AGBriefings April 2021 Edition by Asia Gaming Brief

JURISDICTION UPDATES April 2021 Edition

MACAU

Back in the black pg.10 Morningstar’s market pulse pg.14

In focus pg.32

North Asia Primorye marches on as Korea stumbles

CAMBODIA

Online renaissance pg.28

PHILIPPINES Will tax change stop POGO exits? pg.24

AUSTRALIA Trade tension adds to VIP woes pg.16

SUPPLIER SPECIAL REPORT pg.44

Asia Gaming Briefings | April 2021

MESSAGE 3

Back on black

n this April edition of Asia Gaming Briefings we take the

recovery by the first half of 2022.

pulse of how the North Asia jurisdictions of Japan, Korea

Meanwhile in the Philippines the outflow of online gaming

and the Russian Far East have fared.

operators is expected to slow, at least for the time being,

Firstly we go to Japan, which had been counting on the

following amendments to tax regulations and due to

Asian VIP market for about a quarter of its gross gambling

uncertainties in neighboring alternative jurisdictions, such

revenue for its planned multi-billion dollar IRs. Spectrum

as Dubai or Malaysia.

Gaming takes us through some of the key developments that

On to Cambodia, despite having announced a blanket ban

have taken the gild off the VIP lily and suggests the course

on the country’s thriving online gambling scene just over

Japan may need to steer to ensure it doesn’t incur China’s

a year ago, the industry is still going strong, particularly in

ire. While also in Japan, although IRs are unlikely to open

Sihanoukville, supporting casinos.

their doors for years to come, the online segment is quietly

Across to Australia, and outside of the global pandemic, the

booming, ever under the radar.

trade war between Australia and China is casting another

The next North Asian market under the spotlight

dark shadow over Australia’s already-strained VIP gaming

is South Korea. The jurisdiction was seen as highly

industry, prompting operators to start looking elsewhere for

promising and attracted high profile investment

recovery. We also hear from Darwin Casino Resort CEO, Avril

from global players such as Caesars Entertainment

Baynes, who is mandated to lead the facility through and

and Mohegan Sun. However, gradually the appeal has

beyond the era of the Covid pandemic where it plays a central

diminished as Covid and other geopolitical events

role within the local community.

highlighted the risk of foreigner-only markets.

Also in these pages is the Supplier Special Report where

The third jurisdiction is the Primorye gambling zone in

manufacturers and service providers share their commentary

Russia’s Far East. The gaming hub has been slow to develop,

on market trends and expectations going forward, as well as

however does appear to be gaining traction. A second resort

new products range and offerings.

opened last year and NagaCorp has said it’s on track to open

Managing editor Sharon Singleton closes the edition

its delayed property in 2022.

on a high note writing that “although there will be no

On the online sphere this edition’s focus is the latest trends

V-shaped recovery to this crisis, which is dragging on

in live dealer. It has been the most popular online vertical

longer than anyone predicted, there is light at the end of

in Asia for many years, but as the field gets increasingly

the tunnel.” Here! Here!

Rosalind Wade

Luis Pereira

crowded, we ask what trends are emerging and what stands Happy reading and stay safe!

out in the pack. In these pages you’ll also find the most relevant market updates across the Asia Jurisdictions.

On behalf of Asia Gaming Brief

Starting with Macau, operators have come back to black and

Rosalind Wade & Luis Pereira

are now looking towards a steady recovery. A combination of

CO-FOUNDERS

concerted cost cutting since the beginning of the pandemic, coupled with steadily improving visitation, has helped Macau

Connect with us:

operators post positive EBITDA, save for SJM. The market consensus is to get back to two thirds of its 2019 levels by

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the end of the year, led by the premium mass segment.

Asia Gaming Brief

MorningStar analyst Jennifer Song expects Macau’s full

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APRIL 2021 EDITION SERIES II • ISSUE XIX

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Asia Gaming Briefings | April 2021

Evolving Hold & Spin –

the all new Picture Pays mechanic .

Trigger the feature and pick

your favourite Chinese Zodiac . The perfect family to welcome Year of the Ox this Chinese New Year .

Two recognisable Asian theme: Da Sheng Yeah & The Great Empress .

Asia Gaming Briefings | April 2021

CONTENTS 8

GREATER CHINA

AUSTRALASIA

SOUTH EAST ASIA

MACAU - BACK IN THE BLACK

AUSTRALIA - THE CROWN AFFAIR

MACAU - MORNINGSTAR’S MARKET VIEW

AUSTRALIA - AVRIL BAYNES ON MINDIL BEACH 18 AUSTRALIA - CHINA TRADE WAR HITS VIP

THAILAND - CASINOS UNLIKELY

PHILIPPINES - POGO TAX REPRIEVE

PHILIPPINES - JOE PISANO ON GOING DIGITAL 26

INDOCHINA CAMBODIA - SIHANOUKVILLE ONLINE

PATA SEES SLOW RECOVERY

SPECIAL FOCUS

Asia Gaming Briefings | April 2021

SUPPLIER SPECIAL REPORT

INDUSTRY OPINION

LAST WORD

62 54

Asia Gaming Briefings | April 2021

MACAU

(Credit: Macau Photo Agency)

GREATER CHINA

Operators back in the black and seeing market improvement All but one of Macau’s six concessionaires posted a return to positive EBITDA in Q4 and are seeing more meaningful signs of market recovery. Asia Gaming Briefings | April 2021

GREATER CHINA

combination of concerted cost cutting since the beginning of the pandemic, coupled with steadily improving visitation, helped results in the final quarter of the year, with only SJM Holdings remaining in the red at the EBITDA level. The New Year brought a setback with new Covid clusters across China sparking more restrictions, highlighting how vulnerable the market remains to the pandemic. However, as vaccines rollout operators are beginning to see stronger signs of life and analysts remain convinced in a significant H2 comeback. Most now see the market getting back to about two thirds of its 2019 levels by the end of the year, led by the premium mass segment. There remain major question marks over the

is no “moreThere quarantine

with China, vaccines are being rolled out, all the pieces are getting incrementally better.

”

recovery of VIP, which is only forecast to be at half of its pre-pandemic levels by the end of 2021. Perhaps one of the most upbeat assessments of the market’s prospects came from Melco Resorts & Entertainment Chairman and CEO Lawrenco Ho. Presenting the group’s Q4 earnings, Ho said for the first time in 12 months he sees more positives than negatives. “Our optimism comes from seeing what happened with the tail end of the Chinese New Year and how strongly the pent up demand came back,” he said. “There is no more quarantine with China, vaccines are being rolled out, all the pieces are getting incrementally better.” Ho also said he believed China would allow a return to e-visas in the short term, contrary to most analysts who still see this step as being some way off. The visas are seen as key to removing bottlenecks to visitation and the Macau Government Tourism Office has been in talks with Mainland authorities to urge their resumption.

Group visas are also still off limits, which will be a driver for the grind mass part of the business. In terms of travel bubbles, Bernstein says that it’s possible that restrictions could be lifted with Hong Kong in Q2. “A travel bubble encompassing China/HK/ Macau should be a key driver of recovery,” it said. In terms of Q4 results, Galaxy posted adjusted EBITDA of HK$1 billion, down 75 percent year on year, but up from a HK$233 million loss in the prior quarter. Total GGR at $4.6 billion was up 435 percent from Q3. Both mass and VIP showed strong sequential growth, though mass was particularly positive rising to become 64 percent of the total. Overall Galaxy’s market share in Macau rose to 22 percent. Melco posted adjusted EBITDA of $53 million, down 87 percent year on year and up 170 percent from the prior quarter. Macau GGR was up 234 percent sequentially.

Wynn Resorts saw a 58.5 percent yearon-year decrease in operating revenues to a total of US$686 million for the quarter. Net losses attributable to the company were US$269.5 million. “In Macau, the gradual and thoughtful easing of visitation restrictions allowed us to return to Adjusted Property EBITDA profitability in the fourth quarter, with particular strength in our premium mass business,” CEO Matt Maddox commented. MGM China saw its net revenues decrease 58 percent compared to the prior year quarter to US$305 million. Adjusted Property EBITDA decreased 78 percent to US$41 million. Sands China posted adjusted property EBITDA of $73 million, down from $378 million, helped by the Venetian and The Plaza Macau and Four Seasons. SJM posted an adjusted EBITDA loss of $323 million, below forecasts from Bernstein Research for $337 million.

Asia Gaming Briefings | April 2021

GREATER CHINA 12

GROSS GAMING REVENUE Jan. 2021 MOP8.02

-63.7%

Feb. 2021 MOP7.31b

+135.6% (Source: DICJ)

Galaxy to bring Raffles brand to Macau

(Credit: Yuchen Dai)

Galaxy Entertainment Group has signed an accord with Accor to bring storied hotel brand, Raffles, to Macau with the opening of an exclusive all-suite tower, Raffles at Galaxy Macau in the second half of 2021. The hotel will feature about 450 suites, with some featuring their own private pools and gardens. The raffles brand dates back to 1887 and Galaxy said its introduction to Macau will bring a “new level of sophistication and refinement.”

Macau to get high-speed connection with Beijing Macau’s connectivity with Mainland China will continue to be expanded and will include a link to Beijing via a maglev high-speed train, according to the 2020-2035 National Territorial Spatial Plan for Guangdong Province. The link – named the BeijingHong Kong-Macao Maglev – is one of six proposed rail lines included in the plan, with the Department of Natural Resources of Guangdong Province outlining a multi-center gridded spatial layout with Macao-Zhuhai, Hong Kong-Shenzhen, and GuangzhouFoshan clusters.

Asia Gaming Briefings | April 2021

A GLASS HALF FULL

GREATER CHINA 13

Percentage change in GGR 2019/ 2020 Commentary by Daniel Cheng*

MACAU

-79%

-75%

SINGAPORE

PHILIPPINES

-90%

-50%

MALAYSIA

CAMBODIA

-56%

(Sources: DICJ, Company filings: LVS, Genting S, Genting M, Pagcor, Donaco, NagaCorp.)

Asia Gaming Briefings | April 2021

GREATER CHINA 14

Morningstar takes the Macau market pulse Jennifer Song, equity analyst with Morningstar, spoke with Asia Gaming Brief managing editor Sharon Singleton about visitation to Macau during the recent Chinese New Year period and the outlook for recovery. The longer-than-usual May holiday may be a key catalyst for growth.

hat is your view of the data from Chinese New Year? Was it disappointing?

I think the Chinese New Year data was not too surprising. I am actually stationed in Shenzhen and the policy of the local authorities was to encourage residents to stay local, so you had lower numbers for the China New Year period. China recently lifted its remaining restrictions on travel to Macau, triggering a share price bounce. How significant is this? There is a change in the overall market conditions. One is that restrictions have been lifted and there is an improvement in market sentiment. How do you see the stocks moving from here? From our perspective we have seen the stocks move up quite a little bit recently and they’re trading at 0.9 percent of our fair value estimate, so the upside is definitely lower in the near term.

Asia Gaming Briefings | April 2021

We’re going to see the focus for investors being on the GGR data and the visitation data. When will we start to see a meaningful increase in GGR data? I don’t think GGR will suddenly go up. It will be gradual. The May holiday is usually just three days, but this year it will be five days. The government has tried to boost travel. I think this is a good opportunity for short-haul travel of two to three hours. We expect good GGR data during the May holiday. What are you expecting for Q1? For Q1, we’re expecting about 32 to 35 percent of 2019’s GGR which is not very bad and pretty much the same as Q1 last year. The operators have been cutting costs. What impact will this have on profitability as revenue picks up? Some of the cost cutting is temporary as they are closing down part of their properties. This part will

GREATER CHINA 15

definitely come up when revenue returns, but some of the other costs will be quite sustainable. They chose to optimise the operations of the business, so up to 5 to 10 percent of the cost cuts will be sustainable going forward. We expect permanent cost cuts of 5-10 percent for the next one or two years. For the next few years we will still see the benefit on margins from cost cutting. Are you hearing any news about the resumption of e-visas? e-visas will probably come back later, probably in the second half of this year. The government’s focus right now is to make sure the virus is under control for the overall sustainability and benefit of the economy. What about the VIP sector. Will that return in the same way? VIP I don’t think any time soon. There is quite a big policy concerning money flows out of China and that will definitely affect the VIP business. From our chats with management we have seen recently that VIP data is very volatile from one month to the next. VIP will definitely be affected by China’s overall money controls. That said, the operators still have VIP rooms, so I don’t either expect it to disappear in the next three to five years. Over the past ten years VIPs have been quite important to Macau’s economy and have made up half of the overall tax. So we don’t expect they will disappear but we do see tighter regulation, especially for the junkets. Will operators extend direct credit to VIPs? There’s a trend of direct VIP services, however, that’s not very good for the company’s balance sheet as they give their own credit. We’re more likely to see rising bad debts. The company itself will take risks so it depends on the overall credibility of the client.

connect with Macau, which will be very good for Macau and will also create synergies with visitors from other parts of China.

Do you expect Macau to allow any other travel bubbles?

What’s your current outlook for stocks by year-end?

China accounts for 70 percent and Hong Kong accounts for 20 percent, so the impact would be very low. The big impact would be to connect with Hong Kong. They tried with Singapore but haven’t managed. I still think it’s very likely that this year HK will

The market is currently only at about a 10 percent discount to our fair value estimates, but different players have different discount to fair value. Some players have a lower valuation. For example SJM or Melco have a lower discount to our fair value, so they have

a higher potential upside, especially SJM. SJM will open its first Cotai property in the first half of this year and that will change the company’s market positioning, so it’s very hot for this company. It’s currently our best idea. When will Macau get back to 2019 GGR levels? For this year we target 65 percent and expect a full recovery in 2022 which is pretty much in line with market expectations. We’re looking at the first half of 2022.

Asia Gaming Briefings | April 2021

AUSTRALASIA

AUSTRALIA

David Green*

Crown fallout unlikely to prompt national regulation The report to the New South Wales Independent Liquor and Gaming Authority of the Bergin Inquiry into the suitability of Crown Resorts and its in-scope associates, in connection with its Barangaroo casino licence, has energised the discourse regarding the regulation of gaming in Australia.

Asia Gaming Briefings | April 2021

n particular, it has suggested that a uniform national regulatory model could be adopted “to afford greater protection for casino operators to the disadvantage of the organised criminals and money launderers”. In theory, a good idea, but here’s why it likely won’t happen. The Australian Constitution reserves to the federal government the power to make national laws in respect of only a few nominated industries, such as banking, insurance and fisheries. It also enables national laws related to “the influx of criminals”, though this is closer to the exclusive federal jurisdiction of national border control than it is to the functioning of enterprises operating within Australia. It is not unprecedented for the states to cede certain legislative powers to the Commonwealth; for example, the states have the power to impose income tax, but since 1942 income tax has been legislated and collected by the Commonwealth, which re-distributes that revenue by way of grants to the states. This has resulted in a vertical fiscal imbalance, as the states must fund schools, hospitals and essential services from a revenue source that they do not control, and a grant mechanism which bears no direct relationship to taxes collected from their residents and enterprises. A means of lessening reliance upon redistributed tax revenue from the Commonwealth has been various state taxes, such as stamp duty on certain transactions, payroll and land taxes, and gaming taxes. Casinos have become major contributors to state development, infrastructure, employment, tourism and tax revenue. Victoria has developed a close symbiotic relationship with Crown, effectively trading off more prescriptive regulation for enhanced investment and tax revenue. Casino licences in Australia are privileges granted by the states, not by the Commonwealth. The states are very unlikely to surrender the power to determine who will qualify for the award of such a privilege, or disciplinary powers over their casino licensees to a federal regulator. In similar vein, they are almost certain to reject any empowerment of a regulator, state or federal, which has unfettered power to disregard agreements that they may be a party to which may limit the regulator’s power, or its ability to make a decision regarding a casino licence. Such subjects have a keen political edge to them, especially in states which host monopoly casino licensee’s operations, being Victoria, South Australia, Western Australia and Tasmania. Assuming a national model would require

AUSTRALASIA 17

a national regulator, where would it be based? Would it have branches in each state and territory? Who would comprise the Board, and who would appoint it? How would it be funded, given any extension to it of the powers of a standing Royal Commission, as Bergin suggests, and the support of a dedicated full-time workforce would likely make it a much more expensive regulatory cost overlay on an industry which is destined to shrink if the report’s recommendations re junkets and the prevention of money laundering are adopted beyond New South Wales. An alternative model to a national regulator administering national legislation might be to have existing state regulators re-purposed and resourced to administer a

Casino licences “in Australia are privileges granted by the states, not by the Commonwealth.

”

national casino control Act. This presents two threshold issues. First, Australia is renowned for its competitively federalist model of government. The states often take any opportunity which may be offered to them to use what might be termed “legislative arbitrage” in order to compete for investment. Secondly, what should go into an omnibus gaming law? Forget junkets; it is unlikely that any state will oppose the blanket ban proposed in the report. What about credit? Should it be allowed, and if so to whom and why? Should the body be subject to oversight, and if so, by what body? Should it be excluded from the jurisdiction of the Ombudsman in each state? Should it be exempted from responding to Freedom of Information requests? Should the states agree to exchanging information under Memoranda of Understanding that may be concluded by the national regulator and other regulatory bodies internationally? While the Australian state jurisdictions have learnt from each other, and developed largely similar regulatory regimes and laws,

it would be expecting rather too much for them to cede their sovereignty to either legislate or regulate their casinos. While there have been examples of the Australian gaming regulators working together to achieve some uniformity, such as developing an Australasian Gaming Machine Standard, even that limited commitment is conditional; each state retains certain of its own provisions in Schedule B to the Standard. Staying with the theme of a good idea but unlikely to happen is the Bergin recommendation that suitability assessments of licensees and close associates should require the subject of such an assessment to provide “clear and convincing evidence” of their suitability. The provenance of this recommendation is a Massachusetts law that requires an applicant to “establish its individual qualifications for licensure” by clear and convincing evidence. Massachusetts is a comparative newcomer to commercial casino operations. It passed its Expanded Gaming Act in 2011, and has since licensed two casino operations, which opened respectively in 2018 (MGM Springfield) and 2019 (Encore Boston Harbour). Its licensees, MGM and Wynn, have been licenced in Nevada for decades. Imposing a statutory onus to “prove” suitability in their case is arguably unnecessary, but for the fact that both companies also control subsidiaries holding casino concessions in Macau. Presumably they were able to provide clear and convincing evidence that their link to Macau did not compromise their suitability to hold a licence in Massachusetts. Placing a statutory onus to prove suitability upon an applicant is akin to reversing the presumption of innocence upon which the criminal law in Australia is founded. Perhaps this is justified by the fact that casino licences are granted as privileges, and not by right. Whether it really adds anything to the quality of regulation is doubtful, as evidenced in Massachusetts itself, which imposed a US$35m fine on Wynn in 2019 for failing to disclose sexual misconduct allegations against its founder and former CEO, Steve Wynn. Such a result might even be seen as an embarrassment for the regulator, given its inferred acceptance prior to licence grant of “clear and convincing” evidence of suitability on the part of the company. *David Green is a gaming lawyer and founder of NewPage Consulting.

Asia Gaming Briefings | April 2021

AUSTRALASIA 18

Playing It Safe at Darwin Casino Resort Avril Baynes, a resident of Australia’s Northern Territory for three decades, was appointed general manager of the Mindil Beach Casino & Resort in Darwin in November 2020 with a mandate to lead the facility through and beyond the era of the Covid pandemic.

ith a background as an industrial relations lawyer and interest in hospitality, Baynes has been at the property in one executive role or another since March 2015. The property itself, which Baynes describes as “Darwin’s leading entertainment destination” and “a bit of a one-stop shop,” was formerly known as SkyCity Darwin, but it gained its current name after its April 2019 purchase by Delaware North, a global food service and hospitality company headquartered in Buffalo, New York. It includes a four-star hotel with 120 rooms, a five-star

Asia Gaming Briefings | April 2021

resort with 32 rooms, four restaurants, four bars, and it is commonly host to such events as gala balls, awards dinners, trade shows, and boat shows. In the dry season, it can easily accommodate outdoor events as well. Baynes emphasizes that Mindil Beach plays a central role within the local community, and it also serves as a “gateway to Asia,” including countries such as Indonesia, Singapore, and even China. This is both because visitors to Darwin used to come to the facility in large numbers, as well as because there are not a few Asians living in the nearby area.

AUSTRALASIA 19

While the casino resort was in its period and delivery staff has been made to scan in of business suspension, employees were put and scan out. In the back of house, various through a Covid training program teaching technologies have been employed to help them how to recognize coronavirus symptoms manage the contact tracing requirements. both in themselves and others, as well as the Fortunately, the relative absence in Covid proper hygiene and in the region has not sanitation practices. called much of this The casino floor saw preparation into service. screens go up between Askedhergoalsgoing Something EGMs where possible, forward, Baynes notes and where not possible, that “the community that we’re really some machines were certainly has felt the understanding now turned off to allow for fact that we have been social distancing. As closed.” As the crisis is that, since Covid for the table games, subsides, she hopes to has struck, people’s there has been reduced strengthen the presence key drivers in seating, the staggering of Mindil Beach and to of the tables put in use, reforge and expand the selecting places to and crowd management community bonds. go for holidays have for onlookers. She explains that An examination the new owners had not changed. was made to eliminate been in place even a year unnecessarytouchpoints, before the pandemic which meant that, for entirely changed the example, the tickets used nature of the game. for drawings shifted from physical to virtual. New strategies had not been given time to One of the most significant new requirements manifest positive results. was to facilitate contract tracing policies in the “The first priority for me,” she says, “is event that someone began exhibiting Covid really to build on the strong foundation symptoms. The resort and its suppliers formed that Delaware North started when it first agreements instituting a duty to inform, purchased the casino.”

“

”

Of course, the onset of Covid profoundly impacted these previous patterns. While the Northern Territory has largely been bypassed by the pandemic, international travel routes were largely severed and the casino resort was forced to suspend its operations for a period of time. Now that it has reopened, some behaviors and strategies have been obliged to change. With international travel still largely shut down, more visitation must be pulled from Northern Territory locals as well as visitors from other parts of Australia. “Something that we’re really understanding now is that, since Covid has struck, people’s key drivers in selecting places to go for holidays have changed,” Baynes observes. “They used to be very much driven by location and price, and now safety is very high on people’s list. They want to go somewhere that’s safe.” Delaware North designed a companywide “Play It Safe” program to protect both guests and employees, and one of Bayne’s key tasks has been to apply and implement these policies at her facility.

Asia Gaming Briefings | April 2021

AUSTRALASIA 20

AUSTRALIA

Clouds over VIP gaming amidst trade war, Crown debacle Outside of the global pandemic, the trade war between Australia and China is casting another dark shadow over Australia’s already-strained VIP gaming industry, prompting operators to start looking elsewhere for recovery.

he spat between the two countries began towards the height of the coronavirus pandemic – around April 2020. At the time, Canberra was calling for an inquiry into the origins of the coronavirus, a move that China’s deputy head of mission, Wang Xining said: “hurts the feelings of the Chinese people.” China responded by blocking many of Australia’s goods and services. As of today, exports of Australia’s timber, barley, coal, copper, sugar, wine, and lobster have ground to a near standstill, which is estimated will cost the country up to A$19 billion a year. However, the most significant development for our industry came as a move from China’s culture and tourism ministry warning its citizens not to travel to Australia for study or play. More than 1.4 million Chinese tourists travel to Australia each year (pre-pandemic), and 260,000 students are enrolled in Australia’s schools and universities. Choking the supply of Chinese visitors (including tourists, students, and their wealthy families) would most definitely have an impact on VIP-facing casino operations, but there are mixed views as to how this would affect their overall financial stability. Asia Gaming Brief spoke to Kelly Amato, Director of South-East Asia Industrials at Fitch Ratings, about the impact of the trade war on international-focused VIP developments, such as Crown Sydney – notwithstanding the current NSW license debacle and company shakeup. “In answer to your first question on what would happen to developments like Crown Sydney which were “banking” on Chinese VIPs, undoubtedly this will affect the economics of the project if there were limitations on visitations from these VIPs,” she said. Amato pointed out that China’s arrest of Crown employees in October 2016 led to a significant fall in VIP visitation and revenue,

Asia Gaming Briefings | April 2021

but noted that this eventually rebounded. “Further, VIP has historically made up a smaller proportion of Australian gaming operators’ revenues than domestic. It is inherently more volatile, and operates at lower profit margins than domestic – so, from our

perspective, further volatility or declines in this business would have less of an impact on the overall operations of the gaming operators given the size and stability of their domestic mass-market operations,” she added, Gaming industry veteran Ben Lee, however,

AUSTRALASIA 21

“

VIP has historically made up a smaller proportion of Australian gaming operators’ revenues than domestic.

”

students,” noted Lee. “With the ongoing trade war and Crown’s targeting of Chinese gamblers in 2016, there is suspicion that Australia has made it onto China’s blacklist,” added Lee.

(Credit: Chuttersnap)

did not share the same optimism as Amato, arguing that a large part of what is classed as the “domestic VIP market” is still made up by Chinese international players – the only difference (between that and VIP) is that they are not under any rolling chip program. “China is the biggest market for tertiary education in Australia,” said Lee. Over 260,000 students were enrolled in secondary and tertiary education in Australia in 2019. These students are visited by their parents and relatives, who spend big amounts across Australia’s casinos. Lee said this domestic factor was so significant, that there was a stage when Crown Resorts had even set up a lifestyle team, whose sole purpose was to assist Chinese VIP families to set up bank accounts, buy property and enroll their children in schools – services akin to those of a private bank. “There was a lot of business coming to casinos indirectly as a result of Chinese

“If we are on the blacklist, that means any Chinese citizen wanting to travel to Australia will need to go through massive scrutiny in order to obtain the appropriate exit visa.” With the trade war showing no signs of abating anytime soon, operators may need to look to other VIP markets to fill the void post-Covid, according to gaming industry veteran David Green. “With the departure of SunCity from the market and the aggressive focus which the PRC has now on the recruitment of Chinese for gaming tourism, there is no doubt that Australian casinos are looking elsewhere for VIP players.” “Indonesia has always provided a pipeline for Burswood (Crown Perth) and there is a smattering of Thais, Malays, and Singaporeans. Australians also have a high propensity to gamble, and there are enough of legal gambling age to ensure the domestic market remains substantial and robust (COVID aside),” he said.

Aristocrat eyes digital M&A Aristocrat Entertainment CEO Trevor Croker said the company plans to “significantly escalate” its focus on convergence products and services, which may involve mergers and acquisitions. In his annual address to shareholders, Croker said the group had undertaken a strategic review of its business over the past year in response to the Covid-19 crisis. While the overall strategy of the company won’t change, there may be changes in emphasis, he said. “In the context of COVID, and with the encouragement of our customers, we will continue to significantly escalate our focus on convergence products and services as part of our strategy,” he told the meeting. “We remain ready to invest to accelerate our strategy.”

Donaco returns to Q4 Ebitda profit Donaco International, the operators of casinos in Cambodia and Vietnam, said it had positive EBITDA of A$0.2 million in the first half of the fiscal year after the final three quarters of the year generated $2.7million. Revenue declined to $6.3 million from $40.9 million.

Asia Gaming Briefings | April 2021

THAILAND

Casinos still seen as a pipedream News last month that Thailand may consider legalizing gambling has been met with scepticism by those who know the market well, with most saying casinos are not likely to open in at least the next decade.

(Credit: Yavor Punchev)

SOUTH EAST ASIA

(Credit: Mike Swigunski)

rime Minister General Prayut Chan-ocha raised the prospect of liberalizing what could potentially be one of Asia’s most promising gaming destinations as a way to solve rampant illegal gambling. Several Covid-19 outbreaks have been blamed on illegal gambling dens and Prayut announced the formation of two committees to study the situation in Thailand. One will focus on authorities’ investigations of illegal gambling and the other will investigate how illegal border crossings are handled. Some politicians from minority parties have also in the past year called for the market to be opened as a way to rebuild the Covid-19 shattered economy. Mongkolkit Suksintharanon, leader Thai Civilized Party, last summer suggested that legalization could bring in about THB5-6 billion ($167.4 million) in tax revenue. Thailand has long been on the radar of global casino companies, including giants such as Las Vegas Sands. The country attracts some 40 million tourists every year, making it one of the most visited in the world. It also has a local population of almost 70 million and the eighthlargest economy in Asia. Almost a fifth of its gross domestic product comes from tourism. Talk of potential legalization has been on the cards for several decades, in particular under former Prime Minister Thaksin Shinawatra. However, the proposals never progressed and industry insiders say this time around is unlikely to be any different. “Thailand is an enigma, it’s a very conservative society,” said James Kaplan, CEO of Destination Capital. “The whole religious conservative family side really pervades the culture and Buddhism is the fundamental base of their education and belief system. Gaming is really a bad thing for them.”

Kaplan, who has more than 30 years of experience in the hospitality industry, with a focus on Asia, said it was likely Prayut was throwing out the comments as a trial balloon to test public reaction. The immediate feedback from the public has been negative. There is a section of the Thai population who like to gamble and are travelling overseas and across into neighbouring countries to do so. There is also a large illegal market, put at THB122.5 billion a year in a 2019 Chulalongkorn University Study, but the majority of people are still opposed to casinos.

is going “out Money of the country

so from that perspective it makes sense if you regulate it and control it.

”

Another executive said he didn’t believe there was enough political willpower to risk inflaming public opinion on the issue. Beyond conservatism, the issues get more complicated. Many of the illegal gambling dens are known to be under the protection of local police and powerful figures who are making too much money to want to see them shut down. Academics quoted in a recent Bangkok Post article claimed that the police force needs a fundamental overhaul if there is to be any success in clamping down on illegal activity.

Thais also control many of the border casinos and their interests would be hurt by opening legal casinos at home. There is also scepticism over how foreign investors would be able to participate in the market were it to open to outside investment. At present, foreigners cannot own land and foreign investors are restricted to owning 49 percent of a Thai company in most circumstances. That’s not a business model that suits many international operators. Another issue the government would need to consider is the rationale for having casinos, which would play a major part in deciding the shape of the market. If they are seeking to regulate and stamp out illegal activity, as Prayut seems to be suggesting, building multi-billion dollar integrated resorts aimed at tourists is unlikely to be effective. If however, the government is seeking to refresh its tourism offering and avoid losing ground to other jurisdictions in Asia, then IRs would be the way forward. “Money is going out of the country so from that perspective it makes sense if you regulate it and control it,” Kaplan said. “Thailand needs to reinvent itself. You need gaming as a way of bringing in fresh activities and a fresh new market, as well as spending on infrastructure so it rises the tide for everyone.” In the past, projects have been mooted for areas such as Pattaya, on the coast a few hours drive from Bangkok, the island of Phuket and Chiang Mai in the north. Although industry sources contacted by Asia Gaming Brief said there was a very low probability of Prayut moving ahead, some also acknowledged that unlikely government changes of heart had happened in the past and post-Covid there are few sacred cows.

Asia Gaming Briefings | April 2021

SOUTH EAST ASIA 24

PHILIPPINES

POGO sector seen as stabilizing The outflow of online gambling operators from the Philippines is expected to slow, at least for the time being, following amendments to tax regulations and due to uncertainties in neighbouring jurisdictions.

axation of Philippine Offshore Gaming Operators (POGOs) has become a politically contentious issue after legislators sought to squeeze more revenue out of the companies to make up for budget shortfalls caused by the pandemic. An attempt to impose a 5 percent franchise tax on overall turnover last year was met with howls of protest from the industry, with many choosing to vote with their feet and leaving the country in droves. The tax added to already rising costs of doing business in the Philippines at a time the firms had also been forced to shut up shop due to Covid. That tax was suspended in January following a petition to the Supreme Court from foreign gaming groups, but swiftly reintroduced in February. This time however, there is a crucial difference. It will now be 5 percent of gross gambling revenue and not total turnover.

Asia Gaming Briefings | April 2021

“It is more “acceptable” but still ridiculously high,” said Danny Too, general manager of Cherry Interactive. “That is why everything is still very much “negotiable,” though I don’t foresee an immediate exodus of all the POGO operators from the Philippines.” Too said the House of Representatives has already given its final approval for the new tax and the bill will now be transmitted to the Senate, where it must undergo another three successful readings before being sent to President Rodrigo Duterte for a final signature. The 5 percent tax is payable to the national government and only applies to master operators and not service providers. The firms will still need to pay all applicable fees and charges to the Philippine Amusement and Gaming Association (PAGCOR). There is also a 25 percent withholding tax on the income of POGO employees. The Bureau of Internal Revenue has said

it expects tax collections from POGOs to be just PHP3.93 billion this year, which is half the PHP7.18 billion raised in 2020. BIR Deputy Commissioner Arnel Guballa said this is based on January revenue of PHP327.2 million multiplied by 12 months. His estimate is more downbeat than that of PAGCOR Chair Andrea Domingo, who at the end of last year predicted POGO revenue would return to 2019 levels by Q2 of this year. She said the situation had stabilized with companies leaving the country and that the regulator was in discussions with four potential new entrants. The number of POGO license holders that are currently operating is just 33 compared with 61 prior to the Covid crisis, as of February 23, according to PAGCOR’s website. Philippines-based iGaming consultant Mark Gilbert agreed any further departures will not be due to taxation if the bill goes

SOUTH EAST ASIA 25

Bloomberry says recovery “well underway”

(Credit: Luca Bucken)

Bloomberry Resorts said its recovery is “well underway” after posting positive EBITDA for Q4 due to strength in the local mass market. The company, which operates the Solaire Resort & Casino in Manila’s Entertainment City and a property on Jeju in South Korea, posted EBITDA of PHP129.3 million, compared with a loss on that basis of PHP203.7 million the prior quarter. Total gross gambling revenue at Solaire was PHP5.3 billion, which was down 63 percent from the prior year, but up 22 percent sequentially. “I am encouraged by our performance in the final quarter of 2020, particularly as we saw domestic mass gaming revenues increase by 75 percent from the previous quarter and EBITDA hitting positive territory,” Chairman and CEO Enrique Razon said.

through in its current form. Though there are at about 470,000. He bases his estimates on surveys of property in Metro Manila and still major issues facing the sector. “A more prevalent issue for POGOs is contributions made to the Department of personnel. As long as the Philippine government Finance, among others. The Philippines Inquirer cited Dominique continues to restrict foreign access into the country, POGOs cannot fill backlogged positions Tutay, Assistant Secretary at the Department requiring specific lingual skills, payments of Labor and Employment (DOLE), as saying more than 200,000 Pogo experience or customer workers have been issued acquisition background,” alien working permits he said. “Thus, POGOs in the last two years. are looking at other POGOs are Another factor countries where entry is looking at other slowing the departures not as restrictive, such from Manila is uncertainty as Dubai or Malaysia, countries where over other potential to set up shop.” entry is not as jurisdictions. February’s Many Mainland coup in Myanmar has Chinese fled the country restrictive, such as significantly changed the during the first wave of Dubai or Malaysia, outlook for that country’s the pandemic to return burgeoning iGaming to China, which was to set up shop. hubs, while officially seen as a more secure online gambling remains location from a health banned in Cambodia. perspective. That said, Malaysia is another option that has been there is significant uncertainty as to how many workers POGOs are employing and how many actively considered, although ongoing political uncertainty in that country is also clouding of them are foreign nationals. PAGCOR has reported the number of its potential and hopes for some kind of POGO employees as standing at about 118,000, regulation in the near term. As a result, remaining in the Philippines although Senator Ralph Recto estimates that the number is at least three times that amount becomes a case of better the devil you know.

“

”

Universal eyes U.S. listing for Philippines business Universal Entertainment is planning to test U.S. investor appetite for the Philippines by listing the holding company for its integrated resort business in Manila. The Japan-listed company said it has taken on multiple advisors in both the U.S. and Japan to help prepare for a listing on either the Nasdaq or the New York Stock Exchange some time in fiscal 2021. Universal, which operates Okada Manila through its Tiger Resort Leisure and Entertainment unit, said that business had been slow over the past year due to Covid-19-mandated restrictions. However, the group has used the time to cut fixed costs and reinforce marketing, which had been areas of concern.

GROSS GAMING REVENUES Q3 PAGCOR Operated

Q4 915 2,437

Entertainment City

Fiesta

Clark

(units in million)

12,962 16,900

185 291

1,888 2,004 (Source: Pagcor)

Asia Gaming Briefings | February 2021

SOUTH EAST ASIA 26

Jade CEO talks diversification, India and opportunities in the Philippines Twelve months ago, Jade Entertainment and Gaming Technologies was primarily a land-based gaming supplier, based in the Philippines. Then along came Covid-19, which forced the company to swiftly change tack and reinvent itself over the course of the year.

ade CEO Joe Pisano told us in a recent interview that it was a choice of changing the way the company worked or shutting up shop. “Instead of closing the doors we have expanded, both geographically and with our products. We’ve become much more creative. We’ve signed deals with AI companies and are looking at bringing in more AI, both in the land-based and online segments, which will help us to better understand the games and what players want in the future.” Earlier this year, the company went live with its new India-facing online site. The site has been specifically designed for the local market with the Hindi language and features designed to appeal to the Indian player. “We have kabaddi, which is a very popular sport, live dealer, virtual and TV games. We cover casinos, sports

Asia Gaming Briefings | April 2021

and soon will also introduce games betting on lotteries, such as Euromillions. We are very excited about it.” Pisano said the site started in India, but will likely be rolled out in other jurisdictions down the road. Jade chose India as it’s one of the world’s fastest growing gambling markets, with a population of 1.3 billion people with rising income levels. He decided not to target the Chinese player base, which has for so long been the golden goose, due to a conviction that the market is likely to die out within the next year or so. “The government is putting measures in place to stop online gambling,” he said, adding that Beijing is able to influence a lot of smaller jurisdictions from taking bets from Chinese players. “We didn’t want to be part of that.”

SOUTH EAST ASIA 27

Moving closer to home, Jade is gearing up to take advantage of the domestic online market in the Philippines under the so-called PIGO licenses. The company currently has a sports book license and is live in Okada Manila. Over the next few months, it plans to roll out a number of retail sites on the sports betting side. “As part of the retail offering, we also have what we call “privileged betting,” which allows us to accept bets if a player maintains an account of PHP10,000. Once we identify the player, we can set up an account and he can place bets online.” The identification process can be via video or other biometrics and Jade is looking into iris recognition technology.

We can take a “casino live online

within a two-week period.

”

(Credit: Prashanth Pinha)

“Casinos and properties licensed by PAGCOR will be able to apply for an online license and our platform is ready for these companies. We would like to become a service provider to those properties,” he said. “Our platform is casino ready, it’s live dealer ready and our virtuals are ready, so as they prepare themselves we’ll be ready to go live. We can take a casino live online within a twoweek period. We’re just waiting for PAGCOR to finalize some details.” “We will then submit our platform to Pagcor for approval. It’s GLI compliant and our sportsbook is too. It’s just a matter of approvals.” Pisano said he’s a strong believer in the convergence between land-based and online gaming. “I still strongly believe we are one industry,” he said. Another product Jade is venturing into is cock fighting. Known as Sabong in the Philippines, the practice is hugely popular and viewed almost as a national sport. Jade has signed exclusive rights with some of the largest event organizers in the country and will provide the screens, call the games and publish results on its site. At present, the PIGO sector is waiting for PAGCOR to dot the i’s and cross the t’s on the relevant regulation. It’s a slow process, but once the approvals are in place, Pisano sees “incredible opportunities.”

Asia Gaming Briefings | April 2021

INDOCHINA

CAMBODIA

Online gambling quietly flourishing in Sihanoukville supporting casinos Just over a year after Cambodia announced a blanket ban on the country’s thriving online gambling scene, the industry is still going strong and quietly flourishing.

Asia Gaming Briefings | April 2021

ajor casino properties in Sihanoukville, which was the red hot centre for online gambling, are still beaming their live dealer services out to the world, industry insiders say. It’s not on the scale as it was before, as many of the fly-by-night operators have fled and now appears to be more manageable, they say. “It’s still going on, but it’s not as in your face,” said one operator who declined to be named because of the sensitivity of the subject. Cambodia announced its ban on online gambling in 2019 following pressure from China to clamp down. At that point, Sihanoukville, on the southern coast had been overrun by operations seeking to cash in on online gambling targeting the Mainland. Basic infrastructure was crumbling and unable to cope with the resulting building boom. There were almost daily reports of rising crime, while resentment was building among locals who were no longer able to afford property or rentals. What’s perhaps surprising is that China’s stance towards online gambling targeting its nationals hasn’t changed and has in fact hardened in recent months, with a new law coming into effect last year that criminalizes those that seek to lure Chinese. Cambodian Prime Minister Hun Sen is one of Beijing’s closest allies in Asia and has been a major beneficiary of Chinese investment. Chinese direct investment in Cambodia reached $860 million in the first 11 months of last year, up 70 percent from the same period in 2019, the Chinese embassy in Phnom Penh said on January 1. China is also opening a Consulate in Sihanoukville. “We just did a site survey in Cambodia and the fact that online gambling is coming back is a surprise,” said Ben Lee, managing partner of iGameX Management and Consulting. “There is significant video streaming going on and there is still an army of telemarketers.” “It’s a balance between giving countries just enough of what they want but with a whip to flourish if necessary,” Lee said, referring to China’s potential reaction. Another insider, who also declined to be named, said the businesses are being tolerated as they are backed by powerful figures close to the Cambodian government. The presence of the online operators is providing support to the local casinos at a time when the borders are closed and international visitation is at a minimum. “People are gambling at the tables but they are not tourists. Just as we surveyed in 2019, the gamblers are the people involved in the

INDOCHINA 29

online industry and they are back, Lee said.” What’s clear is that online operations are providing support during the crisis and the industry in Sihanoukville appears to still be viable in its scaled down version. Late last year, one operator estimated that the number of operating casinos had fallen by about half, leaving just the big brands. Following the online ban, which took effect in January last year, authorities took steps to give the city a face lift, significantly improving roads, sewage and other basic infrastructure. As a result, most industry watchers and local sources predict that the city has strong potential as a more family friendly, mass market destination.

GROSS GAMING REVENUE

Although locals are not permitted to gamble, the city does enjoy support from expatriate businesses. It’s home to Cambodia’s only deepwater port and is close to the sprawling Sihanoukville Special Economic Zone, which has ambitious plans for expansion. According to local media reports, the zone is stepping up investment and seeking to attract more foreign companies. In October last year, it said it had new entrants from France, Switzerland and Laos among others. The question remains as to whether the online gambling component can be kept at a sustainable level that doesn’t attract the ire of authorities, at least until the crisis is over and land-based has a stronger base for growth.

(units in US$’ 000)

2020

2019

878,681

Revenue

1,755,466

Net Profit

102,303 521,278

Casino operations gaming tables Casino operations electronic gaming machines (“EGM”)

787,268 1,561,422

82,360 158,054 (Source: Nagacorp)

NagaCorp touts recovery prospects NagaCorp has turned in its financial report for the full year 2020, noting that Cambodia has fared much better than many other countries throughout the pandemic era. Headlining the report is that NagaCorp managed a net profit of US$102.3 million in a year that most other firms fell to losses at the hands of Covid. This was despite a three-month closure that lasted until July 8, 2020. NagaCorp sees even better prospects ahead, stating that “the company believes that the rollout of vaccination, and eventually the anticipated gradual border reopening throughout Asia may most likely further improve the economy and tourism sector of Cambodia, which is expected to contribute positively to the group’s business.”

UNESCO concerned over Naga’s Angkor Wat project NagaCorp’s US$350 million Angkor Lake of Wonder project has drawn concern from the United Nations’ cultural agency UNESCO. UNESCO noted, “The proximity of the project to the protected buffer zones of the [Angkor Wat] site as well as the scale, scope, and concept of the planned activities could indeed have an impact on the outstanding universal value for which Angkor was inscribed on the UNESCO World Heritage List.” The statement added, “UNESCO is certain that the Cambodian authorities remain fully committed to the implementation of the World Heritage Convention and will ensure that the protection of the outstanding universal value of Angkor remains at the heart of the decision-making processes relating to the property and its surroundings.”

Asia Gaming Briefings | April 2021

INDOCHINA 30

PATA CEO sees slow recovery, but optimism for future Pacific Asia Travel Association (PATA) CEO Dr Mario Hardy sees a slow recovery for Asia’s tourism markets, though remains optimistic about the future of travel.

n a recent Asia Gaming Brief podcast, Dr Hardy speaks about PATA’s three scenarios for the impact of Covid-19 on travel this year and beyond. Under a mild scenario, by the end of 2023, international visitor arrivals (IVAs) into and across the Asia Pacific region could return to 96 percent of the volume received

Asia Gaming Briefings | April 2021

in 2019. Under a medium and severe scenario, those levels may be just 74 percent and 49 percent respectively. At present Dr Hardy believes that we are looking at somewhere between the moderate and severe-case scenario due to the latest wave of cases, new variants and the time it will take to roll out a vaccine.

INTERVIEWS 31

“I would not anticipate mass travelling in 2021. There might be more in the third and fourth quarter but I wouldn’t expect too much,” he said. In the meantime, domestic tourism will need to stand in to fill the gap. Over 2020, various jurisdictions have had success in focusing on this segment and offering incentives to spend money on staycations. For example, Singapore handed out vouchers worth $100 to its citizens over age-18 to spend on local restaurants and attractions. “It will never make up the gap, but it does help,” he said. Domestic tourism in the Philippines has been particularly successful, with locals spending significant amounts of money on travel. “Philippines domestic tourism is booming,” he said.

never “makeIt will up the gap, but it does help. ” Over the next few months, Dr Hardy said it’s likely that governments will try to re-establish travel corridors between the countries that have managed to control the virus. Travel bubbles were a hot topic before Christmas, but have had little success due to the new wave of infections. However, Dr Hardy said now is a time to reassess the world’s tourism market and to take a step back to look at the value that is being created for the local economy. Governments will need to examine factors such as the level of job creation and how to manage capacity. The sheer number of visitors should not be the main way of measuring success in a country’s tourism industry. Many popular cities and destinations have in recent years complained of overcrowding, however, it’s more an issue of managing capacity to ensure tourists don’t all travel at the same time. There is also a case for improving tourism infrastructure to spread visitors across a country and not just to one area, Dr Hardy said, pointing to the example of Bali in Indonesia, which gets the lion’s share of visitors. Summing up, he said: “I’m optimistic for the future. I do believe we will travel again, but it will be a slow recovery. 2021 will be difficult and 2022 will be better, but we have to prepare for a slow recovery.”

Asia Gaming Briefings | April 2021

FOCUS

(Credit: Jongsun Lee)

Taking the N. Asian market pulse: Is Korea flatlining? Covid-19, trade tensions and China’s battle against capital outflows have all had an impact on Asia’s gambling jurisdictions in one way or another, with some significantly losing their appeal and others showing surprising resilience.

n this edition’s Focus section we look at the North Asian jurisdictions of Japan, Korea and the Russian Far East to see how they have fared. Firstly we go to Japan, which had been counting on the Asian VIP market for about a quarter of its gross gambling revenue for its planned multi-billion dollar IRs. However, much has changed since the law allowing IRs was passed in 2018 and that sector of the market has been particularly hard hit. Spectrum Gaming’s Fred Gushin and Paul Bromberg take us through some of the key developments that have taken the gild off the VIP lily and suggest the course Japan may need to steer to ensure it doesn’t incur China’s ire. Our second piece stays in Japan. While IRs are unlikely to open their doors for years to come, one gambling segment is quietly booming. Although online gambling is technically not legal, authorities turn a blind eye to the practice. Betting on horse racing, motor boats and cycling is legal and there has been a gradual shift to betting online. So much so that the Google Play App store began offering real money sites for download in Japan from March. The next North Asian market under the spotlight is South Korea. The jurisdiction was seen as highly promising and attracted high profile investment from global players such as Caesars Entertainment and Mohegan

Asia Gaming Briefings | April 2021

Sun. However, gradually the appeal has diminished as Covid and other geopolitical events highlighted the risk of foreigner-only markets. Caesars threw in the towel earlier this year and Mohegan is looking for financing. We look at what operators could do to adjust their offering and regain their lustre. The third jurisdiction is the Primorye gambling zone in Russia’s Far East. The gaming hub has been slow to develop, however does appear to be gaining traction. A second resort opened last year and NagaCorp has said it’s on track to open its delayed property in 2022. The first company to open its doors, Tigre de Cristal, is now part of the Suncity Group, via Summit Ascent, and its performance has shown significant promise. The latter company has attracted attention from analysts recently, who see its access to Suncity’s database and close proximity to other North Asian markets as key draws. Covid-19 has undoubtedly had an impact on the region’s revenues, however, its casinos attracted support from local Russians who are allowed to gamble, supporting the operators in the absence of international travel. Lastly in this focus section we change tack slightly to examine the latest trends in live dealer. It has been the most popular online vertical in Asia for many years, but as the field gets increasingly crowded, we ask what trends are emerging and what stands out in the pack.

Asia Gaming Briefings | April 2021

FOCUS 34

Japan’s VIP challenge Fredric Gushin*

Managing director, Spectrum Gaming Group

Paul Bromberg*

Senior vice president, Spectrum Gaming Group

VIP play had been projected to be a major segment of the potential overall Japanese gaming market, but a lot has changed since the law permitting integrated resorts was passed in 2018.

t was anticipated that international VIP play from China, Taiwan, Hong Kong and Korea would be the major feeder markets, with some studies estimating that the VIP market could constitute up to 25 percent of overall gross gaming revenues (GGR) in Japan. It is important to note that the IR law prohibited the use of junkets in Japan. This was a significant mandate based on the past experience of other jurisdictions. The Macau government has historically permitted the services of junkets, but from a law enforcement perspective this has caused multiple concerns related to the infiltration of triad groups, pervasive money laundering and the explosion of the underground banking system in China. In contrast, the Casino Regulatory Authority of Singapore decided in 2009 to permit junket operators,

Asia Gaming Briefings | April 2021

known as Independent Marketing Agents (IMAs), at its two IRs, but only under a strict licensing and operational regime resulting in only three IMAs having been licensed in total (with none currently licensed). Junket ban The Japanese government appears to have based the decision to prohibit junkets on the regulatory and law enforcement issues associated with junket operations. That decision has been validated by the recent inquiry held under the auspices of the New South Wales Independent Gaming and Liquor Authority into Crown Resorts, which documented serious breaches related to junket operations and anti-money laundering (AML) regulations

FOCUS 35

(Credit: Andrey Kremkov)

at the Crown casinos in Melbourne and Perth. Junket operators have demonstrated over the years that they are masters of circumvention in avoiding governmental efforts to regulate them. The Japanese gaming regulator, the Casino Regulatory Commission (CRC), and the Financial Intelligence Center (responsible for AML compliance) will have to be on guard to assure that junkets are not operating behind the scenes issuing credit to VIP players outside the traditional casino credit systems. Meanwhile events taking place in China will have a direct impact on the VIP market in Japan. The length and severity of China’s anticorruption campaign, initiated by President Xi Jinping in late 2012, has surprised many analysts and political observers. The impact of the crackdown had a major impact in Macau but also has been extended to other jurisdictions that market to Chinese VIP players. Whereas the crackdown initially targeted junket operations in Macau, it then impacted the ability of junket operators to take Chinese VIP players to overseas

casinos and now appears focused on those VIP players themselves traveling to casinos outside China. Key VIP landmarks Below is a summary of the key developments impacting the VIP market from 2015 to the present:

The Gaming Inspection and Coordination Bureau (“DICJ”), the Macau gaming regulator, introduced a number of initiatives to strengthen gaming regulation. One required that all new Macau junket licensees from 2015 provide full disclosure of shareholders, investors and key employees. In December 2016 new controls were imposed on the amount of cash individuals using China-issued ATM cards could withdraw from ATM machines in Macau. Facial recognition technology and ID verification for cash withdrawals was deployed In May 2017 at ATMs in and around casinos and then extended to all ATMs in Macau. China’s State Administration of Foreign Exchange announced that as of 1 September 2017 information would be collected on overseas transactions exceeding RMB1,000 (US$147). In May 2016 the DICJ banned proxy betting in Macau’s casinos and required casinos and junket operators to follow significantly stricter AML protocols. The DICJ banned junket operators, with effect from 1 August 2019, from using Macau casino and VIP rooms as a base for cross-border settlement of VIP gambling services provided outside of Macau. The DICJ also stated that any violation of local laws, or even of regulations in places outside Macau, could potentially affect the suitability of a junket operator in Macau. Since the start of the Covid-19 pandemic, the Chinese government has stopped financial outflows by keeping its citizens from traveling overseas, thus ensuring a boost to the domestic economy. In June 2020 the People’s Bank of China began tracking large-sum domestic cash transactions in an attempt to curb illegal transactions and make the movement of money even more difficult for junket and underground banking operators. Around the same time, Chinese authorities arrested thousands of people suspected of being involved in cross-

2 3

6 7

border gambling and there have been many official pronouncements against online gaming and those involved, as well as firms providing payment services to these entities. China’s Ministry of Culture and Tourism established a “blacklist” of overseas tourist destinations in August 2020 that are targeting mainland Chinese customers for gambling purposes. The Chinese government announced in December 2020 that the National People’s Congress had passed an amendment to Chinese criminal law so that, with effect from 1 March 2021, it became a criminal act punishable by a prison term of up to 10 years for any person or entity (such as an offshore casino) organizing or soliciting Chinese citizens to gamble overseas, while the penalties for serious breaches have also been increased.

11 12

Conclusion Taken together it appears VIP play from China at Japan’s IRs will have to be re-evaluated in light of these developments. VIP play is always risky from a regulatory and operational perspective. The CRC will have to ensure that VIP play follows the rules and that money laundering is not taking place. In addition, the IR licensees will have additional compliance responsibilities in terms of conducting periodic risk assessments and enhanced due diligence on VIP players including understanding the player’s true source of wealth. VIP play will still be an important component of Japan’s GGR but there will have to be aggressive marketing efforts related to the mass and premium mass markets. It is still a long time until the first IR opens and much can change in that time. *Fredric Gushin founded Spectrum Gaming Group in 1993 after working 13 years for the New Jersey Division of Gaming Enforcement as Assistant Director and Assistant Attorney General. Gushin has led Spectrum’s Asian engagements for a variety of public and private sector clients. He is an expert on gaming regulation and anti-money laundering related to all forms of gaming. *Paul Bromberg has been overseeing and conducting investigations in Asia since 1988. During this time, he has worked closely with various governments including law enforcement on gaming and other matters, including conducting probity investigations.

Asia Gaming Briefings | April 2021

FOCUS 36

Online gambling sees quiet explosion in Japan Largely ignored by the media and the policymakers, Japan has clearly entered an era of explosive growth for online and mobile gambling.

ike an iceberg that is only partially visible above the waterline, the only people who seem to be paying close attention are the businesses directly participating in the industry and the punters who are laying down their bets. One recent signpost, however, was an announcement that Google Play app store will begin, effective March 1, offering real money gambling apps to be downloaded in Japan. This will make Japan the only Asian nation among the nineteen states globally where such apps will be offered. Google’s support page specified four gambling categories that may be allowed in some jurisdictions: online casino games, lotteries, sports betting, and daily fantasy sports. In the case of Japan, it noted that real money gambling

Asia Gaming Briefings | April 2021

apps related to horse racing, motorboat racing, bicycle racing, and lotteries would be hosted. Legal forms of online and mobile phone gambling are thus beginning to proliferate in Japan, and the industry is on a trajectory of sharp growth. The shift toward online betting for horse racing, motorboat racing, bicycle racing has been underway for a number of years, with the proportion of revenues coming from this source gradually eclipsing the more traditional approach of heading out to tracks for the weekend and placing one’s bet. Needless to say, the coronavirus pandemic accelerated this shift with stadiums often empty of spectators, but nevertheless with total sales commonly

FOCUS

(Credit: Hakan Nural)

rising rather than falling. The distribution of real money gambling apps on mobile devices will, in this sense, only entrench these practices even further. Less easy to track are all of the international online casino sites now available in the Japanese language. They may be illegal, but the online advertisements are easy to find. The police would seem to have decided to turn a blind eye for the time being. Anecdotally, it’s not hard to assume that both the number of Japanese gamblers using these websites and the amount of money being wagered has also been on the rise. These are social and business realities in this era, but not only does Japan not have any established policy framework to cope with them, there doesn’t even seem to be much of an appetite to discuss what might be the best approach. This is hardly a surprise in an era where so much of Japanese politics is dysfunctional. This week the nation is debating about a failed former prime minister who apparently is too powerful to be fired even after embarrassing the nation before the world with overtly sexist comments, and the less noticed scandal of an incumbent prime minister who just declared

in the national parliament that Covid-19 vaccine approval needs to be delayed because Japanese people are somehow biologically

The distribution “of real money

gambling apps on mobile devices will, in this sense, only entrench these practices even further.

”

different from the rest of the human race, so new tests are necessary. If that’s the level of politics, then it is no surprise that questions about whether or how to

regulate online gambling have slipped through the cracks. One would hope, however, that at least in the universities and in the news media serious discussions could emerge. Indeed, the passing of the IR legislation had seemed for a time to herald a more substantial debate in Japan about gambling addiction and the sorts of public policies and infrastructures that would be needed to address this long-ignored public scourge. But even though the opportunities to gamble these days are not only at the pachinko parlor or at the race track, but increasingly right there in our own homes on our desktop, or even in our pockets on our mobile phones, the serious debate seems to have faded. Japan appears to be falling back into its old habit of ignoring things that are unsightly, uncomfortable, or which generate controversy. One thing is clear. By the time that those three IRs open their doors later this decade, they will hardly make a difference for Japanese society as a whole. While watching those giant buildings go up at a few venues around the nation, the practice of gambling will have already silently slipped into most people’s pockets.

Asia Gaming Briefings | April 2021

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S.Korea loses allure, leaving projects in limbo South Korea’s gaming market, which attracted significant interest when it first opened for foreign investors, is now seen as holding limited appeal unless the government agrees to relax its stance on local gaming.

ike all markets in Asia, it’s been hit hard by the pandemic, with properties facing rolling closures as caseloads have spiked. However, even before then it has suffered more than other foreigner-only markets around Asia. A series of events has taken the allure off what was seen as a potential playground for Chinese and Japanese players, attracted by the K-pop culture that was taking Asia by storm.

Asia Gaming Briefings | April 2021

An outbreak of Middle Eastern Respiratory Syndrome shut down tourism, in 2015, which was just recovering when tensions flared between Seoul and Beijing over the former’s decision to deploy a U.S. anti-missile defense system on its soil. China retaliated by banning tour groups to Korea, resulting in a 33 percent decline in visitors from 2017 to 2020. The outlook for the VIP market across Asia has also

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changed with China passing a law making it a criminal offence to lure its nationals to overseas casinos. And in 2018, Japan changed the game by voting to allow casinos, holding out promise for a potentially far bigger prize. “The Korean gaming market has been impacted by Covid-19 more than most other markets due to its structure,” said Matt Landry, managing director of Strategic Market Advisors. “With negligible foreign visitation last year, the foreign-only casinos were limited to foreign passport holders residing in Korea. ” “Now existing projects under development will find it more difficult, if not impossible, to be financed,” he added. There is currently only one casino that is permitted to allow locals to gamble and that’s owned by Kangwon Land in a remote area of the country. It’s High1 casino in a normal year generates more revenue that all the other foreigner only casinos put together, clearly illustrating the potential from the national

market. In 2019, it generated GGR of KRW14.81 billion, compared with KWR14.48 billion for all the other 16 combined. “The government should move to strengthen the operating environment by considering policy changes, with the potential for domestic play being a specific and meaningful change,” Landry said. “ Because of the government’s financial interests in the industry and the controversial nature of the potential changes, they should lay out potential changes and find an independent third-party to evaluate the alternatives with deep expertise in the gaming industry.” Ben Lee, managing partner of iGamiX Management and Consulting agrees access to locals would be a game changer, but doubts anything will happen in the short term given government concern over problem gambling. “There are limited opportunities given the current geopolitical situation,” he said. “The potential upside is if they allow local gaming and that will only happen if Japan opens up.”

“The foreigner only market does not have much appeal. The AML laws are very tight and players can’t get money into South Korea. The cost to bring money in is about 10 percent and the casinos have to pay that.” When South Korea asked for expressions of interest in 2015 for two new casino licenses in Incheon, close to the country’s main international airport, it received responses from 34 interested parties. However, that had dwindled to just six by the deadline and the government ultimately only issued the one license -- to Mohegan Sun for a $1.6 billion complex. It was to be joining a $700 million project underway by Caesars Entertainment and a $1.1 billion joint venture between local operator Paradise Co. and Japan’s Sega Sammy, which broke ground in 2014. To date, only the Paradise project has opened its doors and there are serious question marks over the other two. Caesars pulled out earlier this year, with CEO Tom Reeg derisively telling analysts that it had sold its stake to Hong Kong-listed partner R&F Properties “for some barbecued pork.” After merging with Eldorado Resorts, management has pivoted its attention away from international expansion to the U.S. market. In addition, the U.S. online gambling and sports betting market has opened up, which appears to promise more lucrative and less complex opportunities. The South Korean Ministry of Culture, Sports and Tourism has given R&F a 12-month extension to the construction deadline, which was in March this year, less than the three years it had requested to finish the project. The Midan City Resort Complex is expected to eventually include a casino, 750 hotel rooms, a theater, and a convention space once it is operational. Theoretically, the opening should come by March of next year, although there is currently no word on who the real estate firm may bring onboard to operate the casino. Mohegan has also requested a six-month extension to its agreed June 2022 opening date and is known to be seeking partners to help finance the project. It’s currently about 15 percent towards completion. However, CEO Mario Kontomerkos, a key proponent of Project Inspire, has said he’s stepping down. The company is now looking for a new leader, but whether the incoming management will view the Korean project kindly remains to be seen. Unlike Caesars, Mohegan at the present time is still vying for a license in Japan, which it says will complement the Korean property.

Asia Gaming Briefings | April 2021

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(Credit: Sung Shin)

Primorye projects saw “major 2020 progress,” officials say Officials in the Primorye gambling zone have been on a public relations blitz in recent months, highlighting how projects are now pushing ahead and stressing there is no change in the long-term plans for 12 casino complexes.

he Deputy Prime Minister of Primorsky Territory, Konstantin Shestakov, said that the development of the casino entertainment district in his part of the Russian Far East made major progress in 2020 and is on a very positive trajectory. Russian media has shown video images of infrastructure construction powering ahead, despite the frigid temperatures in Russia’s Far East over the winter months. The zone, whose development is being overseen by the Primorsky Krai Development Corp., has been slow to ramp up. The first resort, Summit Ascent’s Tigre de Cristal, opened its doors in 2015, while Shambhala,

Asia Gaming Briefings | April 2021

owned by a Russian businessman followed last year. A project by NagaCorp, which broke ground in 2016, ground to a halt in 2020 due to difficulties in bringing in Chinese contractors during the crisis. However, that has now restarted and the Cambodian-based company said it expects to complete the premises in 2022. As of 31 December 2020, the hotel tower topping off for Naga Vladivostok was completed and construction of the casino podium was progressing up to level 2. Water and sewage systems connected to the development site were largely completed. Despite the slow progress, the zone’s potential has peaked the attention of the investment analysts who follow Hong Kong-listed Summit Ascent.

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In a recent note, Bank of America forecast that the stock has potential upside of about 135 percent. The firm explains its optimism by saying that it will benefit from the deep database of parent company Suncity Group Holdings. However, local Russians are allowed to gamble and have provided significant support to the casinos in the zone during the crisis. Once borders reopen, the zone is within about three hours flying time from Korea and Japan as well as the Northern China market. Phase 2 of the development will boost capacity, which will drive growth in the longer term. While the gambling zone was initially envisaged as a hub to boost tourism, in particular the VIP market, in practice the local mass market segment has been one of the strongest performing. Again, it was a weak start with company officials complaining of illegal competition in the area. Authorities have taken action and appear to have had some success. According to the government, the Primorye zone saw a 24 percent drop in resort attendance last year due to the pandemic, which is a far better performance than many others in the region. In 2020, the number of Russian tourists to Primorye decreased by 14.8 percent, and

foreign tourists by 56 percent. At the same time, the number of unique visitors to the zone amounted to almost 219,000 against 289,000 in the year before last. The ratio of Russian and foreign tourists was 88 percent to 12 percent. There is also fresh data for two months of 2021 – out of 12

note, “BankIn ofa recent America

forecast that the stock has potential upside of about 135 percent.

”

percent of foreigners, guests from China make up 5 percent, from Uzbekistan 4 percent and from other countries 3 percent of the total flow. In terms of future expansion, both Summit Ascent and Shambhala are in second-stage planning. Tigre de Cristal’s next stage will

involve investment of about $200 million and will double the group’s VIP and mass gaming tables when it begins to come online from 2022. It will also have twice the number of rooms and will add four restaurants and bars, more retail offerings, and an indoor beach club and spa. According to a Goldman Sachs report based on a corporate day, the property will house 350 hotel rooms, 300 slots, 75 tables (20 direct VIP, 20 junket VIP, 35 mass) when Phase 2 opens. The company is eyeing the generation of more than US$200 million to $250 million in EBITDA by that date. Shambala is also designing the second stage of construction - a hotel and entertainment complex with an area of 24 thousand square meters, up to 11 storeys with up to 270 rooms. The volume of investments will amount to over 4.5 billion rubles. In addition, the officials from the development zone said there are currently three additional projects in the design phase and four remaining sites to fill. Zone authorities are seeking to attract nongaming investors to fill out the remaining leisure offering. They foresee the zone incorporating a ski hill, as well as entertainment parks, golf courses and other family friendly leisure attractions.

Asia Gaming Briefings | April 2021

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Pandemic sparks live dealer innovation The closure of physical casinos and suspension of sports tournaments in 2020 resulted in a banner year for live casino products. Experts believe that even as we return to normality, the live casino boom will be far from over.

“

As a direct result of Covid, we are seeing and in my opinion will continue to see, a significant uptake in the online space,” comments Shaun McCamley of Euro Pacific Asia Consulting. “What we are seeing in this uptake is the need by players for more social interaction, this as a result of continued lockdowns and social distancing requirements many jurisdictions enforce.” Live casinos aim to simulate the thrill of betting in a real-world casino environment, the croupier smiles as she deals cards, interacting with players using an in-built chat function.

Players are still eager “to channel the visceral thrill of participating in a real-world casino.

”

McCamley pointed towards an innovative platform called Live Solutions, a B2B provider which operates “Casino Floor Live”, which is an infinitely scalable table games environment, with each table hosted by a live presenter. The players all get to video chat with each other and the host which creates social interactions and activity. The tables can be hosted in any language and using any currency, with local presenters, speaking the local language, with local knowledge, working from home. It’s been described as “Zoom for casino”, according to McCamley. “With many individuals in lockdown, craving social activity, the product seems to tick all the boxes and is already reporting very high demand from revenue-starved operators. Social isolation is going to be with us for quite some time, so the key message to operators is to act responsibly and look toward the long game,” he added. QTech Games’ chief commercial officer Ulf Norder

Asia Gaming Briefings | April 2021

said that covid has been a prime accelerant in the trend towards digitalized entertainment. “As the coronavirus closes casinos, live-casino products, in particular, have been thriving across Asia, delivering comparable gaming experiences from the comfort of players’ homes or on the move.”

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Norder said that Qtech has used the period during the pandemic to bolster its existing live-dealer portfolio, including inking partnerships with Ezugi in February 2020 and Evolution in January 2021. “Players are still eager to channel the visceral thrill of participating in a real-world casino, not to mention the chance for some long-delayed social interaction with the dealers themselves.” “Speaking generally across the industry, a raft of Q3 and Q4 2020 results suggest a reversion to type, with products like poker declining rapidly, while live-dealer appears to be reliably retaining its audience, with newer habits progressively established.” The pandemic has also sparked product innovation in the live casino industry. Kfir Kugler, chief executive of live-casino provider Ezugi has seen a steady increase

in popularity in “Live Casino Game Show” products over the course of the pandemic. Live Casino Game Shows, as the name suggests, simulate a television game show. The croupier is effectively the show’s host - akin to a television presenter, and each viewer is effectively a contestant in the game show. It mixes the thrill of betting in a live casino with television-level production. One of the first entrants into the emerging product vertical was Evolution Games. Today, it has amassed one of the largest range of offerings, including Crazy Time, Monopoly Live, Lightning Roulette, Mega Ball, Dream Catcher, Deal, or No Deal Live, Lightning Dice, and Football Studio. Playtech launched its “Adventures Beyond Wonderland” Live casino game show in November 2020 in the UK, which is based on an existing Playtech slot, but translating it into

a new live experience. It is themed after the popular “Alice in Wonderland” story. At the time of its release, Edo Haitin, managing director at Playtech Live said: “Today’s players demand innovative, experience-led content, and Adventures Beyond Wonderland offers that in spades. Taking a slot with an iconic theme, look and feel and bringing that to the Live Casino arena is a genuinely groundbreaking move… we believe Adventures Beyond Wonderland offers a uniquely enriched Live gaming experience.” Its release was parallelled by Pragmatic Play around the same time, with their first entries into the growing Game Show market with titles including Mega Wheel in November and Mega Wheel Roulette in February. As our industry moves towards digitization, this won’t be the last we’ll see of innovation from the live casino space.

Asia Gaming Briefings | April 2021

SUPPLIER SPECIAL REPORT 44 AGS

Bonus Spin Extreme delivers community thrills

rive excitement, player engagement, and incremental revenue with AGS’ Bonus Spin Xtreme innovative and award-winning new progressive side bet system. With its groundbreaking proprietary technology, Bonus Spin Xtreme enables casino operators to link all table games on the casino floor to the same jackpot pool, requiring only one seed amount and providing faster-incrementing and larger jackpot awards. Bonus Spin Xtreme is also the perfect solution for community-style table games. Its unique wheel design allows for one unique progressive jackpot winner on community games such as roulette, baccarat, craps, sic bo, and poker cash games. Three jackpot levels, including AGS’ popular must-hit-by progressive, accelerate player engagement. Anticipation builds as the

jackpot gets closer to hitting! When the wheels spin, every participating player wins a prize, creating excitement among everyone at the game. Here’s how Bonus Spin Xtreme works: Each table game features a unique communitybased triggering event, which initiates the spin of three eye-catching concentric wheels. The inner wheel displays the community prize, which every participating player wins. The middle wheel selects the hot spot player position. If the Hot Spot player makes the wager, their bet sensor lights up and blinks, activating the outer wheel spin. The outer wheel selects the Hot Spot prize, which includes the progressive awards. Bonus Spin Xtreme, a cutting-edge product available only from AGS, drives big-win excitement and community thrills in your table pit.

ARISTOCRAT

Aristocrat introduces dynamic 2021 lineup

s a content and technology driven company, Aristocrat never ceases to innovate and create new concepts that support our customer’s business and cater to different player appetites. Our talented teams have continued to focus on the development pipeline during various lockdowns in Asia, to ensure that a robust portfolio of games are readily available for our ever-changing market, instilling confidence in the path ahead. Aristocrat maintained our commitment to the Asian market by continuing game builds throughout the crisis and as a result, we have a stronger portfolio in 2021 than ever before. In fact, we have increased our D&D investment year-on-year to ensure we have a suite of content readily available to support customers, regardless of form factor, as players continue to migrate back to properties throughout Asia. In the next 12 months, we are dedicated to strengthening the Asian market with over 30 new titles to be released which includes a variety of Links, Standalone and Standalone Progressives. In the Link space, we were excited to debut a new product during Chinese New Year called Lucky Fortune Link. With two recognisable characters from classic Chinese literature, Da Sheng Yeah and the Great Empress Wu Ze Tian. Lucky Fortune was built in response to the player favourite Hold & Spin feature and will be launching with a new Picture Pays mechanic.

Asia Gaming Briefings | April 2021

Players can choose their lucky Chinese Zodiac in the Lucky Fortune feature, collect the Zodiac pictures to award the credit prizes and jackpot, while adjacent credit prizes combine to bigger symbols for bigger prizes. This product is a great fit for Chinese New Year and is ideal for operators to promote with “Sending Away the Year of Rat and Welcoming the Year of the Ox.”

As we look forward at the year ahead, Aristocrat is committed more than ever to our continued partnership with our Asian customers by delivering our strongest portfolio yet. To find out more about our dynamic product line-up please reach out to your Aristocrat sales representative or visit our website at www.aristocrat.com/apac.

SUPPLIER SPECIAL REPORT 45 BETINVEST

Time to renovate: What’s the new with BetInvest’s online platform

ocusing on major software updates, with innovative UX/UI design and frontend solutions, BetInvest is offering a new approach to business development. Our platform solutions are known for their flexibility, simplicity and speed, and this remains the case with our new and updated package of services. Capable of fulfilling any client’s needs, our upgraded platform, certified by NMI, allows fast and flexible integration of new providers for specific regions. Attractive and customisable design is supplemented with a new frontend and full integration with the new CMS, which was developed by BetInvest specialists. Among its best features is the fully flexible, platform-wide management of content, which can be configured to unique desktop, tablet or mobile layouts. Thanks to our innovative ideas, we can provide a bespoke service that allows each of our clients to configure and replace the set of components responsible for site features such as the sports menu, teasers, and top events. Additionally, the CMS provided by BetInvest gives our clients an

amazing opportunity to customise and personalise their own platform in order to optimise it for specific markets. We make use of Figma software, an innovative platform for white label solutions that allows our clients to dynamically revamp their site, providing the perfect means of connecting with users through eye-catching and emotive design. Furthermore, BetInvest has developed a new set of features aimed at the verification process. Highly secure, international document verification accompanied with a quick and easy registration form is sure to attract new customers.

Using machine learning, our updated service can segment games, creating new categories with automatic recommendations to players. In addition, our platform allows user segments to be divided according to specific features, providing the added flexibility of being able to target specific content or the entire site for certain user segments. That BetInvest responds to client demands, giving them the opportunity to make their own aesthetic choices when and how they desire, is proof of our commitment to a client-oriented approach.

BBIN

BBIN urges care for the world via latest TGB Charity video

he leading iGaming software supplier in Asia, BBIN, established its charity brand, “The Gaming Beat Charity” (hereinafter referred to as

TGB Charity) in 2018. It has actively participated in important global issues and cooperated with major charities to implement corporate social

responsibility with practical actions, endeavoring to make contributions to the society. TGB Charity releases the latest brand video of 2021 to tell stories of four different characters, interpreting the dilemma that the world is facing and using low-saturated tones to bring out the urgency of the issue. Will the girl in the dry land jump off the springboard eventually? What is the boy looking at the distant place waiting for? What is the old man waiting near the withered tree? Will the woman who wakes up in the polar areas survive from the crisis? All the answers are in the video, we invite you to explore together. The symbolic color “hot pink” of TGB Charity is used constantly throughout the film to show its spirit of infinite love. With the heart symbol, infinity and game elements, TGB Charity’s logo thoughtfully conveys the spirit of “Think big, Give beyond”. Through diversified projects and activities, BBIN & the Charity will continue to increase the public’s attention towards charitable events, and make good deeds more fun! Visit BBIN’s website to watch the latest TGB Charity video. https://www.bb-in.com/bbin/en/News/ BBIN_TGB_Charity_Think_Big_Give_Beyond

Asia Gaming Briefings | April 2021

SUPPLIER SPECIAL REPORT 46 BETCONSTRUCT

BMM

Setting players HomeWork

o broaden player appeal and expand operators’ reach, BetConstruct has launched a new promo campaign for Sportsbook called HomeWork. As a part of a player acquisition strategy meticulously developed for partners, BetConstruct creates a special assignment to be provided to players via sportsbook. A very literal homework can be assigned to the bettors by an operator. With this additional player engagement channel also comes the configuration layout for operators to customize the assignments and track the results. The tasks include, but are not limited to, predicting the outcome of different markets

like match result, goals total, handicap, etc. The participants are given 24 hours for a regular task and get a new one in case the previous has been annulled. Upon completing the homework and depending on the number of correct predictions, bettors receive rewards from the total prize pool of the promotion. HomeWork is an excellent fit for forward-thinking partners who seek to provide extraordinary sportsbook experiences alongside traditional well-loved betting. The new enhancement is set to contribute to the profits of any sportsbook businesses, creating an involving experience for the players and prolonging their sessions on operator’s website.

Setting gaming standards since 1992

MM is the longest established and most experienced private independent gaming certification lab in the world, providing professional technical and regulatory compliance services to the gaming industry since 1981. BMM is a systems-expert company that has provided consulting for and tested many of the largest gaming networks and systems over the last 40 years. BMM has been successfully testing and certifying the full scope of Class III, Class II, VLT, AWP, HHR, online, sports-betting, social, pari-mutuel and lottery products over four decades. BMM authored the first set of independent gaming standards in 1992 and the first set of online gaming standards in 2001. BMM employs some 500 people in 13 global locations and serves over 460 gaming jurisdictions. BMM’s world headquarters are in Las Vegas (USA) with offices in Moncton (Canada), Lima (Peru), Buenos Aires (Argentina), Barcelona (Spain), Bologna (Italy), Krakow (Poland), Bucharest (Romania), Midrand (South Africa), Melbourne and Sydney (Australia), Macau (SAR, China) and Singapore. For more information on BMM Testlabs, please visit bmm.com

CONTINENT 8

Protecting Web applications

eb applications and API’s are the backbone of every Internet connected device we use today. Specifically, a web application is any program that interfaces with a customer through a web browser. An application Programming Interface (API) is a tool that allows two or more applications to communicate and exchange data. Continent 8 have reimagined the way that Web App and API security is approached by building a fully featured cloud Web App and API Protection (WAAP) platform directly in-line with customer data flow. This enables us to bring all the features and functions usually only found in costly localised set-ups to the cloud. Other cloud WAAP deployments have Content Distribution (CDN) in their DNA, but C8 leverages security veteran Fortinet’s 20+ year expertise to transform the way cloud WAAP is delivered. WAAP is achieved using a combination of Web Application Firewall (WAF), Robot (BOT) and API protection mechanisms.

Asia Gaming Briefings | April 2021

Protection from the OWASP (world standard in web security risks) Top 10 is one of the fundamental features of any WAAP and is what is required to comply with payment security (PCI-DSS) requirements. The OWASP Foundation has tens of thousands of members worldwide working to improve application security. The OWASP Top 10 represents a broad consensus of the ten most important security considerations for web applications. There are more security risks than just the Top 10 and Continent 8 WAAP protects over and beyond this including the API Top 10. By considering the Top 10 when developing code, developers are actively protecting businesses from application attacks and the resulting revenue or data loss caused by downtime or a compromised system which can severely damage any business. According to Verizon’s 2019 ‘Data Breach Investigations Report’, Web Applications are now the number one target for attacks, but in their

document ‘API Security: What You Need to Do to Protect Your APIs’ Gartner believes that API targeted attacks will knock Web App attacks off the top spot by 2022. There has never been a more apt time to deploy Web Application & API Protection mechanisms – Such as Continent 8 Cloud WAF.

SUPPLIER SPECIAL REPORT 47 DALLMEIER

AI technology to boost ROI

allmeier offers a Casino Operating System (COS) called HEMISPHERE SeMSy, a software platform which helps casinos to easily control and optimise their core areas: gaming, surveillance, and marketing. Dallmeier focuses on its core strength, has specialized functions optimized in a sophisticated system and at the same time plug in to the overarching CMS. Operators can integrate various

production systems, such as the dealing shoe or POS, into Dallmeier’s system and achieve full interoperability. By doing so, they can combine and correlate information from different systems. Together with a comprehensive integration of CCTV, the key benefit is that casinos receive image and video material for all data to understand processes and make smarter business decisions. For example, table protection: Dallmeier´s

Casino Automation Technology (CAT) uses AI-based video analysis to detect if someone is tampering with the table. At the same time CAT provides the operator with a recording of the relevant video sequence so that he can instantly verify the incident. This is just one example of how Dallmeier’s system manages to digitalize analogue processes, make them comprehensible for those involved and derive meaningful actions. Dallmeier constantly works to improve its software and integrate new features that the market demands. Its Casino Automation Technology is available for Blackjack and Baccarat. SicBo to follow soon. With this solution, the games can be processed much more efficiently, and the increased game pace enables a significantly higher turnover per hour. CAT also enables highly accurate, AI-based player rating, which prevents cheating in loyalty programmes. The tracking of all game-relevant actions also reveals suspicious winning patterns, for example. Thanks to decades of experience in the casino industry, Dallmeier is very optimistic that its innovative solutions will continue to offer the customers decisive added value, enabling them to achieve sustainable competitive advantages. True to the Dallmeier company motto: “Making things easier.“

DRGT

Expediting the move to cashless

t’s been just over a year, almost to the month, and the current global situation remains, in my view, quite surreal, says DRGT CEO Jurgen de Munck. Just over 12 months ago, most of the gambling world was in the UK attending the planet’s biggest gaming exhibition, ICE London. At that event many of us were speculating to what extent what was happening in China and how it was going to impact the rest of the world, and within a month we all found out. Notwithstanding the health-related consequences, the effect this pandemic has had on the global economy, and specifically our entertainment sector, is almost unquantifiable, so I am not even going to try. What I can do though is reflect on our company, and the fact that we were, and we remain, in the fortunate position of being almost debt-free, and as such able to, as best possible, ‘weather the storm’. Notwithstanding this I firmly believe that (as per Benjamin Franklin)

“Out of adversity comes opportunity”. Now whilst in the short-term this thought may be difficult to digest, I really believe that in time it will ring true. I referenced ‘in time’ specifically, as it is time that allows us, and teaches us, to adapt, and once we have, we prosper again; in relation to DRGT that ‘opportunity’ has been the fuelling of the cashless gaming debate, a technology solution we have advocated since inception; and one that forms the very backbone of our existence. Operators have always seen the value therein, both for themselves and their players, with the barrier at times being financial, and at other times operational or regulatory. What the pandemic has taught everyone is that change can be affected, across all spheres of life whether they be at home and at work, a lot quicker than we all thought, and if an expedited move to cashless, in the gaming sector, is the change – then bring it on!

Asia Gaming Briefings | April 2021

SUPPLIER SPECIAL REPORT 48 DIGITAIN

Hop aboard the Keno Express

t Digitain, we are in constant discussion with our network of over 100 partners. As a result of these discussions, we have begun to develop more of our own products, under our Fast Games studio brand, in order to further support our partners in various markets globally and to hopefully attract some new operators. Our latest initiative to recently launch is a new take on a classic game– Keno Express. Keno Express is a fast-paced, exciting lottostyle numbers game that offers customers a dynamic, engaging experience with a new game drawn and resolved every minute. A wide range of opportunities are available to bet on, providing a great experience to entertain a wide range of players. Customers can bet small but win big by selecting the winning number from 100 balls in each Keno Express game. Alternatively, they can opt to be more cautious and bet on over / under a particular number of their choice, or even bet on a particular range of numbers. Players can even bet on multiple selections in any game. This game definitely offers something for everybody. Keno Express can be configured to meet our partners’ requirements regarding minimum and maximum stakes as well as

jackpot limits – and it has a flexible bonus engine, so operators can promote the product effectively and with confidence. Keno Express is available across all web and mobile channels too and is a great addition to

our Fast Games portfolio offering our partner network an excellent new product to both attract and engage new and existing players. Look out for more exciting products from our Fast games studio team in the near future.

INTERBLOCK

Interblock debuts at Kangwon Land

nterblock has been working hard throughout 2020 with continuous product improvements and market developments under the global pandemic restrictions. Covid-19 has significantly affected the industry, however, one of our highlights is notably the successful bidding

Asia Gaming Briefings | April 2021

to supply a 64-seat ETG stadium to Kangwon Land Casino, South Korea. The only casino that allows locals to gamble. The ETG stadium consists of 64 G5 Diamond Play Stations with Live Baccarat, Live Blackjack (MHBJ), large LED display panels with

multigame, multi-denomination, multi-lingual support, including Korean and Japanese, game performance reporting functions and the ability to enhance player’s experience via a user-friendly roll-back functionality. “Interblock’s ETG is a system that has accumulated abundant experience and know-how, and is expected to provide better convenience and interesting games to customers by providing excellent stable servers and various attractive functionalities,” noted the person in charge of the project at Kangwon Land. With a wealth of local experience and expertise from our long-trusted partner at Korea Gaming Solution Co., Ltd (KGS), project implementation was on time to Kangwon Land’s specifications, with installation completed in December 2020. Interblock’s President for Asia Pacific, Michael Hu commented: “We are thrilled to showcase our live table products at the flagship casino of the Korean casino industry. We wish Kangwon Land Casino and our partner great success beyond 2021.”

SUPPLIER SPECIAL REPORT 49 HABANERO

Saddling up for new adventures

hile 2020 may have had its challenges, the gaming industry has proven itself resilient and come out on top. With lockdown restrictions remaining stubbornly in place, digital entertainment has been in high demand over the last few months – and we know the future of gaming is all about fun, extended sessions that don’t empty the

wallet in a matter of minutes. Our games are all about that, and we’re here to entertain this summer like never before. Take the example of our most recent hit, Before Time Runs Out, taking players on an audacious adventure that sees them saddle-up in an ancient Middle Eastern wilderness.

The title’s Duel Feature invites gamblers to help its handsome hero battle the villainous Vizier, potentially winning x1,000,000 the line bet if the princely protagonist vanquishes his opponent. The hair-raising slot also showcases a Coin Respin Feature allowing players to win prizes worth up to x50, making it a truly action-packed caper designed for intrepid fans everywhere. Orbs of Atlantis, meanwhile, is a Habanero hit providing players with an exhilarating aquatic experience in that legendary city of old. The title’s Big Reels feature showcases a unique reel structure unlike anything else in the industry, so it’s safe to say we’re delivering the goods for partners looking to keep players engaged with something genuinely new and different. Slots such as these – visually pleasing and easy to play – are going to be key to retention and acquisition this summerespecially with all the sporting fixtures on the agenda. Euro 2021, and the Olympics, present a fantastic cross-selling opportunity for those of us in the casino sector, and slot providers who get it right could be onto a real winner. Habanero is able to deliver exactly that for a global partnership network stretching across LatAm and Europe, where we’re continuing to celebrate multiple tier one operator deals courtesy of our recent acquisition of the highly coveted MGA and ONJN Licences. We can’t wait for what comes next!

IGT

Intelligent bonusing drives player loyalty

GT has adapted its business to the new normal to deliver business growth for our customers. During 2020 we continued with gaming innovation, new system updates and additions as well as growing our electronic table games portfolio. In 2021 we will be launching many of these innovations, including a series of new, locally-developed links as well as new hardware for our future products. Given the pressures COVID has put on operators’ businesses, they are now looking for new technologies to help them adapt and grow. So, there has been strong adoption of IGT’s ADVANTAGE® Intelligent Bonusing products, which enable casinos to deliver targeted bonuses floor-wide or for specific

player types – all set by the operators to drive greater patronage and player loyalty. Operators also need to offer bonuses to players during a play session, and market directly to the player’s mobile phone while on the casino floor. Plus, venues want to be able to identify hot, as well as new, players in real-time so they can proactively enrol un-carded players. These are all features of IGT’s Mobile Host product – offering the best on-the-go solution. From the players’ perspective, they’re seeking greater recognition and reward for their play. They’re also expecting greater ease and convenience when it comes to engaging with loyalty programs and transferring funds between the gaming machines and paying

for entertainment in the property. This is even more so in Asia than in other parts of the world. IGT’s Resort Wallet product is the perfect solution for these players.

Asia Gaming Briefings | April 2021

SUPPLIER SPECIAL REPORT 50 JADE

Bridging the land-based/online gap

ade Interactive, a division of Jade Entertainment, provides land-based Properties with the tools to expand their operations into the online environment. The difference between success and failure lies in the ability to innovate. With online casinos striving to create an immersive experience that resembles the real thing, land-based operators are using groundbreaking technology to make their physical games more entertaining In recent years, the quality of gameplay online operators have been able to provide has come on leaps and bounds. The crèmede-la-crème of their products is live casino, which links players up with real-life dealers, adding the all-important human element to the experience gamblers can enjoy from the comfort of their own living rooms. Not only are these dealers real people but they are the same people that they would encounter when they visit their local property – they’re using real casino equipment such as roulette

JUMBO

ARK-65 enjoys success in Cambodia

RK-65, the six-seater electronic fishing game — Fortune Cruise — is Jumbo’s latest and finest innovation and has successfully become a part of Cambodia’s attraction this year. Despite the continued pandemic influence on the global economy and cancellations of industry exhibition shows, Jumbo has not stopped striving towards market expansion. Other than the casino in Phnom Penh, the Fortune Cruise can also be found at Donaco’s Star Vegas in PoiPet City. At these casinos, Fortune Cruise has already proven to be one of the top products to capture players’ attention. The brand new ARK-65 gaming cabinet, focuses on user experience, achieves inordinate efficacy and aesthetic craftsmanship. The LED lights situated around the gaming cabinet and the loudspeakers in each of its four corners provide an animated lighting show effect that shapes a highly recognizable design. The gaming cabinet completely integrates Jumbo’s patented technology, fashionable design, high quality, and high efficacy. The black-gold outer appearance portrays a contrasting aesthetic. With the visual feast for the eyes, Jumbo brings the best gaming experience to our players.

Asia Gaming Briefings | April 2021

wheels and blackjack cards. This means that players also get the benefit of using strategies commonly used in land-based casinos. Jade can bridge the gap between land based casinos and players in the digital world. It combines the proven appeal and dynamic entertainment of casinos with a fully interactive, real-time AR experience that immerses gamers in true gaming action whether at home or on the go. Gamers can play, chat, challenge, practice, and engage with their friends, other players, and real dealers on their PCs and mobile. Products are built on a core of live streamed table games with real dealers. The product complements this with a suite of multiplayer electronic table games to complete the casino gaming experience. The human element of dealers and the community of table game players coming together with the platform renders a highly- personalized, and appealing land based experience. Jade works with the best-in-breed technology,

deep casino expertise, and a focus on delighting the gaming community. Its diversified product and platform can be leveraged to provide a variety of market options including Live Dealer Studio and On Property, Casino Games, Live Sports, Virtual Sports and a variety of betting options. It’s clear to see that the rise in online gambling has had a transformative effect on the gambling industry as a whole. As players have headed there in their droves, attracted by the convenient and high-quality nature of the gameplay they offer, however, bricks and mortar establishments can now start to use technology as part of their Armory.

SUPPLIER SPECIAL REPORT 51 PINNACLE

Euro 2021 the opportunity to realise better sportsbook success

hile the sports betting calendar may have been cut short last year, it’s returned bigger this time around with Euro 2021 imminent and looking well set to be the backbone of a major sports betting summer. A month long goldmine of soccer action, Euro 2021 will see the return of the best teams to the biggest stages once more, and it’s fair to say that the sports betting community is excited, not just across Europe, but also in Asia, the Americas, and beyond. However, despite inevitable acquisition boosts and increased turnover from your existing base, it’s not a time to sit back and wait confidently for the action to roll back in. Now is an ideal time for operators to review their current trading success and decide whether they have the resources in

place to extract the full potential from such a massive revenue opportunity. Those that rely on market average prices and basic risk management tools may find they’re not seeing a full return on investments. Homogenised prices won’t be engaging existing or potential customers, while trading minor margins at major tournaments requires specific expertise to deliver consistent, impressive results. It will be those that have the risk management tools in place that can

best drive revenue and maximise hold off the back of it, and, in doing so, reclaim much of the lost revenue from last year. Pinnacle Solution continues to raise the bar and drive added value with a bespoke trading service to partner sportsbooks. Whether looking to start a sportsbook from scratch or upgrade to a better sports betting service, our iFrame or Turnkey Solution can be in position well in advance of Euro 2021, providing your brand with the springboard to a better sportsbook future.

But sometimes, it isn’t just about the gameplay itself, but about developing the relationship the player has with our content, creating a connection with them that will leave a lasting impression. Part of this comes from trust. People trust what they know and recognise,

especially when it comes to their choice of entertainment. That’s why we invest in our stories’ intellectual properties, developing worlds and characters players want to experience over and over again. Take two of our releases for April, Rich Wilde and the Amulet of the Dead and Fire Joker Freeze. Fearless explorer Rich Wilde is the star of many Play’n GO adventures, with a story interweaved through several games. Players now know that they’re in for a great game and an entertaining journey when they see a Rich Wilde adventure. Because they trust our brand and the characters we create, they’re willing to invest their time on another Play’n GO experience. The same goes for our second game Fire Joker Freeze. Our Joker Family of games has been highly popular within the market for years. This time it’s not about a particular character or the storyline, but people know that a Play’n GO Joker represents a simple classic slot experience combined with unique features based on the Joker. Each game brings a new twist, and players look forward to the latest instalment. The industry is maturing, short term gains and ‘wow’ factors are no longer enough; it’s time to start planning long-term to keep your players connected to you. At Play’n GO we’re not just about creating games; we’re creating legacies.

PLAY’N GO

Trusting in the legacy

t Play’n GO, giving MORE isn’t just a case of providing more games; we also want to provide the next level of entertainment for our suppliers and their markets. That can mean innovating with new grid shapes or unique features with titles such as Gold Volcano and Reactoonz 2.

Asia Gaming Briefings | April 2021

SUPPLIER SPECIAL REPORT 52 RGB

The value of preventative care

proper electronic gaming machine (EGM) and gaming equipment Preventive Maintenance program protects and prolongs the value of a gaming property’s capital investments. When well executed, a proper Preventive Maintenance program maximizes available play time on the various available offerings by way of minimizing unscheduled downtimes on the EGMs and gaming equipment. Not only do unexpected downtimes cost gaming properties loss of income, they will also create a negative perception of poor service quality over what should have been an otherwise enjoyable and satisfactory experience.

RGB, through our Engineering Services arm, provides quality Preventive Maintenance services for EGMs and gaming equipment from all major gaming manufacturers. The Preventive Maintenance program that we offer, can and will be distinctly designed based on the unique operational requirements of individual gaming properties. RGB’s Engineering team is staffed by qualified engineers and has more than 34 years of experience in rendering gaming technical services, executing successful turn-key projects for multiple integrated resorts and casinos, as

well as providing casino system maintenance services and consultation in over 10 countries across Asia. We also offer extensive technical repair capabilities which incorporate module and board level repairs, including BGA circuit replacements, refurbishment of power supply units, repairs of flat panel displays and refurbishment of ticket printers as well as note validators.

wins with the Wild symbol will be multiplied by the outcome of the dice. The second “Dice Circus Feature” entertains players with the gimmick to determine the condition of Free games played after the feature by using dice and a game board as with well-known classic board games. Each space of the board contains one or more bonus awards such as number of free spins, multipliers and more. Players can roll 2 dice twice to proceed the number of spaces indicated by dice and collect the bonus on the

space. This feature awards up to 64 free spins or X62 multiplier as the condition of Free games. If players hit X12 multiplier in the Dice Multiplier Feature during this session and X62 multiplier is the condition, wins will be “multiplied” by x744! The combined effect of these dice rolling features generates a CRAZY WIN!! Our creepy-cute “DICEMAN” character attracts the player’s attention and brings an unforgettable experience for players who will love this smash hit!

SEGA SAMMY

DICEMAN debuts in Asia

EGA SAMMY CREATION INC. is excited to announce that our latest slot game “DICEMAN” with a 2-level Progressive Jackpot has been released in the Asian market with the exception of Macau. DICEMAN brings an unforgettable winning experience with two unique dice rolling features. The first “Dice Multiplier Feature” provides the chance to win up to 12x on the Multiplier. When the Wild symbol substitutes in a win, this feature is randomly triggered. Players roll 2 dice, any

Asia Gaming Briefings | April 2021

SUPPLIER SPECIAL REPORT 53 SCIENTIFIC GAMES

Hurricane Horse gallops into Asia

cientific Games launched the DualosX cabinet in 2019 featuring the games Duo Fu Du Cai –5 Treasures and Diamond Eternity. These winning combinations were very well received by players across gaming floors in Asia. As a result, Scientific Games developed and recently launched the third Duo Fu Duo Cai game on Dualos X, Hurricane Horse. Hurricane Horse is equipped with the player-favorite All Ways and ALL UP game and Jackpot features and also includes exciting new player-selectable Free Games and a Fu Bat Substitute feature during paid spins. During paid spins, if a Fu Bat symbol appears on the middle or bottom position

of a reel, it is guaranteed to move up one position for the next spin. The Free Games Feature is awarded if three or more ELEMENT symbols appear. Players can select from one of the Free Games options, which includes a “Mystery Choice” for added excitement. During the Free Games Feature, Fu Bats are guaranteed with each spin, with the number of Fu Bats depending on which feature option is selected. The Free Games Feature can be triggered again during the free games by two or more ELEMENT symbols. BET ON A WINNER AND GET HURRICANE HORSE ON YOUR CASINO FLOOR TODAY!

SIMPLEPLAY

Vanessa saves the world

lot provider SimplePlay has launched a new slot game, “Vanessa.” The game features a schoolgirl with special powers. In her world, a lady villain threatens the world and everyone’s survival. Vanessa is destined to save the world. By transforming into a journalist, a police officer, or a warrior, Vanessa is doing all she can to stop the lady villain from ruling the world. “Vanessa” is a 3x5-reel, 30-line slot. The Free Game Feature of this game is the Power Wheel Feature, where players can spin the wheel to determine the extra prize they would get: Power Spin Feature, Power Climb Feature and Power Prize Feature. Power Spin Feature gives a single free spin with extra Wild Symbols. Power Climb Feature can multiply players’ free game win up to 6 times. Power Prize Feature can give winnings up to 100 times of the Total Bet. Other than slots, the supplier is working on its key project for the first half of 2021. It is developing its native app, SimplePlay APP, which allows players to run the e-Game Lobby more smoothly as the app has been pre-installed. This also allows quicker launch of the lobby. It allows screen rotation, giving players greater freedom to play in their desired screen orientation. SimplePlay APP also enables Gesture Log-in and QR code verification. The former allows players to log in by drawing a unique pattern on a 9-dot grid. Players no longer have to remember their passwords as long as they log in this way. The latter allows seamless transition from Desktop Lobby to the SimplePlay APP simply by using an in-app scanner to scan the QR code provided by the supplier. SimplePlay APP is definitely one of the most expected products by the market.

Asia Gaming Briefings | April 2021

SUPPLIER SPECIAL REPORT 54 TRAFFGEN ASIA

Raising the bar with AI

raffgen Asia is a Macau based company established in 2018, which has since established itself as a leading technology supplier in Australasia. With long term contracts established at Wynn Resorts & Melco Resorts & Entertainment in Macau, Naga Corporation in Cambodia and the Widus Group in the Philippines, Traffgen Asia is assisting over 10 different operating locations to enhance their businesses. Traffgen Asia is a development & marketing platform provider, which has built a world class reputation for stable and reliable deliverables, speed to market and cost effectiveness, with proven performance with blue chip clients on 3 different continents. With an operating landscape that has patrons receiving more targeted service & promotions, VIP market saturation and competitors moving fast to offer more, Traffgen Asia has the ability to Empower Hosts to raise service bar with AI. Provide

operators with tools to Manage and Measure Staff Accountability. Provide Security & Retention Tools with Real-time Targeted Marketing in-property. Traffgen Asia is not a typical technology supplier and we develop and support our clients with on-going development and improvement support systems, which allows operators to change as and when the business environment changes, without high cost or

long turn- around times. With a strong focus on Asia, the group also has current developments in the US and is looking to expand its footprint into Australia in the near future. We Are: Proven; flexible; fast and cost effective. If your operation is looking for a company and platform that provides you the ability to improve your revenues while driving down costs it’s time to talk to Traffgen Asia.

WDTS

Case Study in Innovation: Perfect Pay Baccarat

DTS’s Perfect Pay Baccarat was presented as a case study in successful innovation in the gaming space by Han Tian, MGM China’s Senior Vice President of Gaming Operations and Strategic Marketing at a seminar hosted by Professor Wang Changbin, Director of the Centre for Gaming and Tourism Studies at the Macau Polytechnic Institute. WDTS has worked with MGM China since 2016 to integrate PJM RFID into their table games and cage operations. Today, MGM maintains over 400 RFID-enabled live table games. Mr. Tian shared that in addition to improving table operations for game speed and overall efficiency, RFID technology and the availability of real-time game play and table performance data has driven improvements and operational innovations in other areas of the organization. Surveillance has implemented innovations in game security and marketing has gained new insights and capabilities with access to perfectly accurate and automated player ratings as well as tracking for player-owned chips. The introduction of this new technology has also enabled a mindset for innovation

Asia Gaming Briefings | April 2021

across team members that brings a fresh and strategic perspective to day-to-day operations. Mr. Tian points to this kind of successful innovation as a critical vehicle in cultivating and maintaining a competitive advantage as the gaming industry matures and diversifies. While the game of baccarat has evolved with the addition of smart shoes and electronic trend boards, he noted that there will always be challenges in balancing the introduction of automated solutions with the customer’s preferred live gaming experience. Successful innovation must be flexible, user friendly,

and enhance the customer experience. Perfect Pay has been able to do this by seamlessly integrating hardware and software to create not only a powerful game platform but also the ultimate customer experience. Emily Io, Vice President of Sales for WDTS, attended the seminar at MPI and expressed her deep appreciation for Mr. Tian’s recognition as well as for MGM’s ongoing collaboration with WDTS to continue the advancement of the product as a key customer. Ms. Io is confident that these kinds of partnerships will ensure Macau’s role as a global leader in gaming innovation.

SUPPLIER SPECIAL REPORT 55

Asia Gaming Briefings | April 2021

SUPPLIER SPECIAL REPORT 56 XSG

Serving up appetizing content

SGames is an international gaming company dedicated to offering stunning new game mechanics every year to provide players unforgettable intense gaming experiences. For the past year, XSGames has been committed to keeping their focus on product research and development. Some of the strongest titles in XSGames include Yummy Chef, Fabulous Lights and the first ever link series – Bao Bao King. While offering exciting bonus rounds in addition to dazzling sounds and graphics, both Yummy Chef and Fabulous Lights offer multi-level stand-alone progressive jackpots. Yummy chef is an exciting 30 lines cooking theme game which consists of a popular wheel feature, credit prizes and an ante bet betting structure to enhance feature gaming experience. Alternatively, Fabulous Lights offers three stand-alone progressive jackpots. With a fixed 50 lines throughout the game, the

Fabulous Lights Feature allows players to win up to 64x of the normal line win. Additionally, the Jackpot Wheel Feature also offers credit prizes and multi-level jackpots. With low feature hit rates and massive credit prizes on offer, there are a million possibilities to win in this game. Unleashing the all new link series Bao Bao King that includes a series of four games in total with both lines and ways. The eye-catching cartoon theme features an all-new battle feature which has never been seen on the market before! Bao Bao King aims to engage players in different machines to bet up and stay in the game in order to participate in the battle feature and win big. XSGames is confident that this never seen feature will attract all kinds of players on the casino floor. In the next few months, XSGames will soon be unleashing several exciting slot titles. Stay tuned to the company’s website for more firsthand information!

ZITRO

Innovation and fun in bingo

ragon lamp Progressive is the latest video bingo sensation from global gaming supplier Zitro, that is keeping players dazzled in the Philippines, and elsewhere in the world where it has been installed. Providing a 180

Asia Gaming Briefings | April 2021

degrees spin to the traditional video bingo, this new system is called to change forever the way of playing video bingo. The success of Dragon Lamp is that it is no longer necessary to mark bingo to get the

jackpot, allowing this way to enjoy many more progressives. Winning them is very easy with the new Dragon Lamp bonus system where only 5 lamps need to be accumulated to opt for the Jackpot. In addition, there are options to get many other prizes, such as the SUPER, MINOR or MINI and also tons of exciting game features that guarantee a long playing time. Nadège Teyssedre, Sales Director of Zitro for EMEA stated that: “Dragon Lamp Progressive brings innovation and fun to the video bingo players, especially in the Philippines, where we have a huge community of bingo-lovers. For those who prefer slot games we also have good news! During the past year, marked by the pandemic and with many casinos closed for long periods of time, we have been focusing our efforts in R&D and worked hard on new video slots games that very soon will hit the casino floors in the Philippines as well. At Zitro, we firmly believe that bringing extraordinary games to the casinos is key to help accelerate operators’ economic recovery. And if that would not be enough, we also invested heavily in our digital business to have all of our games available not only for land-based operations, but also for online casinos. As you can see, we are fully prepared and look optimistic to the future as our industry, and the world, comes back to its feet, stronger than before”.

UP NEXT E U R O P E ( M A LTA )

ASIA (MANILA)

April 13-15, 2021

M a y 2 7- 2 8 , 2 0 2 1

AMERICAS (SAO PAULO)

A F R I C A ( C A P E T OW N )

Sept 13-14, 2020

March 22-23, 2022

w w w. s i g m a .w o r l d Asia Gaming Briefings | April 2021

INDUSTRY OPINION 58

Sudhir Kale*

Pandemic pushes change in priorities While the economic, political, and cultural impacts of this pandemic will differ from country to country, there exist a handful of trends that will be experienced around the globe, albeit to varying degrees.

he direction and pace of these developments are nothing short of breathtaking. According to the Barrett Values Centre, the tectonic shifts that have taken place in people’s priorities and values within the first few weeks of the onset of COVID-19 would normally have taken five to eight years. The outbreak of COVID-19 has pushed consumers out of their normal routines. People are adopting new habits and behaviors that many anticipate will continue in the long-term. This article is based on research on COVID-19’s effects carried out by various organizations and is written to highlight the overall impact of the once in a century pandemic. We shall discuss five key trends in consumer behavior that will continue well beyond the pandemic. A simpler life COVID-19 has forced a re-evaluation of what is important and how people spend their time and money. For many, such assessment has led to a sustainable embrace of the simpler pleasures of life. The desire for simplicity has translated into a pullback from conspicuous and unnecessary consumption. People are focusing more on their own personal health and the health of their friends and family. In the immediate aftermath of COVID-19, consumers plan to spend less on entertainment events and travel. In a multinational study of consumers conducted by Brandwatch, around 70 percent of those surveyed said that they will save more money in the bank than usual. The Guardian reports that in recent months, home cooking has enjoyed a renaissance, demonstrated by the surge in demand for baking ingredients, and 71 percent more time spent online with food and cooking content since the last weekend of February 2020. Dwindling loyalties COVID-19 has forced many consumers to reassess their brand choices, partly due to the unavailability of their preferred brand during the pandemic, and partly due to brand affordability. People experimented with brands that they had never considered using before, and many came to realize the inherent value in these hitherto unfamiliar brands. Today, less than one in five consumers are adamant

Asia Gaming Briefings | April 2021

about sticking to their pre-pandemic favorites. In the casino industry, a survey of 1,000 U.S. gamblers carried out by Synergy Blue revealed that just over half of the gamblers surveyed planned to return to casinos upon reopening. Of those, only 35 percent said they will return to their usual casinos. These figures imply that less than 18 percent of a casino’s pre-pandemic loyal clientele would return to that casino post reopening. The precipitous drop in brand loyalty combined with consumers’ desire to save money would create opportunities for masstige brands. Downward brand extension on the part of some companies has the potential to reap handsome rewards. Online surge The pandemic compelled many consumers to look online for purchases that they would usually make at a physical facility. Online sellers of groceries, toiletries and beauty products, clothes, and furniture found new customers by the millions, almost overnight. What’s more, these new converts liked the online shopping experience. For example, around 70 percent of consumers who had never shopped online for clothes before now say that

INDUSTRY OPINION 59

Work from home COVID-19 lockdown necessitated a work from home solution in many countries. Most employees who work from home are broadly positive about their experience and plan to continue doing so after the pandemic. According to Accenture, 30 percent of people plan to increase the amount they work from home in the future. Accenture further reports that most consumers feel they have the right tools to work from home—and they largely enjoy it. Increasingly, it will be incumbent on businesses to have a virtual working strategy. “Work from home” will become a part of the employee value proposition for many businesses. Working from home will not only change the ways in which firms organize their processes, but it will also impact demand for various goods and services. Rent for office space could drop, as

would demand business attire, transportation services, and fuel. Growing love for local All through the pandemic, many governments have been urging their citizens to develop self-reliant economies. There has also been an increasing desire on part of consumers to shop local. The preference for local is reflected in both the products consumers buy (for example, locally sourced goods) and where they shop (for example, supporting community stores). In Australia, major retailers have lost share in the most recent weeks to independent and specialty grocery outlets such as butchers, bakeries, and fruit and vegetable stores. In a recently released KPMG International study entitled Consumers and the New Reality – 85 percent of Australians said they would be willing to pay more for locally sourced groceries and 90 percent said they would pay more for non-grocery items. Nielsen’s Connect managing director Bernie Hughes says that because of COVID-19, consumers are more aware and wary of products from overseas production. There is now a well-entrenched preference for all things local. Businesses will need to connect with customers on a local level by using locally sourced ingredients in their products or by finding ways to engage with local communities in authentic ways. Conclusion The five macro-trends in consumer behavior discussed in this article will impact all

industries—from aerospace to agriculture, and from casinos to cruise operators. The questions for businesses to consider are: How do we design and price our products to accommodate the customer’s preference for simplicity? What innovations can be introduced in our marketing strategy to rekindle customer loyalty? How do we design our offerings and channels of distribution such that the best of both worlds—digital and brick and mortar— are incorporated? What new opportunities are opened up by consumers working from home, and how do we capitalize on these opportunities? What initiatives can we undertake so that consumers perceive us as a local entity with whom they want to transact business? COVID-19 and the ensuing post-pandemic period is, for most businesses, a time of crisis. It behooves us all to remember what Andy Grove, the former Intel CEO had to say in relation to crisis, “Bad companies are destroyed by crisis, good companies survive them, great companies are improved by them.” *Sudhir H. Kalé, Ph.D., is the Founder and CEO of GamePlan Consultants. He advises businesses of all sizes on matters regarding customer experience, corporate culture, employee engagement, and customer relationship management. Sudhir has published around 150 articles on the marketing and management practices of casinos. You can write to him at skale@gameplanconsultants.com.

(Credit: Jon Flobrant)

they will continue to shop for garments on the Internet once the outbreak is contained. We see a similar flight to digital in the gaming industry. Online gambling in Australia grew by 140 percent during the pandemic and many consumers who had moved away from gambling in casinos to online gambling are likely to continue with online gambling even after the pandemic. The shift toward digital has accelerated the trend toward phygital (physical + digital) offerings. Phygital allows retailers to design immersive experiences for their customers in their physical point-of-sales by employing digital tools.

Asia Gaming Briefings | April 2021

CALENDAR OF EVENTS 60

APRIL

JULY

RUSSIA GAMING WEEK 27 April 2021 Intercontinental, Moscow Tverskaya https://rgweek.com/en?utm_source=pr_liubinska&utm_ medium=calendar&utm_campaign=igamingcalendar.co

MAY SIGMA MANILA 27-28 May 2021 SMX Convention Centre, Manila https://www.sigma.com.mt/en/events/asia

PHILIPPINES ASIA GAMING EXPO 29-31 July 2021 World Trade Center and SMX Convention Center, Manila https://www.phil-asiangamingexpo.com/

SBC SUMMIT 21-24 September 2021 Fira Montjuic, Barcelona https://sbcevents.com/sbc-summit-barcelona

SPICE SRI LANKA 28-30 July 2021 Colombo https://www.sportsbettingevents.com/spice-sri-lanka

IGB LIVE 28 September - 01 October 2021 RAI, Amsterdam https://www.igblive.com/igb-affiliate-amsterdam

AUGUST AUSTRALASIAN GAMING EXPO 10-12 August 2021 ICC, Sydney https://austgamingexpo.com/ G2E ASIA 17-19 August 2021 Venetian Macau https://www.g2easia.com/

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Asia Gaming Briefings | April 2021

SEPTEMBER

OCTOBER CYPRUS GAMING SHOW 01-05 October 2021 Nicosia, Cyprus https://sbcevents.com/sbc-summit-barcelona

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AGB serves as a platform for multiple levels of information about the Asian gambling industry in the form of feature articles, latest news headlines, network-

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Asia Gaming Briefings | April 2021

LAST WORD 62

Looking for silver linings Sharon Singleton

Managing Editor, AGB

It’s a term that’s frequently over-used, but if you were a land-based gaming operator in Asia last year, it truly was an “annus horribilis.”

rom government mandated closures, to the onerous on-quarter gain in gambling revenue. The company said social distancing requirements on reopening, it had seen strong support from the local mass market through to second waves and continuing travel and is convinced the recovery was underway. Elsewhere in Asia, figures for both Malaysia and restrictions, it doesn’t come much worse than that. Recovery is also painfully slow, with new Covid Cambodia have been surprisingly strong. Locals are clusters popping up and crushing hopes for an imminent not allowed to gamble in Cambodia and the border is mostly shut to tourism, however GGR there was only return to normal travel. However, a deeper dig behind the headlines turns down about 50 percent from 2019. Nagacorp, the operator of NagaWorld in Phnom up some more pleasant surprises which attest to the resilience of the casino industry and its ability to adapt. Penh posted a net profit for the year as a whole, not just Gross gambling revenue in Macau was down just Q4, and said its volumes in the mass market segment over 79 percent last year, but growth is seeing gradual are back to about 95 percent of pre-crisis levels, while signs of accelerating into the second quarter. Despite the figure stands at 69 percent for VIP. The company, which has a the lack of revenue coming in on monopoly within a 200km radius the top line, all but one of the six of the capital, said it had been operators managed to return to supported by the large expatriate positive territory on an EBITDA Gross gambling community in the city as well level in the fourth quarter. as by some visitation from East The territory’s mammoth IRs revenue in Macau Asia. It also benefits from being managed to trim expenses to the was down just over one of the few options available bone, keeping the lights on even for entertainment. as government travel policies 79 percent last year, TheHongKong-listedcompany ensured the customers stayed but growth is seeing said it would support shareholder out. Those restrictions are now gradual signs of loyalty by an “unprecedented” slowly beginning to ease and the payout of 100 percent of profit in industry is looking forward with accelerating into the the form of dividends. Its founder, anticipation to the extended May second quarter. Dr Lip Keong Chen is the largest holiday, which this year will be five shareholder in the group. days instead of the usual three. Malaysia too enjoyed strong Although some of the cut back support from the local VIP market operating costs will begin creeping back into the business as things return to normal, analysts and those who in more normal times may have visited say the operators should continue to feel the benefit from other jurisdictions to scratch their gambling itch. GGR at Resorts World Genting was down about 56 percent improved margins for several years to come. One of the hardest hit jurisdictions in Asia last year last year and analysts are relatively optimistic about the was the Philippines where the properties have only been year ahead, especially as it will finally open its outdoor allowed to reopen on an extremely limited basis with theme park. As the only player in the country when it comes to invites to selected guests and long-term hotel occupants. GGR there slumped almost 90 percent, prompting the casinos and an increasingly strong and diversified nonPhilippine Amusement and Gaming Corp. to consider gaming offering after its Genting Integrated Tourism allowing the casinos to accept online bets from VIP Plan investments, it’s seen as well placed once the players. The creation of the so-called PIGO licenses was pandemic subsides. Although there will be no V-shaped recovery to announced at the end of December, though progress has been slow as regulators tread carefully with their this crisis, which is dragging on longer than anyone predicted, there is light at the end of the tunnel and even move into convergence. Still, Bloomberry Resorts announced that it too turned in the land-based world the major operators look set to in positive EBITDA for Q4, with a 22 percent quarter- weather the storm intact.

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Asia Gaming Briefings | April 2021

AGBriefings April 2021 Edition

Articles inside

LAST WORD

INDUSTRY OPINION

SUPPLIERS SPECIAL

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CAMBODIA

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THAILAND

AUSTRALIA

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