutu hit, packing 180-mph winds. The equivalent of a Category 5 storm, Yutu was the strongest storm of the year and one of the most destructive in the U.S. in a century. It killed two people on the island, destroyed
Japan’s GCM Ltd. has agreed to invest $500 million in the first phase of Imperial Pacific’s integrated resort on Saipan, the company says. The first tranche of $100 million was paid on May 15. The investment followed the approval by the CNMI Lottery Commission to allow IPI to lower its minimum controlling interest in the resort. CLC chair Mark Rabauliman said the move will allow IPI to garner more interest from investors, and is reportedly part of IPI’s plans to bring in other partners and bring on international hotel brands for the project. According to IPI chief executive Mark Brown, there has been high interest from investors wanting to invest.
3,000 homes, flattened hundreds of power lines and left devastation in its wake. And again, it left Saipan without power. Paradoxically, online gaming is of interest to the Saipan government because of the destruction from so-called “super-typhoons” which could easily shut it down, wrote Guerrero. “The government is desperate to implement any new revenue-generating business activities, including internet gaming.” Clearly Saipan could use an infusion of industry, but online gaming is not a viable solution, says Klebanow. “Unfortunately, the CNMI will not become the next Gibraltar or be able to mimic Philippine Offshore Gaming Operators,” he says. “If online gaming is implemented and is limited to just the local residential population, then there won’t be a lot of tax revenue generated.” Which brings us to the customer base. Guerrero noted that Saipan’s close proximity to Asia would allow the industry “to tap into that mass market … within the confines of following U.S. local and federal laws and regulations. This could give players more
comfort and greater piece of mind when depositing money to play, instead of new and emerging markets in Southeast Asia. That leaves the final question: the federal Wire Act, which specifically prohibits online gaming. In January, the U.S. Department of Justice released an updated opinion that reaffirmed its ban on all online wagering, not just sports betting. Though that decision is subject to challenge, “The laws in the United States are far more restrictive and do not permit online wagering across state lines and into or out of other sovereign nations,” says Klebanow. “I suspect that commonwealths of the U.S. must adhere to the same laws and regulations as do states. “Suffice it to say, regulators and legislators may want to conduct more research before embarking on the development of an online casino industry that targets gamblers from outside the CNMI.” Lee agrees. “This is an idea that never was thought out properly or researched properly. The technical aspects aside, I think it’s a non-starter.”
Asia Gaming Briefings | August 2019
AUSTRALASIA 20
New zealand
SkyCity takes to the cloud SkyCity Entertainment Group is forging ahead with plans to launch an online casino, even though offering internet gaming is prohibited under New Zealand law.
T
“As an established land-based casino operator he country’s dominant land-based operator is getting around the ban by with significant investments in New Zealand running its operations out of Malta. and a track record of compliance in a highly Although it’s not possible to offer regulated environment, we know a great deal services from home, many New Zealanders about host responsibility and harm minimization. gamble using offshore sites, which is not illegal. We believe the skycitycasino online gaming site This results in a significant loss of revenue offers customers an opportunity to enjoy playing to the government and onshore gaming and in a safe, secure environment with a brand they wagering firms. According to reports, some $400 know and trust and we will be striving to set the million a year is currently leaking offshore to benchmark for any regulation in the future.” Stephens says SKYCITY will be making a unregulated overseas websites. SkyCity wants to reclaim some of the $180 million of that which conservative entry to online gaming and will actively avoid the sales and marketing tactics goes to online casinos. SkyCity’s Maltese subsidiary recently adopted by some existing overseas operators. “This means SKYCITY is not initially announced it would partner with Gaming Innovation Group Inc (GiG) to provide New expecting to monetize materially from this Zealanders the ‘skycitycasino’ online gaming initiative – it should be seen more as a strasite. It’s expected to go live in mid-2019 and tegic entry into a space that we believe has will be operated from Malta under a .com URL. long-term relevance.” About the company’s tie up with GiG, Stephens The service will be targeted at Kiwis and said he believes “GiG provides the right balance of will be in Kiwi dollars. SKYCITY Chief Executive Graeme Stephens experience, coupled with a new software platform said that while the skycitycasino online gaming relevant to the future and access to high-quality site will be operated from offshore, it will ensure content for online gaming customers. GiG has that its obligations under New Zealand General experience in partnering with land-based casinos through their relationship Sales Tax legislation are with Hard Rock Intercomplied with. national and is licensed Stephens went on in some of the world’s to add that SKYCITY According to most regulated gaming would be supportive reports, some markets, including the of any future plans United Kingdom and by the government to $400 million a the United States.’’ regulate the New Zealand year is currently As part of the agreeonline casino market, ment, GiG will provide including introducing leaking offshore a full-suite online casino an appropriate licensing to unregulated solution which includes regime for operators a technical platform, and imposing taxes overseas websites. gamingcontent,managed and mandator y services and front-end host responsibility development. The arrequirements. “Online casinos are widely used by New rangements will be structured primarily as a Zealand customers and this trend will only revenue share arrangement, with the majority continue. The world is rapidly moving online of operating costs variable or directly linked to and our industry is no exception, so we have to revenue generation. The SKYCITY subsidiary ensure we remain relevant to changing consumer in Malta will assume a modest level of on-going fixed costs, such as staff, technical support trends and preferences,’’ he says.
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Asia Gaming Briefings | August 2019
and regulatory and compliance. If SKYCITY ultimately becomes a licensed operator in a regulated New Zealand online casino market, the agreement with GiG allows for SKYCITY to assume the B2C (i.e. customer facing) components of the business in the same way as it does for its current land-based activities. The skycitycasino online gaming business will be managed by an Online Director (Steve Salmon) based in Europe. Mr Salmon has a wealth of experience in online casino gaming and wagering, including senior leadership roles with industry leaders such as Rank Group plc, a leading multi-channel gaming operator in the United Kingdom, and High5 Games, a leading content creator for the land-based, online and social gaming markets. Although SKYCITY is not anticipating meaningful incremental earnings from its online business pre-regulation of the online casino market in New Zealand, Stephens felt that “consistent with our group strategy, longer-term we see an exciting opportunity to grow and diversify our earnings through provision of a multichannel offering to gaming customers both online and at our land-based casinos in New Zealand.”
AUSTRALASIA 21
NZ cuts betting levy to kick start racing industry
GAMBLING EXPENDITURE 2016/17 NZ Racing Board (Tab)
2017/18
The New Zealand government said it’s phasing out its current betting levy over the next three years in an effort to revitalise the country’s racing industry. The funds will be redirected to the racing and sports sectors, instead of going to the Crown. New Zealand raised NZ$13.9 million in 2018, that’s about 4 percent of the profit generated by the industry. “This change will provide an important source of revenue for industry investment decisions,” Racing Minister Winston Peters said announcing the decision. The funds will be redistributed to the racing Codes and Sport New Zealand, with a proportion set aside to support the reduction of gambling harm. “The racing industry plays a vital role in the New Zealand economy, having contributed NZ$1.6bn to the economy in 2016/17 whilst employing tens of thousands of New Zealanders, many of them young, and boosting New Zealand’s exports.”
(in $m)
$338 $350
NZ Lotteries Commission
$555 $561
Gaming Machines (Outside Casinos)
$895
SKYCITY battles regulatory red tape in Queenstown
$870
Casinos
$572 $578
Total
$2,334 $2,383 (Source: NZ government)
SKYCITY Ltd has now obtained permission to buy land in Queenstown for a new luxury hotel complex, but is still battling with regulatory issues over its casino licenses. SKYCITY owns both the casino licenses in Queenstown. It has recently renewed its lease on one set of premises in the downtown area for a further three years, but under the law may not transfer the second license to its planned new luxury property on a 1.01-hectare parcel of land. The New Zealand government has also imposed a freeze on the granting of new casino licenses. This means that if the project proceeds the hotel would have to operate without a casino license, and the company would need to offer various incentives to attract high rollers to its Queenstown casinos.
Asia Gaming Briefings | August 2019
SOUTH EAST ASIA
22
PHILIPPINES
Pagcor grapples with POGO concerns The Philippines is continuing its crackdown on its online gaming companies, tightening work visas and stepping up tax collection efforts in a delicate balance between enforcing the rules and not killing the goose that lays the golden egg.
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he Philippines Amusement and Gaming Corp received PHP3.9 billion ($74.8 million) last year from Philippine Offshore Gaming Operator licenses and expects that number to double in 2019. Pagcor said that its overall gross revenue in the first four months increased to P25.1 billion (U$482.9 million), up from just P22.5 billion in the first four months of 2018. The number surpassed the regulator’s P23.6 billion target for the four-month period, helped by fees from licensees and offshore gaming operators. “Right now, we are recording a monthly average of P6.27 billion revenues. Of this amount, we remit an average of P4.57 billion to the national coffers and Pagcor’s other mandated beneficiaries,” said Pagcor chair and CEO Andrea Domingo. The influx of money, mainly from Mainland Chinese investors, is also buoying Manila’s property market, with rentals up 27 percent in the first quarter of the year. However, the government is concerned that many of these companies are not paying the correct taxes and its workers have entered the country on tourist visas. The influx of Chinese is also creating resentment among locals, who see them as taking jobs and pushing up prices. Pagcor recently warned its POGO operators to comply with regulations and pay correct taxes in the wake of intensifying monitoring and enforcement measures from the government. Jose Tria Jr., Pagcor vice president, has warned operators that concerned government agencies are closely monitoring how they conduct business in the country. “Let this serve as a final warning for everyone to strictly comply with all the rules, regulations and directives of all other government agencies which may have jurisdiction over the other aspects of your operations,” Tria said. “Finally, for those under-declaring the income tax of their employees, be sternly warned that you will be placed under strict scrutiny by the Bureau of Internal Revenue (BIR) for such actions. The practice of declaring income tax below industry standards will not be tolerated by the BIR and will be dealt with accordingly,” he added. Domingo has, however, stressed that POGOs should not be overtaxed by the government, warning that there is increasing competition around Asia for the lucrative operators. “I hope we don’t overtax them so we don’t lose the good” that comes with the POGO boom, Domingo said. Earlier this year, Pagcor issued a directive ordering POGOs to submit lists containing the
SOUTH EAST ASIA 23
names of all their employees, along with their salaries and visa statuses. It is understood that there are many that have not submitted their lists and will be subject to penalties and demerits, or may even have their operations seized, should they remain non-compliant. The Philippines also plans to impose further restrictions on foreign migrants as Chinese workers flood into the country. Migrant workers will now need a working visa and a tax number, together with a permit from the Labour Department. More than half of the 45,000 work permits issued by the Labor Department in 2017 were given to Chinese nationals, according to the
agency’s latest available data. The number of Chinese workers who secured permits doubled in 2016 to 18,000. To make it easier to oversee and regulate the POGO operators, Oriental Group has taken the bull by the horns, suggesting the creation of two online gaming hubs. The hubs will help to ease social tensions created by the influx of Chinese and will hopefully lure more illegal operators to seek licenses. The group will build two online gaming hubs, one in Clark City in the north and one in Cavite City in the south. As an incentive, Pagcor has agreed to allow operators in the hubs a five-year license instead of the threeyear permits currently being issued.
GROSS GAMING REVENUE 2017 GGR P176.5b
2018 GGR P215.8b
Tables
Q1 GGR P52.5b
Electronic Gaming Machine
PAGCOR - Casino FIlipino
486
City of Dreams Manila
9,654
257
Resort World Manila
2,032
345
Solaire Resort and Casino
1,721
293
Okada Manila
2,082
326
2,449
Thunderbird - Rizal
24
Thunderbird - Poro Point
34
362
Royce Casino
35
263
Midori Casino
54
Widus Hotel and Casino
42
218
186 342 (Source: Pagcor)
PH Resorts seeks $600m financing for Cebu resort PH Resorts Group is looking to raise around $600 million in funds to support the construction of its $600 million integrated resort in Mactan, Cebu. In an interview with local media, PH Resorts president Raymundo Martin Escalona said the company was looking to raise debt and equity to finance the construction of The Emerald, which is scheduled for completion by the end of 2020. The company was originally planning to sell around P12 billion (US$228.8 million) worth of shares through the Philippine Stock Exchange but said the new method was more strategically suitable for its funding requirements. “The intention of PH Resorts is to really go to the market. We have the option until the end of 2020, depending on the market situation,” he said.
Asia Gaming Briefings | August 2019
SOUTH EAST ASIA 24
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. 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, which will add approximately 940 rooms. It will also include new gaming and retail spaces. Travelers reported a 46.5 percent gain in net revenue for Q1, helped by gaming and non-gaming activities. Net profit, however, fell in the quarter, due to increasing costs. President Kingson Sian has said he was confident the strong revenue growth would continue into Q2. Alliance Global is embarking on a digital transformation strategy to “future proof ” its business, which will include its gaming operations, such as the RWM app.
Bloomberry Resorts Bloomberry Resorts’ Solaire was the first IR to open in Entertainment City and 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. The Sky tower consists of a 312 all-suite hotel, additional ten VIP gaming salons with 66 gaming tables and 223 slot machines. According to analysts from Morgan Stanley, the group is expected to post an 11 percent rise in gaming revenue in 2019, driven by strong Chinese visitation and junket expansion in the ASEAN region. During the first quarter of 2019, Bloomberry Resorts saw its net profit shrink 40 percent, due to lower foreign exchange gains, higher interest expenses and weaker gaming revenues.
City of Dreams The $1.3 billion City of Dreams Manila is owned by Belle Corp and Melco Crown Entertainment’s local unit. 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 and a 4,612.44 square meters family entertainment center in collaboration with Dreamworks Animation. CEO Lawrence Ho has said the company has turned more cautious on the Philippine market, given increasing competition in the region. For Q2 revenues edged higher to $176.1 million compared to $173.9 million, while
adjusted EBITDA slipped to $82.8 million from $87.3 million in the comparable period of 2018. Rolling chip volumes totaled $1.9 billion down sharply from $3.0 billion in the second quarter of 2018. Mass market table games drop decreased to $192.8 million from $196.9 million.
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. 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.” Okada Manila saw a 26 percent increase in gross gaming revenue for the month of June, reaching P3 billion (US$58.9 million). The increase was driven by a rise in revenue across all three gaming segments, with VIP revenue rising 10.5 percent, mass table games by 58 percent and gaming machine revenue by 26.8 percent. Non-gaming revenue also grew during the month, rising 41.3 percent. Adjusted segment EBITDA reached P424 million, up from a loss of P91 million in the prior year period.
Palmary buys stake in Philweb E-bingo operator Palmary Corporation has purchased a 6.78 percent stake in Philweb Corporation and has signed a cooperation agreement with the company to develop its electronic and e-bingo business. Speaking about the purchase, Gregorio Ma. Araneta III, chairman of PhilWeb said, “I welcome the Palmary Group’s investment in our company, a great sign of faith in the positive developments we have attained in the past year. I believe this investment will result in positive gains for both over the next few years.” PhilWeb is an accredited service provider to PAGCOR, the Philippine Amusement, and Gaming Corporation, for its network of electronic gaming outlets.
Asia Gaming Briefings | August 2019
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Asia Gaming Briefings | August 2019
SOUTH EAST ASIA 26
MALAYSIA
Genting Malaysia seeks cost cuts to offset tax upsets Genting Malaysia has been forced into cost cutting mode to offset the negative impact of recent tax rulings, which are expected to take a major toll on earnings.
I
n addition to an unexpected tax hike in last year’s budget, the company also recently dropped an appeal against changes to a tax incentive scheme to develop its Genting Integrated Tourism Plan (GITP), which will lead to higher tax rates for the group. Chairman Tan Sri Lim Kok Thay has taken the lead, saying he will take a 20 percent pay cut to mitigate the impact of the tax increases.
Asia Gaming Briefings | August 2019
Last year Tan Sri was paid MYR93.5 million and the reduction will save the company MYR18.7 million, according to Maybank analyst Samuel Yin Shao Yang. The savings would be MYR12.4 million if he takes that cut to his cash earnings, without bonuses. “Either way, the cost savings to GENM will be less than 1 percent of our FY19E core net profit estimate,” he said in a note.
“As much as Tan Sri’s move sits well with the investment community, it is unlikely to move the hypothetical needle,” he adds. Finance Minister Lim Guan Eng said in his budget last year that annual fees for casino licenses will be increased to 150 million ringgit ($36 million) from 120 million ringgit. Duties on casino gross income will rise to 35 percent from 25 percent previously.
SOUTH EAST ASIA 27
The tax hikes, which were double the level analysts had been expecting, triggered a series of rating downgrades for Genting Malaysia. Fitch Ratings estimated Genting is likely to see a decline of around 8 percent to 9 percent in group earnings before interest, tax, depreciation, amortization and rent/restructuring costs (EBITDAR) as a result of the tax hikes, though potential cost savings may offset the impact on the group’s financial profile. For Q1, the group reported a decline in net profit of 26 percent to RM253.1 million. The operator said the decline was due to an overall lower volume of business in its gaming segment, largely due to lower incentives offered to customers. The group reported revenue of RM 1.9 billion while adjusted EBITDA was at RM555.6 million. Genting said EBITDA was supported by lower marketing expenses for the mid to premium player business, as well as lower payroll and related expenses due to a reduction
in the number of employees. However, this was offset by higher casino duties. The group’s earnings were also impacted by a provision for contract termination related costs of RM198.3 million in relation to the outdoor theme park at RWG. Analysts had been patiently waiting for Genting’s Q1 results to determine the extent of the impact of the tax hike which came into effect in January. Analysts said that cost control will be key to wading through difficult times. “In Malaysia, the Group will continue to review its capital expenditure requirements and rationalize its operating cost structure to mitigate the impact of the hike in casino duties and the increasingly challenging operating environment,” it said. “Additionally, the Group will focus on leveraging the new assets to grow key business segments. To this end, the group will place emphasis on intensifying database marketing efforts to optimize yield management, as well as improving service delivery and operational
GROSS GAMING REVENUE
efficiencies at RWG to enhance the overall guest experience.” Still, the decision to withdraw its application for a judicial review against the Ministry of Finance’s (MOF) decision to amend a tax incentive in December 2017 is a further blow on top of the budget hikes. In 2014, Malaysia’s Ministry of Finance gave its approval to Genting Malaysia’s application for tax incentives for the GITP redevelopment project, which allowed the group to claim income tax exemption equivalent to 100 percent of qualifying capital expenditure incurred for a period of 10 years. However, the MoF amended the tax incentive scheme in December 2017, prolonging the utilization period of the tax allowances “significantly.” Dropping the appeal will likely see Genting suffer from higher corporate tax rates in the near future and will probably result in Phase 2 of the GITP being put on hold indefinitely, analysts say.
5 years CAGR 3%
(in RM million)
5,684
5,362
5,577
5,623
5,837
FY13
FY14
FY15
FY16
FY17
6,595
FY18 (Source: Genting Malaysia)
Police continue illegal gambling crackdown Malaysian police are continuing their crackdown on illegal gambling, arresting 14,759 individuals and seizing RM3.8 million ($917,000) in cash and 10,361 pieces of equipment from January to end June, local media reports. Bukit Aman Criminal Investigation Department director Datuk Huzir Mohamed said 8,775 illegal gambling premises were raided between January 1 and June 22, with 92 operators arrested. Police also identified 160 gambling syndicates believed to be actively operating in Selangor, Kedah, Penang and Pahang. Police are working with the local authorities and the Malaysian Communications and Multimedia Commission to cut off utility services and block gambling websites, adding that MCMC have been asked to block 1,270 websites.
RGB eyes overseas expansion Gaming supplier RGB International is looking to expand its gaming machine concession business overseas, despite putting its capitalraising plan on hold. The company had earlier planned to spin off its gaming machine leasing unit in Hong Kong. “We need to wait for a conducive environment to implement our initial public offering plans in Hong Kong,” said group managing director Datuk Chuah Kim Seah in an interview with StarBiz. Despite the setback, the company has reportedly allocated US$20 million to secure new machines for its concession programme this year. In 2018, the budget was US$25 million. The company said it is planning to install additional 1,770 gaming machines across Asia, most of which will go to the Philippines market. In Cambodia, RGB is set to install another 280 machines, and another 100 is set for Timor Leste, said Chuah.
Asia Gaming Briefings | August 2019
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INDOCHINA
28
VIETNAM
Vietnam debuts IRs as industry expands Vietnam’s casino industry continues its solid pace of development, with the first property to allow in locals opening in January and a second major debut expected late in the year with the first phase of the $4 billion Hoiana resort. Asia Gaming Briefings | August 2019
INDOCHINA
W
29
hile expansion has not attract mass-market visitors in the future. Phase 2, being finalized at the moment, been at the rapid pace of neighbouring Cambodia, is set to include 100 villas, two hotel brands many foreign investors view boasting 2,000 rooms, a commercial village Vietnam as a highly attractive market, with with retail stores and a theme park. A total of 4km of beach line will be part of the project, better controls and regulation. The Hoiana, which will be Vietnam’s as well as more than a dozen restaurants. The Corona Resort and Casino, which largest integrated resort, will have more than 100 tables and 300 gaming machines. is located on Phu Quoc island, was said to The three-phase resort will include three have had a slow start but is beginning to gain some traction. luxury hotels with more It is the only one in than 1000 hotel rooms Vietnam that currently in Phase 1, retail space, allows locals to gamble a golf course and food Under under a three-year pilot and beverage outlets. Vietnam’s recently scheme. The property is being Another resort under developed by Macau’s revised gaming development in the far biggest junket, Suncity legislation, north of the country Group, local investment in Van Dong is also group Vinacapital and developers must expected to form part VMS and in scope it is invest a minimum of the pilot scheme once expected to be slightly of $2 billion in their it opens. bigger than Singapore’s Netherlands-based Resorts World Sentosa. resorts. Up f f i n i t y G a m i n g The resort is located Management operates in central Vietnam, Corona under an exclusive which is seen as one of the most promising areas for casino management deal signed in May 2017, while investment in the country. The area is well Peter Keijzer, the former general manager connected to surrounding countries through of Holland Casino in Amsterdam, is serving in the same role at the Phu Quoc venue. international flights from Danang. The casino’s location, though, is seen Industry experts estimate that an existing casino in the area, the Crown International by some as a big challenge. The island is in the far south of Vietnam and has a local Club, generates in excess of $550 million. Under Vietnam’s recently revised gaming population of just over 100,000. The 18,000 square metres of casino legislation, developers must invest a minimum space offers 100 tables – including baccarat, of $2 billion in their resorts Suncity expects VIPs to the be main roulette, black jack, sic bo and poker variants. target visitors initially, with overhauls to There are 30 automated roulette stations infrastructure in the region expected to and about 850 slot machines.
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VISITORS ARRIVALS Top Five Arrivals 5 months 2019 vs, 5 months 2018 (%) China
+99.2%
Korea
+22.4%
Taiwan
+26%
Japan United States
+13% +6% (Source: GSO)
Arrivals gain 8.8 percent Jan-May Tourist arrivals to Vietnam in the first five months of 2019 rose 8.8 percent compared with the same time last year, with the country targeting a total of 18 million visitors for the year as a whole. However, arrivals for the month of May alone were down 9.7 percent. Vietnam’s tourism authorities have been actively promoting the country, holding a recent conference to promote ties with South Korea and signing a memorandum of understanding for bilateral cooperation on tourism with Russia.
Vietnam deports 35 Chinese for illegal online gambling Vietnam recently deported 35 Chinese nationals, four women and 31 men, for organising online gambling activities in Da Nang City. The Chinese group told the police that they were part of an organisation in China and received orders to build a transnational ring to organise online gambling in order to avoid detection by Chinese authorities. Authorities in Da Nang raided six properties after receiving tips, where they also arrested unspecified numbers of Vietnamese workers implicated in the online bust. Vietnam has been cracking down hard on online gambling, which remains illegal in the country.
Asia Gaming Briefings | August 2019
INDOCHINA 30
CAMBODIA
Breakneck expansion sparks environment, safety concerns The expansion of Cambodia’s casino industry has continued apace into 2019, though the collapse of a building in Sihanoukville in June has raised concerns that construction and environmental standards are being ignored in the race for development.
M
uch of the investment, especially into the southern coastal town, has been driven by Mainland China under Beijing’s “one belt, one road” initiative. However, even before the condominium building crumbled, killing 28 workers, there was mounting criticism over the lack of scrutiny over construction and operators. Now the government is taking action, though industry insiders question whether they have the resources to effectively monitor developments. “The building collapse seems to have been a wake up call for the Ministry of Land Management & Urban planning,” said Dominick Stenson, casino director at the Queenco Hotel & Casino in Sihanoukville. “They are now going to check all construction permits on existing projects, particularly steel structure. “But it will need more than that to make sure proper materials are used, foundations are sound, stress testing etc. There are so many ongoing building projects that I have no idea how they can manage this at the present time.” The Cambodian government issued a
Asia Gaming Briefings | August 2019
further 13 casino licenses in the first four months of 2019, taking the total to 163. Currently only 51 are in operation, with the rest either under construction or having ceased operations. Out of the total, 91 were issued for the province of Sihanoukville. Ros Phearun, deputy director-general at the ministry’s financial industry department was cited as saying that the increase reflected the rise in tourism numbers to Cambodia. Tourism arrivals were up 10.7 percent last year to 6.2 million, with the fastest growth from China, which saw a gain of 32.6 percent. According to Andrew Klebanow, a partner with Global Market Advisors, over a dozen high rise structures are going up along with a near equal amount of mid-rise structures. “Sihanoukville’s building inspectors were probably not equipped to handle this sudden increase in construction activity, leaving safety and adherence to building codes in the hands of the builders,” he said. “ The likely fallout from the building collapse will hopefully lead to increased scrutiny of all current and future building projects, greater enforcement of building
codes and better adherence to safety standards.” Klebanow said the large projects are unlikely to be delayed as they are being developed by experienced and reputable construction firms, though smaller developments will probably face closer examination. “The direct involvement by the Prime Minister clearly indicates that this event will not be quickly dismissed,” he said. A Cambodian court has charged seven people, including five Chinese nationals, with involuntary manslaughter and conspiracy over the building collapse. The seven-storey building fell overnight, trapping workers who were sleeping in the structure. State media described the China-owned project as an illegal structure. Environmental activists have also been sounding the alarm that the development of sewage and other waste disposal services are not keeping pace with the rapid construction. Cambodian campaigner Thon Ratha sent away a sample of seawater for analysis last year after noting waste was being channelled directly into the ocean in Sihanoukville. “I sent a sample of the polluted water to
INDOCHINA 31
the laboratory at the Pasteur Institute, so the government could not accuse me of incitement or of causing social chaos,” he was cited as saying in local media. “The result indicated that the polluted water came directly from toilets and had many parasites and bacteria that can cause many diseases.” Queenco’s Stenson said the environmental impact of the construction boom, is clear to see for all who live there. “I hope this tragic incident at least brings to the fore all the shortcomings in the almost non existent urban planning,” he said. The authorities are taking some steps, though environmentalists warn much more needs to be done, with tourism overdevelopment threatening to destroy many of the natural assets that attracted visitors in the first place. In March, a Chinese-owned casino in Sihanoukville was forced to close for pollution, the promotion of illegal online betting games, and other disturbance complaints. The Jin Ding Hotel and Casino was operating without a license and releasing untreated sewage water directly into the sea. It was also found to be playing loud music on the beach, which is a violation of the law. Sources said that the order to close and the follow up to that order was ignored. Sihanoukville province spokesperson Kheng Phyrum said that police and court officials have now closed Jin Ding, with its owner forced by a court official accompanying police to sign an agreement to close it down. “If the owner doesn’t comply with this agreement, the case will automatically be sent to the court, and the owner will face prosecution,” he said.
TOP 5 VISITORS ARRIVALS 2018
2,100,000
2019
1,750,000 1,400,000
2018 gaming tax revenue $46m 2019e $70m
1,050,000 700,000 350,000 China
Vietnam
Lao PDR
Thailand
Korea
(Source: Nagacorp)
Amax sells mobile business to Cambodian operator Amax International Holdings has sold its mobile gaming business to Galaxy World Co. Ltd, a casino operator in Cambodia, for HK$30 million (US$3.8 million). The mobile games apps include 30 offline mobile game app’s source codes, which cover the areas of leisure and entertainment, education and intellectual, sport, and adventures. Amax said it made the decision to dispose of its mobile games business in order to focus more resources on the group’s gaming business and IT Solutions Business. The group currently operates a gaming business in Vanuatu and a VIP room in Cambodia.
Paul Arbuckle joins Donaco as CEO Former Star Entertainment Group COO Paul Arbuckle has been named as the new chief executive of Donaco International to help the group improve its performance in Vietnam and Cambodia. Arbuckle was most recently the chief operating officer at Star Gold Coast, responsible for all operating divisions. Prior to that, he was the senior vice president of casino marketing for Resorts World Sentosa. “The Board of Donaco is very pleased that Paul Arbuckle has agreed to join us as our chief executive officer,” said Donaco Chairman Stuart McGregor: “Paul’s experience and expertise in gaming operations are critical to improving the performance of our casino operations in Cambodia and Vietnam. While these businesses continue to be profitable, the board has considered for some time that they are not reaching their full potential.”
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Competition forces innovation in EGMs, online gaming in Asia For this edition of Asia Gaming Briefings, which coincides with the Australasian Gaming Expo, we are dedicating our focus section to trends in the electronic gaming sector.
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accarat still remains the game of choice in Asia, but electronic gaming machines are gaining traction across the region, especially in jurisdictions such as the Philippines, where the regulator and some of the operators are more accommodating than most about trialling new products. Australia has for decades been the world’s largest slot machine market, with pokies ubiquitous in pubs and clubs across the country, but industry insiders lament that there is a lack of innovation to drive growth. Suppliers keen to introduce new and exciting products into the market are facing push back from regulators concerned about the potential impact on problem gambling. In our first focus article, we look at this delicate balancing act between breathing new life into the market, without creating harm to the consumers. In a first for Australia, regulators in New South Wales recently set up a Regulatory Sandbox to test new products and technologies in a controlled environment. Suppliers are hoping this may help ease bottlenecks in bringing new machines to the market. For our second article, we look at live casino.
Asia Gaming Briefings | August 2019
A rapidly improving offering of RNG and online slots is beginning to challenge live casino’s reign in Asia when it comes to online offerings. We take a look at some of the ways live casino operators are introducing innovations to differentiate their services to stay ahead of the competition. Also in the online space, we examine trends in online slot machines. The operating environment has become increasingly competitive, with new entrants aggressively cutting pricing. As a result, game developers are being forced to pay even closer attention to the preferences of individual Asian markets and to produce engaging and relevant content. For our last article in this section, we talk to Gamesource Managing Director Iao Lam, whose cloud-based gaming platform is being trialled in MGM Macau and being tested in two further casinos. The company also has ambitious expansion plans this year, targeting Cambodia, Vietnam and the U.S. The company aims to shake up the slot machine market with new types of games that will potentially appeal to that key millennial audience, or as Lam says will “bring in new blood.”
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Asia Gaming Briefings | August 2019
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Red tape tangles innovation, manufacturers say Manufacturers have become frustrated with Australia’s lengthy product approval processes, and have been pointing to “regulatory bottlenecks” as one of the main reasons for a lack of innovation in the market.
“I
f an Australian gaming operator ever wants to see what the future gaming floor looks like, they need only buy a plane ticket to Asia,” said one industry commenter in recent talks with Asia Gaming Brief. “We see technology moving so quickly in general ‘run of life’ segments that seem to be difficult for gaming to adopt,” adds Neil Spencer, an Australian gaming industry consultant. “For example, take the reduction of cash usage in the community. You can go to your local supermarket or retailer and be confronted with ‘card only’ checkouts. Yet the same innovation won’t likely come to the EGM space anytime soon,” he said. Up until now, the road to product approval has been a time-consuming and expensive affair for manufacturers. John van Waard, Senior Manager of System Sales, APAC at International Gaming Technology (IGT) says that one of the major issues stems from the number of different regulatory bodies, each with their own set
Asia Gaming Briefings | August 2019
of regulatory and technical compliance requirements. “Each different jurisdiction comes with its own challenges – often evaluating regulatory and technical compliance against older and/or outdated regulations and legislation. This, coupled with the naturally riskaverse nature of regulatory bodies, can introduce additional compliance requirements which can slow time to market or even render a product unviable for introduction altogether,” he said. “There just aren’t easy ways to get early indicators of acceptance of products that don’t fit neatly into the existing Standards & Regulatory regimes - well before significant R&D resources are expended,” adds Spencer. Working on solutions Australia’s regulators say they are very aware of these plights and have been working on initiatives aimed at solving this age-old issue. “The gaming industry is experiencing increasing
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disruption and product innovation at a national and international level. Regulators in all Australian jurisdictions are actively working on their approach to new products and the process for assessing those new products for release into the market,” said Natasha Mann, executive director of Liquor and Gaming NSW. In an Australian-gaming-sector-first, the NSW government has established what is known as a Regulatory Sandbox, to test new products and technologies. “The Regulatory Sandbox is a closed and controlled environment where innovative products, services, business models and delivery mechanisms that do not meet the current regulatory requirements can be tested,” said Mann. “It provides the environment to identify emerging, innovative gaming products and practices, and to assess their gambling harm impacts in a real-world, but controlled setting. It is also an avenue to identify specific harm minimization measures that contribute to reducing gambling-related harm.” Assessing risks The Victorian government has also been working on similar initiatives, according to Alex Fitzpatrick, Director of Licensing at the Victorian Commission for Gaming and Liquor Regulation (VCGLR). “The Victorian regulator is very mindful of the need for industry participants to introduce innovative products.” According to Fitzpatrick, the VCGLR is implementing a risk assessment tool and a risk framework to apply when considering new and differentiated products. The regulator said it has also been following the NSW regulator’s sandbox concept closely, which has success internationally in Malta and Singapore. “The VCGLR will research this concept. At this stage, it has had no industry feedback. However it will engage with industry to get their views on this fascinating concept,” said Fitzpatrick. However, both regulators made it a point that these initiatives are in place not to expedite the product approval process at the detriment of harm minimization. “The VCGLR wants to engage with industry to facilitate this innovation but at the same time ensure harm to patrons is not increased,” said Fitzpatrick. “It is not the intention to fast track the approval of new products at the expense of public interest and harm minimization,” added Mann. Yet, while the regulator’s ambitions come
under good intentions, some manufacturers and industry commenters remain skeptical. “There is a recent move in public departments for ‘red tape reduction’ and a growing recognition that innovation in our industry needs to be encouraged for the future health of the industry,” says van Waard. “However, there often isn’t an appropriate framework for evaluating new technologies and products, which still creates bottlenecks in the approval process of any innovations,” he adds. Lack of results Similarly, Spencer acknowledged NSW’s innovation strategy but also admitted that he has not seen any positive results to have emerged from this so far. “We are also still faced with the age-old problem where manufacturers do not want to expose too much too early, particularly in our heavily patent-driven industry,” he added. It’s not all doom-and-gloom though. Some manufacturers have been able to push products into the Australian market, albeit, with some persistence. Spintec for example recently celebrated the first installation of its Aura amphitheater gaming set up in a prominent club in Sydney. “We went through a very long certification process, our R&D team invested a lot of time and effort, and now we are very proud of what we have achieved,” says Primoz Krsevan, regional sales manager at Spintec in a press release in June. Spencer believes the solution should be greater access to key regulators and policymakers so
that new concepts can be flushed out or tailored for acceptability. Van Waard, on the other hand, says that the solution should lie in a principle-based framework for the approval of new technology. “Technology will always move at a faster rate than regulation. You only need to look at what Uber has done to the public transport space to understand how disruptive a new technology can be.” “If a certain innovation was not considered when the original regulation was drafted, then it should be evaluated against a set of clear, published principles or guidelines in a manner that is completely transparent to the vendor. Providing a keen understanding of where and why products have failed to be approved in each jurisdiction will also improve each vendors’ ability to accelerate innovation that is appropriately attuned to each market,” he says. In the end, however, better communication between vendor and regulator is seen as a must. “IGT regularly presents its innovative technology concepts to each of the regulatory bodies, where appropriate, well in advance of bringing it to market. We aim to be on the front foot and work closely with them. This enables each regulator to develop a better understanding of the concepts and develop the means for evaluating the technology against perhaps out of date regulatory requirements,” says van Waard. “If we stick to the current status quo, products will be unattractive to new customers due to the inability to access ‘expected’ technologies, ultimately reducing revenues in our industry,” concludes Spencer.
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Live casino eyes innovation to stay ahead of the game The rising popularity of slots and RNG table games is challenging live casino’s long-held reign as the dominant product vertical in Asia’s online space.
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ow operators and suppliers are looking at ways to maintain above-market growth rates for a product facing far greater competition than ever before. Live casino, where users wager on video streams of table games usually hosted in recording studios, has long been the benchmark for a successful online gaming operation in Asia. Several sources told AGB that it usually accounts for more than half of total revenues from most online casinos in the region. The product vertical dates back to the mid-2000s,
Asia Gaming Briefings | August 2019
but it is the last five years where it has recorded truly explosive growth. Live casino’s most dominant supplier, Evolution Gaming, has seen its Stockholm-listed share price multiply 10-fold in the past four years. It reported full-year operating revenues of €245.4 million in 2018, a 38 percent increase on the previous year. Evolution’s success has encouraged several other large suppliers to enter the space, including Playtech and NetEnt, as well as the emergence of a number of successful regional suppliers specialising in live
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casino, most notably Asia Gaming. “It is no secret that live casino is the fastest growing of the major product verticals in online gaming, particularly in key Asian markets,” Andres Burget, live casino manager at the Coingaming Group, told AGB. The Coingaming Group, which operates online brands Bitcasino.io and Sportsbet.io, recently launched its own live casino studio in Riga, Latvia. Known as the Bombay Club High Roller Studio, the Asian-themed studio is tailored to VIPs, accepting wagers of upwards of €50,000 per hand. “Live casino has been a key driver of online gaming growth in Asia for more than a decade now. But it is true that the landscape is changing and live casino will need to adapt. “For many years, players in Asia’s grey markets had tended to avoid slots and RNG games out of a fear that unregulated operators would rig these games against them. So live casino had something of a free run.
“This is now changing quickly. Many of Europe’s most respected slots suppliers have entered Asian markets and their games are becoming more trusted and widely played. Now live casino must compete with a wide range of RNG table games, slots, virtual sports and other products.,” Burget said. For the Coingaming Group, creating a fully bespoke, branded live casino product is advantageous over offering a standard white-label. While most live casino providers offer larger operators the chance to brand individual tables, launching its own studio gives even greater control over game variants, languages and bonusing. “We launched the Bombay Club High Roller Studio to take control of our live casino and offer our customers a truly bespoke experience,” said Burget. “Another important part of this is creating a sense of exclusivity, and the Bombay Club is tailored specifically to our VIPs. We can
accept wagers of up to €50,000 per hand, which most traditional live casino offerings simply cannot compete with,” he added. For BetGames.tv, a provider of live games since 2012, innovation is the key to future growth, with a focus on introducing new social elements to its product. “Playing live casino is no longer a solitary activity,” BetGames.tv COO Aiste Garneviciene told AGB. “Now you can chat live while playing, and there are multiple camera angles available.” BetGames.tv is live on more than 400 websites, and also supplies its feed to more than 3,000 retail outlets. BetGames.tv has also expanded beyond traditional live casino favourites like roulette and blackjack to offer a range of lottery draw products. Its typical games offer players more than 90 options to wager on, creating greater levels of player engagement. Garneviciene notes that some studios are now offering commentary on sports, with a host reacting to the action on screen and encouraging interaction with players. Moving live casino forward in this manner will help avoid the dangers Burget at Coingaming Group describes when he warns that the product is becoming “increasingly commoditized.” Many operators are currently sharing unbranded tables from a handful of major suppliers. Different suppliers are taking different approaches to remedying this. For NetEnt’s live casino product, the focus has been on the mobile channel and creating a fully immersive experience on handheld devices. Playtech has explored the potential of augmented reality, allowing players “to experience products on an entirely new level with … content literally leaping out of the game.” It has also enjoyed success with its multichannel Age of Gods Live Roulette product, which allows players to experience the same slots brand across an online slot and a live casino game, with a jackpot shared between the two. At the time of launch, Playtech said the product would “significantly increase” cross-sell opportunities. And Asia Gaming’s VJ Hal’ product looks to maximise the social element by encouraging greater interaction between the player and the game’s host. The hope will be that against a backdrop of increasing competition from other product verticals – particularly slots – such innovations will help keep live casino’s impressive growth rate ahead of the pack.
Asia Gaming Briefings | August 2019
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Online slots up game on content as competition heats up It wouldn’t be fair to say that anyone enquiring about the Asian gaming scene faces a wall of silence when it comes to the specifics of the market but there is an element of the-first-rule-of-fight-club about it all.
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s one experienced gaming executive living and working in Asia says, given the regulatory profile in most Asian jurisdictions, it doesn’t pay to say too much in public. “It’s stupid to be high-profile in Asia,” the source adds. Or as another European-based gaming executive
Asia Gaming Briefings | August 2019
says, “there are so many wheels within wheels and people saying one thing and doing another.” Still, solid information about what is happening across the region does occasionally leak out. In particular, Playtech’s recent comments about its travails in Asia provide some insight into a clearly competitive landscape for suppliers.
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In its profit warning in July last year, the company said its revenue run rate in Asia was “materially below” average. The company blamed the “sudden” deterioration on an “aggressive pricing environment from new entrants.” “Microgaming, Playtech and NetEnt were the first into the market and they dominated by size,” says our seasoned executive. “But they didn’t dominate on innovation. And arguably now they are being dominated by innovation and by price pressures because the market is so competitive and the B2Cs are more powerful and they can drive down the price.” One such new entrant is QTech Games, a developer and supplier of slot games which claims to be the fastest-growing in Asia. Global chief executive Markus Nasholm says one look at the “crude numbers” for Asia point to why the sector has become
so competitive and why there has been a “transformation” within the past three years. “Just in population alone there are 4.5 billion (people) in Asia versus 741 million in Europe,” he says. “You don’t need to be an accountant to interpret those figures for each continent’s respective potential.” Another company targeting Asia is Kalamba Games which itself is based in Malta and Krakow, Poland. Chief operating officer Alex Cohen says the key to success is content. “To be successful, a new supplier must be very efficient at producing highquality content, while providing innovations that players and operators respond well to.” Whatever the nature of a given market, whether regulated, grey or black, the same commercial dynamics will determine whether the product is a hit with the end
consumer. “Trite as it may sound, content remains king,” says Nasholm. But what will be crucial is whether the product is tailored, not just for Asia but at an individual territory level. “It is definitely not a homogeneous region, and that is reflected in terms of styles of graphics, math, and betting activity,” says Cohen. Indeed, Nasholm makes the point that the Asian market is as fragmented as Europe, making it vital that the games portfolio is targeted. “Such is the ever-expanding breadth of taste and sheer volume or games, it’s a matter not only balancing quality with quantity in any given region, but also sifting through that quality to define the desirable games.” Cohen says that at Kalamba the aim is to understand the nuances of the various Asian audiences. “We attempt through several of our designs to make culturally relevant games for the Asian market,” he says. “We see many other suppliers trying to do Asian-style games through a very European lens, but it’s a different matter to make a game that appeals to the audience on its own terms.” Still, the differences between game preferences shouldn’t be overstated. Cultural differences have to be taken into account – mah-jong is, in Nasholm’s words, “distinctly China’s game of choice” for instance – but baccarat works across the continent. So with games, as Cohen says, most cultures will have been exposed to Chinese and Japanese-style content. Technology is definitely a driver in Asia as elsewhere. “Smartphone-adoption rates continue to rise rapidly over this great continent, and this tide is only running one way,” says Nasholm. Further developments are also set to drive the market forward. A particular success across the continent is live casino, and while Nasholm says that both RNG games and live casino “happily co-exist” at present, he foresees changes as games become ever more immersive. “Ultimately, as the RNG trend becomes more seamless and convincing, overcoming ingrained player biases in, for instance, India, live casino will likely concede any ground it holds for reasons of cultural trust alone,” he predicts. This might be the next step change in Asia and what can be guaranteed is that the next phase of development within the market will be just as crowded as it is currently.
Asia Gaming Briefings | August 2019
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Gamesource eyes expansion with cloud-based gaming GameSource, a cloud-based gaming platform, says it expects to enter three new jurisdictions this year as well as further expanding in Macau.
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he company’s games have been deployed in MGM Macau on a trial basis since October last year and are expected to be turned into revenue generation mode shortly, the supplier’s Managing Director Lam Iao told Asia Gaming Brief.
Asia Gaming Briefings | August 2019
The company supplies land-based operators access to a library of innovative games through a gaming terminal on the casino floor. MGM has selected 7 games from GameSource’s 80-strong library. Lam says the platform is also being tested by two further casinos in Macau, while it also plans to roll out in Cambodia, Vietnam and the U.S this year. The Philippines is also on the radar, though not in 2019. In Vietnam, the system will be deployed by Hoiana, Sun City’s $4 billion integrated resort which is scheduled to open later this year. While in Cambodia, the company is working with local casino, Jin Bei, for the second and third phases of its casinos in Sihanoukville. GameSource is also in discussions with a U.S. partner to deploy the platform in their properties Lam says. The company is seeking to shake up the traditional slot machine market by providing access to new types of games. The ultimate aim is to draw a new market segment audience, who are more in tune with casual/ social/ online gaming, back to the physical casino floor. “The keyword is not “slots”, we are trying to invite game developers to develop “games” that can be certified and placed on the casino floor,” Lam says. “With those new games, it will help the land-based casino operators to target this new market segment.” “We started this initiative because we talked with the casino operators and they thought there are no real new games out there in decades. There are just new game titles with no new content,” he adds. Our goal was to bring in new blood.” GameSource’s games can also be accessed on a hand-held device in a designated area in the casino. In Macau, this is likely to be on the casino floor, though in Cambodia, there may be a much wider footprint, such as in bars and restaurants, and potentially in hotel rooms. The company is currently working with four gaming content providers — CREATEC, August Gaming, EPICONE and Laxino Systems — and a number of individuals developers. Lam stresses that the system is open and flexible and it’s seeking the most creative minds to build games based on its modules. These games have a 95 percent chance of achieving certification as GameSource partnered with BMM Testlabs to build the platform together.
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Asia Gaming Briefings | August 2019
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SOUTH KOREA
Korea’s foreigner-only casinos post strong gains in 2018 South Korea’s foreigner-only casinos posted strong revenue growth in 2018, gaining 34 percent over the prior year, according to figures from the country’s National Gambling Control Commission. Asia Gaming Briefings | August 2019
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tourism, which has suffered from rocky relations with its giant neighbour China. Beijing turned off the visitor taps in 2017 after Seoul chose to deploy a U.S. anti-
oreigner-only revenue amounted to KRW16.25 trillion ($1.4 billion), up from KRW12.07 trillion the prior year. Revenue at Kangwon Land, the only casino permitted to allow locals to gamble, fell 8 percent to KRW14 trillion. The figures marked a significant improvement from the prior three years when revenue for the foreigner-only properties, which include those run by Grand Korea Leisure under the Seven Luck brand and Paradise Co. under the Walker Hill brand, had been largely flat. The NGCC gave no commentary in releasing the figures. It said the number of properties in the country, including Kangwon, was 17. Overall gaming revenue in the country, which also allows betting on horses, boat racing, cycling, lotteries and bullfighting, rose 3 percent to KRW223.9 trillion. The foreigner-only casinos were by far the best-performing category, with most others posting declines from the prior year. However, revenue from Sports Toto gained nearly 13 percent and lottery revenue was up 5.5 percent. The figures show the strong reliance of South Korea’s gaming section on foreign
The foreigner“ only casinos
were by far the best-performing category, with most others posting declines from the prior year.
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aircraft missile system, sending revenue in the casinos tumbling. Visitation was also hit in 2015 after an outbreak of Middle Eastern Respiratory Syndrome also sent tourism numbers into a tailspin.
Visitors to foreigner-only casinos in 2018 rose to 2.8 million from 2.2 the prior year, while at Kangwon Land fell to 2.8 million from 3.1 in 2017. A country-by-country breakdown of the tourism statistics last year shows that the fastest-growing segment was from Vietnam, with arrivals up 41 percent. However, arrivals from Japan, Taiwan and Malaysia also showed strong growth, up 27 percent, 20 percent and 24 percent respectively. Although the NGCC only releases annual figures, the listed operators do release quarterly earnings and monthly revenue figures. So far this year, they have proved a mixed bag. Paradise Co said it saw its casino revenue increase 19 percent in the first half yearon-year, driven by a 19.8 percent increase in table games revenue, along with an 8.1 percent increase in gaming machine revenue. The figures include results from the operator’s four casinos in the country, including Walker-hill, Jeju Grand, Incheon Paradise City, and Busan Casino. The company also operates the country’s first IR, the Incheon Paradise City, which it runs in a joint venture with Japan’s Sega Sammy.
GROSS GAMING REVENUE Annual total turnover (in hundred million won) 2017
2018
217.263 223.904
+3%
(Source: NGCC)
Opposition calls for second locals casino An opposition party has called on the government to allow the development of a second casino in South Korea that would allow locals to gamble as a means of boosting tourism in North Jeolla province. Korea Bizwire reports the opposition Bareunmirae Party’s North Jeolla branch brought up the subject in a statement on May 30 welcoming the Ministry of Oceans and Fisheries’ plan to designate the Saemangeum area as a special zone for marine leisure and tourism. “Building a casino will become a turning point for growth in North Jeolla Province,” the party was cited as saying. “We ask North Jeolla Province, Gunsan, and local politicians to concentrate the effort on turning the Saemangum area into an international destination for marine leisure and tourism, just like Darling Harbour in Sydney, Australia and Marina Bay Sands in Singapore.” A prior suggestion for a similar project was suspended in 2016 after public opposition, the news wire says.
Kangwon Land seeks global distribution for slots range Kangwon Land has developed its own range of slot machines and is planning to distribute its products globally, beginning with the Philippines. The operator, which runs the high1 resort, expects gaming machines to become a major part of its business, with potential investment in the hundreds of millions of dollars, Andy Jeon Jongsun, deputy general manager of the EGM business and Raymond Choi, executive producer and general manager said during an interview at G2E Asia. Kangwon Land’s resort is the only one in South Korea where locals are allowed to gamble and it makes more revenue than the other foreigner-only operators combined. The company is cash-rich with about $3 billion on hand. “We just need to convince the directors it’s the right way to go and if they think the same way as we do there shouldn’t be a problem at all,” Choi said, referring to financing. The executives said they expected to be ready for full-scale investment in about three years.
Asia Gaming Briefings | August 2019
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RUSSIA
Primorye set for next stage The development of the Primorye gambling zone in Russia’s Far East is hotting up with three new complexes scheduled to open next year and authorities stepping up their efforts to attract further investment.
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he Primorsky Krai Development five floors have already been erected at Naga Corporation and local investors Vladivostok. The operator of NagaWorld in outlined their plans for the zone, Cambodia agreed to invest about $350 million which is located near Vladivostok, in 2013 to develop a resort in the zone. It has during G2E Asia in May. The area is seen as the now established local offices and moved some most promising of Russia’s designated gambling key personnel to oversee progress. It says the property is sited on an area zones given its close proximity to northern with dual frontage and “majestic views to the China, Japan and South Korea. At present only Summit Ascent’s Tigre de sea and an inland lake flanked by two hills.” Also opening next year will be Diamond Cristal is in operation, but the second phase of development is scheduled for completion Fortune Prim’s Imperial hotel and entertainment next year with at least 12 hotel complexes with complex. It will house a casino, hotel, nightclub, casinos, as well as entertainment facilities. restaurants, shops and a SPA center with a 25-meter The total investment amounts to more than pool. The company received investment earlier this year from Japanese US$2 billion. company, Simple Create. “In 2020, the second Summit Ascent phase of the construction Investors are Executive Director of the Primorye IRC will be Eric Landheer spoke completed – the opening in the active stage about the group’s plans of new Naga Vladivostok of construction for the second phase of and Shambala complexes expansion for Tigre de will take place,” said – the first floors Cristal, which involves Primorye Corporation of new buildings significant additional Executive Director Igor have already been room capacity and new Trofimov. “Investors facilities. are in the active stage of erected. “We believe that construction – the first within four years the floors of new buildings g amb l i ng z on e i n have already been erected. Financing in the amount of RUB2.9 billion under Primorye will already be transformed into the program initiated by the Federal Agency for a full-fledged resort due to the opening of Tourism will be directed to the construction of new complexes, including our company’s the transport engineering infrastructure,” he said. plans to implement the“ Tigre de Cristal “We are interested in new investors. Today Phase 2,” he said. “Additionally, our plans include the creation of there are two free land lots for the construction of hotels and casinos, [and] work is underway eight guest villas and 22 buildings for residential to expand the possibilities of the non-gaming apartments. We plan to increase the number of entertainment segment – the resort concept rooms to at least 350, which is three times the includes not only a gaming zone but also number of rooms in the current Tigre de Cristal.” The project provides 25 gaming tables for mass provides entertainment for family and youth recreation, such as an amusement park or water players and about 300 slot machines, as well as 50 gaming tables for VIP guests,” said Landheer. park,” he added. Some adjustments will be made to the NagaCorp Chairman Tim McNally said that
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Asia Gaming Briefings | August 2019
previously conceived “Tigre de Cristal Phase 2” after the acquisition of a stake by Macau’s Suncity Group. The approximate opening date of the new complex “Tigre de Cristal Phase 2” is scheduled for 2021. Meanwhile, authorities in Russia’s northernmost region of Kaliningrad have given the approval to hold land auctions for about 80 hectares of the Yantarnaya gambling zone, which was previously transferred to a single investor, local media reports. According to a speech by regional deputy Alexander Nikulin to the local parliament, the authorities are currently clearing 80 hectares of land to be leased out and intend to leave the existing investor with only 10 hectares. “There are people who are ready to come to these sites, but, unfortunately, the land lot was completely at the disposal of one participant, and, accordingly, this limited the ability of other participants to get there and build casinos… There are about 90 hectares of the zone. Out of this territory, we have about 10 hectares left in use by the participant who won and built the facilities, and about 80 hectares will be cleared so they can be used,” Nikulin said.
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GROSS GAMING REVENUE
(in HK$’million)
Rolling chip turnover Q1 2018
3,239
Q2 2018
3,268
Total table drop 164 184
Q3 2018
4,505
183
Q4 2018
4,550
169
FY2018 FY2017 (restated)
Magic Crystal gets green light for expansion
15,562
700 18,791
577 (Source: Summit Ascent)
Suncity’s Alvin Chau named as Summit Ascent exec. director Suncity Chairman Alvin Chau Cheok Wa was appointed as non-executive director and chairman of Summit Ascent Holdings Limited, with effect from June 1, 2019. The appointment follows Suncity’s acquisition of a further 24.68 percent stake in Summit Ascent in late April, bringing its total interest in the operator of the Tigre de Cristal to almost 28 percent. Commenting on its reasons for the acquisition, Suncity said the group wants to build an integrated tourism-related platform through equity investments as well as provide tourism-related services to the resorts.
Slot machine parlor Magic Crystal, located in Russia’s westernmost Kaliningrad Region, has been granted approval to expand its venue by 1,100 square meters, local media reports. The venue was originally opened by Neverland in April 2016 and was soon followed by the Sobranie casino run by another investor.According to the construction permit issued by the authorities, Neverland is expected to complete expansion works by 23 February 2020. The allocated land lot for a three-storey building is situated in close proximity to the Baltic Sea. Magic Crystal reportedly has about 150 slot machines while Sobranie has 350 slot machines and 14 gambling tables.
Asia Gaming Briefings | August 2019
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JAPAN
Policy delays give late movers a fighting chance The decision by the Abe government to drag its feet on issuing more detailed regulations governing the IR industry and to delay the establishment of the Casino Management Board probably changes little about the shape of the national regulatory regime, but it may potentially exercise a profound effect on which local governments get licensed and which IR operators are selected.
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ccording to the original schedule, the Casino Management Board (the official English name has yet to be revealed) should already be up and running with almost a hundred staff members, preparing themselves to become the main regulator for each IR’s casino floor. Also, local governments should now be preparing to launch their RFP processes and international IR operators pouring over the details of the published regulations, adjusting their bids and finalizing their strategies. Instead, many are trapped in an unexpected holding pattern, preparing as much as they can under the circumstances, but mainly waiting for the central government to come out of its cave and to provide everyone with more concrete information. Now that the July House of Councillors elections have passed, this may come at any time. All accounts suggest that there never was any national policy reason why the delay occurred, but rather it was a political decision to remove the casino controversy from public view so as not to work against the electoral interests of the ruling party. In other words, the delay will probably have little or no consequence for the ultimate shape of the national regulatory regime. The impact on local governments, however, may indeed be highly consequential. The Osaka government, for example, is increasingly panicked that national policy delays will doom the anticipated Yumeshima IR to open its doors only after the 2025 World Expo is concluded. This would signify a tremendous loss of opportunity as millions of visitors who would have seen and experienced the IR will instead not have the chance to do so. It would also deprive the new IR of the potential revenues from some of those visitors, an inflow
Asia Gaming Briefings | August 2019
that might have assisted the operators to more quickly recover their vast investment funds. To be clear, the Osaka government has not given up its goal of opening the IR in 2024, but many independent analysts believe this target will prove to be much too ambitious, and reports suggest that even many local officials are losing confidence in their timeline.
Beyond Osaka, it has long been a toss-up about which local governments will receive the other two IR licenses. Potentially, the delay might change the lineup of winners and losers, as the early movers see their advantages reduced and the late movers have time that they otherwise would not have had to put together more credible local policies.
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The most impactful scenario would be if a late-bloomer like Chiba City decided to fully embrace an IR bid, and this resulted in a second major urban IR in the Kanto region, which otherwise might have missed out on the first round of IR licensing. Not only would such a development deprive a would-have-been regional city of an IR license, but it would sharply increase the overall size of Japan’s IR market once the industry is up and running. It’s much the same with the international IR operators. MGM Resorts, for example, carefully laid the groundwork for its Osaka bid over many years, putting direct effort into building community relations that has not been matched by other operators. It is also the only firm to unveil its main consortium partner, the Orix Corporation. But whereas earlier this year MGM had built up such momentum that they appeared to be well ahead of their rivals, the unanticipated delay may have allowed others to narrow the gap. Las Vegas Sands, for example, decided during the period of delay to announce its own policy of prioritizing an Osaka bid. This
suggests that Sands is now sharply focusing its resources on a Yumeshima bid in a way that was not previously the case. More generally, firms such as Galaxy Entertainment used the months of delay to assemble an increasingly large design and development team, suggesting that it will be extremely well prepared when the local governments launch their RFP processes. Additionally, the delay clearly was of benefit to Wynn Resorts as well. Earlier this year its attention was absorbed by its case before the Massachusetts Gaming Commission and the launch of Encore Boston Harbor. Now that these matters are safely behind them, they have opened their Tokyo office and are quickly bulking up an in-country Japan operation. The early movers maintain that they always expected it to be a long process, and that they remain as committed to Japan as ever. Indeed, with the single exception of the Clairvest Group, there have been no indications that any potential operator has been retrenching. In fact, new players are still making their debuts, especially in the smaller, regional markets.
VISITORS ARRIVALS 30M
20M
10M
0M
2014
2015
2016
2017
2018
(Source: JNTO)
Chiba City launches RFI process Chiba City has launched an RFI process with an eye to a possible IR bid next to the current Makuhari Messe convention center. Companies that wish to participate in the RFI need to register between August 8 and 22, and then submit their reports and other information between October 15 and 28. Hearings with individual companies will be conducted in November. Like the Yokohama RFI held last year, Chiba City is conducting the process without a clear commitment that it intends to follow through and actually make an IR bid. Mayor Toshihito Kumagai has suggested that the information is being collected to help the city make an assessment of whether or not it should move forward.
Panasonic jumps into IR industry Electronics and technology giant Panasonic is jumping with both feet into the anticipated IR industry by consolidating on July 1 about thirty of its employees into an “IR Business Promotion Headquarters.” Panasonic is aiming for deep and wide-ranging involvement in the Japanese IR industry, supplying both products and services including multilanguage translation systems, facialrecognition and security systems, and even autonomous electric vehicles. Some of these technologies Panasonic plans to showcase at the 2020 Olympics, using that event as a springboard to make sales and partnerships with IR consortiums. Another showcase and development venue for related technologies is the Fujisawa Sustainable Smart Town which began operations in 2014.
Asia Gaming Briefings | August 2019
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SOUTH ASIA
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INDIA
China investors eye online gaming startups India’s booming online gaming market is attracting a flood of investment from mainland China as Beijing steps up efforts to regulate video games at home.
Asia Gaming Briefings | August 2019
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lthough all forms of gambling outside of the official lotteries are banned in China, social gaming has been exempt. However, even that is now coming under increasing scrutiny with Beijing expected to approve fewer game titles and to pay closer attention to the types of product on offer to ensure they adhere to core socialist values. As a result, many Chinese companies are looking for new markets and have found fertile ground in India, both in real money and social games. Of the top six investments in the sector over the past 18 months, four have been from Chinese companies. According to the 2019 edition of the FICCI-EY annual report on India’s media and entertainment sector, online gaming revenue increased by 59.4 percent last year to INR49 billion ($703 million). Real money gaming soared 82 percent to INR26 billion, while casual gaming rose 40 percent to INR22 billion. The segment as a whole is expected to grow at a compound annual rate of 35 percent to reach INR120 billion by 2021, with the number of fantasy sports gamers forecast to top 100 million by that time. Real money games, such as rummy and fantasy sports, are forecast to hit INR71 billion. “While the Chinese market is showing signs of saturation and regulator control, India will become the next key market for gaming companies and investors,” the report says. Recent investments into India’s gaming start ups include China’s biggest gaming and social media company, Tencent Holdings. Last September, it invested $100 million in Dream 11, India’s biggest fantasy sports platform. Dream 11 is India’s first unicorn in the gaming sector, with a valuation exceeding $1 billion and more than 50 million users. Tencent plans more big-ticket investments in India, with a budgeted spend of US$200 million. Its goal is to own at least one-third of India’s gaming user base by 2020. Other companies that have received funding from Chinese investors include Gamepind, which is a joint venture between Indian company Paytm and Alibaba-owned AGTech Holdings. Together they have funded Gamepind to the tune of $16 million. Gamepind has started to offer fantasy sports and card games, although it is yet to introduce cash rewards. “We offer rewards only in kind at the moment, like two-wheelers etc,” said a company spokesperson. The company has plans to introduce real money gaming in the future. Mobile Premier League, which also offers
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fantasy sports, along with real money gaming, raised over $35 million in April this year. The company claims to have garnered over 25 million active users since its launch in September last year. A company official from Tencent-backed Go Ventures, which funded MPL, said that they had plans to invest more in other online start-ups, not excluding gaming companies. Others to benefit from Chinese investors’ largesse include Yoozoo Interactive and Zapak, which is owned by India’s biggest conglomerate Reliance. Zapak offers real money gaming. Yoozoo Interactive is already offering card games and fantasy sports. “It is here to stay,” Ashish Pherwani, who heads the media and entertainment sector at EY India, said, referring to Chinese investment. “With the Chinese government tightening regulations, Chinese gaming companies will invest more in Indian companies. India also has
a young demographic with disposable income which is what is attracting these companies.” According to Pherwani, the growth in the smartphone market and easy broadband connectivity is fuelling the gains. He noted that small town users of smartphones were in the forefront of growth in the sector. Digbijoy Shukla, Head - Startup, Ecosystem, estimated recently that the country is expected to have 700 million mobile users by 2020. However, Avanish Tiwary, managing editor of Bangalore-based portal The Passage, which exclusively tracks Chinese investments in Indian online start-ups, cautioned that India’s patchwork of regulations is holding back growth. “In India, the regulations depend on the particular states. Some allow it whereas others do not. What these companies would like is a centralised set of regulations to be in place.” Tiwary also noted that online gaming start-ups focusing on real money games.
GROSS GAMING REVENUE Online Gaming Revenues
Online gamers in India (million)² 120
Mobile gamers
Non-mobile gamers
300 68
200
49 30
100
2017
2018
2019E
2021E
0
2015
2016
2017
2018 (Source: EY India)
Online fantasy operators prove taxing question for authorities India’s tax authorities are currently working out how to best tax online fantasy gaming businesses, after launching an inquiry into how GST is calculated, local media reports. According to people familiar with the matter, the tax department is essentially trying to determine whether GST should be applicable on just the net commissions (revenues) earned by fantasy gaming firms, or by the entire transaction amount.
Goa CM told to retract casino remarks Goa’s Chief Minister Pramod Sawant found himself in hot water in June after using casino footage in a Goa tourism promotion video and stating their importance to the state’s tourism industry. Political party Goa Suraksha Manch (GSM) called on the CM to withdraw his remarks and issue a public apology, threatening to take the issue up with the country’s Prime Minister Narendra Modi. “There are a few tourists who come to Goa to play in the casinos,” Sawant told reporters. “They are important from the tourism point of view. You cannot write them off. We need to do whatever activities are required to attract tourists to Goa,” he said.
Asia Gaming Briefings | August 2019
SUPPLIER SPECIAL REPORT 50
AGE 2019
AGE to provide “hyper distraction” Now in its 30th year, the Australasian Gaming Expo (AGE) is one of the world’s largest hospitality and gaming trade shows and the most significant gaming industry event in Australia.
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ver three days from 13-15 August 2019, as many as 200 of the world’s best gaming and hospitality equipment and service providers will be on show for more than 8,000 industry executives from around the region. It’s an unmissable event for the Australasian gaming event calendar - focused on education and development. This year, AGE will also host its third annual AGE Seminar Program, co-produced by Asia Gaming Brief. The seminars gather regulars, operators, and suppliers, providing insights through a world-class program which will help hotel, clubs, and casinos plan for the year ahead. Key topics include “The Year Ahead for Gaming”, “The Evolution of Customer Service”, “Gaming Floor
Asia Gaming Briefings | August 2019
of the Future,” and of course, “Hyper Distraction,” a keynote speech by famed futurist, Chris Riddell. Nearly 35 industry experts are confirmed as speakers to this year’s Seminar Program. Visitors who have completed the online registration to attend AGE 2019 will have access to the AGE Seminars, so be sure to come in over the three days to see us. Of course, there’s also lots to see at the exhibition - with new gaming machines, peripherals, systems and other technology being showcased. Get a glimpse of some of the key innovations to enter the Australasian market in our AGE 2019 Supplier Special. To book a meeting at Asia Gaming Brief during the show, email us at AGE@AGBrief.com.
Where gaming technology meets hospitality. Australasian Gaming Expo 2019
The Australasian Gaming Expo truly connects you. This August come and experience the very latest in gaming technology and discover the best in hospitality equipment and supplies. 2019 celebrates AGE’s 30th year so you know it’s going to be bigger than ever.
Visitor registration is now open at www.austgamingexpo.com
13-15 August 2019 Tue-Wed 10am-5pm ,Thu 10am-3pm ICC Sydney Darling Harbour NSW
Asia Gaming Briefings | August 2019
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SUPPLIER SPECIAL REPORT 52 BMM Testlabs
Trusted test lab
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MM Testlabs, the world’s leading gaming testing laboratory, and technical consultancy, is pleased to exhibit at the Australasian Gaming Expo. EVP and General Manager APAC and Europe, Kirk White commented, “AGE provides us with a fantastic opportunity to discuss our testing services with existing and new customers. It is always a pleasure to be an exhibitor at such an amazing event, such as the AGE. Founded in Australia in 1981, BMM has grown to become the largest independent test lab in the Asian Pacific region, with considerable knowledge of Australasian gaming markets. We have built a strong reputation as the best test lab in Australasia and our success in 2018 continues to add to that reputation.” White continued, “That reputation comes from BMM continually evolving our capabilities to maintain the quality and speed that gaming manufacturers demand
BETRADAR
Virtual sports a winning bet in Asia
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ne of the biggest developments Betradar made in Asia this year was the launch of their new virtual Asian Cup. The product added to a growing list of virtual sports Betradar offer, including Virtual Football and Virtual Basketball. Like the company’s successful virtual football World Cup in 2018, the Asian Cup featured the same group and knockout stages as the real-life competition, plus all 24 Asian Cup 2019 teams, with Asian odds visualization, multiple localisation options and was available in a range of local languages. The company’s Managing Director of Gaming, Frank Wenzig says virtual Gaming Solutions continue to grow in popularity across Asia. “This is one of the reasons why we continue to invest heavily in enhancing and expanding our Gaming Solutions portfolio on an ongoing basis,” Wenzig says. “We’re seeing a lot of take-up in regions across Asia with our virtual products. It was really good to see the virtual Asian Cup prove popular. Like all of our solutions, the realistic matches, betting markets and competition mechanics create an environment
Asia Gaming Briefings | August 2019
that engages punters and lets them place bets as they do in real sports. “We’re really looking forward to unveiling our next products in this space, with Virtual Baseball In-Play later this year and Virtual Cricket In-Play next year. As such a diverse and expansive region, it’s really important to offer a product that will appeal to the local market. With baseball big in Japan and cricket big in India, for example, our two new products will be a great way for clients to really engage customers.” Another reason Betradar’s Gaming Solutions are so successful is because of their focus on reality, both in terms of look and feel and betting experience. “We maintain a focus on realism across all of our gaming solutions, using high-tech Motion Capture and our comprehensive data from real-live sports to create the most trueto-life virtual gaming possible, Wenzig adds.” Betradar’s Gaming Solutions are a great way to supplement any licensed sportsbook. They are available as a standalone product or via the company’s Gaming Platform, which provides clients with access to all Betradar’s existing and future virtual sports and gaming products with one single e-wallet integration.
and rely on. As ISTQB Platinum partners, BMM engineers around the world must qualify to ISTQB tester standards. This allows BMM to fully align its testing capabilities to meet the needs of gaming technologies. By continuing to make investments into testing tools and tester training combined with our existing knowledge, BMM will continue to be the test lab of choice in Australia, Asia-Pacific Region. We look forward to providing our world-class services to visitors at AGE this year.” BMM experts will be at AGE 2019 to discuss product testing and customer support service. See them during AGE 2019 at stand #346.
SUPPLIER SPECIAL REPORT 53 BETCONSTRUCT
Looking back
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his summer has been productive for Betconstruct in Asia. Although it won’t be present at the Australasian Gaming Expo, it already participated in both AGE in Cambodia and PAGE in the Philippines. In Cambodia, the company has successfully presented both its offline and online solutions to the gurus of the Asian market. Thanks to the networking opportunities the participants were able to learn more about the market specialties and challenges. BetConstruct demonstrated it’s land-based solutions including Self-service betting terminals, Betshop cashier client, Live monitor application and Pocket betshop solution. For the land-based live dealer casinos BetConstruct launched a special solution allowing to extend the physical presence of the casino brand to online. The web version can help land-based casino operators enter the online gaming market, resulting in multiple
benefits for their business without interfering with the real casino games or violate the privacy policy in any way. Adding online streaming equals to establishing a new casino branch, but on the web, targeting the highly profitable sector - online gaming. In regards to the first-ever Phil-Asian Gaming Expo, it was an immense success. BetConstruct’s representatives networked with the biggest gaming providers and engaged in discussions with its current and potential partners. BetConstruct offers to its partners and their players an extraordinary experience. The award-winning Sportsbook solution of the company includes the widely popular in the region Esports betting options with the coverage of most famous championships such as LoL. CS:GO, DOTA2, etc. Yet at the forefront was the uniquely developed Bet on Teen Patti live casino game that captured the visitors’ interest. They were
willing to learn more about the game and our Fantasy Esports offer that is one of a kind solution in the market. BetConstruct hopes to come back to the events next year and bring forward its trailblazing solutions and showcase industry achievements.
Asia Gaming Briefings | August 2019
SUPPLIER SPECIAL REPORT 54 Banktech
Evolution of the ATM
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s the use of cash reduces the ATM is quickly evolving to meet our digital payment needs. Having an ATM to dispense cash to their patrons will remain a core service for any pub or club however with more services being moved to smartphones it is time for the ATM to adapt to how people are managing their payments and cash. Banktech is fast-tracking this evolution of the ATM with their Cash Connect ATMPlus and visitors to this year’s AGE will be able to see what’s available now and what’s just around the corner. “We are transitioning the ATM into the digital age”, says Henry Kiwarkis, GM Sales at Banktech. “We have taken a traditional ATM and added new hardware and software to offer a much wider range of transactions to eventually include depositing funds into mobile wallets, paying bills, withdrawal of cash from cryptocurrency accounts – even converting foreign exchange. The possibilities are endless.” The first new feature of Cash Connect ATMPlus is the ability for club members to pay ATM fees with their loyalty points. Now available and in use, Pay With Points is gathering increased interest, in particular from those venues looking to value-add to their loyalty programs. The Banktech team will also be demonstrating how to use Cash Connect ATMPlus to top up digital wallets. “CashConnect ATMPlus will allow venues to benefit from the digital economy,” says Kiwarkis, “The ability to insert cash to enable digital transactions is unique and will be a service valued by all customers” Visit the Banktech team at the AGE, stand #322.
GANAPATI
Pacquiao One Punch KO
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anapati PLC’s latest initiative packs quite a punch. The global supplier of Japanese content recently announced its intention to produce an official Manny Pacquiao slot game, to add to the company’s portfolio. Pacquiao One Punch KO, to be released this September, will take the form of a 3x5 cascading slot with 25 pay lines and its central theme none other than living boxing legend, Manny Pacquiao. Having recently beaten Keith Thurman to the welterweight title in their widely publicised Las Vegas fight, the boxer is showing no signs of slowing down in all areas. The news that Ganapati is producing the official Pacquiao slot game was recently announced to coincide with this fight, along with the information that a portion of the game’s proceeds would be channelled into the boxer’s own charity, the Manny Pacquiao Foundation, supporting children’s education in the Philippines. The game’s main features include Cascading Reels and Multipliers – every time a winning combination of symbols appears, the winning symbols cascade off the reels
Asia Gaming Briefings | August 2019
and disappear, increasing the Multiplier by 1x. The symbols above cascade down to replace those that disappeared, with new symbols filling their now empty slots. As well as this, 3 or more Scatters that appear anywhere on the reels activate 10 Free Spins, which are re-triggered if 3 or more Scatters appear during the Free Spins feature. There is also a Wild symbol which has the power to substitute for all symbols except Scatters. Aside from its standout features, Pacquiao One Punch KO is set to be a knockout in more ways than one. As not only a champion sportsman but a well-loved Senator in his home country, Pacquiao emphasises his determination to support local Filipino communities and give back to those who started out in life struggling, as he himself once did. The game’s focus is on fighting – not just in the ring, but to overcome hardships in life. For Ganapati, which has previously made a name for itself in both European and Asian markets, the upcoming release represents the company reaching new heights in Asia
especially – with backing from Asia’s number one sports star.
SUPPLIER SPECIAL REPORT 55 Scientific games
Hot, Hot Jackpots and Rising Riches
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cientific Games Corporation will showcase the gaming industry’s most comprehensive product lineup at the Australasian Gaming Expo. Highlighting its new and innovative slot game content and platforms, proprietary table games and utilities, electronic table systems, casino management systems solutions and its new digital and global leading sports betting products — Scientific Games’ entertainment ecosystem is designed to engage players, enhance operating performance and drive customer revenue. Derik Mooberry, Scientific Games’ Gaming CEO said, “Our company is always finding new ways to elevate and innovate the gaming floor, and AGE is where we get the opportunity to reinforce our vision with customers. Visitors to the show will see a number of our new game series that will be driving a reinvigorated lineup in our gaming business. An incredible range of products will be showcased from our Lottery and Digital divisions, highlighting creative content and the dynamic games that delight our players.” Three new exciting game series Hot Hot Jackpots, Rising Riches and Quick 6 will feature prominently on the DUALOS X cabinet. This new cabinet has the signature 27–27–27 look: high definition LCD topper, main monitor and top box for higher luminance, CPU4x processor and runs on Scientific Games’ new ArgOS platform to deliver a more engaging gameplay experience.
games portfolio, Scientific Games will display ETG products on the QUARTZ cabinet. The highly anticipated new generation VEGAS STAR Blackjack will be on display alongside the innovative Roulette-X that debuted earlier this year. As a global leading supplier of casino management systems, Scientific Games will display the industry’s broadest end-to-end suite of solutions, presenting key new offerings including: Shufflink, a network and user interface that collects real-time data from utility products, including shufflers, chippers and related table peripherals for table performance analysis and player ratings. This advanced product provides new metrics and reports to enhance a pit operation’s ability to quickly identify and forecast improvement opportunities and operating constraints. Shufflink also serves as a powerful middleware data bus, enabling vital live data into a casino ecosystem that can be leveraged for system integrations for surveillance, security and other applications. The iVISTA 4 web-based content management solution allows for drag-and-drop content design within an exclusive web interface to create new
iVISTA content and publish it to the casino floor. With analytics, rules and scheduling features, the iVISTA empowers a new level of player engagement for casino marketers. From the company’s proprietary table games portfolio, highlights this year will include Lightning Blackjack, Paris Poker, I Luv Suits and the exciting 5 Treasures Baccarat, one of the first table games to leverage a popular slot title. Scientific Games will showcase its industryleading sports and casino technologies that bring partners to the next level. The company will highlight its comprehensive portfolio of platforms and services that enable customers to win in both established and burgeoning markets. Scientific Games’; OpenSports product suite will be featured on the show floor, giving an in-depth look at the company’s player-centric sportsbook solution. Among the most reliable and scalable platforms on the market, OpenSports powers sportsbooks with end-to-end technology that includes trading, marketing and product management services, managed trading services, real-time data and pricing resources and Sportsbook Operations Services.
Hot Hot Jackpots A new game series featuring a novel selection feature concept that incorporates an improved Action Spins wheel mechanic. This compelling alternative to the current Hold-and-Spin style games brings rich game themes and gameplay onto the big screen. Rising Riches A new game series designed to capitalize on the ready-made appetite for hold-and-spin formats with a novel twist for added fun and appeal. Penny Pier Scientific Games re-enters the Progressive Link segment with this standout new game concept that evokes the enjoyment and novelty of classic penny arcade games while delivering a highly engaging gameplay experience full of anticipation, surprise and big rewards. From the market leading electronic table
Asia Gaming Briefings | August 2019
SUPPLIER SPECIAL REPORT 56 GLI
Locally focused expertise
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aming Laboratories International (GLI) Australia is excited to demonstrate how success is achieved with GLI’s suite of testing, certification, and professional products and services. Attendees to this year’s AGE will discover how GLI’s innovative communications protocol, interoperability, and test automation technologies help get your products into the fastest-growing global gaming markets quickly, efficiently, and cost-effectively. They will also gain important insights into how to protect their most valuable digital assets through Bulletproof, a GLI Company. Bulletproof offers a comprehensive array of cybersecurity and managed IT products and services. Additionally, they can learn how to personally and professionally benefit from the many outstanding training and educational resources available with GLI University.
GLI brings its 30 years of tested, proven, and trusted global capabilities with five strategically located labs in Sydney, Melbourne, Adelaide, Macao, and Tokyo. This local focus ensures the highest level of personalized service, quality, and value. With a combined 100+ years of local gaming-related experience in the Asia-Pacific market, GLI is your “regulation ready” leader. GLI has provided 23,957 certifications for the Australian and New Zealand market and has certified 792,232 Australian innovations for global jurisdictions. Additionally, GLI has transferred approval to over 475 jurisdictions totaling over 3,100,000 certifications globally since the company’s inception. “We’ve been helping the Australian gaming market reach virtually every corner of the world since 1991,” said GLI’s vice president of global services, Ian Hughes. “With 24 offices on six
continents, no other lab can match our global coverage and deep understanding of local markets. Our 1,250 highly skilled employees effectively deliver GLI’s superior portfolio of products and services to suppliers, operators, and regulators in 475 worldwide jurisdictions.” GLI returns to the Australasian Gaming Expo, stand #453.
HABANERO
Celebrating the 100th slot addition
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abanero celebrates the launch of Colossal Gems this August – the 100th slot addition to its ever-growing portfolio of offerings. Habanero’s century of slots features the latest top‐of‐the‐range graphics and sounds, as well as exciting maths models and engaging narratives. Colossal Gems makes its debut and takes players into a world of lucrative treasures featuring massive symbol groupings inside cascading respins.This introduces some great volatility into the game experience, with colossal wins being a real possibility. Colossal Gems follows Habanero’s other recent release, Nuwa. Nuwa, more of a temperate and soothing game, focuses on the goddess of Chinese mythology, challenging players to channel their inner courage and wisdom in the hunt for double level bonuses and free spins. Focusing on the creation of quality slots and table games that are both entertaining and immersive, Habanero is dedicated to offering titles for a wide range of markets. Its portfolio now features more than 120 games in total, with a mix of slots, tables games and video poker offerings meaning there is something to suit the tastes of all players. With Magic Oak, another 2019 release, wins are paid when the same icon appears in blocks rather than lines, with wins paid when they
Asia Gaming Briefings | August 2019
meet horizontally and are vertically adjacent. Habanero prides itself on delivering variety, innovation and gamification within the industry and this forward‐thinking approach features in Mount Mazuma. Mount Mazuma starts with palm trees on row one and five as blocker symbols which are
opened up as the game progresses. Symbols can hit up to x64 super-multipliers as well for more prize eruptions during the game. Habanero is constantly making quality additions to its portfolio and players and operators alike should also look out for other recent releases such as Lucky Lucky and 5 Lucky Lions.
SUPPLIER SPECIAL REPORT 57 WALKER DIGITAL
Offering table games and more
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able game technology has come a very long way from the days of the “dumb table”. As operators and their customers become more demanding, gaming suppliers have had to invest heavily in R&D to provide the right services to the market. Floor-wide, real-time data has become the catalyst for much of these advancements. For example, Walker Digital Table Systems, the developer of the “Perfect Play” solution for table games, has not only continued to add new and exciting features to their product but has also been developing innovative new products made possible through via its table games automation platform. While the platform was designed to solve common live table games issues such as dealer accuracy, accuracy in player ratings, and ensuring game security, these days, WDTS has gone beyond the table to introduce new features and products made possible by the Perfect Pay Platform. Hidden Treasure Bonus The new Hidden Treasure Bonus from WDTS selects random winners from live
play that is automatically tracked on targeted Perfect Pay tables. No manual rating entry is required. Promotion set-up supports many different prize types per promotion with different player type and value criteria options. Additionally, any Perfect Pay table can be included in a promotion, allowing the casino to target specific gaming areas or pits with unique promotions and player bonus opportunities.
can also choose an option that replaces the standard Perfect Pay upper chip tray with a carrier base that holds drop-in chip tray partitions for chips, jetons, and plaques of different sizes that can be used in any combination. Later this year WDTS will also be offering new dual-level chip trays with capacities of 1,700 and up to 2,500 chips.
Games of Wealth Series
Quick Change and Quick Buy In are two new Dealer Toolkit features that ensure fast and accurate table transactions.
The Games of Wealth series offers players new ways to play and win without changing the traditional rules of baccarat. Both Raise Baccarat and Baccarat Insurance lift house advantage while increasing the volume of wagers on the table and player excitement. Modular Chip Tray Components and HighCapacity Chip Trays Perfect Pay includes an integrated one or two-level chip tray with an industry-leading capacity of more than 1,300 chips. Operators
Quick Change and Quick Buy In
Chip Based Player Tracking The newest Perfect Pay module associates chips to casino player IDs for Chip Based Player Tracking. This feature exactly tracks chip transactions by known or anonymous players across the casino floor. When chip purchases are associated with players, it is possible for all play to be automatically tracked and optionally rated without manual procedures at the table.
Asia Gaming Briefings | August 2019
SUPPLIER SPECIAL REPORT 58 INTERBLOCK
IGT
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Stadium products gain popularity he Australasian Gaming Expo at ICC Sydney Darling Harbour NSW is poised to be another great year for Interblock, which is a proud supporter of the gaming industry. This year, Interblock will be showcasing its range of multigames stadium-styled video products consisting of video Roulette, Multi-hand Blackjack and Baccarat in conjunction with its popular 21” and 27” screen Diamond Play Stations, game side bets and 55” LCD Player Information Display (PID). Stadium-style gaming has seen a steady increase in popularity throughout Asia Pacific from VIP clubs to Integrated Resorts. Interblock is proud to be part of the growing trend in this region assisting operators with their gaming needs to achieve their customer service goals.
Raising the game
GT is featuring a range of compelling solutions at this year’s Australasian Gaming Expo (AGE). Based on the theme “Raise Your Game,” the company’s stand 590 at the International Convention Centre in Sydney is showcasing a strong line-up of regionally attuned games with exciting new features, a diverse range of volatilities, and new styles of gameplay. IGT’s recently launched Bubble Blast Link is performing exceptionally well on game floors. At AGE, IGT is unveiling a new game for this link, Spells and Whistles, as well as launching a standalone progressive version of the game to provide smaller venues with greater variety on their gaming floors. Other examples of IGT’s high-performing solutions at AGE include the Cleopatra Rising game, an evolution of IGT’s Waterfall play feature where one spin can affect the next, including multi-denoms, jackpots, and a scalable bonus prize. It’s the first in IGT’s “Rising” range now live in the market and entertaining players with engaging graphics. Two new games in the series are being unveiled at AGE: the Fortune Rising and Treasure Rising games. As well as featuring new themes, these titles offer players an additional option in the high-denom segment. Additional featured titles include the Fortune Coin game, a strong global performer localized for the Australian market with a progressive feature that boosts bonus prizes. IGT’s Multistar Legends™ theme offers six classic games with a twist — a new-style jackpot where two-game groups share a special progressive jackpot. In addition, IGT’s Systems team is debuting the Cardless Connect solution in the region. This technology puts the player loyalty card on players’ mobile phones, enabling a new series of product offerings for customers, driving strong player uptake, and providing a convenient, ‘frictionless’ way for patrons to interact with their venue of choice. Meet the team at AGE at stand #590.
Jumbo Technology
A Star is born: Bao Ni Fa Link
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umbo Technology launched the new Bao Ni Fa Jackpot Link this year in their latest D-27 cabinet. This uniquely designed cabinet features dual 27-inch HD displays and enhanced comfort that provides the ultimate gaming experience for players and which is already generating a high level of enquiries after Global Gaming Expo Asia this year. The Bao Ni Fa Link is a progressive linked jackpot that follows the success of Jumbo’s popular Yi Lu Fa Link in Asia. Bao Ni Fa offers two different Asian-themed base games, “Power Dragon” and “Power Mask”, in which the new bonuses and “Power Up” feature provide an entertaining and rewarding experience for players. In addition to the Grand, Major, and Minor jackpots; players also have the chance to win a Fortune jackpot that increases in value based on the bet amount. And the most anticipated feature of Bao Ni Fa is its exciting jackpot game that enables players to win more than one jackpot prizes at the same time. Jumbo Technology, founded in the year 2000, is one of the leading gaming suppliers in Taiwan with an international footprint in Macau, Philippines, Cambodia, South Korea, Myanmar, and Malaysia. Jumbo offers a one-stop tailored gaming solution including Slot Games, Electronic Table Games, Fishing Games, Casino Management Systems, as well as technical and service support. Jumbo Technology is still expanding and exploring new opportunities both in and outside of Asia to achieve their mission: “Have fun with Jumbo around the world.”
Asia Gaming Briefings | August 2019
SUPPLIER SPECIAL REPORT 59 KONAMI
Lian Lian Fa
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ONAMI will be exhibiting their top games of the year including proven performing Stand Alone Progressive games, Link Progressive game titles under All Aboard The Lucky Link and exciting brand new game series exclusive to the Concerto Stack cabinet.
All Aboard has taken the hold and spin concept to a whole new level with its repeat win trigger method during the popular All Aboard Feature. The success of All Aboard has led to the expansion of 7 game titles in the series, including the latest Go West, Shinobi,
Thai Treasure and Prosperous Panda. Konami will also be featuring Money Trails series on the Concerto Stack cabinets. The first of the new Money Trail games, Rising Koi was launched into the NSW and QLD market in April and results so far are exceptional. With the second recently approved title in the series, Fortune Phoenix, Konami looks set to add to their success of the Money Trails series. In addition, Prize Drop and Lian Lian Fa series will be showcased for the first time at Australasian Gaming Expo 2019, reinforcing KONAMI strong product line-up and being “More Than a Game”. Lian Lian Fa will be introduced with their two titles, Perfect Pig and Bamboo Treasure on the Concerto Stack cabinets with 4k graphics and unique voiceover which will have Lian Lian Fa definitely stand out on the floor. The focus of Konami Australia is to not only develop creative and fun games but also the leading SYNKROS management system which has integrated reliable accounting and slot management capabilities, to accurate data collection, adaptable floor management, interfaces with existing property management systems like POS and hotel management, analytics, and highly-targeted marketing that drives consumer behavior and player theoretical worth. All of the above and many more will be showcasing at KONAMI stand #390 at AGE.
Orion Art
Bespoke signage
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rion Art Pty Limited is a direct supplier of custom-designed, gaming-related signage to the casino and gaming industry. Our diverse range of products include: Slot Overhead Signage, Bank End Displays, Denomination Signage, Table Game and Pit Signage, as well as large scale ETG Stadium Signage. We use the latest in LED technology in our wide range of signage. The goal for the company has been to establish itself as a worldwide leader in custom-designed signage specifically relating to the gaming industry. We aim to provide alternatives to “off-the-shelf ” mass-produced signage, while maintaining the highest level of quality in materials, finishes and construction of our products.
Asia Gaming Briefings | August 2019
SUPPLIER SPECIAL REPORT 60 NOVOMATIC
Electronic Table Games
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ovomatic offers a wide portfolio of Electronic Table Games that has seen significant international success on gaming floors around the world. Different solutions available for live games such as Roulette, Baccarat, Black Jack, Sic Bo and various types of Poker include Novo TouchBet Live, Novo Multi- and Novo Flying game versions based on the NOVO LINE Novo Unity II gaming platform that connect multiple terminals to live dealer-driven, fully automated and virtual games, respectively. Each game displays winning numbers provides live data and is packed full of features to maximize the ETG experience. The NOVO LINE Novo Unity II platform combines Electronic Table Games and slot gaming solutions on one terminal. This hybrid product offer gives players a great variety and assists casinos in migrating players between live table play and slots. The multi-game functionality allows operators to link large numbers of terminals to create bespoke live gaming environments while giving players their own stations with the option to select electronic table or slot games. Terminals can link together inside a venue or across a casino estate, creating large stadium-style areas, as well as linking to a range of jackpots. Available on popular cabinets such as the EXECUTIVE SL 1.24 and NOVOSTAR SL 1.27, the platform combines best-of-breed ETGs with slots, creating complete gaming experiences
powered by a single, server-based system. This provides a great range of advantages to the operator such as improved security, player tracking and scalability for gaming positions to be added and repositioned. Connecting a large number of terminals to a single system additionally benefits the operator through increased reliability and decreased labor costs, allowing minimum bets to be offered and attracting a wide range of low- to high-stake players. A single podium or live dealer, for example, can broadcast games to a variety of terminals throughout different venues across a WAN. The dealer does not have to worry about handling chips, instead simply deal or spin, dramatically optimizing game efficiencies. The game selection can be single games or multi-game mixes that can comprise European and American style live games together with renowned slot titles from the NOVOMATIC
games library. Simultaneous betting is also available where up to three live table sessions of one game type can be played at the same time: Roulette, Baccarat, BlackJack or Sic Bo. Extra game windows on the betting screen enable the guest to switch at any time between the games and game versions such as TouchBet, Multi- or Flying versions of the game. Expanding the player options even further, add-ons such as jackpots, tournaments, and side-bets augment the experience while maintaining the essence of the traditional game. NOVOMATIC has partnered with Roulette wheel specialist Cammegh to offer a range of innovative side bets that increase the betting and wagering options for guests. Bets are placed on variable numerical ranges with correlating odds that are displayed on the Electronic Table Game layout. These include Spread-Bet Roulette, Baccarat and Black Jack that enhance engagement with the product.
RTG
RTG launches Football Fortune
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TG Asia has launched an online slot game focused on football to take advantage of Asia’s passion for the sport. Football Fortune enables players to play in Rhino Mode with the option to win up to 100 free games with prizes tripled. The Try the Fortune mode gives the chance of triggering 8 Free games at the end of any normal spin. If extra mini ball icons appear on all reels during free games, the player will be rewarded a Penalty Kick Bonus and each successful kick awards bigger prizes. Shooting the final Golden Ball past the goalie triples the prize pool. RTG SLOTS is the Asia-focused division of Real Time Gaming, which is now celebrating over 20 years of producing igaming platforms and games. With offices in Manila and Kuala Lumpur, RTG SLOTS is focused on producing games that are innovative and provide new experiences for the player. Our games are specifically designed for Asian players, featuring themes, graphics, animations, music and algorithms to which Asian players will connect. From deeply rooted stories and legends that players
Asia Gaming Briefings | August 2019
have grown-up with (e.g., The Three Kingdoms War, Tian Di Yuan Su, Wu Zetian) to more contemporary themes such as the exclusive Kung-Fu Hero film-based series of games and the industry’s first web personality featured game with Sprite (The Mermaid’s PEARLS), RTG SLOTS “understands your players” and is dedicated to delivering games that engage players and increase player lifetime values.
SUPPLIER SPECIAL REPORT 61 SUZOHAPP
SPINTEC
S
S
Simplifying sourcing UZOHAPP, a leading technology company with over 50,000 products for casino operators and gaming OEMs, will be presenting a complete range of gaming solutions at the upcoming Australasian Gaming Expo. ”We are excited to be participating at AGE again,” says Peter Noye, SUZOHAPP’s Vice President, Commercial & Strategy, APA. “‘Simplify your sourcing’ is the message we want to communicate this year. We are proud to provide the world’s largest offering in the gaming and amusement industry - just about anything you need, we can source it.” Visitors to the SUZOHAPP stand will see a full range of key products for OEMs and casino operators, including: • Cash handling, including coin & bill validators, and hoppers • Nanoptix printers • New DPS (Dynamic Panel Systems) featuring PKT technology • Latest VisionPro monitor • Barcode scanners Additionally, SUZOHAPP offers an extensive range of cash handling products for the casino cashier. As major highlights, the CashComplete SDS-35 Smart Deposit Solution and the SCAN COIN desktop solutions (SC-8220, DTC-2) will be showcased. Finally, a special focus will be put on the new 27” Touch Screen Kiosk. “SUZOHAPP is a complete source for OEMs and operators. We can provide every single component that fits into a gaming machine. Manufacturers don’t need to spend time dealing with lots of different suppliers. In a single meeting with our team, they get the latest expert advice on all the components and peripherals they need - simplifying their sourcing and saving time and money,” said Noye. Find SUZOHAPP at stand #477.
Ultimate gaming solutions
pintec will be exhibiting together with its Australian distribution partner Independent Gaming at AGE 2019, where they will present their ultimate gaming solutions. “We are very excited to present our products at AGE 2019. This year’s Australian tradeshow is very special to us, as we have finally entered into the market and started making the first footprints in the Australian gaming industry”, says Primoz Krsevan, Regional Sales Manager at Spintec.
Spintec will showcase its amphitheater setup with a library of virtual games that include Roulette, Baccarat, and Sic Bo. The company is very confident that the Aura amphitheater solution will see great success in the Australian market. Aura attracts a diverse range of players and keeps them in their seats which drives to longer gaming sessions and consequently higher revenues for the operators. Visitors will be able to experience Karma 8 GEN2 Automated Roulette, the first time shown at AGE. Karma roulette is one of the most sold Spintec products in Area. Customizable and ergonomic design, unbeatable comfort, and modular array are the main product’s features that will bring success also on the Australian market. Spintec team warmly invites all the AGE visitors to meet them at Independent Gaming stand #510.
ULTRAPLAY
Unique odds portfolio
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ith its global leadership position as an eSports betting solutions provider, UltraPlay has once again revealed a fantastic selection of markets for the Dota 2 tournament - The International 2019, which kicks off on August 20th in Shanghai, China. The company’s traders have come together to offer a unique odds portfolio for the most important Dota 2 event on a global scale. Lyubomira Petrova, chief marketing officer at UltraPlay said: “The International Dota 2 is a great example of how fast eSports is developing over the years. UltraPlay is totally prepared to offer an unprecedented number of pre-match and live odds that eSports punters all across the globe can bet on through our clients – the leading eSports betting operators on the market.” The event already surpasses a $30 million prize pool, which is the biggest in the history of eSports, topping the Fortnite World Cup.
What’s even more exciting, though, are the markets players can choose from and feel the adrenaline of winning together with their favorite teams, like: Team with most assists in a game; Team that wins – longest game; TI9 prize pool, and many more.” In addition to the outright winner odds, gamblers will be able to select the Region of Winner; Top China Team; Top EU Team; Top NA Team and Top SEA Team. Five teams have the highest chance for securing a victory – Team Secret; Vici Gaming; Virtus.pro; Team Liquid and PSG.LGD. Currently, Team Secret is leading the race to win the International, and on August 2025th all Dota 2 fans will watch the spectacular tournament to know the winner.
Asia Gaming Briefings | August 2019
CALENDAR OF EVENTS 62
AUGUST Australian Gaming Expo 13-15 August 2019 International Convention Center, Sydney https://www.eventus-international.com/ace
SEPTEMBER Mekong Gaming Summit 10-12 September 2019 Sofitel, Phnom Penh, Cambodia https://www.mekonggamingsummit.com/
October International Association of Gaming Regulators annual conference 30 September - 3 October 2019 Montego Bay, Jamaica https://iagr.org/conference G2E 14-16 October 2019 Sands Expo, Las Vegas https://www.globalgamingexpo.com/
Gaming, Entertainment & Tourism Summit 23-25 September 2019 Tiger Palace Resort, Nepal https://www.eventus-international.com/gets
Become a member Exclusive access to AGB Intelligence BE the first to receive our daily briefs priority registration for our events
REGISTER NOW AT AGBRIEF.COM
Asia Gaming Briefings | August 2019
November Asia Gaming Summit 5-7 November 2019 W Hotel, Taipei https://taiwan.asiagamingsummit.com/ Affiliate Conference and Expo. 21-22 November 2019 Solaire Resort & Casino, Manila https://www.eventus-international.com/ace
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Aisling Ni Chonaire Senior Advisor, The Behavioural Insights Team Applying behavioural insights to increase safer gambling
Dr. Larry Barton
Prof. John Braithwaite
Distinguished University Professor of Crisis Management and Public Safety at the University of Central Florida
Distinguished Professor, College of Asia and the Pacific, ANU College of Asia and the Pacific
Professor Emeritus Whittier Law School and Visiting Professor University of Macau
Responsive regulation of gambling
Where’s my jetpack? The future of legal gaming
The dynamic realities of crisis management and casinos: Prevention and oversight in the midst of chaos
Prof. I. Nelson Rose
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Asia Gaming Briefings | August 2019
INDUSTRY OPINION 64
Sudhir H. Kalé*
Six-step plan for optimising customer experience Over the last fifteen years or so, much has been written about the primacy of customer experience to bolster organizational growth and profitability. Pretty much every large organization claims to compete on the basis of customer experience (CX). Yet, the organizational competencies required to deliver a superior guest experience are seldom understood, let alone aligned.
W
hat is a competency? Competency is generally understood to mean that a person or organization is qualified, capable, and able to understand and do certain things in an appropriate and effective manner. Distilling CX competencies is not easy because of the ubiquitous scope of customer experience. CX is impacted by the actions of every department and every level within the organization. Based on two decades of research and consulting experience, I have extracted six CX competencies which, if developed and refined, should result in a superior customer experience. Market Orientation The concept of market orientation came about in the early nineties when researchers were looking to identify what separates great companies from the merely good ones. An offshoot of the marketing concept, market orientation refers to the “organization wide generation, dissemination, and responsiveness to market intelligence.” Market intelligence is organizational understanding of customers’ current and future needs and the factors affecting them. Market intelligence thus becomes the foundation on which to build the customer experience. Without understanding customer needs and expectations, and responding to these with appropriate design and actions, customer experience will always fall short of customer expectations. Employee Engagement Employee engagement can be defined as putting forth ‘‘discretionary effort,’’ in a job-context. The discretionary effort could be extra time, brainpower, or energy. To garner requisite employee engagement competency, organizations should address the drivers of engagement and disengagement. First, there needs to be alignment in values between the employer and the employees. If the organization is looked at as something more than a provider of jobs and a means of making a living, employees will be more willing to exert discretionary effort in their jobs. Second, interactions between senior management and employees has a strong bearing on engagement. Senior management needs to communicate with employees at all
Asia Gaming Briefings | August 2019
levels in a manner that is open, transparent, and caring. The third driver of employee engagement is the relationship an immediate supervisor has with an employee. The human touch, so necessary for employee morale and well-being, is often absent in superior-subordinate interactions. The fourth major driver of employee engagement is providing a setting where employees feel that they have plentiful opportunities to learn and grow. Where development is clearly in sight, discretionary effort follows. Emotional Intelligence Over the last two decades, much has been written about emotional intelligence (EI). So, exactly what is emotional intelligence? It’s the ability to recognize, understand, and relate to your own emotions as well as the emotions of others. In his path-breaking book, “Emotional Intelligence: Why It Can Matter More Than IQ,” Daniel Goleman reported on a variety of research studies making the case that skill in handling emotion is as significant as skill in handling other forms of data (such as those measured on an IQ test). A study reported by the University of Maryland in 2011 stated that over 70% of hiring managers considered EI to be more important than IQ in recruiting of employees. Emotional intelligence is comprised of five key elements: Self-awareness, motivation, empathy, social skills, and selfregulation. This combination of traits helps individuals control their own emotions while relating to people to establish a bond. Emotionally intelligent employees are almost intuitively able to assess customer emotions and expectations and respond to these in a manner that creates customer intimacy and enriches the customer experience. Service Blueprinting A service blueprint is a diagram that visualizes the relationships between different service components — people, props (physical or digital evidence), and processes — that are directly tied to touchpoints in a specific customer journey. It is a visual, information-laden document that describes where and how customers interact with your organization. The unique benefit of using a service blueprint is that it allows an organization to view the entire customer experience from the customer’s perspective. By providing
INDUSTRY OPINION 65
an overview of the entire service process—both current and future—employees can get insight as to how their roles fit into the integrated whole. The blueprint also generates understanding into the various role and relational interdependencies throughout the entire organization, thereby highlighting the interrelationships across business processes. Given the potentially innumerable applications of service blueprints, it is no wonder that three of the six major casino operators in Macau are using these tools for fixing fail-points in the customer journey, for identifying touch points where cost savings can be generated, and for designing touchpoints that differentiate their customer experience from competitors. Designing the Servicescape A servicescape comprises of tangible elements within a gaming property. It encompasses the physical environment where the service is delivered and is composed of numerous elements such as the color, music, scent, layout, design and employee uniforms. Environmental stimuli affect the emotional states of pleasure and arousal, which, in turn, becomes an important determinant of customer experience. Gaming providers need to ensure that the entire servicescape is such that guests want to visit and spend time in the environment that is provided for them. In designing the servicescape, care must be taken to avoid a clash between the different elements. For example, the color of the carpets should not clash with that of employee uniforms.
If you are piping in low arousal music, you should avoid using a high arousal scent in your property. Ensuring harmony across the multitude of elements constituting the servicescape is no easy task. Typically, an integrated resort is built in phases, often under the stewardship of leaders with somewhat different tastes and preferences when it comes to resort décor and ambience. Therefore, it is always advisable to bring in external experts to assess the servicescape at regular time intervals. Linkage Analysis Linkage analysis involves connecting customer experience outcomes to business metrics such as revenues, market share and profits. CEOs of gaming organizations will buy into CX enhancement only if they see tangible financial rewards from enhancing the customer experience. While there exist aggregate findings on the benefits of CX (e.g. a billion-dollar company can increase revenues by $375 million by becoming a CX leader), CEOs want to see irrefutable evidence that CX pays off handsomely in their context. With the right data and appropriate evaluation, linkage analysis will answer questions such as, “What is the bottom-line impact of increasing customer satisfaction scores by ten percent?” “What is the relationship between Net Promoter Score and profitability?” “How much money should be spent on fixing a particular touchpoint along the customer journey?” Obviously, for linkage analysis to thrive
within an organization, there needs to be a culture that promotes data-driven decision making. Data generated and disseminated from market-oriented activities should form the inputs for CX initiatives. CX metrics resulting from the CX initiatives should then be tied to key financial metrics such as revenues and profitability. Conclusion The gaming industry has become increasingly competitive over the last decade. Customers have an increasingly array of choices between online as well as land-based gaming options. Gaming analysts estimate that US$65 billion will be spent in Asia alone between now and 2025 to create additional integrated resorts. To attract and retain valuable customers in such an ultra-competitive marketplace will necessitate offering the best possible customer experience. The six competencies discussed in this article should provide gaming operators with an understanding of what it takes to offer a superior customer experience. As with most business initiatives, the robustness of the CX will be determined by the weakest link across the six competencies. *Sudhir H. Kalé, Ph.D., has studied the topic of customer experience for over 20 years. He is the Founder and CEO of GamePlan Consultants, a company that has helped companies enhance their customer experience on five continents.
Asia Gaming Briefings | August 2019
LAST WORD 66
Sharon Singleton
Managing Editor, AGB
China puts online gambling in its crosshairs Once again Beijing is flexing its muscles and this time is sending a clear warning signal that online gambling targeting its nationals won’t be tolerated.
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The operators themselves are also well aware of n July, Public Security Minister Zhao Kezhi pledged to resolutely crack down on cross-border gambling, the potential problems they could face if they don’t including those recruiting gamblers from China tread carefully, with master licensor Oriental Game recently announcing that it plans to set up two hubs through overseas casinos. Cited by state news agency Xinhua, he warned to house the ballooning number of Chinese workers that police will crackdown on underground banks and companies. It argues that these centres, one in the north in and payment platforms that facilitate the movement of funds and that he will seek international cooperation Clark City and one in the south in Cavite, will make it easier to oversee and regulate the online gaming to stamp out “such crimes.” He was speaking just days after state media singled companies. As a reward for its efforts and to attempt out Macau’s largest junket operator, Suncity Group, to lure out underground operators, the Philippine accusing it of illegal online gambling and proxy betting. Amusement and Gaming Corp. has said it will grant five-year licenses to those settling The unusual step prompted in the zones, compared with the Suncity CEO Alvin Chau three years available elsewhere. to call a press conference to Whether Philippine efforts to vehemently deny the allegations. Given the tidy up before Beijing gets more He nevertheless apologized to influence China heavy handed are successful the Macau government for any remains to be seen. inconvenience the reports may wields in Cambodia, In some ways you could argue have caused. it wouldn’t have Beijing has been remarkably The Suncity incident and tolerant for some time, prompting Zhao’s comments potentially been hard to the question as to why now? have far-reaching ramifications pressure Phnom Given the influence China for other jurisdictions in Asia, wields in Cambodia, it wouldn’t most notably the Philippines Penh or Manila to have been hard to pressure and Cambodia. turn off the taps Phnom Penh or Manila to turn Although it is strictly illegal years ago. off the taps years ago. to target Mainland clients, it’s Some argue that China clear that gaming companies in knows its people will gamble both countries have been doing come what may and it’s better exactly that for some years now. Both have seen a massive influx of Chinese workers for Beijing to have them do so in countries where it can into the online industry to man their call and service exert control. Prime Minister Hun Sen is a close ally of President Xi Jinping, while since coming to power centres with Mandarin-speaking staff. For some time now the Philippine government Philippine President Rodrigo Duterte has hitched has been seeking to crackdown on Chinese flooding himself to the mast of the regional superpower. That into the country’s online gaming sector without proper hasn’t changed. What has changed is China’s economic growth. visas and without paying the right level of taxes. It’s probably fair to say that some of these efforts stem The trade war with the U.S. has put the brakes on the from a desire from the Philippines to put its own economy, which slumped to a 27-year low in the second house in order before Beijing does it for them, thereby quarter. As it grapples to right the ship, it may have retaining what has become a highly lucrative source become far less tolerant of anything that potentially leeches money out of the country or its citizens. of income for the government.
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Asia Gaming Briefings | August 2019
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