AGBriefings August 2020 Edition by Asia Gaming Brief

Jurisdiction Updates August 2020 Edition

In focus

Australia

Reopening pubs, online rethink and reflections on gambling behavior pg.20

Philippines POGO problems pg.36

CAMBODIA

Ready for a rebound pg.18

Macau

Stanley Hoâ&#x20AC;&#x2122;s legacy pg.8

JAPAN

Online opportunities pg.14

AGE SUPPLIER SPECIAL REPORT pg.40

Asia Gaming Briefings | August 2020

MESSAGE 3

So long, but not farewell

he industry might be down but it’s definitely not out

health and other concerns, Macau has been back online after a

- its resilience has been proven again and again.

short hiatus. The massive IRs have kept the lights on, and all

In this edition of our magazine, the focus section

that entails, catering to minimal patronage. “All six operators

examines a range of issues facing gaming in

have maintained their staff levels and contributed greatly to

Australia. In our first article, we take a look at the opening

charitable efforts in the special administrative region, but

experience for pubs and clubs, which at first blush has been

with no end in sight to the border restrictions, it wouldn’t be

more positive than expected. However, as government

unreasonable if their patience is wearing thin,” says Sharon

subsidies wind down, venues are expecting business to

Singleton, AGB’s managing editor, on her Last Word.

slow down. There’s also renewed uncertainty given the new

Also covered in these pages are the endeavours in Japan’s

lockdown in Victoria.

online market: A growing number of online operators

From a regulatory perspective, Julian Hoskins, Principal

are targeting the country - attracted by the potential of

at Senet, takes us through the pros and cons exercise

converting some of the $38 billion in annual pachinko

of rethinking the country’s online gambling ban. And,

revenue to their sites.

operations wise, Sudhir Kale, founder and principal of

For the first time in 30 years, the Australasian Gaming

GamePlan Consults, provides his thoughts on how to

Expo will not be filling the floors of the International

successfully restart the casino motors. Lastly in this section,

Convention Center in Sydney’s beautiful Darling Harbour.

for a rounded view, we study the impact of the pandemic on

However, Asia Gaming Brief has once again been selected

problem gambling rates. Leading gambling harm researchers

to deliver the Australasian Gaming Seminars, a three-day

Sally Gainsbury and Alex Blaszczynski assess whether the

digital conference program aimed at exploring the latest

stress from the current situation is leading to a spike in

developments in the Australasian gaming market.

gambling addiction, or whether lack of access to pokies is

Tune in to get exclusive insights such as the exclusive video

helping to press the reset button.

tour of SkyCity’s Auckland venue – one of the first gaming

Asia Gaming Brief has taken a proactive approach to the

venues in the region to reopen amid COVID-19 where you’ll

market’s recovery with the development of the Australian

hear how they’ve seen customer demand change from the

Gaming Survey: Covid-19 Response - a nationwide survey

onset, what challenges have been experienced in their venues

sent to clubs and pubs across Australia to explore how

and their advice for the Australian market.

Rosalind Wade

Luis Pereira

businesses have been impacted by the Covid-19 pandemic, We’ll find you at AGE’s Digital Seminars!

and the strategies employed to mitigate its impact. Results from this new data instrument will be presented by leading research firm Forecast during this year’s online

On behalf of Asia Gaming Brief

Australasian Gaming Seminars.

Rosalind Wade & Luis Pereira

Taking another page from the recovery coverage, while

Publishers

Cambodia has taken a major knock from the Covid-19 crisis and last year’s ban on online gaming, we’ve found

Connect with us:

that those on the ground are optimistic it will bounce back stronger than ever.

@agbrief

Unlike other Asian jurisdictions, where most properties have been allowed to shut down their operations due to public

Asia Gaming Brief

www.agbrief.com

AUGUST 2020 EDITION Series II • Issue XIX

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Asia Gaming Briefings | August 2020

CONTENTS 6

GREATER CHINA

INDOCHINA

NORTH ASIA

MACAU

south korea

JAPAN

russia

CAMBODIA

SOUTH EAST ASIA

AUSTRALASIA AUSTRALIA

malaysia

CNMI

PHIlippines

special focus

SUPPLIER SPECIAL REPORT

LAST WORD

AUSTRALASIAN

GAMING SEMINARS

AGE 20 TUESDAY 11 AUGUST - THURSDAY 13 AUGUST 2020 AD In 2020 AGE brings you its thought-provoking seminar sessions online. Hear from analysts, operators, regulators and marketers. Find out how our industry is rising from restrictions and strengthening for future challenges.

www.austgamingexpo.com/agenda

Asia Gaming Briefings | August 2020

GREATER CHINA

MACAU

Family feuds, lack of leadership, cloud outlook Stanley Ho’s death in May left his family fighting for the spoils of his sprawling empire and further complicated problems created by SJM Holding’s complex leadership structure.

Asia Gaming Briefings | August 2020

uring his long life, Stanley Ho had four wives and he fathered seventeen children, of which fifteen survive. Long before his death finally came in May, many of these heirs had become rivals for money and power. SJM Holdings Limited is the Hong Konglisted holding company of Sociedade de Jogos de Macau, which holds one of Macau’s six operating licenses. SJM controls 22 of Macau’s 41 casinos as well as a string of other business interests that extend his reach into most corners of life, including the Macau Jockey Club, Shun Tak Holdings, which operates the ferries and hydrofoils shipping gamblers into the territory and a stake in Macau’s international airport. Although Ho has not been directly involved in the business of the company since 2018, his presence was seen as a steadying influence amongst rival factions. Daughter Pansy Ho is currently believed to be the most influential of his heirs, but she also faces a serious rival in the person of Angela Leong, the fourth and final wife. Ho family politics are both complex and dark, and would be worthy of more than one fiction novel if it weren’t real life. In recent years and going forward, the biggest question mark hanging over SJM Holdings is that of its future leadership. Will Pansy Ho tighten her grip on the empire? Or will her power be broken by Angela Leong or another rival? Or will the company just muddle along for years without leadership clarity? Many independent analysts have not been impressed by SJM Holdings’ approach to corporate governance. For example, a note by Bernstein Research stated, “In our view, instead of using Stanley Ho’s retirement back in 2018 as an impetus to make governance

GREATER CHINA 9

and management changes, the company opted to further entrench the status quo, i.e., dysfunction, while placating various interests. A hydra-like three headed co-chairman group and the elevation of entrenched management was not an indication that any shake up at the company for the benefit of independent shareholders was forthcoming. The byzantine corporate ownership and governance structure of SJM was not alleviated by this agreement. The current board is comprised of three co-

If anything we “ could see greater

infighting between various interested parties.

”

chairman with varying interests.” The note did not see any fresh clarity likely to immediately emerge from Stanley Ho’s death: “If anything we could see greater infighting between various interested parties. Again, until we see substantive alterations to management and governance that will lead to fundamental changes to how SJM operates and increases their positioning in Macau’s highly competitive market, we remain on the sidelines.” Ho was laid to rest in a star-studded ceremony in Macau in July. Among the pallbearers were Hong Kong Chief Executive Carrie Lam, former Hong Kong Chief Executive Tung Chee-hwa, former Macau Chief Executive Edmund Ho, in Central People’s Government Liaison Office

in Hong Kong Director Luo Huining. Funeral wreaths were sent by many others, including Chinese President Xi Jinping. Ho dominated Macau’s casino industry for four decades before the market was opened for competition in 2002. He was known as the King of Gambling, but professed never to gamble himself. He amassed a personal fortune of about $3.1 billion, according to Forbes, but his colorful life has not been without its hardships. Ho was born in Hong Kong in 1921 to the powerful Ho Tung clan. He was the ninth of 13 children and in his early years lived a life of wealth and privilege. However, the Great Depression bankrupted his father leaving his family in poverty and two of his brothers committed suicide. In a rare interview with CNN in 2004, Ho said the experience was the kick start he needed to stand on his own two feet and improve his mediocre school grades. According to reports, the fortune came from running luxury goods into China during the war. He also set up a kerosene company in 1943 and later benefited from Hong Kong’s post-war construction boom. He used those profits to win Macau’s gambling monopoly rights in 1962, which he enjoyed for four decades, presiding over the world’s highest-grossing casino. Under the surface though tensions were bubbling, finally reaching a boiling point in the mid-nineties, when Triads fought openly on the streets in a battle for a slice of the lucrative industry. When Portuguese rule ended in 1999, the incoming administration decided a shakeup in the industry was needed. In 2002, it broke up Ho’s monopoly, awarding three new licenses, which subsequently morphed into six through a series of sub-concessions.

APE plans sports unit to diversify income Asia Pioneer Entertainment, an electronic gaming equipment company, said it plans to begin a sports and sports-related entertainment business in Macau to diversify its income stream. The Hong Kong-listed company said the new business would include sponsorship and promotion of sports events and operating sports entertainment venues. APE Sports and Entertainment Limited, will be a wholly-owned subsidiary of the company. “The group has been actively exploring new business opportunities in order to diversify its income stream and bring a higher return to its shareholders,” it said in a note to the Hong Kong Stock Exchange. “Taking into account the increasing awareness of health and increasing demands for sports events in Macau, the directors are of the view that the commencement of the new business will be a good opportunity for the group to diversify its income stream and may enhance the financial performance of the group.” APE reported a widened loss of HK$1.9 million (US$242,000) for the quarter ended March 31, 2019, due mainly to a fall in revenue.

Asia Gaming Briefings | August 2020

GREATER CHINA 10

MGM china

Sjm holdings

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 and its ramp up has helped the company gain market share in the latter half of 2019. CEO Grant Bowie left the company at the end of May, slightly earlier than analysts had been expecting. Bernstein Research has noted that Pansy Ho seems to be personally stepping into the leadership vacuum at MGM China. “Pansy Ho looks to take on more day to day oversight of MGM China, which comes as somewhat of a surprise to us. We have concerns around this structure as there is limited direct casino operations and marketing management experience among the top executives.” They noted that no single individual was appointed as Bowie’s successor, but instead the day to day operations have been split amongst two executives Hubert Wang and Kenneth Feng, with a third executive, Antonio Menano, expanding on his role as general counsel. These three, in turn, now report directly to Pansy Ho.

SJM Holdings (880:HK) has 22 casinos in Macau, though the former monopoly has been losing market share to new IRs on Cotai. SJM Holdings said it doesn’t expect its revenues to return to their pre-crisis levels this year and at present it’s not possible to predict how long the Covid-19 pandemic will continue to affect its business. The operator does expect spending to return positively once travel restrictions are lifted, but at present there is no visibility on timing. SJM posted a 74.4 percent drop in group revenue in the first six months of 2020 to $4.7 billion ($606.4 million) and swung to a loss at the level of adjusted EBITDA of HK$984 million compared with a profit of $2.0 billion in the same period a year earlier. The company had a net loss of $1.4 billion from a profit of $1.6 billion. It said it won’t pay a dividend. The company said it had a 15 percent share of the market in the first half, a slight improvement on 14 percent a year earlier, with a 22 percent share of the mass market and 8.6 percent of the entire VIP market. At the company, mass market gross gaming revenue declined by 73.5 percent during the reporting period and VIP gross gaming revenue was down 81.6 percent. SJM said it has completed construction of its new Cotai property, the Lisboa Palace and is still targeting an opening by the end of this year.

Wynn macau Wynn Macau (1128:HK) operates two resorts, with its $4 billion Wynn Palace opening in 2016. The company’s original property is on the Macau Peninsula. The Wynn Palace has 1,700 hotel rooms and 90 percent of the resort is non-gaming. In November, the company opened elements of its new Lakeside Casino at Wynn Macau. During the Covid-19 crisis the daily burn rate in Macau has been $2 million, according to comments made by Executive Chairman Allan Zeman in July. That compares with a profit of about $3.5 million a day in the same period a year earlier. “Obviously business has not been good because the borders have been closed between Hong Kong, China. Though we have maintained our staff throughout the last two months,” he told CNBC television. The company says it will be able to break even on an adjusted property EBITDA basis once gross gambling revenue returns to between 45 percent and 50 percent of its prior run rate.

Asia Gaming Briefings | August 2020

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. It is also developing a resort in Cyprus and maintains a strong focus on Japan. Like other operators, Melco has been striving to cut costs to mitigate the impact of the coronavirus on lost revenue. It says it has been able to push its average daily operating costs to around US$1.5 million, reflecting a decrease from run-rate levels in the first quarter of 2020. Melco noted that as of June 30, 2020, it had cash and cash equivalents of US$670.7 million and restricted cash of US$0.3 million, along with US$1.56 billion under 2020 Credit Facilities and US$129,000 under the 2015 Revolving

Credit Facility which remains available for future drawdown. The company is also backing a $500 million private placement by its Studio City International Holdings unit, agreeing to take up its entitlement and also any shares that are not subscribed. Prior to the offer, Melco held 54.1 percent of the operator of the Studio City resort.

Sands China Sands China (1928:HK) has five properties in Macau. The company has 12,000 hotel rooms and suites, making up for 48 percent of hotel rooms run by casino operators in Macau. For Q2, Sands China recorded a net loss of US$549 million, with revenue at US$40 million, which was a 98.1 percent drop from the same quarter in 2019. Nevertheless, the company reported that it still has plenty of cash, with unrestricted balances as of the end of the quarter above US$3 billion, and almost US$4 billion more available to the company through combined revolving credit facilities. As a result, it says it will be able to complete projects in Macau and Singapore as well as have available funds for new market opportunities.

GREATER CHINA 11

The company says the Covid-19 pandemic has not affected its timetable for the opening of a London-themed IR, with some elements to be open to the public this year. The Londoner is a revamp of the Sands Cotai Central complex.

Galaxy Entertainment Group Galaxy Entertainment Group (27.HK) has three main properties and runs three City Club casinos inside hotels. The company is currently working on Phase 3 of Galaxy Macau, which is to feature 1,500 hotel rooms, some casino space, a large-scale arena with 16,000 seats, and 400,000 square feet (37,161 sq metres) of MICE space. The launch is scheduled for the first half of next year. The company was recently forced to issue a statement denying allegations that it favored non-local construction workers as it transferred them from the Phase 3 site to the Phase 4 site in Cotai. The statement followed a protest by workers who claimed they had been laid off while non-locals were working on the new site. Galaxy said the issue, relating to barbending work, had been handled properly by the contractors and subcontractors.

GROSS GAMING REVENUE

Mass market still key to Macauâ&#x20AC;&#x2122;s future

Monthly Gross Revenue from Games of Fortune

The sharp downturn caused by Covid-19 has not altered the underlying structural reality that the future of Macau gaming lies much more with the mass market than with VIP, according to a new report issued by Bernstein Research. Bernstein projects that it will take several years for Macau GGR to fully recover from the impact of Covid-19, but by 2023E it will reach new heights, recording US$47 billion, led by 8 percent CAGR from the mass market. By that point, mass should be contributing 78 percent of incremental growth. In 2011, the contribution of mass to GRR was only 27 percent, but it has surged ahead of VIP over the past decade, and Bernstein projects that this trend will continue as Covid-19 subsides. The Bernstein report also highlights the importance of Guangdong as a feeder market to Macau for its mass customers. The analysts estimate that the province contributes about 30 percent of mass GGR as well as about 15 percent of VIP GGR, exceeding the impact of the second-largest feeder market, Hong Kong.

2019

2020

January

24,942 22,126

25,370

February

3,104

25,840

March

5,257 23,588

April 754

May

25,952 1,764

23,812

Jun 716

(Source: DICJ)

Asia Gaming Briefings | August 2020

NORTH ASIA

south korea

Jeju most at risk from Covid-19 downturn South Koreaâ&#x20AC;&#x2122;s three major operators are likely to come through the economic downturn caused by the Covid-19 pandemic without too much difficulty, but the smaller and weaker operators on the island of Jeju may face a much tougher time, analysts say.

Asia Gaming Briefings | August 2020

NORTH ASIA

he South Korean casino market is devastated because there’s been no business with dominated by three major players— the casino or hotels. The local businesses have Paradise Co., Grand Korea Leisure suffered a lot. I think up to 70 or 80 percent losses of income.” He adds that about half of the (GKL), and Kangwon Land. Privately-held Paradise Co. operates four surrounding shops and restaurants have closed. Choi believes that once it reopens its foreigner-only casinos in the country. These are Paradise Casino at Paradise City in Incheon, doors, Kangwon Land will bounce back almost Paradise Casino Walkerhill in Seoul, Paradise immediately, probably more robustly than any Casino Busan, and Paradise Casino Jeju Grand. other casino in South Korea. “I think that as soon as we reopen our casino Government-owned GKL operates three foreigner-only casinos under the Seven Luck and hotel, business will get back to a normal brand; namely, the Seoul Gangnam Casino, the level quickly… Being the only casino that allows Seoul Hilton Casino, and the Busan Lotte Casino. local people has such an advantage over other Finally, government-owned Kangwon casinos,” he notes. The other two major firms will likely see a Land operates a single casino in a remote part of Gangwon Province, but this facility has the slower return to normality since their casinos distinction of being the only casino in the nation depend exclusively upon foreign patrons. Some where it is legal for South Korean nationals to foreigners live in South Korea, and so in major urban areas the casinos will not be entirely come and wager on games of chance. All three of these firms have witnessed steep empty, but until the airports are humming declines in their revenues since the Covid-19 with customers arriving from abroad, they crisis took hold, first by choking off the flow can only hope to do a fraction of their normal of patrons from abroad—mainland Chinese gambling business. The situation, however, is considerably more visitors above all others—and then, in many dire for the small casinos on cases, forcing long-term the island of Jeju. suspensions of operation. Aside from the previThat said, analysts do ously mentioned Paradise not foresee the economic The damage Casino Jeju Grand in the impact as being serious hasn’t been as Maison Glad Hotel, the other enough to threaten South seven gambling facilities Korea’s big three with any extensive as I here are the Gongzi Casino permanent closures or initially thought it in the Ramada Plaza Hotel major realignments. was going to be. (Gongzi Group), Landing In the case of Paradise Casino at Jeju Shinhwa World Co., it is known to have (Landing International deep pockets and is already Development), LT Casino spending heavily on new promotional campaigns to bring local customers at the Lotte Hotel Jeju (Lotte Corp.), Jeju Sun back through its doors, especially to its non- Casino at the Jeju Sun Hotel (Bloomberry Regaming facilities such as its hotels, swimming sorts), Majestar Casino at the Shilla Hotel Jeju pools, and its new indoor theme park Wonderbox. (Hotel Shilla Co.), MegaLuck Casino at KAL GKL and Kangwon Land have even less to Hotel Jeju (New Silkroad Culturaltainment), worry about. Since they are owned and operated and Royal Palace Casino at the Oriental Hotel by the South Korean government, bankruptcy (Jeju Oriental Hotel). Gaming Korea Director of Strategic Planning isn’t really a concern. GKL’s casinos are meant to draw US dollars from visiting tourists, and Jeff Heo notes, “For the small Jeju casinos, they’ve Kangwon Land serves as the centerpiece for the really had no foreign guests coming to Jeju, and economic revitalization of a depressed former the tourist volume has dramatically decreased.” Lacking the government support of GKL mining community. Perhaps this is part of the reason why Kangwon or Kangwon Land, and in some cases the deep Land’s Executive Producer and General Manager pockets of Paradise Co., and furthermore with of the EGM Division Raymond Choi can be so virtually no resident foreigners in the local area upbeat: “The damage hasn’t been as extensive as to bring in at least some casino business, these firms are facing a much harder road. I initially thought it was going to be.” Moreover, Heo adds that “Jeju casinos Choi was speaking of the condition of the Kangwon Land resort itself, but he noted have very small marketing budgets compared that the picture is quite different for the local to the big casinos like Paradise, GKL, and people: “The surrounding community has been Kangwon Land.”

“

”

GROSS GAMING REVENUE Kangwon Land

Only for foreigners

GGY (hundred million won) 14,001 16,253

Turnover share

GGY share

6.3%

14.5%

7.3%

16.8%

Number of visitors (thousand people) 2,852 2,839

Average betting price per person US$49.1

Number of premises 1

US$57.2

(Source: National Gambling Control Commission)

June revenue improved for GKL Grand Korea Leisure saw casino sales in June rise 20.5 percent from the prior month, boosted by revenue from table games, although they showed a drop of 68 percent from the prior year. The South Korean operator said sales were KRW12.48 billion ($10.4 million), down from KRW38.95 billion a year earlier. In May, sales were KRW10.36 billion. The company said table games revenue was down 69 percent year-on-year, but were up 29.4 percent from May. Machine sales were down 11.2 percent.

MegaLuck owner issues profit warning New Silkroad Culturaltainment, operator of the MegaLuck Casino at KAL Hotel Jeju, has issued a profit warning for the six month period ending June 30. “The group is expected to record a net loss from the continuing operations of more than HK$47 million as compared to a net loss of approximately HK$23 million for the corresponding period in 2019,” a statement to the Hong Kong Stock Exchange revealed. The increased losses were mainly attributed to “the significant drop in revenue from the group’s entertainment business in Jeju, Korea, due to the outbreak of the novel coronavirus pandemic since January this year and the imposition of local travel and entry restrictions by the Korea government.

Asia Gaming Briefings | August 2020

NORTH ASIA 14

JAPAN

Japan online growing, but a tough nut to crack A growing number of online operators are targeting Japan, attracted by the potential of converting some of the $38 billion in annual pachinko revenue to their sites, though cracking the market takes patience, meticulous attention to detail and full immersion in the local culture.

nline gaming is illegal in Japan, although the regulations are not strictly enforced. Some operators are betting on the fact that once the country finally has casinos up and running, online regulation will follow suit. “We’ve seen it in other countries. We might be wrong, but we really hope that will be the case,” said an executive from a recently launched an online operation in Japan, who wished to remain anonymous. Figures for the current size of the market are hard to come by, although Robin Reed, CEO of operator Ichiban Ventures, told an SBC CasinoBeats conference panel that online casinos may be currently generating about $300 million annually. Perhaps the most solid data comes from Gamesys Group, which owns brands such as Vera & John, the market leader in Japan, as well as Solid Gaming and Golden Hero. In its annual report, the U.K.-listed group

Asia Gaming Briefings | August 2020

said that Asia B2C revenue, which forms the bulk of its income in the region was GBP 122.4 million last year. Japan is its largest market. “With triple-digit growth in 2019, Japan has been a resounding success and continues its positive momentum and upwards trajectory,” it said in its annual report. Still entering the market is notoriously difficult. The main ways through the door are through SEO and through the country’s existing super affiliates, as advertising on normal channels is not permitted. Any adverts that are appearing tend to be on less mainstream sites and ones which are unlikely to improve the image of the industry amongst the general Japanese public. One online operator, which offers games from all the major providers, took a big step last month when it began advertising on a small television channel, but only for its not-for-money gaming site, which has a different domain from the real money channel, but the same brand.

If you can convert a Japanese player onto your site, you are likely to have a highly loyal and valuable customer. Andrea Bellezza, VP of EU and Asia Pacific at KaFe Rock, a Malta-based affiliate organization, told the CasinoBeats panel that he couldn’t put a figure on lifetime value for a player, but said it’s higher than the numbers being seen in the U.S. “They are a bit harder to get and you need to put in a lot of effort, but it’s definitely worth it as the amount they spend is much higher than in Europe. They are one of the most valuable players in the world.” Reed agreed, saying he had seen lifetime player values in excess of EU2,000 and that is likely to rise over time. Still, anyone thinking they can attract and retain a Japanese player by a few localisation tweaks to an international website is unlikely to be successful. The Japanese need meticulous attention to customer service and expect a unique proposition for their market.

NORTH ASIA 15

GROSS GAMING REVENUE Number of overseas visitors to Japan for the month of May 3.000.000 2.500.000 2.000.000 1.500.000 1.000.000 1.700

500.000 0

2016

2017

2018

2019

2020

(Source: JTB Tourism Research & Consulting)

Lawmaker Shirasuka admits to receiving bribes

“The number one thing is you need to show you are dedicated to the Japanese market, so you need to pay attention to Japanese,” said Natalie Meyer, founder and CEO of Tokyoesque, a marketing and research agency. “You need to show there is something you are doing that is Japan only, such as that mascot you have. It shows that you have taken the time to see what Japanese design expectations are and have localised the websites accordingly.” Reed agrees, admitting that his country had delayed its entry after understanding the barriers. “We realised how high the threshold is to enter the market. That caused us to push back a bit because we realised if we go in there prematurely you are going to burn yourself and won’t be taken seriously are not going to get a second chance.” The Japanese player also expects a lot more information than the typical European. “The Japanese tend to read a lot more before they try something new,” the executive said. “They want all the cards on the table so you have to explain a lot more. We’re used to being as few clicks away as possible from a deposit, but in Japan it’s not that way, they need a few more steps.” Gamesys points out that those steps a company takes to gain that trust are key. “In an unregulated market, where some operators may not adhere to best practice, it is even more important to establish high operating standards and look after our players in the best way possible,” it says.

Japanese lawmaker Takaki Shirasuka has admitted to receiving 1 million yen (US$9,300) from 500.com whilst visiting the company’s headquarters in 2017, according to a report by Kyodo News. The revelation forms part of a bribery scandal involving Chinese gambling company, 500.com, and former Cabinet Office state minister Tsukasa Akimoto, which at the time, was in charge of IR policymaking. Akimoto was indicted on bribery charges for accepting a total of 7.6 million yen from the Chinese company from 2017 to 2018, which was allegedly used to pay off supporters in his reelection campaign. At the time of Akimoto’s arrest, two other lawmakers had their offices raided, one of them being Shirasuka, a member of the Liberal Democratic Party. Shirasuka is said to have accompanied Akimoto whilst visiting the headquarters of 500.com in Shenzhen and a casino in Macau in 2017, where he accepted payment of expenses by the firm and the covering of his gambling chips.

Citizen group plans anti-IR signature push in Sept. A citizen group in Yokohama will conduct its signature drive demanding a popular referendum over the city’s IR development plans beginning on September 4. The signature drive will last two months until November 4. The aim of the group, fronted by prominent constitutional scholar Setsu Kobayashi, is to deliver the signatures to the Yokohama City Council when it reconvenes in January 2021, and to trigger a popular referendum to be held around May 2021. Originally the group had targeted 500,000 signatures, but Kobayashi explained at the press conference that the target would now be about half that amount because the Covid-19 pandemic has resulted in fewer people who can take to the streets to collect the signatures.

Asia Gaming Briefings | August 2020

NORTH ASIA 16

RUSSIA

Primorye’s gaming hub dream edges towards reality The concept of a casino and entertainment hub in Russia’s Far East will take a further step towards fruition this summer with the expected opening of the Shambhala Casino.

t will be the second integrated resort in Russia’s Primorye gambling zone, with a further property being developed by Nagacorp likely to open next year. The Shambhala casino is being built by businessman Maxim Smolentsev, who already operates a casino in Russia’s Azov City zone. So far, 3.5 billion rubles have been invested in the Shambhala resort out of a total projected cost of 8 billion rubles. The second stage will begin in 2022 and will feature a five-star hotel

GROSS GAMING REVENUE 2018

2019

Rolling chip turnover Mass table drop Slot handle

HK$15.2b HK$15.5b $751m 700m

$3.4b $2.8b (Source: Summit Ascent)

with 270 rooms, a spa area, a banquet hall and a conference hall. The main gaming hall will occupy an area of 5200 sq. m, which is more than other casinos in Russia. “In the short term, we see the Primorye IRC as a pan-Asian resort that attracts tourists from many countries of the world,” says Smolentsev, General Director of Shambhala CJSC. – We are waiting for guests from Japan, Cambodia, China and South Korea. Although for us, the

Ukraine legalises gambling Ukraine has passed a bill that will legalise all forms of gambling, although casinos will only be able to be located in hotels. The bill, which has been subject to multiple amendments, sets licence fees for online gambling at UAH30.7m ($1.1m), which will need to be paid when a licence is renewed every five years. Bookmakers’ licence fees were set at UAH70.8m while a flat fee UAH121.6m was set for casinos located in hotels in Ukraine’s capital Kyiv, with a UAH70.8m fee for casinos in hotels elsewhere. The bill stated that all operators and slot machine suppliers “must not be controlled by residents of an occupying state and/or the aggressor state in relation to Ukraine”.

Russia overhauls sports betting rules Russia has approved legislation that will significantly overhaul its sports betting industry, imposing tax on bets placed on overseas events and extending financial obligations to all market participants. The State Duma passed the bill in the second and third reading, according to law firm Dentons. The new rules pose limits on the types of events that can be wagered on, limiting activity to those held by Russian national sports federations and professional sports leagues. It also allows sports events held by international sports organizations, although Dentons says at present the definition of those organizations isn’t clear. Operators accepting bets on non-Russian sports will now be required to pay contributions to Russian sports federations, which amount to at least 5 percent of GGR every three months. An operator may have a license withdrawn if it fails to pay the relevant contributions within a three-month reporting period. Furthermore, it will no longer be possible to have a license on both sports betting and tote betting. The new rules also bring the first 14 sports betting licensees in line with the rest of the market.

Asia Gaming Briefings | August 2020

opportunity to provide a fabulous service to wealthy VIP clients is not all. We are not going to become a closed elite club for the elite from the first days. Our casino will be truly popular.” Smolentsev praised the local authorities for their support during the construction process, saying the licensing procedure had been fast and smooth. Primorye is seen as the most promising of Russia’s designated gambling zones due to its proximity to China and northern Asia. The

NORTH ASIA 17

authorities want to establish a gaming hub, though so far only Summit Ascent’s Tigre de Cristal resort is open. According to Igor Trofimov, executive director of the Primorsky Krai Development Corporation, 12 hotel complexes with a casino are projected for the zone. In 2021, Nagacorp’s Naga Vladivostok hotel and entertainment complex is expected to open. Tigre de Cristal has now reopened and been granted a tax break to help it through the pandemic. However, it said that it has adequate cash on hand and sufficient working capital to support operations for years to come. Since COVID-19 started, the group has rolled out stringent cost controls measures, such as offsetting unused annual leave entitlements, unpaid leaves, cutting travel expenses and renegotiating contracts with subcontractors. It has also so far maintained all local employment and has not cut any staff. “Tigre de Cristal has been able to deliver strong local business in the past few years, especially in the mass tables and slots segments. As borders are still not yet fully opened, the group will continue to focus on

the group’s strength previously – the local market,” it said. The reopening of Tigre de Cristal has also enabled the upgrade works of Tigre de Cristal to continue, which include a brand new Suncity

We see the “Primorye IRC as a

pan-Asian resort that attracts tourists from many countries of the world.

”

VIP room, authentic Korean and Chinese restaurants and an addition of approximately 30 hotel rooms. The upgrade is expected to be ready once the pandemic is settled. On July 16, the local legislative assembly unanimously approved a bill reducing Tigre

de Cristal’s tax rate. Thus, from July to October, it will pay the lowest possible tax. The regional budget is estimated to lose about 16 million rubles (about US$225,000) as a result. The temporarily lowered tax stands at 50,000 roubles (US$700) per gambling table and 3,000 roubles (US$42) per slot machine The tax relief ends in October. By that time local authorities expect to increase the number of tourists in the region by 30 percent. Meanwhile, Suncity Group is planning to take full control of Summit Ascent, raising its stake to 70 percent. Under the proposed deal, Victor Sky, a direct wholly-owned subsidiary of the Suncity Group, which currently holds a 22 percent stake in Summit Ascent, will see that stake upped dramatically. Together with Suncity’s direct stake in Summit Ascent, it will control nearly 70 percent of the shares. The financial results of Summit Ascent would thereafter be accounted as a subsidiary of the Suncity Group and would be consolidated into the financial statements of the parent company. The value of the deal is about HK$1.2 billion (US$161 million).

Asia Gaming Briefings | August 2020

INDOCHINA

cambodia

Cambodia down but not out Cambodiaâ&#x20AC;&#x2122;s gaming industry has taken a major knock from the Covid-19 crisis and last yearâ&#x20AC;&#x2122;s ban on online gaming, but those on the ground are optimistic it will bounce back stronger than ever.

Asia Gaming Briefings | August 2020

INDOCHINA

he country had been one of the most reopening, he said. rapidly expanding jurisdictions in Tim Mcnally, chairman of Hong KongAsia, with about 118 properties in listed NagaCorp, shared a similarly optimistic operation at the end of the year, view of the industry. with most centered on the southern coastal “Although Cambodia has not been town of Sihanoukville. spared the impact of the global pandemic, The economy expanded by 7 percent the country has experienced low numbers last year, helped by Chinese investment as of infected people, as well as few deaths. part of Beijing’s “one belt, one road” project, The country has managed the crisis quite providing a strong visitor base for its casinos. effectively... As a result, we anticipate that It’s expected to contract by 0.3 percent this the business climate will improve over the year, before rebounding 6 percent next, next few months.” according to Moody’s Investors Service. Despite the news, McNally expects it to take However, rampant growth, rising crime and ‘some time’ before tourism returns to normal. pressure from Beijing caused Prime Minister “Since the beginning of the company more Hun Sen to pull the plug on online operations, than 25 years ago, we have enjoyed frequent raising questions about the viability of many travelers from Malaysia and neighboring land-based casinos, which were essentially countries and expect this segment will little more than a front for live dealer and return as the threat of the virus diminishes. other online activities. Cambodia will also continue to be an attractive “The double whammy of the online destination for China visitors as it remains a ban and Covid-19 will ultimately decide comfortable cultural fit, competitive travel which operations can continue viably,” said cost destination, and a developing market Dominick Stenson, casino for China entrepreneurs.” director at Queenco Hotel In 2019, Cambodia & Casino in an interview welcomed more than two with Asia Gaming Brief. million visitors from Mainland The country Queenco Hotel & Casino China, one-third of whom has managed is based in Sihanoukville, were there for tourism. once a sleepy backpacker However, one industry the crisis quite haven, that has been one of insider says that the Covid-19 effectively. the hardest-hit regions in the pandemic has benefited the country due to Covid-19 and industry more so than others the government’s vendetta are willing to let on. against -online gaming. In an interview with Asia “Those who were here for a quick hit Gaming Brief, Danny Too, general manager when Sihanoukville was at its peak will of Cherry Interactive said he had personally undoubtedly disappear, not having the witnessed intense online gaming traffic. stomach to see out this crisis.” “In fact, during the coronavirus pandemic, That being said, Stenson believes that the online gaming activities (especially live dealer) new, larger ‘resort’ style operations, supported mushroomed to some insane figures and I by improving infrastructure, will be able to personally witnessed some of the numbers get through the current crisis provided that via the gaming back-office of some operators the country’s borders and international flights in this industry,” said Too. open up ‘soon’. Live dealer operators, who were previously “Every visitor here describes Sihanoukville operating out of the Philippines, have now as a ‘giant building site’. But having lived here moved back to Cambodia unofficially, said Too. through all the construction, the infrastructure “Due to the so-called Covid-19 pandemic, is now really taking shape,” he said. authorities are not actively pursuing online “I’m quite sure, given the above factors, gaming operators, and thus, this pandemic is, that although the resilient Sihanoukville in fact, benefiting the operators by a great deal.” stakeholders will not be ringing bells in Too believes Cambodia will continue to 2020, they will see the light at the end of the be a viable market for gaming operators, both tunnel and the huge potential going forward.” land-based and online. He said he believes the Queenco’s owner Yigal Zilkha has taken online gaming ban that was enacted earlier the opportunity during the lull to undertake this year should be seen as a “reset button”, major renovations in the casino and around rather than a permanent ban, allowing for the property in preparation for its eventual more proper control measures to roll out.

“

”

GROSS GAMING REVENUE 2019

2020

Gross Gaming Revenue Mass Market Table GGR VIP Market GGR

(in US$’ 000) 321,165 368,854

68,669 67,976

216,546 270,176 (Source: Nagacorp)

Cambodia endorses longawaited gaming law Cambodia’s Council of Ministers endorsed a draft gaming law on July 3, which has been almost a decade in the making, with a view to attracting foreign investment. The next steps consist of approvals by the National Assembly and the Senate, before its promulgation by the king. The primary aim of the draft legislation is to attract large investments to the country’s Integrated Resorts through competitive tax rates. The gaming tax rate will be 7 percent of GGR on mass players and 4 percent of GGR on VIPs. There is, as yet, no minimum investment requirement. A new regulatory body is to be established and junkets will fall within its purview. As for online gaming and sports betting, these fall outside of the draft legislation, but it is said that the impact of Covid-19 is provoking some rethinking about these industries on the part of the government.

Century Entertainment focuses on Cambodia Century Entertainment, formerly known as Amax International made clear that it intends to focus its gaming interests in Southeast Asia, especially Cambodia. The Hong Kong-listed company has been shifting around its gaming interests. At the beginning of June, after the financial period under review, it terminated its licensing agreement to operate a VIP room at the Genting Crown Casino in Poipet, Cambodia. But at the end of October 2019 the firm entered into a five-year assignment agreement for business rights to four mass gaming tables at the casino named Century Entertainment inside Sunshine Bay Hotel in Sihanoukville, Cambodia.

Asia Gaming Briefings | August 2020

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Australia in focus The Australian Gaming Expo is taking its turn in the digital spotlight this month, moving its annual event online due to the Covid-19 epidemic.

sia Gaming Brief is once again providing content for the seminar series of the event and our focus section for this magazine is dedicated to all things Australian. The country tackled the first wave of the epidemic with relative success, with far fewer cases and deaths than many other developed nations. However, the damage to the economy and to the tourism industry has been significant, with the gross domestic product shrinking 7 percent in the second quarter, the fastest pace in history. The budget deficit this year will be the biggest since the Second World War as the government spends billions to mitigate the impact of the pandemic. The Tourism Transport Forum estimates the industry has been losing $10 billion a month, with the countryâ&#x20AC;&#x2122;s borders closed to international travellers. Pubs and clubs have now reopened in much of the country, though Victoria was forced to close down again due to a second wave. Our first article in this section takes a look at the reopening experience, which at the first blush has been more positive than expected. However, as government subsidies wind down, venues are expecting business to slow.

Asia Gaming Briefings | August 2020

In our second piece, Julian Hoskins, a principal at law firm Senet airs the view that it may be time for Australia to rethink its online gaming ban. Statistics show a sharp increase in Aussie punters gambling online anyway during the pandemic, so allowing some form of regulated access may help protect consumers from illegal offshore operators. It would also make it easier for the government to monitor the situation and mitigate any possible gambling harm. Also in this section, Sudhir Kale, founder and principal of GamePlan Consults runs through his ideas on how to successfully restart the casino motors. After such a prolonged break, he argues that itâ&#x20AC;&#x2122;s best to treat the process like a start-up. Managers will need to be nimble and reactive and shouldnâ&#x20AC;&#x2122;t just rely on previous practices when navigating the choppy Covid waters. Lastly in this section, we study the impact of the pandemic on problem gambling rates. Leading gambling harm researchers Sally Gainsbury and Alex Blaszczynski assess whether the stress from the current situation is leading to a spike in gambling addiction, or whether lack of access to pokies is helping to press the reset button amongst some gamblers with risky behaviour.

WE SURVEYED 500 PUBS

AUSTRALASIAN GAMING SURVEY

ANZ ...

Q. HOW MANY EGMs ARE CURRENTLY ACTIVE?

Q. VISITATION IS AT WHAT % OF PREPANDEMIC LEVELS? NSW VIC QLD Other

Less than 25% are active (13%) Between 25 and 50% are active (16%)

ARE THE

100

Between 50 and 75% are active (39%)

Weekday

More than 75% are active (32%)

AND HERE

Covid-19 Response

& CLUBS ACROSS

FOCUS

Q. HOW IS THE BUSINESS OUTLOOK FOR THE NEXT 3, 6, AND 12 MONTHS?

Weekend

Q. REVENUE FOR 2020 IS AT WHAT % OF LAST YEAR? 100

RESULTS.

75 50 25 3 Months NSW

Explore gaming industry data from a truly insightful perspective and use it to transform your business challenges and opportunities into valuable commercial assets.

6 Months VIC

12 Months QLD

Q. WHEN DO YOU EXPECT REVENUES TO RETURN TO NORMAL?

NSW

VIC

QLD

Other

Q. WHEN DO YOU EXPECT STAFFING TO RETURN TO NORMAL LEVELS? 13%

18% 17%

32% 20%

Revenue is Normal (11%)

Our Staffing is Normal (18%)

In less than 6 months (6%)

In less than 6 months (17%)

In 6 months to 12 months (17%)

In 6 months to 12 months (20%)

In 12 months to 24 months (48%)

In 12 months to 24 months (32%)

It will take longer than 24 months (18%)

It will take longer than 24 months (13%)

Asia Gaming Briefings | August 2020

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Pubs and clubs grapple with reopening challenges Whilst operators have rejoiced over stronger-than-expected gaming demand over the last month since reopening, second-wave outbreaks, and upcoming fiscal cliffs may spell the end to optimism for the remainder of the year.

ver the last month, Australians have been returning to their favorite gaming venues with gusto. New South Wales, which opened up their gaming floors (partially) in June, saw average daily player loss/expenditure per unit almost doubling in the first three weeks, according to data from IGT’s Queensland head Craig Harley. Northern Territory and Queensland, which opened in early June and early July respectively, have also shown strong signs of recovery, according to anecdotal evidence. “Gaming demand has remained consistently high throughout the first three weeks of our opening and Canterbury League Club and associated venues,” said Jonathan Brain, chief operating officer of NSW-based

Asia Gaming Briefings | August 2020

Canterbury League Club. But a steep cliff in demand is approaching. “We believe that due to a variety of factors, there is a significant pent up demand for gaming activity. We expect this to be a temporary and reducing effect over the next quarter,” warned Brain. Industry observers believe this drop will be caused by the end of Australia’s financial assistance program for those suffering from financial hardship, known as “Job Keeper.” This $70 billion government assistance program will send its last cheque in September. After that, Australians will be left to their own devices if the program doesn’t continue. “Will the high levels of demand continue? Probably not,” said Geoff Wohlsen, an Australian club consultant.

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“The Job Keeper allowance will either totally stop or reduce substantially at the end of September. Unemployment is growing, the construction pipeline is under question and retiree incomes have been badly affected. These indicators all point to reduced demand for land-based slot operations.” Wohlsen said the Covid-19 economic crisis is comparable to the Australian resources crash and global financial crisis in 2007 and 2009 respectively. Last month during a press conference, Australian Shadow Treasurer Jim Chalmers said that economic growth had fallen to its lowest level since the global financial crisis. “Those events quelled gaming growth in Australia, initially bringing about a drop of 4 percent in 2008 and then another fall of 3.5 percent in 2010. No one really knows the potential long term impacts of Covid-19 on our sector. Gaming demand in the sector will almost certainly decline for a period but venue growth might not. If we have some venue closures, those that open strongly might actually see some growth,” said Wohlsen. However, a recent second-wave outbreak in Australia has not helped to drive any additional

optimism. Just this week, Victoria introduced fresh lockdown restrictions after recording its highest growth in active coronavirus cases in a single day. The New South Wales government is contemplating following a similar path after a few outbreaks across the state. Industry experts believe that now more than ever, it will be vital for customers to feel safe playing in their local gaming venues. Stringent hygiene protocols and communication will continue to form an integral part of a property’s ramp-up efforts over the next year. “Social media, emails, and SMS have been the primary communication vehicles to our customers. A focus on modern, spacious premises with effective controls have been key to our early success,” said Brain. “Gaming machines have been spaced, and more ordered entry and exit arrangements have been put in place. Accurate, automated, and discreet temperature checks and patron count technologies have greatly assisted in this regard.” Sudhir Kale, CEO of GamePlan Consultants, and an expert in customer experience said that operators will need to invest more, not less in player reinvestment and customer experience. “Organizations should double down on

their efforts to establish a strong consumer franchise so that new customer relationships can be forged and old ones reinforced.” “Will my pre-pandemic loyal customers return and remain loyal to me?” Based on early results from other parts of the world where gaming providers have re-opened, the answer is “no,” notes Kale. “All departments will have to be extremely agile, adapting and quickly responding to changes in the macroenvironment (number of Covid-19 cases) as well as drastically altered customer expectations,” he added. “Basically, in the first few months of reopening, every gaming provider needs to act like a start-up,” said Kale. Departments will need to be extremely agile, adapting, and quickly responding to changes in the macro-environment as well as customer expectations. Wohlsen, however, notes that most operators have deployed a spartan approach to their rampup. He expects rewards aimed at grind/mass market will be pared back and aimed instead at the premium market. “Most of the programmed daily, weekly, and monthly promotional activities are gone. Why generate large crowds when your capacity is reduced? Free courtesy buses have been mothballed. Some venues have suspended rewards programs, F&B discounting is now very low and menus have been reduced. Bingo and free live entertainment are almost non-existent.” Overall venue operations will also undergo drastic changes. Food menus will be reduced and repriced. Traditional buffets may not return. Operators will rework marketing plans, while TAB and separate sports bars will struggle to be part of the business moving forward. Wohlsen believes that the trend of increasing space between slots that have been in place before the pandemic will be accelerated as a result of social distancing rules. “When I started advisory in the sector back in 1994, venues were at between 1.7m2 to 2.0m2 per slot. Then smaller banking increased that to 2.5m2. We might be moving to a new benchmark of 4.0m2 per slot and that might stick,” he said. Finally, cash will move into a more marginalized position over time, he says. “I heard some managers say that they ordered large quantities of cash to re-stock machines and floats and neither banks nor cash security services could deliver on time. So, cash is becoming a bit harder to access for businesses” Whatever the hurdle, operators will need to be ready to adapt to the rapidly changing environment or face being swept under the wreckage.

Asia Gaming Briefings | August 2020

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Julian Hoskins*

Should Australia rethink online gambling ban? In March this year following the outbreak of Covid-19 and the declaration by the World Health Organization of a pandemic, Australiaâ&#x20AC;&#x2122;s land-based casinos, hotels and clubs went into full lockdown.

or licensees operating poker machines and other casino games, this resulted in a significant source of revenue disappearing. It also potentially drove patrons who would otherwise have visited landbased venues to illegal online operators. Venues in Australia have been gradually starting to open up, with Victoria originally scheduled to permit poker machines to be switched back on from July 20. Unfortunately, another wave of Covid-19 infections has once again resulted in lockdown in Victoria, but this time for six weeks (or possibly longer) starting on July 9. As a result, venues in Victoria have not re-opened and are back to where they started! This may well happen in other parts of Australia until such time as a vaccine is developed, threatening the financial viability of the industry and also potentially increasing the risk to vulnerable members of the community of gambling-related harm. Interactive Gambling Act 2001 The Commonwealth Interactive Gambling Act (IGA) was introduced in 2001 to protect the Australian public from online gambling, with a focus on harm minimization and general consumer protection. Included in the current

Asia Gaming Briefings | August 2020

prohibitions is online casino style games, which includes (amongst others) slots, poker, blackjack and roulette. In recent years there has been an explosion in illegal online casino gaming sites accessible in Australia, with unscrupulous offshore operators illegally targeting Australian residents. Often these sites refuse to pay winnings, unexpectedly close down their sites or continue to withdraw funds from customerâ&#x20AC;&#x2122;s bank accounts after the customer ceases to use the site. The Australia regulator responsible for enforcing the IGA, the Australian Communications and Media Authority (ACMA), has recently been ordering internet service providers to block illegal sites, with blocking having commenced in November 2019. In May 2020 ACMA announced that ten overseas casino sites had been blocked following a string of complaints from consumers and noted that more than 100 illegal services (which includes online casinos) have pulled out of the Australian market since ACMA started enforcing new illegal offshore gambling rules in 2017. The difficulty with these measures is that as soon as a site is blocked it often re-surfaces under another name and domain, which is not blocked, and the situation continues. The actual size of this illegal market in Australia and the migration of patrons from venues to these sites

FOCUS 25

during the Covid-19 lockdowns is difficult to determine. However, recent statistics pointing to the sharp rise in legal online gambling during Covid-19 would suggest that it could be sizable. Covid-19 and its impact on online gambling The strategy and economics consultancy Alphabeta Australia (part of Accenture), in conjunction with credit bureau Illion, have developed a real-time tracker of economic activity through Covid-19, by analyzing consumer spending on a weekly basis using data available in respect of around 250,000 Australians. This provides valuable insights into the state of the Australian economy and the impact of government interventions. The most recent weekly statistics (June 28 to July 5) show that consumer spending by category in pubs and clubs (which would include those operating poker machines) is down 57 percent compared to a normal week. By comparison, for the same period online gambling is up 34 percent compared to a normal week. The weekly figures for online gambling (compared to a normal week) from May 3 to June 7 were up 242 percent, 214 percent, 232 percent, 164 percent, and 167 percent respectively. In the United Kingdom, figures released by the Gambling Commission on July 6 show the impact of Covid-19 on gambling behavior in May 2020, which reflects two months of full lockdown in the UK in April and May 2020, as collected from the largest online operators and the YouGov Covid-19 tracker. Whilst the report stated that the incidence of switching from land-based to online gambling in the UK

Key arguments for and against relaxing IGA prohibitions for a limited duration

who use them just during lockdown) would have a legal alternative, delivered in a responsible manner complying with Australian consumer law. Any possible offering of online product could perhaps occur in a “regulatory sandbox” environment over a short period of time involving, say, a small number of venues, with data collected (including in relation to gambling-related harm) then being used by government to determine whether to extend the permission to all venues during times of lockdown, either under Covid-19 or any other future pandemic. The key counter-argument is that any online offering would increase gamblingrelated harm for vulnerable members of the community. However, relevant to this is that account-based activity has the benefit of being able to highlight “red flag” indicators and, in some respects, may provide operators with an increased ability to detect harmful behavior. In weighing up the arguments for and against the restrictions, now appears to be the ideal time for the government to consider the issue more broadly in respect of periods of great uncertainty, for the benefit of both venues and the customer, but at the same time being mindful of not increasing the risk of gambling-related harm.

The key arguments which support relaxing the IGA prohibitions and permitting online casino gaming during lockdown include: • revenue derived from the online activities would help offset (but would be unlikely to fully replace) lost revenue from landbased poker machines; and • Australian residents currently using illegal offshore casino sites (or those

* Julian Hoskins is a Principal at Senet, a leading multi-disciplinary law firm in Australia specialising in gambling law and regulation, related advisory services and compliance training. He is ranked by Chambers and Partners Global and Asia Pacific as a leading expert in gambling and gaming. www.senetlegal.com

appears relatively low (only 1.6 percent over a four week period), the key differentiator with the Australian market is that online casino gaming is illegal in Australia and the UK market is therefore not directly comparable to Australia in relation to migration to online gaming. What is worth noting, however, from the Gambling Commission data is that whilst the active number of players for online slots was down 2 percent and other gaming (including casino) was up 5 percent from March to April 2020, the number of bets placed increased for slots by 15 percent and other gaming (including casino) by 25 percent, with gross gambling yield for slots down 9 percent but other gaming (including casino) up a substantial 33 percent from March to April. What does this mean for Australian Venues and also consumers accessing illegal online product? There is likely to be some correlation between the Alphabeta Australia data and the UK Gambling Commission statistics, and consumers accessing illegal casino sites from Australia. The exact statistics are, however, unable to be accurately quantified (which should of itself be a concern for government).

Asia Gaming Briefings | August 2020

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Covid reopening like a start up Sudhir H. KalĂŠ*

Founder, GamePlan

After a hiatus of several weeks, casinos and clubs are reopening their doors to the public. The comeback, for most businesses, has been far more difficult than anticipated. The situation is analogous to learning to walk again after a horrific automobile accident.

ust like a traumatic crash, COVID-19 happened unexpectedly, and left a long trail of misery, uncertainty and anxiety in its path. In jurisdictions such as Macau, integrated resort casinos that once pulled in more than tens of thousands of patrons every single day had to contend with customer numbers in their teens in the weeks following reopening. And Macau is not the only casualty; according to H2 Data Consultancy, the gambling industry around the globe has been hit hard and its share of global GDP is set to fall from 0.50 percent 2019 to c0.38 percent this year. This compares with 0.60-0.65 percent mid2000s and a high of 0.54 percent in 2016. How to act toward customers when you reopen?

Asia Gaming Briefings | August 2020

What should be your stance toward employees? What happens to fiercely loyal pre-pandemic customers? These are a few of the unsettling questions that every casino and club operator is asking. Answers to these vexing questions are far from comforting. History offers little guidance as the last major epidemic to rock the world at comparable magnitude was the Spanish flu a hundred years ago. In this column, I am proposing my take on the thinking needed to steer through the early phases of the post-pandemic scenario. Essentially, in the first few months of reopening, every gaming provider needs to act like a startup. Acting like a startup means letting go of past conditioning, having to navigate through uncharted waters, experiencing and

FOCUS 27

reacting to the new business reality with an them as they learn, while constantly providing evidence of their commitment to safety to open-ended outlook. Acting like a startup means behaving with employees and customers. Acting like a startup means not taking utmost agility. “No plan survives contact with the enemy.” This admonition from German your customers for granted. Synergy Blue, a manufacturer of arcadeField Marshal Helmuth style casino games, recently von Moltke could not be published results of a survey more true in the COVID-19 of 1,000 adult U.S. gamblers. era. We will not know— Acting like a The survey, conducted in for a long, long time—if startup means late April 2020, uncovered and when we have left not taking your preferences and expectations the havoc of COVID-19 of casino gamblers if they are behind. Leaders of gaming customers for to return to casinos when businesses, therefore, need granted. they reopen. to be flexible and be able to Statistics presented in alter (or even throw out) this survey are sobering. plans as their business Only 51 percent of those rolls forward. Observant and responsive, senior leaders surveyed said that they will gamble in casinos should make sure they meet the rapidly changing again upon reopening. Of those planning desires and attitudes of their customers. They to return, only 35 percent said they will go need to experiment with new operating back to their usual casinos. In effect, these models—just as a startup would—refining statistics suggest that at best, only 17.85

“

”

percent of the pre-pandemic customer base could be counted upon to return. For a gaming establishment to break-even, it has to have 50-60 percent occupancy. With less than one in five customers intending to return to their previously patronized gambling venues, gaming operators will have a very tough time running a viable business. Social distancing and other regulatory safeguards, likely to remain in place for the foreseeable future, will only make matters more difficult. Acting like a startup requires CEOs of gaming businesses to be what Chip Conley calls the Chief Emotion Officers for their employees. In the volatile COVID climate, employees are anxious; concerned for their physical safety and their job security. Under this yoke of uncertainty, they have to interact with customers who may be equally anxious and unsure of their physical and financial well-being. CEOs of gaming companies need to create a new psychological contract with their employees, a contract grounded in trust, authenticity, and reciprocity. The contract needs to be renewed each day with face time with employees and with honest, transparent communication. For most gaming operators, a massive cultural inflection will be needed for such psychological contracts to take root. In effect, gaming businesses the world over will have to learn to walk again. This is where the determination and the dogged drive of startups are needed. New strategic plans need to be put in place to guide organizations after pressing the “reset” button. These plans should reflect the present-day realities about the macroenvironment (i.e. economic situation, competition and legal stipulations), newly reconstituted market segments, and a re-formed revenue mix. In face of the monumental crisis, acting like a startup will equip gaming op-erators to emerge with improved capabilities and enhanced offerings. If operators do post-opening what they were doing before they were forced to shut their doors, they will seriously falter or even perish. * Sudhir H. Kalé, Ph.D., is founder and principal of GamePlan Consultants, a company that helps gaming businesses all over the world in planning and executing their strategy. Sudhir has consulted for casino clients on five continents and has published more than 100 articles on the management and marketing of casinos. You can get advice on reopening your casino by contacting Sudhir at skale@gameplanconsultants.com.

Asia Gaming Briefings | August 2020

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Sally Gainsbury*

Are we really a nation of gamblers The shutdown of gambling venues due to Covid-19 may have driven people at-risk of addiction to increased online gambling and experience harm, although for others it may have created a relief from the constant access of problematic pokies.

Alex Blaszczynski*

s venues begin to reopen and sporting events resume, governments and stakeholders need to enact strategies to assist people to take control of their gambling now, to avoid severe harms in the future. For several months Australiaâ&#x20AC;&#x2122;s 4,995 gambling venues housing around a total of 196,177 EGMs were shut, along keno and retail betting with few sporting matches to bet on in response to the coronavirus shutdown measures. This resulted in an unprecedented

Asia Gaming Briefings | August 2020

and unique reduction in accessibility of gambling in Australian history. Gambling problems are often driven by a desire to escape stress and unpleasant emotions. Gambling problems are high among people experiencing depression and anxiety and those socially isolated. Financial hardship is strongly related to gambling problems and psychological distress. Past financial crises such as the Icelandic banking collapse and major recessions show that gambling is highest among those

FOCUS 29

who are experiencing the greatest financial hardship. Gambling offers hope for a change in lifestyle; however, for most the change is associated with greater difficulties caused by unaffordable expenditure. Stimulus packages, although important and well-intended, can add to the risk of excessive gambling. The 2008-2009 Australian economic stimulus packages designed to maintain consumer spending were subsequently colloquially referred to as the “Pokies and Plasma payouts”. Similarly, claims have been made that early withdrawals of superannuation intended to allow financial relief during Covid-19 were related to increased gambling. There is evidence that Australians have increased their online gambling during the shutdown. One estimate using banking data found that online gambling increased 5 percent in April 2020 (along with other Internet activity such as Netflix). Another spend tracker reported that online gambling was 71 percent higher than normal at the

beginning of April, but dropped to 60 percent higher towards the end, suggesting that initial engagement waned. Despite fewer races, racing turnover significantly increased. Tracking offshore gambling is difficult so there is currently limited evidence on whether this has increased. Despite concerns that pokies players would all turn to online gambling, this has not materialised in the two decades of online gambling availability. Gambling on offshores sites is associated with higher rates of gambling problems, but occurs very infrequently. It is relatively unlikely that regular pokies gamblers who are more likely to be older (24 percent >65 years) are suddenly shifting to gamble on online casino sites. Overall changes in gambling are not as important to monitor as understanding which population cohorts are gambling. Research from Canada and Sweden suggests that, unsurprisingly, increases in gambling are more common among regular gamblers and those with problems. Gambling to cope with negative experiences is likely to be highly problematic and if sustained over time can lead to severe harms for individuals, and those around them. Fortunately, gambling treatment services have remained in operation. For example, at the University of Sydney Gambling Treatment and Research Clinic, demand for services from clients remains high and clinicians are treating clients using videoconferencing. The experience reported by many clients seen seeking treatment at the Clinic is that the shutdown has brought much relief and provided opportunities to take back control over their gambling. Treatment attendance rates are the highest they have ever been, demonstrating the strong demand for video-therapy and need for expanded funding for this. However, intake from new clients initially declined, which is consistent with a 50 percent reduction in calls to the national gambling telephone. Unfortunately, for many with gambling problems, taking a break is not sufficient to resolve these. Without active efforts to address the underlying issues, it is highly likely that when society reopens, new ‘habits’ developed during shutdown will make way for a resumption of behavioural patterns including gambling, that have been entrenched over much longer time frames. This is now a critical time as state governments deprived of gambling revenue may look to expand opportunities for gambling where possible – this is the ideal

time to conduct research to understand the relative influence of environmental vs. personal factors on gambling and harms. If the restriction on gambling persists over the longer-term or permanently, it remains to be determined if there will be a transition to online gambling on local regulated and international regulated and unregulated sites. Unintended consequences may include exposure to greater levels of risk for community members engaged in unregulated sites, or illegal gambling on pokies as occurred in New South Wales in the 1950’s. It is essential that governments and stakeholders, including the gambling industry, act to reduce gambling harms. Thousands of gambling-venue employees have been stood down. During this period of suspension, steps could be taken utilise this downtime to retrain and upskill staff in learning more about gambling problems and how individuals atrisk of harm can be identified and appropriate staff-customer interactions can be affected. Venue responsible gambling managers and machine manufacturers could be working with researchers and policy makers to design, test, and have new practices implemented as venues reopen to offer a safer gambling environment. Executives, often too busy to fit consumer protection training into their schedules, could be attending interactive online learning sessions with experts to enhance their understanding of gambling harms, enabling consumer protection strategies going forward to be driven from the top down. Initial reports from NSW, one of the first states to open gambling venues, saw an increase in gaming machine turnover compared to the same period the year before. It will be critical to closely examine whether people resume gambling habits and for those with gambling problems, whether the enforced break has provided enough momentum towards a sustainable recovery. Understanding the factors and motivation that enable some gamblers to regain control compared to those that lead others to resume past habitual behaviours can contribute to the development of more effective interventions and safer gambling environments. * Associate Professor Sally Gainsbury and Professor Alex Blaszczynski are Co-Directors of the University of Sydney Gambling Treatment and Research Clinic within the Brain and Mind Centre and School of Psychology and members of the Technology Addiction Team.

Asia Gaming Briefings | August 2020

AUSTRALASIA

new zealand

Sharing experiences SkyCity Entertainment, New Zealandâ&#x20AC;&#x2122;s largest operator, recounts its experience as one of the first properties to open in the Asia Pacific region, saying the industry needs to make sure itâ&#x20AC;&#x2122;s sharing ideas and learning to ensure the doors stay open.

Asia Gaming Briefings | August 2020

n an interview with Asia Gaming Brief, Matthew Ballesty, executive general manager for gaming, outlined the experience, walked us through the measures the company has taken and described the customer response. SkyCity is New Zealand’s only listed gaming company, with properties in Auckland, Queenstown, Hamilton and Adelaide in Australia. It’s been a tough year for the operator, which suffered a devastating fire at a flagship project in October. The blaze at the under construction international convention centre in Auckland shut down the central business district in the country’s largest city for three days. The coronavirus closed down the casinos once again in March, before being allowed to reopen on May 14. The country and its government, under Prime Minister Jacinda Ardern, won widespread praise for its handling of the pandemic, moving swiftly to shut down the country to stop the spread. As of June 2, it had not had any new cases for 11 days and was considering lifting remaining restrictions. “We’re in the enviable position of being one of the first and it’s nice to see New Zealand lead in that regard,” Ballesty said. Ballesty said the company has taken a highly measured approach to put the right processes in place to ensure safety and minimize the risk of being closed down again. The company was helped by the fact that the recovery process is likely to be VIP led, which although an important part of the business, involves smaller numbers of people and is therefore more easier to control. “The areas where they reside are typically smaller spaces and more easily manageable with one entry and one exit. In a Covid environment they are a lot easier to manage in a safe way.” “Where it gets more challenging is on our mass gaming floors where we have a vast amount of space and a lot of product spread out, so how we handled it there was that we are taking a measured approach to enable contact tracing.” The group divided the floor into gaming zones, using more than 250 metres of hoarding to create separate sections, all of which had their own entry and exit. Starting with eight zones, the process was tweaked and is currently divided into 10. Every other gaming machine was switched off and numbers were limited to three per table. The company also moved all excess seats and furniture from places where people tend to congregate to avoid large groups, leaving only about 100 chairs.

AUSTRALASIA 31

Clients were counted in and out of each zone on a regular basis, with surveillance also backing up the count. Staff were provided with yellow security jackets to give them an impression of extra authority to back up the rules and regulations on signage and to ensure social distancing. SkyCity took the step to only open to club members to facilitate contact tracing should there be any need. “We wanted to make sure we could manage demand. We knew there could be some problems if demand was too high so we wanted to get ahead of that,” Ballesty said. “We also know our loyalty customers and have a lot of details already for them so it made great sense for us to make it a restricted members-only casino that was VIP lead and make sure we know our customers should we need to contact trace.” The company, like any others opening up again, was taking a leap into the unknown when it came to client demand. The impact of the pandemic on the consumer is still not fully known, while New Zealand’s borders remain

closed to international traffic. That said, so far the response has been encouraging. “We’ve certainly not seen the levels of visitation return as we just don’t have the capacity, so that’s worked out quite nicely. What we have seen is that those who have returned, and we’re still looking at the data, have probably spent a little bit more than normal.” The company reported that revenue from electronic gaming machines in Auckland and Hamilton in the 18 days to May 31st had reached 80 percent of the average daily revenue in the eight months to Feb. 29, 2020. Table revenues in Auckland are at about 50 percent of normal daily revenue, while both properties are cash flow positive and profitable. However, one of his key takeaways was how the pandemic has brought together a highly competitive industry to move forward together to share ideas and innovations. “This is about humility and doing the right thing so we keep our doors open. We need to make sure we are sharing and learning from each other.”

Normalised figures 1H20

1H19

(in $m)

Normalised Revenue (incl Gaming GST)

532.9

-7.9%

Normalised EBITDA Normalised NPAT

171.7

-10.7%

153.3

Normalised EPS

490.9

13.3cps

-15%

11.3ps

89.7

-16.4%

75.0

(Source: SkyCity)

SkyCity gets rap for online gambling promotion

NZ launches app to curb gambling harm

SkyCity Entertainment was given a formal warning by the Department of Internal Affairs for breaching the Gambling Act after it emailed loyalty customers in March, saying that its online casino was still open for business despite the Covid-19 lockdown. The operator has a Malta-based online unit that offers services to New Zealanders. Although it’s not against the law for locals to gamble on these sites, it is against the law to advertise them. Local media reports cited department spokesperson Chris Thornborough as saying SkyCity did not intentionally set out to breach the Act. “So a formal warning is appropriate and proportionate,” he said, speaking to RNZ.

New Zealand has launched a mobile app aimed at curbing problem gambling in collaboration with the Deakin University in Australia. New Zealand’s National Institute for Health Innovation says the tool is an interactive mobile program, called Manaaki. “We think it will help people who are having difficulties with any type of gambling activity and with any goal, from quitting completely or just cutting back,” the institute said. Manaaki is a cognitive behavioural therapy app and is based on the Deakin University GAMBLINGLESS on-line tool. While Manaaki is evidence-based, the method of delivery—via an app—is new.

Asia Gaming Briefings | August 2020

AUSTRALASIA 32

CNMI

Poor regulation undermines CNMI gaming industry The fundamental problems now sinking IPI were not only predictable—they were predicted, according to industry insiders.

few months after the US$7.1 billion investment figure was announced, analysts began to query how much sense a property of that size would have on the island, due to the small local population, distance from China and weather instability. It wasn’t just foreign analysts either: Alexander Sablan, head of the Saipan Chamber of Commerce, announced in June 2015 that his organization had officially asked the government to ensure that the IPI investment wasn’t too large for the local economy to support. He was worried that the project would fail, especially without supplementary facilities like a meeting and convention center available on the island. Nevertheless, the soft opening of the temporary casino occurred on July 26, 2015. Then, something amazing began to occur: IPI’s management claimed—in Hong Kong—that visitors were packing into the temporary casino at an average of about 5,700-5,800 per day. In its first full month of operations, IPI said that they had brought in US$1.63 billion in revenues, based upon its 12 VIP gaming tables and 34 mass tables. It claimed US$6.1 billion in VIP table game rolling chip turnover for the first quarter of 2016. All of these VIPs must have come in direct since no junket operators had yet been authorized by the local government. IPI continued to pile up incredible revenue results at its temporary casino throughout 2016, and many experienced gaming analysts began to whisper that the results were not simply impressive—they were impossible. A Bloomberg article in November 2016 revealed that these suspicions were not limited to gaming industry analysts, that the US Treasury’s Financial Crimes Enforcement Network (FinCEN) had begun to investigate IPI’s “suspicious financial flows.” Throughout the controversy, Commonwealth Casino Commission Executive Director Edward Deleon Guerrero vocally defended IPI and its financial reporting: “I can tell you the numbers

Asia Gaming Briefings | August 2020

are real. We are watching, documenting, and tracking it… It is an irrelevant issue if FinCEN is doing an investigation.” Local lawmakers soon began to question the regulatory structure itself, particularly the lack of a gaming tax. Representative Edwin K. Propst noted, “US$15 a year is peanuts for what they are raking in when compared to what we would be receiving if we actually had a gross gaming revenue tax implemented from the beginning. We have the only casino industry in the world that charges zero on gross gaming revenue taxes.”

Indeed, whether the real issue was money laundering or an effort to pump up company share values or massive accounting errors, the lack of a gaming tax presented a perverse incentive for IPI. Ben Lee, managing partner of IGamiX Management & Consulting, observed, “When you have no gaming revenue tax, it doesn’t matter what you roll.” The IPI headlines in recent weeks sound eerily like those of Tinian Dynasty from just a few short years ago: cash flow problems, unpaid

AUSTRALASIA 33

workers, regulators closing in, the impending Kong, away from the eyes of the Commonwealth collapse of a major employer, and the possibility Casino Commission, which apparently must of yet another ghost town facility on the pristine accept IPI reports at face value. Also, CNMI lawmakers frequently complain beaches of CNMI. “What you have now is basically death in to the local media that they really have no idea about the state of IPI finances, not even about slow motion,” predicts Lee. which payments have But there is a common or haven’t been made to denominator at the base their own government of all of the headlines— and related institutions. for Tinian Dynasty, for When you Some observers say IPI, and even for the have no gaming that this lax approach electronic gaming machine to regulation is also clubs and the ubiquitous revenue tax, it characteristic of the CNMI’s neighborhood poker doesn’t matter approach to smaller gaming machines—which is what you roll. industries such as the several the reality that CNMI’s electronic gaming machine gaming industry has been clubs and the ubiquitous repeatedly undermined neighborhood poker by poor regulation. For example, IPI has been given the power machines. Enforcement of regulations tends to to self-audit. CNMI regulators did not provide be weak, and initial regulatory standards have themselves with the power to trace the money a way of becoming watered down over time. These examples suggest that until the flows in Hong Kong, which is where almost all of the significant financial transactions take CNMI improves its own governance, many of place. As the VIPs rack up their debts in CNMI, the same problems in its gaming industry will whatever collections are made happen in Hong likely continue to reappear.

“

”

GROSS GAMING REVENUE 110,222 87,614

-20.5%

2019

2020

(Source: Marianas Visitors Authority)

IPI promotes Donald Browne to CEO Imperial Pacific International has appointed Senior Vice President Donald Browne as its CEO following pressure from regulators. Browne had been senior VIP since 2015. According to an internal message from IPI management to its employees, Browne is a well-regarded leader of IPI with decades of gaming experience. “In his previous role as senior vice president, he proves that his experience and drive will take IPI to the next level of growth and development under a reorganized structure,” added the company. Last month, the embattled casino operator was ordered by the Commonwealth Casino Commission to appoint a CEO, as well as to maintain three months working capital, and to settle all payable accounts. Mark Brown was the last CEO of IPI, who resigned from the position last December.

Tinian, Rota, come into focus as connections improve The Bridge Investment Group has announced that the new Tinian Diamond Hotel is now open. The hotel is expected to be complemented by Tinian Diamond Casino, which is still targeting a December 2020 opening in spite of some recent regulatory controversies. Connectivity to the island has improved with the introduction of The Sand Diamond passenger and car ferry, which is capable of carrying 290 passengers and 30 vehicles between Tinian and Saipan on a daily basis. Lack of access was seen as a key factor limiting tourism on the smaller islands in the Commonwealth of Northern Mariana Islands. Meanwhile, the Rota Municipal Council is examining the current status of its casino commission with the retirement of two of its five members.There are said to be a number of pending proposals before the Rota Casino Commission, although it is not clear if any new project is imminent. The Rota Treasure Island casino hotel closed in 2012.

Asia Gaming Briefings | August 2020

SOUTH EAST ASIA

MALAYSIA

Genting expands online in Europe Genting Group, one of the worldâ&#x20AC;&#x2122;s largest casino companies, has been investing in expansion of its online business in Europe at a time when more land-based operators are eyeing adding a digital strategy to cushion the impact from Covid-19.

SOUTH EAST ASIA

he Malaysia-based group, which operates more than 50 casino properties worldwide, rebranded its online operations to GentingBet from Genting Casino last year. It also secured a Malta and Spanish i-gaming license and applied for a license for Ireland. The group bought Authentic Gaming from Leo Vegas for EUR15 million to incorporate innovative streaming technologies to bring together its offline and online gaming experiences, and launched new casino and sports betting sites and a new live casino app. Genting has had an online license in the U.K. since 2008, but its expansion push has been relatively recent. “We are looking at many markets right now but they have to be complementary and not at odds with our land based business which is one of the biggest in the world,” GentingBet CEO Jeremy Taylor told AGB. “We focus mainly on regulated markets accordingly both in and outside Europe. Watch this space!” Last year GentingBet signed well-known Spanish football commentator Guillem Balague as its brand ambassador to provide insight and analysis into Premier League, La Liga and Serie A games, as well as hold exclusive interviews with key players. Like most casino operators, Genting’s properties were forced to close worldwide to help stop the spread of the coronavirus, though some are now gradually reopening. Taylor says the shutdown has highlighted the value of digital strategies.

1q20 FINANcial highlights (In RM’mil) Revenue 1,956 US & Bahamas 17%

Malaysia 64%

UK & Egypt 19%

Adjusted EBITDA 355 Net Profit 454 (Source: Genting Malaysia)

“I believe Covid has made all industries reevaluate the potential of the digital world and that includes the Casino industry, especially those with a land based presence,” he said. “Irrelevant of Covid, we have seen online add incremental revenues rather than substitute away from our land-based business.” Although the digital business was showing strong growth and has gone some way to offsetting the sharp shock in land-based revenue, the coronavirus has been exceptional in its

We focus “mainly on regulated

markets accordingly both in and outside Europe.

”

impact, shutting down sports betting and the potential to offer live casino, which was among GentingBet’s most popular products. “We were impacted by Covid due to our land-based business closing and therefore our own Dual play tables which are our crown jewels,” he said. “We also lost Sports of course which impacted cross sell into casinos online. Our live casino studio offering via Evolution was also impacted with tables reducing from 6 to 2.” Taylor says these live tables are its unique

selling point when it comes to online gaming, providing a real table experience from some of the U.K.’s top land-based casinos. In fact, he adds that the land-based business is a “great brand awareness driver for online.” Online gaming is still illegal across Asia, apart from in the Philippines, though the crisis has triggered a growing number of voices to call for some kind of regulation to protect the billions that have been invested into the region’s casinos. Visitation in Macau is practically non-existent at present given the harsh border restrictions and quarantine requirements that have been in place for three months, triggering a 97 percent drop in June gross gambling revenue for example.. Speaking to AGB, Jade Entertainment and Gaming Technologies CEO Joe Pisano, said one key lesson from the crisis was the industry needs digital. “The recent and ongoing disruption to business has shown the necessity for the convergence of Land and Internet Gaming, it’s time to start treating the Land and Internet as one gaming industry,” he said. “Convergence should be a basic requirement of any casino business continuity plan.” “Digital acceleration in other industries has moved forward and the land-based gaming industry has lagged at least a decade behind.” Convergence had been a key part of the success of many of Cambodia’s casinos, many of which depended on live dealer for survival. Many are reportedly still operating, despite a ban which came into force last year.

Genting sees reasonable growth in mass and VIP Genting Malaysia has seen reasonable growth in visitation since it began reopening on June 15 and Resorts World Genting has doubled its number of available rooms, according to a research report from CGS-CIMB. The firm said that during the first two weeks of July, arrivals recovered to more than 50 percent of levels prior to when Malaysia imposed quarantine restrictions. RWG has increased the number of hotel rooms available from 2,000 at initial reopening, to 4,000-5,000 in recent weeks, to cater to the higher demand, the report said. Genting’s SkyCasino and Genting Grand casinos are open and operating at about 50 percent of normal capacity due to social distancing measures. Both the mass and VIP gaming segments are reportedly seeing decent recovery, with an opportunity for Resorts World to capture demand from the latter, as local VIP gamblers are not able to travel abroad currently.

Depreciation, Covid-19 hit RGB’s Q1 revenue

Pantone

PMS 109

Cyan Magenta Yellow Black

0 10 100 0

Red Green Blue RGB

255 221 0 Websafe

Malaysian supplier RGB posted a 47 percent drop in profit in the first quarter, though revenue rose due to the opening of new outlets. The group said profit was RM3.6 million ($839,846), compared with RM6.8 million a year earlier. Revenue rose 48 percent to RM77.4 million. According to the company’s financial statement filed with Bursa Malaysia, depreciation and other costs were higher in the period. Revenue in the sales and marketing division doubled, as did profit before tax, due to a rise in the number of products sold. Revenue in its technical support and management division was up by 11 percent.

FFDD00

RAL

Applicationfilm

Asia Gaming Briefings | August 2020

Proces

3 3 3

231

SOUTH EAST ASIA 36

philippines

Prices push POGO exodus While kidnappings and illegal immigration make for unwelcome headlines for the Philippines’ online gaming industry, what’s really driving recent departures from the country is the rising cost of doing business, especially during an economic downturn.

he Philippine Offshore Gaming business, with the government seen to be Operator licenses have been a getting greedy. With the huge volumes cash cow for the government since wagered through the POGOs, some elements they were introduced in 2016 in of government, including the tax department, response to newly elected President Rodrigo debate they are not getting their fair share. The Bureau of Internal Revenue wants Duterte’s call to clean up the industry. Anyone applying for the license needs the POGOs to pay a 5 percent franchise tax to pay $150,000 in processing fees for an on revenue, while they are also expected to e-casino and $200,000 for the license. The remit withholding taxes on salaries paid to company will have to pay $300,000 for a employees. The BIR had also insisted on the security bond and will need to renew the payment of back taxes as a requirement for license every three years for $150,000. The companies to restart operations after the lockdown, though it now figures are slightly lower for appears that it is easing sports betting operations. its stance in this area. The fee is then 2 As well as “If you compare the percent of gross gambling percentage/amount of the revenue that must be the taxes and PAGCOR POGO levies submitted to the Philippine fees, POGOs and these taxes with Amusement and Gambling other top-tier licensing Corp, which has a mandate operating in the jurisdictions, what is to submit 50 percent of country face being expected to be its income to nationpaid by online gaming building projects. other hidden operators and providers In 2019, revenue and rising in the Philippines is way from POGOs hit P5.73 above what they will billion ($115 million), up costs. pay if they are licensed from P73.72 million in elsewhere,” one leading 2016, the first full year of industry figure said, on operation. Accumulated revenue from licensing fees up until March condition of not being named. Another industry insider credited the this year has been P20.83 billion. In terms of taxes, the firms paid P14.28 billion in POGO license as being one of PAGCOR’s 2019, with P6.42 billion coming in the form best ideas, but also said the industry was now being unfairly squeezed for more. While of direct taxation. However, it doesn’t stop there and some Philippine-based workers should pay some POGOs are now voting with their feet. In form of income tax, it’s entirely unclear why recent months, three firms linked to SunCity POGOs should pay on their worldwide income, Group have left the country and in total especially as this was not the case when they about 11 are thought to have left, with more first applied for the license. “The senators/politicians who have reportedly eyeing the door. According to industry experts in the jumped on the anti POGO/Not paying tax Philippines, the issue is the cost of doing bandwagon are in essence either unaware of

“

”

Asia Gaming Briefings | August 2020

how much “officially” POGOS pay PAGCOR or are angry at having been left out of the pie distribution in the first place,” he said, again asking not to be named due to the sensitivity of the subject. “Fact is they make quite a considerable contribution, problem is where does all that “contribution” go. As well as the taxes and fees, POGOs operating in the country face other hidden and rising costs. The office rentals in Manila have soared, though there is little opportunity

SOUTH EAST ASIA 37

INSTALLED CAPACITY per casino 2018

As of December 31

2019

Tables

Electronic Gaming Machines

PAGCOR Casino Filipino

472

9,581

481

9,641

City of Dreams Manila

302

2,161

306

2,310

Resorts World Manila

319

1,827

370

2,134

Solaire Resort and Casino

387

2,106

Okada Manila

396

2,749

444

ThunderBird - Rizal ThunderBird - Poro Point Fontana Casino

2,340

398

243

266

387

384

0 25

Royce Casino Midori Casino

2,591

303

304

Widus Hotel and Casino Fortunegate

D’Heights

186

312

362

440 0

151 0

560 (Source: Pagcor)

for companies to relocate as the internet and social infrastructure in most other areas of the country is inadequate. According to PAGCOR figures, POGOs have generated some P25 billion in leaseholds and rentals. There are also costs linked to employee visas, with hefty charges to “fast-track” permits as well as other payments necessary to smooth the path of doing business. Many politicians are also taking advantage of a wave of anti-POGO sentiment among the public to press their political agendas.

The massive influx of Mainland Chinese have pushed prices in central Manila out of the reach of locals and created a Chinese sub-culture to the detriment of Filipinos. The resentment reached such a level that earlier this year PAGCOR issued an advisory explaining the work of POGOs and how they benefit local society. It includes explanations as to how the regulator is working with the Chinese Embassy to stamp out illegal immigration and criminal activities and also contained a denial of reports that members

of China’s Peoples Liberation Army had entered the country as spies. PAGCOR pointed out that the sector actually employs some 31,556 Filipinos directly, with many more being employed in ancillary sectors, such as real estate and entertainment. Earlier this month, the BIR eased some tax requirements that it had imposed as a condition for the POGOs to reopen, in particular with regard to back taxes, though it remains to be seen whether it’s too little too late and who the beneficiaries will be.

Asia Gaming Briefings | August 2020

SOUTH EAST ASIA 38

(US$16 million) in the first quarter of 2020, due mainly to the suspension of all integrated resort operations from March 15, 2020. Okada Manila’s parent company, Universal Entertainment Corporation (UEC) said this also resulted in a 6.3 percent decrease in net sales in the first quarter of the year, down to JPY15.7 billion. Prior to the suspension on operations, UEC said that gaming operations in the first quarter were performing “well” in both the VIP and mass-market machine categories, due mainly to domestic clientele. Hotel occupancy was also very high in the first quarter before the suspension.

Bloomberry Resorts 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. After delisting last year, the company no longer provides quarterly figures, though for 2019 its revenue rose 38 percent.

City of Dreams The $1.3 billion City of Dreams Manila is owned by Belle Corp and Melco Crown Entertainment’s local unit. The property saw revenue decline by 22 percent in Q1 of

this year due a softness in all of its gaming segments. Rolling chip volume halved, though the mass market performed better, dropping by almost 15 percent. 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. In 2019, City of Dreams Manila had an average of approximately 2,265 gaming machines and 311 gaming tables.

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. Okada Manila posted a widened operating loss of JPY 1.7 billion

Bloomberry Resorts’ Solaire was the first IR to open in Entertainment City and is a 16-hectare integrated resort. The company reported that Q1 net income fell 38 percent due to the impact of the coronavirus and it expects a slow recovery. Profit in the period was PHP1.4 billion ($27.7 million), while consolidated net revenue fell 13 percent to PHP9.4 billion year-overyear. Gross gambling revenue at Solaire was down 10 percent to PHP12.2 billion. GGR was down 16 percent from the prior quarter. Chairman Enrique Razon also warned that the opening of its second IR in the Philippines is likely to be delayed until late 2022, or 2023 due to the pandemic. 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.

Suntrust exempt from foreign-ownership limits Suncity Group’s local Philippine unit says it is no longer subject to any limits on foreign ownership following the approval of an amendment of its scope of business to focus on tourism-related activities. Suntrust Home Developers “does not own land and is not engaged in any nationalized or partly nationalized activities,” it said in a filing with the Philippine Stock Exchange. Under local law, any company owning land must be majority owned by a Philippine corporation. Suntrust has teamed with Travellers International Hotel Group and Westside to develop and operate its main casino hotel in Entertainment City. The Westside City Project will have a total gross floor area of at least 182,000 sqm, and is expected to be operational in Q4 2022. It will consist of approximately 400 gaming tables, approximately 1,200 slot machines, 400 five-star hotel rooms, 960 car park spaces, pool club & leisure club etc.

Asia Gaming Briefings | August 2020

SUPPLIER SPECIAL REPORT 40

AGE INTRO

AGE to share digital delights For the first time in 30 years, the Australasian Gaming Expo will not be filling the floors of the International Convention Center in Sydney’s beautiful Darling Harbour.

he event joins a growing list of exhibitions that have been forced to postpone their activities to the following calendar year. With more than 8,000 delegates expected to attend the 2020 event, it’s of little surprise at this point that the show had been canceled. Although the 31st AGE won’t be happening until next August, organizers remain committed to connecting buyers with sellers, experts with operators. Once again, Asia Gaming Brief has been selected to deliver the Australasian Gaming Seminars, a threeday digital conference program aimed at exploring the latest developments in the Australasian gaming market. On 11th August, delegates hear from Australia’s leading gaming analysts who explore how they see consumer discretionary spending changing in the years to come, along with how the COVID-19 pandemic will impact the Australasian gaming industry from a financial perspective.

Asia Gaming Briefings | August 2020

On 12th August, delegates will be given an exclusive video tour of SkyCity’s Auckland venue – one of the first gaming venues in the region to reopen amid COVID-19. We hear about how they’ve seen customer demand change from the onset – what challenges have been experienced in their venues and their advice for the Australian market. On 13th August, we hear from customer service expert and professional speaker Michelle Pascoe, delivering an inspiring presentation on re-delighting the post-pandemic customer. The AGE Digital Seminars will also share the results of the Australasian Gaming Survey: Covid-19 Response, a nationwide survey sent to clubs and pubs across Australia aiming to explore how businesses have been impacted by the Covid-19 pandemic, and the strategies employed to mitigate its impact. In the following pages, we also highlight some of the more innovative products and solutions being offered by suppliers in response to the crisis.

SUPPLIER SPECIAL REPORT 41 ainsworth

Ainsworth’s A-STAR is born!

s we emerge from the shadows of COVID-19 it’s time to revamp your gaming floors with the brand new captivating A-STAR cabinet by Ainsworth. The A-STAR takes Ainsworth to the next level with a meticulously crafted cabinet that encompasses a sleek, modern, modular design, a spectacular dual screen format, dynamic LED lighting, and a state-of-the-art LCD touchscreen button deck. The new A-STAR cabinet flaunts a unique and elegant design that integrates effortlessly with any décor. This cabinet takes design to a whole new level with an ultra-thin form factor, providing genuine space integration and an element of futuristic luxury, elevating their surroundings with stellar picture quality and newly added gaming features. The A-STAR has launched with the exclusive new brand Pan Chang! Pan Chang, a Chinese traditional decorative knot is also the Buddhist conception of continuity and the origin of all things.

The series introduces the ‘Pan Chang’ Feature; a collection of ‘Pan Chang’ symbols where credit prizes, bonus prizes and the major progressive can be won. With three games approved in the brands portfolio - Long and Happy Life, Endless Fortune and Guan Yu, it’s sure to bring excitement to any gaming floor. Complementing Pan Chang, the next exclusive A-STAR brand is Rise Up! Rise Up encapsulates a multiladder feature with two jackpot progressive levels and two scalable bonus prizes. The Rise Up feature includes multiple awards during the ladder feature with chances to win the progressive jackpots. An additional free games feature provides an attractive feature hit rate desirable to players. Born Free and Wizards Wand are the first two games in this brand and are sure to keep players enthralled. Ainsworth continues to develop its product portfolio with advanced technology and software that delivers aesthetically pleasing art and engaging content. The launch of A-STAR and two strong

brands, Pan Chang and Rise Up aims to support current customer gaming floors and diversify business models.

all in global

Overcoming remote challenges

ur business model is well equipped to handle this situation as all our operations are online. Attending and exhibiting at conferences is part of our DNA as we like to meet our clients around the world and we definitely miss the offline networking. Our company has always been promoting a flexible digital work culture and working remotely has been the safest option for some of our staff. In order to support our clients with the best

possible service we also offered free COVID-19 related translations so they could communicate effectively in such an important time. Over the years we have become a one-stopshop for language solutions you can bet on, including content writing, multilingual SEO and audiovisual services but translation and localization remains our most popular service. We added esports as a sector of specialisation a while back and this has brought us a good

amount of business in 2020. Copywriting for the US has been another important area for us this year, especially for sports and sportsbetting. We have also upgraded our tech in order to become more compatible with the content management systems of our clients. They can now connect their backends with our translation management systems and simply select which pages they want to have translated into any of our 70+ languages. This makes the localization process much easier and more efficient. As a company that was always looking forward to the next iGaming conference it has been a big challenge for us to not be able to travel. We have tried to compensate by hosting casual networking events online like a poker tournament and a chess tournament. This was great fun and we donated a small amount per player who joined, to a charity which the winners could choose. We are very happy to announce that the PAI League is up and running again in Malta, this is a football tournament hosted by All-in Global and Pentasia and engages hundreds of iGaming professionals every week. You might also have noticed our monthly webinar-orama which is a blog post on all-in. global/blog where we present an overview of all the online iGaming events.

Asia Gaming Briefings | August 2020

SUPPLIER SPECIAL REPORT 42 APE

APE to become a repairing and service hub

ince the establishment of its repair centre in 2012, Asia Pioneer Entertainment Holdings Limited (APE), a Macau Gaming Inspection and Coordination Bureaus (DICJ) licensed electronic gaming machine agent, has been providing various repair services and selling electronic gaming machine parts to different casino operators in Macau and SouthEast Asia. APE used to be widely known for technical sales and distribution of electronic gaming equipment. In fact, the group’s revenue generated from repair services has leapt 24.2 percent from FY2017 to FY2019. Moreover, APE has become the authorized repair centre for “TransAct,” the ticket printer professional since December, 2017. In 2019, APE was awarded an ISO 9001:2015 certification for its repair services of electronic gaming machine parts. From 2012 to July 2020, there were over 17,000 items repaired and maintained by the APE repair team, including monitors, power supply, slot MPU boards and SAS system boards. “Chance favors the prepared mind.” said Mr. Vic Ip, Assistant General Manager of Technical of APE.

Although the epidemic and suspension may have had an adverse impact on the company’s business in recent months, the APE repair team perseveres in providing support to the operators, including repairs of monitors, power supply, MPU boards, button panels, bill validators, printers, etc. In addition, the team has seized the chance to start projects that have been prepared for a period of time during the epidemic outbreak. One of the projects is a “One-for-One Replacement” scheme. Under the scheme, the faulty parts, or monitors, of gaming equipment will be replaced from APE’s stock, instead of being sent to the repair centre. It undoubtedly will help with the operators’ immediate needs and save time. Apart from the scheme, the APE repair team is looking to increase the coverage of repairing categories, such as CCTVs, IT servers, PC and Switch, Walkie Talkie, Mobile Phones, TV, etc. “It would be another milestone for our team. All we are anticipating now is to meet our clients and new friends after the epidemic’s gone.”, Mr. Ip concluded.

aristocrat

Aristocrat joins Covid-19 aid efforts

t Aristocrat, we believe in giving back to the communities where we live and work and also contributing to initiatives that reflect the values of Aristocrat and those of our employees. As the spread of COVID-19 mounts globally, The Philippines has taken strong and decisive action to temper the reach of

Asia Gaming Briefings | August 2020

the virus through country wide lockdowns. The containment effort is strengthened by the dedication of Doctors, Nurses, and other front-line health workers, providing medical support to those afflicted across the country. By partnering with the City of Dreams Casino and utilising their transportation, Aristocrat were proud to donate 1,700 food

packages to medical infrastructure sites across ten Hospitals and Medical Centres for use in providing for staff, family and the communities in which they operate. City of Dreams has also worked with local hospitals at Makati Medical Centre, UP PGH and St Luke’s Medical Centre, to provide complimenting medical supplies and food donations for staff while throughout the crisis.These food packages were distributed in the area of Paranaque in Manila to enable the community, staff, and families to have access to essential food ingredients such as pasta, rice, canned fish, and meat during the country-wide lockdown.Lloyd Robson, General Manager of Aristocrat (Asia-Pacific) said, “We know this is a challenging and unsettling time for the local community of Paranaque and we wanted them to know that they are not alone, and together we will get through this. We’re committed to helping wherever we can, and this is just one way that Aristocrat is giving back to the communities in which we live and work.”

SUPPLIER SPECIAL REPORT 43 BBIN

Up for a sustainable future

ounded in 1999, BBIN has dedicated itself to the development and innovation of new technologies and system software. BBIN provides its professional platform integration services throughout Asia, including China, Japan, South Korea, Vietnam, Thailand, Indonesia, Malaysia, the Philippines and more. Currently, the company has successfully provided the market with 14 types of live casino, 40 lottery games, over 100 casino games and more than 50,000 sports betting products per month. Crossing the twenty-year milestone and moving toward the next from 2020, BBIN demonstrates its ambition for sustainable development and growth. It is actively expanding and branching out to collaborate with world-renowned brands in different fields. This includes world champion carracing team Theodore Racing/Prema, famous football clubs Dortmund, and Ajax. BBIN has also become a long-term supporter of eSports since 2019, forming global partnerships with various eSports clubs including MAD Team, and NOVA ESPORTS. Moreover, BBIN foresees the importance of corporate responsibility and founded The Gaming Beat (TGB) charity brand to help raise awareness on different topics. BBIN has brought together the world’s Top 100 DJs to voice their support for charity and worked with Trees for the Future and Water.Org to promote environmental protection. Through these collaborations, BBIN connects with the world beyond Asia, hoping to give back to the society and build a better world for everyone. BBIN welcomes collaborations from all the world, and provides the advantages of professional resources to partners who aim to map out their business in Asia. BBIN is ready to show the world its capability of bridging the eastern and western iGaming market. It will continue to communicate its core principle of “growing with partners” and hopes to light up a bright future with its worldwide partners.

blue technology

Diversifying products

lue Technology remains committed to understanding local requirements and working with our partners to develop games and solutions for ease of business, while streamlining game conversion. One such project recently DICJ approved is with Amatic, where we developed 10+1 games on the machine hard drive, giving the operator the choice to select any one of these ten games + one feature game configuration. Blue has also been working with partners around the globe to expand our product representation through diversification. Our partners include casino chips, table cashbox verification and automation, remote gaming solutions, industry leading technology software developers, ticket and/or cashless transaction redemption terminals, virtual sports provider, COVID staff access & guest entrance temperature control and automated cocktail dispensers. It is worth a mention that partnering with game providers and establishing additional diversified partners, has its fair share of challenges as this can take up to four or five companies who offer the same products, to determine which one is the right partner with the appropriate products to meet our operators needs and serve their customers’ expectations with quality offerings.

Blue Technology remains committed with our partners to deliver sound developed products, while maintaining competitive pricing, by keeping our margins lower than the industry normal throughout the good and tough times as part of our longer term distribution strategy, we believe this shows a deep company commitment as a long term distributor within our Asian markets.

bmm

Setting the gaming standards

MM is the longest established and most experienced private independent gaming certification lab in the world, providing professional technical and regulatory compliance services to the gaming industry since 1981. At its core, BMM is a systems-expert company that has provided consulting for and tested many of the largest gaming networks and systems over the last 38 years. In addition, BMM has been successfully testing and certifying the full scope of Class III casino products for over two decades. BMM authored the first set of independent

gaming standards in 1992 and the first set of online gaming standards in 2001. BMM employs some 400 people in 14 global locations and serves over 460 jurisdictions. BMM’s world headquarters are in Las Vegas (USA) with offices in Moncton (Canada), Lima (Peru), Buenos Aires (Argentina), Barcelona (Spain), Bologna (Italy), Vienna (Austria), Krakow (Poland), Bucharest (Romania), Midrand (South Africa), Melbourne and Sydney (Australia), Macau (SAR, China) and Singapore.

Asia Gaming Briefings | August 2020

SUPPLIER SPECIAL REPORT 44 Colossus bets

Sports betting but BIGGER

olossus Bets is a multi-award-winning provider of global sports jackpot pools and pioneer of Cash Out and Syndicates ‘crowdbetting’ functionality. The company’s always-expanding content portfolio currently covers football, NBA, NFL, ice hockey, tennis, British & Irish horse racing, darts and esports. Colossus jackpots are today available in at least 30 currencies and 25 languages and have received bets from players in over 100 countries since inception. With a global B2B distribution network joined by the likes of bet365, Betway Africa, Mr Green and Paf, Colossus’ lottery-size prize guarantees, legby-leg Cash Out, Syndicates ‘crowdbetting’ and FreePlay features are hardly news to the world. They are nonetheless essential features of the modern jackpot pools user experience - and did we mention the over 80 million bets processed and £160 million paid out in prizes and Cash Outs to date?

C olossus als o holds an extensive patent portfolio in relation to its Cash Out functionality. In 2019, the company entered its first Cash Out patent licence agreement with bet365 in the US so patent protection for this must-have feature in what is currently the most talked-about growth region for betting and gaming is another topic to pick up with the Colossus team. Last but not least, Colossus takes a strong stance on corporate citizenship. The company’s explicit mission is to amplify the sports fan experience with a product ethos that emphasises responsibility towards its customers, engagement driven by top quality sports content and organic, social interaction within the sports fan communities. Colossus’ official charity scheme, Conscious Colossus, supports charities in the areas of sports, racing, gambling education and broader community with funding, volunteering and awareness initiatives.

dispatch to remove guesswork from route planning • Real-time alerts and device insights to prioritize machine maintenance • Live cash and machine performance data to make informed operational decisions

• Remote management and device updates to eliminate unnecessary service calls • Mobile service applications for onthe-go accessibility • End-to-end cash accountability for increased visibility on your earnings.

CPI

CPI introduces Simplifi

rane Payment Innovations (CPI), a Crane Co. Company, has released Simplifi, cloud-based software for route-based gaming operators. By extending into the distributed gaming market, CPI is adding to their existing network of 1 million managed machines. Simplifi is a GLI-approved, cloud-based platform that delivers real-time payment device and route management insights to route operators. Simplifi connects with the SC Advance bill validator and the Universal Connectivity Box (UCB) to enable operators to remotely manage cash box allowances and machine health. Simplifi complements the CPI casino management software, Easitrax Connect, which provides operators access to real-time casino floor data. “CPI has over 10 years of experience managing distributed assets across multiple industries,” said Brian Wedderspoon, Vice President for Gaming at CPI. “The first of its kind for route-based operators, this software offers live cash and machine performance data, dynamic route scheduling, machine optimization, and end-to-end cash accountability.” • Simplifi provides increased efficiency and route visibility through: • D ynamic route s cheduling and

Asia Gaming Briefings | August 2020

SUPPLIER SPECIAL REPORT 45 G+D

Improving efficiency and security

ustralia and New Zealand, like the Asia Pacific region have had a challenging start to 2020, with catastrophic bushfires in Australia followed by the Corona pandemic. The impacts of these unexpected events such as social distancing and travel restrictions have caused changes in consumer and business behaviours. “Casino and gaming venues are seeking further efficiency in their cash handling processes,” says John Scheller, General Manager, Giesecke +Devrient (G+D) Australia, New Zealand. “Over the past 20 years, we have been developing solutions for casinos of all sizes and with varying processing needs; from single to multiple currencies, TITO and voucher

processing as well as cash room management software and global gaming system interfaces.” “Our aim is to align technology to meet the specific needs of casinos and regulators. Based on global best practice, we provide solutions that improve efficiency and security across all processes within the currency cycle and reduce the costs of cash handling.” Mr Scheller states, “I am thrilled to announce our next generation, modular BPS C5 with higher throughput, multi pocket configuration, advanced sensors, increased flexibility and features, including serial number reading, multi-currency, TITO ticket reading. Utilising G+D’s BPS Connect Casino (BPSCC) software,

Everi

Award-winning loyalty

veri is the casino gaming industry’s only single source provider of gaming products, financial technology and loyalty solutions. The company’s “Digital Neighborhood” of solutions is designed to seamlessly connect through Everi’s expansive and secure network and serves to optimize visibility, functionality, and usability for casino operators worldwide. The focus is on bringing customer-centric features to loyalty and cash operations, which ultimately serve to enhance the player experience Everi’s award-winning loyalty platform is a critical bridge between its operator-centric financial technology solutions and its player-centric gaming solutions. This platform consists of three key products: the enrollment kiosk, the promotional kiosk, and the Everi mobile app. These premium products are uniquely designed to engage new and existing players, creating a seamless and exciting experience that compels players to join the operator’s loyalty program with the promise of even more fun, from gaming and dining to hospitality and entertainment. Promotions, drawings, and other marketing campaigns are configured using an intuitive control panel, ensuring a smooth user experience. Like banks, casinos and gaming venues are required to comply with strict Anti-Money Laundering (AML) regulations and standards. Because of the unique nature of gaming operations, maintaining the absolute highest level of compliance can be extremely time consuming and labor intensive. For over a decade, Everi Compliance has been the gold standard for AML compliance across the gaming industry as it provides real-time tracking for all transactions on the casino floor, Know Your Customer (KYC) capabilities, and integrates with all major casino management systems. The system also completes, files, and archives forms required to comply with jurisdictional reporting requirements. Everi Compliance is used by hundreds of gaming operators around the world and is the most widely used and sophisticated type of software available in the casino industry.

compatible and with casino cash management hardware and software results in a significant increase in productivity and can be implemented with minimal integration effort!” G+D’s casino solutions are backed up by reliable service and support models to ensure optimal performance.

habanero

Hey Sushi!

020 has been a tumultuous year for the global economy, and our industry is no exception. Retail and land-based outlets have been hit the hardest, with online focused operations needing to quickly revamp their casino catalogues to retain engagement. With games that offer the entertainment factor which has become so important this year, our ongoing commercial expansion has further extended our player reach across a range of key markets in Europe and Latin America. With the likes of Rush Street, Playtech, GAN and BetVictor coming aboard – we’re excited for the year ahead. Thanks to the hard work of our talented development team, many of our clients will also benefit from access to Habanero’s latest action-packed slot titles. We recently served up Hey Sushi, a luxurious treat for discerning slot fans whose appetite for premium content will no doubt be satiated. The simple, yet exotic high-volatility release, sees a delectable feast of sushithemed symbols cascade the 5x3 grid as Habanero’s signature dish of flawless mechanics and its pitch-perfect soundtrack are showcased with every spin of the reel. Another recently launched player favourite, Wealth Inn, brilliantly displays all the timeless features of the classical gaming experience – and has proven to be one of the most popular recent additions to our 100+ portfolio. With a curved 3D display evoking the nostalgia of land-based slot machines, it has established itself as the perfect alternative for offline players readily awaiting the return of their favourite vertical. This latest title also features Habanero’s versatile Jackpot Race functionality, which fuses both the logic of a poker-style pot, with a must-drop jackpot solution. In a market crowded with studios competing for players spending less, innovative new products are the key to success. With our signature content proven the world over, we’re here to ensure that by hard work and innovative game development we keep our operator partners ahead of the curve.

Asia Gaming Briefings | August 2020

SUPPLIER SPECIAL REPORT 46 id nerd

X-Table coming soon

020 has been a challenging year for IDX Games, although we have hunkered down, concentrating on development with our parent company idNerd Studios. While idNerd now focuses on the creative content side, IDX will focus on bringing innovative customer centric gaming concepts and products to the market. In Macau, we have our X-Stadium ETG product in association with LT Games, which drives excitement, marketing content and revenue for most major casinos and we are soon to launch our live table games product X-table. Outside Macau, our latest install at the new Hoiana Resort Danang, Vietnam is our first ETG integration with Interblock. At Hoiana we incorporated our X-Trend scoreboard for ETG, a product we originally developed for traditional table games and which forms part of our intelligent X-Table Product. X-Trend is our customer-centric dynamic display system that focuses on revenue growth through game trends, player activity, entertainment and marketing. It can be installed on any table game and customised to any jurisdiction and venue. Not only can it speed up play, but it interacts with players’ superstitions and drives more theatre and game play through some unique trademarked features.

X-Table is the only modular open platform tables system offering a fully closed loop solution, from players to table, to back-end management, with actionable outputs, data collection and data processing rule engines, it will offer a powerful tool to send outputs to players, staff and management operations. Our live computer vision tracking of players

and bet chips, allows tracking of carded and non-carded players and links to our real time control centre, with a live dynamic view of the floor, pits tables and players. Fortunately, we have had immense interest from the progressive casinos this year, so will continue refining our products to ensure we deliver satisfaction to our customers.

IGT

Player-driven performance

GT is the world’s leading designer, manufacturer and supplier of gaming system solutions, games and slot machines. As the COVID-19 pandemic has heavily impacted the gaming industry, health and safety is now top-of-mind for casino operators and players alike. Our customers are asking how they can provide safe and sanitised gaming areas for their players while still offering a comfortable, convenient and enjoyable gaming experience. While there isn’t a one size fits all solution, IGT already provides proven solutions for a more contactless and safer experience: IGT’s ADVANTAGE solution offers a comprehensive cashless gaming experience that reduces cash handling for casino players and staff – lowering costs and risk while providing a safer environment for employees and customers. IGT’s Mobile Responder solution - available

Asia Gaming Briefings | August 2020

with ADVANTAGE - enables venues to keep on top of sanitisation, as it can be configured to automatically recognise and report events on the gaming floor. For example, when a carded or un-carded player cashes out it notifies floor staff to sanitise their machine. As a result of the COVID-19 pandemic, IGT has adapted its roadmap of games across Asia Pacific to focus on the best performing games that we know players enjoy - to boost your player visitation and revenues. In ANZ, IGT’s FireBall has been a consistent performer and offers a ‘Hold n Spin’ feature with a twist - line play and free game features can be triggered together. In Asia, the performance of Ying Cai Shen keeps growing because of its playerfavourite game play features: Expanding Reel Matrix, Gold Coin collection mechanics, Hold-and-Respin and Lock-and-Respin jackpot features.

SUPPLIER SPECIAL REPORT 47 Jade Entertainment

Jade introduces nQube’s AI solutions

ade Entertainment and Gaming Technology is introducing nQube Data Science to the Asian Gaming Market. nQube specializes in artificial intelligence solutions to challenging data-driven problems in the casino industr y. Our in-house developed AI system drives our flagship Reel AI casino optimization solution and other technologies. Reel AI is a powerful AI-guided optimization platform designed to find the best possible mix of slot machines or online content to present to players. Reel AI is carefully tuned to the preferences and behavior of each casino’s unique player base. A secondary spatial optimization component determines the optimal arrangement of games subject to physical or online real estate. This component optimizes the location of content

by taking into account the effects of different game locations and making the best content available to your players. Reel AI learns the playing style of multiple player segments and discovers trends in the data to optimize the content and arrangement of games. Advanced AI-Powered Segmentation Core to Reel AI are AI-driven segmentation algorithms that segment both players and games. The segmentation scheme maximizes similarities within segments and highlights differences between them. These behaviorbased player profiles can be combined with demographic information to help retain loyal customers and attract new players. Reel AI generates a model of game utilization by player segment, game segment, and time. It then optimizes the casino by matching

the segmented player groups to their preferred machine categories by varying the mix and location of content. Both the player segmentation and game segmentation technologies can be decoupled from Reel AI and used independently. This information can be used to understand player game preferences to aid in purchasing of new game content, and to market specific games to specific player segments.

JCM

JCM Global and Cash Processing partner on cash handling

n a move that will bring further efficiencies and business intelligence to its customers, JCM Global has selected Cash Processing Solutions (CPS) as their partner of choice. JCM and CPS executed a master distributor agreement which enables JCM to supply advanced high-speed count/sort equipment and cash management software in North America and other casino gaming markets. This partnership is the latest example of JCM continuing to expand their product offerings to benefit its customers, and it brings end-to-end cash handling to casino gaming. JCM will represent CPS’s software solution, ECM Edge, and its count sort machines, including the technologically

advanced 7000i Edge, V Edge, and X Edge. Combining CPS products with JCM’s ICB Intelligent Cash Box and FUZION systems, JCM now offers its customers a complete count room solution for more visibility over the operation, increased efficiency, and enhanced security. “Combined, JCM and CPS have more than 125 years of experience in cash management solutions. Bringing this level of experience and integrating our technology portfolios together benefits JCM’s customers, allowing them to capitalize on the strengths of JCM and CPS, save time, save money, and gain greater insights into their overall cash management operations,” said Dave Kubajak, SVP Sales,

Marketing, and Operations for JCM. “CPS is delighted to partner with JCM as its master distributor in North America. This partnership is the result of JCM’s recognition of CPS’ investment in the multiyear development of its new software and hardware product solutions for the casino count room as well as its expertise globally in supplying Cash Processing Solutions for the Banking sector. The CPS suite of Casino Edge products, when integrated with JCM’s ICB and Fuzion systems, will redefine count room efficiency and provide a level of data granularity previously unseen in this sector,” said Darren Wick, Managing Director Americas for CPS.

Asia Gaming Briefings | August 2020

SUPPLIER SPECIAL REPORT 48 Kangwon Land

konami

Facing the future with confidence

angwon Land is a public company that owns and operates the largest casino in Korea. The casino is the only one in the country to permit entry for Korean nationals as well as international guests. The name “KL Saberi” is a brand that refers to the EGM business division of Kangwon Land. KL Saberi has manufactured and successfully installed its own EGMs over the past three years. Stunningly displayed on the floors of Kangwon Land Casino the machines have not only performed very well but pass the reliability and security tests with outstanding results. Due to COVID-19 we’ve all encountered effects of the epidemic in various sectors of our society. The immediate future in general will be difficult to predict and we are entering an unknown territory. However, by strengthening the security of electronic gaming machines and increasing the overall quality of our products, the result could only be breathtaking. Our board of directors and the executive committee have recently pledged their full support to KL Saberi. During a recent interview with our CEO, he said; “We do not know what will happen in the future,” and added, “We are focusing on developing EGMs to target global customers. Our games are currently in operations in five casinos in Korea and the Philippines and further machines are being supplied to Asia. In addition, from 2021 onwards, the company

All Aboard in Asia

aims to target casinos in Latin America, Europe, Africa, and Far East Asia. Currently, there are 160 EGMs installed and operating in Kangwon Land Casino, and a further 100 units will be added by November 2020 to increase the number to 260 units in 2020. Among the lineup, BUCHAECHUM 77 Part II, which has a Korean theme with traditional costumes and dances, has been particularly popular with customers. In March, distributors from Mexico and Argentina visited our head office in Korea with hopes to deliver KL Saberi EGMs all over the world.

onami Australia has launched “ Ba Fang Jin Bao,” a new 4-level link progressive package to Asian markets. The “Ba Fang Jin Bao” game is on the Concerto Stack cabinet with 4 K graphics. Both game titles are now approved in Macau, the Philippines, Malaysia, Vietnam and Cambodia and will be approved for Singapore soon. Konami is also launching “All Aboard,” another new progressive package (1 level link, or SAP) plus four fixed amount bonuses with multi-denominations. “All Aboard” is also on the Concerto Stack cabinet with 4K graphics. Six or more train symbols trigger a Stay & Spin feature. It’s a highly volatile game with popular ‘Repeat Win’ elements during the bonus game feature. Over 5,000 “All Aboards” have been installed across Australia and New Zealand in the last two years. Available Games are “Dynamite Dash” and “Piggy Pennies.” Both game titles are now approved in the Philippines, Malaysia, Vietnam and Cambodia and will be approved for Macau and Singapore soon.

matsui

Matsui introduces antimicrobial chips

he Matsui Group are pleased to announce the release to market of their latest innovation in specialist chip manufacture with the launch of Nova Guard Chip Protect. Matsui Chips, including Nova Guard Chip Protect, ensure any part of the chip coming into human contact in the casino is antimicrobial therefore stopping the growth

Asia Gaming Briefings | August 2020

or spread of microorganisms. It has the identical feel, weight and quality finish that has come to be associated with any Matsui chips, but with antimicrobial material added in the plastic rim and centre decal whilst still allowing all the same security features and design additional options to be uniquely tailored to your casino. Due to the lack of specific testing ability worldwide during the pandemic, to protect gaming staff and players in the fight against COVID-19 under the current situation, Matsui has carried out extensive and certified tests in highly specialised Japanese laboratories on the new Nova Guard Chip Protect chips. Shigeki Machida, managing director of Matsui Asia Ltd commented “We are very excited to introduce our new gaming chips with added

Nova Guard material. Since the start of the global pandemic now over six months ago, we have worked very hard and invested a lot to develop and prepare this product for mass production.” “Whilst the pandemic was moving rapidly from Asia to Europe and then to the Americas, we have seen and spoken with numerous casinos, which had started using their own methods of cleaning and sterilising chips from antiviral sprays to Ultraviolet Sterilizers. Although they may be a temporary solution, they do not come without risk of damaging the individual chips material strength but also changing the chip colours over prolonged use. Our Nova Guard Chip Protect chips will not require any such process, or carry that risk, as the chips own active antimicrobial properties are an inbuilt protection to stop the spread of the virus.”

SUPPLIER SPECIAL REPORT 49 Play’n GO

More. In One GO

lay’n GO pledged “More. In One GO” for 2020 and they are certainly delivering on that promise. After a landmark year of 40 game releases in 2019, they upped the ante by announcing 52 brand new game releases

this year, and they are well on their way to fulfilling that. Increase in output has not meant any dip in quality either. Rather the opposite - With the equivalent of a game a week being launched

by the slot specialists, we have already seen several top-performing titles released into the market. These titles include Riches of Robin, an adventure slot based on the character of Robin Hood; Shield of Athena the latest edition of their popular Rich Wilde series of games and Rainforest Magic Bingo and Sweet Alchemy Bingo two additions to the bingo titles that have garnered them a nomination at this year’s Global Gaming Awards in Las Vegas. It looks like this is indeed the year of more. This month sees the release of their imaginative new title Diamond Vortex, a reimagining of the cascading gridslot format that Play’n GO does so well. It is a spacethemed game set on a hexagonal shaped grid made up of three rings with a Wild symbol permanently set in the centre. Diamond Vortex will be released in the same month as Jolly Roger (a pirate-themed slot), and music slot Saxon, showing the variety that this supplier is still injecting into their increased output. With so many successful titles already to choose from, and plenty more on the way Play’n GO is showing exactly why they’re one of the industry’s leading slot providers.

sa gaming

SA Gaming expands in Europe

s one of the most successful gaming providers in Asia, SA Gaming has recently made a big step into the European market. It has established a new studio in Europe – SA Euro – to provide popular Live Games including Baccarat and Roulette. Running a studio from another continent is never easy because it involves immense technical difficulties. The establishment of SA Euro can be regarded as the supplier’s major breakthrough, especially under these unusual circumstances. Operating at a Euro-style studio with European dealers, SA Euro will undoubtedly bring a greater variety to the supplier’s entertainment portfolio. SA Euro marks a new standard for studios in a foreign continent. Newly furnished, SA Gaming’s European studio is built to the highest standards, with details customised in European style. There is a 24/7 operation team comprised of highly experienced specialists who have been running studios in Europe. SA Gaming’s clients can be sure that SA Euro is a truly Euro-style studio. SA Euro is launched and now provides five Baccarat tables and a live Roulette table. More tables and game types will come soon! They will certainly offer SA Gaming’s clients more choices of entertainment.

Asia Gaming Briefings | August 2020

SUPPLIER SPECIAL REPORT 50 spintec

Vietnam installations

pintec d.o.o., a Slovenia-based manufacturer of electronic table games (ETGs), recently installed a number of ETGs in two casinos in Vietnam. The ETGs were deployed by Asia Pioneer Entertainment Ltd, the distribution partner of Spintec in the Macau and Asia Markets. A total of 50 Karma GEN 2 automated roulette, video baccarat and multi-baccarat were installed in CLUB99 Furama Resort Danang on the occasion of its 10th anniversary. It was the first multi-baccarat product of Spintec to be placed in a gaming venue in Southeast Asia. Karma Baccarat supports multi-gaming technologies all focused on player’s comfort and longer gaming sessions. Karma Baccarat will have players immersed in the game for hours by making side bets freely. Furthermore, Karma Roulette comes as automated, virtual or any combination thereof depending on operators’ preferences. In addition, the 8-seated “Karma II” automated roulettes were deployed in HOIANA Suncity

located in Hoi An, Quang Nam Province. The automated roulette contains a high-speed winning number reader in order to increase players’ excitement in the game. “Karma II”

was developed to maximize a player’s gaming experience including its table games such as Baccarat, Blackjack, Craps and Sic-Bo, which guarantee longer gaming sessions.

scientific games

Contactless gaming solutions

cientific Games is unveiling a suite of contactless gaming solutions that will aid casino operators in their quest to keep their players and team members safe while maintaining a fun atmosphere. Swiftly responding to the need to develop solutions that support enhanced sanitation protocols and assist with social distancing measures in a post COVID-19 world, Scientific Games developed advanced technology solutions to help casino operators reimagine play for their guests. “Scientific Games has always been committed to innovation, but it is now

Asia Gaming Briefings | August 2020

more critical than ever to develop solutions that help our partners address and adapt to the new normal,” said Matt Wilson, Executive Vice President and Gaming Group Chief Executive. “Our suite of contactless gaming solutions enables our partners to deliver a new, yet fun and engaging gaming experience for their players all while keeping them safe. This advanced technology sets a new standard for the industry and is available for our partners now.” Scientific Games’ suite of contactless solutions includes the Unified Wallet cashless gaming experience, a Social Distancing Module and Automated Game Sanitization. Scientific Games’ Unified Wallet is powering a cashless gaming experience by giving players the power to instantly access funds to play their favorite slots and tables through an app on their personal mobile device. Taking a mobile-first approach, cashless solutions are not only convenient for guests but are also cost effective for casino operators. Unified Wallet eliminates lines at ATMs to withdraw cash or at a kiosk, or casino cage to redeem tickets as well as reducing costs on machine maintenance, including bill validators, ticket printers and ticket redemption kiosks. The Social Distancing Module provides

three distinct features for operators: Dynamic Distancing, EGM Scheduler and Resort and Game Reserve. These features provide further opportunities for casino operators to adhere to the necessary safety measures now required by public health and gaming officials. Dynamic Distancing facilitates social distancing amongst slot players, disabling all games within close proximity once a player cards in. EGM Scheduler allows operators to quickly upload a list of games that should remain enabled on the casino and even allows them to do so remotely through the use of a Control EGM feature. Resort Reserve and Game Reserve allow players to reserve their favorite game during their visit allowing them to customize their experience to their preferences all while staying safe. Keeping casino team members and guests in mind, the Automated Game Sanitization solution eliminates the manual task of searching for games that need to be sanitized on the casino floor by quickly identifying games that require sanitization after active play. Operators can also schedule sanitization at regular intervals for continued sanitization as well as anonymous play.

SUPPLIER SPECIAL REPORT 51 transact

Clean2Play safety tool

e understand that now, more than ever, it is inherent that we protect our customers and employees and give them the confidence that they are safe when getting back to casinos. As such, we created Clean2Play, a revolutionary casino product that provides real-time printed proof that a slot machine has been cleaned, sanitized and is ready for play. “Clean2Play is a tool that empowers both players and casinos,” said Tracey Chernay, Senior Vice President in Global Casino and Gaming at TransAct Technologies. “With re-openings come new safety standards, and this software solution makes it that much easier for casinos to show that they are committed to protecting players while adhering to the new protocols. Players are also more likely to feel safe and come back when they see casinos are taking serious sanitation measures.” The solution is available as an app that is part of TransAct’s well-known Epicentral promotional system, and it is built on Acres 4.0’s Clean Machine product, which detects when each gaming machine’s play session ends and instantly dispatches a staff member

to sanitize the game. Once sanitation is complete, Clean2Play causes the gaming machine to print a certification ticket, which the casino cleaning staff member then places on the machine or directly over the machine’s bill acceptor. Before the next play can begin, the cleaning voucher will be removed from the slot machine allowing casino guests to see that the slot machine is certified as clean.

Casinos can customize the voucher with a sanitation message, the cleaning staff member’s name, machine ID, and a time stamp of when the cleaning occurred. As part of the Epicentral Clean2Play system, casinos can also incentivize their employees by printing a second voucher once the slot machine is cleaned to give the cleaning employee the chance to win prizes and validate their performance.

ultraplay

UltraPlay boosts its online casino portfolio

dvanced betting solutions provider UltraPlay has entered into two partnership deals in the last few months aiming to expand its online casino offerings. The recent growing popularity of live betting products among players helped TVBET to draw the attention of UltraPlay, with the result that the parties entered into a cooperation agreement. The full B2B provider’s portfolio is added to UltraPlay’s platform offering. Due to recent events in the gaming industry, more and more customers, especially, betting punters were eager to wager. At the same time, with similar betting mechanics, lotteries and card games by TVBET have become a true alternative to sporting events for a great number of people throughout the world. Now, they are gradually becoming loyal fans of games like Poker, Joker, Backgammon, WheelBet, 1Bet, and others. The other major deal that UltraPlay made was with the leading live dealer betting games supplier BetGames.tv. Games include Baccarat, Wheel of Fortune, and BetGames. TV’s innovative twist on Texas Hold’em poker, 6+ Poker, is available to UltraPlay’s B2C clients, which include BUFF.bet, Betjoe, and many others. UltraPlay has gone from strength-to-strength in 2020, recording a 500 percent turnover in eSports growth since March 2020 and growing, but also receiving its 13th award for Esports Betting Supplier from the EGR B2B Awards 2020. The company is also greatly expanding its casino offering to include more than 4000 games from 40 leading casino providers. Moreover, the company is strengthening its live casino as well by now offering Evolution Gaming, NetEnt Live, Ezugi, and BetGames.tv. UltraPlay’s partners and clients can easily integrate the company’s online casino solution that opens enormous ways of entertainment for players across the globe.

Asia Gaming Briefings | August 2020

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Asia Gaming Briefings | August 2020

LAST WORD 54

Sharon Singleton

Managing Editor, AGB

Lights are on, but no one’s home The lights in Macau’s casinos were turned back on after a two week break in early February, though since then the properties have barely seen a visitor.

That’s not because it can’t afford it. Thanks to the s one analyst commented: “The reopening is akin to keeping a body alive without efforts and investment of the six operators, Macau has built up fiscal reserves of $72.5 billion. the food required to sustain it.” There are schemes available to help small and All six operators have maintained their staff levels and contributed greatly to charitable medium-sized businesses, but not much love is being efforts in the special administrative region, but with extended to the large casino companies, which are the no end in sight to the border restrictions, it wouldn’t biggest employers and biggest wealth creators in Macau. To be sure, the companies have deep pockets and be unreasonable if their patience is wearing thin. Macau imposed draconian border restrictions back analysts estimate they have enough available cash, or in March, only allowing a limited number of travellers financing to carry them through the crisis, however, from the mainland to enter without compulsory authorities do now seem to be dragging their feet quarantine. As a result visitation has been all but when it comes to border opening. What everyone wants to hear is the return of non-existent with just a few hundred visitors a day the individual visit scheme crossing from the Mainland. that would allow a significant There has been some easing volume of tourists to come on the part of Chinese authorities across the border, rather than in recent weeks, allowing Macau July gross the limited tweaks that allow a residents to travel freely in gambling revenue few business trips and family Guangdong without quarantine, members to travel. but it’s done little to help the plunged 94.5 Noone wants to see a second visitor numbers. percent, its fourth wave of the virus, but Macau is July gross gambling revenue virus free after the last imported plunged 94.5 percent, its fourth straight month of case was released from hospital straight month of a decline of a decline of more in July and Guangdong province, more than 90 percent. In the according to official figures at first six months of the year, than 90 percent. least, is in a similar situation. hotel occupancy was down just A safe travel corridor between under 64 percent. Macau and Guangdong would The operators as a result are each losing millions. Wynn Resorts has put go a long way to easing the pain, with the province its daily losses at $2 million a day, while Morgan accounting for about 30 percent of Macau’s GGR. Stanley estimates that collectively Macau’s operators The corridor could be further extended to other will have amassed losses of about $1 billion in the provinces as and when they become safe. Singapore and Malaysia are planning to create second quarter. Sands China said its Q2 loss came in at $549 such a travel bubble that should take effect on August million, while MGM Resorts said its adjusted EBITDA 17. That will greatly ease the pain for the island state’s loss in the first half was HK$1 billion ($129 million). two integrated resorts, with the bulk of their mass The crisis has sent the companies scrambling to market travellers from its neighbour. Analysts there say the IRs are already receiving a decent trim costs wherever possible, but cutting staff is a no, no and the government isn’t providing a furlough level of support from the local market and could return scheme as in many other jurisdictions to support to EBITDA positive quite quickly once travel improves. In the meantime, Macau’s operators are still waiting. labour costs until the punters come back.

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Asia Gaming Briefings | August 2020

AGBriefings August 2020 Edition

Articles inside

LAST WORD

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SO LONG, BUT NOT FAREWELL