AGBriefings June 2021 Edition by Asia Gaming Brief

JURISDICTION UPDATES

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June 2021 Edition

JAPAN

Regulation gets a sporting chance pg.24

MACAU

Could a digital yuan drive GGR gains? pg.10

VIETNAM

Locals relief unlikely for Covid-hit casinos pg.16

AUSTRALIA Post-pandemic staffing crisis pg.20

In focus pg.30

Southeast Asia Genting readies to light up Las Vegas SUPPLIER SPECIAL REPORT pg.40

Asia Gaming Briefings | June 2021

MESSAGE 3

Genting’s Vegas debut

or this edition of our magazine, we focus on

appears determined to push ahead with the IR process,

Southeast Asia, with a particular look at the

at present it appears that only one location - Nagasaki -

Philippines, which longer-term is still viewed as

seems to have all its ducks in a row: Osaka and Wakayama

one of the most promising markets in the region.

only have single bidders, while Yokohama is vulnerable due

Indeed other Asian jurisdictions are closely watching the

to unstable politics, with a possibility that a win by an anti-

Philippines’ efforts to bridge the land-based and online

casino candidate in upcoming elections would scupper the

divide with a view to following suit, while Nepal is likely to

bid. In turn, the prospect of legal sports betting has created

have its first online operator live within two months. We

a buzz in the global community, though industry insiders

particularly examine the island of Cebu as a gaming hub.

warn that Tokyo will need to do a better job on regulation

It’s one of the top tourism destinations in the country and

than it has with casinos if the market is to reach its full

is already home to multiple casinos. Two new large-scale

multi-billion dollar potential.

properties are under development, but analysts hold mixed

Meanwhile Australia’s hospitality and gaming industry is

views on just how exciting the island will be as an actual

suffering from a labor shortage, which has been described

gaming destination and say the operators need to stay

as having hit “crisis” levels. Pre-Covid, there were around

focused on catering to the tastes of the local market to

1.1 million migrant workers in the country, with a large

underpin their earnings.

portion of these employed in the hospitality sector which

Switching countries, we also look at the prospects for

make up a significant gap.

Resorts World Las Vegas, which opens this month. The

Special contributions in this edition include Susan O’Leary,

resort is owned by Malaysia’s Genting Group, one of the

CEO of Alderney eGambling, on the ever-changing

biggest operators in the Southeast Asian region which in

landscape of eGaming; and Sudhir Kalé who puts the

recent years has been making a push into the U.S. market.

Crown/ Star merger to the Drucker test.

The more than $4 billion Resorts World Las Vegas will

Asia Gaming Brief managing editor Sharon Singleton has the

be the first from the ground up resort to open on the Las

Last Word on how the travel industry needs vaccine relief.

Rosalind Wade

Luis Pereira

Vegas Strip and expectations are running high. Property President and CEO Scott Sibella also offers up his views on

Happy readings and stay safe!

the opening with Asia Gaming Brief. In these pages you’ll find the most relevant updates

On behalf of Asia Gaming Brief

across the Asia gaming jurisdictions. In Macau, the digital

Rosalind Wade & Luis Pereira

yuan brings the promise of a “sky’s the limit” casino

CO-FOUNDERS

market: as speculation about the introduction of the digital yuan increases, the focus is beginning to switch

Connect with us:

away from the negative impact on the junket industry and VIPs to the immense potential an e-currency may offer for

@agbrief

the mass market.

Asia Gaming Brief

Across to Japan, and although the central government

www.agbrief.com

JUNE 2021 EDITION SERIES II • ISSUE XIX

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Asia Gaming Briefings | June 2021

CONTENTS 8

GREATER CHINA

INDOCHINA

AUSTRALASIA

MACAU - DIGITAL YUAN

VIETNAM - DOORS CLOSED FOR LOCALS

AUSTRALIA - STAFFING CRISIS

COTRI WOLFGANG ARLT - INTERVIEW

CAMBODIA - NAGACORP’S CHALLENGES

JPM’S DON CARDUCCI - INTERVIEW

NORTH ASIA JAPAN - SPORTS BETTING

JAPAN - OPERATORS HEAD FOR EXITS

MOHEGAN SUN’S BOBBY SOPER - INTERVIEW

SPECIAL FOCUS

Asia Gaming Briefings | June 2021

SUPPLIER SPECIAL REPORT

INDUSTRY OPINION

LAST WORD

58 54

ARE YOU READY FOR THE NEXT LEVEL SHUFFLING TECHNOLOGY? AS SEEN IN THE SG SUMMIT + VIRTUAL EXPRIENCE TO LEARN MORE, CONTACT YOUR ACCOUNT MANAGER TODAY!

MACAU OFFICE | Phone: +853 2872 2539 | sggaming.com/asia ©2021 Scientific Games Corporation. All rights reserved. Scientific Games is committed to responsible gambling. Responsible gambling features are proactively developed to ensure the safety and security of players while using Scientific Games products.

Asia Gaming Briefings | June 2021

GREATER CHINA

MACAU

Digital yuan may create “sky’s the limit” casino market As speculation about the introduction of the digital yuan in Macau increases, the focus is beginning to switch away from the negative impact on the junket industry and VIPs to the immense potential an e-currency may offer for the mass market. Asia Gaming Briefings | June 2021

on their ability to bring cash out of China,” said Ben Lee, managing partner of iGamIX Management & Consulting. “With the introduction of the digital renminbi Macau becomes a single currency jurisdiction and you would no longer need to have restraints because the e-renminbi will allow the central authorities to monitor the transfer of funds from the Mainland to Macau. “Once that happens the market for the casinos absolutely explodes. We now can call China truly as our domestic market,” he said.

“

We’re looking to focus on the mass customer, premium mass.

”

There are caveats. The VIP segment of the past, which had already been decreasing in importance, may disappear, especially among players who are not able to explain the source of funds. It’s also unclear at present, whether casinos operators would be forced to only allow chip purchases in e-currency, or whether the current legal tender would still be accepted. Were the digital yuan to replace the Macau pataca altogether, U.S. casino operators would need to report to

central authorities to be able to repatriate their funds, which at present they are not required to do. Bernstein Research, in a report earlier this year, said the “devil will be in the details.” It said if there was a requirement to purchase chips with RMB and China were to insist on daily or annual transaction caps it would be negative for the industry. However, the firm said it believed this would be a “draconian” option. Las Vegas Sands CEO Rob Goldstein was asked his views on a recent conference call with analysts for the group’s Q1 results. He said he views greater integration with China as a positive. “I think the assumption has been by a lot of people, that this is a negative thing,” he said. “We view it as a positive as again, we would love to have more cross-border currency. We’re looking to focus on the mass customer, premium mass -- that’s our bread and butter, that’s who we are, where we want to go in the future.” Much media coverage has focused on the potential impact on the junkets, with the common view that it will be the final nail in the coffin for the struggling sector. However, Lee says he believes there will still be a role for the bigger groups. “The movement of funds is not the junkets’ core activity and in fact they don’t make any money,” he said. “Their most important function is the ability to identify and recruit players from Mainland China and bring them over and to grant credit, which casino operators can’t do.”

(Credit: Markus Winkler)

he digital yuan is a blockchain-based currency, however, unlike cryptocoins, it’s not decentralized and will be managed by the central People’s Bank of China. It will also not be anonymous and authorities will have the capacity to track and monitor potential illegal activity. China accelerated the rollout of the Central Bank Digital Currency last year, with trials in major Chinese cities such as Shenzhen, Suzhou, Chengdu and Xiong’an. The Hong Kong Monetary Authority has also recently conducted cross border testing of the e-currency and now plans to move to the next level of technical testing. Macau’s Chief Executive Ho Iat Seng said in April that the territory was amending its legislation to pave the way for the introduction of the digital currency, which is expected to help the government combat money laundering and tax evasion. Talk of the e-currency has generated significant media attention on the likely impact on Macau’s junket industry, which has been under pressure from anti-corruption campaigns and efforts to stop illegal cross border movement of funds. However, industry insiders are beginning to see enormous potential. The introduction of a digital yuan facilitates the movement of funds in and out of Mainland China for all players in a way that has not been possible beforehand. “Right now with all the cross currency restrictions between mainland China and Macau and Hong Kong, the average premium mass player is faced with huge constraints

GREATER CHINA

Asia Gaming Briefings | June 2021

GREATER CHINA 12

Pent-up demand not factored into stock performance: UBS

(Credit: Ishant Mishra)

Analysts from Swiss bank UBS have upgraded their rating for the Macau gaming sector to “buy,” noting that upside potential from China’s pent up demand has not been fully factored in. “We believe there are upsides that have not been factored into the stock price” said Angus Chan, head of Hong Kong strategy at UBS Global Research. “Once Macau relaxes border controls further, there will be a [greater] recovery in the gaming sector. That’s why we recommend buying the sector.” Chan said that Macau’s gaming sector, relatively speaking, has underperformed compared to other Chinese discretionary spending sectors and the overall market over the past year. An example of this is the luxury market, which outperformed expectations in 2020.

Supply shortage may limit future growth Macau’s mass gaming market is likely to grow in the high single digits from 2022 once the pandemic eases, but growth going forward will depend on the ability to bring new attractions and products online, industry experts on a gaming panel said. “I’ve always been a big believer that Macau is a build it and they will come story, so as long as Macau continues to develop new resorts and features and the border stays open, the prospects on the mass side are exceptionally strong,” Bernstein Research senior analyst Vitaly Umansky said on a SIGMA Manila virtual roadshow. However, the key question will be whether Macau is able to continue to add new attractions. SJM Holding’s Grand Lisboa Palace is expected to open in June, while most of the operators have further later phase expansion plans in the works over the next two years. But a lack of space may be a severe hindrance beyond 2024 to the ability to add features to pull in new visitors.

Asia Gaming Briefings | June 2021

MACAU GGR CLIMBS Gaming tax revenue a quarter of target Macau collected MOP12.38 billion ($1.3 billion) in gaming tax revenue from the industry in the four months to April, which is 24.8 percent of its budget target for the year. The government is seeking to raise MOP50.00 billion from the industry this year. The figure to April was down from the MOP20.52 billion collected in the same period last year. Macau levies tax at 39 percent of gross gambling revenue, one of the highest in the world.

Melco teams with Tencent Melco Resorts & Entertainment has teamed with Tencent Sports to bring the World University Cyber League 2021 e-Sports event to Macau. The competition will be held in Macau and the Hengqin New Area of Zhuhai under a “one game, two places” model. The Macau finals will be held at Studio City. In 2018, Melco partnered with digital entertainment platform Garena to bring the 2018 League of Legends Master Series (LMS) – Spring Final to Macau for the first time.

Macau hotel staff fall 15.9% in 21Q1 The number of staff working in Macau’s hotels fell 15.9 percent year-on-year during the first quarter of 2021. The decline was due to the “severely adverse” impact of the Covid-19 pandemic on the local tourism and gaming sectors, data released by the Statistics and Census Service (DSEC) shows. At the end of the first quarter of 2021, Hotels had 49,685 full-time employees, down by 15.9% year-on-year; average earnings (excluding bonuses) of full-time employees in March this year rose by 1.0% year-on-year to MOP18,360. Restaurants had 23,914 full-time employees, a decrease of 3.9% year-on-year; their average earnings rose by 17.4% to MOP9,600.

Asia Gaming Briefings | June 2021

GREATER CHINA 14

China domestic travel trends point to pent up demand China’s domestic travel was almost back to 2019 levels during the Ching Ming Festival in April and the pent-up demand to venture overseas once restrictions are relaxed remains intact, says Professor Wolfgang Arlt, CEO of the China Outbound Travel Research Institute (COTRI).

ver the holiday, which coincided with and tired of having to stay home and especially in Easter, travel returned to 93 percent of China. The pandemic has been over since May last its prior levels, although spending only year for them. They’ve had very few cases, so for the Chinese they are not afraid reached 60 perto travel.” cent due to changing travel Before the pandemic, patterns and discounts. China’s outbound travel Arlt said there had The pandemic has market was tipped to reach been a lot of special offers been over since May last more than 200 million trips on accommodation, while by 2020. The segment is many Chinese had chosen year for them. They’ve the most important for the self-driving holidays, had very few cases, so integrated resorts that have which pushed the overall sprung up around Asia, spending down. for the Chinese they are offering luxury amenities Speaking in an Asia not afraid to travel. along with gambling. Gaming Brief Face-toHowever, over the past Face interview, Arlt said a year, Beijing has also stepped trickle of outbound travel up its rhetoric against capital is rapidly likely to become outflows and jurisdictions seeking to lure its nationals a flood once the gates are fully opened. “More than ever,” he said, referring to the demand to gambling resorts, raising concern as to where the for overseas travel. “Like everybody, people are sick Mainland tourist will venture once travel is possible.

“

”

Asia Gaming Briefings | June 2021

GREATER CHINA

(Credit: hiurich granja)

Arlt said he believed Macau would be a key beneficiary in the short term as it’s not viewed as outside of China. However, he also downplayed the impact of the campaign on the decisions of the average traveller. “If you are a public servant, or you are in a close relationship with the government you might be more careful because you will

be under more surveillance and it’s not politically correct,” he said. “We’ll have to wait and see. This is a campaign and like all campaigns eventually it will be over, like most campaigns in China have been in the past.” “For those who have money to gamble from their private enterprises I think they

will be less put off by this because they think if anything goes wrong I will just pay a fine.” Arlt said there may be a temptation to travel to more remote jurisdictions, such as Kathmandu in Nepal, to avoid Chinese government scrutiny. However, he said Beijing’s key concern is the outflows due to the online gambling market.

Asia Gaming Briefings | June 2021

INDOCHINA

VIETNAM

Locals program unlikely to be expanded, despite Covid Appeals from Vietnam’s casino owners to allow locals to gamble are likely to fall on deaf ears despite plummeting revenue due to the closure of international borders.

Asia Gaming Briefings | June 2021

lthough foreign investor interest is strong in Vietnam, the market is complicated, with government regulations mandating a minimum $2 billion investment, a figure seen as too high for a resort that will be wholly reliant on foreigners. Some of the biggest names in the gambling business, such as Las Vegas Sands, have been known to have looked at Vietnam and then walked away due to restrictive operating conditions. The government is currently running a three-year pilot program, allowing locals to gamble in the Corona Resort on Phu Quoc island in the south and in a yet to be opened resort in Van Don in the north. However, it has remained silent on the petition from local casino owners earlier this year for the program to be expanded. “The government’s main concern would be not to expose the local population to potential social risks from gambling and so I do not think there will be a significant shift in government policy in the near term,” said Saponti Baroowa, associate director of business intelligence at Dezan Shira & Associates in Ho Chi Minh City. “There are these pilot programs, but that gives us the view that it’s something the government is experimenting with, but I think it’s highly unlikely to be opened up to domestic big spenders any time soon.” Ben Lee, managing partner of iGamiX Management & Consulting, agrees saying any such decision would need to be taken by the ruling politburo, which is “vehemently anti-gambling by locals.” Prior to the pandemic, Vietnam was

Vinpearl eyes $2.2b resort on Hon Trey island Hospitality firm Vinpearl Co. is proposing the construction of a new VND50 trillion (US$2.2 billion) IR on Vietnam’s Hon Trey island. This new resort would initially include a casino, a five-star 1,200-room hotel, a convention center, and a transportation system that may include cable cars and waterways. The casino would have about 200 gaming tables and 2,000 electronic gaming machines. The project would open in two phases, with the casino opening first in 2024 and the hotel and other non-gaming facilities opening the following year.Vinpearl plans to put up about 15 percent of the investment capital itself and raise the rest of the funds from other sources.

INDOCHINA 17

experiencing a tourism boom. It welcomed a record 18 million visitors in 2019, an increase of 16 percent on the prior year, with Chinese tourists making up 5.8 million of that total. The country has been developing its tourism offering to cater for high-end travellers, with its multiple UNESCO World Heritage sites and unique culture. As a result, Lee says he believes that Vietnam is a “sleeping giant” as a destination, which will continue to be popular with the Chinese once borders reopen.

Without a local “market, a multi

billion dollar resort doesn’t work.

”

“One of the things we observed is that the Chinese love Vietnam,” he said. “It’s a culture that has a lot of familiarities, the food is almost the same, but there’s a twist, with the French influence.” Still, for analysts the regulatory environment will continue to be a significant deterrent. “The problem you have in Vietnam is that the government has unrealistic expectations around what needs to get built and what they are putting on the table regulatory wise,” said Bernstein Research analyst Vitaly Umanski

on a recent SIGMA webinar. “Without a local market, a multi billion dollar resort doesn’t work. You can get away with $100 million - $150 million property if you can target foreigners and it’s easy to get there, the tax looks good and the regulatory environment is loose, that works, but if you don’t have those things and you have a multi billion dollar property without a local market there’s no way it works.” Particular interest has been focused on Suncity Holding’s more than $4 billion resort in Hoiana, which held an opening preview last year, with its full opening delayed by Covid. The upscale property was expected to leverage Suncity’s deep database of high-end Chinese players. However, China’s repeated warnings over cross-border gambling may mean few high rollers will be prepared to make the trip. “With a crackdown on VIP there’s going to be very few people from China who are going to go all the way down to Vietnam to have an experience that’s not the real Macau. It’s going to have challenges,” Alidad Tash, managing director of 2NT8 said on the SIGMA webinar, referring to Hoiana. Lee agrees in principle that a $2 billion investment in a foreigner-only market would make most resorts unviable. However, he points out that for both Hoiana and Van Don, real estate sales will be the main drivers for return on investment. “Gaming is not the profit driver for the Hoiana project nor the Van Don project. It’s the anchor and the draw card, but it’s the real estate development card where they will make the majority of their return on investment.”

Phu Quoc’s sleepless city to drive tourism growth Vietnam’s Vingroup in April opened a mega-entertainment centre on Phu Quoc, which it hopes will drive tourism to the southern island. The island is home to the Corona Casino, the only one in Vietnam currently allowed to let locals gamble. Covering an area of more than 1,000 hectares, the Phu Quoc United Centre will provide 24/7 entertainment and has been dubbed the “sleepless city.”

Asia Gaming Briefings | June 2021

INDOCHINA 18

CAMBODIA

Nagacorp faces labor challenge, expansion setback Nagacorp, Cambodia’s largest casino operator, has faced a rocky quarter, with another shutdown, labour issues and a blow to its expansion plans.

he group came under fire from labour unions over plans to cut jobs despite reporting a robust recovery after the first phase of the pandemic. The company is reportedly in talks to shed as many as 1,300 positions after the pandemic flared up again. Cambodia has weathered the Covid crisis well, with the situation kept under control until February this year when two Chinese women illegally left a quarantine hotel and partied around the capital Phnom Penh. Up until the February outbreak, the country had not reported a single death. Nagacorp closed its doors on March 1st after mass testing revealed 11 employees had been infected.

“We are asking for support and they have responded with the idea of mass layoffs. It’s extremely disappointing,” she added. Even though international borders are closed to leisure travel, Nagacorp’s NagaWorld reported a strong recovery for 2020, helped by expatriate workers living in the capital, where it holds a monopoly within a 200km radius.

”

The casino staff cuts have earned the ire of worker union leader Chhim Sithar, who, speaking to Reuters, alleged the company is unfairly paying staff only a fraction of the severance pay they are owed, by basing the severance pay on the reduced salaries that were imposed last year. “Workers risked their safety to make profits for NagaWorld during the pandemic and then when they needed help, they were abandoned,” said Sithar.

Asia Gaming Briefings | June 2021

(Credit: James Dickson)

“

We are asking for support and they have responded with the idea of mass layoffs. It’s extremely disappointing.

During the first quarter of 2021, NagaCorp said its mass market business had continued to improve, gaining sequentially from the second half of last year. Its mass market table business was only a fraction below its pre-pandemic level at 99.4 percent, while electronic gaming machines recovered to 98.5 percent. VIP

INDOCHINA 19

lagged, returning to a little over half of where it was prior to Covid. Meanwhile, the company suffered a setback to its expansion plans in March, when the government backed the views of the United Nations’ cultural agency, UNESCO in opposing a non-gaming resort near the Angkor Wat temple complex, a world heritage site. The US$350 million development project raised eyebrows from the time it was announced last November. “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,” UNESCO said in a statement. “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.” The International Coordinating Committee for Angkor (ICC-Angkor) ultimately told the Cambodian government that the project “cannot be implemented” in the planned manner and the Ministry of Culture and Fine Arts agreed. NagaCorp had been granted a fifty-year lease, with an option to renew, on a prime piece of development land sited just about 500 meters south of the outer restricted zone of Angkor Wat. The anticipated non-gaming facilities were being planned by two architectural firms, US-based Steelman Partners and Gensler, and may have included three hotels, the Naga Water World park, an indoor Digital Theme Park, a non-motorized boating canal system, MICE facilities, and a China Town food street.

Covid puts Dara Sakor project on ice Century Entertainment says that the opening of a new casino in Dara Sakor in which it aims to place its mass market tables, will be delayed until further notice. The Hong Kong-listed company had plans to launch mass market tables at the casino after switching from a similar plan to operate tables in the coastal casino hub of Sihanoukville. The new casino, operated by Lion King Entertainment will include 40-mass market tables, 25 VIP tables and 50 slots. “In view of the current strict lockdown measure, there has been no significant progress on the re-opening preparation works of the new casino including systems testing and provision of training to casino staff,” said the company in a filing to the Hong Kong Stock Exchange. The casino, located in a controversial China-backed entertainment zone spanning 36,000 hectares in a remote area of the country, was due to open by the end of April.

Donaco revenue plunges on renewed outbreaks Donaco International said its revenue in the March quarter plunged by half due to a new outbreak of Covid in Thailand and Cambodia resulting in border closures and the shutdown of its Star Vegas property. Revenue was A$2.8 million compared to $6.0 million in the December quarter. Management said it expects the impact to be temporary as vaccines begin to be rolled out. Non-Executive Chairman Porntat Amatavivadhana said: “We have done everything to manage what had to be managed internally within the business. We keep a conservative approach and we are ready to move forward once external conditions improve.”

Asia Gaming Briefings | June 2021

AUSTRALIA

Hospitality industry faces staffing crisis Australia’s hospitality and gaming industry is suffering from a labor shortage, which has been described as having hit “crisis” levels.

(Credit: Alex Voulgaris)

AUSTRALASIA

Asia Gaming Briefings | June 2021

AUSTRALASIA

n 2020, the Covid-19 pandemic forced many said the pandemic has brought to the fore what long-serving employees in the industry to has been a perennial issue in terms of priorities find alternative avenues of employment. for hospitality workers. “Most Gen Ys and Gen Zs want to transition And whilst the country’s economic recovery has bounced back, those that previously worked to a new role within six months, want bigger in the gaming and hospitality industry are and better things, and get frustrated when this does not happen immediately. The pandemic reluctant to return. “Many of the club CEOs and GMs that I made them realize the joys of not working in speak with are saying that both front and back of a 24/7 environment where they could spend house hospitality labor are now very tight,” said time with their families, and now they do not Geoff Wohlsen, a gaming industry consultant want to make trade-offs by going back to the hospitality environment,” he said, drawing from who has been dealing with this issue. “I spoke with one manager who contacted recent conversations he’s had with club CEOs. “The hospitality industry has always been over 20 applicants for a simple interview and only 3 turned up. I was talking with a manager of a regarded as the place to work while a person was large club in Sydney the other day who advertised waiting to get a “real” job,” adds Leigh Barrett and didn’t get one response. It’s even worse for of Leigh Barrett and Associates. “Firstly, the wages and employment conditions chefs and kitchen cooking staff,” he added. Wohlsen was referring to a growing trend across the hospitality industry generally have in which hospitality workers have been hesitant historically not been such to attract and retain to return to the industry in fear of another employees, resulting in high staff turnover.” Barrett, drawing from black swan event. his strong background in “It seems that since social work, said it was also hospitality workers were common for (especially most impacted during The hospitality young) hospitality industry Covid that now potential industry has always staff to be exposed to, or be employees are saying “if the victims of harassment I go back to hospitality been regarded as and/or bullying by other I could lose my job the the place to work staff or patrons. minute there’s another This notion becomes shutdown. It’s not while a person was more apparent as already clear where the former waiting to get a pre-Covid,around64percent hospitality workers have of workers interviewed by been redeployed either.” “real” job. Barcats was found to be JeffreyWilliams,CEO suffering from some form of hospitality-focused of anxiety, whether it be job-seeking platform Barcats said the issue has been compounded a shortage of shifts, working nights, sporadic by the fact that migrant workers have not working hours, fair pay, and working conditions. “During Covid, this spiked to 92 percent,” been allowed to return to the country due to added Williams. travel restrictions. It’s an industry that has traditionally not Pre-Covid, there were around 1.1 million migrant workers in the country, with a large given a lot of comfort or security to those in portion of these employed in the hospitality sector. the workplace. To combat this, Williams said that his “Collectively, there’s about a quarter of [hospitality] staff that are no longer available, company has done a lot of work with young and that’s basically the gap that we’re now seeing.” people, specifically getting them more excited Staffing shortage and availability of skilled about hospitality as a career path. Some venue managers have opted to instead labor are key concerns in many jurisdictions around Asia. Macau in particular has suffered target a different working demographic to fill the even pre-Covid due to restrictions on imported hole left by unenthused youth and non-existent labor, where for example all dealer positions are foreign workers. “In our space we’re starting to view the reserved for locals. However, experts believe the issue within employment landscape as ‘coming full circle’ Australia’s hospitality sector runs far deeper than back around to the supply and demand of hiring that. The industry has had a long-brewing issue mature aged workers with life experience, as they are available and ready to work,” said Morgan with attracting and retaining staff. Sudhir Kale, a gaming industry consultant Stewart, CEO of Blacktown Workers Club.

“

Crown appoints former Lendlease boss as CEO Crown Resorts has appointed former Lendlease boss Steve McCann as chief executive officer and managing director of Crown, subject to regulatory approvals and probity checks. According to a filing from Crown to the ASX, McCann brings more than 25 years experience in real estate, funds management and investment banking and capital markets. He is currently group chief executive officer of real estate and investment group Lendlease Corporation, a role he has held for more than a decade. Crown said that McCann will join Crown effective June 1, 2021.

”

Star takes a shine to Crown with merger proposal Australian casino operator The Star Entertainment has officially entered the race for Crown Resorts, proposing a $12 billion mega-casino merger. The proposal sees Star proposing a nil-premium share exchange ratio of 2.68 shares in The Star per Crown share. The proposal also includes a cash alternative of $12.50 per Crown share for up to 25 percent of Crown’s issued share capital. The operator joins U.S. private equity firm Blackstone Group in bidding for Crown. The firm has upped its offer from $11.85 to $12.35 per share.

Asia Gaming Briefings | June 2021

AUSTRALASIA 22

What are the ups and downs for a Crown/Star marriage? A combined entity consisting of The Star Entertainment Group and Crown Resorts would create a behemoth gaming enterprise not just in Australia, but in the wider Asia gaming market, though market observers have flagged a number of regulatory hurdles that could hinder it from ever becoming a reality.

ver the last few months, investors have been salivating over the Melbourne-based casino operator, which has seen its shares fall as a result of ongoing investigations into the company’s management and operations in NSW, Victoria, and Western Australia, along with a general share price slump due to border closures and covid-19 related lockdowns. In March, a surprise proposal came from U.S. investment manager Blackstone Group to buy out all of Crown’s shares at an indicative price of A$11.85 per share in what would be an A$8 billion deal, which has now been rebuffed. Only a few weeks

Asia Gaming Briefings | June 2021

later, Oaktree Capital Management made an offer of its own – to buy out A$3 billion worth of shares owned by James Packer’s Consolidated Press Holdings at an indicative price of around A$12 a share. However, the boldest move came from The Star Entertainment Group, which put together its own unsolicited, non-binding offer to merge the companies into a A$13 billion Australian gaming giant. The proposed merger is seen by analysts and observers as an overall positive for the two companies should it go ahead – but opinions divide on how it would be seen by Australia’s competition regulator, the Australian

Competition and Consumer Commission. “The biggest issue facing a merger is likely to be the ACCC, which will be concerned about the concentration of ownership and absence of competition in the three key Eastern state markets. NSW will be a particular issue,” said David Green, an Australian gaming industry veteran. The problem wouldn’t be present in Victoria, due to Crown’s monopoly license. Indeed, the ACCC chairman, Rod Sims on Monday told local media he would conduct a public review of the merger proposal. “We will do a detailed investigation. It will be a public review,” said Sims. “It’s very early days. But we would look at the

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market for domestic table game customers,” he said. “We would look at the competition between Barangaroo and Star in Sydney. We would also look at the extent to which there is intercity competition for customers.” Sims was referring mainly to NSW, The Star’s flagship property, which would likely share a portion of its customers with the newly opened Crown Barangaroo (though the casino is yet to open). But The Star CEO Matt Bekier said he’s had informal soundings with ACCC in the past and is confident that the deal will be allowed to push on through.

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It’s very early days. But we would look at the market for domestic table game customers.

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The optimism is shared by CLSA analyst Anthony Longo, who said: “With most Australian casinos servicing the “locals” market, we see the limited threat of the ACCC blocking the transaction, and this view is shared by Star from its initial discussions with the body.” JP Morgan’s Don Carducci said he saw no risks for Star receiving formal merger approval from the ACCC, as previous talks did not throw up any red flags at the time. He even expects the company to be able to receive approval quicker than other parties. Kevin Clayton, former chief marketing officer of Galaxy Entertainment Group and now independent consultant said it would be short-sighted for regulators to see the merger of the two companies as monopolistic. “Australia regulators must grasp the opportunity and look beyond Australian shores into Asia and further afield. If the regulator is myopic and views a coming together of The Star and Crown Resorts as monopolistic, then it doesn’t truly understand how and why Australia must compete in the Asia region for tourism and gaming spend.” The pairing could also be seen by regulators as a better alternative to foreign suitors, by keeping ownership of the Australian gaming company within the country’s borders.

Asia Gaming Briefings | June 2021

JAPAN

Will Japan score a home goal with sports betting regulation? The prospect of legal sports betting in Japan has created a buzz in the global community, though industry insiders warn that Tokyo will need to do a better job on regulation than it has with casinos if the market is to reach its full multi-billion dollar potential.

(Credit: Yavor Punchev)

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(Credit: Dave Kim)

n April article in the Financial Times cited a special governmentcommissioned report from Dentsu to look at the possibility of legalizing betting on major sports such as football and baseball. The group submitted its findings in September last year and internal discussions have begun, it said. The report hasn’t been confirmed and some remain sceptical that regulated sports betting will come about any time soon. The main reason driving the current discussion appears to be loss of revenue for the country’s sports clubs due to Covid-19. For example, the central league in the Nippon Professional Baseball league saw attendance drop 78 percent in 2020. Given that sales from tickets and related food and beverage make up more than half of the team’s revenue, the impact on club coffers is clear. At present sports betting is only allowed on horse racing, motor boats, cycling and motor bikes. However, online operators have been increasingly targeting the market. “Some early estimates have put it at a $55 to 65 billion per year market which in my opinion is a conservative number. I think we potentially could be looking at double of those figures,” said Kaare Hilt Ingvaldsen, Tokyo-based Asia Pacific manager at odds data provider TXOdds. “The interest and market for sports betting is already there, mainly in the form of foreign bookmakers and various under-ground markets. If they were to legalize it they could stop the flow of money leaving the country or ending up with illegal gaming operators.” “The clubs also need this, and by legalizing betting especially for soccer and baseball the sports networks like DAZN could also attract more viewership as more people would be invested in the games. This could again lead to better tv-deals for the clubs which would again create higher revenue. So the economic potential for this is massive ,and it could generate tens of thousands of jobs and have a very positive impact on the Japanese economy.” Whether the government actually moves ahead and in a way that would be acceptable to industry operators remains to be seen. Much of the early excitement about the potential for casinos in Japan has evaporated amidst the snail’s pace of the regulatory process and the less than optimal legislation that has been put in place. “It would be fantastic,” Michael Maerz, deputy CEO for Asia Pacific at Sportradar said about the possibility of legalized sports betting. “Not only for Japan, but it would also show other countries in Southeast Asia that regulation is

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a very closed and difficult market to enter so the way forward if it’s done properly.” “If it’s going to happen, it’s going to happen there’s a little bit of a model there for other faster than we thought, but the question will be jurisdictions such as Japan.” He said this would avoid undermining existing whether it’s done right. For example, in some global jurisdictions taxation levels have been monopolies and would create a framework based on turnover rather than gross gambling that’s likely to be within the government’s revenue and that makes it almost prohibitive risk appetite. However, that may be a more restrictive model than most of the industry for an operator to run a successful business.” When it comes to regulation, Martin will be hoping for. Baseball and soccer are expected to be far and Purbrick, a director at Purbrick & Associates, away the biggest sports, who consults on a primarily the J-League variety of risk related and the NPB. However, issues, specialising in the e-sports are becoming areas of sports betting If it’s going to increasingly popular, with and sports integrity Tokyo having legalized suggests Tokyo should happen, it’s going professional gaming in turn to international to happen faster 2018 and these games expertise to help it are also expected to than we thought, establish a framework. have strong potential. “Sports betting but the question Key challenges markets are global as will be whether it’s that would need to sports have become be addressed would global and it’s no longer done right. be funding of foreign the case that customers betting accounts and are only interested in the need to localize betting on their local products and services product, whether that be horse racing in Japan or other sports in Japan. for the Japanese market. “They would need to make it easier for You need some kind of international model.” Purbrick, who is also Chairman of the the users to fund their betting accounts via Council on Anti-Illegal Betting & Related traditional banking methods, or via local Financial Crime for the Asian Racing Federation, e-wallets like PayPay, Suica or Linepay,” said points to the tie up between the Hong Kong Hilt Ingvaldsen. “As of today, the only way to Jockey Club and the China Sports Lottery to fund a foreign betting account is by making the offer betting on football as a potential template. customers jump through hoops by setting up “That’s an injection of international talent accounts with international e-wallet providers, with a very experienced operator into what is or transfer via crypto currencies.”

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Asia Gaming Briefings | June 2021

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Two locations left with sole bidders as operators exit Wakayama’s IR bid appears to be on the ropes as the Suncity Group has withdrawn from the RFP process.

(Credit: Andrea De Santis)

his leaves the Wakayama RFP—which has been delayed for what until now had been unclear reasons—with only one remaining applicant. It doesn’t help that the last firm standing, the Clairvest Group, may or may not have presented the prefectural government with a credible proposal.

Asia Gaming Briefings | June 2021

All that is known is that Clairvest has been seeking for the past year to “quarterback” an IR bid together with other unnamed partners, but the degree to which the Canadian investment firm has succeeded in making strong allies remains to be seen. The two scenarios which seem to remain are that, like Osaka, Wakayama is now left with

a single potential IR consortium against which it has little leverage, or else the prefecture’s bid for an IR license will soon collapse altogether. Either way, the chances of seeing an IR built at Wakayama’s once-coveted Marina City location are clearly fading. Before its sudden withdrawal, the Suncity Group had been taking quite a high profile.

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The firm opened an office in Wakayama City last September and has been active in cultivating community support. Included among these efforts were a sponsorship deal with the local professional basketball team, the Wakayama Trians, and interaction with the local yachting community. A statement from Chairman Alvin Chau on the company’s Japanese-language website explains, “After deep consideration, we have made this difficult decision under the enormous impact on the industry due to the spread of the new coronavirus infection. Many companies anticipate a long period of uncertainty, and the IR certification process in Japan appears set to take a lot longer than expected. Many things remain unclear, but we must consider the risks as a business operator.” However, the decision appears to have

come quickly. On May 1, Yoshikatsu Ohara, president of Suncity Group Holdings Japan, publicly promoted the firm’s bid at a general meeting of the Wakayama IR Promotion Council. The group has been actively focused on Japan as an increasingly popular destination for Chinese travellers, its main client base. In 2019, it said it was buying a plot of land on Miyako island in Okinawa to build a non-gaming resort. It said it intends to build 40 villas with a pool and a hotel of more than 100 rooms, saying that with the increased number of Chinese visitors traveling to Japan, and newly operated direct flights to Shimojishima Airport, the acquisition represents a good opportunity to expand Suncity’s tourismrelated business and to diversify its focus, from China to the East Asia region.

Suncity’s departure from the IR race probably explains why the Wakayama Prefectural Government has fallen behind its own timeline for naming its IR operator partner. Attention now must turn to whether Clairvest is declared the winner, or if Wakayama itself withdraws from Japan’s IR race. The prospect of another Japanese city with just one sole contender for an IR casts further doubt over the whole process. Osaka, once one of the most sought after destinations, has found itself alone with the MGM Resorts-Orix consortium after other bidders pulled out in favour of the bright lights of Yokohama. Wynn Resorts has left the bidding altogether, as has Las Vegas Sands, which cited Japan’s less than optimal regulatory and tax requirements.

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The prospect of another Japanese city with just one sole contender for an IR casts further doubt over the whole process.

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Authorities in Osaka are said to be concerned they may have lost leverage in negotiations with MGM-Orix, which may be pushing for a scaling back of ambitions due to the poor business environment. According to the Nikkei newspaper, there is now concern in Osaka that “if we ask the MGM side for strict conditions, they could withdraw,” thus leaving the Yumeshima site with no bidders at all. Although the central government appears determined to push ahead with the process, at present it appears that only one location -- Nagasaki -- has all its ducks in a row. Osaka and Wakayama only have single bidders, while Yokohama’s problem is unstable politics, with a possibility that a win by an anti-casino candidate in upcoming elections would scupper the bid.

Asia Gaming Briefings | June 2021

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Entertainment key to Inspire Korea Mohegan Sun is confident that its entertainment-centric business model will help it succeed in South Korea’s notoriously volatile foreigner-only casino market.

he company won a license in 2016 to build plans in both Korea and Japan, said the company is an integrated resort in Incheon, next to the comfortable with the new deadline and with the new international airport and about 30 minutes approvals expects to secure financing to move on with the project before summer. from the centre of the “We feel really good,” he capital, Seoul. The price tag for told Asia Gaming Brief in a Phase 1 was $1.6 billion, with Face-to-Face series interview. a $5 billion budget overall in Once we “We wanted to see how the multiple phases. finalize the pandemic evolved and lenders However, progress on Inwanted to see the same thing.” spire Entertainment Resort has financing you’re “That’s not just in Korea, been slow, with Covid adding going to see a lot it’s everywhere, but I think to the delays. there’s now a sense that there The group won approval for more activity on is light at the end of the tunnel. an extension to its construction the site. There’s a sense of optimism on timetable in early April from this and based upon that we the Ministry of Culture, Sports felt comfortable about moving and Entertainment and now forward with that extension expects to open in the first and wouldn’t have done so without being confident half of 2023 instead of 2022 as originally planned. Bobby Soper, a former Mohegan CEO who has now of meeting those deadlines.” As part of the extension approval, the group was returned to head up the group’s international expansion

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Asia Gaming Briefings | June 2021

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also permitted to amend its business plan to include more outdoor space and to change the timetable for its second-phase construction. Soper said the new outdoor amenities will include more family friendly facilities, which will add to other non-gaming attractions at the resort, such as a live indoor arena capable of seating 15,000, a cosmetics and beauty hub and extensive food and beverage outlooks. “It’s a work in progress but it will be a great opportunity for families,” he said. The ability to drive revenue from nongaming may be key to the success of the IR. South Koreans are not permitted to gamble and its tourism market has suffered a series of setbacks in recent years, making it one of the most volatile in Asia. 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 impact from the Covid crisis is ongoing. “We went into Korea understanding the potential volatility especially coming from China and that’s one reason our model is what it is, focused on non-gaming,” he said. “We know the risks and expect volatility but we think we’ve mitigated a lot of risk based on the model that we are creating.”

Soper explains Mohegan is an entertainment company first and foremost, well known for its live entertainment, where it expects to be able to excel in South Korea. “We’ve always thought there is an opportunity to take our expertise for live entertainment and put it on an incredible piece of land next to the airport and 30 minutes from downtown Seoul,” he said, adding the facilities such as the arena and planned giant indoor water park will be unique selling points for the market. “There will be attractions for gamers who are flying in, but this really is a nongaming driven project. We want to maximise those assets.” At present, work on the site has slowed, but Soper said there is a lot of planning being done. “Once we finalize the financing you’re going to see a lot more activity on the site.” The group’s other focus for international expansion is on securing a license for an IR in Nagasaki in Japan. In January this year, Mohegan teamed with Hong Kong-listed Oshidori for its bid after Hokkaido dropped out of the race. “We think they’re the favourite in Nagasaki and we also feel good with them as partners. They have invested in our Korea project, which shows the type of partnership,” he said. “They understand the opportunities for the sites to leverage with each other on cross marketing opportunities and database opportunities.”

Soper also said Oshidori is committed to building a “spectacular” project for Nagasaki, though wouldn’t be drawn on further details. “It’s going to be iconic and something Nagasaki and Japan can be very proud of.”

Asia Gaming Briefings | June 2021

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(Credit: Alana Harris)

Philippines pushes forward online to contain Covid damage For this edition of our magazine, we focus on Southeast Asia, with a particular look at the Philippines, which longer-term is still viewed as one of the most promising markets in the region.

he country’s casino industry has been among the hardest hit in Asia, with the integrated resorts in Manila’s Entertainment City having remained mostly closed to the general public since the beginning of the crisis last year. The capital and other areas of the country have faced successive waves of lockdown as the government has grappled to bring the Covid crisis under control in a sprawling archipelago that’s home to more than 108 million people. After a five-month closure, the properties were allowed to open in August last year at 30 percent capacity with invited guests and long-term hotel guests only. The system was designed to allow the operators to fine-tune their operations to accommodate the new safety procedures and to train their staff. As a result, operators in the Philippines reported a near 90 percent decline in revenue for 2020, the biggest decline anywhere in Asia. However, the Philippine Gaming and Amusement Corp (PAGCOR) has not rested on its laurels. Concerned about the loss of a highly lucrative revenue source, the regulator last year announced that it would allow the casinos to accept online bets from VIP players. The news triggered a ripple of excitement in the online gaming world keen to see whether the announcement would pave the way for a regulated Asian jurisdiction for domestic players. One of our articles in this section focuses on the more recent developments when it comes to these local licenses. So far, three integrated resorts in Entertainment City and a PAGCOR casino in

Asia Gaming Briefings | June 2021

Subic Bay have been authorized to accept bets and are understood to be carrying out trials. Industry experts say other governments around Asia are closely watching the Philippines’ experiment and are perhaps more willing now than ever to consider regulating the sector to repair Covid-ravaged coffers. In this section, we also focus on the island of Cebu as a gaming hub. The island is one of the top tourism destinations in the country and is already home to multiple casinos. Two new large-scale properties are also under development, with PH Resorts saying its Emerald Bay will now open in the third quarter of next year, due to pandemic-related delays. Analysts hold mixed views on just how exciting the island will be as an actual gaming destination and say the operators need to stay focused on catering to the tastes of the local market to underpin their earnings. Switching countries, we also take a look at the prospects for Resorts World Las Vegas, which opens this month. It perhaps seems a stretch, but the resort is owned by Malaysia’s Genting Group, one of the biggest operators in the Southeast Asian region. The group is highly diversified and in recent years has been making a push into the U.S. market. The more than $4 billion Resorts World Las Vegas will be the first from the ground up resort to open on the Las Vegas Strip and expectations are running high. Gaming revenue in the U.S. appears to have bounced back with a vengeance and Las Vegas is reporting booming trade. Property President and CEO Scott Sibella also offers up his views on the opening in a Q&A with Asia Gaming Brief.

Asia Gaming Briefings | June 2021

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Cebu short-term IR success hinges on locals Cebu, with its white sand beaches and coral reefs, was one of the most visited tourism destinations in the Philippines in 2019 and has sparked the interest of integrated resort investors as a potential gaming hub.

he province in the central Visayas is home to Cebu Island itself and about 150 smaller islands in the vicinity. Home to 3.3 million people, it’s the second largest metropolis in the country. Visitor arrivals to the Philippines rose 15.2 percent to 8.2 million in 2019. Koreans made up the biggest segment of the market accounting for 1.9 million arrivals, although China was hot on its heels at 1.7 million and was the fastest growing, up 38.5 percent on the year. Cebu, which hosts the new Mactan International Airport, was second to Manila in terms of direct foreign arrivals by air, accounting for 20 percent of the

Asia Gaming Briefings | June 2021

total, while the city was one of the most visited in the Philippines, according to the Department of Tourism. From the figures, the potential is clear. However, the Covid pandemic has changed the international outlook in the short term at least and operators will need to tweak their offering to focus on the local market, experts say. There are currently about 7 gaming facilities, several of which are smaller operations known as VIP clubs. The full-scale casinos are being operated by the Philippine Amusement and Gaming Corp (PAGCOR), with the major revenue contributor the Waterfront in Cebu City.

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international high rollers. “Yes the new projects coming up will be of similar scale to Manila’s Entertainment City but I can’t see real gamblers making the choice to go to Cebu over Manila and Clark.” Feeney said he’s confident that Cebu can support the two new resorts coming on line, but that will probably be to the detriment of the older PAGCOR properties. He estimates demand next year at least could only support 100 tables and 500-800 machines at each casino property. “Further out with all the uncertainty, the casino operators I feel need to get back to the basics of really focusing on the locals

Cebu enjoys “ a very strong and

captive local VIP market not only in Cebu but also in the Visayas and Mindanao.

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In addition, two new integrated resorts are in the works. PH Resorts’ Emerald Bay is the largest of the two with 270 rooms scheduled in the first phase of its development. The property, designed by Steelman Partners, is on a beachfront location and is about 20 minutes from the international airport. It has now pushed its opening back to Q3, 2022. The second is the Universal Hotels and Resorts’ NUStar Resort and Casino, which is also scheduled to open next year in Cebu City. “We firmly believe that the presence of Integrated Resort properties in Cebu would provide a huge benefit in the region that would drive more tourists and casino players as Cebu becomes a world-class destination,” said Jose Angel Sueiro, chief operating officer of PH Resorts. “Currently, Cebu enjoys a very strong and captive local VIP market not only in Cebu but also in the Visayas and Mindanao,” he said. “What is missing so far to make it attractive for international players is the existence of high-end facilities, which is what we are building,” he said, adding that

PH believes the project has the potential to bring in the big gamers. However, even without the Covid travel restrictions the market has changed. China’s introduction of a “blacklist” of countries targeting its gamblers has raised concerns as to whether VIP gamblers will be prepared to travel to highly visible neighbouring jurisdictions. While Beijing’s clampdown on international capital outflows will also hurt junket play. “These new casino properties will need to rely upon the locals and as Cebu is the 2nd busiest airport then there is an opportunity to attract premium local play from Manila for short trips away to experience the new integrated resorts,” said Scott Feeney, CEO of Gaming Concepts Group. “The casinos in Entertainment City Manila are now quite established so there is a large base of premium locals already familiar with high-end gambling which the new casinos in Cebu can target.” On the downside, Feeney said he doesn’t see Cebu as a prime location for

and what makes Filipinos tick,” he said. “We know they love to be entertained, but this has taken a backward status due to the insatiable demand from Junkets and Premium play from 2016 to 2019.” Sueiro says PH Resorts plans to adopt targeted strategies to attract both VIP and mass customers both overseas and domestically, “utilizing the principle of marketing to “catchment” geographies, comprising gateway metropolitan areas.” Spectrum Gaming is more confident about Cebu’s potential as a gaming jurisdiction. “Spectrum has done some work in Cebu over the years and our takeaways are that some projects are better than others,” said Spectrum managing director Fred Gushin. “In my view, Mactan Island, Cebu has potential as a gaming resort. The advantages of Mactan Island include that it is in close proximity to the newly rebuilt airport, it is on an island that has seen the opening and planning of several major hotel projects which brings a steady mix of potential gamers to the island.”

Asia Gaming Briefings | June 2021

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Asian jurisdictions eye Philippines online gambling lead Other Asian jurisdictions are closely watching the Philippines’ efforts to bridge the land-based and online divide with a view to following suit, while Nepal is likely to have its first online operator live within two months.

nline gaming has either been a grey, or strictly taboo area in many of the region’s jurisdictions, but the Covid pandemic is triggering a re-think as cash-strapped governments seek to raise more revenue and aid their land-based properties. This was the view of Jade Entertainment CEO Joe Pisano and Loren Stout, founder and CEO of Pixil Asia and Dragon Points Live, speaking at the recent Sigma Manila Roadshow. “We are getting enquiries from governments about how PAGCOR is going about this and how they can go online,” Pisano said. “They have never looked online before and now they are looking into this for their casinos,” he said, adding it’s a positive move for the industry.

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We are getting enquiries from governments about how PAGCOR is going about this and how they can go online.

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Pisano said Nepal has endorsed its first online provider and that it should go live in 60 days, where Sri Lanka plans to develop a Dubai-style economic zone, which will include both casinos and land-based gaming. Stout said that as the only country in Asia so far to regulate online gambling, the Philippines has set a benchmark. The country has hosted Philippine Offshore Gaming Operators (POGOs) that provide their services to punters outside of the country since 2016. However, it has now taken the step to introduce online gaming for nationals. “I know for a fact that other countries are looking

Asia Gaming Briefings | June 2021

at their regulations to see how they might handle this going forward.” Under PAGCOR’s charter, five percent of its revenue goes towards franchise tax, while 50 percent of the remainder is used to fund nation-building projects

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around the country. The gaming sector has proved a lucrative source of funds, with its rapid expansion in recent years. However, Covid has caused the cash flow to dry at a time when the government is lacking funds for social infrastructure. PAGCOR expects gaming revenue to drop to about PHP16 billion ($330 million) this year, about half of what it earned in 2020, which offers a clear illustration of why the regulator is willing to consider alternative sources, which were once considered taboo. PAGCOR Chair Andrea Domingo has said that three of the integrated resorts in Manila’s Entertainment City - Okada Manila, Solaire and Resorts World Manila - have been given permission to accept online bets from VIP players. This is in addition to the

greenlight given to one of its own casinos in Subic Bay and two platform providers. It has also permitted i-gaming on cockfighting, known as Sabong, which is highly popular in the Philippines. While the potential for legal online gambling in Asia appears to be more in reach now than it has before, it’s unlikely to be a straightforward process and will be subject to setbacks. Politicians in Sri Lanka are already debating the legality of the China-backed Colombo Port City, arguing that it may violate the island’s constitution. Efforts to open up the island in the past to foreign casino operators have also failed. China’s attempts to crackdown on online gambling, especially those firms targeting its

nationals, will also continue to be an issue for governments who may be keen on regulating and taxing online gambling, but are concerned about getting on the wrong side of Beijing. Cambodia, under pressure from China, banned online gambling from the beginning of last year, although industry insiders say the practice is continuing. Stout said given the large level of investment into Cambodia’s casino industry, putting in place regulations would be a sensible move to create jobs and tax revenue. “I think that it would be only smart to do some kind of regulation along the lines of what the Philippines and PAGCOR has done,” Stout said. “I think it all bodes well for regulation. I think that they understand the opportunity. I think it’s a matter of time.”

Asia Gaming Briefings | June 2021

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Will Resorts World light up the Strip? Genting is gearing up for one of the world’s biggest openings this year, with the $4.3 billion Resorts World Las Vegas set to become the first all new property in more than a decade to switch on the lights on the Strip.

WLV is scheduled to open this month and the company claims it will be the first “truly groundbreaking” resort in Las Vegas. It will have 3,500 rooms distributed across three premium Hilton brands. The casino will have 117,000 square feet of gaming space, with some 250 tables and 3,250 gaming machines, as well as state of the art technology and nightlife concepts, such as Singapore’s Zouk Club.

Asia Gaming Briefings | April 2021

Resorts World Las Vegas will also have the distinction of being the most expensive property so far built in the city. And that hefty price tag carries implications for the group’s return on investment, with the operating environment having changed significantly from when the group germinated the idea. Genting bought the land in 2013 from Boyd Gaming, which had demolished the Stardust Resort that stood on the site to develop its own casino complex.

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The Asia-themed IR, which was held up due to a dispute with Wynn Resorts over design, was designed to pull in Asia’s premium players as well as to provide a new point of reference for the Strip. Since then, the fortunes of Las Vegas have changed with the pandemic crushing destinations reliant on incoming visitation, while the return of Asia’s VIP market is a subject of intense debate. “The property is opening at a time when it’ll face similar operating pressures as other Strip operators – lower visitation and limited group activity,” Fitch Ratings analysts told Asia Gaming Brief. “Our current rating case expects RWLV to break even by end 2022 and reach its fully-ramped up EBITDA by end-2024. The property being the newest in Las Vegas could help to accelerate rampup but there is significant downside in the event of slower than expected recovery in inbound visits, which could delay our expectation by 1-2 years.” Nomura analysts expect the property to be a drag on net profit for the initial few years with the high start up costs resulting in losses to the bottom line. However, based on an analysis of other venues in the area, it does expect the resort to begin contributing from next year. Nomura expects revenue of $350 million

next year on EBITDA of $82 million, while that figure is expected to rise to $477 million in 2023 for revenue and $112 million for EBITDA. It will also be an interesting test for the old adage “if you build it, they will come.”

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The property is opening at a time when it’ll face similar operating pressures as other Strip operators – lower visitation and limited group activity.

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Some industry observers say the concept still carries weight. “Historically, new properties on the Las Vegas Strip have always driven incremental visitation. This will be no different,” says

Josh Swissman, founding partner of Las Vegas-based, The Strategy Organization. “The timing of the opening is actually well suited to existing trends and sentiment around Covid-19. Currently, Las Vegas is enjoying a boost in visitation with additional desire to travel anticipated for the second half of this year (and beyond). That bodes well for Resorts World Las Vegas across multiple customer segments.” Swissman also points to various unique selling points that will help Genting draw in the crowds. “First its design, architecture and amenities are drawn from different influences than those typically seen on the Las Vegas Strip,” he said. “Additionally, I think the partnerships that they have struck with Hilton Corporation, AEG Presents and others will draw from those companies’ preexisting fan bases. What’s more, the entertainment offerings that have been announced will be a draw.” Katy Perry and Celine Dion have been announced as residency acts. The sprawling Genting Group is one of the world’s largest casino companies, owning properties in the U.S., Singapore, U.K., Bahamas and Egypt through its various subsidiaries. It also owns Resorts World Manila through its Travellers International Group venture with Alliance Global.

Asia Gaming Briefings | June 2021

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RWLV to rev up post pandemic revival Scott Sibella, president of Resorts World Las Vegas, speaks with Asia Gaming Brief about the upcoming opening of Resorts World Las Vegas, how he sees demand springing back after the pandemic and the likely revenue mix.

irstly, congratulations, the property appears to be getting positive reviews. What would you say was the unique selling point?

We’re building a truly integrated resort with everything guests need for the ultimate vacation or visit. The resort will offer an array of amenities under one roof, from casual experiences and dining options, to high-end attractions such as fine-dining restaurants, a world-class theatre and some of the city’s most luxurious suites. I believe our guests will really love the way we’ve programmed the property – we have an immersive arrival journey, a variety of

Asia Gaming Briefings | June 2021

room products and plenty of fun, new experiences. The diversity of offerings, advanced technology and the exciting moments awaiting within the property will set the resort apart. Has the pandemic pushed out this timeline? I’m proud to say we are opening on time. Though the pandemic brought unprecedented hurdles, we were fortunate that construction never fully stopped. We’re prepared to open our doors on June 24 and excited to finally unveil what we’ve been working so hard on.

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How do you view current levels of demand/ visitation in Las Vegas? Several factors will have an impact on how quickly Las Vegas is able to recover post-pandemic. We have the benefit of seeing demand trends and monitoring how visitation progresses – drive markets will be key and convention business and air travel will be major factors. People want to come to Las Vegas, and we are encouraged by how many travelers have already been returning. Las Vegas is already showing strong signs of recovery and we are so excited to be a part of the city’s revival.

“

We’re prepared to open our doors on June 24 and excited to finally unveil what we’ve been working so hard on.

”

How have you rebalanced the design/ offering to reflect the company’s Asian roots while appealing to a wider audience? The property’s design will combine traditional and modern architecture with progressive technology while paying homage to Genting’s roots with subtle Asian touches within the art, decor and service standards.

Given what we know about today’s Las Vegas traveler, we’ve seen somewhat of a paradigm shift and we’re about expecting 70 percent of our revenue to come from non-gaming amenities such as dining, entertainment and more. While we will offer an incredible casino experience unlike anything else on the Strip and welcome the traditional gaming customer, our property was designed to resonate well with all types of guests and interests.

(Credit: Wesley Tingey)

What do you expect the revenue mix to be between gaming/non-gaming and similarly between VIP/premium mass and mass?

Asia Gaming Briefings | June 2021

SUPPLIER SPECIAL REPORT 40 1XBET

Looking forward to the summer’s sporting delights

fter last year’s sporting hiatus, 1XBet is looking forward to a packed sporting calendar this year, including the European Football Championships and the Tokyo Olympics, which at the time of going to press are still going ahead. The company is working on promotions and special offers to keep the audience engaged, as well as technical improvements to improve the player experience. It’s also keeping a close eye on regulatory developments in Japan. Do you have any new products/ initiatives focused on the Asian markets? In the development of the 1xBet product, we always cater for individual approaches. For different regions, we are implementing adjustments that will make the experience of playing at 1xBet unique and enjoyable. Often in each country, there are specific sports that are especially loved. For example, for the Japanese version of the product, we have added several sports that are popular in this country. These include a variety of racing types - keirin (bicycle), keiba (horse), motorboat and motorcycle. We have applied a similar approach for slot lovers. At 1xBet, Japanese players can enjoy games

from a provider like JTG, which is particularly popular with local audiences. To top it off, we would like to note that our promotional offers are also geared towards regional specifics. Therefore, players receive unique offers that are not found in other regions. For example, Indian players are regularly offered cricket promotions. And this is just one example. What are you expecting for the second half of the year? The previous year was rife with match cancellations and postponements of various sporting events. This year, the world of sports has seen far fewer such force majeure events. For us, as a bookmaker, this is a big plus. We are looking forward to the second half of the year: summer will delight everyone with major tournaments. These are the Tokyo Olympics and the European Football Championship. Such competitions are in the focus of the whole planet, and 1xBet is here to keep the audience interested. We are preparing promotions and special offers for the top events so that our players not only enjoy the competitions but are also able to win valuable prizes. In addition, we continually work on improving the product. This year, many technical innovations

will be implemented to make your stay on the site and in the application even more pleasant. There is discussion about opening to sports betting in Japan. How significant is this? The regulation of the gambling industry at the legislative level is a very good step on the part of the government. We always support such initiatives because it contributes to greater transparency, creates new jobs and brings money to the state budget. Bookmakers are interested in all these processes being regulated and for players to have free access to their products. Such a step will give a huge impetus to the development of gambling in the entire region as a whole, because Japan has every chance of becoming one of the centers of the industry. But, of course, the final word is with the authorities. And they will certainly make a well-considered decision.

ADVANTECH-INNOCORE

High performance gaming systems meet modern needs

dvantech-Innocore, the gaming-focused business group of Advantech Corp, has launched two brand new DPX Products, The DPX-E145 as well as the DPX-J100. The DPX-E145 is a passive-cooled, complete gaming system for the regulated casino and AWP gaming markets, combining all the hardware features necessary for a gaming platform together in a high performance industrial-grade system. Breaking new ground in integrated graphics performance, the new 11th generation Intel Core processors with Intel Iris Xe graphics allow the DPX-E145 to meet the ever-increasing demands placed on casino slot machines for a multi-screen, high resolution, immersive player experience. At the heart of the DPX-E145 is the 11th Generation Intel Core processor, which includes high performance CPUs up to Dual Core at 3.0GHz (3.9GHz maximum turbo), Quad Core at 2.8GHz (4.4GHz maximum turbo) and sporting massive cache up to 12MB. The system can be supplied with up to 64GB DDR4

Asia Gaming Briefings | June 2021

PC3200 system RAM. The “Discrete-level Graphics” core outputs to four independent monitors via four DisplayPort DP++ ports. The graphics engine features the latest Intel Iris Xe architecture with up to 96 graphics execution units, providing unrivalled performance and features including Direct X 12, OpenGL 4.5, OpenCL 2.2 and support for video decoding HEVC/VP9/SCC (10 bit). The new display engine is optimized for four 4K displays at 60Hz but also supports two 8k displays at 60Hz. The DPX-E145 is designed with the same format as the other E series products (DPX-E135, DPX-E140) and has the same “Cabinet-ready I/O”. This innovative design puts all the connectors conveniently in one area and uses typical slot machine industry connectors to provide an economical, robust harnessing design. The need for additional connector boards or backplanes is eliminated saving costs and simplifying cabinet layout and harnessing. As well as the DPX-E145, Advantech is

pleased to launch the revolutionary DPX-J100, which is a complete gaming system for the regulated casino, AWP, redemption and skillbased gaming markets. This product also combines all the hardware features necessary for a gaming platform together in a high performance industrial-grade system but at an incredibly low price point. These two exciting new products extend Advantech’s large portfolio of gaming platforms giving the slot machine OEM an even broader range of price, performance and formats to choose from for their next generation gaming machines.

SUPPLIER SPECIAL REPORT 41 APE

APE teams with historic Macau bakery

sia Pioneer Entertainment’s newly launched Snap Buy vending machine brand has teamed with historic Macau bakery, Choi Heong Yuen Bakery to provide popular gifts 24 hours a day. The offering will include favourites such as Almond Cakes, Phoenix Egg Rolls and Liquorice Lemon. APE, which is a gaming supplier and service company, has been seeking to diversify its revenue sources to offset the impact of Covid. A new generation of smart vending machine is equipped with a flexible mechanical arm to ensure that goods can be delivered to the

customers smoothly without any damages. Customers do not need to bend down to pick up the goods. The humanized design is used to enhance the shopping experience of customers. The smart vending machine is also equipped with a variety of latest electronic payment methods to meet the consumption habits of different users. “Under the trend of intelligent retail and self-service, combined with the encouragement from Macau government to push the use of electronic payment, I think “Snap Buy” smart vending machine has a great potential for development,” APE and Snap Buy head Herman Ng.

ARISTOCRAT

Aristocrat introduces Lucky Fortune Link

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. 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.

Asia Gaming Briefings | June 2021

SUPPLIER SPECIAL REPORT 42 BETCONSTRUCT

eSports picking up pace

etconstruct has been actively working on localizing its product portfolio and adding new games in its live casino segment. During the pandemic it has seen particularly strong growth in the esports segment, which is continuing. As for the land-based industry, the company says it has become clear that more flexible business models are needed. What kind of recovery are you seeing in the land-based industry in Southeast Asia? It goes without saying that the land-based industry suffered the most from the pandemic with most of the casinos shut down for quite some time now, while others were open temporarily. As a result of this, the need and necessity for a new and more flexible business model became obvious, and this is the reason why many casinos are looking to expand or transform their operations online. Of course, governments are also supporting this by making necessary changes in the regulations to enable these transitions, as they, too, are suffering from the financial downturn and lack of income.

What are you expecting for the second half of the year? Looking at the situation in South East Asia at the moment, especially in India, where the second wave is hitting really hard, we can only hope that in the second half of the year the situation will be more in control and travelling restrictions will be lifted so that hopefully the industry can attend networking events again, even with limited capabilities. In the meantime, as online businesses are continuing to grow, we are seeing more and more online or virtual events, and we are also happy to be hosting our own East and West virtual expo to provide a safe and convenient platform for providers and operators to stay connected. Do you have any new products/ initiatives focused on the Asian markets? We are constantly working on expanding our products portfolio and following the market trends. At the moment, we are actively working on localization and also adding new games in our Live Casino product such as Asian Baccarat and

Dragon Tiger with multiplay modes and many other interactive features for the players and configurations for the partners. Esports has been pretty strong the whole season. We’ve increased our coverage to 22,000 matches monthly, added a new user-friendly layout for mobile and saw a 300 percent bet amount growth. How much opportunity do you see in the Philippines opening its online market (PIGOs)? This is a huge opportunity for the landbased casinos in the Philippines, and actually a long awaited one, so we can say that this will result in very good increase in traffic for the land-based casinos who were limited to their physical location and premises. Now they can target a bigger range of players with the PIGOs, and, of course, get back the revenue they lost during the pandemic.

GIESECKE & DEVRIENT

G+D walks customers through difficult times

he pandemic has had a huge impact on casinos in Southeast Asia, and the market recovery depends on both the current pandemic situation and lifting travel restrictions. We expect Macau will be the first city to recover as travelers are gradually returning from Mainland China. However, Singapore has slightly regressed in previous weeks; Malaysia, the Philippines, and Cambodia are still in lockdown in certain areas; and Korea and Vietnam are experiencing a daily increase of positive cases. Because of this, some casinos

Asia Gaming Briefings | June 2021

are only in partial operation and revenues have dropped significantly. The recovery of the tourism industry still needs to wait until the end of 2021 or 2022. G+D is a long-term business partner of casinos. During the pandemic, we have supported our customers like a trusted partner walking through this difficult time together. In addition to providing service support, we have helped casinos plan for future count rooms and cage equipment once the market recovers. G+D provides various banknote processing and

automation solutions such as BPS M5, BPS C5 with BPS Connect Casino for count rooms, and BPS C2, BPS C1, BPS B1 for cage equipment. The combination of the equipment depends on the needs of the casino. We also provide our knowledge and experience to assist customers with future planning. Recently, Philippine Inland Gaming Operators (PIGO) received approval to provide online gaming that allows their existing registered members to play table games and electronic machines within the Philippines. The scheme has helped casinos boost their revenue during the pandemic, especially casinos that could not open fully, and it has served as a good opportunity for casinos to develop online sports betting. Sports betting is also a hot topic in Japan. It is only legal for races involving horses, motorboats, motorcycles, and bicycles. However, the pandemic also prompts the discussion of opening sports betting to other popular sports, such as football and baseball, both of which are huge potential markets and could help Japan’s economy.

SUPPLIER SPECIAL REPORT 43 IGT

New products greet customer return

hat kind of recovery are you seeing in the land-based industry in Southeast Asia? As we all know, the industry has been hit hard, and some countries have had more prolonged and repeated impacts than others. So, it’s been a two-stage ‘recovery’ with Macau now leading the way, and other countries seemingly recovering and then going backwards into lockdown again. We are very hopeful for our customers that we will see a stronger bounce back on reopening as we have seen in other countries, such as Australia and in the USA. What are you expecting for the second half of the year? Well, we know that there will be operational challenges for not only our customers, but also for IGT. Social distancing and travel restrictions will apply for some time to come, into 2022, so we expect that may limit our customers’ ability to invest in as many new gaming upgrades.

Also, there are global shortages in the supply of electronic components such as semiconductors that is affecting every industry – from Apple to Ford – and this is impacting gaming equipment supply too, so that presents another challenge for us all. At IGT, we’ve been continuing to develop new games adapted to the COVID environment and new systems functionality such as more cashless tools to help our customers do more with less. We’ve also been working closely with customers to provide updates to their gaming fleet so as players come back, they are seeing new products that give a great experience such as our popular Ying Cai Shen link. Do you have any new products / initiatives focused on the Asian markets? Yes we are launching a series of innovative games designed specifically for Asian markets, one of which we are particularly excited about is

Fire Dragon. Fire Dragon has a fantastic feature to get more players into slot machines by giving them the faster gratification available on table games. Players can get Instant Free Games by increasing their bet with the Dragon’s Touch – taking them straight to the feature. Also when you look at our class-leading ADVANTAGE system solution, we’ve been working throughout the pandemic on adding to our suite of contactless and cashless system products – now customers can be COVID compliant, keeping their customers safe while boosting their efficiencies and revenues. We have also seen countries like Australia, where casinos are announcing that they will be phasing out cash – our ADVANTAGE solution set is ready for this.

INTERBLOCK

Eyeing convergence opportunities as market challenges remain

nterblock says it’s still seeing challenging times across Asia, with the ongoing travel restrictions forcing jurisdictions to extract as much value as possible from local markets. The company welcomes the Philippines’ lead in allowing local IRs to begin accepting online bets and says this may be a new area of opportunity. What kind of recovery are you seeing in the land-based industry in Southeast Asia? There has never been a more challenging time than the year 2020, and halfway through 2021, there are still challenges that lay in waiting ahead. While the COVID-19 vaccines are being rolled out worldwide, many countries in Asia are still struggling to keep their borders tight and keep community transmission under control. With this in mind, any kind of recovery for the land-based gaming industry is dependent on the resilience of the local domestic market. In contrast, the international tourism market is still heavily restricted with limited travel bubbles. A sign of recovery is the relaxed domestic travel restrictions, which have included the promotion of staycations to support the local industries, such as the increased number of visitors to Macau, increased hotel occupancy in the Philippines at IR casinos and improving local club visits in Malaysia where players cannot travel

abroad to spend at other gaming destinations. Expats who cannot travel back to their home countries are another source of recovery for the gaming clubs in Vietnam. Countries such as Laos and Cambodia may take longer to recover while international borders are still closed. What are you expecting for the second half of the year? The second half of 2021 will be very challenging due to the ongoing lockdown situation in Laos, Cambodia, Singapore, Nepal and India. Hopefully, more travel destination bubbles will be open, allowing vaccinated travels.

How much opportunity do you see in the Philippines opening its online market (PIGOs)? Allowing the domestic online gaming market in the Philippines is a very positive move. The IR casinos can reach out to their members beyond the property boundaries. There would be opportunities for us as a manufacturer to adapt our current technologies and innovations once all the requirements are defined.

Do you have any new products/ initiatives focused on the Asian markets? We are focused on delivering innovative products such as the Universal Cabinet with a suite of ETG games such as Roulette, Sicbo, Craps, Blackjack and Baccarat with a single deck and double deck of flip flop cards. In addition to our popular mechanical Roulette technology, we now offer a Golden Ball feature in the MiniStar platform or stadium settings. Another unique feature for the roulette game is the Dual Roulette functionality, where two Roulette wheels synchronized to produce alternating results allowing players uninterrupted gameplay.

Asia Gaming Briefings | June 2021

SUPPLIER SPECIAL REPORT 44 JADE

Looking forward to the boom times

e have seen little change to land-based operations at the halfway point in 2021 and I expect this to continue through the remainder of the year. We will start to see a slow recovery in 2022 once vaccinations reach the masses and 2023 will be a BOOM year for the gaming industry in Asia.

The Philippines will lead the boom as the Philippine Gaming and Amusement Corp. (PAGCOR) has been proactive in allowing landbased properties to start offering both tables and slots online. Over the next 12 months this will allow the land-based properties to have a business continuity plan and use their online offering to

grow their customer database. Those properties with the best marketing and branding for their online product will lead the land-based boom in 2023. Over the next 12 months the properties’ social media assets will be critical for developing a strong customer base. PAGCOR has also regulated to allow sports betting to go online within the Philippines and Jade Sportsbet is preparing its remote gaming services to go live in the next few weeks. This together with its retail offering will drive its sports betting business. Jade Sportsbet has returned to Okada Manila and will be launching new products i.e Order Bet, Cash Out and Bet Builder. Since the start of the pandemic Jade has been building its product base in the area of online services and these include the integration of on property live dealer to a full online casino and sportsbook book platform. Jade is available for consultancy to land-based properties that want to learn how to ∫ between land and the internet.

JUMBO

Jumbo releases new products at G2E ASIA Online

OVID-19 has prompted faster digital transformation among companies. How to stand out in the global market has become the main issue for businesses and countries across the globe. As the world is still under the threat of the pandemic, Jumbo Technology has been unable to attend trade shows abroad. Global Gaming Expo (G2E) Asia is an online marketplace for gaming and entertainment vendors worldwide to interact and communicate with one another. Through this platform, Jumbo Technology demonstrated its latest products and games. The expo was held online on May 25. Allen Hsu, Associate Vice President Jumbo, said, “We appreciate G2E Asia for providing this

Asia Gaming Briefings | June 2021

platform to let us align with the global trend, and release our new products online without being restricted by the epidemic. Clients and audiences around the world get to participate in this grand activity.” This year, Jumbo’s ARK-65 GLI Six-Seater Multiplayer Fishing Game was the highlight that caught people’s eyes. Immediately upon release, it became one of the products that gained popularity in the industry. The new game, Ocean Phoenix, features the Mighty Phoenix, the Elegant Mermaid, the Ancient Crocodile, and the Flawless Octopus. With the feedback from the players and the advancement by the R&D team, the game has been improved to provide an unprecedented gaming experience. When the players successfully capture the Phoenix, players will be pampered with dazzling visuals as the phoenix soars high into the universe by leveraging special effects. The Elegant Mermaid is the ocean goddess of love. Upon successful capture, the elegant Mermaid will play the harp and bubble up all the species on the field, awarding players with many points. On top of that, one cannot miss many other jackpot link games by Jumbo. Jumbo launched this year the Money Bull of the Jin Fa Cai jackpot link with a 43-inch curved screen.

It symbolizes fortune in the year of the Ox, which conquers difficulties and brings good luck. Spin & Stack was added in the game to let players collect coins to trigger higher levels of challenges. In the Fortune Treasure and Golden Horse Treasure of the Long Yi Fa jackpot link, Hold & Spin was added and that has proved highly popular among players. It is expected that these types of games will become hot products at casinos in Asia. Other than the fishing games and jackpot link games, Jumbo also released the new J-Multi series for the Multi-Game ETG. It provides more betting options for Baccarat, Roulette, and Sicbo. In particular, augmented reality (AR) was added to the J-Multi roulette. It allows players to better pick up random pay and the betting situation in each game. At the expo, Jumbo’s business partners also showcased new functions for casino management systems, which include a bonus system that connects the bonus systems across casinos to quicken the accumulation of the bonus; The customized marketing campaigns allow gaming suppliers to flexibly arrange the schedule to attract more players; Operational advice, including risk control, is provided for gaming businesses.

SUPPLIER SPECIAL REPORT 45 JCM GLOBAL

Looking for a post-pandemic bounce back

CM Global General Manager Asia Pacific, Ian Payne, said the recovery from Covid in Southeast Asia has been slow. However, JCM hopes that once the pandemic subsides the region will see the same bounce back due to pent up demand as the U.S. In the meantime it’s helping clients to protect revenue and assets with technology.

What kind of recovery are you seeing in the land-based industry in Southeast Asia? The economic recovery in Asia is moving forward slowly on a case-by-case basis in countries across the region. We are pleased to see how Macau is steadily recovering with more visitation being opened to Chinese provinces. We continue to work closely with our customers in southeast Asia, in the larger APAC region, and around the world, helping them as best we can to move forward and to protect their revenues and assets with our technology solutions. What are you expecting for the second half of the year? Southeast Asia will have a slow recovery of land-based casino revenue; however, once Covid is stable and international travel resumes, we are hopeful that will help increase land-based casino revenue. While consumer preferences are always evolving between land-based gaming and online gaming, JCM hopes our land-based APAC partners experience a surge in post-

pandemic business due to pent up demand for travel, socialization, and hospitality, similar to what is currently happening in the U.S. Do you have any new products/ initiatives focused on the Asian markets? We are helping our customers migrate from the legacy UBA series to the more technologically advanced products like UBA Pro and the iVIZION. Security is always a top priority, and these products feature superior sensor packages and patented anti-stringing technologies. They also have faster noteto-note speeds and a 2- or 4-way barcode reader, giving operators greater flexibility. Of course, tables are a traditional part of Asian gaming, and we are helping customers secure their table transactions with CountR’s TITA system. This is a payment solution that enables TITO and POS transactions, along with high-speed and high security currency validation using JCM’s MRX bill validator, all directly at the table game.

LT GAME

Live multi-games outperform

“T

he COVID-19 pandemic has demonstrated how drastic and rapid changes on the world’s business environment can be brought by a single incident. The days ahead are no doubt full of challenges, but there are always opportunities co-existing in the midst of such difficulties, particularly in the region of Southeast Asia where more integrated resorts are scheduled to open, for instance in Japan, Cambodia, Vietnam, etc. Macau is also reviewing all aspects of the application of gaming concessions in an effort to perfect the market, which shall contribute to the

city’s economy bringing further opportunities,” said Jay Chun, Chairman and Managing Director of Paradise Entertainment. It is encouraging to see Macau’s GGR rose 1,014 percent year-on-year in April 2021, according to DICJ figures. For the remaining months of the year, Chun remains cautiously optimistic that land-based gaming markets should be proceeding along the recovery path. Due to the stringent travel restrictions, gaming patrons were almost filtered out from crossing the borders before. Thanks to the respective governments of Macau and the PRC, who have continued to perform admirably throughout the pandemic with proactive and decisive leadership in containing the spread of virus, the crossborder resumption allowed gaming patrons from the Mainland to visit Macau during the recent China “Golden Week” holiday. As the pandemic situation in Hong Kong stabilizes, it is generally expected that travel restrictions between Hong Kong, Macau and the Mainland will be lifted soon and visitation and spending in Macau will respond positively. As always, Paradise operating under its trade name or brand “LT Game”, is dedicated to continuous innovation in the gaming equipment

industry using top-notch and innovative technology to create good electronic gaming products that are primarily catered to the mass market. Despite the challenges imposed during the pandemic time, Chun observed LT Game’s flagship product, the live multi-game machines, performed exceptionally well. This is due to the distinctive features of these machines being capable of aligning with the specific measures imposed by the DICJ to maintain a safe distance between gaming tables, and between gaming machines. In respect of development and deployment of LT Game’s own slot machines, its new Jackpot Series has recently been approved for the Macau market, which contains a group of slot games that are straight-forward, simple and perfectly suited for high denomination areas with nonprogressive, standalone progressive and linked progressive options. Slot games of the series have received encouraging results when the products were launched in the North American markets. LT Game’s other brand-new slot game, namely, “TEKKEN” series has also hit the market. Being a famous Japanese media franchise, TEKKEN centered on a series of fighting video and arcade games, which have been very popular with players over decades.

Asia Gaming Briefings | June 2021

SUPPLIER SPECIAL REPORT 46 PRAGMATIC PLAY

Pragmatic aims to lead Asia market growth

ragmatic Play is one of the top content providers to the iGaming industry. With a multi-product portfolio of over 200 titles across slots, live casino, Fishing Games, bingo and virtual sports, Pragmatic Play continues to focus on expanding its footprint in emerging markets across the globe. This has put it in a position to enjoy sustained growth. The provider’s Live Casino products are among the most widespread in the industry, and nowhere more so than in Asia. Games such as Baccarat and Mega Roulette are hugely popular, delivering immersive experiences that replicate the brick and mortar experience, utilising the very best in modern audio-visual technology. Highly trained dealers, 4k cameras and artfully crafted environments ensure that its games are delivered to a top standard, offering a level of immersion unmatched in the igaming sphere. The expansion of the provider’s Live dealer range has included the recent ‘Mega’ series of

games, Mega Roulette, Sic Bo and Wheel, all of which incorporate a slot-style random multiplier, in some cases of up to 500x. These hugely exciting titles are a core part of the supplier’s growing Live Casino offering, with the simple yet engaging Dragon Tiger being added to the portfolio. Dragon Tiger is a card game where players bet on the highest card to be drawn – Dragon or Tiger. With ties, side bets and lots of features available, the simple gameplay is aimed at fans familiar with Baccarat and others just looking to enjoy a unique Live Dealer experience in a purpose-built studio. With so much room for development in the Asian markets, Pragmatic Play isn’t resting on its laurels. The increasing acceptance of igaming has seen a slow change in attitude towards regulation, with more and more markets on the cusp of delivering legislative roadmaps, which will truly propel the market to a period of hypergrowth – something Pragmatic Play intends to be at

the forefront of. With an intense roadmap of products launched regularly, the vendor has never had a wider range of products to engage players with, and this is something that it intends to continue doing. From Megaways™ games to classic slots, localised Roulette to innovative Live Casino products and Fishing Games to fast-paced virtual sports, the multi-product provider has never been more primed to capitalise on the growing popularity of igaming within the world’s largest continent. With an innate understanding of the demands and requirements of some of Asia’s most exciting markets, the vendor’s presence in the region is set to soar, bolstered by a thrilling product suite. With so much more scope for growth in terms of markets size, Pragmatic Play is set to reinforce its status as a leading provider to operators globally and continue to be at the forefront of innovative products for some time to come.

PINNACLE

Esports View to provide new look games

he professional esports scene grew out of the East Asian heartlands and it’s these same markets that have enabled esports betting to now sit at the top table of sports betting brands worldwide. We’ve come a long way since the proof-of-concept offerings from over a decade ago. They may have lacked in varied content, but they did demonstrate a lot in the way of potential, both in the demand for esports betting content and the scope of the future product. With many of these product improvements realised, we’re now much better positioned as an industry to persuade future esports bettors that we have something for them. The Asian fan base propelled esports into the stratosphere, and the same communities are now also having a huge sway on the direction of the esports betting product. Knowing the unique demands of this audience, we’re continuously looking for ways to shape our own esports product in their image, not merely reskinning traditional sports and tweaking the same markets and bet interactions. The Esports View is set to be a major step forward in providing the Asian esports bettor with a more immersive betting experience.

Asia Gaming Briefings | June 2021

Having incorporated significant feedback from both existing esports bettors and those who follow and stream the likes of CS:GO and Dota 2, but are yet to bet on them, we’ve developed a unique layout that specifically suits their betting requirements. Set to go live in Q3, the Esports View isn’t just an alternative odds layout, it’s an

investment in the esports community and a showcase of the best esports betting content in one easily accessed location. We’re excited to bring it to market, delivering partners in East Asia a unique means of driving trust with the esports audience, as well as a fast track to becoming standout esports betting brands in their own right.

SUPPLIER SPECIAL REPORT 47 PLAY’N GO

Play’n Go introduces Prism of Gems

ur latest release gives you much more than you bargained for! Prism of Gems is a 5x3 cascading payways slot with plenty of great features to give players more entertainment in more ways than one. The game is the latest addition to our ‘Gems’ Series of games, following Frozen Gems and Perfect Gems. Our game series provides players with a new way to enjoy the type of entertainment they prefer while still seeking out new experiences without worrying that they won’t enjoy it. Each title within a series is a standalone game with its own stories, designs and features. However, they are all interconnected by themes and certain mechanics. For instance, if a player enjoys games with expanding symbols, they can pick any game from our Dead series, like Rise of Dead Legacy of Dead or Cat Wilde and

the Doom of Dead. They know that they’ll get the feature that they most enjoy while experiencing other fun features and still having various games to choose from. The Gems series all feature a splitting symbol feature. In Prism of Gems, there is a horizontal bonus reel that can affect the main grid in various ways. Any symbol that lands on the bonus reel will instantly split identical symbols that land on the corresponding reels below, increasing the payways and giving more ways to win. But they will also form part of the payways, meaning this game can go from 576 payways all the way up to 3,087 and the potential of a 1000x win multiplier! Now, any fans of the previous Gems games can enjoy the splitting symbols and extra payways, alongside the fun of a cascading gridslot and a fun free spin feature. They can trust the product based on

what came before, meaning no sticking to the same old games and getting bored, or trying something new and feeling dissatisfied. Slot gaming is evolving as an entertainment industry; it’s time to evolve the way we entertain.

Asia Gaming Briefings | June 2021

SUPPLIER SPECIAL REPORT 48 SCIENTIFIC GAMES

SG talks convergence, virtual events and evolving Asian tastes

cientific Games’ leading decision makers in Asia offered their views on developments in the market and what we might expect from the year ahead in the suppliers’ inaugural SG Asia Summit & Virtual experience. The Q&A sessions offered insights into some of the key questions being asked by casino operators around Asia and the world. Below, we’ve summarised some of the most interesting takeaways from these sessions. 1.Virtual will stay, but physical trade shows will be essential When asked whether Scientific Games’ digital conference would become an annual event, and whether the company believes that digital events will be the way forward, SG’s Vice President and Managing Director Asia Ken Jolly reserved his optimism for digital conference platforms over the long term. “I do believe that virtual [conferences] is the situation we’re in because of covid,” said Jolly. “And virtual is something that will last for a couple of years but at some point we’re going to want to be face to face again. I think the trade show will come back. Whether it will be as big or large or as bold in the past remains to be seen,” he said, adding that the expense of physical trade shows are enormous. Adrian Halpenny, SVP of the Australian and Asian division said he believes the virtual format will remain as part of the “suite” to engage customers. In Asia, there is only one key trade show to connect with customers, said Halpenny, adding that [a virtual trade show] will add more opportunities to connect with customers. 2. Land-based/online convergence to dominate When the panel was asked how the shift to online / digital during covid had impacted landbased gaming, the panelists said digital wasn’t seen as a threat, but more of an opportunity to grow the industry. “This whole covid situation has triggered a convergence between land-based and online,” said Halpenny. “When lockdown came in , our digital business did well. However, when landbased markets reopened, the money flowed back in, and we saw a lot of pent up demand.” This shows that both online and landbased offerings can be relevant concurrently, said Halpenny. “The people we’ve brought on board are really tailored to converging our online digital

Asia Gaming Briefings | June 2021

and land-based offering and bringing into a 360 view of the player.” Halpenny said he’s seeing a lot more landbased gaming operators getting concessions to start offering their products online in Europe, Australia and the US., and this is also slowly coming into Asia. “I don’t see it as a threat. It’s an opportunity to grow our industry,” he said. Nathan Drane added that around 30 percent of Scientific Games’ online games are based on land-based game titles, which has seen immense growth over the last 14 months. 3. Returning customers will go back to favorites Halpenny, describing the uptick in revenues in Australia when properties reopened said

that he saw returning customers going back to their favorite games, with revenues up from 2019 despite less players on the floor. That being said, he expects the increased distancing between machines to remain even post-covid. Halpenny also notes that while the more hardcore players returned initially, the post covid enviroment will see a more diverse customer base heading back to gaming venues – who will be also interested in other aspects of the venue such as entertainment, food & beverage, etc. 4. Game diversifying outside of Chinese themes, linked progressives to rule In a poll conducted during the Game Design Panel, around 52 percent of respondents

SUPPLIER SPECIAL REPORT 49

believed that players would be interested in Chinese, Asian and a variety of Western themes, as opposed to only Chinese, or only Chinese and Asian themes. “The market is clearly evolving in Asia. There is a level of sophistication and diversity that was seen as risky ten to twelve years ago,” said Peter Wilkins, VP of Product Management at SG. “With technology and efficiencies, the ease of bringing a product from one of SG’s global studios are [now] a lot easier,” said Wilkins. “Operators can now afford to experiment with games that are slightly off the convention that they’re used to.” “We’re still very passionate about Chinese and Asian themes,” added Drane. The poll results do open up some options. It doesn’t mean we’ll

flood the market with Western themes, but it means we can hand select key themes and key mechanics and bring them to the market.” When asked where are the biggest opportunities in SG’s game product portfolio, a vast majority of respondents picked linked progressive. Interestingly, none of the poll respondents picked “Licensed Content”. 5. Players moving from table games to ETGs during covid During the Tables Games Panel, the panelists were asked whether they had observed players moving from tables to ETG during the pandemic, and what revenue growth has been seen in respective regions. Rob Bone confirmed there was definitely

an increase in players moving from live tables to ETGs for a variety of reasons, not just due to a restriction on the number of players allowed to gather at tables. Bone said that casino patrons have seen ETGs as a much more hygienic terminal than any other in the market. “Casino operators have moved terminals to allow for social distancing and have been very conscientious about cleaning these units,” he said. “As a result players have jumped across to electronic table games.” This has been the case especially for Singapore, which has seen a massive increase in electronic table game play, well above normal levels pre-covid.

Asia Gaming Briefings | June 2021

SUPPLIER SPECIAL REPORT 50 SEGA SAMMY

Focusing on versatility and performance

ega Sammy is seeing a patchy recovery in Asia’s markets, but says once social distancing measures are removed, there appears to be underlying pent-up demand. The company has been active with projects and product placements and is finding its stand-alone electronic table game product is highly suitable to the operating conditions imposed by Covid-19. What kind of recovery are you seeing in the land-based industry in Southeast Asia? Due to the pandemic, there are still ups and downs in the situation of the Southeast Asian (SEA) market. We do see signs of player demand picking up when Covid is under control in some regions. The land-based industry in SEA always had shown strong growth in preCovid times, but since then these operators are actively revising their strategies, with all having individual challenges due to the varying degrees of limitations. We expect that once the Covid situation eases, SEA will come back strongly.

stopped developing new products during the pandemic, so we have a wide range of products ready to go for our customers. We will continue to work together with operators to bring our new games for their floors that cater to their specific needs. Do you have any new products/ initiatives focused on the Asian markets? Our Standalone ETG product is produced especially for the Asian market. We focus on “Versatility” and “Performance.” Many operators are taking advantage of this flexibility of our product to maximize performance. For instance, social distancing requirements can be achieved

more easily with standalones as they can be banked in creative ways, that allows more product to be activated. Performance is another important factor with us, as we have a track record of 100 percent trial pass rates across a variety of venues (IRs, local slot clubs). Due to this our Standalone ETGs are well accepted by players so will still receive steady orders from operators despite the pandemic. In the same way, we now have a variety of slot games focused on the Asian market such as “Dragons Foo”. A Popular ‘Dragons” themed game with the feature of Wild Addition. Our goal is to work with operators through these challenging times by bringing valuable products to their floor.

What are you expecting for the second half of the year? Just like other regions, it depends on the varying dynamics of the pandemic. How each region deals with limitations such as border closures, quarantines and social distancing measures is as diverse as there are countries. A positive thing is that we have been active with many projects and product placements throughout this time. We also have never

ZITRO

Dragon Lamp enters the Philippines

itro has introduced its Dragon Lamp video bingo product to the Philippines. Zitro said the success of Dragon Lamp began in Mexico and Spain and is gradually spreading to other countries around the world. “Our video bingo has always been overwhelmingly successful with players in the Philippines, and now Dragon Lamp has come to further increase the hype for our machines,” says Nadège Teyssedre, Zitro’s EMEA Sales Director. “Progressives can now be won much more frequently, as you don’t have to do ‘bingo’ to win the Jackpot. In addition, we incorporated completely new games with highly sophisticated graphics and sounds, an unmistakable hallmark of the Zitro brand and which enchants the Filipino players”, Nadège concludes.

Asia Gaming Briefings | June 2021

SUPPLIER SPECIAL REPORT 51 ULTRAPLAY

UltraPlay offers advice on establishing esports in Asia

dvanced betting solutions provider UltraPlay has recently took part in the SiGMA Roadshow Manila conference, where it covered one of the hottest topics – How to establish a profitable eSports betting brand in Asia. The company’s CEO Mario Ovcharov explained how it all started for UltraPlay and what kind of challenges there are in the region in terms of an eSports betting operation. “UltraPlay has been one of the early adopters of eSports betting. Back then we decided that we need to have a proper offering of eSports with pre-match and live odds. Since then we have won 20 international awards, we have a big team of traders and our product is one of the most recognized in the eSports industry.”, says Mario Ovcharov, CEO of UltraPlay. In terms of differences, starting off from the top would be the games that are more popular in the Asian region compared to Europe. CS:GO is not so dominant in Asia, it was lately adopted on the continent, where in

Europe and America is among the top titles for over 20 years. Secondly, there is a difference in the devices and the localization of the websites could be challenging. People in Asia are using different browsers, blockages, languages in each of the countries that create local environments. They can be targeted separately later on. There is

a specific language, and views of the offered markets on the website, the so-called Asian view. The list of challenges for every new eSports betting website could be long and operators should have a trusted partner by their side. UltraPlay is well-established in the Asian region and over the past year of pandemic has supported many companies out there.

WIN SYSTEMS

Adding value through innovation

IN SYSTEMS is a leading technology supplier of management solutions, electronic roulettes, and slot machines to the casino and lottery industries, with 25 years of experience and presence in more than 60 countries around the world. The company’s products allow you to build a seamlessly integrated, profitable, and flexible casino floor with

best-in-class customer support and unbeatable adaptability for your business requirements. During the last year, the company has been working on two main priorities at the forefront: the first being helping casinos to maximize their income and profitability in such a complex business environment. Our second priority was to facilitate the efficient accomplishment

of hygiene and social distancing measures, both for players and for the casino staff. As an example, the new PlaySafe functionalities have been developed within our casino management system Wigos, which allow casinos to achieve both objectives at once. In the Gaming division, too, Win Systems works very hard to enhance player’s experience thanks to innovation that adds value to players and boosts their excitement when they return to the casinos and gaming venues. Another great example is the Gold Club Huo Long electronic. The Huo Long roulette has been specifically designed for the Asian players in casinos worldwide. It is based on the traditional roulette game, thus incorporating betting elements that are related to the Chinese culture. Even the gaming layout has the shape of the figure eight, which is related to luck in the ancestral Chinese tradition. As an additional feature, the Zero 50/50 exclusive game allows players to recover their bets after each spin, increasing the fun and odds to win. To maximize flexibility and chances to attract new public, players can choose whether they prefer to play traditional lottery or Huo Long roulette at any time and in each gaming position individually.

Asia Gaming Briefings | June 2021

INDUSTRY OPINION 52

Sudhir H. K a l é*

Does the Crown/Star merger pass the Drucker test? Peter Drucker (1909-2005) was arguably the most influential management scientist who ever lived. He was the author of some seminal books on management such as Practice of Management (1954), Managing by Results (1964), The Effective Executive (1967), and The Age of Discontinuity (1969). Forbes magazine labeled Drucker as the “Einstein of Management.”

n 1981-82, Drucker articulated his Six Rules of Mergers and Acquisitions. We shall look at each of these six rules and evaluate the proposed StarCrown merger according to these rules.

Rule 1 According to Drucker, a successful merger or acquisition should be based on a sound business plan, not mere financial analysis. All information that has been disclosed in the Star-Crown merger thus far has been assessed solely from a financial viewpoint. Recall Harrah‘s largest single expansion in 2005, when it acquired Caesars Entertainment, Inc. for $10.4 billion. While the merger probably made financial sense, the marketing and operating strategies of the two companies were far too divergent to be placed under single ownership. Harrah’s operating model was based on the slicing and dicing of data whereas Caesars strategy was based on product differentiation. The acquisition resulted in huge debt for Harrah’s, forcing the company into bankruptcy.

Rule 2 The attractiveness of a merger or acquisition, according to Drucker’s second rule, needs to be assessed along what the company suggesting the merger will contribute to the company being acquired. The Star Entertainment Group, if merged with Crown, would add the new markets of Queensland (Gold Coast and Brisbane) and Sydney to regional monopolies of the resulting behemoth, making it the undisputed market leader on the Australian casino scene. Apart from scale, there is little that The Star could contribute to the merged entity. Rule 3 Successful mergers or acquisitions, like all alliaSuccessful mergers or acquisitions, like all alliances, must have a common core of unity. Such unity could be found in markets, technology, or culture. Of these three factors, cultural unity is most significant. Over 80 percent of mergers fail to achieve their objectives, and culture is often

Peter Drucker’s six rules

Asia Gaming Briefings | June 2021

The successful acquisition must be based on business strategy, not financial strategy.

The acquirer must respect the business, products, and customers of the acquired company, as well as its values.

The successful acquisition must be based on what the acquirer contributes to the acquisition.

The two entities must share a common core of unity, such as markets and marketing, or technology, or core competencies.

The acquirer must be prepared to provide top management to the acquired business within a fairly short period, a year at most.

The successful acquisition must rapidly create visible opportunities for advancement for both the people in the acquiring business and people in the acquired business.

INDUSTRY OPINION 53

a contributing factor to most of these failures. Addressing the issue of culture in alliances, Mitchell Marks and Philip Mirvis, experts in organizational culture, write, “On the human side, studies document how cultural differences can give rise to ethnocentrism, stereotyping, and the belittling of counterparts between members of combining top management teams.” Culture at The Star could not be more different from culture at Crown. James Packer’s loathing for The Star and the way the company operates is well known and well documented. Given this inevitable culture-clash, it is hard to see how the two companies can form a successful union. Rule 4 In discussing the third rule, we mentioned the disdain Crown’s major shareholder—James Packer—has for The Star. The fourth rule holds the acquirer needs to respect the products, customers and core values of its target. The two companies operate at different levels of customer centricity. The Star has been on a binge of costcutting and slashing headcount. Crown Resorts is largely about offering a premium product. These fundamental differences in business orientation make it highly unlikely for the two companies to have mutual respect for each other’s values. Rule 5 Should the merger between The Star and Crown Resorts go ahead, The Star should be ready to replace a significant portion of

current executives at Crown Resorts, according to Drucker’s fifth rule. Capable executives at Crown who do not hold their counterparts at The Star in high regard may want to quit and seek their fortunes in places such as New Zealand, Macau, the Philippines, or Vietnam. Does The Star have a ready supply of high-level executives to fill these spots? Based on the current talent pool at The Star, such a scenario seems extremely unlikely. Rule 6 Drucker’s last rule says that the merger should create opportunities for advancement across lines. If basic synergy across the two organizations is lacking, an “us versus them” mentality is bound to develop among employees of the former organizations. Sometimes it can take a whole generation before these invisible but distinct identities are merged. It is therefore imperative that, within the first few months after the acquisition, several executives on both sides are promoted to a better job across the lines. This way both sides see the acquisition as an opportunity for professional advancement. Should the Star-Crown merger go ahead, an exchange of executives at various properties of the combined organization would be paramount to the success of the merged organization. Conclusion So, would the merger of The Star and Crown resorts be a success? If Peter Drucker’s

six rules are applied as the acid test for likely success, the chances of a happy union appear slim. But not all mergers have to meet all six criteria to be a successful union. The six rules aside, reservations on the part of the Australian Competition and Consumer Commission (ACCC) could also be a huge barrier to the merger going ahead. Furthermore, a merged Star-Crown juggernaut would effectively reduce the bargaining power of individual Australian states in offering or renewing casino licenses. Finally, the interests of the ordinary casino customer also need to be considered. The currently prevailing regional monopoly in Australia has resulted in a dearth of customerorientation on the part of Australian casino companies (more evident at The Star than at Crown Resorts). A combined Star-Crown entity may further feed management hubris at the cost of the customer experience and player reinvestment. I believe that the casino industry in Australia requires more—not lesscompetition if the interests of the customer are to be served. Sudhir H. Kalé, Ph.D. is Founder and CEO of GamePlan Consultants, a boutique consulting company that has advised casino clients on five continents. He has written around 150 articles on the marketing and management of casinos. Sudhir has followed the Australian casino industry very closely for over 25 years. You can write to him at skale@gameplanconsultants.com.

Asia Gaming Briefings | June 2021

CALENDAR OF EVENTS 54

JUNE

SEPTEMBER

SBC DIGITAL NORTH AMERICA (VIRTUAL) 9-10 June 2021 https://sbcevents.com/sbc-digital-north-america

JULY PHILIPPINES ASIA GAMING EXPO 29-31 July 2021 World Trade Center and SMX Convention Center, Manila https://www.phil-asiangamingexpo.com/ SPICE SRI LANKA 28-30 July 2021 Colombo https://www.sportsbettingevents.com/spice-sri-lanka

AUGUST AUSTRALASIAN GAMING EXPO 10-12 August 2021 ICC, Sydney https://austgamingexpo.com/

SBC SUMMIT 21-24 September 2021 Fira Montjuic, Barcelona https://sbcevents.com/sbc-summit-barcelona UKRAINIAN GAMING WEEK 21-22 September 2021 Kyev, Ukraine IGB LIVE 28 September - 01 October 2021 RAI, Amsterdam https://www.igblive.com/igb-affiliate-amsterdam

OCTOBER CYPRUS GAMING SHOW 04-05 October 2021 Nicosia, Cyprus https://www.eventus-international.com/cyprus-gamingshow GLOBAL GAMING EXPO 04-07 October 2021 Sands Expo, Las Vegas https://www.globalgamingexpo.com/

Become a member EXCLUSIVE ACCESS TO AGB INTELLIGENCE BE THE FIRST TO RECEIVE OUR DAILY BRIEFS PRIORITY REGISTRATION FOR OUR EVENTS

Asia Gaming Briefings | June 2021

NOVEMBER G2E ASIA 9-11 November 2021 Venetian Macau https://www.g2easia.com/

DECEMBER WORLD GAMING EXECUTIVE SUMMIT 6-8 December 2021 W Hotel, Barcelona https://www.terrapinn.com/conference/world-gamingexecutive-summit/index.stm

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Asia Gaming Briefings | June 2021

INDUSTRY OPINION 56

Susan O’Leary*

Alderney: an online safe harbour amidst Asian market turbulence With over 20 years’ experience of the eGaming industry, the Alderney Gambling Control Commission is well placed to assist Asian operators to navigate the ever-changing eGaming landscape.

ver the past 12 months we’ve witnessed a radical shift in Asia’s gaming landscape, highlighting instability across the market. Covid has been just one contributing factor, adding to the existing regulatory inconsistencies across the region, uncertainty in the Philippines and now pressure from Beijing, leaving the gaming industry in a precarious position. The differing ways in which Governments across the world are handling the COVID crisis has highlighted flaws in some business set ups and potential concentration risks for those with operations in one

Asia Gaming Briefings | June 2021

sole jurisdiction, especially where that jurisdiction proves restrictive to business continuity. We’ve seen this play out in the Philippines, where POGOs affected by the seemingly endless lockdowns, changeable eGaming regulations and Government management of COVID have been forced to look outside of their home ground for solutions to allow them to continue to operate. Many have sought out the experience and consistency offered by a jurisdiction like Alderney who understands the industry, and the challenges faced by global operators. It’s not just the Philippines though, the unpredictable

INDUSTRY OPINION 57

approaches to eGaming regulations across Asian countries has left operators in a state of flux for some time now. The recent news from Beijing sent a clear message to the industry, in no uncertain terms, and we’re already seeing businesses now taking steps to diversify and change direction. In times of such uncertainty and change, many businesses have taken the opportunity to look for a new or additional base providing much needed stability, with a strong, respected regulator and steady political backdrop ranking high on the criteria for choice of jurisdiction. Throughout the pandemic, Alderney eGaming, the strategic and developmental arm of the Alderney Gambling Control Commission (AGCC), has been advising gaming businesses, suppliers and advisors, many from Asian countries, who have taken the decision to work with a regulator who understands their business, and has experience of their markets. Much of the work for 2020 and 2021 has

centred around those who are choosing to relocate, with Alderney eGambling assisting them not only with the licensing element, but also to strategize and plan the logistics of the move. For some, relocation has meant a satellite office to support offices in other established jurisdictions. For others it’s a relocation of the entire operation to the Bailiwick of Guernsey (of which Alderney is the second largest island.) The options for regulation from the AGCC have been tailored to meet the needs of the industry and provide flexible solutions: being licensed by the AGCC and holding a physical based in one of the Islands of the Bailiwick, or holding a licence with the AGCC and maintaining a company structure elsewhere. Alderney has regulated Asian facing businesses for a number of years and the stability of the Bailiwick has also attracted many Asian operators. This year has seen several seek out a business continuity solution and it’s easy to

see why when you look at how the pandemic has been handled by the jurisdiction. Businesses on Guernsey and Alderney have been largely able to continue as normal throughout the past year since the initial lockdown ended, with only a short period of disturbance which was quickly resolved with a circuit break-style intervention at the start of 2021. There are currently no restrictions on socialising and masks are not mandatory. The Bailiwick blueprint, mapping out the Islands’ strategy for a return to normality post Covid, looks to allow for movement in and out of the islands without quarantine restrictions by the start of July. The two largest Islands of the Bailiwick, Guernsey and Alderney, offer a supportive government, political stability and the backdrop of a cosmopolitan business community and an enviable island lifestyle and AGCC licensees can choose to base themselves in either Island. While other jurisdictions have spent recent years adjusting their regulations to fit every whim and trends of the ever-evolving industry, the AGCC has already created a licensing framework and approach that has been able to stand the test of time, incorporating new technologies and innovations effortlessly. Working in the Asian space for many years, the AGCC has adapted unique solutions to meet the needs of the operators in the region. The events of the past 12 months have, undoubtedly, brought challenges for many, but it’s reassuring to know that a safe harbour exists for businesses facing disruption. The stability and certainty offered by Alderney is tried and tested, with a regulator who understands the challenges and supports its licensees and a jurisdiction that is already welcoming new businesses. The opportunity exists now to not only succeed in navigating the rapidly changing landscape post-Covid, but to thrive while doing so. *Susan O’Leary is the CEO of Alderney eGambling, the Alderney regulator’s strategic and development body. As a lawyer, she represented some of the world’s leading eGambling operators and gambling service providers including many of Alderney’s licensees for many years; and as such has perspective on both the commercial and regulatory elements. Susan has a clear understanding of the online landscape and is a regular speaker at key industry conferences and events globally.

Asia Gaming Briefings | June 2021

LAST WORD 58

Sharon Singleton

Managing Editor, AGB

Travel industry needs vaccine relief Six months into the year and there’s still no visibility as to when international travel may be able to resume in Asia, with the situation in many countries having deteriorated significantly.

s countries in the Western world gradually itself off to the outside world and its citizens feel little get back to normal life thanks to fast-tracked need to get protected as they have been Covid-free for mass vaccination programs, rollout in the better part of a year. That’s all very well, but the borders can’t remain Asia and other developing countries has closed forever. It’s also a huge setback for the government’s been shockingly slow. According to the World Health Organisation, efforts to diversify its tourism industry, creating 100 high and upper-middle-income countries represent percent reliance on Mainland China as they’re the 53 percent of the world’s population but have received only ones allowed in...and at a drip-feed pace at that. There is also a very real risk that sooner or later 83 percent of the world’s vaccines. By contrast, low and middle-income countries account for 47 percent Macau will let one past the goalie and will find itself of the population, but have received just 17 percent in the unenviable position of its neighbours. As of mid-May, Macau had vaccinated about 87,731 of the vaccines. This has left countries across the Asian region battling people with at least one dose of a vaccine. It’s not an renewed spikes in the virus, forcing further lockdowns impressive number given it only has a population of about 640,445. and creating more damage to their The casinos are doing their already Covid-battered economies. part to encourage vaccination Countries that handled the efforts. MGM China and Sands first wave of the crisis well, are The casinos China are hosting community also now struggling. Cambodia outreach vaccination services for example didn’t record a single are doing their from late May in conjunction with Covid death last year, but has part to encourage Macau’s health authorities. been fighting to get the situation Melco Resorts & Entertainment under control since February when vaccination has made immunity one of its key two Chinese women bribed their efforts. goals and is putting its money where way out of quarantine and went its mouth is. The operator is putting out partying across the capital up MOP16 million ($2 million) Phnom Penh. for its “Get the Jab” campaign to Cases are also raging in neighbouring Thailand, with the region’s porous encourage its employees to get vaccinated. Likewise, Wynn Macau is offering incentives to borders being blamed for the spread of the disease. Vaccine programs are starting, but too slowly to hold its employees, giving two days off to get the shots. China’s vaccine program was also limping along out much prospect for a return to international travel with its citizens feeling no real urgency to get protection any time soon. Needless to say, this doesn’t bode well for the until a new outbreak triggered a rush to get vaccinated. The country is now administering an eye-watering 15 land-based casino industry. A highly anticipated travel bubble between Hong million doses a day and experts say that could be stepped Kong and Singapore has been delayed a second time up to 20 million. According to World in Data statistics as after a new surge in the latter city, while Taiwan, another of the time of writing 450 million shots had been given. Analysts are expecting Macau’s gross gambling revenue country praised for its handling of the pandemic and seen as a potential bubble candidate, is also seeing to pick up from the second half and although the city’s vaccination program is still lagging, China’s example record numbers of cases. Even in places where vaccines are available the lends hope to the idea that travel will become easier. The rest of Asia may have a longer wait. rollout has been slow. Macau for example has closed

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Asia Gaming Briefings | June 2021

AGBriefings June 2021 Edition

Articles inside

INDUSTRY OPINION

SUPPLIERS SPECIAL REPORT

FOCUS

AUSTRALASIA

GENTING's VEGAS DEBUT

CAMBODIA

LAST WORD

NORTH ASIA

AUSTRALIA

VIETNAM

GREATER CHINA

JAPAN

MACAU