Agbriefings September 2016 by Asia Gaming Brief

JURISDICTION UPDATES September 2016 Edition

IN FOCUS

Tribal networking pg.30

U.S. tribal operators seek Asian ties as traffic grows

MACAU

World’s “most elegant casino” draws out VIPs pg.06

AUSTRALIA

Anti-gambling crusade gathers pace as GGR gains pg.38

RUSSIA

Tigre de Cristal ups non-gaming ante pg.22

INDONESIA Tapping outbound tourist potential pg.18

G2E 2016 SUPPLIER SPECIALS pg.42

ExCeL, London 7-9 February 2017

the world theatre of gaming

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MESSAGE 3

Good relations

s one of the world’s largest gaming shows gets

revenues come from Vietnamese patrons. Cambodia was

underway in Las Vegas, AGB takes a look at global

one of the best performing jurisdictions in Asia in 2015 and

relationships and alliances in the industry.

although growth has slowed from the stellar levels seen last

Our first focus article features an Asian giant

year, the country’s casinos are still going strong.

making strides in the U.S. Malaysia’s Genting Group first

Malaysia’s only casino operator, Genting Malaysia, also

entered the US in 2011 with its Resorts World New York

saw an uptick in its Q2 results and confirms that the major

City. The development is designed to service an estimated

elements of its RM10.4 billion revamp are on track.

$4 billion unsatisfied local gaming market and has been a

Next door, the head of Singapore’s Casino Regulatory

resounding success since its launch, with GGR growing at an

Authority is calling for closer sharing of information between

above-market annual average of 4 percent.

global regulators to help combat money laundering and

The company is now planning for a Phase 2 expansion, which

transnational crime, pointing out that the casino industry

aims to grow the existing market and diversify revenue

and regulatory landscape are evolving rapidly.

streams with the addition of more non-gaming amenities.

Politics are playing a part in Australia’s gaming industry as

The biggest prize, however, could be Las Vegas. The

record gambling spend has prompted politicians and anti-

multi-billion dollar project will be the first ground-up,

gambling crusaders to call for increased pressure for reform,

new integrated resort in Las Vegas in over a decade and

including a clamp down on sports-betting TV adverts and

will feature innovative concepts that are designed to lead a

restrictions on “highly addictive” gaming machines.

resurgence in interest in Las Vegas from both domestic and

Echoing a global trend, Russia’s Tigre de Cristal is adding

international customers.

further non-gaming amenities in an attempt to woo the local

Our second feature article focuses on how tribal operators

market, while in Saipan, the natural attractions of the exotic

are tailoring their offerings towards the Asian market to

island appear to be captivating the Chinese VIP.

attract both local ethnic communities and the increasingly

With the U.S. elections around the corner, politics will

adventurous Asian millennial. Mohegan Sun and Genting

inevitably feature at G2E. The show is undergoing a revamp

are very much the leaders of the pack when it comes to

for 2016 and for the first time the conference will run on all

Asian/U.S. tribal relations with their joint venture in Incheon,

four days of the show from September 26-29. Conference

South Korea, and their partnership may provide the catalyst

sessions will touch on where the presidential candidates

for other such alliances.

stand on gaming issues and what scenarios could play out

Meanwhile, our regular Asian jurisdiction updates provide an

depending on who is elected.

insight into recent launches and performances. In Macau, we

AGB is excited to once again be participating in this essential

review how the latest luxury resort Wynn Palace, “arguably

event. If you’d like to book a meeting with one of us during

the most beautiful hotel in the world” according to its

the show, please email us at g2e@agbrief.com.

creator, Steve Wynn, is luring VIPs back to the market.

We can’t wait to see you at the show and/or parties!

Rosalind Wade

Luis Pereira

In neighboring Hong Kong, we explore how the Hong Kong Jockey Club is increasing its commingling partnerships and,

@agbrief

as a result, its fortunes.

Asia Gaming Brief

Vietnam’s new casino regulation, which is expected to open the door for locals to gamble, is still waiting to see the light of

On behalf of Asia Gaming Brief

day. The continuing delays have allowed Cambodia’s casinos

Rosalind Wade & Luis Pereira

to breathe a temporary sigh of relief since a large part of their

PUBLISHERS

www.agbrief.com SEPTEMBER 2016 EDITION SERIES II • ISSUE IX

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Asia Gaming Briefings | September 2016

CONTENTS 4

NORTH ASIA

GREATER CHINA

MACAU

HONG KONG

AUSTRALASIA

RUSSIA

NEW ZEALAND

SOUTH KOREA

CNMI

AUSTRALIA

INDOCHINA

SOUTH EAST ASIA

SOUTH ASIA

MALAYSIA

VIETNAM

PHILIPPINES

CAMBODIA

INDONESIA

SINGAPORE

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GREATER CHINA

MACAU

Wynn Palace lauded for design elegance Macauâ&#x20AC;&#x2122;s most expensive casino to date opened in August and the initial reaction has been positive, yet analysts remain cautious over VIP prospects.

ynn Resorts’ $4.2 billion Wynn Palace opened its doors to widespread praise for its spectacular design, drawing in VIPs and helping the Macau market to achieve its first positive growth in two years in August. However, longer term analysts are taking a wait and see approach, as the market continues its shift to the mass sector and more non-gaming attractions. The resort “exemplifies the most impressive and elegant casino property ever built, not only in Macau, but in the world,” Bernstein Research wrote in a note after the opening. “Based on what we have seen, we expect Wynn Palace to be a game-changing addition to Wynn Macau and allow the company to strongly compete in Cotai in both gaming and non-gaming.” Personal touches The resort offers 1,706 exquisitely furnished rooms, suites and villas with numerous personal touches overseen by Steve Wynn. The spa is the largest in Macau and features 22 treatment rooms and the resort’s pool and pool-side restaurant overlook the Performance Lake. The Wynn Palace Esplanade is 18,580 square meters of luxury shopping and is home to more than 50 of the most renowned names in retail. Floral themes play a major role in the resort. Immediately popular with opening-night guests were the two massive floral sculptures located in the South and North Lobby Atriums. The sculptures are custom designed by renowned floral designer Preston Bailey. Also on display throughout Wynn Palace are thousands of works of fine and decorative art, assembled over a six-year period and representing an investment in excess of $125 million. Many of the pieces continue Steve

GROSS GAMING REVENUE Y15 MOP 230.84b August MOP18,8b

-34.3%

+1.1%

Y16E MOP200bb (Source: DICJ)

GREATER CHINA 7

Wynn’s efforts to bring Chinese artwork home, including a quartet of rare porcelain Qingdynasty vases. The only other such quartet is in Buckingham Palace in London. The Wing Lei Bar features an 18-century crystal chandelier valued at more than $25 million. At the pre-opening event chairman and CEO Steve Wynn called the resort “arguably, the most beautiful in the world.”

“

BASED ON WHAT WE HAVE SEEN, WE EXPECT WYNN PALACE TO BE A GAME-CHANGING ADDITION TO WYNN MACAU AND ALLOW THE COMPANY TO STRONGLY COMPETE IN COTAI IN BOTH GAMING AND NONGAMING.

”

VIP draw According to analysts, the luxury property appears to have lured some VIP clients back to Macau for a look and probably helped the market achieve GGR growth of 1.1 percent in the month.

Iao Kun reviews VIP rooms amidst slump Iao Kun Group Holding says it’s undertaking a comprehensive strategic review of its VIP gaming room operations in Macau due to the ongoing challenging VIP environment. As an initial measure to cut costs it has closed its VIP room at Sands Cotai Central and may close a further one to two facilities. IKGH believes the closure of the room will generate annual savings of approximately US$750,000.

Asia Gaming Briefings | September 2016

GREATER CHINA 8

Union Gaming analyst Grant Govertsen said, “Clearly the opening of Wynn Palace had at least some positive impact on the high-end of the market, likely causing players to return and trial the property.” However, the integrated resort is launching into a market that has changed dramatically from when the project was first conceived, with the government pushing hard for a more mass market and diversified tourism offering. Less than two weeks before opening, Secretary for Economy and Finance, Lionel Leong broke the news that the government would allocate only 100 new tables to Wynn Macau for its new development, with an additional 25 tables on January 1, 2017, and another 25 on January 1, 2018. The table number allocation came as a shock to analysts, as it was significantly lower than the 250 total tables allocated to Galaxy Macau Phase 2 and Studio City, and far below the 400 tables initially applied for by Wynn Macau. It’s also no secret that Wynn Palace has less focus on family entertainment and nongaming offerings than its mass-market rivals. Cannibalization concerns Analysts were also concerned about the possible cannibalization of clients from the company’s existing resort on the Macau peninsula, at least in the early stages. “The product caters to higher-end customers (VIP and premium mass), which have not been growing in the last two years. Also, it could cannibalize its own property in both the premium mass and VIP segments,”

Asia Gaming Briefings | September 2016

Morgan Stanley wrote. However, longer term they say it may be possible to poach VIP clients from other Cotai properties. “We expect to see market share gains at the corporate level as existing Cotai-centric high end customers gravitate towards WP with the eventual help of WP marketing efforts. Corroborating high end strength we have noticed lots of retail activity at WP including luxury inventory turnover,” Govertsen said. Focus on turnover At the opening event, Wynn confirmed the property would feature around “50 to 60” VIP tables, but also said the focus of investors and media should not be on the number of tables at Wynn Palace; instead,“the focus should be on the amount of people that are here.” “Our strategy is to make this hotel available to anybody, regardless of their income and their propensity to gamble… We cover all the rainbow of demand… Why do we want to turn our back on someone that wants to gamble for a lot of money?” said Wynn. “A casino is a passive place,” he stated. “Its value as a revenue source depends solely on how many people come through it and what their average per person spend is. What is dynamic in my business is the non-casino stuff: that is what brings people from afar.” Wynn Palace had been taking pre-bookings of hotel rooms since June. According to the operator, occupancy rates in the weeks following opening are already in the 70 percent range.

SJM HOLDINGS (880:HK) Has 20 casinos on the Macau Peninsula. Mass market property the Jal Alai is being revamped and is now expected to reopen towards the end of the year, with 130 rooms and 45 gaming tables. The company is currently building The Grand Lisboa Palace on Cotai, which is scheduled for completion towards the end of 2017. The casino’s original plans were for 700 gaming tables and over 1,200 slot machines across a gaming floor area of approximately 27,000 square metres. However, CEO Ambrose So Shu Fai recently said that the company is hoping for 500 to 600 tables. The resort will feature a Palazzo Versace hotel and a Karl Lagerfeld Hotel and the total production cost is estimated at about HKD$30 billion ($3.8 billion). SJM in March opened a new gaming area at the Grand Lisboa, which includes 870 square meters of space, with 10 gaming tables and over 40 slot machines as well as a dining area. For Q2, adjusted EBITDA went down 27.8 percent to HK1.6 billion, falling short of analyst estimates of HK$1.7 billion. Total revenue declined 20.6 percent year-on-year to HK$21.1 billion. Analysts have said the company is likely to continue to lose market share until its Cotai property opens, as visitation increasingly migrates away from the peninsula to the strip.

GALAXY ENTERTAINMENT GROUP (27.HK) Has three main properties and runs three City Club casinos inside hotels. 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. Galaxy Chairman Lui Che-Woo says he will be venturing into family friendly theme parks as part of the next two phases of the HK$86 billion (US$11 billion) Galaxy Macau project. Construction of the third and fourth phases of Galaxy Macau are expected to start this year. In August, the group’s StarWorld Hotel officially opened its new mass gaming floor on the third floor with a 108-seat electronic table game arena. The floor will also feature 14 gaming tables and 159 slot machines.

GREATER CHINA 9

In H1 revenue rose 1 percent, with revenues generated from VIP-room gaming tables down 15 percent year-on-year to HK$13.2 billion, offsetting the gains made from main-floor tables, which brought in HK$10 billion in revenue, up 22 percent. Adjusted EBITDA jumped 13 percent to HK$4.7 billion, beating analyst estimates.

SANDS CHINA (1928:HK) Has four casinos. The new $3 billion The Parisian is scheduled to open in September and analysts expect the resort to help fuel mass market growth. The Parisian Macao will feature a scale replica of the Eiffel Tower, nearly 13,000 hotel rooms, two million square feet of retail-mall offerings and two million square feet of MICE capacity. The company recently announced its retail line up for another 170 shops. An air-conditioned walkover bridge with moving sidewalks is also planned, which will connect Parisian Macao to Sands Cotai Central. In Q2, adjusted EPS was $0.52 per share, down from $0.60 per share a year earlier and falling short of the $0.56 per share consensus. Revenues fell 9.3 percent year-over-year to $2.65 billion and missed expectations for $2.75 billion. CEO Sheldon Adelson said, “the operating environment in Macao remained challenging during the quarter; but we do see signs of stabilization, particularly in the mass market.”

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. So far, analysts say the ramp up at the resort has been slow. All tables were initially allocated to the mass sector, a first in Macau, but it now plans to open three VIP rooms. 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. Joint venture partner Crown Resorts recently said it would sell down some of its stake in Melco Crown, selling the stock back to Melco for about $800.8 million. In Q2, adjusted EPS was $0.05 per ADS, down from $0.08 per ADS a year earlier and missing the consensus for

$0.08 per ADS. Revenues surged 17 percent year-over-year to $1.07 billion but were just shy of the $1.08 billion mean estimate.

GROSS GAMING REVENUE Sept. GGRE -2% to +2%

WYNN MACAU (1128:HK) Opened its $4 billion Wynn Palace in Cotai on August 22 after facing construction delays. The company’s original property is on the Macau Peninsula. The Wynn Palace has 1,700 hotel rooms and 90 percent of the resort will be non-gaming. The resort features a performance lake, casino, spa performance lake, casino, spa, retail and other outlets. It was aiming for about 500 table games, but was only granted 150, with 100 at the opening, 25 in January and the remainder in 2018. Unlike other recent openings, the resort will have VIP operations, with Suncity Group, Tak Chun Group and Guangdong Group announcing they will be operating VIP rooms. For Q2 adjusted EPS of $1.07 per share was up from $0.74 per share a year earlier and beat expectations for $0.96 per share compiled by Capital IQ. Revenues rose to $1.06 billion from $1.04 billion in the year-ago period and were just above the $1.03 billion consensus

(Source: Wells Fargo)

Sept. GGRE (Bernstein) +1% to +3% GGR Y16E -1% VIP Y16E -10% (Source: CLSA)

Y16E -16% Y17E 0% (Source: Morgan Stanley)

MGM CHINA (2282:HK) Is operating a single casino in the peninsula. The opening for its new $2.9 billion development, the MGM Cotai, has been pushed back from late 2016 to the second quarter of 2017. The resort will not feature any VIP rooms at the opening and will focus on mass gaming, while its original property will continue to offer VIP services. MGM Cotai will have approximately 1,500 hotel rooms and suites, meeting spaces, high end spa, retail offerings and food and beverage outlets. The HK$24 billion ($3.1 billion) project has a jewellry-box design and 85 percent of its gross floor area will be dedicated to non-gaming facilities. MGM China CEO Grant Bowie recently said he is “very confident” about the future of Macau’s gaming industry. The company reported Q2 adjusted EPS of $0.26, up from $0.17 in the prior year period and exceeding the estimate of $0.25 from analysts polled by CapIQ. Revenues of $2.27 billion were down from $2.38 billion in the same period a year ago and missed the Street projection of $2.33 billion. The company recently completed the acquisition of a further 188.1 million shares from Pansy Ho, taking its stake to 56 percent from 51 percent.

Parisian gets 150 tables Sand China’s newest development, The Parisian Macau has been given the same allocation as that of Wynn Palace - 150 total tables. The new development will receive 100 tables upon opening, with another 25 at the beginning of 2017 and a final 25 at the beginning of 2018. “From an operating perspective, we believe that the new 100+25+25 tables are sufficient to efficiently run The Parisian, as we anticipate a significant number of underutilized/unused tables to be transferred from other Sands properties. We expect that The Parisian will open with 425-450 tables,” Bernstein said in a note.

Asia Gaming Briefings | September 2016

GREATER CHINA 10

HKJC Y15/Y16 ANNUAL RESULTS HKJC total turnover Y15/Y16 HK$202.7b

+6%

Racing turnover HK$107b Football turnover $86.8b Mark Six HK$8.55b

HONG KONG

Commingling a winning wager for HKJC The Hong Kong Jockey Club’s experiment with commingling, which began just two seasons ago, grew at a 31.5 percent clip in the past financial year and is now seen as a key driver of future growth.

n the year ending June, 2016, the club had total turnover of just over HK$202.70 billion ($26.1 billion), up by almost 6 percent. Racing turnover for the financial year was up by 1.8 percent to just over HK$107 billion. Football turnover was up by 10.9 percent to HK$86.80 billion, while the Mark Six, which celebrated its 40th anniversary this year, reversed last year’s small decline to record a 9.9 percent increase to HK$8.55 billion. Commingling had a turnover of HK$3.48 billion this racing season, representing 3.3 percent of total racing turnover. From just two overseas partners in 2014, the club now has 13. “It is a very promising area of growth, rich with potential benefit for Hong Kong,” CEO Winfried Engelbrecht-Bresges said in the club’s annual report. During the first half of the new season, the club plans to add two partners, the UK and Canada, and is in ongoing discussions with the Irish Tote and France’s PMU. To further boost commingling growth, the club is entering into publishing and telecasting arrangements which will enable its fields, information and telecasts to be distributed worldwide in different languages and varied racing cultures. “In addition to further developing the potential of current markets we will develop partnerships in new jurisdictions, especially in Europe,” Engelbrecht-Bresges said. “Furthermore, with Japan now taking simulcasts of overseas

Asia Gaming Briefings | September 2016

races featuring Japanese horses, we will broadcast major events such as the LONGINES Hong Kong International Races and the Audemars Piguet QEII Cup to Japan, with the potential, in time, of developing commingling in Japan.” In June, the Hong Kong government agreed to the club’s request for five additional race days and eight more simulcast days. This will increase total race meetings from 83 to 88 and simulcast days from 15 to 23 from next season. However, Engelbrecht-Bresges said the club won’t be able to fully benefit from the additional races until its new training facility across the border in Conghua comes online in 2018. “I cannot overstate the importance of the Conghua centre we are building in China – our future growth and development depends on it. Sha Tin is almost 40 years old. Its facilities have been at maximum capacity and we have tried unsuccessfully for 20 years to acquire more space in Hong Kong. In terms of project progress, construction is on schedule, pre-opening preparations are well in hand, and recruitment and training of staff, including of the first work riders, has begun. A successful trial of the cross-border movement of horses has also been carried out. In Hong Kong, the club has undergone a HK$6.5 billion refurbishment of its facilities, with the opening of five new or upgraded venues, which helped push racecourse

+1.8%

+10.9%

+9.9%

Costs push Genting to loss Genting Hong Kong swung to an interim loss in the six months to June as operating expenses rose. The loss attributed to owners was $53.6 million, compared to a profit of $2.2 billion in 15H1. Total operating expenses increased 73.1 percent to $344.7 million. Revenue from cruise activities increased 44.8 percent to $384 million in the period. The company has also begun offering FSG (FreeStyle Gaming) Mobile, a live-table mobile betting application which allows customers of Resorts World at Sea to wager real money on live casino games.

Landing losses widen Landing International Development says its first half loss widened in part due to increased employee and operating expenses. The company, which owns the Jeju Casino in South Korea, as well as the Les Ambassadeurs Club in the UK, reported a loss of HK$662.6 million ($85.5 million) compared to HK$173.4 million in the prior-year period. Revenue was HK$445.3 million, up from HK$109.2 million a year earlier.

attendance to just over two million for the fourth consecutive year. The club has also been developing digital products to meet customer demand for speed, convenience and connectivity. To maintain its position as a technology leader, the Club is moving ahead with a multi-billion next generation customer information and wagering system.

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Asia Gaming Briefings | September 2016

SOUTH EAST ASIA

MALAYSIA

Genting gets ratings lift Genting Malaysia beat expectations with its Q2 results, prompting renewed optimism in the investment community over the groupâ&#x20AC;&#x2122;s prospects and expansion plans.

SOUTH EAST ASIA

enting Malaysia has won a vote of confidence from several regional analysts after posting strongerthan-expected Q2 results and indicating that its Genting Integrated Tourism Plan remains on track. AllianceDBS recently raised its rating on the stock to buy and hiked its 12-month price target to RM5.00 ($1.22) from RM4.15. The research house said in a note that “we foresee three catalysts to re-rate the stock: (1) additional gaming capacities arising from its launch of the Genting Integrated Tourism Plan, (2) the weak RM to attract more foreign tourist visitations and encourage more local travelling among Malaysians, which could benefit GENM, and, (3) rising optimism on the group’s earnings outlook as its GITP launches could re-rate the stock closer to its intrinsic value.” The company has confirmed that the major elements of its RM10.4 billion revamp are on track, with the Sky Avenue & Sky Plaza shopping malls, and the new cable car station to open by end-2016 and the highly anticipated Twentieth Century Fox World outdoor theme park by end-2017. The analysts said they expect the number of visitors to improve from 19 million in 2015 to 25 million by 2018, on track to meet its target of 30 million by 2020. The new Sky Plaza is likely to get a further

300 gaming tables, up more than 50 percent from the current estimated 550 gaming tables. AllianceDBS therefore expects Genting’s table capacity to increase progressively to 800 in its earnings model.

“

THE INCREASED VISITATIONS, COUPLED WITH THE POTENTIAL AVAILABILITY OF 300 NEW GAMING TABLES, ARE EXPECTED TO DRIVE ITS EARNINGS

”

“The increased visitations, coupled with the potential availability of 300 new gaming tables, are expected to drive its earnings,” the firm wrote. “We raise our FY17-18 earnings by 4-7 percent. Nonetheless, we believe that our assumption of 8 percent visitor growth/ per annum to Resort World Genting between 2016 and 2018 is conservative.”

GROSS GAMING REVENUE

TOURISM

Genting Malaysia Q2 revenue RM2.23b

TARGET Y16 30.5m arrivals RM103b receipts

Malaysia leisure & hospitality revenue RM1,34b

+13%

+4%

Genting UK RM504.2m

+71%

Genting US RM351.6m

+13%

For Q2, Malaysia’s only casino operator reported adjusted earnings before interest, taxation, depreciation and amortization grew by 52 percent to RM662.2 million, while net profit more than doubled to RM465.3 million. Total revenue increased by 13 percent to RM2.23 billion, mainly boosted by the results of overseas operations, as sales domestically continued to suffer from the impact of the country’s goods and services tax. The performance of the group’s overseas operations in the U.S., Bahamas and the U.K. all saw an improvement in the quarter. Genting said it was pleased with the performance in the U.K. which came as a result of its revised marketing strategies to international premium players, but maintains a cautious stance on the volatility implicit in this business. The company is also revamping its marketing strategy for the Bahamas where the 305-room Hilton hotel is now fully open. TA Securities said the results were better than expected and as a result the firm is raising its rating and discounted cash flow valuation. The rating goes from Sell to Hold and the DCF valuation rises to RM4.89 from RM3.92 a share based on a discount rate of 8.7 percent. “We raise our FY16-18 earnings by 8-15 percent to factor in higher business volume and operating margin for UK operations,” TA said in a note.

TARGET Y20 36m arrivals RM168b receipts

Police bust illegal gambling ring in Borneo

Berjaya launches Vietnam lottery operations

Malaysian police carried out forty-six raids on illegal gambling premises and illegal character lotteries across Borneo from Aug 22 to 28, according to media reports. A total of 72 people were arrested and RM37,722 in cash was seized. “These operations were carried out following a directive from the Commissioner of Police Sarawak, Datuk Mazlan Mansor, to all OCPDs to clear their districts of gambling activities,” State CID chief Datuk Dev Kumar was cited as saying.

Berjaya has officially launched its joint venture lottery operation in Vietnam, with the introduction of the Mega 6/45 Lotto Jackpot Game. Within the first month of operations, 800 point of sale terminals for Mega 6/45 tickets will be available throughout Ho Chi Minh City with some 10,000 point of sale terminals planned nationwide within the next 5 years. The 18-year lottery contract was awarded in January and foresees investment of $210.58 million.

Asia Gaming Briefings | September 2016

SOUTH EAST ASIA 14

PHILIPPINES

Thunderbird spreads its wings While much of the focus in the Philippines continues to be the mega resorts opening in Manila’s Entertainment City, smaller operators are beefing up their facilities to capitalize on the natural beauty of their locations and capture spillover traffic.

hunderbird Resorts & Casinos is undergoing a multi-million dollar expansion as it seeks to attract more foreign travellers to its two regional Philippine resorts. The company is operated by Magnum Leisure, which bought the Philippine assets from Panama-based Thunderbird Resorts for $26.5 million in 2013. Up until now the two properties have focused on the local market. Thunderbird opened its resort in Binangonan, Rizal 14 years ago and a Santorini, Greece-style property in Poro Point, La Union a decade ago.

Asia Gaming Briefings | September 2016

Rizal province has a population of just under 3 million and lies about 16 km to the east of the capital Manila, while La Union is about 273 km north of the capital and a population of just 786,653. When it started out, the company was accused of being overly ambitious for attempting to build such a large-scale resort. Most developments of any size have been centered in Manila, or on the better-known tourist islands, such as Cebu. “At that time when we were looking for markets to expand operations, we found that in the case of both Rizal and La Union,

there was a huge underserved market, which made the possibility of putting up new properties in these areas very exciting,” says chief operating officer Angel Sueiro. “We were (in La Union) thinking, how will we be able to make money here? How can we make this place different? The first idea was very obvious, I cannot make what everybody else is doing, then the location of the place. I remember being there at sunset and dreaming that the sunset will reflect on the white walls that we’ll build and the place is over a cliff - that’s what would make the place different. It was as simple as that.

SOUTH EAST ASIA 15

Sueiro and his team have now begun an aggressive marketing plan to tap into new foreign markets. Recently, Thunderbird sent a team of executives on a trade mission to China and were surprised at the response. “They came back with 400 business cards and we are communicating with them on a bi-weekly basis. I know working on this would take a lot of time. We have to study our market well to be able to offer them the best experience.” After China, Sueiro says the company plans to focus on S. Korea. “So far we are focusing on the China market but in October, we’ll also do a business mission to S. Korea, as we already have a lot of Korean nationals coming to the property. We hope that the reception would be similar to how it was with China.”

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

Y16E

+17%

$2.9b

Y20E

$5.8b (Source: Pagcor)

Y16E VIP revenue Y17E VIP revenue

+18% +16% (Source: Morgan Stanley)

Y16E VIP revenue

+23% (Source: CLSA))

Grand plans

Marketing focus Sueiro attributes Thunderbird’s success to a combination of factors - aggressive marketing strategies, a beautiful property, and a focus on customer service. “We start with doing research on customer profiles and market demographics. We study the individual preferences of the actual players in order to understand their needs and maximize their long-term value. At the same time, we explore demographics in the 30 – 60 minutes distance to discover and create new players. Execution is different depending on the target groups…from the usual raffles, tournaments, shows, points promotions, bingos, etc. to customized marketing packages for individual or specific group players.” “Something we feel very proud of is that we have a lot of repeat visitors. We’ve built a lot of loyalty.”

The current expansion phase will almost double the capacity of the resorts. In Poro Point there are 93 units and the company is adding another 96. Rizal has 41 rooms and is also being expanded. The event center in La Union will be three times the size of the existing facility and will be the biggest in La Union. The clubhouse and casino are also being upgraded. “Right now there’s construction everywhere you go, we are opening a beach club, we’ve brought in consultants from Ibiza, we are also opening a pool for the beach club. All those will be completed at the last quarter of the year. In Rizal, it’s the same, we’re adding more rooms to the hotel, we’re also renovating the casino to be a really highstandard casino, a new event center, pool renovation.”

SOLAIRE RESORT & CASINO Solaire is a 16-hectare gaming and integrated resort complex along Asean Avenue in Parañaque City owned by Bloomberry Resorts. 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 of a 312 all-suite hotel,

Pagcor to sell casinos, issue new regional licenses The Philippines government has directed Philippine Amusement and Gaming Corp. (PAGCOR) to sell its casinos in order to raise funds to support the national budget. In addition, Pagcor plans to issue further licenses outside of Manila and has revoked a 10 percent license-fee cut for operators in Entertainment City that was granted by the previous administration.

additional ten VIP gaming salons with 66 gaming tables and 223 slot machines. It also includes a certified 1,760-seat lyric theatre. The company Swung to a profit in Q2 of P1.3 billion ($28.5 million), compared to a loss of P787 million in the same quarter in 2015. Bloomberry Resorts said its Q2 revenues surged by 40 percent to P.8.4 billion, posting its best ever quarterly mass table drop (22.5 percent growth) and EGM coin-in (16 percent growth), as well as VIP volume (18.6 percent growth).

Asia Gaming Briefings | September 2016

SOUTH EAST ASIA 16

Overseas online operators safe from purge? PAGCOR has confirmed it will soon be issuing online gaming licenses for operators that target overseas punters, in a move that could help offset losses from the decision not to renew permits for services used by local Filipinos. The announcement came shortly after the government shook the online sector by declaring it will not renew the license for local e-gaming company PhilWeb.

CITY OF DREAMS The $1.3 billion City of Dreams Manila is owned by Belle Corp and Melco Crown Entertainment’s local unit. The grand opening was held Feb. 2 last year. For Q2, the company reported revenue of PHP5.62 billion ($120.8 million), up from PHP3.33 billion a year earlier. Gaming revenue made up 91 percent of net operating revenue. The company’s comprehensive loss in the period narrowed 84 percent to PHP288.5 million. Rolling chip volume for the three months ended June 30, 2016 was PHP79.4 billion, as compared to PHP22.2 billion a year earlier. Mass table drop gained 21 percent to PHP6.3 billion. Hotel room revenue was up 81 percent. PAGCOR has approved the operation by City of Dreams Manila of up to a maximum of approximately 380 gaming tables, 1,700 slot machines and 1,700 electronic table games. As of December 31, 2015, City of Dreams Manila had 261 gaming tables, 1,579 slot machines and 83 electronic table games in operation. City of Dreams Manila has six hotel towers with approximately 950 rooms in aggregate, including VIP and five-star luxury rooms and high-end boutique hotel rooms, a wide selection of restaurants and food & beverage outlets, a 4,612.44 square meters family entertainment center in collaboration with Dreamworks Animation, a live performance stage, two international nightclubs and a multi-level car park.

Asia Gaming Briefings | September 2016

It includes an approximately 260 room Crown Towers hotel, Hyatt City of Dreams Manila, a 365 room hotel managed by Hyatt International Corporation and Asia’s first Nobu Hotel with 321 rooms.

RESORTS WORLD MANILA Travellers International Hotel Group, a joint venture between Genting Hong Kong and Alliance Global, is the owner and operator of Resorts World Manila. The company reported net profit of P1.8 billion ($38.6 million) in 16H1, down from P2.4 billion in 15H1. While net revenue remained flat at P12.5 billion in 16H1, second quarter revenues increased 18.6 percent to P6.5 billion. Gross gaming revenue for 16Q2 increased 9.1 percent to P6.2 billion. Total room count for the group’s three hotels (Maxims Hotel, Remington Hotel, and Marriott Hotel Manila) remains at 1,226 with the occupancy rate in Q2 at 87 percent. Expansion projects in RWM are in full swing with Phase 2 nearing completion with the addition of 228 rooms in the Marriott West Wing in Q4 this year. As of end June PHP7.00 billion in proceeds from the company’s share offering had been invested and all allocated funds for this phase have been used. Phase 3, which will consist of three hotels, Hilton Manila, Sheraton Manila Hotel, and Maxims II, will be completed by 2018. It will also include an additional gaming area, new retail spaces and six basement parking decks. As of June, PHP8.7 billion of its offering proceeds had been released

and used for Phase 3. PAGCOR has approved new gaming capacity of 420 gaming tables and 4,148 gaming machines at the resort. However, the company said it has delayed the opening of a second Manila resort, the $1.1-billion Resorts World Bayshore along Manila Bay to Q4 2020 due to oversupply in the market. It had been aiming for a 2018 opening.

OKADA MANILA Tiger Resorts and Entertainment, the Philippine unit of Japan’s Universal Entertainment, plans to open the first phase of its Okada Manila project by the end of this year with an investment of $2.4 billion. The company is in full recruitment mode for the property, in which it may invest as much as $4 billion once all phases are completed. A recent job fair, attracted 10,000 applicants for 8,000 positions on offer. Once fully operational, Okada Manila will 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 manmade beach and club covered by a huge glass dome, high-end and casual dining restaurants, upscale retail shops, trade halls and cinemas. Tiger President Steve Wolstenholme has said the resort, which will feature a huge fountain as its centrepiece, aims to provide Manila with a must-see icon, as well as retail options not yet available in the Philippines.

SOUTH EAST ASIA 18

INDONESIA

Untapped player potential While Indonesia is not expected to open up its domestic gaming industry in the foreseeable future, the country’s residents still have a role to play and its wealthier citizens are an increasingly important customer segment for Asia’s casinos.

he country has a population of 242 million, making it the world’s fourth most populous nation, and a rapidly expanding middle class. Fervently held religious beliefs against gambling among the overwhelmingly Muslim population and a government determined to punish, in a very public way, anyone caught gambling would seem to rule out gambling at home.

Asia Gaming Briefings | September 2016

However, as in China and India, there is a strong propensity to gamble. The two areas of Indonesia gambling activity are online gaming and overseas visits by wealthier Indonesians to casinos in south-east Asian destinations like Macau and particularly Singapore. “Indonesia is a very interesting market for sure. Many people do not know it but India and Indonesia have some of the highest numbers of online Poker players in the

world,” says Steve J Karoul, president and CEO Euro-Asia Consulting. Steve Gallaway, managing partner, Global Market Advisors, commented, “The Indonesian gambler is an important market segment for casinos in Asia, particularly those in Singapore due to the proximity, ease of access, and similarities in culture. There are increasing levels of wealth among a greater population of more than one quarter of a billion.” User guides Go online and type in the words Indonesia and gambling and there is a high chance that the first sites in the search will be comprehensive and user-friendly guides to intranet-based gaming. Almost universally they offer betting accounts in Indonesian Rupiah and an easy-to-

SOUTH EAST ASIA 19

use deposit method. Asia-based dafabet.com offer an initial match of Rp. 750,000 to customers and the ability to make instant deposits from players’ bank accounts. European operations like 188bet and bet365 have offered new players cash bonuses that are twice as high as their Asian counterparts – up to $200 – which is a large incentive for the profile they’re aiming at. In 2 0 1 2 In d on e s i a’s Mi n i s t r y of Communications announced it would block Indonesian nationals from accessing online gaming sites. However, online sites offer plenty of helpful advice about setting up overseas payment systems. European bookies also provide IT platforms like EntroPay to facilitate deposits and withdrawals from customers’ betting accounts using a virtual credit card. Unless the Indonesian authorities divert unrealistic sums of money to build anti-online gambling structures it will continue to flourish quietly. No operator discloses what they earn

from Indonesia’s online gamblers. But it will continue to operate under the radar; as one site says: “Online betting will happen on a large scale in Indonesia even if this article never appeared on our website.”

GDP GROWTH SLOWS +5.18% +4.91%

+5.04% +4.74%

Travel plans More Indonesians are traveling, though with a slowing economy and a relatively weak currency relative to its neighbors, much growth has so far been at home. Research by the Oxford Business Group says Indonesians made 251 million domestic trips in 2014, according to the Ministry of Tourism (MoT), and that number is expected to rise to 254 million trips in 2015. By 2019, domestic tourist movements are forecast to reach 275 million. The World Travel and Tourism Council says domestic travel spending accounted for more than three-quarters of all travel spending in 2013. It estimates that domestic travel spending reached $33.68 billion in 2014. Over the next decade it forecasts growth of 5.3 percent a year to reach $55.81 billion. To be classed as a middle-income earner in Indonesia you need an annual income of US$3,500. There was an increase of 40 percent in the number of Indonesians joining the middle class in the first decade of this century, but is clear that even this rise in incomes doesn’t yet leave a lot of disposable income for overseas travel and accommodation. So the Indonesians who gamble in casinos outside the country will inevitably have significantly higher incomes. Steve Karoul says: “Indonesians are very good players with many very rich and big players who often play in Singapore, Macau and on some of the gaming cruise ships in Asia. Where this market will end up in the future will depend primarily upon marketing. The trust and relationships the marketers create are critical,” he adds. Taste for a flutter Steve Gallaway adds: “Like most of Asia, Indonesians have demonstrated a strong proclivity to gamble, despite having poor access to casinos. Being primarily a Muslim country, it is unlikely that the construction of state authorized casinos will happen anytime soon. As such, the population will continue to be of interest to casinos in other Asian countries.” The unequivocal domestic laws against gambling and Islam’s moral condemnation also means that Indonesian players gambling

Q2 GDP growth

15Q4

+4.66%

15Q3

15Q2

Household consumption Q2

+5.04%

+4.94%

Indonesia eyes tourism boost Indonesia’s “Wonderful Indonesia” campaign is part of an initiative to double visitor numbers to 20 million by 2019, creating about 13 million new jobs. The government has allocated $200 million this year to tourism promotion. About 10.5 million visitors traveled to Indonesia in 2015, generating $12.4 billion for the economy.

overseas need to be treated with discretion and sensitivity until – or if – there is a change in attitudes. As Steve Gallaway concludes: “It is very difficult for casinos to reach out to customers as they are not allowed to market to customers directly, or connect with them in any fashion with regards to a casino or casino resort while the player is in Indonesia. “While it is likely that smaller, independent operators in markets ignore these rules, larger, more respected operators likely do respect these laws which will always preclude their ability to property penetrate the market.”

Asia Gaming Briefings | September 2016

SOUTH EAST ASIA 20

SINGAPORE

CRA calls for closer regulatory ties The head of Singapore’s Casino Regulatory Authority is calling for closer sharing of information between global regulators to help combat money laundering and transnational crime.

ingapore held its fourth symposium on casino regulation and crime in July, with Casino Regulatory Authority of Singapore Chairman Lee Tzu Yang calling for greater cooperation amongst global regulators. In his keynote address, Yang pointed out that the casino industry and regulatory landscape are evolving rapidly and much has changed since the last symposium was held three years ago. “There is continuing internationalization of the industry, ambitious expansion in Asia, and integrated resort (IR) operators are renewing their customer offers to be more attractive,” he said. “Developments on the part of regulators include concerns about money laundering and transnational crime.” “Although regulators will face different challenges at different times, due to the social and legal environment being different, we have to look for opportunities to learn from one another, and to prepare to manage the risks and threats ahead,” he said. “Sharing of experiences will also alert us to the changing modus operandi of criminal behaviour, and allow us to take action.” Overseas opening The symposium was first held in 2009 as an internal training forum, between the Casino Regulatory Authority and the Casino Crime Investigation Branch of the Singapore Police Force. It was subsequently developed to include international participants. This year’s event included 170 participants from 16 regulatory and enforcement agencies from 11 jurisdictions, as well as speakers from the government and industry.

Asia Gaming Briefings | September 2016

Shortly after the conference, police in Indonesia arrested six suspects for allegedly planning a rocket attack against Las Vegas Sands’ Marina Bay Sands property in Singapore, highlighting some of the new threats faced by the region’s casinos. According to Indonesian National Police spokesperson Boy Rafli, the local terror group called Katibah Gigih Rahmat was ordered to attack Singapore by Bahrun Naim, an Indonesian now believed to be in Syria. It is believed that Naim has been sending money from Syria to Katibah Gigih Rahmat to finance radicalism and terror activities in Indonesia. Security tightened The attempt prompted the city-state to tighten security, although it wasn’t clear

whether the group actually had the capability to follow through with a rocket launch. Prime Minister Lee Hsien Loong in a National Day address in August confirmed the planned target of the Indonesian attack had been Marina Bay Sands and told Singaporeans that the government had been aware of other potential attacks against the island state. Other than stepping up patrols and raising protection for major events and prominent premises, some events were shifted and rescheduled because of these threats, Lee said. In January this year, security consultancy Steve Vickers & Associates released its 2016 Asia Risk Assessment, which warned of a potential attack on casinos in Macau. The report says the combination of Chinese,

SOUTH EAST ASIA 21

GROSS GAMING REVENUE Y15 $4.8b

-10%

Y16E (Fitch)

Y16E VIP revenue

-10%

Y17E VIP revenue

+12% (Source: Morgan Stanley)

TOURISM ARRIVALS H1 8,169,192

+12.5%

China arrivals 1,472,654

+55.2%

Indonesia arrivals 1,412,756

+7.3% (Source: STB)

Sentences raised for sticky hands thieves American and Jewish interests in the territory make it particularly appealing as a target. Meanwhile, Q2 proved another disappointing quarter for Singapore’s two casino operators, which continue to struggle due to a sluggish domestic economy, a strong currency relative to regional neighbours and the ongoing lack of revenue from Chinese VIPs. Unexpected drop Marina Bay Sands was the first to report, shocking the market with an unexpected drop in its mass sector revenue. Overall casino revenue for the quarter fell 1.6 percent to $556.7 million, with a drop of 29 percent in its rolling chip volume and an almost 11 percent drop in mass market volume year-on-year. Slot handle gained 6 percent.

Adjusted property EBITDA dropped 1.7 percent to $357 million. Las Vegas Sands chief operating officer Robert Goldstein told analysts on a conference call that he’s hoping that the market will rebound over the summer, as the company has been “hyper-focused” on the mass sector. “The question is, is that a short-term blip, the 90-day miss or is that a trend, we don’t know at this point,” he said. Genting Singapore meanwhile said its net loss narrowed in the second quarter of 2016, as expenses and finance costs fell. The loss was S$10 million ($7.8 million) compared with $16.9 million a year earlier. However, total revenue fell 17 percent, with gaming revenue down 23 percent.

Singapore’s High Court raised the sentence of two thieves caught stealing $100,000 worth of chips from Marina Bay Sands and Resorts World Sentosa by using double-sided sticky tape on their hands. The judge lifted an 18-month sentence for Zhou Haiming and Luo Jianguo imposed by a district court in May to two years in jail.

China arrivals top Indonesia in H1 Singapore tourism arrivals rose 12.5 percent in the first six months of this year to 8,169,192 helped by a 55.2 percent jump in visitors from China to 1,472,654. China overtook Indonesia as the island’s biggest tourism source market. Indonesia arrivals rose 7.3 percent in the first six months to 1,412,756.

Asia Gaming Briefings | September 2016

NORTH ASIA

RUSSIA

Tigre de Cristal eyes non-gaming to lure local crowds While Chinese tourism is still ultimately expected to be the main driver for growth in Russiaâ&#x20AC;&#x2122;s Primorye gaming zone, the current lack of tourism infrastructure has prompted a greater non-gaming focus to appeal to locals.

igre de Cristal, Russia’s biggest casino, is building its non-gaming attractions to boost revenue following lower-than-expected demand from locals for its casino offering. The property is owned by G1 Entertainment, a unit of Oriental Regent in which Summit Ascent has a 60 percent stake. It held its gala opening in the Primorye Integrated Entertainment Zone near Vladivostok last November. Among Russia’s gaming zones, the Primorye area is seen as having the most potential given its proximity to the northern Chinese and Korean markets. In its interim results, the company said its VIP rolling volume has been steadily rising from HK$258.0 million in November 2015 to HK$2.2 billion in August ($283.5 million). Oriental Regent generated an adjusted EBITDA of HK$35.2 million for the six months to June. However, at present about 60 percent of the resort’s client base is local and they are not showing the same propensity to gamble. “Initially our expectation was much higher on the local market from a gaming perspective but non-gaming attractions have always been part of our game plan,” Craig Ballantyne, chief operations officer of G1 Entertainment, a majority-owned subsidiary of Summit Ascent, told AGB. The property has 650 gaming machines and 67 gaming tables (25 VIP tables and 42 mass market tables) including Blackjack and Roulette. According to Ballantyne, over half of the VIP tables are in regular use but the gaming revenue is mainly from the mass market and the average number of players per day is between 60 and 80. Although the casino is only operating at half capacity, the hotel part of Tigre de Cristal is often full at the weekend and almost half-full during the week, Ballantyne said. Prize shows Entertainment events are playing a major role in driving visitation, according to Ballantyne. For instance, Tigre de Cristal is running a talent show, Broadway, in which the winner will be awarded 1 million rubles (about $15,000). Ballantyne said that the show has been instrumental in bringing local visitors. Currently Tigre de Cristal is operating 121 hotel rooms and the basic room rate ranges from 22,000 rubles ($340) to 110,000 rubles ($1,715) per day. In addition to a spa and two restaurants, there will be also be a golf simulator area, a jewelry store, travel agency and convenience

NORTH ASIA 23

store which will be opened in the near future. While Tigre de Cristal enjoys a first-mover advantage in the zone until the next property opens in 2018, Ballantyne concedes that more properties will help to create a critical mass. Diamond Fortune Holdings Prim is working on a second resort, the Selena complex, that will take up to 10 hectares of land with an investment of $900 million. Hong Kong-listed Nagacorp, the operator of Cambodia’s Nagaworld, also began work on its casino in the zone last summer. The company has been preparing foundation work for the future hotel complex with a casino and an aqua park, with a pledged investment of not less than $350 million. The local authority is also said to be in talks with another investor regarding an investment of $500 million. Tax concerns At present the zone has one of the most favorable tax rates globally when it comes to gaming at about 1.3 percent. However, there are rumors about possible changes after the Russian government introduced a federal bill this year that includes tax amendments that relate to online bets and wins. Ballantyne remains cautious about the ongoing regulatory uncertainties in Russia. “The tax level has to be stable otherwise there will be no further investment,” he warned. Steven Gallaway, managing partner of Global Market Advisors, which conducted a study in 2012 to recommend how to develop the zone, agreed on the importance of government relations. “As the tax rate is based on the gaming laws from pre 2009 (the year that the casinos of yore were forced to close), a refreshed code directly approved by the Putin administration in this new gaming environment would give a heightened sense of security to the investment community. However it must be a rational fee or rate, one that does not equate to more than 10-15 percent of gaming revenue. If a revised code were to be much greater than this rate, the IEZ would die.” 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 and conference facilities. The company in August reached an accord with Kangwon Land, the operator of the only casino in Korea where locals are allowed to gamble, for possible project finance investment in the second phase.

GROSS GAMING REVENUE CHINA TOURISM ARRIVALS PRIMORYE JAN TO MAY 38,000, +20,000 Q1 CHINA ARRIVALS +80%

TIGRE DE CRISTAL ROLLING CHIP TURNOVER Nov Dec

HK$ 258,197 ($33,296) HK$312,277

July

HK$2.00b

Aug

HK$2.2b (Source: Summit Ascent)

Government greenlights Sochi zone Russian Prime Minister Dmitry Medvedev has given the go ahead for the creation of a new gambling zone in the city of Sochi. The gaming zone, named “Krasnaya Polyana” or Red Meadow, will occupy an area of 165,026 square meters. The gaming zone is also to fall within the boundaries of the land lots used for the facilities of federal significance for the Sochi Olympics, whose financing and construction did not come from the state budget.

Warming to Bitcoin? While Russian authorities have been adamant in the banning of Bitcoin in the country, a recent report by Russian news agency Interfax suggests there may now be a change of heart. According to the news agency, certain representatives from Russia’s Ministry of Finance, Central Bank and other government bureaus are becoming increasingly supportive of the use of cryptocurrencies.

Asia Gaming Briefings | September 2016

NORTH ASIA 24

FOREIGNER-ONLY GGR

SOUTH KOREA

Gambling sales Y15 KRW 20.5 trillion Gambling tax KRW 2.4 trillion Foreigner-only revenue Y15 $1.13b

+3.1%

+4% -18%

Genting sets up South Korea support unit

Profits bounce back after MERS slump South Korea’s casino operators are putting the MERS crisis behind them, with the latest round of results showing strong signs of recovery.

outh Korea’s casinos continued to show recovery in the second quarter, rebounding from a 2015 slump as tourism numbers declined in the wake of an outbreak of Middle Eastern Respiratory Syndrome and China’s crackdown on corruption. In Q2, Paradise Group posted consolidated operating profit of KRW32.8 billion (US$29.4 million), up 147.6 percent from a year earlier. Revenue rose 32.2 percent to KRW 189 billion, while net profit surged 113.6 percent to KRW 27 billion. Casino sales were up almost 36 percent to KRW166.7 billion. However, the figures showed that the main driver for growth was VIPs from Japan and the mass sector with the drop from China VIPs down from a year ago. The VIP drop from Japan increased to 22 percent of the total in Q2, from 17.3 percent in the same period a year ago, the mass drop was also higher, while the China VIP drop slipped to KRW714 billion, from KRW789 billion. The company, which operates fiveforeigner only casinos, had a 49.4 percent share of the market. Strength continued into the third quarter, with Paradise reporting total casino sales up 19.5 percent year-on-year to KRW58.2 billion in August. There was a 22.7 percent increase in table games sales in the month, to KRW55.72 billion. However, machine game

Asia Gaming Briefings | September 2016

sales declined year-on-year, down 25.3 percent to KRW2.44 billion. Rival Grand Korea Leisure Co Ltd reported a 38.1 percent year-on-year increase in net income to KRW25.6 billion in 16Q2. Revenue for the period was up 5.4 percent to KRW 129.0 billion, while operating income for the quarter was up 44.8 percent year-on-year to KRW 31.4 billion. According to Daiwa Securities analyst Thomas Kwon, GKL’s management said it expects stable growth in casino revenues in the second half of 2016, “on growing mass-table gamers and casual game players.” Kangwon Land, the operator of the country’s only resort to allow locals, reported a 27.1 percent increase in net income to KRW123.7 billion. The results were lower than analyst expectations, with Daiwa’s Kwon attributing the results to “a fall in VIP gamer traffic and hold ratio.” Meanwhile, Kangwon Land has hit out at a request for a second local casino in the Saemangeum region. The operator pointed out the abandoned mine area in the Gangwon Province where its resort is located and Saemangeum had distinct differences. “The Kangwon Land Casino was inevitable for the livelihood of more than 300,000 people in the region who lost their jobs as a result of

Genting Singapore has set up a new subsidiary in South Korea, Claremont Co Ltd, which will focus on leisure and hospitality related businesses. “Claremont’s business objectives will be the provision of support services to leisure and hospitality related businesses.” Genting Singapore is building a $1.8 billion casino resort on Jeju Island.

Paradise expands into U.S. Paradise Group has acquired a hotel in Orlando for $353.5 million. The operator acquired Embassy Suites by Hilton Orlando Downtown through Paradise America LLC, the group’s U.S. unit. The property, which includes 167 rooms is located in downtown Orlando Florida. The purchase marks the group’s first acquisition in the U.S, and its first hotel foray outside of South Korea.

the government-led restructuring of the mining industry,” it explained, adding, “although the Saemangeum Project is drifting now, a casino in the region cannot be justified in that it entails huge detrimental and intangible effects and the original purpose of the project is farmland supply.” “This issue has a complete lack of national consensus and policy demand and current attempts to build a casino in the region are not that different from those of some local governments and interest groups that tried in the past to do so in a populist way,” it added. This is the first time that Kangwon Land had made an official statement on the issue of a casino in a region other than the province. South Korea’s People’s Party announced it was seeking to submit a revision bill that would pave the way for a second casino allowing Korean nationals to gamble.

NORTH ASIA 25

Asia Gaming Briefings | September 2016

INDOCHINA

VIETNAM

Vietnam draft decree may spell trouble for Cambodia casinos Vietnamâ&#x20AC;&#x2122;s proposals to overhaul its casino legislation are now in the hands of the government for final approval in a step that could be a game changer for the industry, and that of neighboring Cambodia. Asia Gaming Briefings | September 2016

n June, Vietnam took the long-awaited step and sent a draft decree that could pave the way for locals to gamble to the National Assembly. There’s been much speculation over the impact a change in the law will have for both Vietnam and neighboring Cambodia’s casino industries and whether Vietnam will finally be able claw back revenues lost over the border. Though details of the draft and timeframes of when it may be enacted are hazy, Vietnam’s deputy director of the Ministry of Finance’s Lottery and Gambling Division was quoted in local media as saying, “we hope that this will be the last draft.” The bill aims to give the country a competitive edge over Cambodia, which draws busloads of Vietnamese everyday to its ramshackle casinos in the border town of Bavet. Local media has reported that Vietnam will rake in $800 million a year in state revenue if it allows locals to play. Industry game changer Michael Kelly, executive chairman of the board of Asian Coast Development Ltd, the master developer of the Ho Tram Strip in Ba Ria-Vung Tau province, says revoking the ban would “change the face” of Vietnamese gaming and put an end to underground operations, and money leaving to regional rivals. “With a heavy reliance upon Vietnamese players, it would be fair to say that casinos on the border and generally around Cambodia would find themselves having to compete with domestic enterprises to attract players,” Kelly said. Similarly, Citi Research said in a note that the draft decree “could create threats” to Cambodia’s leading casino, NagaWorld, in Phnom Penh. Players from Vietnam represent between 10 to 20 percent of Naga’s mass players, according to Citi estimates. “If the Vietnamese government allows locals to play in Vietnam, Naga could see a lot less cross-border Vietnamese players.” Low spending power But given the Vietnamese market’s average wealth is below that of mainland Chinese and Koreans, coupled with the fact that some of its Vietnamese players reside in Phnom Penh, “We think a more likely impact would be a 5-10 percent hit on Naga’s Mass and Slot volumes.” Recent local media reports in Cambodia have cited border casino operators expressing concern that a gaming law in Vietnam will deal

INDOCHINA 27

Sports betting cap criticized as too low

FOREIGNER-ONLY GGR Aristo International Y16 revenue RMB106.7m

+22.5%

Net gaming revenue RMB58.7m

+16.2%

Non-gaming revenue RMB48.1m

+31.4%

VIP table game turnover RMB8.32b

The Finance Ministry of Vietnam is seeking the government’s approval to legalize sports betting, but the draft proposal has been criticized for setting a maximum stake far too low at just $45 a day. Nguyen Hoang Hai, deputy chair of the Vietnam Association of Financial Investors said either people won’t bet, or will get others to place bets for them. “Betting should be either banned or legalized. But it should not be half allowed like this,” he added.

-23%

GGR table games RMB228.4m

-5%

GGR slots RMB9.4m

-16%

TOURISM ARRIVALS Jan/Aug 6,452,373

+25.4%

YOY Aug arrivals 899,738

+34.4%

No gambling at new race track Vietnam’s Dai Nam Joint Stock Company said it plans to invest $100 million into a racecourse complex in the Dai Nam Tourism Park. The racecourse will occupy an area of 60 hectares in the recreation park, about 40km from Ho Chi Minh City, and is expected to open in October this year, said Huynh Uy Dung, chairman and general manager of Dai Nam. However, no gambling will be allowed.

a heavy blow to an already ailing industry. “Yes, the law would likely make it difficult for Cambodian border casinos,” Ros Phirun, deputy director of the financial industry department of Cambodia’s Ministry of Economy and Finance, told local media. However, some industry insiders say the local market that Vietnam’s government will seek to attract to its casinos will be markedly different from those playing at the border, or in NagaWorld. Ben Lee, managing partner of IGamiX management and consulting, says the government will want to attract wealthy players who are less likely to develop social problems than the low-spenders who go to Cambodia. But a prominent industry executive, who declined to be named, said Cambodia’s border business will surely lose traffic given the convenience of gambling at home. No free-for-all However, even if the law is changed and the local ban is lifted, it will not be a free-

for-all scenario among gaming operators and players, which could stymie some of the local market’s potential. Only wealthy patrons, who will possibly be charged an entry fee and have to apply for membership, will be allowed in casinos. Similarly, the government will be selective in who gets local gaming licenses, while burdensome investment requirements will still be imposed with the new draft, said the source. The draft proposes halving the investment threshold for new casinos looking to operate tables from $4 billion to $2 billion. But some say this only applies to locally-backed developers, and foreign investors will still have to invest a minimum of $4 billion. Getting a license and being qualified to offer local gaming remains a risky bet at this stage, the source said. “Nobody is going to qualify for local play unless you’ve got that $2 billion in the ground already or your license has been issued,” said the source. “Qualified is one thing and receiving play is another.”

Asia Gaming Briefings | September 2016

INDOCHINA 28

CAMBODIA

Casinos on a roll Cambodia was one of the best performing jurisdictions in Asia in 2015 and although growth has slowed from the stellar levels seen last year, the country’s casinos are still going strong.

ambodia’s main casino operators continue to post positive results as smaller jurisdictions benefit from the exodus of Chinese high rollers from Macau. The country’s largest operator, Hong Kong-listed Nagacorp, said its net profit increased 24 percent to US$125.2 million for the six months ended June 30, 2016. While Star Vegas, the Poipet casino owned by Australia-listed Donaco International, posted a 22 percent gain in net profit to THB2.1 billion ($60.7 million). NagaCorp, whose Nagaworld casino holds a monopoly in the capital Phnom Penh, said the positive results were attributable to an increase in business volume across all segments of the gaming business. VIP rollings increased 26 percent to $4.5 billion, mass market table buy-ins increased 17 percent to $305.6 million and mass market EGM bills-in increased 18 percent to $741.8 million. Flight links “The implementation of table buy-ins for all Public Floor Tables in 2015 continued to drive incremental growth in business volumes. In addition, the group’s collaboration with Chinese outbound travel agents and an independent airline operator to bring Chinese visitors into Cambodia contributed positively to visitor growth of the property. In January 2016, the airline operator commenced thrice weekly scheduled flights from the Chinese cities of Changsha and Xian to Cambodia,” the company said. Nagacorp also confirmed that the $369 million Naga2 is set to open next year. It is expected to contain as many as 200 gaming

Asia Gaming Briefings | September 2016

tables and up to 1,000 slot machines. The NagaCity Walk, which forms part of the Naga2 development, held its soft opening in August with duty-free goods ranging from tobacco, perfumes, designer watches to cognac. China Duty Free Group (CDFG), which already operates stores in Siem Reap and Sihanoukville, has leased nearly all 4,000 square meters of the mall space from NagaWorld. However, the group may be facing a tax bill. According to recent reports, the government is conducting an audit of NagaWorld to assess its tax liabilities on non-gaming operations. The probe began after finding “discrepancies” last year. Tax audit In 2015, Nagacorp paid $6.9 million in taxes on gross profit of $327.8 million after generating a record $503.7 million in revenue, according to its 2015 financial

year statement. The government sent NagaCorp an additional tax bill of $9.4 million after auditing the company’s non-gaming revenue, which includes earnings from its hotel, restaurant and other non-gaming activities. NagaCorp in its 2015 annual report, however, claimed it was exempted from additional taxes by a 2006 agreement that granted a seven-year grace period to complete construction of its multi-storey hotel, describing the $9.4 million tax bill as a one off payment. Donaco bought the 385-room Star Vegas last year, significantly boosting the scale of the group’s business. The property, which Donaco describes as the most luxurious in Poipet, has 139 gaming tables, predominantly catering to baccarat, with 1,556 gaming machines. Being on the border with Thailand, the company is hoping to attract wealthy Thais who are not permitted to gamble at home.

INDOCHINA 29

GROSS GAMING REVENUE Nagacorp interim VIP rollings $4.5b

Donaco said total revenue at Star Vegas was up 16 percent to THB3.1 billion in the six months to end June, while non-gaming revenue gained 30 percent to THB113.4 million. However, rolling turnover slipped to THB124.7 billion, from THB127.7 billion in the year ago period. The group said the VIP win rate at 2.97 percent was higher than 2.72 percent a year earlier and was above the theoretical average of 2.85 percent. Marketing drive “We are focused on driving growth at Star Vegas, which is a world class gaming facility. Marketing initiatives are in place to increase visitation numbers and generate additional revenue in future periods, including our brand partnership with Manchester United, and VIP promotions,” Donaco Deputy CEO Att Asavanund said in the group’s interim earnings release. “In addition to gaming, Star Vegas has a luxurious set of resort facilities, comprising

of a hotel, restaurants and shops. Accordingly, management initiatives are also being directed at increasing our non-gaming revenue streams. We have been encouraged by a 30 percent increase in non-gaming revenues in FY16.” Donaco also said it has signed a deal to expand the Star Vegas gaming business into the adjoining Star Paradise property, which will start earning fee income from September. The company will get about THB5 million monthly in addition to the reimbursement of capital operating costs. The group’s Thai partner has built a new gaming hall, with no upfront capital required by Donaco. “The additional capacity will allow us to accommodate new Thai junkets and additional players, who cannot be accommodated in our existing property due to long-standing arrangements with existing junkets. The additional earnings for managing Star Paradise will complement our core earnings from Star Vegas,” Asavanund said.

+26%

Mass table buy-ins $305.6m

+17%

Net profit $125.2m

+24%

Star Vegas interim net profit $60.7m

+22%

Total revenue

+16%

Non-gaming revenue

+30%

Nagacorp taps investors for capital Nagacorp is seeking to raise HK$930 million ($119.9 million) net through a share placing to finance the fit out of its TSCLK Complex. The stock was offered at $5.00, which represents an 8.9 percent discount to the closing price of HK$5.49 the day prior to the announcement. The complex, part of the Naga 2 development, has 1,000 hotel rooms and additional gaming space of 300 tables and 300 gaming machines.

Chinese nationals arrested in online gambling bust Police have broken up another online gambling ring, arresting 22 Chinese nationals in August. The ring was being run from a villa in Sen Sok district’s Toek Thla commune. Those arrested were aged between 25 and 40 and faced deportation.

Asia Gaming Briefings | September 2016

FOCUS 30

Going tribal U.S. tribal operators are increasingly tailoring their offerings towards the Asian market to attract both local ethnic communities and the increasingly adventurous Asian millennial, who may be willing to travel beyond Las Vegas and other traditional destinations.

ome of these U.S. operators are also looking back at Asia, counting on their mass-focused tourism offerings to give them an edge in entering the region. The most prominent example is the $5 billion development being spearheaded by the Connecticutbased Mohegan Tribal Gaming Authority, with Korean chemical company KCC Corp also providing funds. When it completes in 2020, Project Inspire will be the largest entertainment and gambling complex in South Korea. The integrated resort, located next to the Seoul-Incheon International Airport, will include a 15,000 seat arena, 1,350 hotel rooms, 200,000 sq ft of convention space, luxury fashion and retail, dining and nightlife options, a Paramount Studios indoor-outdoor amusement park, as well as a foreigners-only casino with 250 table games and up to 1,500 slot machines. Entertainment facilities “Our initiative in Korea is an opportunity to showcase the entertainment-driven brand of Mohegan Sun on the international stage,” says Mohegan Sun

Asia Gaming Briefings | September 2016

CEO Bobby Soper. “We strongly believe that Korea, and more specifically Incheon, will be the tourist hub of Northern Asia and as such we feel this is the perfect location to extend our brand.” “As the closest gaming jurisdiction to Northern China, including the cities of Shanghai and Beijing, there are over 700 million Chinese residents within a two-hour flight of Seoul. In Seoul itself, more than half the country’s population lives in the Capital Area which is only a subway ride from our site, making the opportunity significant,” he said. South Korea is one of the world’s top ten economies with around 50 million inhabitants, but is widely considered to be an underserved leisure destination. The government is keen to promote the integrated resort experience to attract tourism revenue. “One of our core focuses has always been entertainment; for example, the Mohegan Sun Arena in Connecticut is consistently ranked as one of the top arenas in the world. And while Korea is a trend-setter in Asia for music and entertainment, it is underserved on entertainment venues and production of live music, which is something we will be able to contribute in a meaningful way through Inspire,” he adds.

FOCUS 31

Asian visitation Back, in the U.S., the Mohegan Sun and other casinos are seeing an increasing number of Asian visitors to their resorts, opening other potential opportunities for partnerships. Singapore-based Genting recently agreed to help the Mashpee Wampanoag tribe in Massachusetts build and manage its new $500 million First Light Resort and Casino development, due for completion in 2018. It will be the first bricks-and-mortar casino for the Mashpee Wampanoag, so joining forces with Genting offers them the experience required to establish and run a large casino operation, as well as Asian expertise. However, the project is currently caught up in a legal dispute over the land targeted for the development. Michael Zhu, VP of operations planning and analysis at The Innovation Group, says players at the tribal casinos tend to be Asian ethnic groups who are U.S. residents rather than tourists. “They are attracted to the U.S. tribal casinos because they are providing more amenities and offerings with strong ethnic elements such as special food and beverage outlets, hosts who speak the same language, events to celebrate Asian holidays and so on,” he adds. Good feng-shui To accommodate the Asian demographic, Soper says Mohegan Sun has taken a number of steps to ensure the casino floor and entertainment options on offer are in line with player expectations. “With thousands of Asian guests visiting the property each day, we have substantial gaming space with their preferred gaming products, such as Baccarat, Blackjack, Pai Gow, Pai Gow Poker, BJ and Sic Bo, that is appropriately themed and incorporates a feng-shui environment. In addition, we have spectacular authentic culinary and retail offerings to accommodate their tastes as well,” he adds. Las Vegas remains amongst the top destinations for Asian gamblers playing in U.S. casinos and its position is likely to be bolstered by improved air links with Asia. China’s Hainan Airlines will commence routine non-stop service between Las Vegas and Beijing this December, while Korean Air already offers regular routes between Vegas and Seoul. “That said, road trips in the U.S., national parks, and other remote natural assets are becoming increasingly attractive to Asian tourists,” says Zhu. “Particularly amongst

younger generations such as millennials, which bodes well for more self-driving Asian tourists hitting Indian reservations and tribal casino properties,” he adds. Out ahead Mohegan Sun and Genting are very much the leaders of the pack when it comes to Asian/U.S. tribal relations, and while both developments are still a long way from completion, they may eventually be the catalyst for other such partnerships.

“There won’t be too many more in the short term,” says Zhu. “Everybody is kind of waiting to see how the large projects roll out, such as Mohegan Sun in Seoul, and especially how they attract Asian players without an established client base. But the chances are good that U.S. tribal operators will be able to achieve a decent share of the Asian market.” If Genting and Mohegan Sun are able to crack the code and develop resorts that appeal to their respective customers, they will leave their rivals playing catch-up for some time to come.

Asia Gaming Briefings | September 2016

SPECIAL 32

Genting builds on U.S. growth Since entering the US market in 2011 with the launch of Resorts World New York City, Genting Group has made a number of major investments in the country, indicative of an operator intent on becoming a major player in the market.

hese investments have included the $236 million purchase of real-estate in Miami in 2011, a near $250 million investment as part of an agreement to run a proposed $1 billion tribal development in Taunton, Massachusetts, and, most eye-catchingly, plans for the estimated $4 billion Resorts World Las Vegas, which will be the first major new development on the Strip for almost a decade when it opens in 2019. These projects add up to a serious statement of intent in the U.S. from Genting Malaysia Berhad, the subsidiary which runs the group’s U.S. casino business, even if a number of question marks remain over the particulars of its various interests. “Genting’s strategy appears to be focused on U.S. states with large populations, or tourist resorts as in the case of Miami, which is a mixture of both. The U.S. economy is recovering well, and this will support a market that has less legal gambling spend per capita than most countries, even though its GDP per capita is one of the highest,” Warwick Bartlett, CEO of Global Betting & Gaming Consultants, told AGB. The group first entered the U.S. in 2011, with Resorts

Asia Gaming Briefings | September 2016

World New York City, the city’s first legal casino. Michael Levoff, SVP of public affairs, Genting Americas, told AGB the development has been a “resounding success” for both New York State and Genting. Resorts World New York has seen its GGR grow at an above-market annual average of 4 percent since launch, exceeding $800 million in 2014. Levoff said there is scope for further growth, too, with New York having an estimated $4 billion unsatisfied gaming market and more than $1.8 billion being wagered out of state each year. “Over time, we will work to further market to and capture those customers by continuing to invest in the product and customer experience at Resorts World New York City,” he said. Alex Bumazhny, a senior director at Fitch Ratings, told AGB that Resorts World New York City’s revenues have grown strongly as it has penetrated deeply into the local Long Island market. However, he cautions that further penetration upside could be limited and that going forward, the casino’s revenue will be more likely driven by local economic conditions as opposed to attracting new customers. Genting has explored a second license in New York,

SPECIAL 33

missing out on a proposed Orange County development in 2014. However, earlier this year it was granted a license to operate a further 1,000 video lottery devices on site and is planning for a Phase Two expansion. “This expansion is designed to position the facility to grow the existing market and diversify revenue streams with the addition of more non-gaming amenities,” said Levoff. Nearby in Massachusetts, development on the proposed Mashpee Wampanoag tribe’s First Light Resort and Casino in Taunton continues to hit legal issues. The project is somewhat of an anomaly for Genting in the U.S., insomuch that it has partnered with a tribe rather than developed individually, and the experience is unlikely to alter Genting’s historic preference to operate alone. In Florida, Resorts World Miami also stalls amidst a flurry of lawsuits. Levoff at Genting said Miami “continues to be an exciting opportunity for future development,” but the firm will not project an opening date. Bartlett at GBGC said Miami would be the perfect location for a Resorts World Casino, but that questions remain over the license and tax rate. “The Florida State Lottery will be concerned that they may lose some revenue, and that is quite serious because the lottery helps fund state education. But the state needs the tax revenue that a casino would bring, let alone the jobs,” Bartlett said. The biggest prize, however, could yet be Vegas. Genting projects a 2019 opening for Resorts World Las Vegas, and said full construction mobilization is likely to take place in Q1, 2017. Smaller site preparation projects are already underway. “The multi-billion dollar project will be the first ground-up, new integrated resort in Las Vegas in over a decade and will feature innovative concepts that are designed to lead a resurgence in interest in Las Vegas from both domestic and international customers,” Levoff at Genting said. It is understood that the development will be tailored with Genting’s Asian database in mind, and it will likely be boosted by the announcement in August that Hainan Airlines will begin operating a non-stop flight from Beijing to Las Vegas. Bumazhny at Fitch Ratings said he was somewhat skeptical about large scale greenfield projects on the Strip in terms of return on investment prospects, but did note that Genting is “uniquely positioned due to its deep global database that it has built up across Asia and

the New York area.” Bartlett said that promising recent numbers out of Vegas suggested that by the time the $4 billion development opens, Genting could experience a tailwind.

“

ONE ADVANTAGE GENTING HAS IS LONGTERM COMMITMENT TO ITS PROJECTS AND ITS DEEP BALANCE SHEET, WHICH ALLOWS IT TO WEATHER LONG RAMPUP PERIODS AND MAKE EARLY ADJUSTMENTS IF NECESSARY.

”

While Resorts World Las Vegas could be Genting’s only project to complete in the next three years, Bumazhny said it had been aggressive with capex in the U.S., adding that Genting’s history of maintaining long-term

investment horizons with an emphasis on establishing footholds in gateway markets may explain the approach. “One advantage Genting has is long-term commitment to its projects and its deep balance sheet, which allows it to weather long ramp-up periods and make early adjustments if necessary,” he added. Whether this means there will be further U.S. expansion, however, is unclear. Fitch Ratings expects Genting to incur annual capex of MYR7 billion - 8 billion ($1.72 billion - $1.96 billion) from 2016 to 2018, of which 40 percent will likely be incurred by Genting Malaysia Berhad, primarily on Resorts World Genting. That could equate to an annual U.S. capital expenditure in the region of $750 million. This would appear to suggest a strong commitment to the U.S. While Levoff would not be drawn on future U.S. developments, he did describe the country as a “vast market with tremendous revenue potential”, adding that Genting “is well prepared and suited as it continues to pursue U.S. expansion.” Having already left a significant footprint in the U.S. over the past five years, and with a Vegas debut yet to come, Genting looks well placed to continue its rapid growth stateside.

Asia Gaming Briefings | September 2016

AUSTRALASIA

NEW ZEALAND

International business drives record profit SkyCity, New Zealandâ&#x20AC;&#x2122;s only casino operator, says itâ&#x20AC;&#x2122;s optimistic about the growth prospects for its international business after delivering a record year in 2016, helped by investment in VIP facilities.

Asia Gaming Briefings | September 2016

kyCity’s international business saw group wide turnover of NZ$12.4 billion ($8.94 billion) in the fiscal 2016 year ending June 30th, a jump of 32.7 percent over the prior year, as more distant jurisdictions continue to benefit from the exodus of VIP gamblers from Macau. Normalized EBITDA in its international business jumped 26.6 percent to $33.5 million. It said the result reflected stable operating margins and improved efficiencies, which were slightly offset by higher commissions and bad debt provisions. Group-wide SkyCity’s net profit for the year to June 30 was $145.7 million, up 13 percent on the previous year, from revenue up 9 percent to $1.1 billion. SkyCity said its international business has benefited from “increased recognition of our first-class service offering amongst Asian VIP customers, a continued focus on direct relationships and increased play at higher table differentials.” VIP facilities To build on the business, the company has expanded its customer service team and added a new gaming salon at its Adelaide, Australia, casino in December 2015. It also has a new “Grand Horizon” gaming salon, which recently opened in Auckland. The two VIP rooms are expected to help ease capacity constraints during peak periods for Chinese travel, such as Chinese New Year and Golden Week. “There is potential for further significant growth in SkyCity’s international business over the medium-term,” the company said in its annual results. “Accordingly, SkyCity intends to continue to invest prudently in the business to deliver market-leading customer experiences and attractive returns for shareholders.” To further appeal to the Asian visitor base, SkyCity is adding an additional high-end Cantonese restaurant on its award winning Federal Street dining precinct, taking the number of restaurants in the precinct to nine. The new restaurant will open in 2017. The New Zealand operator also said its flagship Auckland property is seeing the benefit from gaming concessions that were activated in November 2015 after the company signed a contract for the construction of a new international convention centre. The concessions included an extension of SKYCITY Auckland’s casino license to 30 June 2048 and a 30 percent increase in gaming capacity at the property.

AUSTRALASIA 35

The casino, which has seen significant investment to upgrade facilities, posted record results in the year, with revenue up 6.9 percent to $5575 million and EBITDA up 10 percent to $251.2 million. Those figures don’t include international business. Auckland facelift The Auckland casino had its 20th birthday in February this year and a $20 million upgrade to its main atrium area is now almost complete. The new features include white marble walls and tiled floors, a feature wall and one of the country’s largest escalators, which leads up to the casino. Part of the atrium has also been filled in to expand the gaming floor.

“

SKYCITY INTENDS TO CONTINUE TO INVEST PRUDENTLY IN THE BUSINESS TO DELIVER MARKETLEADING CUSTOMER EXPERIENCES AND ATTRACTIVE RETURNS FOR SHAREHOLDERS.

”

“The continued momentum at SKYCITY Auckland reflects the significant investment in the property over the past few years, initiatives to drive incremental visitation through customer segmentation and positive external factors which remain supportive of the business,” said interim CEO John Mortensen. Meanwhile, construction of the new convention center and the associated Hobson Street Hotel is also progressing well and is on budget. Excavation commenced in June 2016 and completion of both the NZICC and Hobson Street hotel is expected in the first quarter of 2019. In May, the company elected to retain the five-star hotel as part of its portfolio, rather than sell it to help fund development costs. The company said it’s “comfortable” retaining the asset given the “favourable” outlook for the Auckland hotel industry. Instead, the company decided to raise about $263 million through a share offer.

T OTAL GAMBLING EXPENDITURE All gambling Y14/Y15 NZ$2.09b Casinos $527m

+1.2% +8.5%

Gaming machines (outside casinos) $818m

+1.5%

Lotteries expenditure $420m AB and sports betting expenditure $325m

-9.2%

+4.8%

(Source: NZ government)

Bumper package for outgoing SkyCity CEO SkyCity’s former CEO Nigel Morrison, who resigned unexpectedly in April, received base pay of $1.66 million and short-term incentive pay of $2.06 million in the year to June. In addition to those payments, Morrison was reportedly paid $2.3 million in lieu of notice plus a $978,950 short-term incentive in respect of that notice, as well as dividends of $363,196 from his long-term incentive shares. The short-term incentive pay was based on achievement of financial and nonfinancial key performance indicators. The company is still searching for a full-time CEO.

Gambling syndicate suspected in All Black bugging case New Zealand Rugby CEO Steve Tew said the association is taking the issue of a listening device found in an All Blacks’ Intercontinental hotel room ahead of a key match with Australia very seriously. He said the matter has been handed to Australian police for investigation. Auckland University of Technology associate professor of sports management, Geoff Dickson, was cited by media as saying the device was most likely planted by a large gambling syndicate.

Asia Gaming Briefings | September 2016

AUSTRALASIA 36

CNMI

Year of the Chicken to lay golden egg for Saipan resort? Imperial Pacific International Holdings says it’s already accepting advance bookings from China and Japan for its new luxury resort scheduled to open on Saipan at Chinese New Year 2017. The company is counting on the new property to ease capacity restraints and unlock the island’s growth potential.

he operator of Saipan’s only casino posted record interim profit in the six months to end-June, powered by VIP business, but further growth is likely to be limited until new facilities come online. Total revenue in the six months to June reached HK$3.98 billion ($513 million), with revenue from VIP gaming operations making up the bulk at HK$3.82 billion. Mass gaming operations generated HK$122.2 million, while slots and ETGs came in at HK$26.8 million. Adjusted EBITDA was HK$1.24 billion, compared with a loss on that basis of HK$82.59 million. Leo Chan, Imperial Pacific’s new chief financial officer, previously the CFO of Macau Legend, commented that EBITDA growth at 31.5-32 percent was significantly higher than in other jurisdictions. He and other executives attribute the company’s success to the natural beauty of the island, increased direct flights from Hong Kong and Manila and visa-free access for Chinese travellers.

Imperial Pacific secured the right to run Saipan’s only casino two years ago, beating out rival Marianas Stars Entertainment in a hard-fought auction process. “Imperial Pacific secured a 40-year exclusive Casino Resort Development License and although we must pay $35 million each year to retain the license, this was quite a bargain, since Macau has a 35 percent tax on revenues, but Saipan’s tax rate is only 5 percent, a number which can be reduced even further by rebates and expense deductions,” CEO Mark Brown wrote in a recent release. The company’s multi-billion dollar plans for Saipan include at least a half dozen major hotel/ casinos, private villas and other resort properties, shopping malls (for duty free shoppers), a conference center, world-class golf courses designed by Greg Norman, and the world’s largest water park. The company is also investing millions of dollars to upgrade Saipan’s airport and terminal facilities, build docks and marinas for ultra large yachts and cruise ships, and improve access to the island’s offshore coral reefs.

Flight connections boost Korea arrivals Tourism arrivals jumped 17 percent in July, boosted by a surge in South Korean visitors following the addition of new flights. Total arrivals were up to 47,700, from 40,900 a year earlier. Korean arrivals gained 38 percent, Chinese arrivals were up 9 percent, and Japanese arrivals declined 26 percent.

Asia Gaming Briefings | September 2016

Still, the company acknowledges that until more facilities come on line, further growth is likely to be limited due to capacity constraints. There has been a drop-off in rolling chip volume since a high of $3.19 billion in April, though the monthly average over the past six months remains about $2 billion. The company only has two large yachts and one villa in which to house the more than 100 VIPs who visit every month. However, new five star hotels are opening, such as the Kensington Hotel which opened in July with 313 rooms. When the Imperial Pacific Resort & Hotel opens in April 2017, it will have 350 hotel rooms and 15 villas. The casino will open at Chinese New Year in 2017 with 300 tables, 180 VIP only, and 500 slot machines.

Commenting on the sidelines of the company’s recent results announcement, Brown said that, as a conservative estimate, both rolling chip volume and also profits could double when the casino is fully open. Imperial Pacific has also recently strengthened its executive team, appointing Leo Chan, former CFO for Macau Legend, as chief financial officer; Kwon Yiu Ling, a veteran of Macau gaming, as COO; Vic Choi, former head of compliance for HSBC China as general counsel; and the addition of Judges Eugene Sullivan and Robert James Woolsey as non-executive directors. The C ommonwealth of Northern Mariana Islands’ government is counting on the revenue the integrated resort and other

projects will bring to rebuild the island’s battered economy. The island’s population had declined from nearly 80,000 twenty years ago to approximately 50,000 in 2015, when the economy received a further blow from Typhoon Soudelor, the worst storm to hit in 50 years. The CNMI government is expecting an additional $39 million of gaming tax at the end of this fiscal year, according to local media reports. “The total projected amount of $39 million in gross gaming tax for the remainder of the year speaks volumes about our economic resurgence and the viability of the CNMI’s tourism industry as we expand to new tourism products,” said Governor Ralph DLG Torres.

GROSS GAMING REVENUE IMPERIAL PACIFIC ROLLING CHIP VOLUME Y16 July June

$1.74b $1.65b

May April

$2.52b

$3.18b

March

$1.88b

Feb.

$1.94b

Jan.

$2.26b

TOURISM ARRIVALS July tourism arrivals 47,700

+17%

China arrivals

+9%

Korea arrivals

+38%

Japan arrivals

-26% (Source: MVA)

New campaign targets Japan tourists The Marianas Visitors Authority has launched a major campaign to revive tourism arrivals from Japan, once the islands’ largest source market. The MVA has appointed 227 travel agency staff in Japan. “The historic foundation of the NMI tourism industry is based on Japanese travelers, and a continued good partnership with travel agencies in Japan is necessary for the industry to thrive in Saipan, Tinian, and Rota,” said MVA managing director Chris Concepcion.

Asia Gaming Briefings | September 2016

AUSTRALASIA 38

AUSTRALIA

Anti gambling lobby gathers strength as spending gains Australia’s latest gambling statistics show healthy growth from an industry perspective, but look likely to further fan the flames of the country’s anti-gambling lobby, which is pushing hard for change.

ccording to Gambling Statistics Australia $23 billion (US$17.5 billion) was lost in 2015 on gambling, up 8 percent from the previous year, with more than half of that bet on pokies. A smaller amount of $815 million was lost to sports betting, but that was a spike of 30 percent from the prior year. The data comes against rising anti-gambling sentiment in the country, helped by the ascent to power of anti-gambling crusader Nick Xenophon in recent elections. The industry

Asia Gaming Briefings | September 2016

looks set to face increased pressure for reform, including a clamp down on sports-betting TV adverts and calls for restrictions on “highly addictive” gaming machines. Australians spend more on gambling than any other country, losing about $1,240 a head last year. While for most people having a flutter is nothing more than harmless entertainment, the issue of problem gambling has featured prominently in mainstream press of late. Much of the attention continues to be focused on the slots-style poker machines

that are a familiar fixture in bars and clubs throughout the country. There are around 200,000 poker machines, otherwise known as ‘pokies’, in Australia, with 100,000 clustered in New South Wales (NSW) alone. It is estimated 600,000 Australians play on these machines at least once a week.“We have 0.5 percent of the world’s population, and 20 percent of the world’s poker machines,” says Rohan Wenn, Director of Strategy at the Alliance for Gambling Reform. “You don’t have to be a maths whiz to see that doesn’t add up.”

AUSTRALASIA 39

Tuned for addiction Opponents say these machines, which have been around for decades in Australia, have been fine-tuned over the years to be highly addictive and extract as much money as possible from players. The Australian Productivity Commission has reported that 40 percent of all losses on poker machines come from problem gamblers, or people developing an addiction to the machines. In NSW, where poker machines have been legal for 60 years, players can bet a maximum of $10 per spin every few seconds. Yet unlike horse racing where bettors are forced to wait half an hour between races, the immediacy and speed of play are what make poker machines particularly addictive, say critics. The maximum average loss rate per hour is $720 in Australia compared with $156 in New Zealand and $130 in the UK. Dr Charles Livingstone, a gambling researcher at Monash University, says there are roughly 500,000 people in Australia with a gambling problem at Level 3+ on the Problem Gambling Severity Index (PGSI). “That is a big deal in a population of 23 million.” For Livingstone, the manner in which poker machines are concentrated in disadvantaged and low-income areas is a key factor in accentuating problem gambling. “Accessibility is the key risk factor for gambling harm, and the link between social stress, accessibility, high expenditure and harm is now well established. “Furthermore, Australian-style machines

T OTAL GAMBLING EXPENDITURE All gambling Y14/15 A$22.73b Sports betting $814,6m

+30.1%

Racing $2.81b

+2.7%

Total gaming (incl. pokies and lottery) $19.1b Casinos $5.17b

+7.7%

+17.8% (Source: Queensland Treasury)

are high impact and packed with features to render them highly addictive. And many Australian EGM [electronic gaming machine] venues, especially in New South Wales, have very large numbers of machines – 600 to 800 is common in clubs and are essentially suburban casinos. Again, large venues are linked to high expenditure and great harm.” However, it’s the knock-on effect of poker machine addiction that seems to be fueling growing hostility among many Australians. Wenn says: “According to a recent study funded by the Victorian Government, for every dollar gained in poker machine revenue, around seven dollars is spent by the three tiers of government cleaning up the mess made by this deliberately addictive product – whether it is dealing with poverty, broken homes, suicide, fraud or violent crime.” He adds: “Poll after poll shows more than 80 percent of voters want pokies shut down completely or made significantly less harmful.” Low blow Senator Nick Xenophon and Independent MP Andrew Wilkie have put their weight behind calls for bet limits to be slashed to just $1 per spin. If this ever came into force, it would be a hammer blow for this multi-billion dollar industry, not to mention the potential job losses and shortfall in tax revenues generated by the machines. Unlike online gambling, which is regulated at a federal level, state governments oversee

poker machine gambling and collect around $3.5 billion a year in taxes from poker machines. Trending down In response to the criticism leveled at poker machines and their potential harm, Ross Ferrar, CEO of the Gaming Technologies Association (GTA) – Australia’s poker machine lobby group – says problem gambling prevalence rates in Australia “have been on a downward trend for many years.” He also states that $1 bet limits would be the “most expensive and least effective” way to reduce the incidence of problem gambling. “A $1 maximum bet limit has already been rejected by two parliamentary inquiries, mainly because it would cost about $3.6 billion in equipment changes plus associated compensation to affected customers, employees and state governments.” The GTA states that there are no ‘near miss’ machines in the country and that Australia and New Zealand have the slowest machines in the world that are designed and regulated to limit play speed. Additionally, Ferrar points out that the industry actively promotes responsible gambling. “The gaming industry, government and the community have been working together for years to implement responsible gaming features including clocks and currency meters on every poker machine screen, in-venue and statewide self-exclusion programs, in-venue patron care and chaplaincy programs.”

Star 2016 profit gains, Queen’s Wharf planning moving ahead Star Entertainment Group posted strong earnings growth for full year 2016, with good revenue growth across all lines of business. Normalized net profit after tax rose 23.4 percent to A$241.3 million ($183.9 million), and normalized EBITDA of A$556 million was up 14.1 percent. The operator says detailed planning is progressing at its Queen’s Wharf Brisbane development, with an expected budget of A$3 billion.

Tatts’ profit hit by asset sale, court case Tatts Group said its net profit for the 2016 financial year fell 7.2 percent to A$233.8 million ($179.7 million), down from A$252 million in 2015. The results came under analyst estimates of A$266 million. Tatts said profits fell following the loss on the sale of UK-based Talarius and the repayment of the interest benefit to the State of Victoria after Tatts lost the Pokies compensation case in March.

Asia Gaming Briefings | September 2016

SOUTH ASIA

INDIA

Federation to bat for gambling reform India is often referred to as the sleeping giant of Asiaâ&#x20AC;&#x2122;s gaming industry, due to the potential of its large and rapidly growing middle class. While gambling is still illegal in most states, a new association has been formed to help push for change.

Asia Gaming Briefings | September 2016

he All India Gaming Federation held its official launch in Delhi in August. The AIGF is a registered, non-profit organization based in Mumbai, Maharashtra, and is headed by chief executive officer, Roland Landers, who has more than two decades of experience in managerial positions. The federation is made up of players, policy analysts, industry experts and other stakeholders and has a mission to address all issues linked to the gaming industry. AIGF is partnered by the country’s biggest operator, the Deltin Group. The launch of AIGF was accompanied by a panel discussion moderated by wellknown sports journalist Pradeep Magazine. Kirti Azad, a Member of Parliament from the Bharatiya Janata Party which is in power at the Centre, Ranjit Sinha, former director of the premier Indian investigative agency, the Central Bureau of Investigation, and Rosalind Wade, managing director of Asia Gaming Brief. Magazine pointed out that there was no nation-wide regulatory mechanism when it came to gambling and that this lack of formal recognition is leading to the loss of billions of dollars in revenue. While casino gambling is banned except for in Sikkim, Goa and Daman, the courts do make a distinction between games of skill and those of chance. Rummy and poker are considered skill-based games and are permitted. Multi-billion potential A 2010 report by KPMG, the global audit firm, estimated that the gaming industry in India was worth over $60 billion. More recently, a report by the International Centre for Sports Security calculated the betting market in India to be worth over $130 billion. The Federation of Indian Chambers of Commerce and Industry believes that legalizing betting and gambling would help the government generate tax revenue of $3 billion. Azad, whose party, the BJP, is backed by the Rashtriya Swayamsevak Sangh, an ultraconservative Hindu nationalist organization, reiterated the objections that AIGF is likely to face in its efforts to make gambling legal in India. Citing the oft-repeated tale from the Indian epic Mahabharata, Azad cautioned that, that like one of the main characters from the book who ended up wagering his wife in a game of dice, others might also take to such degrading and extreme acts if gambling were

SOUTH ASIA 41

to be promoted in the country. He specifically mentioned his fear that the poor might lose all they possessed if they became addicted to gambling. Taking the more practical view, Sinha pointed out illegal gambling was already very prevalent in India. He took the view that it would be useful for society if it were to be legalized, with a system put in place to help check misuse, especially by youngsters. He also batted for a regulatory body to be set up to deal with the task. “If the people can vote to elect a Prime Minister and a government, they know what is good and bad for them,” Sinha said. Adding that “moralistic positions” were compounding the problems related to the industry. Those Indians who can afford it were already gambling abroad, he noted.

GROSS GAMING REVENUE TOTAL GAMBLING SPEND ESTIMATE $60b (INCLUDING WAGERING, LEGAL AND ILLEGAL) $10.1b

GGR Y21E

(Source: Global Market Advisors based on estimates for a legal casino industry)

Maharashtra GGR Y21E

$1.1b

Tax revenue Y21E

$273.2m

(Source: Global Market Advisors)

International state-of-play Providing the international perspective, Wade stated that countries like Russia and Australia had regulated betting on sports, while Vietnam, Cambodia and South Korea were considering the same. “This can check fraudulent activities,” she said. However, she admitted that since betting was not a “popular political topic”, it made legislating the issue difficult. Nevertheless, she mentioned that even China, India’s neighbor and economic competitor, was considering opening up the lottery to online and mobile channels on a province by province trial basis. The AIGF has already made some moves concerning the legalization of gambling in India. Last month, Landers formally requested the government of Kerala, a tourist hotspot, to allow poker, bridge and fantasy games to be played legally. This was after Jay Sayta, an office-bearer of AIGF, found out that the state government had exempted rummy from coming under the ambit of gambling, as per a notification issued in 1976, under section 14A of the Kerala Gaming Act. Online gaming is only licensed in Sikkim which permits intranet gaming, while games of skill are legal in all states except Assam and Odisha, with Nagaland having a separate bill to regulate online games of skill pending in assembly. It remains to be seen how successful AIGF will be in its efforts considering the entrenched conservative views to which influential elected representatives continue to subscribe but, going by the positive and enthusiastic sentiment at the launch, it appears to be a challenge that ought to be taken up.

Nagaland issues skills-based LOI to Club Empire The Government of Nagaland has issued the first Letter of Intent to Club Empire, a Kolkata-based gaming startup, to offer games of skill. Founded by Luv Kalra and Swapnil Chaturvedi, Club Empire is a growing brand in the skill gaming industry in India. The company offers three different variants of Rummy - Points/101, Pool/201 and Pool Rummy along with different types of promotions and freerolls. It is also said to be exploring strategic partnerships with national and international businesses to assimilate innovative games to enthuse and engage Indian players.

Delta Q1 revenue spikes 35 percent Delta Corp registered its best-ever quarter in 16Q1, posting revenue of Rs 108.6 crore (US$16.3 million), up 34.6 percent compared to 15Q1. Net profit after tax was Rs 20 crore, compared to a loss of Rs 99.7 lakh in 15Q1. The company said the positive results were attributed to better targeted marketing, resulting in stable income flow; increasing customer numbers; and more stable patronage from customers in Goa, which has “become a year-round destination rather than seasonal.”

Asia Gaming Briefings | September 2016

SUPPLIER SPECIAL REPORT 42

G2E 2016

Politics, tribal ties and education to take center stage The Global Gaming Expo 2016, presented by the American Gaming Association (AGA), is an international trade show and conference attracting over 26,000 gaming industry professionals from around the world to Las Vegas each year.

he show, which debut in 2001, has undergone an overhaul in 2016. “The biggest difference between this year and previous years is the fact that we have done a top-to-bottom review of all things G2E,” said Geoff Freeman, president and CEO of the American Gaming Association. “What works, what doesn’t, what needs to be modified. We want to make this event as timely, as compelling and as attractive as it needs to be,” Freeman said. “I’m proud of what our team has done to build this thing up from scratch, particularly around the educational conference.” For the first time in G2E’s 16-year history, prominent speakers will take the stage on all four days of the show from September 26-29, with dozens of panel discussions and seminars scheduled on topics such as e-sports, online gaming in the United States and how to attract millennial customers to casinos. With the American presidential election only weeks away, it should come as no surprise that politics will be high on people’s minds, says Freeman, who adds that conference topics will include where the candidates stand on gaming issues and what scenarios could play out depending on who is elected. The trade show itself will showcase an abundance of new gaming technology and innovations. Freeman said the show this year will also include a number of

Asia Gaming Briefings | August 2016

integrated resorts concepts, which debuted at last year’s show in a side room off the trade show floor. “We’re very excited about the growth of the integrated resort experience,” Freeman said. “It’s a miniature version of what this industry has become. Any casino you walk into today is providing a multitude of entertainment options to their customers and it’s important that our event do the same,” he said. The association is also making greater efforts to align itself with the National Indian Gaming Association. “It’s a greater alignment between AGA and NIGA and a greater alignment within AGA among commercial operators and tribal operators,” Freeman said. “I’m not naive and I realize there’s still a lot of great competition taking place between tribes and commercial gaming entities,” he said. “There’s consternation out there over several issues. But at the end of the day, when we look at a lot of the big issues, there’s more where we align than what divides us. That’s really going to be a theme for this G2E, that the rising tide will raise all ships and that’s what Ernie (NIGA Chairman Ernest Stevens Jr.) and I will be speaking to. Our relationship with the tribal community has never been stronger and I think that bodes well for the future of the entire gaming industry.” G2E educational programs are open from 9am to 5pm on Monday, September 26 to Wednesday, September 28, and 9am to 3pm on Thursday, September 29, while the exhibition begins on Tuesday.

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SUPPLIER SPECIAL REPORT 44 ABBIATI

Pharaon to satisfy VIP standards

ollowing noteworthy successes of the last 30 years, at G2E this year, Abbiati will showcase its most luxurious tables line, called “Pharaon”, aimed to satisfy the top VIP’s standards. Abbiati will present these prestigious tables, with related chairs, both of which will be characterized by precious finishings. As usual, Abbiati will display its line of innovative security casino currency products, such as chips, plaques and jetons, which incorporate a number of new security technologies. The new range includes new patterns, designs and materials for the plaques, as well as the new line of patented “Tie” chips featuring multiple injections, see-thru inserts and a combination of intricate and innovative rim and edge inserts. All products are available with security features such as 13.56 MHz PJM RFID, 8-color UV pigments, 3-in-1 UV security feature, Laser Tracer technology, Optical Variable Ink and high security holograms. Abbiati will also present its new line of chips, “il Gettone,” a chip that marries the portability, durability and versatility of the best American-style chips, with the technological sophistication found in higher face value plaques. Show visitors will see Abbiati’s high precision GLI-25 certified American Roulette Laser Wheel, which incorporates upgraded patented invisible laser technology (Class 1A). Abbiati wheel can be connected and run to online gaming terminals and winning number displays. The company will also display a selection of high-quality multimedia displays. Lucky Ball side bet is another new product at the Abbiati stand, which is one of the alternatives offered to the American Roulette game. As the exclusive worldwide distributor for Modiano, Abbiati will present a complete range of 100 percent plastic and paper plastic coated playing cards. Lots of gaming operators have chosen and appreciated this high-quality product offered at a very competitive price. Abbiati can be found at stand 3423.

Asia Gaming Briefings | September 2016

AINSWORTH

New cabinet and premium titles

o show its solid commitment to the international markets, Ainsworth will showcase the all-new A600 cabinet and a range of premium titles at the upcoming G2E. The all-new cabinet will be among the highlights of the company’s G2E display and represents an evolution from A560. The all-new cabinet uses dual 24-inch monitors, compared to the 22-inch displays of A560. The monitors are framed by a matte black finish that makes the graphics pop with a cinematic feel—the graphics themselves improved because of an upgraded CPU. An LCD button panel is dynamic—changeable for different games and denominations—yet maintains the feel of classic buttons, and includes a “bash button” for quick play. The all-new A600 elevates the engagement of game-content to another level. The all-new A600 will premiere with a spectacular range of titles for our established brands – Play 40/50/100Lines, Quad Shot, Double Shot Gold, High Denom and several more titles due for release FY2016-2017. You can find Ainsworth at stand 2059 at the show.

BMM TESTLABS

Technical and regulatory expertise

aming testing lab and technical consultancy BMM Testlabs is celebrating another significant year in the run up - the Australasian Gaming Expo. Kirk White, executive vice president & general manager, commented, “BMM continues to increase its quality testing advantage in the Australian gaming market through the retention of its long-standing technical and regulatory expertise and the extension of its world-class training programs for its test engineers.” “BMMs worldwide commitment to the ISTQB program (International Software Testing Qualifications Board) has already enabled many of our test engineers in Australia, and around the world, to train and improve their skill sets. This is providing BMM with exceptional productivity improvements, despite the complexity of gaming products coming into the Australian market. BMM’s continuous drive for improvement is recognized and appreciated by our customers globally, as we share their objective of delivering high quality and compliant products into the Australian and international gaming markets.”

White concluded, “BMM’s progressive development of testing methodologies, technical expertise and customer service over the last 34 years continues to exceed the increasing requirements of customers and regulators. BMM maintains the highest level of independent quality testing in Australia and around the world, and we look forward to sharing our expertise and industry knowledge with both new and existing customers at this year’s Australasian Gaming Expo.” BMM Testlabs is exhibiting at stand 605.

SUPPLIER SPECIAL REPORT 45 APEX GAMING

EVO Games

PEX gaming sends out a warm welcome to come and see its award-winning gaming solutions at G2E. APEX gaming will be exhibiting from stand 2050. The iDROPe is the cash-handling solution for live gaming tables that is the talk of the industry. Having just won two major awards at the Casino Marketing & Technology Conference that took place between July 12 and 14 at Paris, Las Vegas – in the categories Top 20 Most Innovative Gaming Technology Products and Attendees’ Choice – the innovation, cleverness and sheer benefits of

the iDROPe have been rightly recognized for operators, croupiers and players alike. The iDROPe is therefore the win-win-win cash management solution on live gaming tables. The VIP Premium from the Pinnacle slot machine family will receive its US debut at the G2E. This complete VIP Premium slot machine has exactly the right-sized VIP screen at 43”. This great curved monitor has been especially chosen so that the player has the best possible focus on the games. The integrated VIP chair offers naturally first-

rate comfort and includes gaming buttons and sound speakers. The terminal screen measures 24” and offers swish, touchscreen technology. Now the EVO games of APEX gaming can be enjoyed better than ever. The APEX PLAYER STATION – the APS – is the multiplayer solution from APEX gaming. This automated roulette station is not only stylish – it offers a host of features and benefits. For example, the APS can be linked with up to three other roulette wheels – both live and automated – so players can bet from up to four roulette wheels. Players can bet on the EVO slots and the APS can be linked with the Pinnacle slot machines as well. The APS offers further table games. Choose between the complete APS with one or two roulette wheels in different sizes, or take the terminal-based solution and place the APS to fit into your gaming location. Mr. Kubilay Özer, global sales director at APEX gaming, extends a warm welcome to G2E visitors, stating, “Our company motto is to take gaming to the next level. The two awards for our iDROPe highlight this dedication.” Apex can be found at stand 2050.

ARISTOCRAT

Key to the future

ristocrat will show global casino customers that the key to winning as an operator, and to winning in the future, is a connected global gaming perspective that strengthens operatorpatron interaction. Operators know, no two players are alike, which is why Aristocrat offers its customers the most diverse product portfolio in gaming, one that has been created to appeal to every type of casino player. Entertainment-seekers, jackpot-hunters, core gamers, and players who love top entertainment brands will find exactly what they are looking for in Aristocrat games. Of course, games are nothing without performance, and Aristocrat’s substantial R&D process helps create games that arrive on the scene as the future of the floor, standing on a solid footing of experience to create winning games in Class II and Class III. Its diverse portfolio of performing games is brought to life by unsurpassed innovation, and Aristocrat is creating the trends and changing the face of the floor. This innovation is on sharp

display in a collection of new cabinets, including a new stepper product that is the fruit of the Class III and Class II technology integration of Aristocrat and VGT. Operators whose players love top entertainment brands will thrill to the lineup of new licensed titles Aristocrat will showcase, including Tim McGraw, Sharknado and My Cousin Vinny. Additionally, the new Dragon Link linked game builds on the global success of Lightning Link and takes the excitement to the next level. Aristocrat’s line of sale games includes the blending of two incredible categories, Wonder 4 Wonder Wheel; the new multi-play product Quick Fire Flaming Jackpots; and the new Spin It Grand, a four-level progressive family. VGT will show the new Ovation platform that brings player-favorite Aristocrat content to the Class II space. VGT will also show high denomination versions of its popular Mr. Moneybags, Hot Red Ruby, Lucky Ducky and Polar High Roller games, along with new Red Spin Lock Zone and Newton the Nudger products.

Today’s reality for operators is the competitor is not just the casino down the street, it’s all forms of entertainment, and with that increased entertainment competition, having more tools to differentiate the entire enterprise is critical. Aristocrat’s Oasis 360 Brand Connectivity Suite helps operators increase customer interaction with a range of integrated solutions that arm the enterprise with tools, empowering them to use marketing budgets most effectively – giving them layers of marketing programs so they have options as varied as their patrons. Aristocrat can be located at stand 1141.

Asia Gaming Briefings | September 2016

SUPPLIER SPECIAL REPORT 46 ARUZE

Changing the game

ruze Gaming will be hosting the newly introduced Cube-X Vertical with other multiple products. The newest titles coming out exclusively on the Cube-X Vertical, Tower Stack Lion and Tower Stack Dragon allow the player to play up to three frames, adding up to 150 lines. Just to keep the excitement going, Aruze decided to add a 23-inch customized topper with LED effects to compliment the cabinet lighting. In addition, the Tower Stack titles will be available on the recently launched Cube-X Vertical 80 with a 4-level progressive jackpot. Cube-X Vertical 80 encompasses two 42-inch vertical monitors to bring the most

realistic visual experience to players. Cube-X Vertical and Cube-X Vertical 80 feature the fastest operating system and are equipped with a high-end graphic board to offer eye-capturing animations. Cube-X Ultimate, the extravagant 8-foot stepper cabinet cannot be missed at the Expo. With the 999.9 Gold Wheel series being such a hit since its release last September, Aruze expanded its library to eight themes. Of the eight themes available, four are set up as 3-reel and the remaining four as 5-reel. The iconic mechanical wheel, which is very popular throughout the gaming world, boosts this series to the apex of the industry. This beautiful creation of

ASIA GAMING

Unique advantage

sia Gaming is a leading designer and manufacturer of live dealer casino products in the Asia-Pacific region. The company has a unique advantage in the market due to its ability to serve players in this region, and this has equipped them to expand their business to the global gaming market. All of its games are designed by teams of talented individuals with the aim of appealing to the local cultures and player experiences in the target market. The company tirelessly conducts market research in order to keep up with trends and offer the most innovative products to this ever-changing market. From ‘Pre-dealing Six Cards’ to ‘Interactive Bid Baccarat’, players enjoy the thrills of a land-based casino experience from the comfort of their own home, whilst maximising interaction with dealers. Asia Gaming offers an extensive portfolio of games, including table games and a market-leading Live Dealer platform to operators in order to drive revenue across the likes of baccarat, dragon tiger, roulette and sic bo, targeting the overseas Chinese population residing in Europe.

Asia Gaming Briefings | September 2016

a slot machine has truly engaged the players in a way that has rarely been done before. Aruze continues to support its core Cube-X Innovator and Video products, as well as Electronic Table Game development. Aaron Huang, vice president corporate strategy of Aruze Gaming America, says, ‘‘At this year’s G2E, we are debuting new content on all platforms as well as a new cabinet, Cube-X Vertical. With so much gaming variety to be showcased, Aruze Gaming is sure to continue entertaining every kind of player.” Aruze can be found on stand 2659 at the show.

BETCONSTRUCT

Exciting alternatives

etConstruct joins G2E Vegas 2016 with a whole set of additions to its offerings to cement its reputation as an award-winning provider and supplier of gaming and betting solutions. The company will showcase its Fantasy Sports and Social Gaming suites and Skill Games product, which are all an exciting alternative to traditional casino and Sportsbook. This year BetConstruct brings the latest August release of its Fantasy Sports product, enhanced with such features as live updating of points, auto calculation of contests, user-created contests, licensed headshots for players, compare and live transfer modes and more. “Amidst a lot of confusion about the status of DFS in the US, the category continued to grow. BetConstruct has put a lot into its Fantasy Sport offering, and we are extremely pleased with the result – a unique product focused on entertaining the players and increasing operators’ profitability,” says Vahe Baloulian, BetConstruct CEO. BetConstruct’s Social Gaming suite leads the market by providing access to the widest range of products – Social Sportsbook, Poker, Casino and Skill Games. “Social gaming has delivered for companies who did it right. With our Social Platform and exceptional content, it is very hard to do it wrong,” says Vahe Baloulian. “Social has been described as many things. Above all, BetConstruct’s Social Gaming presents an amazing opportunity to unearth new players and new revenues.” For partners, it creates more gaming activity and more revenue. So does BetConstruct’s Skill Games offering. It now includes a growing number of games - Chinese Poker, Belote and Deberc as well as seven Backgammon variants. The team also look forward to the decision on the overall winners of the Global Gaming Awards. The company was shortlisted for the GGA Digital Industry Supplier award earlier this year. BetConstruct can be found at stand 4823.

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SUPPLIER SPECIAL REPORT 48 BMM

Quality, Performance & Partnership

MM’s experts will be taking part in a variety of events and conference sessions at this year’s G2E. Professional staff from BMM’s North American, Australian and European testlabs will also be on hand to discuss compliance and testing services for both land-based and online clients during the three-day exhibition. Martin Storm, BMM’s president & CEO commented, “As BMM celebrates its 35th year, we are very proud to maintain the highest level of independent quality testing in the world. BMM has grown significantly over the last 10 years and we have gained substantial market coverage, now partnering with all of the industry’s leading manufacturers. BMM’s progressive development of testing methodologies, technical expertise

and our unparalleled customer service continue to ensure that BMM is the testlab of choice.” Kirk White, executive vice president & general manager, BMM International added, “BMM is providing innovative testing solutions to clients around the world, enabling them to reach their goals faster and within budget. With the most up-to-date market intelligence and the world’s most qualified compliance experts, our dedicated team of professionals are available around the clock to meet our client’s needs.” Travis Foley, EVP Operations, BMM Americas commented, “BMM recently qualified as a Global Partner with ISTQB, the industry leading software tester training and certification program. This ensures that

COMTRADE

CPI

Market developments

EASITRAX Web

omtrade Gaming, provider of gaming platforms and professional services, will showcase its core technology at G2E. “Comtrade continuously looks to enhance the gaming landscape by combining both industry advancements and traditional business practices,” said Igor Rus, Comtrade’s head of business development. “By attending G2E, we empower our customers with the best gaming technology. Our objective is to not only develop with the industry, but shape it with new strategies to drive a more dynamic gaming experience.” The team will show iCore, an online gaming platform for enterprise-level operators that manages the entire business across multiple channels and products on a single platform. With innovative player management features, fast integration and complete automatization, the seamless wallet drives superior player engagement. sCore: a central monitoring system designed specifically for gaming regulator demands. The system connects all gaming terminals in a jurisdiction to one central monitoring system that enables for effective gaming systems management, central monitoring, server based gaming, G2S and S2S system integration and player protection measures. gCore: A remote game server (RGS) solution for vendors and operators that enables implementation and distribution of online, mobile and server-based gaming content. Able to integrate with any third-party gaming platform, the server provides detailed control over the player experience, enables faster change management and quick content integration.

Asia Gaming Briefings | September 2016

we not only have the most qualified staff, but that we provide an environment where engineers can improve their skills and enjoy their work. This coupled with our ISO/IEC 17020, 17025, and 17065 accreditations, ensures that we carry out all of our work to the highest standard and that BMM conforms to stringent procedural criteria.” Foley added, “BMM looks forward to sharing our expertise and industry knowledge at G2E 2016. We encourage all regulators, manufacturers and operators to visit the BMM booth to discuss how BMM can support their objectives.” BMM Testlabs can be found at stand 2416 at the show.

rane Payment Innovations (CPI) will be exhibiting at G2E with the most comprehensive portfolio of automated payment systems in the gaming industry. Among the products on display will be the EASITRAX Web and its new Maintenance Alerts feature. EASITRAX Web is a recent software extension of EASITRAX Soft Count, an RFID-based cash management system that is now installed in more than 200,000 games worldwide. Like EASITRAX Soft Count, EASITRAX Web works by gathering data from multiple SC note acceptors and funnelling that information into a secure remote database that can be accessed to track revenues and analyze slot performance. And because cash boxes are no longer tied to specific machines, operators can save 20-30 seconds per cashbox on every drop – routinely resulting in a return on investment in less than one year. What differentiates EASITRAX Web from the standard Soft Count package, though, is that it provides even more flexibility and control to operators – further strengthening the efficiencies that lead to a quick payback. The data it collects can still be used to streamline the

drop process, facilitate asset evaluations and conduct preventative maintenance programs. EASITRAX Web simply makes it easier to import that data, and convert it into customizable reports, from anywhere in the world with secure intranet access. It also has the functionality to grant security levels. Now, CPI has released a new Maintenance Alerts feature for EASITRAX Web that allows operators to set performance thresholds and receive automated notifications based upon these critical metrics. This will help operators save time and interpret data so problems can be identified and prevented before they even occur. To learn more, visit CPI’s stand at G2E, number 1850.

SUPPLIER SPECIAL REPORT 49 DLV

DRGT

Diamond Games Ultra 4

Your system needs

or this edition of the show, DLV has prepared a new software product – Diamond Games Ultra 4, a sequel to 25-game Diamond Games Ultra line that followed its 15-game Diamond Games Premium line. This fourth sequel has its particular features. First of all, its colorfulness. The designers have diverged from their usual shades of blue, adding more colors to make the multigame brighter and catchier. The other and most important feature is the new interface concept. Game selector is grouped by lines and to view all the games in a row it suffices to slide them the way we do it on gadgets. In such a way, the machine becomes more comfortable to use for all those who use modern technologies. Together with the new additions, there will also be company’s other products, including Diamond Games Ultra 3 for standalone machines and the three-level Lab Creatures jackpot, which will be exhibited in Excel, HD and DWS cabinets with 27”, 24” and 22” screens respectively. DLV can be found at stand 3219.

RGT will be participating individually for the first time at G2E Las Vegas. The DRGT team from around the world will be more than happy to discuss your gaming system requirements to find the right solution to fit your operational needs. Jurgen De Munck, CEO and co-founder of DRGT, comments, “We live and breath systems. We provide the full A-Z service. Our gaming systems offer a host of benefits alongside extreme security. We understand that each operator has different system needs and so we focus on making them modular and flexible to cater to the individual requirements each of our customers. We listen to our customers and develop our systems to cater to their future requirements. There are so many reasons why DRGT should be your next system. We invite you to come to our booth, to find out just why.” DRGT is a completely independent company that primarily focuses on gaming systems technology. Although a young company, DRGT has assembled a team of seasoned gaming professionals from around the world with vast combined gaming experience, not only with systems background but also with operations experience, who understand your systems needs. The DRGT team can be found at stand 4405.

EVERI

Trusted cash access supplier

veri will be showcasing a variety of payments solutions at G2E. Everi understands gaming operators have a strong desire to allow their gaming customers access to their funds more freely, and with lower overheads to the operator. Everi’s CashClub Wallet allows gaming customers to store and manage their payment methods, hold their funds, easily, move funds in and out of the casino, and set velocity settings to better manage their spend and support responsible gaming. The architecture of the CashClub Wallet is focused on driving land-based play with the ability to manage existing casino system wager accounts, while being able to easily integrate and add additional casino wager accounts and currencies in the future.

As the first casino industry supplier to achieve full EMV compliance end-to-end for all its financial offerings, Everi is prepared to help customers seamlessly transition to EMV technology-ready products and systems. G2E attendees can receive demonstrations of Everi’s full-service kiosks, as well as its new VersatileXchange (VXC) ticket dispensing kiosk that offers casinos a smaller footprint device to support all funds dispensing kiosk functionality (Check Cashing, POS Debit, and Cash Advance transactions) and other supported transactions such as charitable giving through Everi Cares Giving Module, issuing and loading Everi Stored Value Cards, and access to Everi’s CashClub Wallet. Casino operators looking to improve the jackpot payout process will be interested in

Everi’s new Jackpot Xpress mobile application. Jackpot Xpress allows slot attendants to efficiently process and pay jackpots at the player’s gaming machine using a mobile device and integrates fully with Everi Compliance AML software. Everi can be located at stand 1116 at the show.

Asia Gaming Briefings | September 2016

SUPPLIER SPECIAL REPORT 50 GIESECKE DEVRIENT

Casino cash processing

ne of the challenges large resort casinos face is the multitude of currencies being used at each of their operations. In order to correctly process these various currencies, manual handling has been inevitable, including moving boxes around, coordination, and wait times. These manual steps do not only pose security hazards, they also cost money. Giesecke & Devrient (G&D) has brought an all-in-one high-speed counting and sorting solution to the market that consolidates the various processes into one. With this end-to-end solution, banknotes are counted, identified and authenticated, then sorted by denomination, series, orientation, and fitness for circulation – all in a single run. Gaming tickets are processed in the same run. As an important extra, used player cards and table chips can be shredded if required. The system produces customized, intelligent reports which management and accounting can access at any given time, since cash processing is integrated with the casino’s back-office systems. To check on the progress of cash operations, managers and supervisors just need to log in to the server from wherever they are. The integrated solution is rounded off by customized process design and count room layout in order to guarantee smooth and efficient workflows. Processes become up to three times faster with this solution, while, at the same time, being much more accurate and secure. The number of individual operations decreases, freeing up resources that can be dedicated to other tasks. With the up-to-the-minute view of the progress of each operation, managers and supervisors are always on top of developments, enabling them to make quick decisions often required in day-to-day business. Giesecke & Devrient will be exhibiting at stand 4216. Asia Gaming Briefings | September 2016

GLI

World of possibilities

aming Laboratories International (GLI) works with regulators, suppliers, and operators in more than 475 jurisdictions, bringing a truly global perspective to each client and project. GLI is globally connected through its relationships and technologies, and because GLI is international, its clients experience unexpected values, in addition to testing, all around the world. Beyond its international technological capabilities, GLI is completely integrated, a must in today’s gaming landscape. And for those regulators, suppliers and operators who are looking online, GLI is ahead of the game, with the international and integrated technological capabilities and expertise for the modern world. With training, professional services, testing, tools and a full range of integrated services, GLI soars above the competition. GLI speaks more than 55 languages, and with 20 labs on six continents, the sun never sets on GLI, meaning clients have access to a lab that is always open, 24 hours a day, just

like the gaming industry. As regulators look to bring new technology to their jurisdiction or opening it to iGaming, they can stand on the solid foundation of the global regulatory experience and expertise of GLI. With its value-added tools, GLI also helps supplier clients to grow beyond the confines of a single jurisdiction and to instantly create a global company. With its testing and certification services, combined with its GLI Standards Series, GLI helps regulators ensure integrity in gaming. GLI helps its clients keep pace with the speed of innovation, and the company’s stability helps to give its clients a sense of security. GLI is more than a company – it is a collection of more than 900 dedicated professionals who go beyond the task to deliver outstanding service. That unsurpassed bandwidth means GLI has the ability, capacity, and expertise to handle any and every type of project in any gaming jurisdiction worldwide. GLI can found at stand 4430 at the show.

GOLDEN RACE

In contention for innovation award

olden Race works hard to constantly innovate and bring the best products and solutions for all customers. And now, its dedication to always strive for better, more realistic, more engaging, and most importantly more innovative products are being openly celebrated and recognized. The company has also announced its new Real Fighting game has been shortlisted for the Digital Gaming Innovation of the Year award at the 2016 Global Gaming Awards. The game launch at the ICE exhibition in London this February was a huge success, with providers and players eager to get their hands on this incredible and exciting new product. Featuring HD video of real MMA world champions competing in real, intense combat in fantastic digital worlds, the game is completely different from anything else on the market today – and being shortlisted for this award is truly a distinguished recognition of that. Customers are able to customize and brand this product like never before – we can produce environments based on our clients’ needs, with

branding, logos, colours, or any other detail in the environment tailored to create a new standard for virtual gaming. The Global Gaming Awards sees 60 of the most influential figures in the gambling industry cast their votes for the winners in each of the 12 categories. The judges’ votes will be collected and independently verified by KPMG, with the winners being announced at a gala awards ceremony at the Venetian in Las Vegas on September 26, at the start of G2E 2016. Golden Race says they will continue pushing the boundaries, using the latest technologies, innovating, and creating new engaging experiences for you and your players to enjoy – products that are not only worthy of awards, but more importantly, products that are worthy of their customers. Golden Race can be found at stand 5229.

SUPPLIER SPECIAL REPORT 51 IGT

Zuma 3D

GT will showcase a vast portfolio of more than 300 games, cabinets, systems and solutions. The company will demonstrate the latest gaming innovations that are designed to deliver compelling casino entertainment across multiple platforms and segments. IGT will unveil new cabinets and themes in its expanded Premium product lineup. The CrystalCurve ULTRA cabinet is equipped with a 32-inch base screen combined with a 50-inch top screen. Players can choose to become part of the game by leveraging the cabinet’s built-in camera on The Ellen DeGeneres Show Sharing the Love Video Slots. The CrystalDual+ Stepper

cabinet will debut at the show and features new games including Top Dollar Premium, Megabucks Double Gold Slots, Gentlemen Prefer Blondes and How to Marry a Millionaire. The company will advance its TRUE 3D game library with new titles such as ZUMA 3D, which features seven must-hit progressives; the Treasures of Olympus 3D game which is based on the popular title ICARUS THE JOURNEY, and Jurassic World 3D, offering captivating cinematic content. These games are set on IGT’s AXXIS 3D cabinet and provide players an immersive glasses-free 3D gaming experience. Delivering standout Core games and cabinets,

IGT will introduce the Prize Disc and Rift Zone game series on the CrystalDual cabinet. Other must-see game themes on the hardware solution include Valley of Gold, Ocean Magic, and the spirited Keystone Kops game family. The awardwinning S3000 cabinet will debut engaging titles such as Double Diamond Silver Anniversary, It’s Raining Cash, and Super Silver 7s. The company’s innovative systems solutions will include the Cardless Connect mobile technology and advanced casino management applications such as Mobile Notifier, Mobile Dashboard and Floor Manager Mobile. The company can be found at stand 3659.

are better, smarter, faster and more integrated, and go even further to help operators make connections with their customers. JCM has always worked closely with key stakeholders across the gaming industry, and the company continuously solicits feedback from operators to discover any pain points that arise as the industry evolves. Those close working relationships have led to the development and evolution of products and technologies, such as intelligent cash boxes, promotional couponing, and complete note scanning, front and back. Now as the content in EGMs and the EGMs themselves are evolving, so is the need to consider ways to generate additional revenue from existing devices and systems. JCM believes the slot machine can be utilized in new ways to unlock greater value for both the

operator and the player. This new “what if…” has sparked a renewed spirit of cooperation between JCM, OEM, CMS provider, operators, and jurisdictional regulators. In that cooperative effort, JCM is exploring many new features that take full advantage of the existing CMS’ and EGM’s combined computing power to deliver more options to the player and greater value to the operator. The goal today for JCM, as it has been since asking that first “what if…” more than 60 years ago is to deliver an ever-greater player experience, while maintaining the highest level of security and accountability for operators and regulators. That spirit of innovation allows JCM to continue to take operators and their players beyond mere transactions, to building strong connections. The company can be found at stand 4039.

we believe the potential for KGM is limitless, and see a robust future for our company, our partners and the industry.” KGM has emerged as one of the top industry innovators of pioneering gaming technology, from online content to the latest in electronic table games. To commemorate 10 years of industry knowledge, KGM will unveil a new company logo and host an anniversary party for its casino clients and partners at this year’s G2E event. Peters continued, “As KGM paves the

way to the future, we will continue to leverage marketdefining technology to provide solutions to client needs. We strive to surpass their expectations at every turn in assisting in the ultimate reward, our clients’ growth!” KGM will be located at stand 2448 during the show.

JCM

A simple question

ometimes revolutionary ideas begin with a simple question: “What if…?” That was how JCM Global began more than 60 years ago, and that spirit of innovation has been driving the company ever since. It was a simple question of “what if we put a bill validator on (and later inside) a slot machine,” that led to a revolution in how players and operators viewed a slot machine, and operator revenue and security increased because of it. JCM is still asking “what if….,” and the company continues to invest in the development of innovative applications for the casino industry to deliver “outside-the-box” solutions for today’s integrated industry and multi-dimensional players. Working in close collaboration with OEMs and system providers, JCM is leading the industry with forward-looking solutions that KGM

Celebrating 10 years

GM, a manufacturer and supplier of groundbreaking products for the casino gaming industry, will celebrate its 10th anniversary at the Global Gaming Expo (G2E). “This 10-year milestone is a testament to KGM’s commitment to continued innovation,” said Jason Peters, president of KGM. “We would like to thank all our industry partners from our inception, such as Aristocrat, Ainsworth and Alfastreet to name a few, for the successes that KGM has achieved in expanding our market throughout North America. Looking ahead,

Asia Gaming Briefings | September 2016

SUPPLIER SPECIAL REPORT 52 KONAMI

Concerto video slot lineup

onami Gaming has announced a record release of next generation slot products set for debut at G2E, including a complete Concerto lineup. Concerto SeleXion, Concerto Slant, Concerto Stack, and Concerto Crescent will be on display for the first time, in addition to new premium releases, skill-based products, multi-station slots, iGaming solutions, and systems tools and updates. “Konami is bringing unprecedented new product segments, game cabinets, and showcase technology solutions to G2E 2016, and everything that guests will see is focused on supporting casinos with diverse product types to reach new audiences,” said Matt Reback, vice president, marketing at Konami. Konami’s award-winning Concerto has shown strong global momentum since its G2E, 2015 debut, with powerful new KP3+ platform titles as well as a deep library of high-performing, backwards-compatible KP3 platform games. The company is now expanding the machine’s proven features to a complete lineup of Concerto video slot products including multi-game, slant, curved single screen, and flat single screen—all displayed with signature elements of the popular upright cabinet. “We know that no two players are the same, so the range and variety of our G2E lineup is focused on attracting different player types with unique products,” said Reback. In terms of new systems technology, Konami’s SYNKROS casino management system continues to pioneer advanced tools and features to give operators an edge in their market. This year during G2E, Konami’s comprehensive systems demo environment will include SYNKROS Dashboards, the industry’s latest dashboard analytics interface. Additionally, SYNKROS Offers Management is further expanding the power of Konami’s marketing suite by making multiple loyalty offers available to players at a wide range of touchpoints. “Our customers worldwide know every square foot of their property and they come to us to engineer the games and systems technology that give the greatest value across their business. This year we’re bringing that mission to the show floor in more ways than ever,” said Reback. The new line for Konami will be att stand 1154.

Asia Gaming Briefings | September 2016

MEDIATECH

Mediatech Solutions to showcase omnichannel expertise

nnovative gaming platform provider Mediatech Solutions will display its omni-channel platform, IRIS, at G2E. Delegates at G2E in Las Vegas between 27-29 September will be able to experience a preview of Mediatech’s market-leading platform IRIS at the SuzoHapp stand fully integrated as the real money platform powering their hardware. The display comes on the back of a number of major deals and accolades for Mediatech in recent months, which included the firm being nominated for omni-channel supplier of the year at the EGR B2B Awards. In September, Mediatech agreed a deal with Global Gaming Network to explore opportunities in the fast-growing Cambodian market, having previously signed a deal to supply Dutch land-based chain Fair Play with a new online casino using IRIS. Meanwhile the firm continues to add new content to IRIS, which now boasts in excess of 1,500 different slot games, sportsbooks, table games, live casino, virtual sports, bingo, lottery and payment solutions. Mediatech Solutions’ head of AsiaPacific Tom Moester said: “It is set to be a busy few months for Mediatech as we roll out new features and continue to integrate a growing number of clients. As ever, we are always delighted to sit down with operators or providers around the world to discuss how Mediatech can accelerate their gaming operations.” In February, Spanish land-based casino supplier R. Franco Group took a controlling stake in Mediatech in a deal which created one of Europe’s largest omni-channel suppliers. Mediatech continues to build upon the opportunities presented by the partnership with one of the world’s most trusted land-based providers. The firm is currently involved in projects in regulated markets in Europe, Asia, Latin America and Africa.

NOVOMATIC

Enhanced gaming entertainment

s Novomatic continues to gain traction in North America, the company retakes its multilevel booth at G2E, 2016 with a host of new cabinets and game mixes ready to excite local players. The full V.I.P. suite will be previewed in the U.S. for the first time, with a showcase that includes the Novostar V.I.P. II and V.I.P. III, the Novostar V.I.P. Royal and V.I.P. Lounge. In addition, the Executive SL will be returning to the show and the brand new Gaminator Scorpion will make its U.S. debut. Following last year’s introduction of the Novostar V.I.P. II in the US, the new range of V.I.P. machines deliver multiple options to create unparalleled Very Important Player experiences on the casino floor. At G2E, Novomatic Americas will shine a spotlight on the V.I.P. Lounge immersive entertainment experience. The Novostar V.I.P. III, which boasts two giant 50” screens, and the Novostar V.I.P. Royal, with a giant curved 65” screen, will be rolled out to selected U.S. jurisdictions soon after the show. The Executive SL multiplayer terminal is built on the huge success of the Novostar SL1 and heightens the electronic table gaming experience. This leading cabinet will be displayed with virtual Flying versions of Blackjack, Roulette, Baccarat, Sic Bo and Poker 3. The dealer operated Novo TouchBet Live-Roulette, together with automated Novo Multi-Roulette and Novo Flying Roulette, as well as Baccarat and Blackjack games, will be connected on the terminals to demonstrate simultaneous betting functionality live at the show. Cutting-edge games, developed specifically for the North American market include the premiering Tales of Darkness series with four hypnotic themes – Full Moon, Luna Eclipse, Break of Dawn and Midnight Heat. New titles being released for the U.S. will also feature at G2E and include Black Jaguar, Dancing Dragon, Orca, Asian Fortunes, Pure Jewels Extreme and JackPOP! Since opening a North American headquarters, Novomatic Americas is now in the position of being able to showcase internationally proven products combined with an impressive USbased design portfolio. Novomatic can be found at stand 1259.

My passion is watching people play. Where they’re looking, how they interact — it’s a very personal thing. The player really goes through a journey. So when fans like Brian become passionate about the world of the game, I know we’ve succeeded. -Yanis Tsombanidis At Aristocrat, we design the games that connect with passionate fans. Visit us at G2E booth 1141 and see how together we can unleash powerful performance for your floor.

Yanis Tsombanidis

Aristocrat game designer

Brian Templeton Aristocrat fan

#aristocratslots

aristocratgaming.com

Asia Gaming Briefings | September 2016

SUPPLIER SPECIAL REPORT 54 ORTIZ

Market debut bonanza

resident and CEO Maurilio Silva, sums up Ortiz’s theme for G2E with three words: “New, new, new.” Ortiz has spent millions in research and development this year, and the show floor will reflect that. The company will have products for land-based, interactive and even hybrids. With the release of so many new products, Ortiz Gaming will highlight its offerings throughout all three days of the event. Additionally, Silva will be speaking during an iGaming session, which is scheduled for the Monday before the show floor opens. Ortiz Gaming has also been shortlisted for the Global Gaming Awards in the category of Land-Based Supplier of the Year. It has been an honor to be nominated and solidifies Ortiz’s position as one of the top 10 suppliers at G2E this year. Ortiz can be found at stand 4444 at the show.

SBTECH

Interactive sports betting solutions

stablished in 2007, SBTech is a leading provider of interactive sports betting solutions and services to the online gaming industry in both regulated and traditional markets. The company’s complete offering includes innovative and user-friendly turnkey and fully managed sports betting solutions, specifically designed for the unique needs of top gaming operators, existing bookmakers and landbased networks. SBTech is a four-time EGR Award Winner, on account of the company’s commercial success, continual product innovation and excellence in service. Most recently, SBTech was awarded the EGR 2016 B2B award for “Best In-Play Betting Software,” in recognition of its achievements in delivering a winning live betting solution, enabling operators to expand their market reach and boost their business results. SBTech’s industry-leading online sportsbook, cutting-edge in-play betting platform, premium casino and live casino products, responsive design and fully equipped iGaming platform provide players with an unrivalled betting experience. SBTech offers over 65,000 monthly sports events, 25,000+ in-play events per month and more than 2,000 proprietary bet markets covering more than 60 sports. Taking a user-centric approach, SBTech has developed a unique data-driven personalization engine which is used to generate tailored betting suggestions, promotions and communications, based on the behaviour of both individual players and similar bettor segments. SBTech’s vast experience in complying with different regulatory environments, combined with its unrivalled industry knowledge and ability to implement a truly localized solution to meet market-specific challenges and needs, has positioned SBTech as the trusted partner of operators in the UK, Ireland, Italy, Belgium, Spain, Portugal, Romania, Czech Republic, Greece, Denmark, Australia, Mexico, Argentina, the Bahamas, Malta, and many other regulated markets.

Asia Gaming Briefings | September 2016

QUIXANT

Winning line-up

his year, Quixant has the largest ever stand to showcase its latest products, technology and innovations. A key theme at the show is Quixant’s Gaming Ecosystem, which is one of the major benefits for customers who adopt the range of products for their machines. “Quixant’s Gaming Ecosystem combines advanced gaming hardware and software which Quixant has developed and integrated across the whole range of platforms, at all price points. This enables portability of games to any platform in the range without changing the platform software. This is a major benefit of Quixant’s Gaming Ecosystem,” said Amit Sharma, general manager and vice president of sales at Quixant USA. Quixant’s Gaming Ecosystem integrates a secure BIOS, PCI Express gaming I/O, high performance NVRAM and communication devices with peripheral device drivers and gaming protocol libraries such as SAS 6.02. We even can provide example code and OS images for Windows and Linux. This “total solution” approach enables our customers to focus on their core expertise – creating market-leading games. Quixant takes care of the hardware and low-level software that are essential ingredients but do not add value or differentiate in terms of the success of the game. Quixant will be running live technology demos to showcase its Gaming Ecosystem on the stand. Also on the booth, Quixant will debut new higher performance discrete graphics card options for the QMax platform which will support up to 8GB of GDDR5 video memory. These new graphics cards will provide a significant increase in the graphics processing horsepower available to drive the latest generation of 4K games. Quixant’s full range of gaming platform products will be on display, including the latest 4K-enabled ultra high-end QMax-1 and mid-range QXi-6000, both of which are based on the AMD Embedded R-Series “Merlin Falcon” SoC. Also on show will be several popular models in the range including the QX-50, QXi-4000, QXi-300 and cost effective QXi-307. Quixant will also demonstrate its complementary range of gaming monitors, which are specifically tuned for the gaming industry. A variety of high-quality panels with wide viewing angles will be showcased including PCAP touchscreen monitors, LCD button decks and even dual-sided 55” monitors. The capabilities of Quixant’s 4K gaming platforms will be shown on Quixant’s 4K monitors and there will be a demonstration of the benefits of utilizing AMD’s Freesync technology on the combination of a Quixant gaming platform and a Quixant monitor. All products are designed for compliance with the regulatory requirements of all major gaming jurisdictions such as Nevada, GLI-11 etc. Quixant can be found at stand 2040.

SUPPLIER SPECIAL REPORT 55 SEGA SAMMY

Sensation and excitement

SPORTRADAR

Betradar is all in at G2E

ega Sammy Creation was established in June 2013 as a gaming machine manufacturer aiming to provide fun and excitement to casino fans around the world. By exhibiting at G2E Asia in Macau for three years, customers have recognized the company as one of the world’s leading suppliers of cutting-edge casino gaming machines. Now Sega Sammy Creations will concentrate on selling its original electronic table games in Macau, with the first product being “SICBO BONUS JACKPOT” and the second one “Exciting Baccarat,” as well as developing new machines, including stand-alones. “Exciting Baccarat,” which attracted a lot of interest from visitors to G2E Asia, has four interesting features. Along with the standard Baccarat game, the player can play the EXCITING REWARD feature, a side game that allows the player to obtain even higher payouts through the Cai Shen Slot. When a bet is placed on the EXCITING REWARD feature, the player can win the PROGRESSIVE JACKPOT, or one of the 5 bonus multipliers [x1,x1.5,x2,x5,x10], but a tie game counts as a loss. The player’s strategy and insight will be tested by this new and exciting game. Stunning visual effects take place on the screen depending on what’s happening at the table. Players can enjoy building their own strategy based on historical data, the player can also pick their preferred dealer from five beautiful women. It has eye-catching “squeeze” effects that adapt to how the user thinks. It is fully automated, so anyone can play the game by simply using the touch screen on the cabinet. Although its market is only in Macau now, Sega Sammy Creations intends to expand into Las Vegas and provide stateof-the-art gaming machines in the near future.

SUZOHAPP

New component and solutions

S B

etradar, a supplier of sports and bettingrelated data, will present its highly diversified product portfolio, including the latest innovations in betting, content and gaming solutions, Live Channels, eSports and Managed Trading Services. G2E draws industry leaders from all of North and South America. Being a 360-degree, one-stop shop provider for betting and gaming operators worldwide, Betradar approaches all betting operators, no matter if they are big or small, and is able to offer a broad set of additional values to their businesses. The portfolio provides solutions to externalize labor-intensive tasks, increase the in-play betting offering, enrich sportsbooks with bet-stimulating content solutions or eSports services, enhance the engagement through live streaming and speed-up bet cycles with virtual sports betting solutions. Eduard Blonk, managing director sales at Betradar, is looking forward to G2E: “It is the show for the Americas and we are excited to show the industry the full range of value generating products and services we have ready for them. With more and more Nevada casinos using Betradar’s traditional live odds service, we expect high interest in our products. We provide live betting on all kinds of props for the major American sports. Betradar’s virtual games will soon be making an appearance in Nevada casinos, and we expect high interest there.” “One new and highly engaging service that is sparking interest all over the world is our eSports service. As the official and exclusive provider of the electronic sports league (ESL) data, Betradar’s groundbreaking eSports platform includes pre-match and live odds, live scores, statistics and a live video stream that is faster than any other source in the world,” Blonk added. The company can be found at stand 4135.

UZOHAPP will be introducing a series of brand new components and solutions to strengthen its product range at G2E this year. Special focus will be on displaying the individual components, including the new SH1950 Video Topper, the RM5 HD electronic coin validator, the Cube and Evolution hoppers, the Vision PRO monitors and the Bill-to-Bill note recycler. SUZOHAPP will be introducing a new innovative product at the G2E – namely the Picture Key Technology (PKT) from Fairlight. The new button control panel can be driven by a range of different video sources, such as HDMI or DVI, each button can be individually programmed. This panel can be found in the interactive gaming area of the SUZOHAPP booth, together with the new skill-based controller and a wide range of innovative components. This year’s G2E Las Vegas will see the introduction of new great solutions - SUZOHAPP DualPro and SoloPro customizable metal cabinets with powerful 15W speakers and two 22’’ LED LCD displays. Game developers simply plug in their game board to have a complete slot machine solution. A wide array of SUZOHAPP cash management solutions will also be on display. SUZOHAPP will be showing its world-class solutions for the gaming industry, including RCS600, able to transform cash handling into smart cash management. Casino operators can look forward to seeing the DisplayPro – the new 42” HD screen that is ideal for visual campaigns. It can be put to varied use – for example, for information, promotions or third-party advertising. The content can be simply transferred using the USB media playback or the content management system that allows varying messages at differing times to be portrayed. Visitorswillhavetheopportunityto learn more about the Shift Interactive PRO Table. This makes full use of its interactive 42” touchscreen and is available in three heights – Bar, Dining and Lounge. Its 10-point multi-touch interface makes it possible to interact with one, two, three, or four independent screens at once. SUZOHAPP will be exhibiting at stand 4233.

Asia Gaming Briefings | September 2016

SUPPLIER SPECIAL REPORT 56 ZITRO

TCS

A New Start

Gaming Floor Live

CSJohnHuxley will be unveiling some exciting new innovations at G2E Las Vegas. The focus continues on the Gaming Floor Live platform and how it’s transforming the casino floor, giving operators real-time visibility and total control. TCSJohnHuxley is particularly excited to announce the worldwide launch of QOREX. Powered by the GFL Gaming module, the QOREX range of products provides unlimited electronic gaming solutions for the casino. QOREX combines

the experience of live table gaming while delivering the benefits of electronic gaming, with more customizable game content to drive revenue and increased levels of security. The new line up of QOREX products will take center stage at G2E alongside Gaming Floor Live’s Optimisation, Bonusing and Media modules and related products. The ability to integrate TCSJohnHuxley core products, from Roulette Wheels to Blaze Gaming Tables, e-FX Displays and even the Chipper Champ 2, provide the basis to future proof customers’ operations, so that every aspect of their gaming floor can now be analyzed, optimized and enhanced with GFL. Tristan Sjöberg, TCSJohnHuxley executive chairman comments, “The introduction of our Gaming Floor Live platform and modules has paved the way for the development of some exciting new products that are set to transform the casino floor. Not only are we able to provide casinos with a powerful tool to manage operations using real-time data and statistics, we are also able to deliver exciting, technically advanced products that thrill and engage players.” TCSJohnHuxley can be found at stand 4439.

YWS

IR evolution

WS Design & Architecture, global leader in leisure design, will join a panel discussion as well as hold a convention floor lecture at G2E. The design firm will also debut its latest white paper, which offers the keys to customer loyalty and brand engagement. Principal and CEO, Tom Wucherer will speak on an interactive panel at the show entitled, Weaving It All Together: Integrated Resort (IR) in Action on Wednesday, September 28 from 3.00 4:30 pm. During the panel discussion, Wucherer will introduce the concept of psychographically driven microenvironments as the next stage in the evolution of the IR.

Asia Gaming Briefings | September 2016

AGA’s Innovation Lab located on the show floor will have a series of interviews, panels and presentations on innovations in the integrated resort industry. Mike Stewart, global director of design, will give a lecture entitled, The Evolving Integrated Resort Experience - From IR to Entertainment District. Founded in 2001, YWS Design & Architecture is an international design firm specializing in leisure environments in hospitality, gaming, retail, dining and entertainment. YWS delivers world-class luxury properties and turn-key leisure design solutions. The company can be found at stand 3136.

n May this year Zitro announced its New Start, a transformation process that sets out to convert Zitro into a global leader in the gaming Industry, going beyond the video bingo market segment. Zitro’s New Start is based on four strategic foundations: new product lines, new business models, greater visibility of Zitro content in online casinos and a wider range of services and entertainment via the social networks. At the next G2E, Zitro will announce the major advances made in its transformation process. On its Blackwave platform, Zitro will present up to 30 video bingo games recently launched at the Zitro Experience 2016 event, held in Mexico City last June. Zitro’s video bingo games are available for markets in Europe, Latin America and especially for the Philippines, where bingo is very popular. In addition, Zitro is going to present its Big Time product at G2E, which has already been installed with great success in more than 40 Mexican casinos. Zitro’s Big Time ends the concept of the static bingo game machine to introduce a concept that can be adapted every day at all hours to the business needs of the gaming room. Finally, in regards to new products, Zitro will present its Advanced Bingo System (ABS) at Las Vegas - a revolutionary new electronic management and operation system for on-site bingo. “At Zitro we combine the best ideas with cutting edge technology, to offer players unbeatable experiences using the newest, most profitable and successful products in the gaming industry,” said CEO Sebastián Salat. ChairmanJohnnyOrtizcomments: “The outstanding advances made since we announced our New Start confirm our firm commitment to carry on being the world leader in video bingo, to compete and grow in other segments of the gaming market, with innovation, differentiation and excellence as our watchwords.” Zitro can be found at stand 2440.

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