AGBriefings February 2016 by Asia Gaming Brief

JURISDICTION UPDATES January/ February 2016 Edition

MACAU

Hengqin takes shape pg.06

Interview with The Star Entertainment Group CEO Matt Bekier

THE STAR BECKONING ASIA pg. 34

VIETNAM Long-awaited bill coming pg.28

CAMBODIA

Sihanoukville’s gamble pg.30

AUSTRALIA

Revamping online space pg.36

ICE 2016 SUPPLIER SPECIAL pg.40

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Sizzling at ICE in London

MESSAGE 3

hile the Northern Hemisphere is freezing

that Japan’s long-stalled casino bill would finally grind

– a snow warning was out in Hong Kong

its way through parliament seem increasingly distant.

(!) – Sydney is riding high this Summer

South Korea says its tourism arrivals have now almost

at the rebranded The Star Entertainment

recovered following an outbreak of MERS last May that

Group. AGB traveled to warm Sydney at the invitation of

triggered a three-month plunge in visitor numbers.

management and met with Group CEO Matt Bekier.

Moving into Indochina, the long-awaited bill to overhaul

The Star Sydney complex as it stands today and its concept

Vietnam’s casino legislation is expected to be published in

going forward, is a far cry from the ‘old’ Star Casino -

the first half of 2016, with the new draft expected to relax

the legacy of its early years shed. Interestingly, Bekier,

some of the conditions contained in earlier versions that

an executive from the old guard - the ‘architect’ of the

analysts warned had risked deterring foreign investors.

TABCORP demerger while then CFO - is now the longest

Trekking along, we take a closer look into Cambodia’s

serving CEO at 18 months in the job and is pushing the

coastal town of Sihanoukville, a sleepy place popular

brand to new heights. In these pages you’ll find a frank

among backpackers and expats, where online gambling

conversation about Group’s new perspectives and what

busts threaten the city’s gaming renaissance. Across to

it hopes to achieve with its developer partners Chow Tai

Australia we examine how the federal review of online

Fook and Far East Consortium. In this New Year edition

gambling regulation could have major implications for a

of AGBriefings we bring you the latest updates and

number of operators - both European and Australian.This

developments across the different Asian jurisdictions.

edition of Asia Gaming Briefings also brings you a special

In Greater China we look at how The Hong Kong Jockey

supplier report dedicated to ICE. In these pages we unveil

Club’s experiments with co-mingling are bearing fruit

what every major supplier will be bringing and debuting

and how it would now like to see restrictions eased

at the show. This year’s edition will be ICE Totally Gaming

on the simulcast of overseas races to allow local fans

biggest on record. Parallel to the exhibition ICE delivers

more access to international competition. In Taiwan,

eight strong conferences. AGB will host a round table on

despite considerable uncertainty stemming from the

Asia at the World Regulatory Briefing on the afternoon of

presidential and legislative elections, there may be

Wednesday January 3rd.

reason for optimism that even a change in government

Lastly, our event partners, Sports Betting Community are

won’t necessarily derail the process. In South East

hosting the legendary London Baby! party at Café de Paris

Asia, The Philippines defied the regional gloom with 17

on the evening of Tuesday February 2nd.

percent GGR gain but, even with the regulator reporting

As always, we look forward to connecting with you at one

that the country’s casino industry was one of the best

or other of the events.

performing in Asia last year. Despite the falling tourism

If you would like to book a meeting with us while in town

numbers and weak consumer sentiment in the country,

for ICE write to us at ICE@agbrief.com or look for us on

Genting Malaysia hopes to start seeing the fruits of its

the show floor. AGB will be exhibiting at stand # SD6-B.

RM 5 billion revamp through the year, although weak

We’ll be sizzling at ICE in London, see you there!

domestic consumption may hold back growth. Across

@agbrief

Rosalind Wade

Luis Pereira

Asia Gaming Brief

the strait, Singapore’s gambling market is expected to be level in 2016 and, with no new catalysts to fuel growth, the battle for market share between the two established casino operators is likely to continue. Heading to North Asia, the industry’s hopes that 2016 would be the year

Asia Gaming Brief On behalf of Asia Gaming Brief Rosalind Wade & Luis Pereira PUBLISHERS

www.agbrief.com JANUARY/ FEBRUARY 2016 EDITION SERIES II • ISSUE XI

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Asia Gaming Briefings | February 2016

CONTENTS 4

NORTH ASIA

GREATER CHINA

SOUTH ASIA

RUSSIA

HONG KONG

JAPAN

TAIWAN

SOUTH KOREA

MACAU

PHILIPPINES MALAYSIA

SINGAPORE

SPECIAL FOCUS - CEO INTERVIEW

IC E

TOTALLY

E XC EL , FO R

VIETNAM

AUSTRALIA

CAMBODIA

PACIFIC ISLES

SUPPLIER SPECIAL REPORT

GAMING

LON DON,

T I C KE T S :

AUSTRALASIA

INDOCHINA

SOUTH EAST ASIA

NEPAL

–

LAST WORD

2016 4

FEBRUA RY

ICE TOTALLY G A MI NG.COM

GREATER CHINA

MACAU

Hengqin takes shape amidst struggles “Hengqin is the most underreported story about Macau,” a casino executive recently told a group of investors.

Asia Gaming Briefings | February 2016

hile many in the gaming and hospitality industries are increasingly taking note of Hengqin’s future plans, projects are beginning to rise from its ground. Cratered construction sites of a Cotai magnitude, along with extensive underground infrastructure, reveal the subterranean clues of projects yet to come. Hengqin Island, a stone’s throw away from Macau and three times its size, is a Free Trade Zone in China with unique policies. Through these policies and transportation links with Macau’s Cotai Strip, master-planned Hengqin is set to be integrated with Macau’s economy over the next few years. Many analysts and industry observers see the development of the island’s tourism facilities as being the real game changer for Macau as it tries to transform itself into a mass market leisure destination. The island has the space to develop a diversified offering likely to appeal to a broader audience and the space to accommodate a much higher volume of visitors. The following is an update of the current state of development on Hengqin. Chimelong sets sights high While 70 percent of Hengqin is designated as green space and off limits to development, a few large scale projects are already operational. For example, the two largest hotels in mainland China have opened their doors. Together with its third recently opened hotel, this gives China’s Chimelong Group around 5,000 hotel rooms on Hengqin. Chimelong’s existing properties are the first phase of its Hengqin plans: Up to 12 hotels and as many as 9 theme parks. When all phases are completed over the next few years, it expects 50 million annual visitors. To date, it has opened a circus and the first of these theme parks, the Chimelong Ocean Kingdom. According to a report by the Themed Entertainment Association and AECOM, this park alone attracted 5.5 million visitors in 2014. In the same period, Hong Kong’s Ocean Park drew 7.8 million while Hong Kong Disneyland attracted 7.5 million. According to Chimelong, visitation was up 30 percent in the first half of 2015. Measured by visitation, Ocean Kingdom has now made the Chimelong Group one of the top ten theme park groups globally. In its annual global rankings, The Themed Entertainment Association assessed:

GREATER CHINA 7

“Chimelong Ocean Kingdom theme park complex opened in Zhuhai to big numbers and rave reviews including a Thea Award for Outstanding Achievement.” To the north of Chimelong, in Hengqin’s central valley, is the Hengqin Tennis Center. The first of its two phases opened this November when it played host to the internationally telecast WTA Elite Trophy Zhuhai. Where village oyster farms stood a few years before, tennis greats from around the world volleyed, with Li Na making an appearance and Venus Williams winning the tournament.

GROSS GAMING REVENUE GGR Y15 -34.3%

Dec. 15 -21.2%

GGR Y16E -6%

Hotel openings Just across the river in mainland Zhuhai (the Chinese town of which Hengqin is a part), the Sheraton Zhuhai Hotel also opened this autumn, alongside the Zhuhai International Convention & Exhibition Center. A St. Regis hotel and office tower are to follow, all to be connected to Hengqin by rail. Earlier this year, a Club Med resort opened on the offshore island of Dong Au, connected to Hengqin by ferry. An immigration and customs facility at the bridge between Hengqin and mainland Zhuhai is complete though unopened. Local authorities say it will open “soon”. When it does, Macau vehicles without a China license plate—some at first, more later—will be permitted to drive on Hengqin though not enter mainland Zhuhai. Other operational facilities on Hengqin include a small but temporary financial district (to be replaced by the permanent financial district in a few years); a zone of new offices built to accommodate start-ups; and some industrial facilities in Hengqin’s northwest corner. In the works Galaxy Entertainment Group has not yet broken ground on its 2.7 square kilometer Maldives-style resort. Insiders expect MGM Resorts International to be among the next Macau gaming operators to announce its large-scale, non-gaming tourism and hospitality project on Hengqin. Most—but not all—of Macau’s gaming operators are expected to follow. Some of these operators might be forced to enter Hengqin through joint venture projects in which they hold a minority stake. Shun Tak Holdings and Macau Legend

MOP 230.8b

GGR Y17E +4% Mass Y16E

+4%

Mass Y17E +8% (Source: Morgan Stanley)

Development have already announced their mixed use projects, both located near Hengqin’s border with Macau. In partnership with a Hong Kong conglomerate, Lions Gate Entertainment announced plans in October to build a Hunger Games entertainment center on Hengqin. More theme park projects are expected to be announced, drawn by the proximity to the critical mass-centric Chimelong and Macau’s casinos—much in the way Walt Disney World as a destination resort drew other theme parks to Orlando, Florida. This month, Ferretti Group plans to break ground on its marina and mixed use project on Hengqin’s northern shore. Among others, the Massachusetts General Hospital has announced its own facility. Infrastructure Hengqin’s island ring road and its accompanying heavy infrastructure are 80-90 percent complete. The Hong Kong-Zhuhai-Macau Bridge goes directly to Hengqin and is expected to be open in 2017. The “spur line” extension of China’s high

Asia Gaming Briefings | February 2016

GREATER CHINA 8

Alternate revenue sources for struggling junkets

MARKET SHARE Y15E SANDS CHINA 23%

Macau’s first junket driven VIP slot parlor opened at the Jimei Casino on the Macau Peninsula with 130 machines. Union Gaming says the facility is a sign of the times, with struggling junkets willing to entertain alternative sources of revenue that would never have been considered in another era.

SJM HOLDINGS 22% GALAXY ENTERTAINMENT 21% MELCO CROWN 14% MGM CHINA 10% WYNN MACAU 10%

speed rail network from Zhuhai to Hengqin is underway with a target completion of July 2018. The same line’s link-up by bridge to the Zhuhai airport will follow. The much-delayed Macau LRT is not expected to be completed by the time China’s train to Hengqin is operating. However, when it is completed the Macau LRT is set to cross into Hengqin from Cotai and converge with the same immigration facility that contains the China rail station. This combined facility is expected to become the world’s largest and busiest border crossing. Slightly to the north of that facility, a separate border tunnel is being planned between Hengqin and Macau’s Taipa district.

SJM HOLDINGS (880:HK)

“

REGARDLESS OF WHETHER OR HOW INVESTORS CHOOSE TO PARTICIPATE, IT CAN BE AGREED THAT HENGQIN IS AN UNPRECEDENTED EXPERIMENT.

”

Property sales

SANDS CHINA (1928:HK)

A handful of high end residential and office buildings have been launched for sale to the public. The first of these buildings is expected to be “delivered” to owners in 2016. According to recent market surveys conducted by GW Investment Consulting, the price for residential units on Hengqin is approximately two-thirds of their equivalent units in Macau. This is up sharply from three years ago. In commercial buildings, office space is selling for about half the price of Macau’s. Based on factors including its discounted price and comparable markets, higher rental yield is being forecast for Hengqin’s office market. Regardless of whether or how investors choose to participate, it can be agreed that Hengqin is an unprecedented experiment. The first trip made by Chinese President Xi Jinping after his 2012 inauguration included a visit to Hengqin. He remarked: “With the blueprint drawn up and work off to a solid start, the future of Hengqin is much anticipated.”

Has four casinos. Analysts say the company has had a lower room occupancy than rivals in Cotai, meaning it has more potential for revenue growth if it fills the rooms. The company’s new developments include the $3 billion The Parisian, which is now expected to come online in late-2016. Sands China also recently expanded retail space at its Sands Cotai central property, with the addition of 150,000 square feet of space, with shops designed to appeal to families. Net revenues for Sands China decreased 28.8 percent in 3Q to $1.66 billion with adjusted property EBITDA down 32.8 percent to $545.0 million. Net income decreased 46.8 percent to $343.2 million. The Venetian Macau saw a 9 percent occupancy drop in the quarter and 20 percent drop in revenue per available room, and Sands Cotai Central saw a 17 percent RevPAR drop YoY. Sands China is seen as the most defensive Macau pick due to its high exposure to the mass market sector. Q4 revenue is seen down 23 percent.

Asia Gaming Briefings | February 2016

Has 20 casinos. Its $3.2 billion Palazzo Versace development is scheduled to come online in 2017. Mass market property the Jal Alai is scheduled for a mid-2016 opening with 130 rooms and 45 gaming tables. The company is currently building The Lisboa Palace on Cotai, which is also scheduled for completion in 2017. The casino plans are for 700 gaming tables and over 1,200 slot machines across a gaming floor area of approximately 27,000 square metres. The total production cost is estimated at about HKD$30 billion ($3.8 billion), although the company has expressed concern over costs. SJM Holdings reported a 37.9 percent drop in gaming revenue to HK$11.24 billion ($1.45 billion) in 2015 Q3 compared to the same period the year before. Adjusted EBITDA during the period decreased by 49.5 percent from 2014 Q3 to HK$884 million and for the nine months ended September 30 decreased 49.2 percent to HK$3.14 billion. Profit attributable to the owners decreased by 81.4 percent to HK$285 million and for the nine months decreased by 61.8 percent to HK$2.07 billion. For Q4, revenue is expected to have fallen 35 percent, according to Citi Research.

MGM CHINA (2282:HK) Is operating a single casino in the peninsula. Its new developments include the MGM Cotai, which is a $2.9 billion project scheduled for completion mid 2016. MGM China earned Q3 net revenue of $529 million, a 33 percent decrease compared to the prior year quarter. Main floor table games revenue decreased 30 percent compared

Asia Gaming Briefings | February 2016

GREATER CHINA 10

GROSS GAMING REVENUE GGR Y15 -13% Y17E +0% Y18E +3% (Source: Macquarie)

GGR Y16E -5.9%

UBS

-5%

Fitch

+0%

Wells Fargo

range of $552 million to $560 million, compared to $761.2 million generated in the fourth quarter of 2014. On a GAAP basis, operating income for the fourth quarter of 2015 is expected to be in the range of $75 million to $83 million, compared to $157.6 million for the fourth quarter of 2014. Analysts say the delay in the Wynn Palace opening, coupled with the company’s strong VIP focus mean its share price is likely to underperform peers. It will also need to hire more and carry extra labor costs for the resort which will add to costs, ahead of any new revenue generation. Its Q4 revenue is forecast to decline 27 percent.

GALAXY ENTERTAINMENT GROUP (27.HK)

(Source: Morgan Stanley)

to the prior year quarter, while VIP revenue dropped 39 percent. Property level EBITDA came in at $128 million versus Deutsche Bank’s $118 million estimate and the StreetAccount consensus of $124.4 million. MGM said its new Cotai project remains on track to open in the fourth quarter of 2016. It said it has reached a milestone with the topping off of its hotel towers. The company is expected to report a 38 percent decline in Q4 revenue.

WYNN MACAU (1128:HK) Has one casino, while its $4 billion Wynn Palace is under development. The company has pushed back the opening date to June 25th this year, from its originally scheduled March opening. It will have 1,700 hotel rooms and 90 percent of the resort will be non-gaming. The company said the resort will feature a performance lake, casino, spa, retail and other outlets. It is aiming for about 500 table games. In Q3 Macau net revenues were $585.1 million, down from $942.3 million a year earlier, while adjusted property EBITDA tumbled by half to $162.8 million. Table games turnover in the VIP segment was $12.2 billion, a 51.3 percent decrease, though the number of VIP tables also declined during the period to 228 units from 251 in the prior year’s period. Wynn expects Q4 net revenues to be in the

Asia Gaming Briefings | February 2016

Has eight properties. The company’s new Galaxy Macau Phase 2 and Broadway at Galaxy Macau opened on May 27 2015, almost doubling the capacity of the resort. The group was recently granted an extra 100 tables, adding to the original allocation of 150 tables. That’s still far short of the 400 it had requested, but brings it in line with the table award given to Melco Crown Entertainment’s Studio City. In the latter part of 2015, the company expects to begin site investigation works for Cotai Phases 3 and 4, the plans for which are almost complete. The group posted 3Q revenue of $12.3 billion and adjusted EBITDA of $2.1 billion in 2015 Q3, year-on-year declines of 29 percent and 36 percent respectively. Morgan Stanley in a recent note said it expects the company to outperform peers in

2016, though its high exposure to VIP may put pressure on EBITDA margins. Growth will be helped by the addition of the extra mass tables and a full-year contribution from new retail facilities. Its Q4 revenue is forecast to be down about 24 percent.

MELCO CROWN ENTERTAINMENT (6883.HK) Has three casinos. The company’s $3.2 billion Studio City opened on October 27, 2015, with an allocation of 250 tables, short of the 400 requested. All tables were allocated to the mass sector, a first in Macau. The resort features a 5,000-seat multi-purpose theatre, a permanent magic show, jungle-themed river rides, Asia’s highest Ferris wheel and a Batman simulated ride. Melco says the resort will be made up of 95 percent non-gaming components. For Q3, net income was $33.2 million, or US$0.06 per ADS, sharply lower than the $132.2 million, or $0.24 per ADS, posted in the prior-year period. Adjusted net income per ADS was $0.11 down from $0.28, beating forecasts by a penny, according to Capital IQ. Net revenue dropped 16 percent to $945.7 million, missing the average estimate of $958.1 million. Morgan Stanley expects the group to post the strongest EBITDA growth in 2016, helped by the ramp up of Studio City and the completion of an expansion at City of Dreams. The company is expected to report the smallest decline in Q4 revenue with a drop of 2 percent.

Suspected junket fraud Macau police are probing another case of suspected junket fraud, with a senior staff member of Casino L’Arc’s VIP business under suspicion of embezzlement. The case involves funds totalling HK$ 99.7 million ($12.8 million). In Sep. 2015, Macau junket operator Dore Entertainment announced it had been a victim of internal fraud by a former employee.

Asia Gaming Briefings | February 2016

GREATER CHINA 12

HONG KONG

HKJC says commingling boosts turnover, wants overseas simulcasts The Hong Kong Jockey Club says its experiment with co-mingling is bearing fruit and it would now like to see restrictions eased on the simulcast of overseas races to allow local fans more access to international competition.

he commingling arrangement, by which overseas racing fans bet into Hong Kong pools, was launched via two operators in the United States and was extended in 2015 to encompass a total of nine overseas regions. Racing turnover for the 2014/2015 financial year reached a new high of HK$105.40 billion ($13.5 billion), while football turnover increased by 26 percent to HK$78.25 billion. Significantly, HK$2.49 billion of racing turnover in the financial year derived from commingling, the club said. On New Year’s Day alone the Jockey Club received a record-breaking HK$57.5 million from commingling activities, up 23 percent from the same day last year, local media reported.

GROSS GAMING REVENUE HKJC Horse racing turnover $107.9b

+5.8%

Football betting $78.2b

+26%

Mark 6 lottery $7.8b

-1.6%

Asia Gaming Briefings | February 2016

The biggest contributors came from gamers in Singapore and the U.S., which funded HK$22.9 million and HK$11.9 million, respectively. Trailing behind was Europe (HK$8.7 million), Australia and New Zealand (HK$8.5 million) and finally, Macau – which solely contributed HK$5.5 million. Meanwhile, U.K.-based Webis Holdings said it’s in advanced talks to extend its partnership with the Jockey Club. The company’s WatchandWager unit is in the final stages of concluding an extended threeyear contract for betting rights into their pools. All the key commercial terms and the longer term of the accord have been agreed, it said. “The commitment to a long term business relationship with the Hong Kong Jockey Club is already paying off with significant turnover increases in the first four months of the new financial year,” it added. Given the growing internationalization of the sport, the HKJC argues it should be allowed to simulcast overseas races to local punters. “Hong Kong fans are deprived of the opportunity to enjoy some of the best overseas racing. In a world of globalised sport such restrictions are surely no longer appropriate and should be relaxed,” CEO Winfried EngelbrechtBresges said in his annual address.

Genting sells Norwegian Cruise Line Holdings Genting Hong Kong said it expects a gain of about HK$14.5 million ($1.9 million) from the sale of shares in Norwegian Cruise Line Holdings that will take its stake down to 11.1 percent. The sale proceeds will be used as general working capital for the group and/or to fund new investments.

Rolling chip turnover down VIP gambling room promoter Iao Kun Group announced its rolling chip turnover for 2015, at US$6.42 billion, down 61 percent compared to $16.64 billion in 2014. Unaudited rolling chip turnover for the month of December 2015 was $420 million, down 40 percent year-over-year, compared to $71 million in December 2014.

Asia Gaming Briefings | February 2016

GREATER CHINA 14

TAIWAN

New year, new start for the casino industry Taiwan’s Legislative Yuan failed to pass the Tourism Casino Administration Act in its most recent session, but the bill is not dead yet. Despite considerable uncertainty stemming from upcoming presidential and legislative elections, there may be reason for optimism that even a change in government won’t necessarily derail the process.

Bill Bryson*

*Bill Bryson is a principal with Global Market Advisors and has more than 25 years of experience practising law in New York and Taiwan.

nder the Offshore Islands Development Act, Taiwan’s offshore islands can create tourist zones that include casino zones if the island’s residents approve by a simple majority vote in a county-wide referendum. Of the three islands – Penghu, Matsu and Kinmen – that are considered viable candidates for hosting casino zones, only two – Penghu and Matsu – have held referenda on the establishment of casino resort zones. In 2009, a referendum in Penghu failed, due mainly to pressure

from anti-gaming groups, an anti-gaming “get out the vote” campaign by the main opposition party – the Democratic Progressive Party - and the absence of draft casino gaming legislation which would have addressed the concerns raised by the anti-gaming groups. In addition, the Penghu County Government – which had championed and supported the idea of a referendum – insisted on remaining neutral In 2012, however, a similar referendum passed in Matsu, the smallest and most mountainous of the

Online gambling ring busted

TOURISM ARRIVALS Nov Y15 939,483

+9.3%

Jan - Nov Y15 9,416,888

+5.1%

Asia Gaming Briefings | February 2016

Taiwan’s Criminal Investigation Bureau in January said it busted a huge online gambling ring, arresting the ringleader and 52 others and seizing over NT$2 billion ($60.49 million) in bets. The ring was allegedly also taking bets on the outcome of presidential and legislative elections.

GREATER CHINA 15

eligible offshore islands, in large part because conditions were markedly different. First, the then-Magistrate (Governor) of Matsu and his entire administration were very active supporters of casino resort zones on Matsu, mainly because of the infrastructure development, tourism and employment opportunities that casino investments would bring to the island. Second, at the time of the referendum, the Taiwan government had already issued a draft of the Act, the provisions of which addressed many of the issues that had been raised by the anti-gaming forces in the Penghu referendum. Third, and perhaps the most important element, a foreign gaming development company (Global Gaming Asset Management) had expressed a very strong interest in developing a multi-billion dollar integrated resort in Matsu, thus precluding any argument that nobody would be interested in developing a casino-based integrated resort in Matsu. The Act was submitted to the LY on April 30, 2013, and there it has remained, mired in public hearings and cross-party negotiations – but not dead yet. Unfortunately, with the close-out of the LY for the year, elections being held on January 15, and the very real possibility that both the Presidency and the control of the LY will shift to the DPP, the only remaining opportunity for the bill to be passed by the ruling Nationalist Party (the KMT) – the party that has traditionally supported the

casino gaming initiative - will be the “lame duck” session between the elections in January and the swearing-in of the new government and LY members in May. Changing political conditions suggest, however, that if the Act does not pass during the lame duck session, that it could still pass, even in a post-election DPP-dominated LY and with a DPP executive branch. The most significant political change appears to be happening in Penghu, where the County government has recently announced its intention to hold a casino gaming referendum in 2016. It is worth noting that the political environment in which the 2016 referendum would be held is quite different from the political environment in 2009. In particular: 1) The County Magistrate of Penghu County is a member of the DPP; 2) The County Government overtly supports the referendum, and seeks an approval from the residents of the county; 3) The referendum enjoys the support of the County Chamber of Commerce and other local business organizations; and 4) The draft Act, which has been submitted to the LY, addresses many of the concerns expressed by the anti-gaming activists in 2009. Given these factors, it is quite possible (though by no means certain) that Penghu’s second casino referendum will pass. The date of the referendum has not yet been set, though there are some indications that the target date would be sometime during the lame duck period. In the event that the Penghu referendum passes, a new DPP government would be faced with a potential conflict between the party’s

prior opposition to the establishment of casino zones in Penghu, and the desire of the residents of a DPP-governed island to establish casino zones. While the LY was not willing to pass the Act for the sake of Matsu alone, the LY might be more inclined to pass the Act if a majority of the eligible offshore islands have held successful referenda. It is not enough, however, merely to pass the Act; it must pass in a form which would encourage reputable foreign casino operators to bid on licenses. Unfortunately, this is not a certainty, as the DPP has previously proposed amendments that would likely make the Act, and the regulatory regime established under it, unpalatable to many potential foreign investors. These include amendments which would: a) shorten the license term from 30 years to 15 years; b) impose a minimum NT$60 billion (approximately US$2 billion) capital requirement on licensees; and c) impose taxation in the amount of up to 62 percent of gross gaming revenue, on top of a 17 percent tax on net income. If these proposed amendments are incorporated into the draft Act, it is unlikely that Taiwan’s casino zones will be attractive to many potential foreign investors. So, while the prospect of casino gaming being established in Taiwan is not dead, it is certainly under threat given the changing political climate that is likely to be wrought by the upcoming election. That same political climate, however, may actually make it possible to pass the Act and establish a casino gaming industry on Taiwan’s offshore islands. The new year will, indeed, be an interesting year for Taiwan.

Matsu ferry links with Fujian The island of Matsu, one of the locations for a potential casino zone, in December launched a direct ferry link with mainland China’s Fujian province. The route covers only eight nautical miles and a single journey takes about 25 minutes.

Asia Gaming Briefings | February 2016

SOUTH EAST ASIA

PHILIPPINES

Defying regional gloom with 17 percent GGR gain

The Philippine market regulator is reporting that the countryâ&#x20AC;&#x2122;s casino industry was one of the best performing in Asia last year, though stock market investors couldnâ&#x20AC;&#x2122;t be convinced with stocks plunging over the course of 2015.

Asia Gaming Briefings | February 2016

SOUTH EAST ASIA

he Philippine Gaming and Amusement Corp says gross gaming revenue reached PHP130 billion ($2.75 billion), a gain of 17 percent over the previous year and much better than most analysts had predicted. “We showed a big improvement last year despite the business environment.” PAGCOR chair and CEO Cristino Naguiat Jr told a local newspaper in an interview. “Pagcor, itself, showed a 15.75 percent increase in gaming revenue, while those of the licensees are up 18 percent,” he said, adding that the industry had also seen gains in the junket business, despite the regional VIP fall. “In 2014, our total junket business was only PHP 2 billion, but we hit PHP 5 billion last year.” In 2014, Pagcor reported gross gaming revenue for the industry of PHP111 billion, but the anti-corruption campaign initiated by the Chinese government resulted in a sharp decline in Chinese VIP visitors. Industry observers had feared casinos in the Philippines would suffer heavily as a result. However, Naguiat said the local properties had repositioned themselves as family entertainment resorts in order to diversify their revenue streams. The market was helped by the opening of Melco Crown Entertainment’s City of Dreams Manila at Chinese New Year and strong support from locals. Unlike in many jurisdictions in Asia, Filipinos are permitted to gamble and visitors to Manila’s Entertainment City report strong foot traffic from local daytrippers. Later this year, Entertainment City will get its third property -- the delayed resort from Japan’s Universal Properties. Local unit, Tiger Resorts & Leisure is promising the “newest, grandest and

GROSS GAMING REVENUE Y15 PHP 130b ($2.75b)

+17% (Source: Pagcor

Y16E Y17E

$2.2b $2.53b (Consensus view)

most exciting gaming and entertainment destination in Asia.” The gaming floors will feature 3,000 slots and 500 gaming tables. The resort will feature a Beach Club, a dancing water display, luxury shopping and restaurants. Despite the developments, Philippine casino stocks have been among the worst performing in the world as operating costs and start-up expenses held back profit, despite higher revenues.

“

GROSS GAMING REVENUE REACHED PHP130 BILLION, A GAIN OF 17 PERCENT OVER THE PREVIOUS YEAR AND MUCH BETTER THAN MOST ANALYSTS HAD PREDICTED.

”

Bloomberry Resorts is trading around its 52-week low of PHP 3.44 down from the high of PHP13.46, while Melco Crown (Philippines) has plummeted from a 52-week high of PHP 13.00 to trade around PHP 1.55. Travellers International Group has dropped from PHP 7.64 to PHP 3.52. A recent report by First Metro Investment Corp said local casino operators are still optimistic for 2016, despite the current environment. City of Dreams appears to

remain on a ramp-up stage and is expected to post a profit as it increases revenues from the gaming and non-gaming segments. Bloomberry Resorts, operators of the Solaire Resort & Casino, expects an earnings recovery by 2016 as it provisions for the unpaid credits granted to VIP players by year-end. “Both gaming and retail operations will be in full blast next year so a revenue boost is anticipated,” FMIC said. However, optimism for local operators does not extend to Resorts World Manila. “We expect decreasing market share for Resorts World Manila in Paranaque as gamblers transfer to the Entertainment City complex. These integrated resorts have started to alter strategy by growing the revenues of the mass segment. However, this shift will generate lower but stable revenues in the long-term.”

SOLAIRE RESORT & CASINO Solaire, owned by Bloomberry Resorts, is a 16-hectare gaming and integrated resort complex along Asean Avenue in Parañaque City and was the first casino to operate within Entertainment City. In November, 2014, the company opened its SkyTower, more than doubling the size of the resort, increasing the room count by 64 percent to 800. Bay Tower of Solaire consists of a casino with an aggregate gaming floor area of approximately 18,500 square meters (including approximately 6,000 square meters of exclusive VIP gaming areas), with approximately 1,400 slot machines, 295 gaming tables and 88 electronic table games. Bay Tower has 488 hotel rooms and 15 specialty restaurants. Contiguous to the existing Solaire Resort and Casino, the Sky tower consists

MJC opens casino at Winford Hotel MJC Investments, an affiliate of the Manila Jockey Club, has opened a gaming and entertainment section at the Winford Hotel, in Manila. The three-level entertainment and gaming area is part of the company’s hotel and entertainment project within the San Lazaro Tourism and Business Park.

Asia Gaming Briefings | February 2016

SOUTH EAST ASIA 18

SG extends Philippines lottery contract Scientific Games said Pacific Online Systems Corporation (POSC) has extended a contract through July 2018 for the supply and maintenance of an electronic lottery system in Visayas and Mindanao, Philippines. Under the contract, SG will supply 1,500 new WAVE lottery terminals by December 2015.

of a 312 all-suite hotel, additional ten VIP gaming salons with 66 gaming tables and 223 slot machines. It also includes a certified 1,760-seat lyric theatre. Bloomberry Resorts Corp reported a net loss of PHP 189.5 million ($4.1 million) in 2015 Q3, compared to a net profit of PHP 991.7 million in the prior year period. Gross gaming revenue for the third quarter of 2015 increased by 19.5 percent to PHP 8.8 billion. The company is now seeking overseas expansion in particular in South Korea, where it recently reopened the Jeju Sun casino and is seeking a license for a bigger integrated resort near Incheon. It also has plans for a property in Argentina.

CITY OF DREAMS PH Belle Corp and Melco Crown held the soft opening of the $1.3 billion City of Dreams casino resort project in December and the grand opening on Feb. 2. As of June 30, 2015, City of Dreams Manila has around 272 gaming tables, 1,588 slot machines and 130 electronic table games in operation. The integrated resort features three entertainment venues, namely: DreamPlay by DreamWorks, Manila’s first branded Family Entertainment Center; Centerplay, a live performance central lounge inside the casino; and Chaos and Pangaea

Asia Gaming Briefings | February 2016

Ultra-Lounge, two nightclubs situated within the Fortune Egg, an architecturally-unique dome-like structure accented with creative exterior lighting. City of Dreams Manila includes an approximately 260-room Crown Towers hotel, a 365-room hotel managed by Hyatt International Corporation and Asia’s first Nobu Hotel with 321 rooms.

RESORTS WORLD MANILA Travellers International Hotel Group, a joint venture between Genting Hong Kong and Alliance, invested PHP 2.05 billion in 2015 Q3 to expand Resorts World Manila. The second phase of the property, which includes the expansion of the Marriott Hotel Manila by an additional 227 rooms, is expected to be ready by 2015 Q1. The expansion will cover a two-hectare area currently used as a carpark. This will include a four-star international branded hotel offering 1,000 rooms, sitting atop a full-service shopping mall that will link Resorts World Manila to Terminal 3 of the Ninoy Aquino International Airport. The company has delayed the opening of a second Manila resort, the $1.1-billion Resorts World Bayshore along Manila Bay to 2018. Pagcor has approved new gaming capacity of 420 gaming tables and 4,148 gaming

machines at the resort. At end-2013, Resorts World Manila housed 287 gaming tables for the VIP and mass markets, 1,822 slot machines and 210 electronic table games.

MANILA BAY RESORTS Tiger Resorts and Entertainment, the Philippine unit of Japan’s Universal Entertainment, is now scheduled to finish its Manila Bay Resorts project by December 2016, more than a year later than originally planned. The company has said it may invest as much as $4 billion. It plans to raise $600 million through a bond sale to help finance the complex. Once fully operational, Manila Bay Resorts would feature two luxury hotels, a 30,000-square-meter casino floor with 3,000 slot machines and 500 table games, as well as a number of dining, leisure, and entertainment options. It will include an indoor man-made beach club covered by a huge glass dome, high-end and casual dining restaurants, upscale retail shops, trade halls and cinemas. The group recently overcame a key regulatory hurdle by teaming with local businessman Antonio O. Cojuangco and his All Seasons Hotels & Resorts Corp. to comply with Philippine regulations on foreign land ownership.

Asia Gaming Briefings | February 2016

SOUTH EAST ASIA 20

MALAYSIA

GROSS GAMING REVENUE Genting 3Q leisure revenue MY1.99b Revenue from Malaysia ops. MY1.41b

-9%

+9%

TOURISM ARRIVALS Jan-June 12.57m

-9.4%

Genting rolling out revamp amid weak consumer sentiment Genting Malaysia, the country’s only casino operator, is expected to start seeing the fruits of its RM 5 billion revamp this year, though weak domestic consumption and falling tourism numbers may hold back growth.

he 10-year Genting Integrated Tourism Plan, launched in December 2013, was designed to improve facilities and infrastructure at the company’s Resorts World Genting property in the Genting Highlands. It envisages a new hotel and a revamp of current hotels, a new cable car station and the much anticipated Twentieth Century Fox World Theme Park, the studio’s first outside the U.S. The company is seeking to build a tourism hub that will attract 30 million visitors by 2020. Given the size and scope of the project, it has been seen by analysts as the main driver for Genting’s stock, with any delays to the rollout timetable viewed as negative. During 2015, the company opened an additional 1,286 rooms at the First World Hotel. According to analysts at AllianceDBS Research the company is on track to launch Sky Avenue and Sky Plaza shopping malls and the new cable car station this year. However, the theme park has now been delayed until early 2017.

AllianceDBS said the group has obtained regulatory approval for a new casino at Sky Plaza, but added management has only provided minimal information on the additional gaming capacity obtained. Malaysian operations account for about 83 percent of group EBITDA and the launch of the new facilities will mean that domestic operations will continue to drive earnings. However, daytrippers account for more than 60 percent of visitation to the resort and that traffic may be affected by the softening Malaysian economy, although analysts differ on the extent of any impact. Gross Domestic Product growth is expected to moderate to 4-4.5 percent in 2016 from about 5 percent in 2015, in part because of the depreciating ringgit. Domestic consumption, which had already been dampened by the introduction of a Goods and Services Tax of 6 percent in April last year, is also under pressure as the price of domestic commodities rises. However, CIMB analysts noted in October

last year that they were positively surprised that the GST had not had any negative repercussions on gaming. “Negative consumer sentiment has also not hurt gaming volumes, in line with Genting Malaysia’s experience in past economic cycles. This is a testament to Genting Malaysia’s economic moat. It is a defensive casino monopoly domestically.” The company may also find itself benefitting from the declining value of the currency, which makes it cheaper for foreign tourists travelling in Malaysia. It may also encourage Malaysians to eschew foreign travel in favor of local destinations. According to Tourism Malaysia, tourist numbers dropped 9.4 percent between January and June this year. A total of 12,567,300 million foreign visitors were recorded in the first half of last year compared to 13.875.046 in the same period in 2014. Tourist arrivals from China fell 28.5 percent to 380,000 tourists in the first quarter of 2015.

Genting Americas buys Delaware company

Updating legislation to battle illegal online gambling

Genting Americas has bought dormant Delaware company Big Apple Regional Center for $150,000. The company said the purchase was to assist Genting with financing for potential future development projects in the northeastern region of the U.S.

Malaysia is considering amending archaic laws to crack down on widespread illegal online gambling activities. Deputy Home Minister Datuk Nur Jazlan Mohamed says police are having trouble tackling the problem because of the outdated legislation, which falls under the jurisdiction of several ministries.

Asia Gaming Briefings | February 2016

SOUTH EAST ASIA 21

SINGAPORE

Steady but unexciting Singapore’s gambling market is expected to be flat in 2016 and with no new catalysts to fuel growth the battle for market share between the two established casino operators is likely to continue.

ccording to Fitch Ratings, the market fell 10 percent in 2015 to about $4.8 billion. Weaker regional currencies, in particular Indonesia’s rupiah, soft economic growth and the fallout from China’s anti-corruption drive are all hampering further gains. The exclusivity licenses for both Marina Bay Sands and Genting Singapore are set to expire in 2017, though the government is not expected to allow any newcomers into the market. The available land space for further expansion is also limited, providing little opportunity for adding capacity to stimulate growth. Genting Singapore opened its new hotel in the Jurong Lake area of Singapore in April last year, hoping to drive more visitation to its Resorts World Sentosa resort. Genting said the property provides a “significant” boost to its room inventory. Genting Hotel Jurong is about a 25 km drive from the Resorts World site and visitors are able to travel back and forth via a shuttle bus. Daiwa analysts recently noted that visitation at Resorts World had increased, partly as a result of the new hotel, but revenue had not seen a corresponding benefit. Losing ground In fact, Genting has lost share to rival Marina Bay Sands, one of the world’s most expensive integrated resorts. The Las Vegas Sands-owned casino increased its market share to 62 percent in Q3, compared with 49 percent in Q1, according to Fitch estimates. The ratings firm said Marina Bay Sands had benefited from its central location, close to the financial business district, connection to the mass transit rail system and from its brand being recognized as synonymous with premium casinos. Genting’s 3Q results came in weakerthan-expected, with gross gambling revenue declining 19 percent to S$659 million ($464.7 million). VIP GGR declined by 29 percent

year-on-year to S$252 million, principally due to low hold in 15 Q2. According to Bernstein analysts, VIP remains challenging for the company as it reconfigures its VIP business model and continues to reduce extension of credit to VIP players. VIP rolling chip volume dropped 50 percent year-on-year, partly on continued reduction of credit extensions and Marina Bay Sands’ more aggressive approach to VIP. Mass and premium mass both showed sequential stability. Adjusted property EBITDA at Marina Bay Sands increased 10.8 percent year-over-year to $389.7 million in 3Q, driven by growth in mass play from visitors to Singapore and healthy rolling chip volume. Hold-normalized EBITDA increased 12.2 percent to $411.3 million. The property generated record mass gaming win-perday in local currency terms while holdnormalized adjusted property EBITDA increased 22.4 percent year-over-year on a constant-currency basis.

RESORTS WORLD SENTOSA Spans 49 hectares and features six hotels, a convention centre, the region’s only Universal Studios theme park, one of the world’s largest aquariums, as well as restaurants and spas. The casino has more than 500 tables and more than 2,400 slots. Genting opened its 15-storey Genting Hotel Jurong in April 2015 to help boost the company’s mass tourism base.

MARINA BAY SANDS Features approximately 2,600 rooms and suites located in three 55-story hotel towers. Atop the three towers is the Sands SkyPark, an extensive outdoor recreation area with a 150-meter infinity swimming pool and several dining options. The integrated resort offers approximately 160,000 square feet of gaming space with approximately 600 table games and 2,500 slot machines.

GROSS GAMING REVENUE Y15 $4.8b

-10%

Y16E (Fitch)

Y15E (UBS)

-11%

VIP TAX 5% MASS TAX 15% SINGAPORE POOLS, SINGAPORE TURF CLUB GGR FIVE-YEAR AVERAGE $2.39b

Counterfeit casino chips syndicate busted Toh Hock Thiam, believed to be the leader of a syndicate responsible for counterfeit casino chips in Singapore, was arrested in Malaysia on Dec. 31. He was said to have used the chips at the Marina Bay Sands casino. If convicted, Toh could be jailed for up to seven years and/or fined a maximum of $150,000.

Asia Gaming Briefings | February 2016

NORTH ASIA

RUSSIA

Tigre de Cristal to benefit as tourist arrivals rise

Early indications show strong interest in Russia’s Primorye region gaming zone, boding well for Summit Ascent Holdings’ Tigre de Cristal property, which opened late last year.

ore than 30,000 people have visited the Primorye gaming zone since its official opening on 8 October 2015, the local tourism department head Konstantin Shestakov was quoted as saying by the state-owned RIA Novosti news agency. He added that all rooms in the hotel situated in the zone are booked until the end of February 2016. Overall in 2015, there was an increase in tourist inflows of 18.5 percent, with most now spending up to three days in the region. Out of 364,802 foreign tourists some 227,950 came from China. Summit Ascent is also optimistic about its prospects, despite a slump in China’s VIP market. The slide, triggered by Beijing’s crackdown on corruption, has raised question marks over the viability of some planned projects in the Asia region, which would have been highly reliant on the China market. However, Eric Landheer, director - corporate

finance and strategy of Summit Ascent Holdings told AGB that Tigre de Cristal has a unique market position and is one of the only true integrated resorts in northern Asia. European flavor “Vladivostok is arguably the most European city in Northeast Asia. Its infrastructure - airport, roads, bridges, and cultural facilities - are much better than most frontier gaming markets,” he said. The luxury hotel is built in a modern style, with crystalline and marble features, though some areas are Chinese in feel. Each room is decorated with modern art pieces, which are expected to appeal to foreign visitors, both from China and elsewhere. Citi Research has estimated that the Primorye market could reach $1.7 billion by 2020. While Primorye Territory vice governor Sergey Nekhayev

NORTH ASIA 23

5-star hotel and a gaming floor of around of 15,000 square meters. There are 121 hotel rooms, 650 gaming machines and 67 gaming tables (25 VIP tables and 42 mass market tables) including Blackjack and Roulette. The nightly rate for most rooms at the hotel ranges from $200 to $400 per night. Compared to the Hyundai Hotel, a luxury hotel of a similar tier in the city center, Tigre de Cristal is $100 more expensive on average. The hotelâ&#x20AC;&#x2122;s other facilities include several F&B outlets ranging from an all-day-dining cafe to a steak-and-seafood restaurant and an Asian fusion restaurant. There will also be a karaoke lounge, spa and gym, jewelry shop and convenience store early next year. The property is around 50 km away from the city center and the trip costs approximately 1,000 rubles (approximately $15) by local taxi. Tigre de Cristal also offers complimentary transfer between the airport and the property for its foreign visitors. Infrastructure lags

also expects strong growth, estimating that tax revenues from the zone will reach 165 million rubles in 2016, more than 700 million per year by 2019 and about 2.5 billion roubles per year by 2022. The zone has one of the most favorable gaming tax rates in the world at 1.3 percent, Citi says. Around 400 million people live within a three-hour flight radius of Vladivostok. Northeastern China and North Korea, for example, are within 600 km of the IEZ, roughly a one-hour flight. Beijing, South Korea and Japan are within a 2.5-hour flight radius. Low penetration Landheer cited estimates showing that Northeast China has approximately a 1.5-2.5 percent visitor penetration rate to Macau and Korea combined. However, Guangdong, which neighbours Macau has a 15 percent penetration rate. The figures show how proximity may be key in attracting tourists. The $172 million Tigre de Cristal has a

Currently there is no main road connecting Vladivostok International Airport and the Primorye Integrated Entertainment Zone (IEZ), which are only 15 kilometers apart. However, there is an expressway currently being constructed by the government linking the two, which is slated to be completed in early 2016 and is expected to reduce the commute time from its current 30 minutes to between 10 to 15 minutes. In the next phase of development, Summit Ascent plans two hotels - one four-star and one five-star - with a gaming floor two to three times bigger than the current one, more retail offerings, conference facilities and other non-gaming amenities. Details of the second stage are likely to be announced in mid-2016. Landheer said the casino will benefit from a more diverse base of target customers as, unlike in South Korea, locals are able to gamble. Tigre de Cristal also has a first-mover advantage. While NagaCorp, Royal Time Primorye and Diamond Fortune Holdings Prim all have planned projects in the zone, the next property is not expected to open until 2018. All projects from the four investors are expected to be completed by 2022. Landheer also said there was one more potential investor, without disclosing further details.

GROSS GAMING REVENUE Y20E $1.7b

(Source: Citi)

TAX REVENUE Y16E 165 million rubles Y19E 700 million roubles Y22E 2.5 billion roubles GAMING TAX RATE 1.3%

Bookmakers forced to sponsor Russian President Vladimir Putin has asked the government to force bookmakers to sponsor sporting events when Russian sportsmen and teams take part, the official Kremlin website said. The law is expected to be introduced by 1 June 2016.

Shambala casino second stage opens The second stage of the Shambala casino and a five-star hotel in AzovCity situated in Krasnodar Territory pre-opened on 25 December 2015. Initially, the official ceremony was set for 4 December but was later postponed, and is now expected to be held at the beginning of 2016. JSC Shambala, which owns two casinos there - Shambala and Nirvana, - expects the official opening to boost the number of visitors and tourists up to 20,000 people per month.

Asia Gaming Briefings | February 2016

NORTH ASIA 24

Casino bill off the table for first half of 2016

JAPAN

Hopes that 2016 would be the year that Japan’s long-stalled casino bill would finally grind its way through parliament seem increasingly distant.

he Bill for the Promotion of Integrated Resort Facilities would set out the framework for establishing a casino industry in Japan, which most analysts say has the potential to become one of the world’s largest gaming markets. On December 29 the Japanese government decided to forego passage of the act in the Ordinary Diet Session beginning this year on January 4. Local press Hokkaido Shimbun reported that ruling coalition partner Komeito remains cautious about lifting the ban on casinos due to its continuing concern over an increase in gambling addiction. It was judged that any effort to rush enactment

A wave to simulcast major races overseas The Japan Racing Association is reportedly considering a move to simulcast major races overseas featuring Japanese horses given the increasing numbers of Japanese runners spreading out to Hong Kong, Dubai, Australia and Europe. Turnover in Japan on a single Group One race can be the equivalent of an entire 10-race meeting in Hong Kong.

TOURISM ARRIVALS Nov. 1,647,600 Jan-Nov. 17,964,400 China arrivals Jan-Nov.

+41%

+47.5%

+109.4%

4,646,700

Asia Gaming Briefings | February 2016

of the bill before next summer’s House of Councillors elections could affect electoral cooperation between the two ruling parties. While the administration of Prime Minister Shinzo Abe views lifting the ban on casinos as a strategic measure to enhance economic growth, in practice the associated legislation is necessary. The goal of opening the first Integrated Resorts before the 2020 Tokyo Olympics is now viewed by most as a pipedream. In regard to the timing of the IR Bill’s enactment, a senior government official stated: “There’s no chance in the coming Ordinary Diet Session. There’s no time for it before the House of Councillors elections.”

NORTH ASIA 25

Pending lawsuit, trial to begin in 2017

GROSS GAMING REVENUE GGRE

A pending lawsuit between Wynn Resorts and former director billionaire Kazuo Okada could potentially force a cash payment of more than $2.0 billion or the reinstatement of 24.5 million shares, says Gabelli & Co. The case is currently in discovery phase with the trial set to begin in February 2017.

$7b (Source: Fitch based on two IRs)

GGRE $22b (Overall consensus)

While there are some within the Liberal Democratic Party calling for early passage and making final adjustments to the bill early in the year, a Komeito executive warns, â&#x20AC;&#x153;there is no reason to do this before the elections. This bill is frozen until the Autumn Extraordinary Diet Session.â&#x20AC;? Even if the bill does come to the table there is still considerable uncertainty about its ultimate form, according to Mikio Tanji, chairman of Gaming Capital Management. Speaking at the Macau Gaming Show in November, he said outstanding issues include whether foreigners will be allowed to have 100 percent ownership and the role of junkets. Macau-style junkets are unlikely

to be approved in Japan, he added. Tanji, who has advised Diet members on IR development in Japan, said there are four locations that are the current front runners for potential casino-resort sites. Yokohama, near Tokyo is seen as the most promising, with the city of Osaka also a strong contender. Hokkaido, which is popular with western tourists and known for its ski resorts is another, while there is a possibility that Nagasaki may ask to add a casino to its Huis Ten Bosch resort. The theme park based in Sasebo aims to be a replica of the Netherlands, with copies of old Dutch buildings. But Tanji said it was unclear whether the government would

permit a casino to be added on. Estimates of the potential value of the Japanese market have varied widely, depending on how many resorts will be permitted and whether locals will be allowed in. Fitch Ratings has estimated that two integrated resorts in Tokyo and Osaka could generate roughly $7 billion in gross gaming revenues. While a recent study on the likely impact of an IR in Yokohama found that it would give a 414.4 billion yen ($3.36 billion) boost to the local economy, with a direct impact of 256.16 billion yen. It would also be likely to create more than 41,000 jobs.

Asia Gaming Briefings | February 2016

NORTH ASIA 26

SOUTH KOREA

MERS outbreak highlights risk of tourism dependency South Korea says its tourism arrivals have now almost recovered following an outbreak of Middle Eastern Respiratory Syndrome in May that triggered a three-month plunge in visitor numbers.

n outbreak of Middle Eastern Respiratory System in May last year that crippled the tourism industry through most of the summer months, coupled with a sharp slowdown in China’s VIP traffic has highlighted the risk of investing in a market reliant on foreign tourists. South Koreans are only permitted to gamble in one isolated property and the government has no plans to ease the nolocals policy.

Asia Gaming Briefings | February 2016

As a result, out of 34 groups that initially expressed interest in Seoul’s Request For Proposals for two integrated resort licenses, only six bidders chose to move onto the next stage by the end of November deadline, according to media reports. Hong Kong-listed Nagacorp said it would not proceed because of concern about the project’s economic viability. “The company is of the view that the expected economic returns of such an investment do not meet the company’s

benchmark in evaluating return on investments and is therefore not in line with its policy of selective expansion,” it said. VIP concerns Incumbent, Grand Korea Leisure, widely seen as one of the strongest contenders, has said that it too will not proceed, mostly on concern about weakness in the VIP market amid China’s ongoing crackdown on corruption and edicts on overseas gambling.

NORTH ASIA 27

approval in March last year also looks to be in doubt. The consortium is seeking to build a foreigneronly property on land near the country’s main international airport on Yeongjong island. It was to be built in stages and be ready in time for the 2018 Winter Olympics in Korea, the companies said at the time. But the parties failed to resolve outstanding issues relating to the venture and the acquisition of the necessary land by a Dec. 31st deadline. The parties remain in discussions on either reaching an accord or extending the deadline for negotiations as of the time of going to press. “There is no assurance that such discussions and negotiations will result in any agreement, in which case the Project will not proceed,” it said at the beginning of January. A leading academic recently warned that the Korean casino market risked oversupply. Pyo Hak K, an honorary professor of economics at Seoul National University told a seminar at the university in December: “Additional construction of integrated resorts without a proper estimation of demand can lead to oversupply, as such is the case on Jejudo

FOREIGNER-ONLY GGR “GKL pulling out of the RFP calls into question whether adequate returns can be generated given the RFP states a minimum investment of US$850 million (with winning bidders likely north of USD1 billion), that the casinos are only open to foreigners, and in the context of serious questions on the future of Chinese-originated VIP play,” Union Gaming said in a note at the time. U.S. tribal operator Mohegan Sun is still in the running, though ratings firm Moody’s recently warned that the project would be credit negative for its partner KCC Corp, a Korean industrial paints and materials company. KCC is planning to invest KRW204 billion ($178 million) for a 24.5 percent stake in Inspire Integrated Resorts, Mohegan’s local unit, which has its eyes set on a casino license in Incheon. Shaky ground Meanwhile, a $2.2 billion project planned by Caesars Entertainment, Lippo Group and Singapore’s OUE which received preliminary

Y15E

$1.13b

Y16E

$1.15b

Y17E Y18E

$1.21b $1.32b (Source: Morgan Stanley)

Island where (resorts there) are sustaining on deficit operation.” Jeju overplayed? Jeju, a semi-autonomous region, is able to grant its own casino licenses and the island has proved highly popular with Chinese gamblers. As a result it has also attracted significant casino investment. Philippine-based Bloomberry Resorts Corporation late last year reopened the casino of its new re-branded property on Jeju under the new management of Jeju Sun Hotel & Casino. While Chinese property developer Landing International has bought the gaming business at the Hyatt Regency on South Korea’s Jeju Island for HK876 million ($113 million) and plans a $2.2 billion integrated resort with Genting Singapore. South Korea’s Lotte Group also has plans for a major integrated resort on the island that is popular among Korean honeymooners. Dream Tower will be developed by LTDC and Chinese property developer Greenland Group and will be the second-largest IR after the Landing/Genting venture.

Korean man extradited from Philippines A 40-year-old South Korean man was deported from the Philippines by local authorities for operating an illegal gambling website from China. Lim allegedly set up an office in the Shandong Province in China in 2013, taking in over KRW $70.6 billion (US$5.9 million) in bets.

Lee Ki-Woo appointed CEO Grand Korea Leisure, the operator of Seven Luck casinos, has appointed Lee Ki-Woo as the new chief executive officer. Lee’s background includes serving at the Presidential secretarial office, the press relations office of the Korean Consulate General in Toronto, Canada and at the Korean Embassy in the United States.

Asia Gaming Briefings | February 2016

SOUTH EAST ASIA

VIETNAM

Long-awaited bill expected in 16H1

A long-awaited bill to overhaul Vietnamâ&#x20AC;&#x2122;s casino legislation is expected to be published in the first half of 2016, with the new draft expected to relax some of the conditions contained in earlier versions that analysts warned had risked deterring foreign investors. Asia Gaming Briefings | February 2016

he final version is expected to halve the minimum investment required in an integrated resort to $2 billion. Previous drafts of the legislation had required any operators seeking a license to run an IR in the country to commit to a minimum investment of $4 billion, which was seen as too high for the Vietnamese market. Augustine Ha Ton Vinh, chairman and CEO of Stellar Group and an advisor to the Vietnamese government on gambling legislation, told a seminar in November that the investment won’t need to be completely upfront, but can be committed in stages. He added that Vietnam is expected to allow a further three IRs in addition to Ho Tram, which opened in 2013. The locations are likely to be Halong Bay in the north of the country, which is a UNESCO World Heritage site, the central coast and on Phu Quoc island in the south. Local access The new legislation is also expected to open up the country’s casinos to locals for the first time which will significantly add to its appeal in the eyes of overseas investors. Many countries around Asia, such as Korea and Cambodia also restrict local access and the ban is viewed as an additional risk factor. Vietnam is currently losing millions of dollars a year in tax revenue from its residents flocking to the small casinos along the border with Cambodia to gamble. There will be a minimum age of 20 for

INDOCHINA 29

entry into the casinos and any local wishing to gamble will have to prove a minimum income of around $750 a month. The casinos will also charge an entry fee, which is likely to be set at around $50, or $500 for an annual pass. Vietnamese citizens will be allowed on a pilot basis into one of the resorts. The Ho Tram resort, on the coast near Ho Chi Minh City, has been tipped as the most likely venue for such a pilot scheme, which would run for a two-year trial. The latest draft of the legislation is currently with the Politburo. It is likely to be released by the Ministry of Finance, mostly likely in February, or March. Solid growth Meanwhile, Vietnam’s existing casinos are reporting solid results. The declining VIP gambling scene in Macau has benefited the Danang-based property, Crown International Games Club. This small, privately owned beachfront casino has emerged as one of the most popular sites for wealthy Chinese to place VIP level bets. Crown is owned by Chinese company Hui Kong and is one of seven licensed casinos in Vietnam. Industry executives estimate monthly VIP revenues have increased over the past year to HKD $3 billion ($387 million) a month. The resort complex plans to double the number of rooms as part of a $600 million redevelopment plan, which will include a JW Marriott-branded hotel, a duty-free shopping mall and an expansion of the casino.

“

THE NEW LEGISLATION IS ALSO EXPECTED TO OPEN UP THE COUNTRY’S CASINOS TO LOCALS.

”

GROSS GAMING REVENUE Y14 VND1.379 trillion ($61.3 million) TAX REVENUE Y14 VND339 billion ($15.16 million)

Australia-listed Donaco International, which operates the Aristo International resort, said its total revenue at the property for the October year to date is up by 41 percent compared to the same period last year. The company has been focusing its marketing strategy on the smaller players to reduce volatility resulting from major VIPs taking the money and leaving.

Success Dragon broadens internationally Success Dragon International has entered into two agreements to provide outsourced services of electronic gaming machines management in Le Meridien Hotel in Ho Chi Minh City, and One Opera Hotel, in Danang. The company wants to broaden its revenue base and expand internationally.

Vietnam approves plan to install slot machines at airport Vietnam has approved in principle a plan to install slot machines in designated areas at international airports for foreigners and overseas Vietnamese. Prime Minister Nguyen Tan Dung agreed that local firms could offer gambling services in designated areas under the management of the Airports Corporation of Vietnam.

Asia Gaming Briefings | February 2016

INDOCHINA 30

CAMBODIA

Online gambling busts threaten Sihanoukvilleâ&#x20AC;&#x2122;s gaming renaissance Cambodiaâ&#x20AC;&#x2122;s coastal town of Sihanoukville, a sleepy place popular among backpackers and expats looking to escape the frenetic pace of the capital, has long been a gateway to some of Cambodiaâ&#x20AC;&#x2122;s most prized beaches.

otel and travel companies have capitalized on the popularity of the nearby islands and coast, leaving investment in the main city largely

neglected. Recently, however, that has changed. There has been a surge in China-driven interest in the hotel and casino industry in the city itself, helped by the introduction of online gambling. Ministry of Economy and Finance spokesman Ros Phirun says in the last year investment from the Chinese has more than doubled the number of licensed casinos operating in Sihanoukville from 7 to 15, with five licenses pending approval. Many of the casinos are integrated into hotels, which are opening rapidly to take advantage of rising visitor numbers and increased flight connections.

Asia Gaming Briefings | February 2016

New openings One of the largest properties to open recently is the 135-room White Sand Palace, which will also feature a casino set to open next month. In the twelve months of last year, Sihanoukville airport handled a total of 84,897 passengers, with total arrivals at 46,732, up 96 per cent and 84 per cent yearon-year, respectively. Lucky Air recently launched direct flights from Kunming to Sihanoukville, becoming the first Chinese carrier to offer year-round regular scheduled service to Sihanoukville. Flights are also available from Sihanoukville to South Korea, Singapore, Cambodian temple town Siem Reap and Phnom Penh.

While casino operators are keen to attract mass traffic, their key market is mainland Chinese gamblers to whom they are also able to offer online services. Phirun says online gaming took off in Sihanoukville in the second quarter of 2015 following some initial guidelines set by the government. Since then many of the casinos in the city have been granted approval to offer the service. Online busts But the partnership between online gambling operators and land-based is on shaky ground, says Phirun, after police arrested and extradited 168 Chinese nationals in October. The scandal and police response shook investor confidence

INDOCHINA

Lost confidence Phirun says offering online gambling from Sihanoukville casinos has been a boost for operators who are looking to make up the shortfall in the lack of foot traffic in the properties. “We don’t have many foreigners who gamble in the casinos in Sihanoukville so online gaming is a big business for them. Casino operators are trying to convince online companies to come back and resume investment.” “Investors have lost confidence and even though we assure them that we will help protect them they are still not confident because online gambling is very new here,” Phirun said. Phirun added that the fallout from the arrests has not prompted any land-based casino applications to be withdrawn due to the expectation that confidence in the industry will be restored soon. Aharon Gini, general manager of the Queenco Hotel and Casino, said last month that the situation had calmed down since the busts, but that Chinese visitor numbers had yet to pick up.

and optimism in the growth prospects for the city’s casino industry. On October 31, 2015, Cambodian immigration police working with Chinese Interpol agents raided a villa and a guesthouse in Sihanoukville, busting a ring that was using an internet-based telephone system to extort money from victims back in China. Local media reported that hotel and casino operators said they suffered huge losses after Chinese investors, workers and tourists left the coastal city en masse, with many of those arrested in the Cambodian raids working in casinos in Sihanoukville. “We have no more customers, and our workers have quit,” Ly Koung, owner of the newly opened Majestic Hotel was quoted by the Phnom Penh Post as saying. He added that that he had to suspend casino operations after racking up $20,000 in losses. “Arresting Chinese nationals who work in casinos without any clear evidence made our Chinese staff fearful and many resigned, which forced us to close the casino,” he said. “If those arrested are found guilty, we support this police action, but if they are in fact innocent then these arrests have [irresponsibly] incited fear.”

NAGACORP 9M GGR $399.8m VIP revenue

+47%

+52%

Mass revenue

+46%

Casino tax collection Y15

+33%

TOURISM ARRIVALS Y15 to Oct. 3,775,792

+4.6%

Gaming revenue up 83 percent Cambodia raked in around $22 million in revenue from its casino industry during the first six months of 2015, up 83 percent year-on-year, with the majority coming from NagaWorld. The figure compares to revenue of $12 million during the same period last year.

Cockfight tournaments authorized at casinos Casinos owned by ruling Cambodian People’s Party Senator Ly Yong Phat have reportedly been granted authorization to run cockfighting tournaments even though the sport was banned in the Kingdom in 2009. The senator owns two casinos in Koh Kong and Oddar Meanchey provinces.

SOUTH ASIA 32

Nepal

Nepali casino industry looks to India’s US$4B market Nepal’s casino industry is forecast to bounce back in 2016 after a devastating earthquake last year and an unofficial border blockade imposed by India. According to Union Gaming Analytics the Indian market could have the potential for US$4B in gaming revenue and Nepal casino insiders say operators are perfectly positioned to attract those players.

he industry in Nepal has faced a tumultuous few years, with the government shuttering all casinos in 2014 after failure to comply with new regulations and pay outstanding license fees. The casinos began reopening in 2015, with many under new management, only to be hit by an earthquake in April. The 7.8 magnitude earthquake caused an estimated 43 billion rupees ($405 million) in damages to the tourism sector, according to a report by the Ministry of Culture, Tourism and Civil Aviation. Tourism numbers plunged

Asia Gaming Briefings | February 2016

to 300,000 from 800,000 tourists in 2014, according to official figures. However, these figures only include tourists who arrive via air. Tens of thousands of Indians cross the open border along the country’s southern plains and although the casinos had to halt their operations for a few days following the earthquake, they reopened within weeks, signaling a quick recovery. Some political issues remain. In August, Nepal saw protests from ethnic groups unhappy with the country’s new constitution. In support of the protesters demonstrating

along several border crossings, India, on Sep. 23, imposed an unofficial economic blockade in an attempt to pressure Kathmandu into addressing protesters’ demands. India denies it has imposed a blockade and says cargo trucks have been halted because of the unrest along the border. Landlocked Nepal heavily depends on India for imports of essential goods such as fuel, medicines and food. As a result, the blockade, in its fourth month now, has battered the country’s weak economy. Nepal has suffered an economic loss of 105 billion Nepali rupees ($982 million), according to

SOUTH ASIA 33

the Nepal Chamber of Commerce. Despite the political and economic backdrop, the casino industry continues to attract investor interest, driven by expectations it will benefit from pent up demand from India, where gambling in most states is illegal. In mid-October 2015, the Goa-based Goa Coastal Resorts and Recreational Pvt Ltd opened Casino Pride at the Hyatt Regency Hotel in Kathmandu. Bollywood actress Amisha Patel and TV anchor Mandira Bedi, as well as Indian comedians, graced the “grand opening,” which was followed by the marketing of attractive packages including a tournament with a 60,000 Nepali rupee entry fee (US$550), with up to 4 million rupees (US$35,000) in cash prizes. It joined the Mahjong Casino at Hotel Soaltee and The Millionaire’s Club and Casino at Shangri-La Hotel, which are all now operating under Nepal’s upgraded gaming

regulations. Mahjong is operated by India’s Mahjong Entertainment and The Millionaire’s Club by Hong Kong-based Silver Heritage Limited. The Casino Royale at Hotel Yak and Yeti has also reopened following a Supreme Court stay order. Surendra Singh, a Nepali businessman, bought Casino Royale from its previous owner a month ago, according to Amba Datta Bhatta, executive director of the Casino Association of Nepal. Bhatta told AGB that Singh is backed by an Indian firm. “It’s a good sign that, despite the hurdles, four casinos are in operation. I think others will also resume their service soon,” Bhatta said. He added some other Indian and Chinese investors have shown interest in investing in the casinos under new improved casino regulations. “I am optimistic that the year 2016 would be a good start for the industry. The business has suffered from multiple crises in recent years. But it’s a mature industry. In the past several decades, Kathmandu has served as a major destination for gamblers from India and other countries in Asia,” he said. Two former casinos—Casino Anna and Casino Everest—became casualties of the quake. The building housing Casino Anna was demolished by the owners of Hotel Annapurna that had leased the space and is now a parking lot in the hotel premises. The five-star Hotel Everest received a red sticker from authorities, meaning that it was uninhabitable. Bhatta said around 800 employees of Casino Everest were negotiating for settlement of their gratuity, which amounts to more than 100 million rupees. “Once it is settled, foreign investors are likely to buy it,” he said. Kumar Shrestha, a former operations manager of Casino Anna, agreed the New Year augured well for Nepal’s casino industry, but he warned there were growing differences between operators and hotel owners. In Nepal,

it’s mandatory for casinos to operate within the premises of five-star hotels. This means operators lease the space from hotels. “This arrangement has created problems between the two parties. The licenses for casinos are issued in the name of operators,” he told AGB. “The operators keep changing, but owners of hotels remain the same. Casino operators seem to have an eye for short-term profit, but for hotel owners, it’s a long term investment. This has often led to tensions,” he said. Shrestha said this may lead to hotel owners themselves trying to obtain a license to run casinos. He cited the example of his former employer, Casino Anna, which prior to its demolition had also been shaken by a bitter dispute. Nevertheless, the industry remains strong and the potential for growth is very real according to Silver Heritage executive director, Tim Shepherd. “We think India is the single biggest untapped gaming market in the world. Nepal is culturally and geographically the ideal location to attract Indian players. We don’t believe Macau or Singapore offer a tailored product for Indians who like very different entertainment and casino games to other Asian players such as the Chinese.” Silver Heritage are on course to open Tiger Palace Resort, a phased 400 room integrated entertainment and conference resort, near Bhairahawa and just 10 km from the Indian border later this year with the casino estimated to launch in early 2017. “Tiger Palace Resort will be unlike anything Indian players have ever experienced, a purpose built entertainment destination on the doorstep of Northern India. If Uttar Pradesh was a country it would be the 5th most populous nation on the planet. The demand throughout India is there and Silver Heritage are the first to move. We intend to build more than one Tiger Palace Resort along the 1000 km border with India.” said Shepherd.

Footballers charged for match-fixing Five footballers, including Nepal’s former national football captain and goalkeeper, have been charged with treason over alleged match-fixing in the 2011 World Cup qualifiers. Police said significant sums of money were found in their bank accounts from suspected match-fixers in South East Asia.

Asia Gaming Briefings | February 2016

FOCUS 34

INTERVIEW WITH THE STAR ENTERTAINMENT GROUP CEO MATT BEKIER

The Star Entertainment Group, formerly known as Echo Entertainment Group, is undergoing a group-wide renaissance, reshaping its brand identity and revamping its properties to take advantage of a forecast surge in Asian tourism.

ts vision for The Star Sydney complex is a prime example, with a planned spend of about $1 billion ($701.4 million) to upgrade the property, including a $500 million luxury hotel tower, more shops, restaurants and amenities. The revamp is likely to give the company a jump-start when it comes to taking advantage of rising demand ahead of the arrival of James Packer’s six-star Barangaroo project in 2020. In a recent report, Morgan Stanley forecast a 15 percent compound average growth rate for Chinese tourism in Australia through to 2020, accelerating to 17 percent from 2020 to 2025. Chinese tourism spending is forecast to rise from AU$5 billion to AU$13 billion by 2020. The two Sydney developments are part of an Australiawide boom in casino investment. Three more properties are planned in Queensland, including the redevelopment by The Star of the Queen’s Wharf site in downtown Brisbane. The Star Entertainment Group CEO Matt Bekier says the added capacity is much needed as he is

Asia Gaming Briefings | February 2016

“absolutely convinced” the next boom for the country will be from tourism. Swiss-born Bekier - an executive from the old guard and “architect” of the TABCORP demerger while then CFO - is now the longest-serving CEO at 18 months on the job. He says tourism is going to be the big story for Australia in the next 20 years. “We need to build up capacity and participate in that proposition,” he told AGB in an interview in Sydney. According to data on affluent Chinese, Australia is the number one destination in terms of desirability, yet comes much further down the list in terms of actual visitation. In the last few months there has been a 40 percent increase in Chinese inbound tourists, with Mainland China having now overtaken New Zealand as the largest source of visitors for New South Wales. And around one third of the Asian visitors in NSW find their way to the casino, Bekier says, adding that their research shows that the tourist likes to do two to three

FOCUS 35

destinations, typically two city destinations and then something else. “The opportunity for us is if they come to Sydney, we’ll also take them to the Gold Coast and eventually Brisbane. If they arrive into Brisbane – a great access point, runs 24 hours, no curfews – they get that as a first city destination before moving to the different experience of the Gold Coast.” Bekier thinks that when Barangaroo opens in Sydney the city will be such a great destination with the two new hotels and additional facilities including high-end casinos that it will provide an opportunity for VIP customers to spend more time in Sydney rather than traveling between Sydney and Melbourne.. The short-term headlines focusing on a downturn in the Chinese economy, slumping stock markets and crumbling gaming revenue in Macau mask a longer-term shift in wealth and spending amongst the Chinese that will ultimately support outbound travel. Household wealth is rising. Last year, the Chinese middle class swelled to 109 million adults, vaulting ahead of the 92 million adults that form part of the American middle class, according to a Credit Suisse report. The number of Chinese dollar millionaires is expected to reach 2.3 million by 2020, a 74 percent increase over 2015. In the 90’s, about nine percent of disposable income was spent on leisure and entertainment. Now it’s about 16 percent and in 2020 it will be over 25 percent. “Not only are the wallets getting bigger, but they are also spending differently and the number one thing they want to do is travel and have experiences,” Bekier says. “As a result, Chinese outbound tourism is going through the roof. That provides us with an opportunity. These are not high roller VIPs, but more premium mass. A lot of them are US dollar millionaires.” He says the typical Chinese visitor spends around nine days in Sydney and spends about AU$8,000, more than any other tourist. The Star observed 50 percent growth from international VIP business in 2015. The Group’s overall business mix is 70 percent domestic and 30 percent international VIP. To capitalize on this forecast demand, Star has begun to recruit a team that will be based out of Hong Kong and Singapore to actively market to the premium mass. Currently the group has around 25 sales reps in the region and has recently recruited a new head of International VIP Business Development. “We have had good growth out of South East Asia and from China over the last couple of

“

INVESTORS LIKE THE FACT THAT WE ARE DRIVING MULTIPLE LINES OF BUSINESS AND CONTINUE TO GAIN MARKET SHARE. INVESTORS ALSO LIKE THAT WE ARE NOT TRYING TO FUND EVERYTHING ON OUR OWN

”

years. The SEA customer is slightly different from that of China, typically direct (no junket) and more experience. The profile is that of a player who has been around the region and the world – very serious players. A lot of the Chinese players don’t have quite the same history and run through junkets.” All the properties are also being rebranded to achieve a single identity. By the end of the year Jupiters will be rebranded to become The Star Gold Coast and Brisbane will be called The Star Brisbane when the Queen’s Wharf development becomes operational around 2022. Jupiters, a large casino with plans for multiple hotels and signature F&B venues, and adjacent to the biggest shopping mall in Queensland, will benefit from a massive revitalization. Within

the next nine months all the existing 592 hotel rooms will be refurbished, followed by the construction of a new six-star all-suite hotel tower the year after, and many new restaurants. As of today, around one third of the planned F&B venues have already been built. “You will be seeing a stronger marketing presence in markets where we need to be, Macau, Singapore, to establish the brand. It’s going to take us some time but we can’t do it under different umbrellas. Indonesia, Malaysia and Singapore are markets also showing potential for growth,” said Bekier. The loyalty system that was called Absolute Rewards will now be called Star Club. The private gaming rooms which currently have different names in different properties are being aligned to the tiers of the loyalty system and all the names will be consistent. “If you’re a “black” player in Sydney you will have access to a similar experience on the Gold Coast and in Brisbane so people know where to go. I’m Swiss I need order,” says the CEO. However, the current lack of capacity in Australia may serve as an impediment to growth unless the problem is addressed. In December, fivestar hotel utilization in Sydney was 97 percent, and has been running at capacity for a while now. Bekier says The Star could do with 1,000 hotel rooms in Sydney. Star has teamed up with Asian investors Chow Tai Fook and Far East Consortium to develop its Brisbane resort and to potentially help finance the expansion in Sydney. Hong Kong-based Chow Tai Fook boasts a jewellery chain and property development amongst its businesses and the group is planning to leverage the company’s extensive Chinese client base. With a retail client list of around 1.4 million and connections with another 50 million Chinese travellers the prospects are fairly substantial, Bekier says. Commenting on Star’s ongoing prospects, Bekier says: “I think investors like the fact that we are driving new and multiple lines of business. We are tapping into the domestic business, the international VIP and continue to gain and expand market share. Investors also like that we are working with our partners Chow Tai Fook and Far East and not trying to fund everything on our own.” Morgan Stanley says it expects Australia’s share of the VIP market to continue to rise, after a gain from 4 percent to 5.9 percent of the global market in 2015. It says Star is likely to be a key beneficiary, given its head start in Sydney, the international gateway city, and its ultimate monopoly in Brisbane. Asia Gaming Briefings | February 2016

SOUTH EAST ASIA

AUSTRALIA

Online review to deal winning hand to European operators? A federal review of how Australia regulates online gambling could have major implications for a number of operators - both European and Australian - when it reports back later this month.

he review, led by former New South Wales premier Barry O’Farrell, was handed to the government in December and will be released alongside a response in the coming days or weeks. It will serve to define exactly how to expand Australia’s limited regulatory framework. Among the issues under the spotlight are the prohibition of inplay betting online, advertising regulations and how unlicensed offshore operators are dealt with. How these issues are tackled will go a long way to defining the longer term prospects for a number of European online operators who have invested heavily in Australia in recent years, despite tight restrictions on advertising and product, strong local competition

Asia Gaming Briefings | February 2016

and a persistent offshore market. Australia remains appealing to online operators with international aspirations, particularly as Europe’s largest markets shift towards dot country regimes. The country boasts the world’s highest per capita gambling spend, an estimated US$866 per year, according to Global Betting and Gaming Consultants. The land-based sector accounts for the vast majority of this spend; half of all money gambled in Australia is spent on “pokie” slot machines and a further 20 percent is taken by casinos, which are increasingly muscling in on the Chinese junket market. But the online market continues to grow as well. According to the Australian Wagering Council, online operators turned over AU$11.06bn (US$8.05bn) in

AUSTRALASIA 37

The Star plans luxury hotel tower The Star Entertainment Group, formerly known as Echo Entertainment, plans to build a 200-meter luxury hotel tower at its Sydney property in an attempt to tap demand from wealthy Chinese travellers. The company, along with its partners Chow Tai Fook and Far East Consortium have already submitted a plan to the New South Wales government.

2014, up 20 percent year-on-year and almost three times the estimated AU$3bn the online market was worth in 2008. Much of this growth has been powered by the entry - and increased investment - of a number of European operators. In recent years Paddy Power, Ladbrokes, Bet365, Unibet and William Hill have been among the European operators to have made significant moves into Australia. However, Alan Pedley, principal consultant at Governance Associates, said he is surprised Australia has proved so attractive to foreign operators. He lists a high tax rate, a high-profile anti-gambling sector and federal government policy as reasons why operators might think twice about an entry into the market. “Australia is a very finite market. In the UK with a much larger population, for example, operators have far more liberal advertising laws, far more liberal betting options, and

far more liberal customer access options – especially through high street outlets,” Pedley told AGB. You may look closer to home for reasons why operators have nonetheless taken on the challenge. With operators beginning to feel the squeeze, particularly in the UK since the introduction of a point of consumption tax in 2014, a share of acquisition and marketing spend has been diverted to Australia. Perhaps the biggest winner so far has been Paddy Power, which entered the market through an acquisition of Sportsbet which was worth an estimated AU$330m when it completed in 2011. In H1 2015 Sportsbet accounted for 43 percent of Paddys’ total online revenues. Paddy Power said its success has been as a result of a material increase in brand investment at a time of “continuing flux in the market amongst competing brands.” Others have tried to repeat the trick. William Hill spent a combined AU$700m on the acquisitions of Tom Waterhouse, Sportingbet and Centrebet in 2013, while Ladbrokes and Unibet have also made more modest Australia-facing purchases. Those operators which have attempted to enter the market organically, however, have tended to struggle. Bet365 posted heavy Australian losses totaling around AU$100m over the past three years, but said in August it remained committed to Australia. “Customer numbers increased significantly from the previous financial period demonstrating that the brand and product offering are gaining momentum in the market, supporting the directors’ view that over the longer term the

company will become profitable and, therefore, deliver a positive financial contribution to the group,” the firm said in a financial report. Another firm which has failed to convert European success to Australia is Betfair, which gave up on B2C operations in the market when it sold its share of its Australian joint venture to Crown Resorts in 2014. Meanwhile William Hill, which last Februar y began to roll up its various acquisitions under the William Hill brand, reported poor H1 2015 results which saw wagering decline 27 percent and revenues decline 10 percent year-on-year. The firm said that the short-term hit in brand awareness - only 46 percent of Australians recognise the William Hill brand, versus 71 percent who recognize the Hills-owned Tom Waterhouse brand - will ultimately be negated by the upside of greater integration into William Hill’s international operations. While branding is clearly central to Australia success, Pedley said European operators face other substantial challenges, particularly around the legal uncertainty of in-play betting, prohibition on retail outlets for foreign online operators and regulatory uncertainty. “Foreign operators are accustomed to a homogenous national regulatory regime, whereas Australia’s federal system brings challenges often unforeseen,” Pedley said. Thus far this doesn’t appear to have been enough to discourage the Europeans, with both Paddy Power and William Hill claiming to control a market share in excess of 20 percent, and it is clear that Australia’s former state-owned monopolies, Tabcorp and Tatts Group, are beginning to feel the pressure.

Asia Gaming Briefings | February 2016

AUSTRALASIA 38

Tabcorp continues to hold the largest online share of an operator in Australia an estimated 37 percent - and in October reported a 13 percent year-on-year rise in online turnover for Q1 FY15/16. However, it has been vocal in its criticism of European operators which offer in-play markets to customers through what it considers to be a legal loophole in 2001’s Interactive Gambling Act (IGA), by which operators allow customers to “click to call” through a website to place in-play bets. “The IGA only permits betting on in-play sports in a retail venue such as a local hotel, community club or TAB agency, or over a telephone ‘wholly by the way of voice calls made by using a standard telephone service’,” Tabcorp said in a statement in November. “Put simply, to place an in-play bet legally, customers are required to place their bet face-to-face or over the phone,” it added. European operators appear unlikely to back down on the issue regardless of the federal review. In December Ladbrokes launched a new Live Play service, despite pulling a similar QuickCall service in July amid concerns over its legality. The new feature allows customers across all online platforms to place bets if the device’s microphone is switched on. Meanwhile Paddy Power-owned Sportsbet’s submission to the federal review called on the government to take a “platform neutral approach” to live betting. If the government does give the green light

Asia Gaming Briefings | February 2016

to online in-play, European operators - which already tend to possess greater expertise in mobile and fixed-odds sports betting than their Australian competitors - will be well placed to capitalize. Should the government response to the review open up the market further in terms of product and marketing, it will not take long for those European operators to scale investment in Australia. Against this backdrop it would be no surprise to see Tabcorp’s proposed AU$9bn merger with Tatts Group, which collapsed in November over a disagreement on terms, revisited in 2016 as the pair search for ways to contain the European invasion. “Also, even if the position relating to online in-play remains unchanged, it is likely that each of Tabcorp and Tatts would seek to provide in play betting services online to their customers,” says Jamie Nettleton, a partner at Addisons Lawyers. “This is likely to result in the Australian betting market corresponding more closely with the betting markets in various countries overseas, like the UK and Denmark, for example, where in-play betting represents a substantial proportion of the betting market.” However, Nettleton adds there are a number of hurdles that will need to be crossed before this becomes reality - the recommendations of the review, the government’s response and the potential reaction by various antigambling proponents.

Adelaide Casino plans AU$300 million expansion Adelaide Casino plans to start construction of its AU$300 million expansion in February, to be completed by the end of 2018. Sky City, the casino’s parent company revealed the expansion will include a 80-room hotel overlooking the River Torrens, gaming suites for international VIP players and signature restaurants.

TOTAL GAMBLING EXPENDITURE All gambling Y13/14 A$21.15b Sports betting $625.95m

+29%

Racing $2.78b

-2.4%

Total gaming (including pokies and lottery) $17.74b Casinos $4.38b

+1.8%

+1.7%

+6.5% (Source: Queensland Treasury)

CROWN RESORTS AND STAR ENTERTAINMENT GGRE Y16 +5% (FITCH)

AUSTRALASIA 39

CNMI

GROSS GAMING REVENUE SAIPAN CASINO DEC. VIP ROLL $1.44b NOV. VIP ROLL $1.63b Nov. visitor arrivals 37,870 China arrivals

Operators eye high rollers after CNMI issues junket guidelines Casino operators in the Commonwealth of Northern Mariana Islands will now be permitted to seek accords with junket operators after the Commonwealth Casino Commission approved new guidelines.

est Sunshine International, a unit of Hong Kong-listed Imperial Pacific and commission executive Edward C Deleon Guerrero said they anticipate applications soon. “The success of Best Sunshine, or the [Tinian] Dynasty, or Alter City [Group] or any other” casino in this part of the world is “through this program, the junket,” Guerrero told the Saipan Tribune. “Basically, they are the travel agency going around the world to get VIPs to come to Saipan.” The CNMI has seen a flurry of investment pledges over the past 18 months, mainly from Asian, and in particular, Hong Kong

investors, promising large-scale integrated resorts to help boost tourism on the islands. Best Sunshine, which holds the only license to operate a casino on Saipan, said it plans an investment of $7 billion and is currently running a temporary casino facility. Guerrero noted there will be differences in the way junkets are allowed to operate in the CNMI from what they are used to in Macau. “In some places in Macau, the junket operator takes over the VIP room,” said Guerrero. “Here, we do not allow that. The junket operator cannot take over a VIP room—it would have to be Best Sunshine and Best Sunshine’s approved and licensed dealers

-3%

+4.4%

and pit boss who are operating the casino.” Best Sunshine has been reporting monthly VIP roll at its temporary location, with its VIP tables bringing in $1.44 billion in December, 2015, dipping from $1.63 billion in VIP revenue in November, its first full month of operations. The live training casino inside the T Galleria in Garapan is also now in compliance with the Smoke-Free Air Act, with the casino fully enclosed by glass walls. Best Sunshine has been seeking to secure land for its large-scale project which is scheduled to be built out over five phases with plans for more than 4,000 rooms, 300 villas, a Chamorro and Carolinian cultural center, and the world’s largest water park. Some analysts have expressed doubt the island can support such a large-scale development. Meanwhile, the expected December 15 re-opening has come and gone for the Tinian Dynasty Hotel & Casino. Tinian Casino Gaming Control Commission executive director Lucy Blanco-Maratita was quoted by local media as saying the property remains closed because its owners, Hong Kong Entertainment (Overseas) Investments, Ltd., has yet to meet “conditions that were imposed by the TCGCC.” “They won’t open until they complete the requirements. There are no new requirements and we’re just following the previous commissionimposed conditions,” Blanco-Maratita said.

Alter City Group appeals for tax break

Bridge Capital to redevelop Plumeria Resort

Alter City Group, which is currently planning to invest $1.2 billion dollars to build two casinos, hotels, as well as apartments and other projects in Tinian, is asking the territorial government to grant it a tax break. Alter City Group’s Edvon Sze, says if they were granted a qualifying certificate for a tax break, it would go a long way to ensuring the project goes ahead.

Bridge Capital announced plans to redevelop the abandoned Plumeria Resort property in Achugao, Saipan, and restore it to its former glory. “Bridge has seen and experienced firsthand the current shortage of hotel rooms on the island. We are confident that redeveloping the Plumeria hotel will help address this critical need as the CNMI economy continues to expand and more and more tourists flock to our island paradise,” it said.

Asia Gaming Briefings | February 2016

SUPPLIER SPECIAL REPORT 40

ICE 2016

The Gaming Technopolis ICE Totally Gaming will be the biggest on record in 2016. It is the world’s most international gaming expo occupying 38,980 square metres of net floor space, across 15 of the 20 halls available at the ExCeL Centre, London’s largest purpose-built events and conference venue.

CE Totally Gaming is the only B2B international gaming event that brings together the online and offline gaming sectors from around the world. Attendees of the event can explore the hottest growth areas in land-based, online and mobile gaming courtesy of the exhibition which has drawn in over 510 exhibiting organizations from a record 62 nations, along with 25,000 other visitors. As well as providing an insight to the latest product innovations and services, ICE is also the biggest learning and knowledgeexchange event in world gaming, delivering 70 hours of learning opportunities from 200 Asia Gaming Briefings | February 2016

thought leaders drawn from both within and outside the international gaming community. The eight-strong program for 2016 includes the International Casino Conference (ICC); Modernising Lotteries: Retail & Digital; Data Insight & Business Intelligence; Cross-Platform & Multi-Channel Gaming; Game Design & Development; World Regulatory Briefing; and Cybercrime as well as a program on Security & Regulatory Compliance. The campaign creative this year, which is set in a surreal gaming city of the future, invites industry professionals wanting to see the very latest innovations and solutions to ‘Enter The Gaming Technopolis’ - a pop-up gaming city where connections are made, where ideas flourish and where conversations are all about the future. “We know from the visitor research that we conduct after each edition of ICE that the single most important reason that thousands and thousands of industry professionals travel

vast distances to be in London each year, is the opportunity that ICE delivers to see the very latest innovations and advances in gaming technology. In fact, many of our 500+ exhibitors timetable product launches around the dates for ICE,” said Kate Chambers, who has directed the development of ICE at ExCeL. ICE app for Android and iOS In addition to the web site, there is also a dedicated ICE app which is available for free on Android and iOS devices. The app allows visitors to access the full event schedule, browse the latest product launches, receive information on all of the speakers taking part in the ICE Conference and Seminar program, as well as develop a personal event planner to remind them of appointments, business meetings, and other events. It also features a detailed interactive floor-plan to help attendees navigate the Gaming Technopolis.

ICE

TOTA L LY

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SUPPLIER SPECIAL REPORT 42

ASIA GAMING

How to succeed in the Asian market with RNG Games?

By Kelvin Chiu*

* Sales Director, Asia Gaming

sia without question is the world’s largest online gambling market. The region has over 4.4 billion people, and this represents 60 percent plus of the world’s population. Many online gambling companies view the region as one homogenous market regarding supplying igaming related products or software. It is, in fact, a market that has several challenges as each country within the Asia region has different market dynamics pertaining to casino gaming preferences, never mind different languages, currencies and many other cultural nuances. So what are the most popular Casino Games in Asia? Baccarat, Blackjack, Roulette and Sicbo are all available as games. However, Baccarat is by far the most popular game played in Asia. You only need to look at the revenues from Macau of which mass market baccarat and high-end VIP baccarat combined account for over 90 percent of all gambling revenues in the world’s biggest casino hub. The growing importance of RNG slots Slots have grown in popularity throughout the Asia region with some undisclosed sources reporting monthon-month double-digit growth. Slots are therefore an important part of an online gaming’s operator’s business product mix and marketing strategy to differentiate their platform from other competitors. As the slots product category becomes more competitive, it is important that operators select not only games developers with the correct technical skills and distribution networks but the current mix of local game design knowledge and game immersion. By utilising a partner that uses cutting edge technology, you can select to aggregate other Asian games providers and also include innovative, customised slot or exclusive ideas in the platform, which can attract new customers for operators and create an enhanced gaming experience for players. For example, in the US market it’s largely accepted

Asia Gaming Briefings | February 2016

that iOS is still the primary platform. However in Asia the number of Android devices far outweighs that of iOS, with industry figures suggesting a penetration rate of 90 percent of smartphones in China alone are Android. Without question, the key to the provision of successful Asian gaming solutions and slot experience not only in the mobile market and desktop is to offer a truly localised product and interactive experience. The users’ game experience must be different for different devices as that is what tech savvy slots players in Asia now expect. Game theme and design As with all games, it is important to consider the local market and player requirements. This increases the performance of the games. For example exotic imagery of Chinese, Japanese, Korean and other cultures of the Far East have made for popular slot game themes. This may include games inspired by local folklore, legends and symbolism. This can include dragon-themed slots, geishas, martial arts and samurai warriors, to specific event themed slots such as the Chinese New Year and Chinese Moon Festival. It is therefore a prerequisite that your preferred games provider has a clear understanding of this and can align game development and the release cycle to important social and cultural events that resonate with the player demographics throughout the calendar year. The future If Asian population groups are on your marketing and product roadmap as an igaming operator, you should certainly partner with an adaptive software solutions provider, which can respond to all these ongoing changes and engage with the latest technologies both on a macro and localised market entry level.

SUPPLIER SPECIAL REPORT 43

Asia Gaming Briefings | February 2016

SUPPLIER SPECIAL REPORT 44 ABBIATI

New design tables featured

bbiati Casino Equipment will feature new design tables, additional security features added to their security products, patented chips, among other products at ICE 2016. Accomplished with composite materials and finishing, the tables are predisposed and ready to accommodate progressive systems, shuffle machines, and chip-sorting machines. As a result of continuous research of new materials and technologies, Abbiati has additional security features on their current casino currency products such as chips, plaques and jetons, making them safer against counterfeiting. The new features will include the 13.56 MHz PJM RFID technology, innovative high security holograms, 8-color UV pigments, 3-in-1 UV

ADVANTECH

Advantech showcases “Gaming Intelligence”

dvantech’s theme for ICE2016 is “Gaming Intelligence”. Three new computing platforms for gaming machines will be on display including the DPX-E135 and DPX-E250 and the DPX-S440, as well as a broad range of products featuring the latest AMD and Intel chipsets, industrial motherboards and modules, and LCD monitor products. The DPX-E135 is a complete integrated system for gaming applications providing a complete PC platform with passive cooling. It uses technology from the integrated HD8000 series graphics core and makes for an ideal platform for gaming, amusement, and kiosk applications. The DPX-S440 is the latest in the DPX-S range of products, a new motherboard for the gaming industry featuring the latest AMD top end embedded platform. DPX-E250, a Xeon capable motherboard, features the very latest 4th Generation Intel Core architecture CPUs up to and including Intel Xeon CPUs. It supports a huge range of price and performance from dual core Celeron, through Core i3, Core i5, Core i7, and up to Xeon CPUs. Advantech can be found at Stand N2-160.

Asia Gaming Briefings | February 2016

security feature, Laser Tracer technology, and Optical Variable Ink. The patented “Tie” and “il Gettone” chips will be featured with injections, see-thru inserts, a combination of rim and edge inserts. Other new products on display include a complete range of plastic and paper plastic playing cards with high security features dedicated to online live gaming and GLI_25 certified American Roulette Laser Wheels with an upgraded patented invisible laser technology. Following huge interest from clients, Abbiati will exhibit its new generation independent Levelling System that verifies up to 128 tables contemporarily, providing real-time statistics. Abbiati can be found at Stand S6-230.

AINSWORTH

A Reel Deal

insworth Game Technology will be showcasing ‘A Reel Deal’ at ICE 2016 as well as new game content for its GamesPlus and Premium Plus product ranges. Ainsworth will be showcasing the popular A560SL cabinet at the annual gaming exhibition, which features a 32” high definition display, 19” LCD topper option for jackpot promotion, as well as unique lighting, sound and animations. As well as this, the popular Sweet Zone brand will be on display including player favorites Rumble Rumble, Jumbo Wilds and the debut of the brand new Sweet Zone title Grand Lions. Another highly anticipated brand that will be unveiled at ICE is Double Sweet Zone. Launching with three entertaining Order of the Dragon titles, Double Sweet Zone offers players the option to play the original ‘Sweet Zone’ for 50 credits or the ‘Double Sweet Zone’ for 50 credits plus 50 credit ante-bet. The debut of Sky High Stacks, a series of games containing a free games feature with an expanded 9 x 5 game array, will also be seen at the show this year as well as many more brands and titles. Ainsworth Game Technology can be found at Stand N3-120.

SUPPLIER SPECIAL REPORT 45 ALFASTREET

Royal Derby nostalgia

lfastreet will take advantage of the upcoming edition of the London ICE show in February 2016 to showcase new evolutions and definitive versions of the products that made impressions in 2015. Over the years, Alfastreet has established close connections and partnership with its clients and other business professionals, who have all contributed to the constantly evolving product line. The company boasts extensive insight into the secrets of the gaming industry, knowing everything that goes into such ventures, from mathematical and physical models, to technical excellence and innovation. At ICE 2016, visitors will be able to witness the premiere of the final version of the Alfastreet slot machine, another spectacular version of the Royal Derby, a product that will evoke nostalgic memories and provide a very clever solution to the casino experience. Alfastreet wishes to extend a warm welcome to everybody in the industry, and hope to welcome you at their Stand S6-130.

AMATIC

New gaming machines from Austria

ustria-basedAMATICIndustries will be showcasing their new gaming machines, Performer Grand Arc, C24, and Roulette Grand Jeu series, along with their latest games and complete solutions at ICE 2016. One of the games featured this year includes the popular “Fire and Ice”, as well as new titles such as Billy’s Game, Flying Dutchman, Fruit Box, Grand Tiger, La Gran Aventura and Vampires, some of which are multi-player games. To appeal to the automated multiplayer market, AMATIC will introduce its Roulette Grand Jeu range, electronic roulette machines equipped with one or two roulette wheels. The Roulette Grand Jeu WS22, Roulette Grand Jeu Double, and Roulette Grand Jeu Solitaire are all part of the Roulette Grand Jeu series. This year, the AMATIC team has further optimised the design of the C24, exhibiting a curved upright slot design, which will be on show at ICE for the first time. Similar to C24, the Performer Grand Arc (PGA) is a slant-top gaming machine with a unique curved design boasting three monitors. The company also offers complete solutions for both land-based and online operators. For land-based operators, AMATIC offers a Jackpot Systems and a Casino Online System, including features like Player Tracking and Cash Card which enable operators to link together all AMATIC’s solutions into their complete machine portfolio. For online gaming, casino games can be found at gerandx.com and Live Roulette can be played online at a real casino. AMATIC can be found at Stand S3-350.

ARISTOCRAT

The Big Play

ristocrat Technologies will be revealing a diverse range of linked jackpot progressives and new standalone games making debut appearances at ‘The Big Play’ at ICE 2016. Lightning Link, the first player-selectable multi-denomination link progressive based on Aristocrat’s formidable J*Series games segment is among the new linked jackpot progressives on display. Making its first appearance in EMEA at ICE, Aristocrat’s new Arc Single is a natural extension to its broader cabinet portfolio, will also be on display at ICE, offering new-style gaming on a curved 42-inch HD portrait screen. “Arc can also be complemented with a range of illuminated branded wedges to create feature banks in straight and round carousel formations, creating a substantial floor presence and a player destination,” said Iain London, product & business development director - EMEA. Further expanding its library of standalone games for the

popular Helix cabinet in EMEA, Aristocrat is using ICE to introduce a number of new games in each of its four principal categories, which include C*Series, J*Series, E*Series and M*Series games. “Aristocrat has continued to invest heavily in design and development of new gaming concepts over the last 12-18 months, right across each and every segment. This has resulted in what will be the most comprehensively rich collection of Class III games and cabinets available anywhere on the ExCeL show floor,” concluded Erik Jan van den Berg, sales director - EMEA. Aristocrat can be found at Stand S3-250.

Asia Gaming Briefings | February 2016

SUPPLIER SPECIAL REPORT 46 ARUZE

Virtual Roulette, and the classics

lobal gaming supplier Aruze Gaming will be showcasing their latest games and products at ICE 2016, including Virtual Roulette, The Cube-X Ultimate games, The Jungle Cash Series, and more. Aruze’s new game, Virtual Roulette, will be bringing back the classics with a twist. Featuring a HD Projection Roulette, players will be able to interact by shooting the ball as well as take part in a Progressive Jackpot side game. This

version is well suited for beginners but still challenging enough for experienced players. The recently released Cube-X Ultimate games will feature physical reels lit with vibrant colors and a topper will also be on display, with games such as The Gold Legend, Bags of Cash, The Jungle Cash Series, as part of the Ultra Stack Series and more. Aruze Gaming can be found at Stand S3-205.

BETCONSTRUCT

Updated Spring Platform

etConstruct’s latest version of their Spring Platform will be featured at ICE 2016, along with their Sportsbook software. The updated Spring Platform includes enhancements such as player profiling, loyalty scheme and bonus management to allow operators to develop more sophisticated marketing campaigns to attract and retain players. BetConstruct’s Sportsbook showcases new margin, limit management and liability tools giving partners greater freedom to choose which various sports, competitions

and markets are offered to players. Partners also have the ability to display order, bet limits, differentiate between pre-match and live. Sportsbook and Odds Feed partners can now benefit from the growing interest in eSports. BetConstruct now offers eFootball and eBasketball as part of its live competition portfolio. The Gaming Management System (GMS) portion of its Spring Platform will be made available as open source as well as all interface code needed to connect the GMS with other gaming products.

This open source initiative is the first in the gaming industry and should provide operators greater flexibility in architecting their gaming infrastructures. For companies seeking to enter the online betting and gaming market quickly at a low initial price point, BetConstruct offers a comprehensive white label solution. Along with Sportsbook, this includes RNG Casino, Live Dealer Casino, Poker, Skill Games, Virtual Games and many other product verticals. All partners are provided access to free comprehensive services including account management, partner and player support, bookmaking and risk management. BetConstruct can be found at Stand S1-350.

BETSOFT

Leader of 3D cinematic gaming

etsoft Gaming, known as the innovator and originator of true 3D cinematic gaming, have announced their demonstration display lineup for ICE Totally Gaming 2016. Among the games to be showcased are Rise of the Dragon, 4 Seasons and Frankenslot’s Monster. Rise of the Dragon tells the story of Hana, a young student ninja who must battle through many distinct game worlds to save her father from an evil rival. 4 Seasons uses an innovative feature that moves the player through the full flow of the Chinese Zodiac, where each representative animal is boosted to provide an 8x return. And in a zany take on a well-known tale of horror, Frankenslot’s

Asia Gaming Briefings | February 2016

Monster brings that legendary creature to life in a burst of electricity and desire, where the player can control the monster’s actions in a fun bonus feature. There will be a playable demonstration version of 4 Seasons available at Betsoft’s stand. “We at Betsoft are pleased to bring amazing new game functionality to iGaming in 2016,” said Mark McKeown, Betsoft’s vice president of sales and marketing. “Each of the games we are debuting at ICE are unique and charming in the difference of their construction and theme. We have built upon the strong foundation that is at the core of our company to provide a wholly enrapturing gaming experience for

our operators and their millions of players around the globe. We know that ICE attendees will leave our stand content that they’ve experienced the best in game development as well as exciting hints as to what is coming from us in the near future.” Betsoft Gaming will proudly present their stunning new games at Stand S3-210.

SUPPLIER SPECIAL REPORT 47 BMM

CAMMEGH

Changing the Game

Aurora Halo roulette wheel

MM Testlabs, the world’s leading gaming testing laboratory and technical consultancy, will be represented from across the globe with staff attending from its Italian, Austrian, Spanish, South African, Australian and US offices to offer advice and assistance on compliance, certification, testing and training services at ICE 2016. Kirk White, executive vice president & general manager International, commented, “BMM has expanded significantly over the last few years with specific emphasis on Europe and South Africa and we have built an incredibly strong team in the region. BMM employs some of the most experienced gaming experts in the industry and our customer service and attention to detail are second to none.” Marzia Turrini, SVP - Southern Europe added, “BMM Testlabs has been testing and certifying gaming product for over 34 years and provides testing and certification services for online, land-based, social and mobile gaming in all regulated European jurisdictions. We would like to encourage manufacturers, regulators and operators, whether online or land based, to visit our booth at ICE and discover the benefits of partnering with BMM.” White concluded, “...BMM is changing the testing and certification game in Europe as we continue to provide technical innovation, excellent service and decrease time-to-market for our customers. The BMM Team is looking forward to sharing our expertise and knowledge with attendees to ICE 2016. ” BMM can be found at Stand N3-420.

oulette wheels manufacturer, Cammegh is set to showcase an impressive spread at ICE 2016. Taking center stage will be the new Aurora Halo roulette wheel featuring a display using LED lighting. Also making its debut at the show will be the latest 23” ultra-slim design Billboard screens which will be paired with customizable RGB LED strips. Cammegh’s increasingly popular roulette side bet, Spread Bet Roulette will also be on display. The side bet brings mini-jackpots and increased house edge to the roulette table and has already found great success with installations in the UK, India and South Africa. Cammegh will also have a range of their world famous roulette wheels on the stand, including the Mercury 360, Crystal Wheel, Slingshot 2 and Connoisseur. Last but not least will be an array of 27” and 32” single and double sided Billboard displays as well as the Eyeball camera technology. Cammegh can be found at Stand S7-120.

CASINOTECH

Play the Gamovation

ully armed with an abundance of bright product developments, inspiring concepts, smart business solutions and premium products, Casino Technology will perform a remarkable spectacle in London during the ICE show. The ARCH slot machine with the unique 42’’ horizontal gaming customized display will rock the floor of the gaming technopolis of ICE Totally Gaming 2016. ARCH is the ultimate answer to players’ search for an immersive gaming experience through the dedicated full HD multigame series GAMOPOLIS ARCH including 20 unique titles of the popular GAMOPOLIS library complemented by the captivating jackpot theme THE CITY OF GAMES. Pyramid of Gold, Scarab Stone, Red Bird and Golden Dragon, Wizzard Blizzard are just few titles of the authentic rich palette of GAMOPOLIS ARCH for players demanding a versatile entertainment.

Also featured will be the premium Hot Rod slot machine licensed by Alto Gaming – the US partner of Casino Technology. The 2015 best seller Aurora Upright slot machine will be presented with the total hit multi-game series GAMOPOLIS in its latest versions Highway and Speedway, each with 40 titles. GAMOPOLIS HIGHWAY combines the most beloved games library consisting of more than 300 unique titles with great performance results in Europe, Asia, Africa and Latin America. The blockbuster Asian themed progressive link 8 Peacocks with a suite of 5 compelling titles Peacock and Dragon, Five Blessings, The Great Warlord, The Peacock and Clover and The Magic Pearl - will also deliver a high adrenaline gaming rush boosted by the themed banks of AURORA machines and the dedicated Jackpot signage. Casino Technology can be found at Stand N5-140.

Asia Gaming Briefings | February 2016

SUPPLIER SPECIAL REPORT 48 COLOSSUS BETS

Can you save a Michael Owen penalty?

he ex-Liverpool and England legend Michael Owen, and brand ambassador of Colossus Bets will be taking on all-comers at their stand at ICE 2016. Bernard Marantelli, the firm’s Chief Executive commented: “Michael has been our brand ambassador since we launched in 2013 and anyone who fancies their chances against him from the penalty spot, can don our goalkeeper’s gloves and try their luck at our stand.” Recent product launches from the firm which specializes in lotto-sized sports pools, includes a weekly £1 million free-to-play Pick 6 game as well as a foray into the world of slots. In partnership with CORE Gaming, Colossus Bets released the world’s first cash-out slot game, ‘Colossus Fracpot’, which went live on Sky Vegas in September 2015, with ‘Fracpot Warrior’ set to go live with William Hill shortly. Marantelli added: “We’re looking forward to showcasing at ICE our FreePlay6 predictor and our cash-out slots. We’ve always believed that enabling players to take part of their potential profits off the table before a gambling outcome is fully resolved should not be restricted to sports betting, so we’ve applied the partial cash-out feature we pioneered on our sports pools to the slots vertical. We will be rolling these out,

together with a series of other cash-out slots, to a long list of operators in 2016.” “With a £1 million weekly prize based around 6 correct scores in the weekend’s big EPL fixtures and leg-by-leg cash-out, our FreePlay6 game provides scale and functionality offered by no other predictor game. Free-to-play is a customisable product within the Colossus microsite and is the perfect tool to acquire, reactivate and retain. We think Colossus free-to-play will become the industry’s most potent CRM asset.” Colossus Bets will be at Stand S1-312.

COMTRADE

High tech gaming

omtrade Gaming, an independent technology provider to both the online and land-based gaming sectors, will be exhibiting at ICE for the eighth time in 2016. This year they will be presenting the latest innovations within their gaming platforms that have been heavily extended during the company’s very productive 2015. iCore, an enterprise gaming platform, allows operators to differentiate their offering by taking complete control of player experience. This year visitors will be able to preview the new 2.0 version. The focus of their presentations will be the new automated sports betting bonusing and player engagement dashboards. At ICE, Comtrade will launch the

Asia Gaming Briefings | February 2016

AwardGames suite, which is an extension of their iCore Bonusing system. AwardGames allow operators to bonus their players in the form of engaging games, in addition to the more traditional “match the deposit” approach. Comtrade’s game server platform – gCore– has been extended with the WebGL support to enable implementation of 3D games on mobile phones. Their gaming machine management platform – sCore – is built around a standard G2S protocol that has been optimized and extended with multi-protocol support to connect legacy and distributed environments running on mobile networks like GPRS. All variants of server-based gaming will be shown with a random number or even game logic running on a central system. Step into the world of high-tech gaming and meet Comtrade Gaming at Stand N4-332.

CPI

New automated payment systems

rane Payment Innovations (CPI), a Crane Co. company, will exhibit at ICE 2016 with a comprehensive portfolio of automated payment systems for the gaming industry. Among the product highlights will be the new MEI SCR note recycler and the EASITRAX Web cash management solution, which now includes a new proactive maintenance alert feature. The two-denomination SCR note acceptor is the most recent extension of the reliable SC product line, which has achieved an installed base of more than 1.5 million units worldwide. To protect operators from losses associated with criminal activity, SCR has been fortified with numerous security features, including a removable anti-stringing module, lockable transport doors, entrance/exit sensors and “door open”. In electronic gaming machines (EGMs) that traditionally pay jackpots in coins, the SCR virtually eliminates hopper starvation by paying out higher value notes instead – using the same notes it accepts, accounts for and stores from previous transactions. CPI will also be showing EASITRAX Web, a recent software extension of the EASITRAX Soft Count system that provides operators with even more flexibility when accessing and evaluating performance data. Like EASITRAX Soft Count, which has now been installed in more than 150,000 games around the world, EASITRAX Web adds value to the original software package by enabling customizable reports and the ability to grant security levels. CPI can be found at Stand N3-320.

PREMIUM CASINO GAMES www.playngo.com

Asia Gaming Briefings | February 2016

SUPPLIER SPECIAL REPORT 50 EVERYMATRIX

EM2 reveal

GLI

More than just testing

aming Laboratories International (GLI) will be reiterating their continued dedication to their clients at ICE 2016. Among its current services, GLI boasts its access to global experts from around the world, an indiscriminatory approach to all clients big and small, exclusive resources developed by GLI, as well as individualized business plans for their clients. “In land-based gaming, AWP, lottery, and in iGaming, suppliers of all sizes turn to GLI for our best-in-the-world

veryMatrix, a leading software service supplier in the iGaming industry with offices across Europe, Asia, and North America, will be revealing details about the EM2, their next generation platform, and reiterating their commitment to their clients at ICE 2016. EveryMatrix has impressed its commitment to its clients through a complete rewriting of OddsMatrix, an award-winning sportsbook solution, and major improvements that enhance their CasinoEngine and GamMatrix products with advanced user engagement techniques and better business intelligence data analytics. Recently launched PartnerMatrix, a complete management system for affiliates, is part of the EM2 platform that will be revealed. Under the theme “Keep Calm and Meet Us at ICE” EveryMatrix strives to maintain established connections, meeting old and new prospective partners, have drinks with friends and make some new ones. EveryMatrix can be found at Stand N6-310.

GPI

GPI expands products into Europe

aming Partners International (GPI) will be showcasing their extensive suite of table game products in front of European gaming executives at ICE 2016, featuring their innovative EGC layouts and RFID offerings. The full graphics EGC layouts can duplicate nearly any photo or design with exact precision, providing design flexibility. SMART is the latest advancement in casino currency using RFID technology. When used with GPI’s Chip Inventory System software, it delivers currency tracking and authentication solution and it can be used with third party software. GPI will also be showcasing a number of currency offerings such as the V-Series chips as well as an extensive suite of currency security products such as the 3-in-1 UV and SecuriFilm. GPI can be found at Stand S7-230.

Asia Gaming Briefings | February 2016

testing services. Once they start working with us, they quickly discover the many, many ways we continually earn their business by providing services that help them advance their business goals, speed time to market, reduce their costs, and open new marketplaces. That’s what makes GLI unique, and that’s what we mean by providing so much more than just testing,” said GLI Europe managing director Martin Britton. GLI can be found at Stand N3-210.

SUPPLIER SPECIAL REPORT 51 INCOME ACCESS

Digital marketing software for gaming

ncome Access, a technology and digital marketing agency servicing the global gaming market, will be demonstrating its multi-channel tracking, reporting and analytics software for gaming brands’ marketing campaigns at ICE 2016. In addition, they will display their marketing services including affiliate program management, website environmental audits, SEM audits and services, media buys, content marketing, PR strategy and web design. Following the addition of a mobile app-tracking solution, the platform has been upgraded with a mobile-responsive design. The platform’s ad serving tool will be demonstrated, allowing operators to develop targeted ad campaigns and automated strategies to optimize their conversions. “We’re excited to exhibit once again at two conferences that are key highlights in the gaming industry’s year,” said Nicky Senyard, founder and CEO of Income Access. “With ICE at the cutting-edge of gaming innovation and LAC demonstrating the ongoing importance of affiliate marketing, both events are incredible places to exchange insights on acquisition, retention and product development as well as emerging verticals and markets.” As part of continual software innovation, Income Access supplies proprietary Ad Serving technology, mobile tracking and a digital marketing service portfolio including SEO, paid search, social media, web design and content marketing. Income Access can be found at Stand N1-300.

INSPIRED

Boxing with Mike Tyson

nspired, the leading provider of virtual sports, mobile games and SBG Video Lottery, will be showcasing its innovative new Mike Tyson product collection at ICE 2016, as well as a range of its industry leading virtual sports, mobile games, and VLT cabinets. Visitors will have the exclusive opportunity to step into the ring with Mike Tyson - in virtual reality. Demonstrations of Inspired’s new Virtual Rush Boxing game for retail and online, along with a new suite of products for sports betting, casino, slots, and social sectors, all featuring heavyweight legend Iron Mike, will be available to play. Delegates will also have the chance to experience a range of virtual sports from Inspired. While mobile and omnichannel games will be present, operators can learn how to maximize the revenue of their mobile games through the integration of Inspired’s Remote Gaming Server (RGS), Virgo. ‘Virtuals on demand’, a new innovation will be unveiled which will be available to play through its RGS and featuring in-play bets enabling gamers to enjoy Inspired’s world

leading virtual sports anytime, anywhere. Inspired’s latest VLT cabinets, Optimus and Inceptor - available on their G2A compatible terminal platform, Core Connect will also be on display. Gerhard Burda, acting chief product officer, comments: “ICE is a strategic focus for Inspired as it gives us an opportunity to showcase our industry-leading gaming technology and content on home turf. We want to ensure that everyone who visits our stand at ICE experiences firsthand why we are renowned for being the company that delivers entertainment with an edge.” Inspired can be found at Stand S2-310.

INTERBLOCK

Interblock introduces “Pulse”

uxury gaming manufacturer, Interblock will showcase a diverse profile of electronic table games, side bets, enhanced player information displays and functionality while introducing “Pulse” at ICE 2016. Interblock Global CEO John Connelly said, “Over the past year, we have increased our investments in R&D, service, player research, and our executive management team to analyze every segment of our portfolio. A primary focus for Interblock in 2016 will be the introduction of new, innovative technology designed to enhance the player experience, while bringing a new level of entertainment to the ETG Segment.” One of Interblock’s latest innovations,The MiniStar String, comprises three play stations that can be placed in a remote location, and allows operators to add and connect additional play stations to existing MiniStar Roulette products on their casino floor. The company will also demonstrate its

revolutionary PULSE ARENA, blending the energy of latest trends in gaming, interactivity, and entertainment. At ICE, Interblock will demonstrate the scalability and flexibility of the PULSE ARENA’s solutions through their products: Diamond Roulette Generator, Diamond Multi-hand Card Generator, Dealer assisted Baccarat and Blackjack table, SicBo Dice Generator, Starbar and Diamond and Organic Bar Tops. Dealer-assisted Baccarat and Blackjack tables, SicBo Dice Generator, StarBar, as well as Diamond and Organic Bar Tops. StarBar, the innovative new play station which can be used as a standalone bar-top gaming machine, will be launched into the market this year. Connelly said, “We knew we had the industry’s best products. Now we have the infrastructure in place to bring those products to every gaming market around the world”. Interblock can be found at Stand S4-210.

Asia Gaming Briefings | February 2016

SUPPLIER SPECIAL REPORT 52 JCM

60 Years of Innovation

CM Global will mark 60 years of creating innovative and industry-leading products that have revolutionized the gaming industry and created new global standards at ICE 2016. Leading JCM’s ICE exhibition is the new TableXchange Plus, a secure, scalable, and easy-to-install intelligent drop box solution for live table game operations. Based on JCM’s award-winning bill validation and printing technologies, it reduces the threat of counterfeit currency being accepted at live tables. As well as this, an optional TITO module allows casinos to extend existing slot TITO. TableXchange Plus also enhances cash management security by accurately tracking cash from table buy in through to the count room and providing a consolidated view of cash drop for all table games, by hour and gaming day. Having supplied more than 2.14 million gaming bill validation units for the gaming industry globally, JCM will be showcasing

their line of award-winning bill validators including the iVIZION, iPRO, Vega, TBV, and EBA-40. Both the iPRO-RC and Vega-RC Twin are equipped with recycling modules, useful to AWP operators. JCM will also show advanced and award-winning printing options such as the GEN2TM, GEN2 Universal, and CouponXpress, a desktop TITO and coupon printer. JCM system solutions include the award-winning Intelligent Cash Box (ICB) and the post-production TITO solution Ticket2Go. JCM’s world-class Services distinguish JCM from other suppliers, and JCM will feature its new JCM Exchange FTP software download FTP site, and JCM’s product replacement program. JCM can be found at Stand N3-220.

MEDIATECH

Mediatech presents CANDY

ediatech Solutions, a product and services provider that supports their clients through technology products, enterprise consulting and professional and operational services, will be showcasing CANDY at ICE 2016. CANDY is a land-based extension of Mediatech’s omni-channel and API-driven platform IRIS, offering all the benefits of an online operation in a land-based format with a range of terminals from several international manufacturers through their platform. Mediatech’s platform is currently used by more than 20 percent of the online Spanish market and is expanding into regions in Europe, Asia, LATAM, CIS, and Africa.

Asia Gaming Briefings | February 2016

Based in Malaysia, Mediatech Asia was established to service the regulated and to-be-regulated Asia Pacific market with unique product lines, dedicated account management, support and sales diverse experienced team. Partnering with regional content providers and leading equipment suppliers allow local product for each various markets across Asia where clients have the ability to customize their own preferred offerings of content, payment systems, registration, bonusing, CRM, and cash reconciliation based on their location and seasons, seven days of the week. Mediatech Solutions will be sharing a booth with R. Franco at Stand S6-210.

KONAMI

Konami announces Concerto

lot machine manufacturer, Konami Gaming, will be showcasing its new Concerto video slot cabinet at ICE 2016, featuring a cinematic display and exclusive game themes. Concerto has the largest screen size in its class with a LCD video button panel, responsive tactile buttons, and a signature holographic side lighting programmed to interact with different events. New international debut KP3+ platform themes will be displayed on Concerto, which is designed to be compatible with Konami’s KP3 library. “Concerto is one of the most important products of the year and we’re thrilled to debut its exclusive features and game themes during the 2016 ICE show,” said Matt Reback, Konami VP of marketing. “Concerto is already seeing powerful momentum worldwide in placements, performance, and attraction, which our international customers will be able to experience first-hand at Konami’s ICE exhibit.” Konami will be showing two new Rapid Revolver themes called Prophetess of Fortune and Fortune Sticks featuring real-time interaction between video and mechanical components, equipped with bezeled designs. New international titles include Dungeons & Dragons, Rapid Revolver, and Frogger. “This year’s ICE show sets the stage for a broad lineup of international releases, ranging from new expansions on proven products to the latest Konami games,” added Reback. “...we’re thrilled to be able to share it with guests at ICE 2016.” Konami can be found at Stand S6-110.

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iGaming Asia Congress 21 - 23 March 2016 | Grand Hyatt Macau

The leading conference + exhibition for the Asian igaming industry

330+

iGaming operators, vendors and industry professionals in Asia

50+ 40+ 12+

Presentations, Debates and Discussions

Sponsors & exhibitors

Hours of formal and informal networking