AGBriefings November 2019 by Asia Gaming Brief

Jurisdiction Updates November 2019 Edition

In focus pg.18

Philippines retains regional edge Hong Kong International business races ahead pg.12

CNMI

Tinian set for 2020 casino debut pg.46

India

Need for a regulatory wake up call pg.38

Macau

GGR lags tourism growth pg.8

MGS 2019 SUPPLIER SPECIALS pg.50

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STAND NO.

Asia Gaming Briefings | November 2019

MESSAGE 3

Regional edge

s Macau is preparing to enter a second cycle in the

throughout the Asian jurisdictions: In Macau, visitor gains

development of the gaming industry -- seeking

are not fuelling GGR. Infrastructure improvements are

to maintain its market leadership while at the

expected to boost tourist arrivals to record levels in 2019,

same time striving to diversify -- we take an

although there has not been a corresponding boost to

indepth look at the competition.

gross gambling revenue, with the weak Chinese economy

The Philippines was a travel destination in its own right

affecting sentiment among high-income players. Across the

before it became one of the strongest gaming hubs in Asia.

Delta, the Hong Kong Jockey Club has seen strong growth

It has outperformed over the past five years and is expected

in its international business, with the addition of a pool

to continue to do so as the country’s operators expand.

on racing at Royal Ascot this year significantly boosting

Revenue from the country’s gaming industry rose almost

turnover. In the Northern Marianas, Tinian, crossed from

23 percent year-on-year last year to $4.2 billion, putting

the maps after Saipan’s licensing saga to Imperial Pacific, is

it almost on a par with Singapore, the region’s second-

set for another casino debut in 2020 as improved transport

biggest market after Macau. That figure looks on track to be

links open up the potential for tourism on the island. India,

exceeded this year.

often referred to as Asia’s sleeping giant may still take some

The Philippines enjoys strong tourism arrivals and has a

time to wake up, with little regulatory movement.

growing domestic economy to underpin revenue streams,

We also dedicate this edition of the Supplier Special Report to

all good news to the IRs in Manila.

the MGS Summit. The show will be held on 12-14 November.

Solaire, the market leader is expected to retain its crown

The event is promising to facilitate business opportunities

this year, despite increasing competition; Resorts World

between exhibitors and buyers, whilst introducing new

Manila is revamping and expanding its facilities to attract

technologies to the industry. In these pages you’ll browse

a wider customer base while combating the after effects

through what you can expect to find on the show floor.

of the 2017 fire incident; Melco’s City of Dreams Manila

Asia Gaming Brief is a Media Partner of the event and you

has long been a strong contributor to the Macau-based

can find us at #BB29. If you’d like to discuss our media

operator’s earnings, though recently Chairman and CEO

platforms, Asia conferences and other industry events

Lawrence Ho has been less optimistic about the outlook

please write to MGS@agbrief.com to book meeting.

there - as competition rises and with no expansion plans

See you at the show!

Rosalind Wade

Luis Pereira

in the immediate horizon to drive growth; Okada Manila, the largest IR in the Philippines and the last to open its

On behalf of Asia Gaming Brief

doors, is seeing a strong ramp up with an urgent need to

Rosalind Wade & Luis Pereira

add more hotel rooms to keep up with increasing demand.

Publishers

The regional casinos may not get the same headline publicity as the bigger resorts in Manila, but smaller, profitable

Connect with us:

properties, are on the rise. A number are slated to open in coming years, which might shift the growth perspective,

@agbrief

particularly in destinations such as Clark and Cebu.

Asia Gaming Brief

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

www.agbrief.com

NOVEMBER 2019 EDITION Series II • Issue XIX

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Asia Gaming Briefings | November 2019

CONTENTS 4

GREATER CHINA

NORTH ASIA

MACAU

HONG KoNG

SOUTH EAST ASIA

SOUTH ASIA

JApan

south korea

AUSTRALASIA

SINGAPORE

AUSTRALIA

THAILAND

CNMI

special focus

INDIA

Asia Gaming Briefings | November 2019

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Asia Gaming Briefings | November 2019

GREATER CHINA

MACAU

Visitor gains not fuelling GGR Infrastructure improvements are expected to boost Macau tourist arrivals to record levels in 2019, although there has not been a corresponding boost to gross gambling revenue, with the weak Chinese economy affecting sentiment among high-income players.

Asia Gaming Briefings | November 2019

isitors are expected to hit 40 million this year, driven mostly by traffic over the bridge linking Macau, Hong Kong and Zhuhai, which opened in October last year. And these levels are expected to rise as Beijing rolls out its Greater Bay Area initiative, which will improve connectivity with some of the key Chinese feeder provinces into Macau. Macau Government Tourism Office Director Maria Helena de Senna Fernandes points out 2019 numbers mark a 438 percent increase since the founding of the Macau Special Administrative Region in 1999. However, analysts say the bulk of visitors across the bridge are grind mass players and therefore are not doing much to move the needle when it comes to gross gambling revenue for the territory’s six operators In the first nine months of this year, visitor arrivals have risen 17 percent, with two thirds of the total coming from Mainland China. However, the hotel occupancy rate is up just 0.3 percent in the same period, with occupancy in the four and five-star categories down on the year. The number of lower spending daytrippers jumped 30 percent. Analysts agree Macau that future growth in Macau will come from the higher-margin mass segment, yet the key will be bringing in the premium mass visitors who stay longer and play more, rather than encouraging floods of short-term visitors, which put pressure on the local infrastructure. VIP and premium mass customers made up of only one percent of visitors in 2018, yet drove around 70 percent of total GGR, according to analysts from Bernstein.

GREATER CHINA 9

“It is clear that premium customers remain critical for long-term Macau growth, as wealthier customers spend more and come more frequently – and the population of this demographic is increasing,” Bernstein Research says.

“

GGR has been negative for five months out of nine in the year to September, with that latter month showing a surprise gain of 0.6 percent.

”

Of this market segment, Guangdong is expected to remain as the key feeder province, however, Shandong, Jiangsu, Zhejiang, Shanghai, Hunan, and Henan are expected to deliver significant growth and will be critically important for future growth of the premium customer base, said the brokerage. According to the China Outbound Tourism Research Institute, the lower middle class in China makes up 30 percent of the population, or 406 million people, while the upper middle class accounts for 9.7 percent. The high income

earners amount to 11.2 million people, it says. So far this year, Macau’s gross gambling revenue has been on a downward trend as the U.S./China trade war takes its toll on the Mainland economy. GGR has been negative for five months out of nine in the year to September, with that latter month showing a surprise gain of 0.6 percent. Year-to-date GGR has fallen 1.7 percent to MOP224 billion. The highest impact has been amongst the VIPs, with GGR down 22.5 percent in Q3. Revenue from the mass market gained almost 18 percent in the quarter. Total mass market baccarat generated MOP30.57 billion ($3.78 billion), almost drawing level with VIP revenue, which came to MOP31 billion. The International Monetary Fund in its latest assessment of the Macau economy has forecast that gross domestic product will shrink for 2019 and the next two years. The economy will contract by 1.3 percent this year and 1.1 percent in 2020 before growing 0.3 percent in 2024, it says. In the first half of this year, Macau’s economy dipped by 2.5 percent, according to government figures. The remaining Macau indicators mentioned in the International Monetary Fund report remain broadly unchanged in 2019 and 2020 compared to 2018, such as the inflation rate, the current account balance and the unemployment rate. On the upside tax revenue generated from gambling activities has helped to shore up the city’s coffers and was 0.33 percent higher through September at $10.6 billion.

Exclusions set for record in 2019 Macau received a total of 148 exclusion requests in the third quarter, putting exclusions on track for a record high, according to figures from the regulator. In Q3, the Gaming Inspection and Coordination Bureau (DICJ) received 129 self-exclusion requests and 19 third-party exclusions. For the year to date, the DICJ has received 439 requests, compared with a total of 490 for the whole of 2018. The quarterly statistics put Macau on track for a record high in terms of exclusions since the system was put in place in 2012. Under the rules, the maximum exclusion period is for two years and the applicant can ask to be excluded for some, or all of the 41 properties in Macau. For a third-party exclusion, the request needs to come from a spouse, or family member such as a son or daughter.

Asia Gaming Briefings | November 2019

GREATER CHINA 10

Sjm holdings SJM Holdings (880:HK) has 22 casinos in Macau, though the former monopoly has been losing market share to new IRs on Cotai. The company says the construction of its $4.6 billion Lisboa Palace resort is nearing completion and government pre-opening inspections are scheduled to begin shortly. For Q3, net gaming revenue fell 3.2 percent to HK$8.05 billion, while profit attributable to owners of the company rose 4.5 percent to HK$738 million. Gross gaming revenue at the Casino Grand Lisboa fell 33 percent to HK$2.79 billion. During Q3. the group operated an average of 286 VIP gaming tables down from 291, 1,503 mass market gaming tables, up from 1,408 and 2,563 slot machines.

MGM china MGM China (2282:HK) is operating two casinos, with its MGM Cotai IR opening in February last year. The HK$27 billion IR features 1,400 hotel rooms and suites, meeting space, high end spa, retail offerings and food and beverage outlets as well as the first international Mansion at MGM for the ultimate luxury experience.

Asia Gaming Briefings | November 2019

The company is another of Macau’s operators expected to have improved its market share in the most recent quarter as its MGM Cotai continues to ramp up. The company recently announced the sale of two major assets, including iconic property the Bellagio, to raise net proceeds of $4.3 billion. Analysts noted that the sale will help the company in its efforts to deleverage, but would also provide a war chest for an investment in Japan if it wins a license there. Unlike its competitors, MGM has stuck by its planned partner Osaka and is seen as being in pole position there.

Wynn macau Wynn Macau (1128:HK) operates two resorts, with its $4 billion Wynn Palace opening in 2016. The company’s original property is on the Macau Peninsula. The Wynn Palace has 1,700 hotel rooms and 90 percent of the resort will be non-gaming. The company is expected to be one of the weaker operators in terms of performance this year due to its focus on the premium and VIP sector, which has seen declining revenues this year. As a result, some analysts have been trimming their forecasts for the group.

“For Wynn Macau we reduce EBITDA by 6 percent for 2019E to reflect weaker high-end and reduce our 2020E-2023E EBITDA by ~2 percent,” Bernstein analysts wrote in a recent note. Although they added that longer term, the outlook for Wynn is positive. Wynn is also competing for a Japan license and was another of the operators to recently switch its allegiance from Osaka to Yokohama.

Sands China Sands China (1928:HK) has five properties in Macau. The company has 12,000 hotel rooms and suites, making up for 48 percent of hotel rooms run by casino operators in Macau. The company’s strong room count puts it in the large room count position to gain market share in the high-margin mass market segment, especially when its rebranded Londoner property comes on line, with attractions expected to be rolled out progressively from 2020 to 2021. It will join sister-themed properties The Parisian and The Venetian, which was the first IR to open on Macau’s Cotai Strip. For Q3, Sands China saw net revenue fall 2.0 percent, compared to the third quarter of 2018, to US$2.11 billion, while net income remained flat at $454 million.

GREATER CHINA 11

GROSS GAMING REVENUE 2018 GGR MOP302.8b

+18%

Q3 GGR MOP71b

-4%

2019e GGR

-3%

2020e

-3% (Source: Morgan Stanley)

2019e GGR

-3%

2020e

+8%

2021e

+11% (Source: Bernstein)

In Macau, adjusted property EBITDA was $755 million, consistent with the prior year, led by a 9 percent gain in the mass market segment, while VIP rolling volume was down across all of its properties. Analysts say the results were in line with expectations. Bernstein said Sands China maintained market share at 23.2 percent, with its mass market share at 28.7 percent, up from Q2, but down from 30.1 percent last year.

Melco resorts & entertainment Melco Resorts & Entertainment (6883.HK) has three casinos and the Mocha Clubs. The company operates the City of Dreams and Studio City in Macau and the City of Dreams Manila. The company opened its new Morpheus property, designed by late architect Dame Zaha Hadid in June last year and is continuing to see the benefits from the ramp up. Analysts expect the company to be one of the main market share gainers in Macau in Q3. Melco has been pushing its international expansion plans and Spectrum Gaming Group named the operator as a leader in the “internationalisation” of gaming brands in its forecasts for the year ahead.

The company is aggressively pitching for a license in Japan and recently switched from Osaka to focus its attention on the Kanto region. It is also developing a property on Cyprus in Europe.

Galaxy Entertainment Group Galaxy Entertainment Group (27.HK) has three main properties and runs three City Club casinos inside hotels. The company’s Galaxy Macau Phase 2 and Broadway at Galaxy Macau opened on May 27, 2015, almost doubling the capacity of the resort. Along with Sands China, the company has the largest share of the Macau gaming market, though analysts expect that to have slipped in recent months due to the softening of the VIP market. Suncity Group reopened its refurbished VIP club at Galaxy Macau in September, with 20 tables. The work is part of Galaxy Entertainment Group’s HK$1.5 billion revamp of Galaxy Macau, Broadway Macau, and StarWorld Hotel. Like its peers, Galaxy is contending for a license in Japan. It has teamed with Monaco’s Societe des Bains de Mer, with whom it has also been hosting a series of cultural events in Macau.

Plan for Macau “Nasdaq” submitted to Beijing A senior Chinese official says a proposal for a yuan-denominated “Nasdaq” in Macau has been submitted to Beijing, local media reports. He Xiaojun, director of Guangdong’s Local Financial Supervision and Administration Bureau, said he hopes the central government would give the plan its blessing as a 20th anniversary gift, the South China Morning Post reported. Such a hub would help develop the financial sector in Macau as part of a drive to diversify from gaming. It would also help to raise capital for hightech companies operating in Guangdong, it said. He said the province has 45,000 hi-tech firms but only 600 Guangdong companies – not all of which are hi-tech – are listed, underscoring that the existing exchanges in Shanghai and Shenzhen could not meet the sector’s needs.

Asia Gaming Briefings | November 2019

GREATER CHINA 12

HONg kong

Ascot provides royal revenue boost The Hong Kong Jockey Club has seen strong growth in its international business, with the addition of a pool on racing at Royal Ascot this year significantly boosting turnover.

he club said commingling turnover organisation in Hong Kong permitted to increased by 13.5 percent in the offer gambling services. 2018/2019 season to HK$18.8 In September, the HKJC found itself in billion ($2.39 billion). a spat with Betfair Australia which began Launched just five years ago, commingling offering bets on racing in the territory now represents 15 percent of the club’s total without the club’s permission. racing turnover and as of next season, it will The club told the Australian company to have over 40 commingling partners in 14 stop in a cease and desist order, saying it was countries and jurisdictions. given no prior knowledge of Betfair’s plans. This year, the HKJC joined with Ascot, “The Club takes this matter seriously as Totepool and other regular partners to offer the it represents a serious integrity issue and an Ascot World Pool on the five days of Royal Ascot. equally serious infringement of its intellectual The event boosted turnover by HK$238 million. property rights,” HKJC secretary Philana Poon Net income from its commingled operations said in an open letter to Betfair CEO Tim was up 11.4 percent to Moore-Barton. HK$780 million. “As a matter of principle “All of this underlines and consistency, the Club Creating the how Hong Kong has become considers that Betfair the global centre for comought not be permitted opportunity for mingling,” CEO Winfried to exploit overseas racing people to back Engelbrecht-Bresges wrote where there has been no in the club’s annual report. approval from the relevant horses to lose is “Our world-class racing, overseas racing authority. against what we competitive field sizes, Betfair said it would high integrity, extensive offer its full range of all believe in. racing information, stateproducts, including allowing of-the-art technology, and punters to bet on a losing wagering pools with high horse and it’s this point levels of liquidity, have all made Hong Kong in particular has ruffled HKJC feathers. a leader in international wagering.” “Creating the opportunity for people The HKJC said it was seeing increasing to back horses to lose is against what we all globalisation in sports, with a growing number believe in,” Poon said in the letter. of fans also watching simulcast racing on After the club’s intervention, Betfair events overseas. Turnover from simulcast races backed off, but said it would still seek to find jumped by 14.6 percent this season to HK$4.5 an accord with the HKJC. billion. At present it offers 23 simulcast days. The storied club also achieved another Total wagering turnover for the financial milestone this year, holding its first race year, which runs from July 1, 2018 – June 30, meeting at a new facility in Mainland China. 2019, was HK$247.5 billion, up 5.8 percent The $3.7 billion Conghua complex provides on the last financial year. much-needed capacity, including state-of-theStill, not all international business has art stables, training and rehabilitation facilities. been welcome at the club, which is the only So far, the club is labelling its China venture

“

”

Asia Gaming Briefings | November 2019

a success, with horses trained in Conghua winning 109 races during the season. However, it’s not all been plain sailing. While the European Union, U.S., Japan and New Zealand recognize Conghua trained horses as having the same health status as those in Hong Kong, it’s been an uphill battle convincing Australian authorities. Biosecurity agreements between H.K. and Australia broke down in 2017 during the construction of Conghua, with Australian authorities since requiring horses travelling from Hong Kong to spend 180 days in a third country out of fear horses may be carrying equine diseases from China. Engelbrecht-Bresges says good progress is now being made in talks to end the dispute. Aside from wagering, the HKJC also offers football betting and lottery through its Mark Six operations. Football betting turnover has been growing fast and is approaching the same levels as racing turnover. In the latest year, turnover jumped 10.7 percent to a record of $114.1 billion, while Mark Six was up 4.3 percent to $4.8 billion. The HKJC notes that 60 percent of its wagering transactions are now carried out online.

GREATER CHINA 13

performance highlights

(in HK$ billion) Football betting 114.1

Horse Racing 125.0

Mark Six Lottery 8.4 (Source: HKJC)

Protests force race cancellation The Hong Kong Jockey Club in September was forced to cancel a Wednesday night meeting in Happy Valley due to concern about protests as the race was to feature a horse partly owned by pro-Beijing lawmaker Junius Ho Kwan-yiu. The club said the cancellation was due to “the imminent threat to the safety of racegoers, jockeys and employees, and to the welfare of racehorses.” This was the first closure for a reason other than extreme weather since the handover in 1997. “The Club has been monitoring the situation in Hong Kong closely. It has conducted a thorough risk assessment of the race meeting tonight and concluded that it should be cancelled in order to preserve the security and safety of people and horses,” it said. Hong Kong has been gripped by months of protests, which were initially triggered by the introduction of an extradition bill easing the deportation of Hong Kong residents to China to stand trial.

Aug. visitor arrivals down 40% Visitor arrivals to Hong Kong dropped almost 40 percent in August as weeks of violent street clashes deterred tourists. The largest decline was in numbers from Mainland China, which fell 42.3 percent during the month. China is by far Hong Kong’s largest tourism market. Arrivals from Taiwan were down more than 38 percent, Thailand 40 percent and Singapore almost 40 percent. For the eight months through to end-August, visitor arrivals are still higher, gaining 4 percent. The protests against the extradition bill began in June, though have escalated, becoming increasingly violent over the summer months.

Asia Gaming Briefings | November 2019

NORTH ASIA

JAPAN

Japan prefectures to get down to business in 2020 Japanâ&#x20AC;&#x2122;s local prefectures are expected to step up activity next year in finally nailing down whether or not they will make a bid for an integrated resort license, with some potentially having already chosen their partner by year-end.

Asia Gaming Briefings | November 2019

NORTH ASIA 15

pectrum Gaming Group forecasts 2020 will be the “Year of the Prefecture,” with officials expected to form advisory councils and working groups to help them with their decision. Meanwhile, the national government will name the members of the Casino Management Board (official English name pending) and the regulatory agency will become operative by issuing a series of regulatory guidelines as the march towards opening Japan’s first IR gathers speed. At the current juncture, a total of fourteen Japanese local governments appear to be in the first round of the Japan IR race, competing for just three licenses. Those that have definitely declared their intentions are Yokohama, Osaka, Wakayama and Nagasaki. A further six have admitted that they are considering the possibility of a bid: Tokyo, Hokkaido, Chiba, Kawasaki, Nagoya, and Hamamatsu. Four other local governments that did not admit to the media surveys that they are considering a bid are known to be doing so are Aichi, Miyagi, Mie, and Kitakyushu. Some prefectures are already well advanced, having launched Request for Concept (RFC) procedures and identified potential locations. Osaka, under its new Governor Hirofumi Yoshimura, was quick off the mark, launching its process in April for an IR on a 49-hectare site on Yumeshima island. Operators were instructed to provide their basic concepts for the IR core facilities, non-core facilities, disaster management, gambling addiction countermeasures, public security policies, and much more. The selected operator will be expected to bear an expense of 20.2 billion yen ($182 million) as its part in subsidizing the extension of the Osaka Metro Chuo Line to Yumeshima. Nagasaki Prefecture began an RFC process in October. The schedule is a tight one, with the

whole process to be concluded by February. “Through this RFC process, a better understanding from an early stage of IR development and related needs / issues for this project will be promoted through the deepening of mutual understanding among local officials, including the prefecture, the city, and private businesses,” the local government said. “The purpose of this project is to facilitate the implementation of the project, accelerate the various preparations and examinations related to this project, and to promptly implement the RFP after the establishment of the basic policy of the country.” A wide range of IR operators and investment groups have expressed interest in making bids for the 31-hectare candidate site at the Huis Ten Bosch theme park in Sasebo. Wakayama hasn’t launched an official RFC, but on the final day of its regular session, the Wakayama Prefectural Assembly declared its support for Governor Yoshinobu Nisaka’s initiative to seek an IR license for the Marina City location. “We will proactively promote IR activities leading to a bid, including the fostering of opportunities to reach local consensus,” the resolution stated. With Yokohama’s entry into the IR race signaling the possibility that only one smaller, regional location may receive an IR license, Wakayama has been endeavoring to present itself as an option that is virtually shovel-ready and with few local political complications. In Hokkaido, political and business groups have been stepping up their lobbying efforts to convince the still undecided Governor Naomichi Suzuki to move forward with the IR process. Four leading business groups—the Hokkaido Economic Federation, the Hokkaido Chamber of Commerce & Industry, the Hokkaido Association of Corporate Executives, and the Hokkaido Tourism Organization—indicated that they will

Wynn abandons Osaka for Kanto bid Wynn Resorts has also withdrawn from the IR race in Osaka and will focus its efforts on gaining a license in the Kanto region. “Wynn Resorts is grateful for the many months of positive dialogue we have enjoyed with the city of Osaka and its citizens, and we appreciate the gracious hospitality we have received from them. Although we have decided not to pursue an Integrated City Resort in Osaka at this time, we wish the city the very best and look forward to following its continued success. Wynn Resorts is currently focused on the Kanto area,” the company said. The entry of Yokohama into the race prompted Las Vegas Sands and Melco Resorts & Entertainment to withdraw from the Osaka site, which had previously been seen as the major prize for IR operators.

issue a “joint emergency declaration” calling for an IR bid. Governor Suzuki has already responded that he will use this joint declaration as a “reference” as he makes his final decision. Pro-IR activity remains brisk in Hokkaido’s candidate city Tomakomai. Sixteen members of the Tomakomai City Council, representing a majority of the chamber, issued a formal request to Mayor Hirofumi Iwakura seeking an IR development in the city. The pro-IR mayor was

pleased to receive such a request as he himself has long been working in this direction. Additionally, Mori Trust, the major Tokyo-based real estate firm, announced that it was prepared to make a 250 billion yen ($2.3 billion) investment to create a large-scale resort in Tomakomai, including a five hundred room hotel and about one thousand villas. This resort is planned for a location very near the candidate IR site in Uenae, and it appears to be an effort to create a facility that would have synergies with an IR development.

Rush Street unveils Japan architectural team Rush Street Japan has unveiled its architectural team, which it hopes will one day soon be designing and building an IR in Tomakomai, Hokkaido. Rush Street’s new partners are the architectural firm Skidmore, Owings & Merrill (SOM) and landscape architecture and design company Takano Landscape Planning (TLP). Neil Bluhm, cofounder and chairman of Rush Street, commented, “We’re extremely pleased to welcome SOM and TLP to the team. Their combination of creativity and regional insight, along with our global expertise in real estate development, enhances the solid foundation we’ve already built here in Japan.”

Asia Gaming Briefings | November 2019

NORTH ASIA 16

south korea

Authorities accused of lax regulation South Korea’s casino regulators have been lax in their oversight for the past three years and the government needs to increase the level of mandatory punishments, a lawmaker said.

ep. Kim Su-Min, a member of the opposition Bareunmirae Part, was given documents regarding infractions from the Ministry of Culture, Sports and Tourism, which oversees the sector, according to the Korea Times. The documents show that four of the 16 foreigner-only casinos faced six administrative punishments after violating laws between 2016 and 2018, but did not face suspension of their licenses, the report said. The infractions included a 475 million won ($395,000) embezzlement case at Grand Korea Leisure’s Seven Luck Casino. The incident involved an employee who misappropriated chips in collusion with a customer and tampered with electronic gaming machines over 469 times in six months from February 2016. In addition, a Korean national was admitted to the foreigner-only casino 15 times in the same year, while an employee working at Seven Luck Casino in Busan was also caught colluding with a customer and pocketing 45 million won. Kim said the ministry had only imposed “corrective orders,” which is the lowest

disciplinary action possible. At Paradise Casino Walkerhill in Seoul, a worker colluded with a customer to misappropriate over 80 million won. It also illegally admitted a Korean national to gamble there on 1,000 occasions, and another one on 20 occasions. It also only received corrective orders in 2017 and 2018. “While 2.2 million people are struggling with gambling addiction in Korea, the ministry has failed to come up with strict regulations against casinos but only slapped them on the wrist,” Kim was cited as saying, urging the National Assembly to revise the relevant law to impose mandatory tougher punishments. Korea’s only operator to allow locals, Kangwon Land, has been mired in controversy over the past few years after former CEO Choi Heung-jip was arrested as part of a probe into nepotism. The state-owned company was accused of hiring hundreds of staff based on their connections to lawmakers. A total of 493 people, which represents almost 95 percent of the total hire, were taken on solely for their links to influential people.

GROSS GAMING REVENUE Bullfighting 273 Sports Toto 47,428

Casino (Kangwon Land) 14,001 Casino (Only for foreigners) 16,253

Lottery 43,848 Motorboat-racing 6,210

Horse-racing 75,376 Bicycle-racing 20,515

(Source: National Gambling Control Commission)

Asia Gaming Briefings | November 2019

Paradise Busan gets new poker room

Novomatic installs machines at Kangwon Land

Suncity Group’s Poker King Club has teamed with South Korea’s Paradise Co. to open a poker room in the operator’s casino in Busan. Poker King Club Vice-President, David Chee, met with Paradise Casino Division Chief, MingZhong Kim in October to finalize the details of the new venture in a small signing ceremony. The Paradise Hotel and Casino is Busan has 532 rooms and is close to Haeundae Beach. The new poker room will feature Short Deck format and No Limit Hold’em games at different levels. VIP guests will also have an array of special services from the casino, including a private room service for when they stay at the hotel.

Novomatic has installed 68 NOVOMATIC gaming machines at luxury resort, Kangwon Land. Kangwon Land comprises the High 1 Ski and Golf Resort including the hotel & casino and is operated by the national government, together with the provincial office of Gangwon-do. Among a total number of 17 casinos in Korea, Kangwon Land Casino is the country’s largest and the only one where Korean residents are allowed to play. Kangwon Land’s casino floor offers some 200 live gaming tables, 208 ETGs and 1,360 slot machines. The latest additions, increase the total count of NOVOMATIC machines on the casino floor to 280 units, or over 20 percent of the floor share.

NORTH ASIA 17

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FOCUS 18

Outlook still bright, despite license moratorium, POGO suspension The Philippines continues to be one of Asia’s fastest-growing gaming markets, with strong tourism arrivals and a growing domestic economy underpinning revenue streams.

ver the past five years, gaming revenue has risen at a compound average rate of 12.8 percent, second only to Cambodia, where growth has surged 33.8 percent. One restricting factor in the Philippines has been the attitude of the government under President Rodrigo Duterte, who has been circumspect about allowing further expansion. On the land-based side, he put a moratorium on new casino licenses in March 2018, although recent comments from the presidential palace have indicated he may be softening his stance. On the i-gaming side, the Philippine Amusement and Gaming Corp. (PAGCOR) has suspended the issuance of Philippine Offshore Gaming Operator (POGO) licenses pending a clean up of the sector amidst reports of tax avoidance, illegal workers and increasing gaming-related crime. So far, however, the government has resisted pressure from China to impose an all out ban. The focus section of this edition of Asia Gaming Briefings is dedicated to this exciting market, which is now snapping at the heels of Singapore as the secondbiggest in Asia. Our first series of articles profiles Manila’s four integrated resorts, which kick started gaming growth in the Philippines.

Asia Gaming Briefings | August 2019

Travellers International Hotel Group’s Resorts World Manila is the grand dame of the Manila properties opening up in 2009. That was followed in 2013 by the debut of Bloomberry Resorts’ Solaire Resort and Casino, which was the first in the Entertainment City zone of the capital. Next came Melco Resorts & Entertainment’s City of Dreams Manila in 2014, while the latest to make its entrance is also the largest, Universal Entertainment’s Okada Manila. These resorts have had a major impact, with annual growth in gross gaming revenue of about 17 percent during the opening cycle from 2012 to 2016, according to Union Gaming research. That compares with growth of just 4 percent for PAGCOR-operated casinos. However, competition is heating up around Asia, with multiple luxury properties sprouting in Cambodia and Vietnam and further expansion planned for Singapore. We therefore look at whether the Philippines can retain to keep its edge and what needs to happen to retain its growth trajectory. Although much of the attention has been focused on Manila’s IRs, there has been considerable development in regional locations of the country. In fact, PAGCOR Chair Andrea Domingo has made it clear she would like to see the development of other regional entertainment hubs to help develop tourism in other parts of the country. We take a look at some of the progress, with Clark and Cebu leading the way when it comes to new properties and investment plans. Lastly in this section we throw the spotlight on i-gaming. As the only jurisdiction in Asia to regulate i-gaming, the Philippines has seen an influx of firms from all over the globe, but mainly from Mainland China. The entry of so many Chinese is seen as one of the major factors propping up Manila’s real estate market, but it has also pushed up prices in general and created tensions with the local population. One solution that has been put forward to help monitor the activities of the POGO firms, in particular the Chinese, is to create two high-tech hubs to house them. The argument goes they will be easier to regulate if they are grouped together. We look at the plans and ask whether they provide a workable solution when it comes to controlling the sector.

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Asia Gaming Briefings | November 2019

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Philippines to fight off regional competition The Philippines has been one of the best-performing gaming jurisdictions over the past five years and is expected to continue to outperform as the country’s operators expand, despite rising regional competition.

he gaming industry seemed to have the odds stacked against it when President Rodrigo Duterte came to power in 2016. For a spell before and after he was elected, Duterte, notoriously ruthless in his pursuit of eradicating the illegal drugs trade, appeared to have similar antagonism towards gambling. However, by July 2019, the President used his State of the Union Address to highlight the record financial contribution of PHP16 billion ($315 million) towards the government’s annual budget by the Philippine Amusement and Gaming Corp. (PAGCOR) and the wider industry, which broke the PHP100bn revenue

Asia Gaming Briefings | November 2019

mark for the first time. As the public watched on, he asked PAGCOR chair Andrea Domingo for “more gambling, ma’am”. Robust growth The industry rose almost 23 percent year-on-year last year, posting total gross gambling revenue of PHP215.8 billion ($4.2 billion), putting it almost on a par with Singapore, the region’s second-biggest market. That figure looks on track to be exceeded this year. Andrew M. Klebanow, senior partner at hospitality and casino consultancy Global Market Advisors, notes

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that all of the industry’s primary segments, including the integrated resorts at Entertainment City in Manila, the regional casino-resorts in Clark and Cebu, the more than 40 PAGCOR operated casinos, and the online licensees are reporting increased revenues. “Quite simply, the Philippines gaming industry can be characterised as an industry that is enjoying robust growth,” he adds.

entirely reliant on foreign visitors for growth. The Philippines is also seeing rising tourism growth, in particular from China after ties with Beijing improved under Duterte. Tourism arrivals in the year to August were up just over 14 percent at 4.86 million.

“ The integrated casino resorts at Entertainment City are similar in size and quality as those found in Macau and Las Vegas,” Klebanow says. “They offer true five-star gaming and lodging experiences. In addition, the greater capital region is

Head start PAGCOR’s vision is to be “the prime mover [to] make the Philippines the top gaming and entertainment destination in the ASEAN region, generating revenues that fund nation-building programs.” The Philippines already has a head start over other markets in the region as its population is allowed to gamble and have provided strong mass market support. The country has a population of more than 104 million and one of the strongest regional economies, with 6.2 percent gross domestic product growth last year. Regional neighbours, such as Cambodia, South Korea and Vietnam all ban locals and are

Asia Gaming Briefings | November 2019

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dotted with a number of smaller casinos located in hotels. Their quality ranges from one- to four-star facilities. PAGCOR has also played a vital role, helping to establish a fruitful regulatory landscape whilst encouraging the introduction of new technology, according to Joe Pisano, chief executive of Manila-based supplier JADE Entertainment and Gaming Technologies. He says: “The other two major markets, Macau and Singapore, have been left behind as far as new product innovation. Here we can see the positive effects of support from the regulator. “PAGCOR has allowed for the growth of casinos, internet gaming, sports betting, e-games, e-bingo and poker, which has made the Philippines the most advanced gaming market in the region. In other legal jurisdictions, regulation has stifled the growth of gaming.” Infrastructure Pisano adds that infrastructure investment is essential to maintain the momentum. “Support for casinos from some of the regional cities would be a great boost to the industry,” he says. “With the continued support of the government and entrepreneurs, the Philippine gaming industry will remain robust.” Klebanow adds that operators must continue to invest in their properties to satisfy the expectations of increasingly sophisticated and demanding Asian casino tourists. He believes the giant Entertainment City complex will continue to garner the most attention amongst land-based operations, particularly with the opening of Resorts World Bayshore, while developments in Cebu and Clark – such as the Emerald Resort and Casino, with 1,186 slot machines, 80 mass tables and 66 VIP tables – are a cause for optimism in the medium to long term. “With integrated casino resorts, regional casino-resort destinations, over 40 PAGCORoperated casinos that serve the local population and a rapidly growing POGO industry, the Philippines has one of the most dynamic and diversified gaming markets in Asia,” Klebanow says. However, there is a note of caution with regard to the unpredictable Duterte’s regime. “Casino operators must also contend with a leader whose views of casino gaming have evolved from strongly opposed to grudging acceptance,” Klebanow adds. “That may change in the future.”

Asia Gaming Briefings | November 2019

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Asia Gaming Briefings | November 2019

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Solaire seen retaining top spot in 2019 Bloomberry Resorts’ Solaire Resort and Casino is the market leader among Philippine integrated resorts and is expected to retain its crown this year, despite increasing competition.

olaire was the first to open in Manila’s Entertainment City zone, in March 2013. The resort spans 16 hectares and consists of two main towers. Phase 1 is known as The Bay Tower, with an aggregate gaming floor area of approximately 18,500 square meters, with about 1,653 slot machines, 295 gaming tables and 88 electronic table games. In Nov. 22, the company opened its SkyTower, or Phase 1a, which consists of a 312 all-suite hotel, 10 more VIP salons, 66 gaming tables and 230 slot machines. This year, the company opened the Philippine’s first electronic table games stadium called “Players Stadium” featuring a 360 square-meter surround screen. Since opening, the company has seen steady growth in both revenue and EBITDA and had a share of around 36 percent of gross gambling revenue amongst the Philippines’ IRs in 2018, followed by City of Dreams Manila at 31 percent and Okada Manila at 19 percent. Although Okada is ramping up fast and is expected to be a key contender, analysts at Morgan Stanley expect Bloomberry to retain its lead this year at least. The firm expects GGR of the IRs to increase a further 15 percent this year, far outpacing Macau which is seen as flat to negative by most analysts. The market is still

Asia Gaming Briefings | November 2019

underpenetrated and tourism arrivals are increasing, led by visitation from Korea and China. Macau’s junkets are also expanding in the Philippines, which is seen as adding to growth. Tourism arrivals in the year to August were up just over 14 percent at 4.86 million. Korea and China were the top two source markets, with 1.29 million from Korea, up 23 percent and 1.20 million from China, up 22 percent. However, like its competitors Solaire also enjoys strong local support. “We foresee that tourism will continue to play a significant role in the growth of Philippine integrated resorts. Growth will likewise be boosted by the rise in middle-class incomes and increasing connectivity across the region,” Chairman and CEO Enrique Razon told investors in June. For Q2, the most recent figures as of the time of going to press, consolidated EBITDA was up 32 percent to a record PHP4.95 billion, with strength across all gaming segments. VIP GGR gained 32 percent to PHP6.18 billion, while its mass table drop was up 14 percent to a record PHP12.5 billion, however net revenue in the segment dipped due to a lower hold rate.

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Hotel occupancy did decline in the quarter to completion of Quezon. Morgan Stanley said the company has 89.4 percent from 93.2 percent as the company is converting its Grand Ballroom into new gaming stronger cash flows and a greater land bank space, which has cut capacity for hotel bookings for expansion than its peers, which will help it increase capacity to drive further growth. linked to conventions and other events. The group also has The company is now plans to harness growth planning a second resort in the cruise industry in in Quezon City, an area We foresee the Philippines, which just to the northeast of despite its potential with Metro Manila and one of that tourism will more than 7,000 islands, the most populous areas continue to play is in its infancy. of the country. The company is Solaire has targeted a significant role building a cruise ship a completion date of the in the growth terminal at Solaire Manila. end of 2022 for the resort, Guillaume Lucci, which is expected to have of Philippine senior advisor of the a strong mass market integrated Solaire Cruise & Marina focus supported by locals. Project, Solaire Cruise The property will have resorts. Center Manila, told similar branding to its Seatrade Cruise News that sister, but the design is the facility is expected expected to be on a more to be operation in Q3, 2021. vertical scale given the smaller footprint. In phase one, the pier will be able to It has a target capacity of 250 tables, 3,000 receive two Oasis-size ships and the terminal slots and up to 800 rooms. Beyond the Quezon City project, the building to handle homeporting for one large company also has plans for Solaire Phase ship carrying between 3,000-4,000 passengers 2, which is expected to begin after the over an 8-10 hour period.

â&#x20AC;&#x153;

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property snapshot Q2 GGR PHP14.62b

+19.1%

Ebitda PHP5.09b

+32.2%

Phase 1

Slot machines 1,693

Hotel rooms 488

ETGs 88

Tables 295

Phase 2 - Sky Tower

Slots machines 230

Hotel rooms 312

Tables 66

Asia Gaming Briefings | November 2019

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Premium-focused expansion plans Travellers International Hotel Group opened the Philippines’ first integrated resort in the capital Manila in 2009 and is now revamping and expanding its facilities to attract a wider customer base.

esorts World Manila, which sits on an 11.5 hectare site opposite the international airport, has built up a loyal mass market following among Filipinos, though has recently been in full expansion mode to add facilities to help it target the premium mass and VIP segments. The company is rebuilding after a deadly attack by a disgruntled problem gambler in June 2017, which left 38 people dead. He set light to tables destroying the second floor, which remained closed for two years. The original building, now known as the Garden Wing, reopened its second floor gaming facilities in July this year. Travellers CEO Kingson Sian told local reporters after the company’s shareholder meeting in June that the new

Asia Gaming Briefings | November 2019

floor would feature approximately 600 slot machines and 100 table games. He added that it will be “an entire new floor of gaming space,” and, “As we expand the gaming space, we are attracting not only locals but also foreign players to come, and we can develop new junket relationships.” Sian said once the venue is completely operational again, it will offer 465 gaming tables and 2,300 slot machines. The total number of gaming positions will be greater than what was offered before the attack. Travellers, a joint venture between Alliance Global and Genting, has also been rolling out facilities at its new Grand Wing, which held a soft opening of its ground floor gaming area in May last year. It added the Hilton Manila in October, while in

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property snapshot GGR 1H19 PHP13.6b (VIP P7.4b, mass P6.2b)

+50%

Q2 gross revenue PHP8b

+43%

Ebitda Q2 PHP1.5b

-32%

Tables total 296 VIP 167

Mass 129 (end. June)

Slots and ETGs 1,922 Hotel rooms 2,200 across 5 hotels

January 2019, Sheraton Manila Hotel officially opened its doors to the public. By the time the Grand Wing is fully operational, it will have a third luxury hotel, the Okura Manila, increasing hotel room count at the Grand Wing to about 940, and bringing the group’s total hotel room count to 3,555. The Okura is now expected to open its doors in Q1 of next year, while it also expects to complete the rebranding of its Maxim Hotel to a Ritz Carlton by the end of 2019. The expansion in gaming facilities helped drive a 47 percent gain in gross gaming revenue in the second quarter of this year. VIP revenue reached 43 percent of the total from 40 percent in the same period last year, while non-VIP tables and slots were at 56 percent. The company didn’t give a breakdown for the lucrative premium mass segment. Average hotel occupancy dropped to 77 percent from 81 percent due to the added capacity. The group is developing a second IR, now known as Westside City Resorts World, in the Entertainment City area adjacent to Manila’s other IRs. The $1.3 billion project broke ground

in 2014, but the first phase is not expected to be completed until the end of 2022 and looks set to go through yet another design

As we expand “ the gaming

space, we are attracting not only locals but also foreign players to come, and we can develop new junket relationships.

”

overhaul after a multi-layered accord with Suncity Group, announced in late October. Under the deal, Westside and controlling

shareholder Travellers are to lease the Westside City Resorts project site for “development of the main hotel casino.” SunTrust, in which Suncity has bought a 51 percent stake, will be the sole and exclusive operator and manager of the main hotel casino. The firm’s initial plan includes total gaming capacity of 400 tables and 1,200 slot machines, as well as 400 five-star hotel rooms, a car park, and non-gaming facilities themed around pool-side parties featuring a high-end pool club. Under the original plan, Travellers had envisaged a strong non-gaming offering, aimed at creating the Broadway of Asia, with music and entertainment. Travellers delisted its shares from the Philippine Stock Exchange from Oct. 21, being the second Manila operator to do so after Melco Resorts & Entertainment (Philippines). The company said going private would allow the firm to address in a “timely” way, “evolving market demands and rapidly-changing customer needs without compromising its business strategies to competition.” About 1.32 billion shares were tendered by investors in the $168 million offer.

Asia Gaming Briefings | November 2019

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Competition eats into earnings Increasing competition in the Philippines is having an impact on Melco Resorts & Entertainment’s City of Dreams Manila, with no clear expansion plans in the immediate horizon to drive growth.

oD was the second resort to open in Entertainment City in 2015. The 6.2-hectare, $1.3 billion property features six hotel towers with 950 rooms, including a Nobu, Nuwa and a Hyatt Regency. It has about 300 gaming tables, 1,708 slot machines and 221 electronic table games. On the non-gaming side, Melco teamed with Dreamworks Animation to develop a family-oriented theme park known as Dream Play. City of Dreams Manila houses Pangaea and Chaos, two premium nightclubs developed by the group and led by the distinguished nightclub operator and “International King of Clubs,” Michael Van Cleef Ault, who has created a number of renowned clubs worldwide. Both clubs are situated inside the iconic Fortune Egg, an architecturally-unique, dome-like structure, accented with creative exterior lighting design. The property has been a strong contributor to the Macau-based operator’s earnings, though recently Chairman and CEO Lawrence Ho has been less optimistic about the outlook there. In Q3, total operating revenue dropped to $130.5 million from $141.7 million in Q3 last year, while adjusted EBITDA fell to $49.9 million from $55.2 million. The company again blamed increasing competition, especially in the VIP market, with rolling chip volume down to $2.44 billion compared with $2.98 billion a year earlier. It was also hit by bad luck, with the VIP win rate just 0.89 percent, well below the normal range of 2.85 percent to 3.15 percent.

“COD Manila suffered in the VIP market as a result of low win rates, which has always been volatile,” Bernstein analysts wrote in a note. Mass market table games drop decreased to $202.1 million compared with US$204.9 million in the third quarter of 2018. The mass market table games hold percentage was 31.3 percent in the third quarter of 2019 compared to 32.4 percent in the third quarter of 2018. According to analysts, management has emphasized a focus on the mass market, saying most of its gamblers in this segment of the market are local. However, unlike rivals Solaire and RWM, the company has not yet announced any firm plans for expansion that might help drive further growth. It may take an extra two hectares of land owned by its local partner Belle Corp to build a luxury hotel with 300 to 350 rooms, but as yet, it has given no firm details. At a shareholder meeting in April, Willy Ocier, Chairman of Premium Leisure Corp, said that discussions were being held about potentially developing a second IR in the Philippines. Premium Leisure is a unit of Belle Corp. Ocier said discussions were being held between the partners, but specified that a new casino license would need to be issued by PAGCOR as the existing one only covered City of Dreams Manila. The companies followed up with a statement to the stock exchange stressing that while the partners are open to expansion, there were no definite plans.

property snapshot Q3 operating revenue $130m Adjusted Ebitda $49.9

Asia Gaming Briefings | November 2019

-8%

-9.6%

Mass table drop $202.1m

-1.3%

Rolling volume $2.44b

-18%

Tables 311

Slot machines 2,267

Hotel rooms 950 across 3 hotels

Q3 occupancy per room 98%

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Race for rooms

Okada Manila, the biggest integrated resort in the Philippines, is seeing a strong ramp up with an urgent need to add more hotel rooms to keep up with increasing demand.

he property opened its doors in December 2016. Spanning more than 44 hectares, it features the world’s largest multi-coloured dancing fountain, designed by Los Angelesbased WET Designs, as well as a giant indoor beach complex, known as Cove Manila. The first phase of development is nearly complete, with the company racing to finish its hotel Tower B, which will add 500 additional hotel rooms. The tower is expected to be fully finished by Q2, 2020, although it has already opened up about 125-150 rooms in July, with a further 150 rooms expected around November. Announcing its Q2 results, parent company Universal Entertainment said it expected a greater number of hotel rooms to help the company accommodate large group events and foreign tour groups. During the quarter, its hotels had a 97.5 percent occupancy rate, with an average daily room price of Y9,613. Analysts are upbeat about prospects for Okada Manila and expect the addition of more hotel capacity to help drive mass market revenue at the resort. “The Philippines is one of the fastest growing gaming markets in the world, and when complete, Okada Manila is positioned to be a category killer in the market,” Union Gaming analyst John DeCree wrote in a recent note initiating coverage of Universal. “We are looking for mass market revenue to accelerate beginning in 3Q19 and continue through 2020 and into 2021.” In the first nine months of 2019, the resort generated Y27.93 billion in gross gaming revenue, with both mass market and VIP seeing strong gains. Union Gaming notes that the company appears to be bucking the trend in the VIP sector, which has seen a

sharp slowdown regionally as China’s economy softens. For Q3, VIP volume rose about 38 percent, while mass table win is up 41 percent and EGM win gained 35 percent. “While we are focused on the mass market ramp at Okada Manila, VIP continues to outperform relative to our expectations, representing near-term upside to the story,” DeCree noted. Tourism growth to the Philippines has been strong, in particular from China due to improving relations under President Rodrigo Duterte. However, unlike many jurisdictions around Asia, the Philippines is not totally reliant on tourism for growth in its casino sector. Local Filipinos are permitted to gamble and with one of the fastest-growing economies in Asia, income levels are rising, boding well for the growth of the mass market segment. Income per capita has risen about 4.5 percent over the past five years. Union Gaming notes Okada Manila still has significant capacity for further growth. The casino at Okada Manila is over 375k sqft, much larger than its competitors Solaire, which comes in at 200k, and City of Dreams Manila at 242k, while it also has a large land bank for future expansion. In contrast to Melco Resorts & Entertainment and Travellers International, which are delisting from the Philippine Stock Exchange, Universal is seeking to go public with its local unit. It bought 66.6 percent of AsiaBest Group International in February to facilitate the future list of Tiger Resort, Leisure and Entertainment. The ramp up of the resort has not been without its challenges, including a legal dispute with Kazuo Okada, Universal’s founder, who was ousted from the board in 2017.

property snapshot GGR Jan-Sept. P27.93b ($545.6 million) Q2 sales Y31.41b

Asia Gaming Briefings | November 2019

+46% +45.2%

Hotel occupancy 97.5%

Planned rooms 933

Q2 Adjusted EBITDA Y5.25b vs Y290m

Slots 2,622

VIP tables 188

Mass tables 207

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Asia Gaming Briefings | November 2019

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Regions present expansion opportunities The Philippines’ regional casinos may not get the same headline publicity as the bigger resorts in Manila, but the number of properties has been growing and their client base evolving as amenities and infrastructure improves.

n the Clark Freeport Zone, the D’Heights Casino recently opened, becoming the fifth property in the area after Fortunegate, Widus Hotel & Casino, Royce Casino and Midori Casino. In Cebu, developments are taking place at a slightly slower rate with two new casinos – the Emerald Bay from Udenna Corp and the Universal Hotels and Resorts – apparently under way after having been granted licences in January 2018, just before the institution of a government moratorium on new casinos. Jose Angel Sueiro from PH Resorts – a part of the Udenna Group - says there is great potential in regional casinos in the Philippines due to the positive demographics and a lack of other quality entertainment options. “In the Philippines we have, broadly speaking, about 50 million people in Luzon and another 50 million

Asia Gaming Briefings | November 2019

people in the Visayas – Mindanao region, with a totally different language, customs, and a different approach to leisure experiences,” he says “Beside that, in the Metro Cebu market we believe we are in a perfect position to attract a lot of customers from secondary cities in our region, to become their local casino.” This necessarily dictates the nature of the customers at resorts such as Emerald Bay and the Thunderbird Casino, says David Lawrence, casino general manager at the latter. “Regionally the focus is on mass (play) due to the current market segments and dynamics of the properties,” he says. However, he adds that “forward-thinking” regional properties are also looking at junket and proxy-betting inclusion. The example from Entertainment City in Manilla,

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says Sueiro, shows that mass-play growth is tied to the continuing economic growth alongside the evolution of the casino offering. If these two factors remain in place, he sees expansion continuing in the regional space. “We believe we will experience a similar scenario where gaming propensity will increase with a high-quality product exposure,” he says. This also means attracting VIP play “(if) our offer is attractive enough to position ourselves as an alternative to existing Integrated Resorts.” Hence, the property benefits from new infrastructure (the new Mactan airport with more than 30 international destinations is just 15 minutes away) and a beach location alongside the property itself, which was developed and project managed by casino development names Paul Steelman and Tenman. While Sueiro doesn’t disclose the amount of investment required for a regional casino in the Philippines, he does say that the focus is on ‘Galaxy-style’ F&B with top Michelin star restaurants as well as a more Venetian-style retail offering. “Besides that we are putting a special focus on MICE facilities, a spa and water sports,”

he says. “We also have a high-end satellite property in Bohol (Donatela Resort) that will help to complement our offer.”

“

We believe we will experience a similar scenario where gaming propensity will increase with a high-quality product exposure.

”

As for the gaming offer in regional casinos, Lawrence says the Philippines remains a “very strong” slot market that skews 70/30 slots and tables, a percentage that changes towards 50/50 if it attracts a foreign audience. Sueiro, meanwhile, says that the Emerald

Bay will feature 146 tables and around 1100 slots at stage one of the development. “The deployment of the actual positions on the floor will be done under a phasing approach,” he adds. A further big change in the regional casino market will come with the proposed privatisation of the PAGCOR properties. Until now, Lawrence says the monopoly status of PAGCOR had resulted in a somewhat moribund offering which left the space open in local markets for private operators to establish a presence. It means, therefore, that choosing which of these properties might be worth taking on will be a task in itself. “For investment purposes in-depth research would be needed locally and cherry picking would be expected,” he adds. Still Sueiro thinks that if the government does go down the privatisation route, some “interesting opportunities will become available.” “The process regulations (existing employee guarantees, contract with suppliers, tax, license periods, bid process terms, etc.) will determine the success of the initiative,” he adds. “Demographics and market research (not just actual performance) will give a good indication about which ones are more valuable.”

Asia Gaming Briefings | November 2019

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POGOs to resist political pressures With the win from China-facing igaming operations forecast to hit RMB230.7bn ($33 billion) in 2019, authorities in the Philippines have little incentive to curb activities of Philippine Offshore Gaming Operators (POGOs).

ccording to H2 Gambling Capital, a market data and analytics company, that figure is likely to rise to RMB252.9bn next year. Since China urged its Asian neighbours to help stamp out online gambling targeting its nationals in August, Manila has stepped up its efforts to clean up the industry and has temporarily suspended the issuance of new licenses. However, so far President Rodrigo Duterte has resisted calls for an all out ban, unlike Asia’s other igaming hub, Cambodia. The Philippines is wealthier and has experienced some of the strongest economic growth in the region at 6.2 percent in 2018, according to the World Bank. It is not as reliant on Chinese trade and investment, or prone to geopolitical pressure as Cambodia. What it has done is to increase pressure on POGOs to ensure they are paying the correct taxes and to clamp down on immigration violations among the hundreds of thousands of Mainland workers, many of whom entered on tourism visas. There are also proposals to increase taxes on the sector, in particular with the addition of a 5 percent franchise tax; a gaming tax of $10,000 a month per table for a live set-up casino and a $5,000 a month gaming tax for random number generator (RNG)based games, as well as a $1,000 presumptive corporate income tax per seat for POGOs. So where do these pressures leave the Philippines as an igaming hub for China and the Asian continent as a whole? Tax changes and employment crackdowns are one aspect of the debate, but the country is unlikely to implement any stricter or more prescriptive legislation for fear of the economic impact it would have on the igaming sector there. POGOs paid PHP175 million ($3.4 million) in taxes in their first year of operations. That rose to more than PHP579 million in 2018, with the figure jumping to PHP1.63 billion in the year to August alone. One industry contact who agreed to speak to Asia Gaming Brief on condition of anonymity says: “The Philippines-based igaming companies are not going to stop targeting China. Both the Chinese and Philippines officials know that. The question is more about how far the POGOs can push their

Asia Gaming Briefings | November 2019

activities in China without upsetting the authorities there too much.” And even though “the Chinese have complained publicly about the serious issues they say are caused by online gambling; such as financial security, money

FOCUS 35

laundering and evasion of the country’s strict capital controls, all parties know that the industry is not going to stop”, adds the contact. The industry itself has proposed a degree of self-regulation to calm authorities’ nerves. Oriental Game has suggested setting up POGO hubs that would offer “one-stop” solutions to help companies comply with Philippine regulations. “Everything will be there,” Kevin Wong, general manager of Oriental Group, told the Philippine Star. “PAGCOR will have an office there. We’ll also invite the Bureau of Immigration and the BIR.” “If you locate in a POGO hub, no one would say that you’re illegal because all the other agencies are already there. So in terms of numbers, visas, the tax identification number, income tax, all will be covered,” he said.

When it comes to product verticals, China is also evolving in line with the rest of the Asia-focused industry. Where once live casino was the dominant product for much of Asia, sports betting has now taken over as the most important igaming vertical in terms of volume and revenues, followed by casino and poker. And while live casino is still very important for Asian casino sites, it is clear that they cost more to produce than online-only table games, or online slots. The latter have been growing consistently thanks to an influx of new suppliers, who are keeping operators in the region supplied with regular content and growing their share of the market. Another source who works with a leading Philippines-based gaming technology supplier adds: “All parts of the Asian igaming sector

are constantly modernising and are getting increasingly sophisticated and the directto-consumer model is gradually replacing the agent system. “This means companies don’t need to have as many contacts on the ground and can market their products directly to players in their target markets. And even though Cambodia is closing down operations and there has been a big exodus of Chinese executives from Sihanoukville, igaming firms are setting up in countries like Thailand, Taiwan or Vietnam to target China and other jurisdictions. “That, and the fact that the Chinese market is so huge and potentially rewarding, are just some of the reasons why the igaming sector in the Philippines is unlikely to change much for the foreseeable future.”

Asia Gaming Briefings | November 2019

SOUTH ASIA

INDIA

Sleeping giant needs a regulatory shake India has often been referred to as Asiaâ&#x20AC;&#x2122;s sleeping giant when it comes to the gambling industry, though on the land-based side at least, it may still take some time to wake up.

Asia Gaming Briefings | November 2019

SOUTH ASIA

ithout a doubt it’s potentially an enormous market. Its population tops 1.3 billion and it has one the world’s fastest growing economies, which is expected to propel nearly 80 percent of households into the middle class by 2030, up from about 50 percent today. Conservative estimates currently put the size of the gambling market at about $60 billion, but just a small fraction of that -- about $200 million -- comes from casinos. The majority of the growth is online, sports betting and lotteries. Although land-based gaming is legal in three states, the necessary changes in legislation to help the industry take off have been slow to materialise and as of now there is little clarity as to a timeline. Last year, Goa’s former Chief Minister Manohar Parrikar, who died in March this year, created a buzz with his pledge that legislation would be upcoming to move Goa’s six floating casinos onshore, potentially to an entertainment hub. Such a move was seen as a game changer for the boats, which allow little room for further expansion. However, since Parrikar’s death, there appears to be no consensus on what to do about the casino ships, which are scheduled to move from their current location on the River Mandovi, near Panaji, by March 2020.

The government is currently examining alternative sites on water, but as yet there is no agreement, while an immediate move to a position on land has not gathered momentum either. One potential location that has often been suggested is the new Mopa airport, which is under construction. However, that is not feasible as work at the already delayed airport has stalled after the Supreme Court suspended its environmental clearance. Goa Ports Minister Michael Lobo is a strong proponent of moving the casinos on land and in October said that he believed the government should publish its casino policy within the next six months. However, he says that it’s likely to take four to five years after the completion of the airport for the casinos to be relocated. Land-based gaming is also allowed in Sikkim, though the state is remote and difficult to reach. The government there legalised gaming in 2009 to drive tourism and it now has three casinos, though it has been slow to build. That may now be changing after the opening of a new airport in September last year. The Union Territory of Daman in theory also permits land-based gaming, although Delta Corp has still not been given permission to operate a casino at its luxury 176-room resort, which opened in 2014. Delta last December

filed a writ petition in the Bombay High Court seeking to speed its casino license. Delta is the only listed casino operator in India and owns three of the floating casinos in Goa, as well as a property in Sikkim, Daman and shortly Nepal. For Q3, it posted a 22.7 percent rise in profit year-on-year to 59.04 crores, due mainly to a reduction in tax expenses. Revenue from its casino gaming division fell 1.3 percent year-on-year to 200.15 crore. Revenue from its hospitality division also fell 28.6 percent to 11.7 crore. It, however, saw a slight increase in income from online skill gaming operations. Earlier this year, industry experts said the slight drop and flattish revenues were mainly attributed to increased competition in Goa due to the entry of Big Daddy casino. While land-based gaming is struggling to take off, the online side is expanding fast. Under the law, games of skill, even for money, are legal and therefore India has seen a profusion of companies offering online rummy and poker. According to the 2019 edition of the FICCI-EY annual report on India’s media and entertainment sector, online gaming revenue increased by 59.4 percent last year to INR49 billion ($703 million). Real money gaming soared 82 percent to INR26 billion, while casual gaming rose 40 percent to INR22 billion.

Goa’s floating casinos Ownership Started operations in

Gaming Positions Gaming Area

Casino Pride

Casino Pride2

Deltin Caravela

Deltin JAQK

Deltin Royale

Maharajah Casino

Pride Group

Delta Corp Group

MDLR Group

2008

2000, then decommissioned in May 2013; recommissioned in 2016

2008; rebranded in 2013

2013

Restarted operations in 2018; license had earlier lapsed in 2012

500

150+

430+

950+

40,000 sq.ft.*

3,000 sq.ft

13,000 sq.ft.

40,000 sq.ft.

NA (Source: Delta Corp)

Lottery says GST “crippling”

Police arrest 58 in Delhi bust

India’s lottery operators are seeking urgent General Sales Tax (GST) reforms, alleging the tax is “crippling” the industry. Mr. Kamlesh Vijay, Group CEO of Sugal & Damani said one of the impending issues is the differential in the tax treatment between state-government run, and state government authorized lotteries. Under the current rules, 12 percent GST is being charged on lotteries run by State Governments directly, while a 28 percent tax rate is being levied on the lottery tickets authorized by state governments. “This huge difference in the tax rate on the same commodity acts as a tariff barrier for smaller states like Goa, Sikkim, Arunachal etc. when their tickets are sold in other bigger States like West Bengal or Kerala,” he said. However, Vijay said a bigger problem has been how the GST Council has interpreted “taxable value on the lottery.”

Delhi police busted a gambling ring and arrested 58 people in October, who were operating a casino from a hotel room. Organisers were contacting traders and businessmen via WhatsApp to invite them to a gambling party, local media reports. During the late-night raid police recovered Rs 11 lakh and 6,000 chips worth 84 lakh, as well as five specially designed poker tables. Police also seized a large quantity of illicit liquor. Devendra Arya, DCP of south-west Delhi said that organisers of the party were booked under the gambling act and other IPC sections in Vasant Kunj south police station. Organisers had planned six similar events in the run up to the Diwali festival, which is considered as an auspicious time to gamble.

Asia Gaming Briefings | November 2019

SOUTH EAST ASIA

SINGAPORE

Daniel Cheng*

Singapore to retain MICE crown Japan has made the highly lucrative MICE business one of the key pillars of its integrated resort policy, though itâ&#x20AC;&#x2122;s unlikely to knock Singapore off its perch as the regional leader any time soon, even with its shiny new properties.

SOUTH EAST ASIA

he global meetings, incentives, conferencing and exhibitions (MICE) market may in its broadest interpretation be approaching the trillion dollar mark, according to Allied Market Research. In the last decade, the buzz has revolved around Integrated Resorts, as an all-in-one destination that is widely heralded as the linchpin of the MICE industry. Once exclusively the domain of mega-properties on the Las Vegas Strip, the Asia region has now stolen its thunder with more opulent developments sprouting up all over the Asian continent. As a tiny nation with few natural resources, Singapore has been the first to take the leap and benefited as the early adopter. The two Singapore IRs helped reverse a declining trend in annual tourist arrivals, and contributed to it being consistently named Asia Pacific’s top meeting destination in the past few years. Singapore’s success spurred some of its Asian neighbours to emulate its achievements. However, none has been able to attain the same lofty heights. Japan is set to be the next guinea pig embarking on the IR experiment and has skyhigh expectations. MICE and tourism growth are trumpeted by the government as the chief grounds to develop IRs in Japan. However, for MICE business to thrive, it needs to be reinforced and supplemented by a conducive ecosystem where MICE is but only a subset.

visitors arrivals Total 4.688.216

+1.0%

Top 5 inbound tourism markets China 960.337

+3.0%

Indonesia 724.770

-3.0%

India 299.993

+1.5%

Malaysia 283.192

+0.4%

Australia 262.711

-0.9%

(Source: Singapore Tourism Board)

MICE works best in a place which has the full deck. Consumers go where their needs are met, and their wants are fulfilled; the former is mandatory but the latter cements the decision. The former is rendered generally by the direct MICE-related businesses; planners and organisers, convention and exhibition venues, hotels, airlines and transportation providers. Suffice to say, the ‘wants’ are of a greater value and are more difficult to create. Consumer ‘wants’ are entertainment, rich culture, exotic cuisine, adventure, variety and a positive experience. In that sense, Singapore perpetually faces an uphill battle because it holds the weakest hand. Everything has to be created, both the ‘needs’ and the ‘wants’. Singapore is the epicentre of MICE in the Asia Pacific not only because it dotted all the ‘i’s and crossed all the ‘t’s in the MICE supply chain, but also because it created a welcoming cosmopolitan, globalised village, building entertainment and attractions where none existed. Japan’s government has pronounced four key pillars for Japan IR development: world-class entertainment; an array of hotel accommodation; MICE, and a gateway to Japan. The Japanese view the MICE component in the IR as some sort of magic potion that would open the tap for MICE business into Japan. They seem to have underrated the fact that Japan is already blessed with bountiful attractions, culture, nature, beauty and a culinary smorgasbord. Do Japan IRs spell the fall of Singapore

from its pinnacle in the MICE sector in the Asia Pacific? Not quite. Singapore still retains three key ‘need’ cards that give it some upper hand. First, Singapore is an established international business centre where thousands of corporations around the globe have business operations. The premise of MICE revolves around an ecosystem of business and corporate customer groups. It is a further advantage of these customer groups to hold their events in a country where they also have a local office. In this aspect, Singapore has no equal in the Asia Pacific region. Second, the bulk of MICE business is international, involving air travel. Here again, Singapore excels logistically as an international travel hub and Changi Airport is consistently voted the best in the world. And third, because of the very international flavour of MICE business, the host country needs to be proficient in the universal language of English. Not only is Singapore highly Englishliterate, but it is also competent in Mandarin, being one of the main second language of Singaporeans; giving it an upper hand for the enormous China outbound MICE market. *Daniel Cheng is a founding partner of Global IR Consulting Japan (GICJ), and previously held senior executive positions with Hard Rock International, Genting Group and Bally International (now Scientific Games).

Operators pay $745,000 in fines in 2018 Fines paid by Singapore’s two casino operators amounted to $745,000 ($540,000) in the 2018 financial year, with the lion’s share extracted from Genting Singapore’s Resorts World Sentosa.The figures were released in the Casino Regulatory Authority’s recently published annual report. Las Vegas Sands’ Marina Bay Sands paid a total of $15,000 split between two offences, one of failing to prevent a minor from entering the floor and failure to prevent a local resident from entering and remaining without paying the entry levy. Resorts World Sentosa was fined $400,000 for failure to implement a system of internal controls approved by the authority; it had to pay $250,000 for failure to comply with a direction related to conduct, supervision and control of operations and $80,000 for failure to prevent five minors from entering the casino.

MBS sues for missing client funds A former Chinese gambler at Marina Bay Sands is suing the casino for allegedly transferring funds from his casino deposit accounts without his authorization, Bloomberg reported. Wang Xi discovered in July that S$9.1 million ($6.6 million) was missing from his account as a result of 22 transfers made between October and December 2015. Wang said he doesn’t know the people who allegedly received the money. According to the lawsuit, which was filed in the High Court of Singapore, Marina Bay Sands told Wang that it had received authorization letters signed by him in Macao for the transactions. Wang said the signature was copied and pasted onto the authorization letters and blamed the casino operator for failing to verify the authenticity of the letters and signatures.

Asia Gaming Briefings | November 2019

SOUTH EAST ASIA 42

GROSS GAMING REVENUE Government lottery THB150.4b Illegal lottery THB153.2b Football betting THB160.5b

Pattaya gambling bust nabs 19 Chinese

THAILAND

Betting ban no hurdle to Thais Thailand’s efforts to stop illegal gambling appear to be yielding little fruit, with a new survey showing just how widespread participation is in the Kingdom.

he study by the Centre for Gambling Studies, Faculty of Economics, at Chulalongkorn University, found that 30.42 million Thais, or 57 percent of the population, have carried out some form of gambling activity in the past year, despite a government ban. The survey was based on data collected from 44,050 people across 77 provinces. The total figure is 1.49 million more than the last time the survey was carried out in 2017 and includes 700,000 first time gamblers. Of particular concern to authorities were the statistics showing how widespread gambling is among Thailand’s youth population. About 733,000 in the 15-18-year age bracket had participated, adding up to almost 21 percent of the youth population. Meanwhile, 3.05 million, or 46.3 percent of young adults aged 19-25, are also known to bet. In the senior group of aged 60 and above, a total of 3.35 million, or 42.2 percent of the senior population admitted they had gambled. The report said that the youngest gambler is seven years old. The only legal forms of gambling in Thailand are on horse racing at the

Asia Gaming Briefings | November 2019

Bangkok Turf Club and the government lottery. However, illegal gambling dens are widespread across the country, as are illegal lotteries and numbers games. Sports betting is also highly popular with Europe’s Premier League football enjoying an enormous following in Thailand. According to the study, betting on football generated the most revenue at THB160.5 billion ($5.3 billion), while illegal lotteries took in THB153.2 billion. The legal government lottery collected THB150.4 billion. The government regularly carries out raids against illegal operations, in particular around major sporting tournaments, though experts say it is nearly impossible to control. Some, such as Visanu Vongsinsirikul, a lecturer in economics at Dhurakij Pandit University, have forecast the government will eventually legalise casinos as it eyes lost revenue to the increasing number of legal jurisdictions across Asia. Neighbouring Myanmar recently passed a bill paving the way to an IR industry, while resorts targeting Thais are proliferating in Vietnam and Cambodia.

Nineteen Chinese nationals were arrested in September for running an online gambling operation from Pattaya, with THB 8 million ($263,000) in daily circulation, according to the police. The raid was conducted on three condominium rooms in the tambon Nong Prue of Bang Lamung district. Around 10 laptops, 300 mobile phones and details of electronic accounts were seized. Police Major General Nanthachart Supamongkhol, chief of Chon Buri police, said the raid was planned after Nong Prue police were tipped off that there were many Chinese nationals often gathered in the condominium rooms, attracting people’s suspicion. The suspects had been hired by a gambling boss in China to run a gambling operation in Thailand. They entered the country on tourist visas.

Thais warned of online data breach The Thailand Emergency Response Team recently issued a warning that about 41 million items of information, 3.3 million of them belonging to Thais doing transactions with overseas gambling websites, had been leaked. The Bank of Thailand (BoT) warned Thais to immediately cancel any credit cards that may have been used during online gambling transactions. Those who have registered with the websites should change their passwords linked with internet and mobile banking and stay alert to “suspicious contact” by criminals who may obtain personal data like phone numbers and email addresses, The BoT said.

#AH29

www.weikegaming.com

Singapore: +65 6547 1878 | Macau: +853 2872 8711 Asia Gaming Briefings | November 2019

AUSTRALASIA

AUSTRALIA

Whistleblowers weigh on Crown Crown Resorts continues to feel the heat from allegations of wrongdoing at its Melbourne casino, with further whistleblowers triggering a call for a royal commission inquiry.

Asia Gaming Briefings | November 2019

he company came under the spotlight for all the wrong reasons at the end of July after a former employee made allegations to 60 minutes, The Sydney Morning Herald and The Age, which teamed for a joint investigative report. Jenny Jiang, who was one of 19 Crown employees arrested in China in 2016, made wide-ranging claims, including links to organised crime and the fast-tracking of visas for the company’s high rollers. Since then two further whistleblowers have come forward making similar claims against the company, which directors have vehemently denied. One included a former limousine driver who also detailed how Crown helps VIPs to bypass customs. He was speaking to Tasmanian MP Andrew Wilkie, who is known as an antigambling crusader. The whistleblower, speaking on condition of anonymity, told Wilkie that casino employees are expected to ignore or facilitate the law breaking, under a system known among staff as “Crown law.” The driver says Crown staff will procure drugs or sex workers for the overseas high rollers who are flown into Melbourne Airport on private jets, bypassing the official customs checks imposed on other travellers, the report said. The third case involved security camera footage leaked, also to Wilkie, by unnamed officials from Victoria, that show bricks of money changing hands in a VIP room in Crown Melbourne. The first case, which received global publicity, triggered a series of probes, including by Australia’s Criminal Intelligence Commission and by Victoria’s gaming regulators. However, Wilkie has argued that it’s time for a royal commission, a much deeper level of inquiry. “This crisis at Crown is multinational, multi-jurisdictional and multi-agency,” he told a local newspaper. “This is a demonstration of catastrophic failure on the part of the major parties, the Victorian Commission for Gambling and Liquor Regulation, Victoria police, the Australian federal police, Border Force and the Australian Transaction Reports and Analysis Centre (Austrac).” The federal government has so far resisted calls, while Victoria State Gaming Minister Marlene Kairouz said the presence of stacks of cash is not necessarily a sign of wrongdoing. “But it’s not uncommon for high roller rooms to have large amounts of cash in those rooms and let me remind the member that cash is indeed a legal tender,” Kairouz said.

AUSTRALASIA 45

The legal troubles come against a backdrop of weakening business conditions for Australia’s casino operators, as the softening China economy hits VIP play. Crown in August reported that its annual profit fell 4.7 percent year-on-year to $368.6 million. The decline was primarily due to the reduction in VIP program play revenue in Australia, which was down 26.1 percent to $38 billion. JP Morgan analyst Don Carducci said the company also posted higher expenses across the board. Main floor gaming revenue only helped to offset this slightly, increasing 0.5 percent to $1.7 billion in the year. Rival operator Star Entertainment has also seen deteriorating conditions, meaning some executives, including CEO Matt Bekier, will forego a share bonus after missing performance targets.

The performance hurdles included an earnings per share (EPS) performance of 35.2 cents per share, as well as a total shareholder return (TSR) hurdle, requiring that the company ranks above the 50th percentile compared to a defined peer group. However, the company’s TSR for the four year period was -3.1 percent, ranking 58th among the defined peer group. Star posted an 8.4 percent annual drop in profit to $224 million. VIP turnover was $42.4 billion, down 30.7 percent year-on-year. On the domestic market front, the company said it saw “solid” domestic gaming growth, supported by market share gains at Gold Coast and Brisbane, and tables revenue growth of 4 percent, though chairman John O’Neill said this was not enough to offset declines in their international VIP business, which was impacted by weaker market conditions.

GROSS GAMING REVENUE Casinos $5.19b

+0.4%

Gaming machines $12.07b

+4.2%

Sports betting $920.6m

Racing $2.94b

+4.1%

Total gambling expenditure 2016/2017 $23.65b

+13%

+3.9%

(Source: Queensland Govt.)

Tabcorp inks NFL accord

Tasmania to introduce one of Australia’s highest PoCs Tasmania is set to become the sixth state in Australia to introduce a point-of-consumption tax, aimed at properly taxing wagering operators on their operations, local media reports. Under a point of consumption wagering tax, operators pay tax to the jurisdictions where the customers are located, no matter where the operator is located. In the past, operators were taxed under a “point of supply” tax, in which operators would typically situate themselves in low-tax jurisdictions, targeting punters nation-wide. Treasurer Peter Gutwein said the new tax will roll out on 1 January 2020, and will be at a rate of 15 percent of net wagering revenue. This has been considered by some as on the higher end of wagering taxes. In comparison, New South Wales and Victoria have a current rate of 10 and 8 percent respectively. Gutwein said the new tax measure is expected to generate A$5 million (US$3.4 million) per annum.

Tabcorp has reached a multi-year accord with the NFL to be the exclusive wagering partner in Australia. The partnership also enables Tabcorp to create unique NFL content and experiences for Australian fans across its digital platforms and venues, the company said in a news release. In addition, TAB and the NFL will combine to promote the NFL’s official Pick’em free-to-play football game. The game will provide NFL fans in Australia the chance to win weekly prizes, as well as a grand prize trip to the Pro Bowl. Further, Tabcorp and Sky Channel will bring the NFL Network and six hours of NFL RedZone programming to Australian fans across its commercial network of more than 4,400 pubs, clubs and TAB agencies. “We are proud to bring Australians NFL action to enhance our existing sports offering to customers and venues and complement Sky’s unrivalled coverage of Australian and international racing,” Tabcorp Managing Director Wagering and Media Adam Rytenskild said.

Asia Gaming Briefings | November 2019

AUSTRALASIA 46

CNMI

Tinian casino to debut in 2020 Tinian in the Commonwealth of Northern Mariana Islands, is scheduled to get a new casino resort early in 2020 as improved transport links open up the potential for tourism on the island.

he long-delayed project, which is owned by China’s Bridge Investment Group and managed by Wyndham Hotels, is now scheduled to open in Q2, 2020. The resort will cover about 40,000 square meters, with 300 hotel rooms. The plans include a 1,800 square meter casino complex, banquet spaces, a wedding chapel, a fitness center, two arcades, and a museum. Tourism arrivals to Tinian have been

Asia Gaming Briefings | November 2019

hampered by the lack of transport infrastructure, though that is now improving. In September, a new luxury ferry service was announced that will ease transport between Tinian and its larger neighbour Saipan. The 49.5m Sand Diamond ferry can carry 290 people and more than 30 cars and will begin regular daily sailings by the end of this year. “The launch of the Sand Diamond will cater to the large demand for Saipan

visitors to experience Tinian and all the entertainment options it offers, including the Tinian Casino. Previously the only access to Tinian has been by plane.” said Danny Ewing, Director Of Operations of US-based casino consultants to the project, Clear Management. The Tinian Casino is the first phase in a master plan for the Wyndham Hotel & Resort, the largest tourism and hospitality investment on the island. “Wyndham Hotel Group, as the international operator, is excited to see this latest commitment by the owners and developers of the Wyndham Hotel & Resort Tinian,” said Wyndham Senior Vice President Acquisition and Development, David Wray. “The introduction of this luxurious fast ferry service, will open up to the world the treasures of Tinian and the opportunity to experience one of the world’s most beautiful islands.” Tinian does have an airport and welcomed its first international charter flight in 2018, which is seen as the key to opening the market to a larger volume of tourists. However, with a lack of hotel accommodation on the island there is little incentive for airlines to

AUSTRALASIA 47

visitors arrivals Year to date 2018 2019

2018

2019

Monthly % change 352,796 -33.3%

-28.3%

-34.3%

January

February

March

-19.4%

-17.0%

-11.1%

-5.4%

May

June

July

275,793

April

(Source: Marianas Visitors Authority)

Regulator mulls junket applications

schedule regular flights. “By having direct flights to Tinian, it is our hope that Tinian will become a major player in the CNMI tourism industry,” Tinian Mayor Joey Patrick San Nicolas said at the opening. “Granted that we need to open up more rooms for our guests, but the completion of the TIA is a step in the right direction.” Bridge was scheduled to break ground in 2016 and originally planned to finish by the end of 2018. The project has been delayed by about a year, but it is moving ahead. Tinian has experienced mixed fortunes with its efforts to develop casino resorts. Macau-based Alter City Group also had grand plans for a $1.7 billion resort, to be known as the Plumeria Golf and Casino Resort at Nasarino Beach. However, its casino license was suspended in 2018 after it failed to pay its annual fee and the project has stalled. Under the terms of its license it was scheduled to pay $500,000 for 40 years. At the time, William Cing, executive director for the Northern Mariana Islands gaming commission, said the company had experienced difficulties raising finance and was seeking further investors. To date there has been no progress. A third project, the Tinian Dynasty Hotel, has been shuttered since 2015 when it was hit with a $75 million fine by the US Financial Crimes Enforcement Network (FinCEN) for anti-money laundering violations, which it was unable to pay. The U.S. government accused the operator of

The Commonwealth Casino Commission in the Commonwealth of Northern Mariana Islands is discussing an application for four new junket operators to operate on the island. They were named as American Bopan, managed by Mingyu Huang: P’Art Corp, with Jun Ho Park as president; Palm Tree Ventures, managed by Jian Hui Jiang and Tropical Sands managed by Zhan Hui Cui. Imperial Pacific International, which is focused on the Asian high-roller market, has so far failed to attract the region’s major junket operators to its property. The resort, which is still far from completion, lacks the hotel rooms and facilities to cater to VIPs, with visitors placed in neighboring hotels and high-end yachts. In the absence of meaningful junket play, IPI has extended direct credit to its clients, resulting in a spike in impairments.

IPI buys stake in land developer Imperial Pacific International has entered into a sale and purchase agreement to acquire a 50 percent stake in American Sinopan LLC, a company developing two pieces of land in Saipan. The consideration for the equity stake in the Hong Kong-owned company amounts to US$23.7 million. Total land area of the two pieces of land is around 129,687 square meters. One of the pieces of land includes 12 villas and a three-story public building under construction on Capitol Hill, the former Heaven II Resort. The other land is the project site for the Casha resort hotel, which is an under-construction hotel set to have more than 1,700 rooms when completed. IPI said the acquisition of American Sinopan LLC is in line with the business development strategy and plans of the group.

“willful and egregious” violations of antimoney-laundering rules going back to 2008. Mega Stars Overseas Ltd., which has management rights over the defunct property, is still looking at an opportunity to re-open the resort, either as a hotel or just a casino, Tinian Mayor Edwin Aldan told a local newspaper in May. The CNMI has been keen to foster an integrated resorts industry to attract high-

spending visitors from across Asia to help it balance its budget. Tinian is just 4.5 hours flight from Beijing and offers visa-free access. However, the islands have been ravaged by major typhoons over recent years, which have further damaged infrastructure and delayed building projects. Imperial Pacific International has opened its casino, but has repeatedly delayed completion of its resort.

Asia Gaming Briefings | November 2019

SUPPLIER SPECIAL REPORT 50

MGS 2019

Technology for tourism development Over the years, the MGS Entertainment Show has pivoted towards a wider technology and innovation focus at its exhibition, as part of efforts to respond to Macau’s position as a “world tourism and leisure center.”

he show will be held on 12-14 November 2019 in Macau, promising to facilitate business opportunities between exhibitors and buyers, whilst introducing new technologies to the industry. “After years of effort, MGS has gradually become one of the important trade platforms in the entertainment industry in the Asia Pacific region. This year, MGS will introduce new exhibitors with self-developed technologies and hope to create a positive influence on the tourism and entertainment industry in the Asia Pacific region,” said organizers. The exhibition, held at the Cotai Expo Hall at Venetian Macau, will feature seven distinct areas of focus, including Leisure Technology, Gaming Equipment, E-sports, Security Systems, Integrated Resorts (IR’s), Procurement Fair, Hotel Supplies Securities Systems and Environment Protection & Sustainability. The conference portion, in partnership with Sina Game, will consist of four major sections, including Transformation and Innovation of the 2019 Gaming Industry; Sina Asia E-sports Industry Summit; Sail Scientifically and Survival and Challenges of

Asia Gaming Briefings | November 2019

Overseas Living; and Future Development Trends of 5G Cloud Gaming. The show will also be cooperating with ICBC for the first time, to host a seminar on the topic of SMEs and smart finance, named ‘ICBC facilitates Macau’s apposite diversification of economic development by supporting the growth of local SMEs, driving the development trend and impacting smart finance.’ In addition, MGS is also working with telecoms company CTM to present the latest in 5G technical applications at their “Experimental Hall.” Interesting technologies to be seen on the show floor includes an interactive indoor cleaning robot named iSmart and Viggo, as well as a VR device named Pilot Era8k Panoramic Camera, which allows users to attend all sorts of events in virtual space, such as conferences, concerts, and games. Of course, a wealth of innovative gaming products and machines will be on display across the show floor - which will see government officials from various Asian countries, along with academics and senior management from integrated resort operators in attendance.

SUPPLIER SPECIAL REPORT 51 APE

Assembling the Latest EGEs

sia Pioneer Entertainment Holdings Limited will continue to gather talents in Electronic Gaming Equipment (EGE), with Jumbo Technology, Konami Australia, Spintec d.o.o., TransAct Technologies and SEGA Sammy CREATION showcasing their latest and the greatest hit products at the 2019 MGS Entertainment Show. This will be the seventh time APE has participated in the show. Latest Bao Ni Fa Progressive Jackpot Link Jumbo the local Taiwanese gaming supplier, showcases its newest product Bāo Nǐ Fā Jackpot, building on the previous features of the company’s wildly popular Yi Lu FaM Jackpot. Bāo Nǐ Fā adds a standalone “Fortune” jackpot on top of the three progressive linked jackpots. Furthermore, players also have a chance to win up to four jackpots at the same time. Jumbo has launched three hit games linked to Bāo Nǐ Fā, including “Power Dragon”, “Power Mask” and “Power Lion”, in which the unique “Power Up” feature gives players the chance to multiply their winnings. Gaming Perfection Brought to Life Spintec’s highlight at this year’s MGS is the Aura Multigame Amphitheatre. Aura combines automated, live and virtual games into one seamless and enjoyable multigame experience. Aura boasts of state-of-the-art technology which was designed to offer a better gaming experience and an extensive library of games. Operators can choose to have installed either Roulette, Sic Bo, Craps, Baccarat, Blackjack, or opt for a Multigame with every possible combination of games. Visitors will be also able to experience Karma 8 GEN2 Automated Roulette and stand-alone multigame solutions, the core Spintec’s products. Proven Performing SAP and Cabinet Gaming machine specialist Konami will showcase their top-performing products and include proven to perform standalone progressive (SAP) innovations such as Star Watch and Golden Blocks series showcasing Konami’s new Strike Zone feature. The games can be applied on the Concerto Stack cabinet with 43-inch HD vertical displays, enhanced 4K graphics and signature Concerto highlights. Optimized

for the Asian market, the linked progressive game series, Golden Blocks and Ba Fang Jin Bao series designed with Chinese graphic symbols and themes together with Cai Lai Si Ji titles, will also be displayed on the booth. Epic: The Industry’s Most Trusted Name in Printing The long-time industry-standard for TITO printing, TransAct’s Epic 950 continues to deliver proven performance in over 750,000 slot machines worldwide. Easily integrated into all game types, the Epic 950 features TicketBurst technology to eliminate player/ticket interference and is fully compatible with Epicentral to provide for the direct, real-time delivery of eye-catching personalized promotions and bonus offers. New Standalone Maximum Fortune Series SEGA SAMMY CREATION INC. plans to showcase their new standalone ETG – “Baccarat Maximum Fortune”, “SicBo Maximum Fortune” and “Roulette Maximum Fortune”. Maximum Fortune Series includes the unique “Quick Result Display” function (patent-pending) that allows the player to quickly see the results of games without placing bets. This enables players to proceed with the game history until desirable result trends appear. The standalone Baccarat title has already been installed in Macau since last year and it has seen strong performance. SicBo and Roulette titles will be available in Macau soon. Mr. Herman Ng, Chief Executive Officer and Executive Director of APE said: “Having accumulated over 14 years of professional experience, APE holds a high market share and remarkable customer satisfaction in Asia. Noting with pleasure that our distribution partners enjoy deepening trust and sound cooperation through continuous strategic partnerships. I would like to thank for their efforts for the show, and last but not least for Sega Sammy’s first participation with us.” APE and their suppliers can be found at booth#AR35 at the show.

ARUZE

New titles and instant triggers

ruze Gaming continues to push the boundaries of what is expected in slot design. From award-winning, top-performing cabinets to powerful, unique gameplay that players love, Aruze has a wide range of exceptional products. This year at MGS, Aruze will be displaying two cabinets from their Muso product line, Muso Curve-43, and Muso Triple-27. Both cabinets feature LED lighting that continues behind the monitors, in edge lighting along the monitors themselves and even in the player’s wrist rest. The unique light display in its LED backlighting gives a 360-degree presence on the casino floor. Additionally, both cabinets have an integrated wireless phone charger and two USB ports for charging. Aruze will be displaying new titles for the popular Fu Lai Cai Lai game series, Fu Lai Cai Lai Wild Instant Trigger Reveal and Fu Lai Cai Lai Instant Trigger Wild Destiny. These new titles offer Instant Trigger, a feature that allows players to purchase a guaranteed Free Games series. Wheel of Prosperity Dragon and Wheel of Prosperity Phoenix continue to be top performers on the Muso Curve-43 cabinet. Two new titles are being launched for this series, Wheel of Prosperity Serpent and Wheel of Prosperity Tiger. Both new games maintain the great gameplay of the original Wheel of Prosperity themes, but with exciting new Free Games Features. Also new this year on the Muso Curve-43 cabinet is Fantastic Dragons Fire and Fantastic Dragons Gold. These games have an exciting hold and respin feature that can be triggered in either of the 50-line reel sets or in both reel sets at the same time. These along with other amazing titles and cabinets will be on full display at MGS 2019 booth #AS29.

Asia Gaming Briefings | November 2019

SUPPLIER SPECIAL REPORT 52 ebet

Mobile iGaming

ounded in 2012, eBET is considered Asia’s first leading supplier of mobile iGaming. The company’s mission is to design intuitive and interactive live gaming experiences that are customized for all generations of mobile users. Trusted by millions of players throughout Asia, eBET’s awardwinning pro ducts are fully supported on PC, Mac, iOS, and Android. All games designed by eBET are certified by GLI, and it is regulated and monitored by PAGCOR to ensure game fairness and reliability while supporting 16 languages and 26 currencies.

ganapati

End of Edo

nternational iGaming supplier Ganapati PLC presents another release well worth a play at MGS 2019. End of Edo is set in a period of Japan’s history known as the Fall of Edo – a time when the country’s militant, samurai rule was brought to an end and power was restored to the Emperor. The Fall of Edo took place in 1868, when the Japanese capital of Edo (modern Tokyo), controlled by the Tokugawa shogunate, fell to forces favoring the restoration of Emperor Meiji. The Fall of Edo brought the samurai system to its long-awaited end and became the stepping stone towards the creation of modern Japan. Players will join members of each of the four clans involved in the war which ended the Edo era, as they fight to restore Japan to peace in this action-packed Ganapati game. An intense air of warfare permeates the base game, with a shadowy Edo castle in the background, dimly lit by the flames of war. Dramatic music emphasizes the game’s dark mood. The game’s interactive element is what really makes the End of Edo stand out. The highly original, strategy-based bonus game allows players to battle their way across a tiled map one step at a time, picking up fun features and rewards as they go, as they fight their way to the Free Spins round. Players must choose their own path – and in doing so, are control their own destiny. The attention to detail in this slot game is truly special. The crackling fire and slashing sword sound effects, the unique rope pay lines and the Expanding Wild snakes which make a dramatic appearance across the reels, are all particularly worthy of note.

habanero

Hot Hot Halloween

oasting more than 150 HTML titles, Habanero prides itself on its entertaining content which can be played on mobile, tablet and desktop. These include their newest seasonal content, Hot Hot Halloween, just released, and Naughty Santa, which will be seen at the end of November. These games feature the latest in high-end graphics and great audio. They feature unique math models and narratives to ensure they are always exciting and engaging. It is truly worthy of note that Habanero has been reliably releasing a new slot game once a month, every month, for the last 4 years running. Games specifically designed to Asian themes and settings are also abundantly available. These include established favorites such as Nuwa, Lucky Lucky, 5 Lucky Lions, Fire Rooster, Fa Cai Shen, Koi Gate and Fenghuang, all of which can be played on all devices. Innovation is always key for Habanero and that’s demonstrated in each slot it brings to market, including Colossal Gems, which was its 100th slot when released in August. To celebrate reaching that eventful

Asia Gaming Briefings | November 2019

century of slots, Habanero had unveiled its most impressive slot to date, with precious stones filling a 6x5 screen which depicted a futuristically vibrant backdrop. With a game portfolio of such high quality,

it’s no surprise to hear Habanero has achieved a number of significant deals, including a recent agreement to feature on Playtech’s Open Platform, and a few more in the pipeline now to wrap up the year of 2019.

SUPPLIER SPECIAL REPORT 53 BetConstruct

Spring Pro platform for expansion

pring Pro is BetConstruct’s innovation that allows operators to choose, adjust and configure its products to their desired specifications. BetConstruct is passionate about helping its partners grow into strong and successful businesses. We have developed Spring Pro based on our desire to develop tools and processes that help our partners thrive and based on listening to their needs. Spring Pro allows our partners to take even greater control over big data, player insights and source codes, to unleash their full potential and customize the offering

to their exact requirements. The solution empowers partners to become a full-scale technology provider similar to BetConstruct, with the freedom to manage all aspects of the betting operations, as well as odds, event creation, risk management, trading tools and beyond. We know that customer experience is ultimately what will set brands apart in the battle for market share and with Spring Pro we enable our partners to deliver on customercentric strategies and compete by creating unique propositions and experiences that are

loved and trusted by the targeted end customer. “Spring Pro is key to our aggressive expansion and growth,” said Vigen Badalyan, BetConstruct Founder & CEO. “It is the next generation of our vision for the relationships between us, as a provider, and our partner operators who want to separate themselves from the pack and gain more flexibility. We see the future of igaming business as transparent and open. These are the qualities that we encourage our partners to embrace and Spring Pro is at the heart of this approach.”

Asia Gaming Briefings | November 2019

SUPPLIER SPECIAL REPORT 54 IGT

Born to Perform in Asia

ing Cai Shen is IGT’s new, approved link that combines winning IGT game mechanics with an innovative jackpot feature to provide the performance that players across Asia will love. Players will enjoy the winning features of IGT’s Expanding Reel Matrix and Gold Coin collecting gameplay, which generates even more player excitement with its Hold-and-Respin plus Lock-and-Respin in the jackpot feature. The visibly growing stack of Gold Coins and Red Pockets, along with the Hold-and-Respin progressive feature – offering a chance to win the Major, Maxi, or Grand jackpots – adds an extra touch of anticipation that players enjoy. Ying Cai Shen will drive performance and deliver a new, exciting choice for players across Asia with its exciting game features and brilliant Asian graphics. “Ever since we showed Ying Cai Shen at G2E

JUMBO

Introducing Bao Ni Fa

umbo Technology will exhibit its latest progressive jackpot link - Bāo Nǐ Fā - during the 2019 MGS Entertainment Show. Jumbo’s newest product, Bāo Nǐ Fā Jackpot, builds on the previous features of the company’s wildly popular Yi Lu Fa Jackpot. Bāo Nǐ Fā adds a standalone “Fortune” jackpot on top of the three progressive linked jackpots. Furthermore, players also have a chance to win up to four jackpots at the same time. Jumbo has launched three hit games linked to Bāo Nǐ Fā, including “Power Dragon”, “Power Mask” and “Power Lion”, in which the unique “Power Up” feature gives players the chance to multiply their winnings. It also features an exhilarating big win teaser animation, culminating in a player experience like no other. Jumbo Technology is celebrating its 20th anniversary next year. Founded in 2000, Jumbo technology has dedicated itself to innovation and development of new gaming machines and casino management systems. Jumbo Technology will be working with its Macau distributor Asia Pioneer Entertainment and can be found at booth #AR35.

Asia Gaming Briefings | November 2019

Asia, it has been the subject of hot discussions amongst our customers. Now that we have received approval for the game, our customers are eager to place Ying Cai Shen on their floor and we are working on a number of exciting launch promotions across Asia,” said Michael Cheers, IGT Sales Director, Asia. This game is produced by IGT’s Asia Pacific studios, delivering IGT’s experience with marketrelevant content to players across the region. The art, mechanics, bet structure options (68 and 88 credit cost to cover) are attuned to fit regional players’ preferences in Asia. IGT recommends minimum banks of eight machines to start, and then grow the banks as the game gains more and more players. Ying Cai Shen is now approved and available in the Asia market on IGT’s Crystal Curve cabinet.

KONAMi

Entering the strike zone

t MGS 2019, Konami will showcase their top-performing products, including proven to perform standalone progressive (SAP) innovations such as Star Watch and Golden Blocks series and also linked progressive game series, Ba Fang Jin Bao. Konami introduces Star Watch Fire & Star Watch Magma slots on the Concerto Stack Cabinet with electrifying animations and fast-paced action. Both games showcase Konami’s new Strike Zone feature, allowing players to activate special areas of the reel frame for extra bonus events at different extra bet amounts. The Concerto Stack cabinet, which includes a captivating 43-inch HD vertical displays, enhanced 4K graphics and signature Concerto highlights, will feature the games on the booth. The single-screen format provides players with exclusive game content designed to optimize the machines’ extra-tall portrait orientation while maintaining a standard upright base size for flexible configuration across the casino floor. Optimized for the Asian market, Golden Blocks and Ba Fang Jin Bao series are designed with Chinese graphic symbols and themes. Ba Fang Jin Bao showcases its proven mechanics from Konami’s popular Cai Li Si Ji titles, such as Wealth of Dynasty and Winning Animals, and delivers it in a single screen format with

4K graphics and animations. Available Ba Fang Jin Bao base games include Abundant Fortune and Fortune Totems, which both feature a progressive chance every time a gold ingot symbol lands on the reels. Join Konami on stand #AR35 at the MGS Entertainment Show in November.

SUPPLIER SPECIAL REPORT 55 lotus gaming

Comprehensive live casino

otus Gaming has been providing its live casino platform to the international market for more than three years. The company is continuously reaching new heights with its progressive multi-gaming platform, which contains Baccarat, Roulette, Sic-bo, Dragon Tiger, Red & White, Hold’em and multiple slot games. We provide an experience of real-time live streaming with a vivid user interface. Lotus Gaming offers a comprehensive platform that allows you to engage in various games. The strength of this service is that all games within the platform can be enjoyed conveniently with a universal game credit. Users can play live Baccarat and bet on slot games at the same time. Our primary function enables users to play games directly from a mobile browser without any installation. HTML5 can provide user convenience even in the presence of an unstable network connection. It can transmit game results even when the video can be toggled on and off. The integration of the HTML5 format has gained a favorable response from the international market.

It enables the player to enjoy existing side bets even when playing at a current table. We assure you that there will be no dull moment on your live casino experience because Lotus Gaming lets you mix it up with other side betting variants. The Preferred Pattern function allows

users to set their preference when it comes to game trends. Lotus’ interface automatically alerts players if their desired pattern appears in any of the tables. It maximizes the gaming experience as our players can easily access and monitor trends at the tables at the same time.

by its Lanterns Boost Feature. Activating this brings the player flying lanterns on the screen during each spin. Landing a lantern on a random reel position allows regular symbols to be turned into Wilds, and then to go up to the next position with the next spin. Collecting 3 to 5 Scatters activates the Pick’em Bonus Feature and by catching some of the

flying lanterns, the player is rewarded with lots of free spins. As you will see, this and all of NetGame’s slots are loaded with lots of bonus features that are especially loved by players. Today, NetGame Entertainment is a young game provider on the market and is just starting to gain popularity and reach players’ hearts.

NetGame

New kid on the block

etGame Entertainment is a new player in the igaming market and has created lab-approved HTML5 games, infused with innovations. The brand started in 2012 with a group of three enthusiasts from land-based gaming and during the past seven years, the team has grown its expertise, establishing a new brand of online casino software - NetGame Entertainment. As a result, a new HTML5 platform was launched in June 2019, with 30 games in their diversified portfolio. To breathe future innovation into this segment, NetGame Entertainment is showcasing a variety of products made for the Asian markets. Among them are Magic Dragons, Dragon Sevens, Magic Tree, ZenZen Cash, Dancing Lanterns, and so on. All the mentioned slots demos are available on the NetGame Entertainment website and are free to play, except the new slot - Dancing Lanterns, which is planned to be released in December 2019. The Dancing Lanterns slot is characterized

Asia Gaming Briefings | November 2019

SUPPLIER SPECIAL REPORT 56 RTG

Classic adventure!

TG Slots is the Asia-focused division of Real Time Gaming, which is now celebrating over 20 years of producing igaming platforms and games. With offices in Manila and Kuala Lumpur, RTG Slots is focused on producing games that are innovative and provide new experiences for the player that over time will maximize player lifetime values and drive enhanced profitability to our clients. RTG Slots’ games are specifically designed for Asian players, featuring themes, graphics, animations, music and algorithms to which Asian players will connect. From deeply rooted stories and legends that players have grown-up with (e.g., The Three Kingdoms War, Tian Di Yuan Su, Wu Zetian) to more contemporary themes such as the exclusive Kung-Fu Hero film-based series of games, as well as the “classic” RTG 777. The word “classic” shouldn’t be associated with something entirely old or outdated, instead, it comes equipped with absolutely modern features and brings more chances to win!

SA gaming

Simply great online entertainment

implePlay is here to provide great online entertainment! Founded by veteran gaming enthusiasts, SimplePlay develops premium slot games that deliver the thrill of the reels to the players. We also offer exciting fishing games to enrich the portfolio of online gaming operators. The following are some of our best-selling products: Crafted by seasoned developers and artists, our slot games are exciting and contain gorgeous graphics. We offer installation-free games in various themes, from famous folklore to popular works. There are also various game features and ways to play. Zeus, a 3-4-5-4-3 reel slot with 720 ways to win, has a wild lock re-spin feature. When wild symbols are stacked on reel 3, the reel can be locked for a re-spin. Sparta’s Honor is a 3x5-reel, 50-line slot game, which contains a double prize for the top payout symbol, and a free game feature, where three different sets of free games are available. In addition, our fishing games offer an exciting multiplayer experience to the players. They can meet opponents all around the world, and compete with them. A maximum of six people can enjoy catching fish with huge rewards together.

Asia Gaming Briefings | November 2019

RTG 777 is a classic 3-reels 1-row medium volatility slot with a single payline, a HOLD feature, and a symbol-driven jackpot. The hold feature, which only applies to symbols in the paytable, will be activated after a paid game. The player may choose to hold any 1 or 2 reels by clicking the “HOLD” button under the corresponding reel. When 2 reels are held, the third HOLD button becomes disabled. When each hold button is clicked, an extra bet amount will be calculated to increase the total bet amount. There are 3 bet levels for the player: Normal Bet, High Bet, and Super Bet according to the different bet amount. Each bet level has a corresponding top award, if the player plays with Super Bet and win 3 wild card logos, he/she will have a chance to trigger the jackpot feature! Enjoy yourself with this retro-style slot, with old-school symbols, new-age graphical detail, and attractive features. Win big in this risky and adventurous slot!

SUPPLIER SPECIAL REPORT 57 sportradar

Planning needed now for future sports betting gains By Michael Maerz

s 2019 starts to wind down, many are reflecting on the year that was and where to for 2020. Attention remained on the US, as states continued to enact sports betting legislation there. But, in turn, this generated excitement for the potential in Asia, with many suggesting that the market there could be worth a lot more. And there are a lot of reasons for this. Asia as a whole has a huge population, there are a variety of sports that are popular and technology and mobile penetration are huge in several areas. Like many emerging

markets, Asia is quite fragmented. In some countries, sports betting is still considered illegal, while others have legislation in place. Additionally, amongst the regions where sports betting is legal, there are variances as to whether it is allowed online or in person. Despite this, the benefits of legal betting, both commercially and from an integrity perspective, are there for all to grasp. And if this continues to catch on in Asia, there are plenty of reasons why operators of all sizes should be looking to make plans for the region now if they want to capitalise on the foreseeable future.

Given the size of Asia, it is important to do your homework, looking at both the trends that currently exist, with one eye on the horizon. Generally speaking, Virtual Sports, Fantasy Sports and Esports continue to prove popular in Asia. From a product and service perspective, many of our customers operating in the region rely on our Virtual Sports solutions as well as our betting and integrity services for their Fantasy Sports or Esports offering. This is part of the reason why we further expanded our Gaming Solutions portfolio this year to incorporate a new Virtual Asian Cup and Virtual Football Champions Cup. We also sealed big deals in the Esports space and enhanced our Premium Cricket Services with even more coverage. More recently, we announced the acquisition of the Optima platform to bolster our hi-tech 360-degree betting portfolio. This means as new legal markets open in Asia, bookmakers can come to us for everything they need to establish a successful sportsbook that pertains to local regulations, whether that be retail, mobile or online. Given the flexibility of the platform and all our services, they can also expand their offering at any point to suit regional transitions. Aside from services to leverage the potential of Asia, as a young market, itâ&#x20AC;&#x2122;s equally as important that bookmakers safeguard their business. This is one reason our risk management and trading solution, Managed Trading Services (MTS), is continuing to see increasing take-up in Asia. MTS utilises a range of cutting-edge innovation together with a group of expert sports traders to monitor the market, helping bookmakers set their pricing while protecting their business from risk, using machine learning algorithms and player profiling. The balance of suitable measures to both leverage the commercial opportunities whilst managing risk is essential in any market, but especially so in emerging markets like Asia where prospects are still in the early days of being realised. The good news is we worked with a lot of customers across both areas this year and expect this activity to grow even more in Asia. *Michael Maerz is Managing Director Asia at Sportradar.

Asia Gaming Briefings | November 2019

SUPPLIER SPECIAL REPORT 58 SEGA SAMMY CREATION

Video slots with familiar foes

EGA SAMMY CREATION will showcase its new video slot series and ETG machines

at MGS Entertainment Show 2019, based on its popular SEGA video games.

At MGS, the Japanese gaming machine supplier will exhibit their new video slot series based on themes from widely popular and internationally acclaimed SEGA video games- “Virtua Fighter” and “HOUSE OF THE DEAD”. Both titles contains a wide variety of features catering to fans old and new, such as pitting main characters in the battle stages against familiar foes, and using special moves and weapons as reel action animations. SE G A S A M M Y C R E AT I O N w i l l also bring standalone electronic gaming machines, “Baccarat Maximum Fortune”, “SicBo Maximum Fortune” and “Roulette Maximum Fortune” based on the popular casino games in the world. Their standalone ETG series include the unique “Quick Results Display” function (patent-pending) that allows the player to quickly see the result of games without placing bets. This enables players to proceed with the game history until desirable result trends appear. “We are excited to be showcasing our innovative products at MGS 2019.” said Masahiro Kurosaki, head of the Asian sales division. “It’s our passion to create never-before-seen games bringing new players to the gaming floor and garnering the interest of younger generations.” Sega Sammy will be at booth #AR35.

automated, live and virtual games into one seamless and enjoyable multigame experience. Aura boasts of state-of-the-art technology which was designed to offer a better gaming experience and an extensive library of games. Operators can choose to have installed either Roulette, Sic Bo, Craps, Baccarat, Blackjack, or opt for a Multigame with every possible combination of games. What is more, the

company also offers stand-alone multigame solutions, Aura and Karma, which allows more intimacy to players and also delivers the best gaming experience. Spintec’s Aura amphitheater and stand-alone multigame solution stand out in the market and make any casino more attractive and appealing to customers, which is why Aura has received splendid feedback from operators worldwide.

spintec

Karma 8 GEN 2 Roulette

pintec will be introducing its ultimate gaming solutions and industry-leading innovations at MGS 2019, which are wellknown for their cutting-edge design and technical perfection resulting in prolonged gaming sessions. Visitors will be able to experience Karma 8 GEN2 Automated Roulette, the core Spintec’s product. Karma Roulette features modern design, uncompromised quality, and customizable and ergonomic design. Karma Roulette is a flagship in Macau and one of Spintec’s most sold products in South-East Asia. Besides the Roulette, Spintec will present also Karma 8 GEN2 Sic Bo, one of the most popular games in the region. Spintec’s highlight at this year’s MGS Entertainment show is definitely Aura Multigame Amphitheatre. Aura is gaming perfection brought to life, combining

Asia Gaming Briefings | November 2019

SUPPLIER SPECIAL REPORT 59 transact

Epicentral 4.0

ransAct looks forward to attending the Macau Gaming Show where they will display their leading gaming products, including Epicentral 4.0 and the Epic Edge TITO printer.

Epicentral 4.0 is TransAct’s next-generation promotional bonusing software suite- the only one in the industry that can target customers in real-time with unique, custom-designed coupons while they play. Epicentral extends time-on-device, increases player spend and generates increased customer loyalty – all leading to more revenue and profits for casinos. Epicentral 4.0 offers a variety of new and improved features that are strategically designed for casino operators to increase their revenue while using the most effective and user-friendly software. The new functionality includes a sleek user interface that is easily operable and creates an optimized user experience with its clean aesthetic. The latest version of Epicentral is also web-based, which makes it easier to install, update and keep secure.

The next-generation Epic Edge is the latest and best choice in ticket in/ ticket out (TITO) printers, offering the highest print quality in the market thanks to its unmatched print resolution and cutting-edge features. Packed with technology to simplify your operations and improve slot floor performance, the Epic Edge retains key designs from the ever-reliable and industry award-winning Epic 950. TransAct’s Epic Edge is the most innovative TITO printer on the market, as it’s the only one that features an unmatched 300 DPI, a high-speed firmware uploading solution and a single interface board for all games. Epic Edge tickets also feature dynamic graphic images, making it ideal for implementation alongside bonusing applications such as Epicentral from TransAct. TransAct invites attendees to visit booth AR35 at MGS 2019.

of over 43 percent. Betting markets are also a very interesting subject, since the traditional markets such as match winner, handicaps and totals continue to dominate the turnover chart. However, fast markets are more and more appealing to the eSports fan, such as round winners,

race to X kills/rounds or game objective markets that are decided way before the end of the game. “Esports bettors are actively seeking our product and this is the feedback we are receiving from our business partners,” concluded Ivanov.

ultraplay

Supply catching demand

ltraPlay says eSports betting is now evolving fast, with an improved range of products and bet types helping to create the supply to meet customer demand. UltraPlay will attend two gambling exhibitions in November – BEGE Expo, booth 2.12, in Sofia and SiGMA, booth S9, in Malta, where attendees can learn what makes eSports a profitable product not to be missed by iGaming brands. The company will present the latest developments in its multiple-times awardwinning eSports platform and odds feed, share extensive knowledge and enhance online operators’ offerings with its turn-key software betting solution. “Esports betting is slowly moving into its next stage of evolution. In 2019 we are no longer talking of it as a “new thing,” but rather focusing on how to present it in the best possible way to its public and finally reaching the point where the supply meets the demand,” says Peter Ivanov, head of trading at UltraPlay. The top three games that make up over 80 percent of the eSports betting market - CS:GO, Dota 2 and League of Legends - had their major tournaments over the past 3 months. In terms of turnover and bets placed, UltraPlay has seen a year-on-year increase

Asia Gaming Briefings | November 2019

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Asia Gaming Briefings | November 2019

LAST WORD 62

Taxing times for POGOs Sharon Singleton

Managing Editor, AGB

Despite pressure from China, Philippine President Rodrigo Duterte has so far resisted pressure to ban online gambling.

midst reports of rising crime, including level possible and ultimately that may be the factor kidnappings and extorsion targeting Chinese that slows growth in the sector. Getting a POGO license isn’t cheap. According operating in the sector, Beijing finally put its foot down in August. In a strongly worded to updated figures from the Philippine Amusement statement issued through the Chinese embassy in and Gaming Corp., the application fee for an e-casino Manila, Beijing warned it would not tolerate any form is $150,000, while the actual license fee is $200,000, of gambling targeting its nationals and urged for help there is also a one-time bond of $300,000 and a license renewal fee every three years of $150,000. The numbers from Asian nations to stamp it out. Cambodia complied immediately, obediently are slightly lower for sports betting. Operators also complain of a myriad of hidden announcing an all out ban on the country’s flourishing i-gaming industry, which will take effect from the extras, which are hard to calculate. There is a fee of 2 percent of gross gaming revenue, end of this year. The government in Phnom Penh has already subject to a monthly minimum of $150,000 for an ecasino, admitted that the decision will cost the country’s payable monthly to PAGCOR, while the licensees also coffers dearly when it comes to tax revenue next pay a 5 percent franchise tax on gross gambling receipts. Over the past year, the Bureau year. Still, it’s hoping its decision of Internal Revenue and other will ensure the continued influx related government departments of Chinese investment, which have been cracking down hard on has been such a key driver for As long as non-payment of taxes, especially economic growth in Cambodia. POGOs continue non-payment of income taxes by For Manila, it was a different POGO employees. story. Duterte has been a loud to generate It sent a notice out to 48 POGOs and outspoken critic of gambling, money for the earlier this year directing them to especially online. But even he has pay the withholding taxes of their now recognised the significant treasury, Duterte foreign workers. As of August, amount of revenue the Philippine is unlikely to shut 22 had replied and had coughed Offshore Gambling Operators up PHP186 million. The BIR (POGOs) are generating and them down. was expecting a further PHP170 doesn’t want to kill the goose that million in coming months. lays the golden egg. But now there is a proposal POGOs paid PHP175 million ($3.4 million) in taxes in their first year of operations. in the works for a further 5 percent tax that would be That rose to more than PHP579 million in 2018, different from the 5 percent franchise tax. The Department of Finance said that Finance with the figure jumping to PHP1.63 billion in the Secretary Carlos Dominguez will support the proposal year to August alone. POGOs are also key drivers of the Manila real put forward by Albay 2nd District Representative estate market and local economy through discretionary Joey Salceda. Salceda is also reportedly proposing a gaming spending, making them valuable contributors to tax of $10,000 a month per table for a live set-up growth in the Philippines. Unlike Cambodia, Manila is not as reliant on China casino and a $5,000 a month gaming tax for random when it comes to foreign investment. According to number generator (RNG)-based games. He also plans figures from the Department of Trade and Industry, to impose $1,000 presumptive corporate income tax China was the largest foreign investor in 2018, making per seat for POGOs. Salceda, who chairs the House Ways and Means up some 28 percent of overseas investment pledges. However, investment by local Filipinos outweighed committee, said the panel is studying his proposals. Salceda has been a vocal proponent for the foreign investment by about five times. As long as POGOs continue to generate money for government to enjoy POGO revenues while they last, but said it should also be prepared for when they the treasury, Duterte is unlikely to shut them down. However, the government has also made it clear leave. Overtaxation may just be the factor that cooks that it’s prepared to squeeze them to the maximum that golden goose.

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Asia Gaming Briefings | November 2019

AGBriefings November 2019

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