Jurisdiction Updates - August 2014 Edition
AUSTRALIA: Whither sports betting?
Massive IRs reshape industry landscape • Special focus p.26 • Last words p.56
MACAU
Project cost overruns p.06
CHINA
Lottery potential untapped p.10
SINGAPORE
Revenues hit plateau p.40
AGE special report: new blood in new venue p.42
MESSAGE 3
Australia evolving
W
e are excited to be in sunny
AGB is lucky to have some extremely
Sydney once again for the
talented and experienced advisors, several
Australasian Gaming Expo
of whom have written columns for this
and the Gaming, Racing &
edition, examining the legislative directions
Wagering Australia conference.
being taken by the states currently and
The AGE is now in its 25th year and is
their impact on the market. James Packer’s
attracting more interest than ever. The
Sydney dream looks like being realized
new venue on Glebe island should provide
soon, the Queensland coast will be changed
a refreshing change as exhibitors take the
forever, while sports betting matters remain
opportunity to redesign their stands for the
mired in controversy and limbo.
new space.
As always there is plenty going on in
Meanwhile, we will be attending and
Australasia and the Asia Pacific region as
speaking at GRWA at the Swissotel on
a whole and we hope to bring you up to
Monday and Tuesday.
date with all the latest in this edition of
The conference goes from strength to
AGBriefings.
strength and this year has attracted several
If you’d like regular updates on all Asian
industry heavyweights as well as key
gaming news, you can subscribe to our
regulators for what should be an eye-
eBrief, sent out daily to ensure you don’t
opening few days on the future direction for
miss a thing. Once a week our members also
Australian casinos and sports betting.
receive two in-depth articles about specific
No doubt much of the discussion will focus
jurisdictions which go beyond the headlines
on Asian money fueling growth, both from
and provide valuable market insights. Please
a customer and a funding perspective, with
see the membership form at the back of this
several Chinese companies involved in new
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consortiums and projects.
AGB - your gateway to Asian gaming! l
Rosalind Wade
Luis Pereira
The end of gaming license state monopolies, has brought in a new wave of expansion, posing new opportunity and challenges.
On behalf of Asia Gaming Brief Rosalind Wade & Luis Pereira PUBLISHERS
www.asiagamingbrief.com AUGUST 2014 EDITION SERIES II • ISSUE III
1
Jurisdiction Updates - August 2014 Edition
AUSTRALIA: Whither sports betting?
Massive IRs reshape industry landscape • Special focus p.26 • Last words p.56
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MACAU
Project cost overruns p.06
CHINA
Lottery potential untapped p.10
SINGAPORE
Revenues hit plateau p.40
Asia Gaming Briefings | August 2014
AGE special report: new blood in new venue p.42
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Asia Gaming Briefings | August 2014
CONTENTS 4
SOUTH EAST ASIA
SOUTH ASIA
GREATER CHINA
MACAU
06
INDIA
17
PHILIPPINES
22
HONG KONG
09
NEPAL
18
SINGAPORE
24
MALAYSIA
25
CHINA
10
AUSTRALASIA
INDOCHINA
NORTH ASIA
JAPAN
12
VIETNAM
SOUTH KOREA
14
CAMBODIA
20
TAIWAN
15
THAILAND
21
RUSSIA
16
AGE SPECIAL REPORT
Asia Gaming Briefings | August 2014
38
CALENDAR OF EVENTS
19
49
AUSTRALIA
26
AUSTRALIA SPECIAL FOCUS
28
PACIFIC ISLES
35
NEW ZEALAND
36
LAST WORDS
50
GREATER CHINA 6
MACAU
Growth optimism outweighs cost overrun concerns Some of Macau’s multi-billion dollar resort plans on the Cotai strip are running over budget amidst rising labor and construction costs, though analysts and industry players remain optimistic the potential for topline growth will eventually outweigh the sky-high expense
Asia Gaming Briefings | August 2014
N
ews of the cost overruns comes
In a recent statement to the Hong Kong Stock
as gross gambling revenue in the
Exchange, Melco Crown said it would incur an
world’s biggest gambling hub shows
additional $300 million in costs for its Studio City
signs of slowing down, squeezed by a
development in Cotai, jacking up the total cost
combination of factors, such as the weakening
to $2.3 billion from an initial plan of $2 billion.
macro-environment in China, a clampdown on
Melco Crown reaffirmed that the 1,600-room
illegal money transfers and the distraction of
resort remains on track to open in mid-2015.
the FIFA 2014 World Cup.
The investment breaks down to a cost per room
The mix has sent stock investors running for the
of about $1.4 million.
exits, with Hong Kong-listed gambling stocks
SJM Holdings, which vies with Sands China for
down about 35 per cent from their 52-week
the biggest market share in Macau, also recently
high late last year.
warned its 2,000-room Lisboa Palace project
Still, casino and resort operators remain
is likely to run over budget. The company has
positive about the developments in Cotai and
raised its estimate for its resort complex by an
the budget overruns should be well managed,
additional $645 million to bring the total up to
Robert Drake, chief financial officer of Galaxy
about $3.8 billion. That works out at about $1.9
Entertainment, told AGB on the sidelines of
million a room.
the company’s shareholder meeting recently.
Ambrose So, SJM CEO, said the budget overrun is
Drake said the second phase of Galaxy’s Cotai
inevitable given the labor crunch and increased
project remains on track to open in the middle
construction costs. He said the company is
of next year, with the budget within the original
expecting the property to help it regain market
plan. He added the cost overruns experienced by
share once it opens in 2017.
some other operators are within reasonable range.
Once the monopoly holder in Macau, SJM has
GREATER CHINA
GROSS GAMING REVENUE $100b
$56.9b +18.6% $45.2b $48.8b
Y13
Y14E
Y21E
Y15E
JUNE GGR
-3.7%
JULY GGR
-3.6%
MARKET SHARE (as of end of Y14 July)
seen its market dominance erode due to capacity
and labor costs, which may be about 10 to 20
constraints.
percent higher than their original plans.
Galaxy is currently adding about 1,350 rooms
According to the latest government statistics,
SANDS CHINA (1928:HK) 23.1%, +1.1
for about $2.04 billion, while the third and
labor costs in Macau have risen 10 percent
GALAXY ENTERTAINMENT GROUP 20.6%, -0.9
fourth phases of its development will take total
this year, while overall inflation was about 6
development costs to as much as $7.7 billion.
percent in April. The former Portuguese colony
MELCO CROWN ENTERTAINMENT 12.3% +0.8
Las Vegas Sands is paying $2.7 billion to add
has almost full employment at less than 1.7
3,000 rooms at its Parisian-themed resort,
percent, and additional workers need to be
while MGM China raised the budget for its
imported. Adding to the natural constraints,
Cotai project to $2.9 billion from $2.6 billion
the government also restricts foreign labor.
earlier this year. It’s adding 1,600 rooms. Those
Nearly all food and construction materials need
numbers work out to about $900,000 per room
to be brought in from elsewhere, making costs
for LVS and $1.8 million for MGM.
one of the major risks for operators.
Wynn Resorts is likely to be the most expensive
The government has indicated that it will impose
of all, paying out a total of between $8 billion to
a moratorium on new projects until at least
$9 billion to add 3,200 rooms in two phases at
2025 once the current round of construction is
its high-end luxury resort, according to Fitch
completed. Therefore, there is a lot at stake for
research. That works out at approximately
operators, who are keen to use the new properties
$2.8 million a room at the higher end of the
to differentiate their product offering and gain
cost range.
market share, Aaron Fischer, CLSA gaming
Matthew Kwok, an analyst at China Yinsheng
analyst Asia-Pacific Markets said.
Wealth Management, said Wynn Macau and MGM
“This is not a massive surprise to us and we
China are likely to face a surge in construction
generally welcome companies investing more
SJM HOLDINGS (880:HK) 24.1% - 0.8
WYNN MACAU (1128:HK) 11.2%, +1.7 MGM MACAU (2282:HK) 8.8%, -1.5
The Macau government, clarifying rumors of a clampdown on illicit credit, said it has banned jewellery and watch retailers from adding any further China UnionPay terminals, but has not asked the stores to move out of casinos or to cease operations. It has also asked banks to strengthen their scrutiny of major cash and card transactions
Asia Gaming Briefings | August 2014
7
GREATER CHINA 8
money into the non-gaming component,”
is investing $2.5 billion in the second phase
million in the three months to end March,
Fischer said, referring to the cost overruns.
of its Galaxy Macau development, which
compared with $0.6 million in the same
Analysts, including Deutsche Bank, Nomura
is scheduled to come online in 2015. The
period a year ago. The company said the
and Wells Fargo have all recently cut their GGR
expansion will nearly double the capacity
resort is on track for a mid-2015 opening.
forecasts for Macau for 2014 and are revising
of the resort. Construction on Phase 3 and
Melco is also considering a casino mega-
down their estimates for share prices and
4 is expected to begin by the end of the year
project near Barcelona in Spain. Q1 revenue
earnings amidst a sharp slowdown in VIP traffic.
with a total investment of HK$60 billion
gained 19 percent to $1.35 billion, helped by
Revenue dropped 3.7 percent in June, marking
($7.7 billion). Galaxy Entertainment Q1
mass market tables, while group EBITDA
the first year-on-year decline in five years.
adjusted EBITDA rose 38 percent, driven
rose 31 percent to $359 million, slightly
Despite the gloomy headlines, the current
mainly by Galaxy Macau to $3.8 billion, while
above the consensus view for $355 million.
slowdown is seen as a short-term blip with most
revenue jumped 33 percent year-on-year to
still predicting significant expansion. Deutsche
$20.2 billion. Total gaming revenue grew 33
Bank estimates that Macau will be a $100 billion
percent to $20.2 billion as total mass table
market by 2021, double its current level.
revenue increased 37 percent to $5.1 billion
Also, much of the recent concern centers on the
and total VIP revenue grew 32 percent year-
VIP market. While still dominant, VIP Baccarat
on-year to $14.6 billion.
has declined from its peak in the second quarter of 2011 when it accounted for about 80 percent of total revenue, to about 60 percent at present, according to UBS. At the same time mass market revenue has seen growth of between 30 percent to 45 percent for the past four years, with superior profit margins, which should help mitigate the impact of higher costs.
WYNN MACAU (1128:HK) has an 11.2 percent market share and currently has one casino. Its $4 billion Wynn Palace development is scheduled to come online in the first half of 2016, with approximately
SANDS CHINA (1928:HK) has a
2,000 rooms and 500 table games. Wynn Resorts Q1 adjusted income was $236.7
market share of about 23.1 percent and has
million compared to $205.6 million a
four casinos. Analysts say the company has
year ago. Net revenues were $1.51 billion,
had a lower room occupancy than rivals in
compared to $1.38 billion a year earlier.
Cotai, meaning it has more potential for
Revenue was boosted by a 14.2 percent
revenue growth if it fills the rooms. The
increase from Macau.
company’s new developments include the $3 billion The Parisian that is scheduled to come online in 2015. It recently expanded retail
MGM MACAU (2282:HK) has an
space at its Sands Cotai central property,
8.8 percent market share while operating
with the addition of 150,000 square feet
a single casino in the peninsula. Its new
of space, with shops designed to appeal to
developments include the MGM Cotai,
SJM HOLDINGS (880:HK) holds the
families. LVS reported an almost 12 percent
which is a $2.9 billion project scheduled for
jump in Q2 revenue, with adjusted earnings
completion mid 2016. Q1 revenue at MGM
biggest market share of 24.1 percent as of
per share up 31 percent, but both measures
China climbed 26 percent to $941 million,
July with 20 casinos. Its $3.2 billion Palazzo
missed analysts’ forecasts. Net revenue
driven by a 45 percent gain from mass
Versace development is scheduled to come
came in at $3.62 billion, below the consensus
market and 12 percent VIP. The company is
online in 2017. The company has indicated it
for $3.8 billion, while adjusted EPS was
adding mass market tables. l
may be interested in opportunities in Japan.
$0.85, compared with expectations for $0.89.
OPERATORS
The company is currently building The Lisboa Palace on Cotai. The casino will have 700
27,000 square metres. The total production
MELCO CROWN ENTERTAINMENT (6883.HK) has
cost is estimated at about HKD$30 billion
three casinos and a 12.3 percent market
($3.8 billion), although the company has
share. Melco recently awarded France’s
expressed concern over costs. Q1 property
Bouygues a $488 million contract to build a
EBITDA rose 2.9 percent to HK$2.19 billion
six-star hotel. The 39-floor building will be
($282.5 million). Gaming revenue rose 4.9
part of the City of Dreams and will have 783
percent to HK$22.78 billion.
bedrooms, a casino, restaurants, conference
gaming tables and over 1,200 slot machines across a gaming floor area of approximately
GALAXY ENTERTAINMENT GROUP (27.HK) has a 20.6 percent market share with six casinos. The company
Asia Gaming Briefings | August 2014
room and a sky pool. The company said recently it’s increasing the budget for its Studio City development in Cotai by about $300 million, taking the total cost to $2.3 billion. Pre-opening costs rose to $0.9
New regulations tightening rules on transit visas are seen as having minimum impact on Macau gambling revenue, analysts say. The number of days Chinese visitors are permitted to stay under a transit visa has been cut to five from seven, from July 1st. Those who repeatedly abuse the law will be banned from entry
GREATER CHINA 9
HONG KONG
Illegal Sports betting booms in Hong Kong While gambling outside of the Hong Kong Jockey Club is illegal in the former colony, a recent report estimates that the illegal sports betting market may have generated turnover of HK$500 billion ($64.4 billion) last year, dwarfing casino revenue in neighbouring Macau, the world’s biggest legal gambling hub. Punters lost $12 billion
T
GROSS GAMING REVENUE
he size of the problem has prompted
“As the operation of illegal gambling becomes
calls for coordinated action amid
more sophisticated, the Club will have to
concern the government is losing
remain competitive against them. We also
millions of dollars in potential tax
believe a multi-pronged strategy involving the
revenue on illegal sports betting.
government, the police and other stakeholders
The HKJC itself recognizes the limitations
would be essential to combat such activities.”
in its ability to keep up with an increasingly
Authorities in Hong Kong launched a major
varied and sophisticated offering from illegal
crackdown on illegal gambling during the FIFA
online players.
2014 World Cup, forming a special task force
Patrick Jay, the club’s head of trading told AGB
and cooperating with counterparts in Mainland
that the club needs a wider array of products
China and Macau to curb activities.
to remain competitive.
During the last tournament in 2010, H.K. police
Given illegal operators are not paying taxes
seized some $386 million in illegal sports
they are able to attract customers with a wider
betting receipts.
variety of bet types and incentives, including
While this time, the clampdown resulted in one
credit and discounts.
of the biggest illegal betting busts seen in the
“Take football betting as an example, they offer
territory, with police smashing a cross-border
as many as 230 different bet types, of which
gambling ring that may have been taking as
100 are in-play types, compared with only six
much as HK$500 million a day ($64.5 million)
in-play options provided by the Club amongst
in illegal soccer bets.
its total of 17 bet types,” he said, talking about
While land-based casinos are illegal in Hong
the illegal operations.
Kong, cruise ships operating out of the city
Jay said while the club needs to improve its
are able to offer casino-style gaming such as
offering, it will never offer credit, or be in
baccarat and slot machines once they are out
a position to develop such a wide variety of
of territorial waters. They also offer intranet
betting options.
baccarat, which can be played on tablets on
Jay said advances in technology were helping
the ship, thereby increasing their capacity.
illegal bookmakers, with most moving to
These cruise ships are growing in popularity
online platforms for gambling operations.
as a quick and cheap alternative to traveling to
From September 2013 to February 2014, there
Macau’s casinos. Although these cruise ships
were over five million visits to some of the
pay no tax on revenues, compared with the
territory’s top five offshore betting–related
39 percent they are required to pay in Macau,
websites. And the number of visits to these
operators in Macau do not see these cruise
five websites is growing.
ships as a threat. l
2013/14 Horse Racing $101.83b
+8.5%
2013 Football betting $50b
+7%
HKJC net margin HK$8.78b
+8.3%
ILLEGAL SPORTS BETTING
HK$500b
Success Universe Group agreed to sell its Macau Success cruise ship for HK$93 million ($11.9 million) to British Virgin Islandsbased Star Sail Inc. The company said it will book a pre-tax gain of $44.2 million from the sale and plans to use the proceeds for general working capital Genting Hong Kong is looking for a new President after David Chua Ming Huat resigned with effect from January 2, 2015 to pursue his personal interests. Chua will take sabbatical leave and annual leave during the six months’ notice period. Chairman and CEO Tan Sri Lim Kok Thay will take over the role of acting president until a replacement is found
Asia Gaming Briefings | August 2014
GREATER CHINA 10
Y13 GROSS GAMING REVENUE
CHINA
Lottery sales $51.1b
+18.3%
China lottery potential still untapped
H1 $28.78b
+19.2%
China’s underground lottery may be three times the size of the official market, while remote sales provide opportunities for foreign providers
F
June Sports Lottery $3.1b
+83%
June Welfare Lottery $2.7b
+18%
AGTech Holdings agreed to buy a Chinese lottery equipment and design company for HK$489.5 million ($63.1 million) for cash and stock. It will issue a total of 178,571,428 shares representing 4.06 percent of the existing issued share capital of the company
igures released by the Ministry of
websites in China today offering lottery tickets
Finance (MoF) this month reveal
for sale – so what is going on?
that China Sports Lottery revenues
Almost all of these websites are operating
increased by 83 percent to RMB19.4
under legacy retailer agreements with different
billion ($3.1 bn) in June 2014 compared with last
provincial lottery authorities. Does this comply
year, no doubt boosted by the FIFA World Cup.
with the ban on intra-province sales? Probably
The Ministry of Public Security was reported
not since it is unlikely that these websites
as saying that, during the World Cup alone,
know where their customers are coming from
more than RMB18 billion ($2.9 billion) had
and, more importantly, the provinces are
been detected in illegal football gambling.
incentivized to increase their sales so actively
The Welfare Lottery also increased by 18 percent
want this “cross border” business (and pay
in June, with total sales of RMB16.8 ($2.7 billion).
high commissions accordingly).
Overall lottery sales in China for the six months
Why is this being tolerated by the authorities?
January to June 2014 have risen 19.2 percent to
The answer comes down to a technology gap.
RMB178.41 billion ($28.74 billion).
Currently neither of the lotteries, i.e. Welfare
Meanwhile, the illegal gambling market in
and Sports, have their own central or provincial
China is estimated to be worth around $160
customer registration and lottery engines –
billion in GGR terms.
i.e. the technology required to know who your
Although the lottery market is the second
customers are, where they are located, how
largest in the world behind the USA, only
old they are and how much they are playing.
eight percent of the population participates
The regulator is pushing for technologies to be
in it. This suggests that there is a high degree
developed by both the Welfare and Sports lotteries
of inefficiency in the current system, and that
to be able to deal with these location issues and
2. Providing content for lottery games
there is enormous untapped potential.
thus comply with the intra-provincial laws.
Only MoF approved lottery games will be
One area that the lottery authorities are trying
Today, both the Operators (Welfare & Sports
available for sale. Any new content will require
to develop is that of remote sales. In terms of
Lotteries) and Regulator (MoF) want to create
approval by the MoF, which can be a multi-year
regulation, in March 2012 the MoF prohibited
a modern, effective, efficient and responsible
approval process.
remote lottery and many websites that were
remote sales framework and technology solution
operating illegally closed down.
that requires customer registration and that is
3. Becoming an approved retailer on the new platforms
In January 2013 the MoF repealed this decree,
thus “approvable” by the Regulator.
Once the new platform(s) are in place, the plan
allowing remote sales via the internet to be
Broadly speaking there are three areas of
is to issue licenses for remote sales retailers.
conducted, with the caveat that companies needed
opportunity for foreign companies to participate
Applicants will need to register with the national
to have approval from the National MoF and
in the China lottery:
lotteries to secure one.
China LotSynergy said its Guangzhou Lottnal Terminal unit has won a contract to supply terminals to the Guizhou Provincial Sports Lottery Administration Centre, its second in the province. Lottnal will provide its upgraded Standard Type KT301 terminals, which it says is more personalized and user-friendly and is proving one of its most successful terminal types in China
Underlying all of this is the concept that lottery
1. Developing a back-end system to include crm and payment solutions
sales should be strictly intra-provincial only.
One national system required for both the
the most profitable ones is not easy. One thing
Today only two entities have any authorization
Welfare Lottery and Sports Lottery, which is
is inescapable and that is finding the right
from MOF – 500.com and another non-trading
already developing its own.
local partner, whether that be an amenable
entity owned by the National Sports Lottery.
For mobile lottery, one system per province
province, technology provider or (future)
Notwithstanding this, there are numerous
will be required.
licensed retailer. l
either the National Welfare or Sports Lottery.
Asia Gaming Briefings | August 2014
There are certainly roles available for foreign players in China’s lottery future, but identifying
NORTH ASIA 12
JAPAN
High hopes for Fall casino bill passage While international operators continue to jockey for position for a casino license in Japan, the bill that will unlock the door to a potential $40 billion market remains in political limbo
Asia Gaming Briefings | August 2014
A
fter weeks of delays, legislators
“Integrated resorts are expected to provide a
began debate on framework
great contribution to tourism, regional economies
legislation that would legalize
and industry, I think, and can be one of the key
casinos in Japan in June, but with
elements of Japan’s growth strategy,” Abe said.
not enough time to allow passage before the
Abe and other supporters of the bill see casinos
end of the Diet session on June 22.
as an integral part in the country’s efforts to
Analysts are now hopeful that the bill will be
boost tourism arrivals. The country welcomed
passed once the parliament returns in Fall,
about 10 million tourists in 2013 and seeks to
especially as Prime Minister Shinzo Abe seems to
double that number, though it hasn’t set a
have thrown his weight behind the legislation.
timeframe. The long-term goal is for 30 million
Abe, who took time out of a trip to Singapore
visitors by 2030. Japan will host the Olympic
earlier this Spring to visit the city state’s two
Games in 2020 and many hope to have the
integrated resorts, told Bloomberg in an interview
first resorts open to capitalize on the expected
that he hoped that in his capacity as leader of
influx of visitors.
the Liberal Democratic Party, Japan’s biggest
In the opening days of debate on the bill, some
political party, he would be in a position to help
lawmakers expressed concern about the potential
push the bill through.
social impact of gambling, saying not enough
NORTH ASIA 13 an interest in the market. Caesars Entertainment recently said a casino
GROSS GAMING REVENUE CASINOS
project in Japan would require investment of
$40b
at least $5 billion and that it has held talks with potential local partners, including Fuji Television Network, Kajima Corp. and Mitsui Fudosan Co. While both MGM Resorts and Las Vegas Sands
$18.4b
have said they may be prepared to invest as much as $10 billion to gain a foothold in the market. Winning a license in either South Korea or Japan
$9.4b
is likely to reap rich rewards for shareholders, with whoever wins in one of the two major cities likely to see their market capitalization rise between $30 billion to $40 billion, or maybe more, LVS Chairman Sheldon Adelson told an
Y20E
investor meeting in New York recently, saying
Y30E
Y25E
(UBS)
(CLSA)
his figures had come from analysts, journalists and industry observers. Bloomberry Resorts, owner of the newly opened Solaire Resort and Casino in Manila
Y1 ESTIMATE (billions)
is also interested. CEO Enrique Razon told shareholders that the company is in talks with
$7
a potential Japanese partner in preparation for
FITCH
$16.5
bidding for a gaming license in Japan. He didn’t
$23.8
TELSEY
give further details of what would be the first overseas venture for Bloomberry, which opened its Solaire resort last year. Genting Singapore has set up eight subsidiaries as it jockeys for position there. Galaxy Entertainment, Boyd Gaming, Melco Crown and Wynn Resorts
PACHINKO/PACHISLOT ANNUAL REVENUE
are among the others lining up their ducks.
$234b
Estimates for the potential size of the market
(Kinbasha Gaming International)
vary, with CLSA saying if all works out for the best it would be worth as much as $40 billion, putting it a close second to Macau. The consensus had been done to tackle current problems related
however is around $20 billion.
to the country’s pachinko parlours.
Japan has a population of 127 million with a
Pachinko and its variants account for more than
per capita Gross Domestic Product last year
two-thirds of total revenue volume in Japan’s
of 38,492, compared with 53,143 for the U.S.,
gaming industry, generating an estimated
according to World Bank figures. The bill is not
$234 billion in gross revenue per annum and
expected to contain any provisions restricting
employing over 310,000 employees, according
local access to casinos.
to Kinbasha Gaming International.
The country also has sophisticated infrastructure
“We strongly believe that not enough has
and transport links, with close proximity to
been done in terms of studying and addressing
much of the China market, boosting its appeal.
gambling addiction,” Takeshi Iwaya, a member
The prize licenses are seen as Tokyo and Osaka.
of the ruling Liberal Democratic Party was
The Osaka authorities have thrown their full
cited as saying. He added some of the revenue
support behind the idea of casinos and are pushing
generated from casinos would be put aside to
a site in Yumeshima, an artificial island in Osaka
help address problem gambling.
Bay. Though Tokyo Governor Yoichi Masuzoe
Meanwhile, as the political process grinds on,
has proved more reticent, saying developing a
casino operators continue to line up to express
casino was not a priority for the city. l
USJ Co., the operator of Universal Studios Japan, plans to seek a casino license in Osaka. The theme park operator is likely to team up with other parties interested in the new business and lead a consortium Japan is considering adopting a Singaporean-style model, charging its own citizens to enter casinos, while foreigners can enter for free, according to Japan’s Nikkei. The fee however is likely to be less than the S$100 ($80) Singapore charges, the report said.
Asia Gaming Briefings | August 2014
NORTH ASIA 14
GROSS GAMING REVENUE
SOUTH KOREA
China tourists drive revenue growth
(Source: CIMB)
$2.8b
$2.7b $2.7b
$2.7b
Rising Chinese tourism numbers are driving revenue in South Korea’s casinos, attracting the eye of international investors and changing the product bias of the market Y13
R
evenue from South Korea’s 17
When broken down geographically, the capital
casinos rose about 7.6 percent to
Seoul made up almost two thirds of the foreigner-
2.64 trillion won ($2.7 billion) in
only market, followed by Jeju at 15.9 percent, up
2013, according to the Korean Casino
from 11.5 percent the year before. Busan stood
Market Review by Kore Co.
at 11.3 percent and Incheon had a 6.4 percent
The total number of casino visitors exceeded 5.7
share, almost doubling from the previous year.
million last year, with 2.7 million categorized as
The proximity to the ballooning outbound
foreigners. In terms of overall visitor numbers,
China tourism market has not gone unnoticed
foreign arrivals into South Korea last year rose
by international players, with Las Vegas Sands,
to 12.15 million, with 22.2 percent of those
Wynn Resorts, Melco Crown and MGM Resorts
visiting the country’s casinos.
all at one point having expressed interest in
Chinese tourists made up 36 percent of the total
the country.
and the country has plans to attract 10 million
The market is set for at least two major new
Chinese visitors a year by 2020, compared with
international-investor driven projects.
4.3 million last year, according to data from
Earlier this year, a consortium made up of
Korea Tourism Organization.
Lippo Group and Caesars Entertainment got
“As for foreign players, the number of Chinese
the greenlight for a $805 million foreigner-
players continues to grow to account for
only resort on Yeongjong island. It was the
approximately half the market at 46.7 percent,”
first casino license to be awarded to a foreign
the report said. “This dramatic shift is reflected
corporation and the first instance of an award
in the sharp increase of baccarat tables.”
through the “pre-approval regulatory process.”
In terms of casino preference, Chinese tourists
Caesars Entertainment vice president of Asia
opted for Paradise Walkerhill and Seven Luck
Development William Shen said he’s confident
Hilton in the capital Seoul.
that the company’s new joint venture project
While on Jeju Island, the Hyatt Hotel, which
in South Korea will see strong growth, despite
has just been bought by Chinese property
not having access to the local market.
developer Landing International, reported
While Genting Singapore is teaming up with
that 95.3 percent of its players were Chinese.
Landing International on a $2 billion resort on
Overall, South Korea’s foreigner-only casinos
the “honeymoon” island of Jeju.
had 1.36 trillion won in sales, outperforming
Groundbreaking on the site has been delayed
the only casino open to locals, Kangwon
from June 24th to the third quarter of this year,
Land, which had 1.28 trillion, the report said.
reportedly to give the company time to brief
Paradise and Seven Luck made up 90 percent
the island’s new incoming administration on
of the foreigner-only market, with growth of
the project and its contribution locally.
6.6 percent.
The casino, open only to foreigners, will have
“When considering that the two operators grew
800 tables, including 200 for high-stakes
at an average rate of 9.4 percent since 2009,
gamblers. It will be built on a site with an area
there is a good possibility that Paradise and
of 2.3 million square meters (25 million square
Seven Lucks would overtake Kangwon Land
feet) and will have a theme park, a mall, luxury
this year,” it said.
apartments and three hotels with 2,800 rooms. l
Asia Gaming Briefings | August 2014
Y14E
Y15E
Y16E
CASINO VISITORS • 2.7m
5.7m
• FOREIGN CASINO VISITORS
FOREIGNER-ONLY CASINO REVENUE
$1.3b
China market share
46.7%
(Source: Kore Co.)
Landing International has completed the acquisition of the gaming business at the Hyatt Regency on South Korea’s Jeju Island for $113 million. The hotel was operated under the trade name of Beluga Ocean Casino Paradise Co said Chelsea soccer team manager Jose Mourinho will feature in the company’s new ad campaign, replacing current brand ambassador Robert De Niro. Paradise, which is teaming with Japan’s Sega Sammy Holdings Inc to build a $1.7 billion casino resort in the coastal city of Incheon, is hoping to capitalize on the growing popularity of soccer in China to lure Chinese visitors
NORTH ASIA 15
Y13 TOURIST ARRIVALS
TAIWAN
Optimism despite political stagnation Taiwan’s long-awaited bill to legalize casinos remains mired in political limbo, though experts are optimistic it may still
8,016,280
48.91%
visitors from HK, China, Macau
CHINA VISITORS
+12.7%
pass by the end of this year Q1 VISITOR ARRIVALS
2.3m
T
he Tourist Casino Management Act,
minimum investments, which will be contained
though considered a priority bill, has
in a separate integrated resorts bill, which has
been stalled by a political stalemate
already been drafted by the Tourism Bureau.
TAIWAN LOTTERY CO. Y14 SALES TARGET
$3.47b
on the island, including a series of
The bill foresees casinos being opened on
student protests that effectively shut down
Taiwan’s outlying islands and will not permit
parliament for a month earlier this year, putting
IRs on the main island, which may reduce the
most legislative decisions on hold.
allure of Taiwan for potential casino investors
“There’s no real controversy over the bill,” said
and is likely to mean much smaller amounts
William Bryson, a partner at law firm Jones Day
than those being touted for casino investments
in Taiwan. “Neither of the two major parties
on neighbouring Japan.
are against it. It’s just because of a higher level
“Everyone interested in casinos would prefer
of disagreements.”
to have them on Taiwan proper and not on an
The bill was supposed to have been considered
island,” said Marcus Clinch of law firm Eiger
in a special summer session of parliament after
Law. “They would want a type of free trade zone
having failed to get to the top of the stump in
that would include casinos.”
the regular session, but it has not been put on
However, the Legislative Yuan’s passage of the
the agenda. However, there is hope that the
casino bill is not an automatic guarantee that
summer debates will help clear the backlog,
casinos will go ahead. Residents of the three
including issues relating to China/Taiwan
islands -- Kinmen, Matsu and Penghu -- need
relations and free economic pilot zones, paving
to approve the proposal through a referendum.
the way for passage in the next regular session
Matsu held a referendum in 2012 which was
that starts in September.
passed, making it the only place currently
and Taiwan. It already has the infrastructure,
“I am hoping that once the above-mentioned
eligible for an IR in the country. Penghu may
the government built a desalination plant and
higher priority bills have been addressed in
be considering a second referendum after the
upgraded the airport,” Bryson said.
the special summer session, the legislature
first was rejected some five years ago. Kinmen
The most interest is likely to be in Kinmen,
will focus its energy on other bills having
has still to test the waters.
famous for the production of Chinese Kaoliang
important economic implications, such as
“They are three very different islands, so it’s
liquor. The island has a local population of about
the gaming bill,” said Anita Chen, managing
not a case of one size fits all,” Bryson said,
100,000 and has relatively good infrastructure.
director at Park Strategies (Taiwan). “If the
referring to the level of investment that may be
Matsu on the other hand would need a lot of
gaming bill is passed by the end of 2014, it is
possible. “A $2 billion resort might be possible
infrastructure investment to support an IR. Bill
expected that Taiwan will see its first IR open
in Kinmen but not in Matsu.”
Weidner of Global Gaming Asset Management
by late in 2017 or 2018.”
Matsu and Kinmen are pure China plays, with
did have plans for the island, though those
The bill is designed to provide a framework for
Kinmen so close to the mainland province
appear to have stalled.
legalizing casinos. It doesn’t currently set out
of Xiamen that it’s possible to see with the
Taiwan’s proposed gambling bill doesn’t prohibit
the number of licenses, which will ultimately be
naked eye.
the country’s 23.3 million population from
determined by the regulator and the Executive
“Penghu is in the Taiwan strait and a different
entering casinos, and neither will it charge a
Yuan. Neither does it spell out details, such as
play. It would be a combination of Japan, China
fee to locals. l
Taiwan’s tourist arrivals hit 817,735 in May, up 32 percent year on year. China visitors rose 45.1 percent Taiwan’s public welfare lotteries generated a surplus of NT$5.51 billion ($182.77 million) in the first quarter of the year, according to data released by Taiwan Lottery Co. In March alone, the lotteries generated a surplus of NT$1.57 billion
Asia Gaming Briefings | August 2014
NORTH ASIA 16
Illegal market GGRE $15b Primorye Y22E $5.2b Azov $300m
SUMMIT ASCENT GROSS GAMING REVENUE
RUSSIA
(Source: Goldman Sachs)
Putin expands gambling zones Russia’s State Duma has passed a bill establishing gambling zones in the newly annexed region of Crimea and in Sochi, the site of the 2014 Winter Olympics, expanding legal gambling in the country and seeking to recoup the economic costs of the games
five years before revenue is generated. In Sochi, the government is keen to recoup some of the $51 billion spent on building facilities for the Olympics. Russia built 14 venues for the games with a total capacity of 145,000 people. “We should do everything to make these projects bring returns on the investment, so that they don’t go bankrupt,” Deputy Prime Minister Dmitry Kozak said. Gambling is banned in Russia, apart from in five specially designated zones. However, many
T
have not attracted the expected revenue or
Y16E
$375m
Y20E
$1.7b
Russia is considering legalizing online poker in a bid to generate tax revenue, in a move that could generate $146 million a year for government coffers Summit Ascent has the potential to more than treble gross gaming revenue from 2016 to 2020, Goldman Sachs says. Gross gaming revenue may reach $375 million in 2016, rising to $1.7 billion in 2020
he creation of a gambling zone
tourism dollars as they tend to be remote and
in Crimea will attract additional
infrastructure is poor.
investment to the region, create
The zone in the Far East in Vladivostok is seen
jobs and improve the tax base,” said
as one of the most promising, with Goldman
percent stake in the venture.
Anatoly Karpov, the First Deputy Chairman of
Sachs recently touting it as one of its top picks
Summit is in negotiations with the top junkets
the Duma Committee.
among the smaller Asian markets, along with
in Macau and plans to bring in VIP players by
The Crimean zone is likely to be located in Yalta,
Cambodia. The investment bank in a report
mid-2015. The casino is scheduled for a soft
but the exact location hasn’t been determined,
pointed to the exceptionally low tax regime,
opening towards the end of this year.
according to local media.
but said political instability and infrastructure
Azov City, which has three casinos, is seen as
Acting Crimean Governor Sergey Aksenov
may be issues.
the other stronger zone in Russia, attracting
said casinos would not be scattered across the
Summit Ascent holdings, which is building a
annual revenue of about $300 million.
peninsula, but are likely to be concentrated
casino in Vladivostok, is well placed to tap into
The second phase of Azov is now being built in
all in one place.
underserved gaming demand in North Asia,
Anapa, which is within 250 miles from Crimea
As early as April, when the idea of a new gaming
Goldman said. It has the potential to more than
and about 300 miles away from the first phase,
zone for Crimea was touted, Crimean Deputy
treble gross gaming revenue from 2016 to 2020.
where the existing casinos are located.
Prime Minister Rustam Temirgaliyev said
Gross gaming revenue may reach US$375 million
Projects in other zones appear to be stagnating
authorities had already attracted nearly $1.5
in 2016, rising to $1.7 billion in 2020, it said.
with repeated delays. The opening of the
billion in private investment.
The lowest effective gaming tax rate globally,
“Siberian Coin” gambling zone in the Altai Krai
The country’s Regional Development Ministry
coupled with low labour costs should allow the
was scheduled to begin operations this summer
has estimated that creating an entertainment-
company to offer attractive incentive programs.
after repeated delays, while the remaining
tourism cluster in Crimea would bring in
Summit, which is owned by Hong Kong billionaire
gambling zone in Kaliningrad, situated close to
an additional 600,000 tourists a year to the
Lawrence Ho, bought majority control of the
the local airport, was recently extended by 100
peninsula and add $28 million to the state’s
casino project in April from a local partner.
hectares despite the fact that the initial casino
coffers. But it also said it’s likely to be at least
Ho’s flagship Melco International holds a 5
project there has long been at a standstill. l
Asia Gaming Briefings | August 2014
SOUTH ASIA 17
INDIA
Delta expands gambling empire
Lottery sales $12.5b
Horse racing $250m
Sports betting $60bE GROSS GAMING REVENUE DELTA Y13/14
$52.6m India’s Delta Corp is expanding its gaming empire, with the launch of the country’s biggest offshore gambling boat in August last year and a five-star luxury casino resort in the Union territory of Daman
has rebranded its operations as Deltin, owns three of five boats operating offshore casinos in Goa, the only place gambling is allowed in the state. The Deltin Jaqk, formerly know as Casino Royale, was Mody’s first boat, and
20% of profits
offers games such as flush, dana (a game of
POTENTIAL TAX REVENUE
dice), andar bahar and teen patti. The second boat, Deltin Royale, launched on 16 August last year, has replaced Kings Casino. It
$2b - $3.1b (Source: KPMG)
is the largest casino boat in India to date, with 123 tables and a total of 850 gaming positions and 250 slot machines. The addition of the boat helped boost gaming
T
POTENTIAL SPORTS BETTING TAX RATE
revenue to 315.98 crore ($52.6 million) for the he 176-room property will feature
year ended March 2014 from 268.77 crore the
Daman’s first in-house casino
year before.
spread over 60,000 sq ft, which
The company is also planning a third offshore
will begin operations now that the
casino in Goa, known as the Dolphin. The two-
property has received a five-star certification,
storey boat replaces the Caravela, which was
a prerequisite for operating a casino.
on lease and has been returned to its owners.
“We expect that our Daman property will
Delta says the Indian market has massive
become a magnet for tourists, gamers,
potential, with rising income levels in a country
vacationers as well as corporate for the
of more than 1.2 billion people, with a propensity
Western India region,” Chairman Jaydev Mody
to gamble. According to India’s National Council
said in a letter to shareholders posted on the
of Applied Economic Research, by 2025-26 the
company’s website. “With a full bouquet of
number of middle class households in India is
offerings, the hotel holds the potential to
likely to more than double from the 2015-16
become a gaming hub for at least four cities –
levels to 113.8 million households or 547 million
Surat, Baroda and Ahmedabad (all in Gujarat)
individuals.
and Mumbai (in Maharashtra).”
The company is also interested in developing
The property will feature between 1,000 and
a resort in neighbouring Sri Lanka, but is
1,500 gaming positions. The company, which
awaiting regulatory clarity. l
India’s diamond producers may have defaulted on payments of as much as $84 million in June alone, with the figure for the first half likely to be about $100 million, according to reports. About 95 percent of those defaults were down to losses from gambling on cricket matches Bangalore police recently arrested 59 businessmen from Gujarat in an illegal gambling sting. Most were wealthy diamond merchants who were flown in by gambling kingpin Dinesh Shah, who is wanted in many parts of the country for running illegal gambling operations
Asia Gaming Briefings | August 2014
SOUTH ASIA 18
NEPAL
Government softens casino stance
TOURISM ARRIVALS Y13 797,759
-0.7%
DIRECT TOURISM CONTRIBUTION (Source: WTTC)
Y13
$714.6M OR 3.9% OF TOTAL GDP
Y14E
$785.2M
Y24E
$1.2B OR 4.7% OF GDP
China visitor numbers to Nepal have almost doubled over the past three years, gaining to 89,509 in 2013, from 46,360 in 2011, with the average spend also doubling from $50-$60 to $100 “The government has realised that the closures have incurred loss to tourism. Hotels are reporting decrease in occupancy,” says Amba Datta Bhatta, executive director of Casino Association Nepal
Nepal’s government is showing signs of softening its stance after closing down the country’s casinos for the first time in more than four decades earlier this year, amid concern over the impact on tourism revenue
Kathmandu owe the government 657.66 million rupees ($10.8 million) in tax and royalties and also have outstanding debts to local hotels. In addition to the fees, the new rules which came into effect on July 16, 2013, stipulated
foreign tourists annually, mostly Indians, who
that casinos should have paid-up capital of
contribute about 15 percent to the occupancy
at least 250 million rupees ($2.5 million),
rate at the five-star hotels in Kathmandu.
with the minimum set at 150 million rupees
Nepal’s casinos had already been suffering
for mini-casinos.
and losing Indian tourists to casinos in Goa.
However, since the initial closure three mini-
The shutdown is estimated to cost the casinos
casinos have been allowed to reopen after the
themselves about 8 million rupees a day.
n a new Financial Bill, the government
Supreme Court issued an interim stay order.
The new regulations were aimed at bringing
in Nepal has reduced its proposed
“The government has realised that the closures
order to the country’s casino industry and
royalty for casinos to 30 million rupees
have incurred loss to tourism,” said Amba
were expected to cause a major shakeout.
($3.1 million) from 40 million rupees.
Datta Bhatta, executive director of Casino
The Casino Pokhara Grande closed its doors
Similarly, the fee for mini-casinos is now 20
Association Nepal (CAN). Hotels are reporting
days after the rules came into effect, with
million rupees instead of 30 million rupees.
decrease in occupancy.
the higher fees cited as a contributing factor.
The government ordered the closure in April
Bhatta said that Casino Mahjong has also
Casino Fulbari, Pokhara’s other casino, had
after casinos failed to meet a deadline to comply
applied to renew its operating license under
closed its business months earlier. Casino
with a new regulatory regime introduced last
the new regulations and owes 266.80 million
Shangri-La, which was taken over in 2010
year that introduced a new fee structure.
rupees in dues to the government.
by an affiliate of Widetech (Malaysia) Bhd,
The country’s seven casinos in the capital
Casinos are estimated to pull in about 150,000
shut down in August last year. l
I
Asia Gaming Briefings | August 2014
INDOCHINA 19
VIETNAM
Donaco’s Aristo pulls in China VIPs
GROSS GAMING REVENUE Y13E MIN
$275m
MAX
Donaco It also said that while the tensions between
Donacao International, the operator of Vietnam’s newest luxury resort, is upbeat about the casino’s prospects and said business had been brisk despite tensions with its giant neighbour China
Vietnam and China had not affected VIP visitation
+44%
to the resort, they may have affected overall tourism to the country, having an impact on the mass market. According to the preliminary data from the Vietnam National Administration of Tourism (VNAT), the country welcomed 539,776 overseas
GAMING TAX (JUNKET COMMISSIONS CAN BE DEDUCTED)
30%
visitors last month, 4.9 percent fewer than in June 2013. However, arrivals from mainland China were up 5.5 percent. The latest maritime tension came from China moving an offshore oil platform into disputed waters on May 2nd, which Beijing has now said will be moved by August 15th, according to Donaco. The tensions sparked widespread
D
Y13H1 $25.87
$300m
and violent street protests across Vietnam.
A decision by Vietnam’s government to open the country’s casino market to locals is not imminent, but is only a matter of time, Donaco managing director Joey Lim believes. Vietnam is currently discussing a bill to revamp casino legislation, with access to foreigners one of the most controversial aspects
onaco said VIP visitors to its property
However, the border crossing into nearby Yunnan
in Lao Cai, northern Vietnam, more
had remained open throughout the tensions
than doubled in May from the same
and in fact trade at the Lao Cai border gate was
period last year. The company,
up 59 percent in the five months to end May.
which had a smaller existing casino at Lao Cai,
In a recent report Bank of America/Merrill Lynch
held the soft opening for its new luxury Aristo
said it was optimistic about prospects for the
International Hotel on May 18th.
property, seeing significant mid-term upside.
In a filing with the Australian Stock Exchange,
Vietnam has seven licensed foreigner-only
the company said total visitation had increased
casinos and allows a limited number of slots
by 41 percent since the soft opening, while
in five-star hotels for the most part in the
VIP numbers were up by 116 percent, driven
capital Hanoi and in Ho Chi Minh City. There
by strong interest from junket operators. The
are also Electronic Gaming Clubs in Da Nang
mass market however declined 13 percent.
and Vung Tao.
Overall turnover also almost doubled, gaining
Five casinos are in the north of the country,
one casino, the Crowne Plaza now known as
94 percent, it said.
mainly on the coast or close to the Chinese
Silver Shores, in addition to an electronic gaming
Donaco has the right to operate a maximum of 50
border, with the biggest currently at Halong
club located at the Furama Hotel.
gaming tables in Vietnam with a gaming license
Bay, some 150km from Hanoi, which boasts
The coastal city has the third-largest airport
until 2044. The casino has 428 hotel rooms,
18 live tables. The remaining two casinos are
in Vietnam and is only an hour and a half away
permission for 150 slots and 150 electronic table
located in southern (Ho Tram) and central (Da
from southern China. It also enjoys strong ties
games. In its most recent release, the company
Nang) Vietnam.
with Macau and China junkets.
said it was currently operating 40 tables.
VinaCapital appears to be moving ahead with its
The Grand Ho Tram project, developed by Canadian
The property gets 90 percent of its revenue from
plans for a $4 billion integrated resort development
company Asian Coast Development Ltd., finally
VIPs, with the majority from the neighbouring
South of Hoi An, in the central Vietnamese
opened its doors in July last year. The company
Chinese province of Yunnan.
province of Quang Nam, after partnering with
recently announced that NewCity Capital, a
The company pointed out that the strong
Iowa-based Pacific Peninsula Group.
company established by American investor
performance had come despite the fact that
One of the most interesting areas of the country
Chien Lee, will be its new financial partner in
some facilities at the resort are still not open.
is still seen as Da Nang, which currently boasts
the venture. It didn’t disclose financial terms. l
Vietnam’s locals ban costs $800 million in lost revenue annually, while Cambodia’s border casinos boast 1,500 visitors a day from Vietnam
Asia Gaming Briefings | August 2014
INDOCHINA 20
CAMBODIA
Cambodia plans casino legislation revamp Cambodia is considering an overhaul of its gambling legislation and may legalize online betting to broaden the government’s revenue base and attract investment from major U.S. and Macau casino operators
(Source: CIMB)
$0.4b
$0.4b
$0.4b
Y13
Y14E
Y15E
that will run until 2065, as well as a 41-year monopoly within a 200km radius of Phnom Penh that expires in 2035. The group reported a 24 percent jump in revenue in 2013 to $344.9 million, while net profit increased by 24 percent to $140.3 million. It’s planning to open a second resort, Naga2, in 2016. Many of the country’s other casinos are small
R
GROSS GAMING REVENUE
NAGACORP Y13 GGR $325m
Q1 GAMING REVENUE
and proliferate along the border regions,
$76.8m
os Phirun, a spokesman for the
attracting a large audience from Thailand
Ministry of Economy and Finance’s
where gambling is illegal. Those casinos have
Y13 TOURISM ARRIVALS
gaming and casino department,
reportedly seen a spike in revenue recently as
was cited as saying that the
Thailand’s new military junta clamped down
4.2m
+25% +16% +17.5%
TOURISM ARRIVALS Y20 ESTIMATES
government is in the process of drafting
on illegal gambling at home.
stricter, more transparent regulation and
Meanwhile, Entertainment Gaming Asia said
investigative requirements.
it has agreed to sell its Dreamworld Casino
“Currently, we are in the process of drafting a
in Pailin, Cambodia, to a local buyer after
Casino Law to attract bigger casino operators,”
effectively writing off its investment in the
he said, adding that a new draft could be
property earlier this year.
finalized as early as this year. “While we don’t
The company said it sold the casino for $0.5
provide online licences yet, it is in the process
million, with $100,000 being paid up front and
of being studied,” he said.
the remainder to be paid in sixteen $25,000
Despite having one of the strongest growing
instalments. It has also terminated all of its
tourism markets in Asia, Cambodia has
agreements with its Cambodian partner, who
failed to attract the same levels of casino
is a relative of the unnamed buyer.
investment as its regional neighbours, such
Entertainment Gaming Asia opened the
as the Philippines and Singapore.
Cambodian property in 2012. It was built on
The World Bank forecasts that foreign direct
land owned by its partner in the northwest
investment inflows to Cambodia will rise 12
of the country next to the Thai border. The
percent in 2014 to $1.6 billion. Meanwhile,
company said the resort has suffered from a
the International Monetary Fund is projecting
low level of natural player traffic, the inability
that Cambodia’s gross domestic product will
to secure a long-term third-party table game
expand 7.2 percent in 2014, with inflation at
operator and political unrest in Thailand.
incurred as of that date.
3.4 percent.
However, it did say losses have narrowed in
For 14Q1, the company reported a 29 percent
International tourist arrivals to Cambodia
recent months. Casinos in the border areas
drop in profit as both its gaming operations
significantly outpaced worldwide tourism
have been reporting a spike in revenue as
and gaming products division declined. The
growth in 2013, increasing 17 percent to
Thailand’s new military rulers have cracked
company reported revenue of $6.9 million.
approximately 4.2 million visitors. Vietnam,
down on illegal gambling dens at home.
Gaming operations revenue, which comprised
China and Korea were the top three countries
The Dreamworld sale includes all assets of
slot and casino operations, was $4.1 million
in terms of total tourist arrivals, with visitors
the casino with the exception of all electronic
for the first quarter of 2014, down 25 percent.
from China increasing by 39 percent year-on-
gaming machines and certain surveillance
Dreamworld Pailin, contributed $216,000 to
year, to 463,123 visitors.
equipment. It also prohibits any use of the
total gaming operations revenue in the first
However, Cambodia’s casino industry is
Dreamworld brand name
quarter of 2014 compared to $1.1 million in the
dominated by Hong Kong-listed NagaCorp’s
The company in January reported an
prior year period.
NagaWorld, which has a stronghold on the
impairment charge of about $2.5 million as
The company said at the time that it remains
most-prized location in the country.
of end December 2013 on the casino, which
committed to seeking new gaming projects in
The resort has a 70-year casino license
represented the entire capital expenditure
Indochina. l
Asia Gaming Briefings | August 2014
Y13 4.2m
Y20E 7.5m
Australian aquaculture company turned casino operator, Cell Aquaculture, held the soft opening of its Roxy Casino in Cambodia’s Bavet City, Syay Rieng Province in May. The casino is 200 metres from the Vietnamese border and hopes to capitalize on gamblers crossing the border from Vietnam, where gambling is illegal for locals
INDOCHINA 21
THAILAND
Booming business brings extra challenges
GROSS GAMING REVENUE $23b
STATE LOTTERY
International online operators are doing booming business in Thailand, where officially gambling is banned, providing a challenge for authorities which are seeking to crackdown on illegal internet activities
O
perators see great value in the Thai
service provider (ISP) firms will operate the
market and pursue it aggressively.
facility to shut down inappropriate content.
The only legal forms of gambling
Police in March also issued an order to seize
allowed in the Kingdom are through
any slot machines or horse racing gambling
the State Lottery and the Bangkok Turf Club,
machines anywhere in the country.
however the underground market is estimated to
That move came in part amid concern that
be worth at least $3.23 billion, dwarfing the official
criminal gangs were taking advantage of the
government lottery with funds of $2.48 billion.
political protests that were demanding so much
Some experts said the black market figure is
police time to operate illegal gambling rings.
conservative and noted that there had been a
But experts say it will be near impossible to
surge in gross revenue in recent weeks.
stop online gambling, which saw a surge in
A recent investigative report by the Bangkok
activity amid the FIFA World Cup. Thai police
Post’s Spectrum supplement put the illegal
said they have arrested 5,064 people for illegal
market at as high as $23 billion, with the State
gambling during the World Cup, including
Lottery at just $1.3 billion.
258 bookmakers and 127 betting slip runners.
However, authorities are cracking down and
This compares with around 3,800 people being
have already blocked access to some sites. The
arrested across Thailand for gambling during
Information and Communication Technology
the previous World Cup in 2010.
(ICT) Ministry is planning to create a national
If convicted, they could face up to two years in
internet gateway in July to crack down on
prison and a 2,000 baht ($60) fine, but most
improper use of the internet.
are expected to receive suspended jail terms
It’s unclear how the “clampdown” will be
unless there are particularly large amounts of
policed, though local media reports have said
cash involved.
the two state telecom enterprises, TOT Plc and
More than 2,000 football gambling websites
CAT Telecom, plus six telecom and internet
have been shut down, the report said. l
$1.3b
DOMESTIC HORSE RACING $258m
Y13 TOURISM ARRIVALS 26.73m
+19.6%
Y14E 26.3m ARRIVALS
(CUT FROM 28m) (Source: Spectrum)
Thai Gamblers expected to spend almost 45 billion baht ($1.4 billion) on illegal World Cup betting, up 17 percent from the previous tournament, the University of Thai Chamber of Commerce estimates Thai junta’s gambling crackdown has spurred a boom in border casinos and sports bars in Cambodia, Laos and Myanmar. Outlets report an increase in revenue of between five and ten times their normal intake
Asia Gaming Briefings | August 2014
SOUTH EAST ASIA 22
PHILIPPINES
Filipino eGame-model attracts Asian interest for central reporting to owners and government
a better business environment by ensuring that
regulators, minimizing the risks of fraud.
proliferation is managed.”
The Philippines’ government regulator, Philippine
Pagcor clarified that it does not see the ordinance
Amusement and Gaming Corp (Pagcor), has
as being in conflict with its rules and regulations.
deployed a lot of resources to monitor stand-
“Our position is for the eGames operators to
alone gaming sites such as e-Bingo, Instawin
follow the city ordinance,” Francis Hernando,
and Slot Clubs, he said. “But, with eGames,
Pagcor’s vice president for gaming licensing, said.
they utilize modern technology to centrally,
Quezon City is adjacent to the capital Manila and
remotely monitor all activities.”
is home to most government offices, including
The Philippines is widely seen as the leader
the Lower House of the Philippines Congress.
in online gaming in Asia. Last year, eGames
Ordinance 2285, signed in May, also covers
remitted more than 2 billion pesos ($46.1
venues such as eBingo and Poker Clubs and
million) in revenue to PAGCOR.
prevents an eGames station from being within
The eGames outlets are similar to internet
a 300 meter radius of another internet café.
cafés, but are dedicated to online gambling.
“From our initial read of the ordinance, gaming
The outlets offer about 300 games ranging from
venues that are not compliant, particularly
baccarat to slot machines and online poker and
with regards to the distance between other
tend to cater to a local crowd who live or work
gaming venues, have a reasonable amount
in proximity to the internet cafe.
of time to cure the problem, whether it be by
would say we are advanced in that respect,”
“Our customers come primarily for amusement
transferring locations, combining or closing
Brian Ng, Philweb Senior Vice President
and entertainment. The economics are much
the venue altogether,” Ng said.
for eGames said in an interview, referring
smaller compared to the regular huge casinos
The city has given two years to comply with
to the Philippines’ lead in the industry.
in hotels or gambling resorts,” Ng said.
the regulations.
“eGames is a low-capital expenditure means
Philweb said its profit in the three months
Asked if other towns and cities might follow
for governments to increase their revenue
through June dipped slightly though operating
suit in their bid to regulate eGames, Ng said
collection. Rather than spending $25,000 for a
revenue rose. The company posted a profit
most local government units already have
slot machine, operators can spend $1,500 on a
attributable to parent equity holder of 211.84
similar ordinances covering the establishment,
computer connected to a central server running
million pesos ($4.9 million), compared with
operation and taxation of gaming businesses
software certified by a reputable third-party
262.47 million a year earlier. Earnings per share
in their jurisdictions.
auditor,” he said.
dipped to 0.180 from 0.189.
“Ng said the Philippines’ objective to become
The company recently hosted visitors from East
Operating revenue rose to 414.6 million pesos,
the center of gaming in Asia rests largely with
Timor who were interested in the product and
from 373.5 million pesos in the same period a
the integrated resort-type casinos that are being
Ng said he is fielding frequent enquiries and
year earlier.
established in Entertainment City and their
has been busy accommodating tours to eGames
Ng said no new stations have been added so far
ability to attract foreign high-value customers.
stations to demonstrate operations.
this year, while since 2012 most new outlets
Aside from eGames, the Philippines is a popular
Ng declined to comment on other visitors, but
were in provinces outside the crowded Metro
center for the front and back-office operations
according to the company’s web site it already
Manila area.
of large internet casinos, employing thousands
serves customers in Cambodia and Guam, while
He said a recent ordinance by Quezon City,
of people in a BPO-type work environment.
representatives from Nepal, Sri Lanka, Laos
which imposed strict new regulations on the
These online casinos can only take bets
and Palau have all had talks with the company.
location of eGames outlets, had not had much
from abroad and operate under license from
Ng said a big attraction is that the system allows
effect, adding the ordinance as a whole “creates
the Cagayan Export Zone Authority (CEZA).
PhilWeb, which operates 299 eGaming cafes across the Philippines, said its business model is attracting growing interest across Asia from regulators and gaming firms eager to replicate the business at home
I
Asia Gaming Briefings | August 2014
SOUTH EAST ASIA
GROSS GAMING REVENUE (Source: CIMB)
OPERATORS
$4b
of gaming tables and electronic table games
$3.5b
upon opening. “The regulatory revisions
$3b
allow for an increased number of gaming
SOLAIRE RESORT & CASINO Bloomberry Resorts’ Solaire Resort & Casino was the first to open in Entertainment City and is now set to open its 200,000 squaremeter extension in October this year. The $400 million add-on will feature more VIP gaming sections, 300 all-suite hotel rooms, a shopping center with 30 to 40 high-end shops, a 1,800-seat entertainment theater, 3,000 parking spaces, a nightclub and more restaurants. The initial outlay was boosted to $680 million, $60 million more than
tables, additional bonus junket tables and electronic gaming machines provided that various size thresholds for hotel rooms, room suites and villas are met,” said Chimmy Leung, director of corporate communications at Melco Crown Entertainment Limited. According to Melco’s Q1 results, the City of Dreams had about $8.8 million of operating opening costs as well as share based compensation costs. It recorded a net loss of approximately $21.8 million.
RESORTS WORLD BAYSHORE
“This is definitely going to drive visitation
Genting Hong Kong and AGG. Travellers
to Solaire not just from locals but more so
International Hotel Group said it will focus
from foreign VIPs going forward,” said Leo
on developing Resorts World Manila before
D. Venezuela, Director of Investor Relations
pursuing development of the $1.1-billion
at Solaire Resort and Casino.
Resorts World Bayshore along Manila Bay,
Bloomberry Resorts Corp. results improved
which is scheduled to open in 2017. The
in the first quarter of the year with an
company, a joint venture between Genting
unaudited consolidated profit of P1.46 billion
Hong Kong and Alliance Global Group has
($33.7 million) from a loss of P1.06 billion in
allotted $600 million for the second and
the same period of 2013. Total gross revenues
third phases of Resorts World Manila to
reached P7.38 billion, over 11 times the
boost retail space by 60 percent. It will add
P661 million generated in the same period
1,100 rooms to the existing 1,226 rooms in
last year, with gaming accounting for 95.7
Resorts World Manila’s Maxim’s, Marriott
percent of the total.
and Remington hotels. Travellers Group
Since opening in March 2013, Solaire has
president Kingson U. Sian told reporters
signed up about 50 junket operators to bring
last July that the 12-hectare Resorts World
in foreign VIP players. The mass gaming
Manila is already a prime lot with a mature
player sign-ups also reached 256,000 in 2013
tourism and gaming market so returns will be
while total visitation for the year hit the
faster. In a disclosure to the Philippine Stock
3-million mark.
Exchange in April, Travellers said Pagcor
Crown are scheduled to open the City of Dreams casino resort project towards the end of this year. City of Dreams will also bring luxury brand, Nobu to the Philippines, as well as an educational entertainment center in a venture with Hollywood studio, Dreamworks. In June, Melco upped its estimate for the Entertainment City resort by about a third,
Y13
Y14E
Y15E
Y16E
expenses, which primarily related to pre-
previously announced.
CITY OF DREAMS Belle Corp and Melco
$2.2b
Solaire Resort and Casino launched a major branding and marketing campaign with AirAsia, wrapping an Airbus A320 with the resort’s colors. The campaign is scheduled to run through to 2016. Solaire claims to be the first consumer brand in the Philippines to fully wrap a brand around a commercial airline Bloomberry Resorts and Hotels has asked the Supreme Court to overturn a Bureau of Internal Revenue ruling that calls on casino companies to pay income taxes on top of the franchise tax they pay to the Philippine Amusement and Gaming Corp. Bloomberry is arguing that Pagcor’s charter exempts licensees from paying taxes
cleared the installation of an additional 420 gaming tables and 4,148 gaming machines. At end-2013, Resorts World Manila housed 287 gaming tables for the VIP and mass markets, 1,822 slot machines and 210 electronic table games. Travellers says it has so far used about 1.11 billion pesos ($25.5 million) of the 16.8 billion pesos that it raised through an initial public offering on the Phase 2 expansion of the Marriott Hotel and the Maxim’s Hotel and facilities.
and bribery charges filed against Japanese billionaire Kazuo Okada and his companies. As of going to press, Universal unit Tiger Resort, Leisure and Entertainment was still scouting for a local partner for the project after the termination of its agreement with Century Properties Group (CPG) designed to help Universal comply with the Philippines’ 40 percent-limit on foreign land ownership. The company is seeking to open its
MANILA BAY RESORTS Universal
$2-billion gaming complex by the third
The property will feature 365 gaming tables, 1,680 slot machines and 1,680 electronic
Entertainment Co. Pagcor chairman and
The casino will feature 2,000 rooms, state-
table games upon opening, catering to both
CEO Cristino Naguiat Jr. has that Universal
of-the-art gaming facilities, and an indoor
the VIP and mass market and 950 hotel
Entertainment’s Manila Bay Resorts would
man-made beach club covered by a huge
rooms.
not be allowed to open its casino until
glass dome, high-end and casual dining
City of Dreams Manila has been permitted
outstanding issues were resolved, including
restaurants, upscale retail shops, trade halls
to operate a substantially increased number
foreign equity limits on land ownership
and cinemas. l
from $680 million to $832 million.
quarter of 2015.
Asia Gaming Briefings | August 2014
23
SOUTH EAST ASIA 24
SINGAPORE
Singapore hits plateau, few growth drivers seen
GROSS GAMING REVENUE (Source: CIMB)
+3.8% $6.07b
Singapore took less than five years to catapult itself to the third spot in the global gambling industry, but that heady early growth now seems to have hit a plateau with few new drivers for growth expected in the short term
S
$6.8b
$7.1b
$7.5b
Universal Studios theme park. However, recent results have been mixed. In the latest quarter ended June 30th, Marina Bay Sands reported property EBITDA rose 17.6 percent to $417.8 million. Meanwhile, Genting Singapore reported stellar Q1 results, but warned that the situation is getting tougher and that it plans to streamline operations
Y13
Y14E
Y15E
Y16E
and introduce new products to lure tourists. Q1 net profit soared 77 percent, boosted by a pick up
trict government regulation, limited
in its gambling business. Revenue rose 24 percent
real estate and other resources, cautious
to S$828.8 million ($663 million), while net profit
economic sentiment, and newly
came in at S$257.6 million. The company said its
developing regional rivals threaten
gaming business saw revenue rise 29 percent on
to stall industry growth in the coming years.
the back of higher rolling volume and a higher
“The outlook for the industry in Singapore
win percentage in the premium market.
remains cautious,” Lucius Jesudason Chong, an
Most pundits agree that the casino and gaming
analyst at CIMB Research, says. “Government
business in Singapore is leveling off as economies
regulation is still the major deciding factor in
in the region soften.
the growth prospects of the industry.”
“Despite being economically stable, the Singapore
The government tightened legislation last
economy is finding it hard to grow,“ Chong says.
year, with amendments to the country’s
The downbeat economic sentiment in Singapore
Casino Control Act that include an increase
has contributed to the cooling of the demand in
in the maximum financial penalty that casino
Singapore’s casino and gaming industry, which
operators may face, from S$1 million up to 10
is reliant on discretionary spending.
percent of annual gross gaming revenue for
On a year-over-year basis, Q1, 2014 GDP grew
breaches of regulations.
by 4.9 percent, similar to the growth rate seen
This indicates that the government’s stance on
in the previous quarter.
gambling is “unlikely to change,” said Chong.
According to the Singapore Tourism Board,
The industry generated gambling revenue of
international visitor arrivals were flat at 3.9
$6.07 billion in 2013, up 3.8 percent from the
million. Arrivals from China, one of the largest
previous year and a far cry from the 18 percent
markets for the integrated resorts, fell 14 percent
spurt recorded in Macau.
compared with the prior year period.
Marina Bay Sands is considered the most expensive
“Casinos are an attraction for tourists, but
stand alone integrated resort property in the
the government is cautious in promoting it
world, with Las Vegas Sands investing a total
as the centrepiece of Singapore’s economy,”
of S$8 billion to complete the construction of
Chong explains.
the waterfront city centre. Marina Bay Sands
Also, the government has to approve any
occupies 15.5 hectares of reclaimed land with
expansion of the current integrated resorts,
a gross floor area of 581,000 square metres.
particularly in adding land area and hotel rooms.
Genting Singapore’s Resorts World Sentosa is
Real estate is a sought after commodity in the
located on the island of Sentosa, off the southern
country and, with casinos contributing less than
coast of Singapore. Also considered as one of
5 percent to Singapore’s gross domestic product,
the most expensive casino properties in the
allocating valuable real estate to integrated
world, Resorts World was developed for $6.59
resorts is just not the government’s priority.
billion or $4.93 billion. The resort occupies
LVS chairman and CEO Sheldon Adelson said
over 49 hectares (121 acres) of land. It features
he didn’t expect the government to approve
Universal Studios Singapore, the region’s first
its request to add more rooms. l
Asia Gaming Briefings | August 2014
Y14 Q1 tourism receipts $4.8b
+5%
Gaming, entertainment receipts $1.3b
+19%
Visitor arrivals 3.9m CHINA ARRIVALS
-14%
Singapore has launched a marketing campaign to attract Chinese visitors amid a drop in tourism numbers. The 5 million yuan ($802,491) campaign will run through to October and will be jointly organized by airport operator Changi Airport Group (CAG), the Singapore Tourism Board and Chinese and Singaporean travel agencies A Singapore delegation has visited the French igaming regulator ARJEL to gain a better understanding of the French online gaming regulatory model. Singapore is currently reviewing its approach to online gaming regulation
SOUTHEAST EASTASIA ASIA SOUTH 25
GROSS GAMING REVENUE
MALAYSIA
Second casino license for Malaysia seen unlikely Genting Bhd, the operator of Malaysia’s only casino, is unlikely to lose its monopoly despite ambitions by tycoon Vincent Tan to apply for a license for the Berjaya Hills Resort in Pahang, analysts have said
$2b $1.6b
$2.1b
$1.7b
massive plans for expansion both at home and abroad. The diversified conglomerate is planning expenditure of $9.5 billion over the
Y13
Y14E
Y15E
Y16E
next five years, according to CIMB estimates, and that doesn’t include a potential project in Japan or Miami. Fitch Ratings recently reaffirmed Genting’s credit ratings, saying the group has the financial
GENTING Y14 Q1 revenue
+20%
Net EPS
+25%
muscle to support its expansion. The group’s Long-Term Foreign Currency Issuer
T
(Source: CIMB)
Default Rating (IDR) and senior unsecured rating an told a local newspaper in an
were confirmed at ‘A-’, among the highest
interview that he’d be prepared to
among Fitch-rated gambling companies. It
invest 3 billion ringgit ($933 million)
also affirmed Genting Singapore’s ratings at
in the Berjaya complex, creating
the same level.
Greece’s Intralot said Malaysia’s Magnum Corp has extended a lottery services contract for a further seven years, with the option to extend for a further two. The agreement covers the procurement, installation and support of an advanced, integrated lottery system to support up to 2,450 gaming terminals, among other items. The implementation will begin immediately and the commercial operation is estimated for mid 2015.
10,000 local jobs. Berjaya, which is close to
“Genting’s ratings reflect its continued
Genting’s Resorts World Genting property, is
strong market position in the Malaysian and
only permitted to offer slot machines.
Singaporean gaming markets, its robust and
It would be the second attempt by Tan to obtain
improving operating margins, and low net
a casino license in the hills, after an earlier bid
financial leverage, it said.
a decade ago was thwarted by protests.
Genting’s low net leverage, with negative net
“We will reapply for the license. Malaysia should
external debt on a consolidated basis which was
not stick to one operator. It should be shared
negative 0.21x in FY13, also supports its rating.
with other operators as tourism developments
The group recently announced a project on
can generate a lot of income for the country,”
South Korea’s Jeju Island with Chinese developer
Tan was quoted as saying.
Landing International, plans for a project in
“South Korea, Japan and Taiwan are looking
Las Vegas and a major revamp of its Resorts
to give out licences to operate casinos as they
World property at home. It is also bidding
realise the full potential of such developments.
for a casino license in New York State and is
“We will market Berjaya Hills as a new casino
interested in operations in Florida. Its name
destination globally. I have 4,600ha in Berjaya
has also been connected to a potential bid for a
Hills and there is lot that can be done with such
license in Japan. The group’s Singapore-listed
a licence,” he said.
unit, Genting Singapore said it has set up eight
However, Malaysian property developer, Tan
subsidiaries in Japan, ahead of the expected
Sri Low Yow Chuan, has claimed he has the
legalization of casinos in the country.
right of first refusal should Malaysia decide to
In a Singapore stock exchange filing, Genting
allow a second gambling license in the country.
said “each subsidiary will be principally engaged
According to The Star newspaper, the license
in investment holding, leisure and related
was granted in 1970 by Malaysia’s first Prime
businesses.” Genting is seen to be positioning
Minister Tunku Abdul Rahman to the 81-year-old
itself in Japan after losing out on a license in
patriarch of the Low Yat group and reaffirmed
Macau. The group is pushing hard to diversify
in 1993.
globally to reduce dependence on the sluggish
Either way, analysts said it was unlikely that
Singaporean and Malaysian markets.
Profit rose to RM1,464.2 million ($455.4 million)
authorities would grant a second license amidst
The company, which has interests ranging from
from RM933.3 million in the same period a
opposition from politicians and conservative
gambling to palm oil, said its Q1 pre-tax profit
year ago. Group revenue gained 20 percent
sectors of the mainly Muslim country.
from continuing operations surged 57 percent,
to RM4,693.4 million. Net earnings per share
Meanwhile, Genting is pushing on with
boosted by its casino businesses.
were up 25 percent. l
Malaysia’s Home Minister Datuk Seri Dr Ahmad Zahid Hamidi has warned that police action alone won’t be enough to tackle illegal gambling. He wants a coordinated approach among community, local authorities and police to ensure phone lines, water and electricity are cut to illegal gambling dens
Asia Gaming Briefings | August 2014
AUSTRALASIA 26
AUSTRALIA
Bookies fees risk inflating illegal market Fee hikes for bookies in Australia’s horse betting market threaten to boost illegal gambling, push players back offshore and may force companies to change their business models, experts say
Asia Gaming Briefings | August 2014
V
ictoria has changed its fee structure,
fees are increased to 2.5 percent, or 30 percent
while New South Wales has also
of gross revenue. For non-pari mutuel bets the
proposed similar hikes, sparking
fees rise to 3 percent for premium meetings.
concern others may follow suit and
In Queensland, the proposed structure will
raising a furore among the nation’s bookmakers.
see totalisator bets charged at 1.5 percent of
According to the Australian Wagering Council,
turnover for standard meetings and 2.0 percent
racing accounted for 13.6 percent of Australia’s
for premium meetings. Non-totalisator bets
total A$19 billion ($17.8 billion) spend in the
will be charged at 2.5 percent of turnover for
2008 - 2009 period. A report by the The Victorian
standard and 3.5 percent for premium. New
Commission for Liquor and Gambling Regulation
South Wales may also follow suit.
for 2012 - 2013 estimated that the combined
According to Tabcorp, without mitigating
racing and sports betting take had risen to some
strategies the Queensland changes would have
15 percent of total spend.
cut net profit after tax by $3 million, while
Under the new fee structure, for pari mutuel
the Victoria hikes would have cost $4 million.
bets, bookmakers in Victoria will have to pay
Paddy Power has condemned the increase and
the higher of 1.5 percent of turnover, or 15
has threatened to redirect promotional activity
percent of gross revenue for 440 standard
to sports betting and racing in other states.
race meetings in Victoria. For the 45 group and
A representative of the Australian Wagering
listed meetings the charges rise to the higher
Council told AGB that “regular reviews of the
of 2 percent of turnover, or 20 percent of gross
product fees levied to bet on racing in Australia
revenue, while for the 10 premium group one
impact significantly on wagering service providers
meetings, including the Melbourne Cup, the
and the racing industry itself.”
AUSTRALASIA 27
CASINO GAMING REVENUE (Source: CIMB)
Y13
$3.5b
Y14E
$3.6b
Y15E
$3.7b
Y11/12
GAMING (INCLUDING POKIES) $151.5b RACING $9.2b SPORTS BETTING $3.9b (Source: Queensland Treasury)
Echo Entertainment said it has agreed to team up with rivals Chow Tai Fook Enterprises and Far East Consortium International to bolster its chances of obtaining a casino license in downtown Brisbane. The new consortium will be known as Destination Brisbane Consortium and the parties will work together on a detailed proposal to develop the Queen’s Wharf project The AWC believes that these fees will limit
William Hill does not yet have a plan of how
competitiveness and may drive punters towards
it will deal with the increase in fees, he said.
either “illegal, unregulated starting price (SP),
“We are currently assessing the impact of the
or offshore bookmakers.” They do not pay tax
change and next steps.”
and do not have policies in place to maintain
The fee hikes may also help to accelerate a
responsible gambling, the body argues.
trend in the country’s betting market away
Karen Avery, Senior Director Gambling and
from wagering on horses to a broader sports
Licensing Services, Department of Business,
betting model, especially online.
for the Northern Territory said the state doesn’t
Bill Brown, of law firm Rockwell Olivier, predicts
plan to follow suit with fee hikes.
that these fee hikes will not necessarily lead
James Henderson, Group Operations Director
to investment back into racing. Brown says
at William Hill, told AGB that he concurs with
“there are no external checks and balances
the AWC’s assessment that the increase in
on how the racing controlling bodies spend
racing fees will negatively affect both punters
the money raised.” He says the race fields
and the industry more generally.
legislation needs to be re-visited so that “the
However this growth marks more of a move
“The real risk is that the increase in fees pushes
fees are not frittered away on administration
from one platform to another, rather than an
consumers to unregulated offshore operators,
rather than on improving the quality of the
expansion in the overall market. The wagering
which defeats Racing Victoria’s objectives as
racing product.”
market has not, overall, expanded tremendously
revenues are funneled offshore”, said Henderson.
Overall the online sports betting market in
in the past four or five years but merely
He believes that such operators do not have the
Australia is booming. The growth has attracted
kept pace with Australia’s general economic
same commitments to responsible gambling
an influx of foreign investment, with many local
growth at about 4 to 5 percent, according to
or harm minimization.
bookmakers being bought up by overseas giants.
AWC figures. l
Tatts and Tabcorp said they will need to take a charge to their results after The Court of Appeal of the Supreme Court of Victoria overturned a ruling regarding pokie machine levies due to the Victorian government. Tatts said it will need to take a charge of about $25.7 million to cover the ruling, while Tabcorp expects its 2013/14 earnings to be impacted by about $19 million
Asia Gaming Briefings | August 2014
AUSTRALIA SPECIAL FOCUS 28
SOCIAL GAMING:
Enticing opportunities, mounting concerns The social gaming market is triple the size of the online gambling market, with revenues growing at a healthy 34 percent clip from 2013 to 2014, creating an enticing opportunity for operators, but also raising concern about the implications for problem gambling
G
ambling operators are increasingly active
brand’s personality to engage and create excitement
on social media platforms, most notably
in their communities.
Facebook and Twitter. Australia is likely to
One popular activity on social media platforms is social
prove fertile ground with one of the most
gaming, and social casino games are one of the most
Internet connected populations worldwide.
profitable genres of this activity. Social casino games
It is estimated that 89 percent of the population have
refer to games based on, or interacting with, a social
a social network account and spend an average of two
media platform that replicate a gambling activity, but
hours per day on social media platforms. Over 12 million
do not award real money prizes. These games are free to
Australians use Facebook and YouTube and there are 2.5
play, but users can choose to pay real money to access
* Dr. Sally Gainsbury is Senior
million active Twitter users.
additional content.
Lecturer, Centre for Gambling
In addition to hosting communities and creating content,
As well as the rise in social gaming revenue over the past
Education & Research,
gambling operators can display promoted content on
year, monthly active users have also risen, up 12 percent,
Southern Cross University
social media and target advertisements to a specific
mainly due to the increased use of mobiles, similar to
population. Social media can be used to portray a
the impact of this device on the gambling market.
Sally Gainsbury*
Asia Gaming Briefings | August 2014
AUSTRALIA SPECIAL FOCUS 29
Recognising the popularity of social casino
(estimated at approximately 2 percent) has
be particularly attractive to young people as
games, several operators have launched or
raised the question of whether these games
they feature themes such as cartoon animals
partnered with social casino game sites in an
cater for different consumer groups.
from popular movies and shows.
effort to engage with customers and diversify
Behavioural economist, Dan Ariely, has argued
The extent to which social media use and
their product offerings.
that social casino games are actually undermining
social casino games should be regulated has
Social casino games owned by Caesars Interactive
gambling by encouraging potential customers
been debated internationally, including in
Entertainment, a division of the U.S. gambling
to prefer a free version, rather than pay for
Australia. A number of studies have shown a
company, represented over one-fifth of the
the experience.
correlation between the use of social casino
total social casino revenue from March to June
If social casino game players are motivated to
games and online gambling and gambling
2014, followed by DoubleDown Casino, owned
play for the enjoyment of the game, according to
problems among young people.
by International Game Technology. In addition
behavioural economic theory, these players should
However, these correlational studies do not allow causal inferences to be drawn. Currently,
to brand recognition, player analytics provide valuable insights into the popularity of games and user play patterns and preferences. The explicit connection between social casino games and gambling operators is important in jurisdictions such as the U.S. and Australia, where real money gaming (i.e., casinos, slots, poker, etc.) is mostly prohibited. Online games offer a way to increase brand awareness among consumers and provide a preview of gambling experiences. For example, MGM Resorts International launched a standalone social gaming website that offers social casino games and allows users to construct casinos on a virtual Vegas strip. All games are free to play, but users can win
"OVER THE LONG TERM, USERS, PARTICULARLY YOUNGER USERS, MAY BECOME ACCUSTOMED TO THE ONLINE ENVIRONMENT AND BE LESS LIKELY TO VISIT GAMBLING VENUES. THIS IS A POTENTIAL CONCERN FOR THE LAND- BASED GAMBLING INDUSTRY IN AUSTRALIA, WHERE PARTICIPATION AND EXPENDITURE ON ELECTRONIC GAMING MACHINES HAS DECLINED IN RECENT YEARS"
there is insufficient evidence as no research has been conducted to determine the impact of these new technologies on gambling and vulnerable populations. Despite this, further efforts are needed to ensure that social casino games are not inadvertently marketing gambling to young people or adversely impacting this vulnerable population. Social casino gaming has proven its value as a source of revenue in its own right. Whether synergies will emerge between gambling and gaming is yet to be seen. To further the understanding of the impact of new technologies, including social media and
loyalty points and rewards that can be redeemed for real prizes such as complimentary hotel
be resistant to paying a higher price to gamble,
social casino games on gambling and related
rooms, restaurant meals, and show tickets,
as they have learnt to enjoy the free version.
problems, an online survey is being conducted
linking the games to gambling venues.
Over the long term, users, particularly younger
by CGER at Southern Cross University.
There is a theory that users who are interested
users, may become accustomed to the online
The survey aims to recruit Australian social
in social casino games may also be interested
environment and be less likely to visit gambling
media users, including those who play social
in gambling and that users may be prompted
venues. This is a potential concern for the land-
casino games and/or gamble. The results
to migrate from these games to real money
based gambling industry in Australia, where
will determine the crossover and impact
gambling sites. The attraction is that if even
participation and expenditure on electronic
between these activities, and any impact on
a small proportion of the social casino game
gaming machines has declined in recent years.
gambling problems.
players migrate to gambling, the expense will be
The concomitant increase in popularity of
For the study to be successful, a large number
worthwhile. Furthermore, the cost of migrating
social casino games and the convergence
of Australian social media users, social gamers
customers from social casino games to gambling
with gambling operators has led to concerns
and gamblers must be recruited. The CGER
is expected to be significantly lower than the
that social casino games may be harmful if
is looking for organizations that are willing
costs of acquiring new customers.
consumers have difficulties distinguishing
to host recruitment notices and links to the
There is some evidence that social casino game
gaming from gambling.
survey on relevant websites, or send notices
players are interested in gambling. A recent study
The widespread popularity of social casino games
to customers to encourage participation in the
conducted by the Centre for Gambling Education
may increase normalization and favourable
survey. The link is http://cger.scu.edu.au/.
& Research (CGER) found that approximately 13
impressions of gambling, which may lead
Support for the recruitment process by relevant
percent of Australian gamblers also play social
to increased gambling participation and the
organizations is critical to ensure the results
casino games and these people were more likely
subsequent development of gambling disorders.
are meaningful and informative.
to be younger and gamble on the Internet than
The impact of social media and social casino
If you are interested in supporting this research
non-social gamers.
games on children and adolescents is of particular
by hosting a recruitment notice or finding out
However, the relatively low conversion rate of
concern given the lack of age restrictions on
more about this research please contact Dr. Sally
social casino gamers to real money gambling
these platforms. Many social casino games may
Gainsbury at sally.gainsbury@scu.edu.au. l
Asia Gaming Briefings | August 2014
AUSTRALIA SPECIAL FOCUS 30
Saving sport: Government action needed Chris Eaton*
T
he FIFA World Cup hosted by Brazil dominated
For example, with the extremely significant arrests of
the world of sport over June and July. While
illegal gambling organizers during the World Cup in Macau,
arguably the biggest global sport competition
Vietnam and USA among others, and with hundreds of
next to the Summer Olympics, and always
millions of dollars seized and billions of dollars in bets
controversial in some way, no prior World Cup has been
taken by those arrested, the prediction by John Sun,
so affected by the shadows of administrative corruption
chairman and CEO of AGTech that betting on this World
and match fixing.
Cup would be four times higher than for the previous
Despite their best efforts, FIFA were not able to completely
tournament, with some games attracting six times the
deflect the interest of the media and the public away from
revenue, seems to have been more than accurate. In this global sport-betting-
corruption taints and allegations solely onto the competition itself. In some ways this is an echo of the International Olympic Committee and Salt Lake City. In other ways it is an echo of endemic, almost institutionalized doping in other sports, such as cycling. However, the double whammy in football of corruption on the field and in governance is even challenging the hitherto seemingly impervious
“BECAUSE TODAY THERE IS NO INTERNATIONAL SPORT BETTING REGULATION OR SUPERVISION AND NO INTERNATIONAL PLATFORM TO JOIN UP THOSE NATIONS THAT ACTUALLY DO REGULATE SPORT BETTING, IN EFFECT THE INDUSTRY IS A GLOBAL MARKET FREE-FOR-ALL”
without-borders environment, a reputable betting monitor has estimated that over €14 million ($18.7 million) on average was bet for every minute of play during the 64 matches of the World Cup. If you add the illegal, legal and under-regulated betting markets, it was estimated that an average of €2 billion was bet on each match, and that €5 billion was gambled on the final.
edifice of FIFA. There is a simple enough reason for this. The growing
Internal greed and corruption in sport and in sport-betting
frequency of football scandals worldwide is seriously
has created a permissive environment within which,
eroding the confidence of all football fans in both the
at worst, match-fixing and betting-fraud has become
game itself and the credibility of its administrative organs
tantamount to acceptable and at best, easily ignored.
to take control of the problem. When the institutions
And because today there is no international sport betting
of governance cannot control the real purpose of their
regulation or supervision and no international platform
existence, just as when the police cannot maintain public
to join up those nations that actually do regulate sport
safety, the blame naturally elevates to government
betting, in effect the industry is a global market free-for-all.
leaders, as it should. When you lose the confidence of
Sadly international sport just doesn’t seem to care enough
your “public”, you will pay the price sooner or later.
and does not find a voice on match-fixing until it actually
Debilitating cynicism is the enemy and whether people
hurts its image or its income. Even then responses are
in football like this reality or not, they must either firmly
usually calls for soft solutions, such as education and
deal with this phenomena, or continue to slowly wither.
betting monitoring.
This withering of confidence might not be so obvious,
Generally international sport betting just doesn’t care
particularly to those blinkered in short-term office or
either. Sport betting globally is competitive, business
to those dominant in the business of sport, but nor was
driven and without either a social context, or a social
*Chris Eaton is Executive
it so obvious in wrestling and boxing until it was too late
responsibility outside of those forced on them by some
Director - Sport Integrity
and these became discredited fringe sports.
individual governments. The sport betting industry will
for the International Center
Football is the archetypal modern sport. It is dominated by
not responsibly self-regulate. Only governments have
for Sports Security (ICSS),
wealth and the wealthy, and by those who want to join them
the power to do this.
and an AGB Advisor
on that “pedestal” in any way possible. It is this wealth that
Saving sport from criminals and global greed must become
naturally brings those who illicitly prey on it into the scene.
one of the highest priorities of international leadership. l
Asia Gaming Briefings | August 2014
AUSTRALIA SPECIAL FOCUS 31
Sports betting matters
A
s participants of sports betting know, it’s all
The Canadian Senate may not be the only upper house
about speed. Betting companies spend big
to restrict regulatory reform in sports betting. Should
to ensure that punters can place their bets
the Australian Government decide to make changes to
as quickly as possible. This is particularly
the Interactive Gambling Act to allow “in the run” bets
important in the rapidly growing segment of the market
to be placed over the internet (and there is no evidence
that participates in “in the run” betting.
I am aware of that it will), that amendment would need
It is therefore particularly ironic that the one area which
to pass the Australian Senate. Who among us has any
would arguably make the biggest difference for punters is
confidence in the likely outcome of an Australian Senate
the one that is moving at snail’s pace. Regulatory reform,
vote right now?
to put it bluntly, has hit the wall.
Let’s look at the Australian States and Territories where
Regulatory reform of sports betting, however, should
all gambling regulation, other than that restricted by the
not be motivated just by the desires of the punter, or the
Commonwealth’s Interactive Gambling Act, resides. The State
commercial interests of betting companies. The primary
of Victoria implemented its sports betting integrity model
reason why regulatory reform is needed is to protect the
in 2007 – and seven years later, even though it appears to
integrity of sport itself.
be fulfilling exactly what was intended, no other Australian
From the U.S., to Canada, to Australia, there’s the
State or Territory Government has followed up with matching
possibility of reform, but a decided lack of activity. In
legislation. It would seem that professional sports see the
the U.S., various state governments are testing the
value in the Victorian model, with nine sporting bodies
waters but, as it was recently explained to me by a U.S.
now approved as controlling bodies for their sports. (This
gaming attorney, governments in America no longer run
approval provides those sports with the power to require
the country, the U.S. Supreme Court does. So, while we
betting operators to have their approval before any bets
wait for the U.S. Supreme Court to determine whether
can be placed.) So why haven’t the other Australian State
individual states have the right to implement sports
and Territory governments come to the party?
betting, let’s look at Canada.
Fortunately, as Victoria hosts most of the big sporting
There the House of Commons voted unanimously two
events or, at least, some elements of a broader national
years ago to support legislation which would, in effect,
competition, the Victorian legislation provides protection
remove the restriction preventing individual provinces
across Australia. But the implementation by all other
from legislating to allow regulated sports betting. That
Australian State and Territory governments of companion
bill never made it through the Canadian Senate. Should
legislation would not only strengthen the integrity model
it fail to pass, it will apparently be the first bill in history
but also signify the intentions of those governments
* Peter Cohen is Director,
to be unanimously supported in the House of Commons,
to take the issue of sports corruption seriously. While
Regulatory Affairs,
but refused by the Senate. That’s the sort of power you
punters, betting companies and even tax collectors
at The Agenda Group,
think might better be reserved for national security or
might all benefit from these reforms, the bigger picture
and an AGB Advisor
personal privacy laws rather than sports betting, but
is that sports and the people who love them, will be the
that’s the Canadian Senate’s prerogative.
main beneficiaries. l
Peter Cohen*
Asia Gaming Briefings | August 2014
AUSTRALIA SPECIAL FOCUS 32
Race field fees: How to avoid a slow (funding) death
W
hen asked for a comment recently
Without going into too much detail about the history
on the setting of race fields fees in
of race fields fees, race controlling bodies in Australia
Australia, I expressed my concern that
were given the power to raise funds directly from betting
some of the money collected might not
and wagering operators by imposing a fee for use of
be invested productively.
racing product.
I meant no disrespect to the various racing controlling
This has largely resulted in operators being relieved of
bodies in Australia. My intention was to raise the prospect
wagering and betting taxes imposed by State and Territory
that the money might, for one reason or another, get
governments.
diverted to such a degree that the industry is forced to
The race field fees were also introduced to deal with the
* Bill Brown is a well known
do one of two things:
“free rider” problem attributed to operators licensed
Australian gaming law expert,
To either go back, cap in hand, to the government for
in the Northern Territory and elsewhere. Without the
and an AGB Advisor
financial assistance, or to “tax” licensed Australian
imposition of race field fees, those NT operators had no
betting operators out of the market.
legal obligation to pay for use of the states’ race fields
Bill Brown*
Asia Gaming Briefings | August 2014
AUSTRALIA SPECIAL FOCUS 33
information. The NT operators were said to be
any measure of reasonableness in setting that
appears that Queensland has reserved some
contributing nothing of significance to the racing
fee. Otherwise, a Queensland control body is
power for the relevant minister to intervene.
industries in Australia. While not directly linked
not constrained in setting the fee.
The minister can give a direction to a control
to the “free rider” issue, there were also issues
If the worst were to occur, what means could
body on a range of matters, including one to
of integrity floating in and out of the debate.
be employed to ensure that the race fields fees
ensure that its actions are accountable and its
As this was going on, the rise of offshore operators
raised by control bodies across Australia were re-
decision-making processes are transparent.
accelerated in parallel. The Federal government’s
directed to productive uses? The most obvious
As well, the minister may direct the body to
attempt at regulating the availability of offshore
is the power to make regulations to impose
review an existing policy, or to make a new
online gambling and betting was proving to be
controls over how a body pursues its objectives.
policy about a matter. Victoria and NSW have
ineffective. Then and now, Australian punters
Regulations can usually be implemented at the
chosen not to reserve this type of power to their
continue to bet more and more on these largely
administrative level, as opposed to statutory
relevant minister.
unregulated offshore sites.
changes which must pass via parliament.
So if we assume the power is there, what might the relevant department consider? Conceptually,
Can or should governments do anything to regulate the way in which each control body spends the fees raised? Some background on the race fields legislation first. The key states here are Victoria, New South Wales and Queensland. The relevant laws and the resultant schemes are similar in structure, with some differences in execution. The relevant control body is invested with the power to issue race field approvals to operators. The approval is to use and publish race fields on races conducted in the particular state. Without approval, the operator commits an offence in the state and can be fined. In each state, the control body is only constrained in what it must consider in determining whether or not to grant an approval if regulations prescribed by the government are in place. In Victoria, some
“REGULATIONS SHOULD NOT BE SO BURDENSOME THAT THEY CHOKE THE CONTROL BODY’S ABILITY TO RAISE SUFFICIENT FEES TO MEET THE GENUINE SHORT, MEDIUM AND LONG-TERM NEEDS OF THE INDUSTRY. THEY SHOULD ALSO RECOGNISE THAT IN THE CURRENT FUNDING ENVIRONMENT, RACING AND GAMBLING ARE CO-DEPENDENT, WITH THE RESULT THAT RACING NEEDS A VIBRANT AND FINANCIALLY VIABLE AUSTRALIAN WAGERING AND BETTING INDUSTRY”
the regulations should not be so burdensome that they choke the control body’s ability to raise sufficient fees to meet the genuine short, medium and long-term needs of the industry. They should also recognise that in the current funding environment, racing and gambling are co-dependent, with the result that racing needs a vibrant and financially viable Australian wagering and betting industry. Some things departments could require a control body to consider in setting and spending of race fields fees are: 1. Giving due recognition to the differences between returns to operators based on the betting model adopted (ie, betting exchange v fixed odds v tote) and differentiating the fee as between those models; 2. Balancing the financial interests of the
regulations have been put into place to regulate the control body exercising its powers, however
In Queensland, regulations may prescribe a
industry and of operators via a fee which does not
no matters have been prescribed in relation to
condition to which approval of a control body
materially adversely impact potential financial
race fields. The situation is similar in NSW and
is subject. This regulation making power could
returns to Australian licensed operators;
Queensland, however both those states require
be used by the Queensland government to
3. Recognising that offshore “free riding”
the control body to take into account whether
impose a condition on a Queensland control
operators exist and putting in place mechanisms
the operator is licensed in Australia, is fit and
body regarding the manner in which it sets
to minimise revenue leakage to them or, at least,
proper, and whether granting of the application
and spends race field fees.
put law-abiding Australian-licensed operators
will undermine integrity of racing in the state.
A similar regulation making power exists in
at an advantage to them;
In Queensland, there is a very interesting
the NSW legislation, establishing the NSW
4. Having clear, transparent and publicly available
difference, which indicates a deliberate intention
control bodies. However the independence of
financial forecasts and business plans that
regarding how the fee is to be set. Under one
NSW control bodies from government (other
justify the fee against actual industry needs;
provision of the Queensland law, a fee charged by
than in selection of members) appears to be
5. Requiring regular independent review and
a control body must reflect the reasonable cost
a key feature. As well, the set prescribed fees
audit against those business plans and forecasts.
to that body of providing the service for which
for “premium race meetings” in NSW provides
Governments have shown faith in control bodies
the fee is charged. However, this reasonable
little (if any) room for any other fee levels to
across Australia and these are suggestions to use
cost test does not apply to constrain a control
be set for those meetings.
regulation making powers to prop up that faith.
body in setting the amount of the fee for using
In Victoria, the relevant law provides that the
Let’s hope the faith shown is well founded and
race information. Accordingly, it can be inferred
control body must, for the purpose of determining
we don’t have to go back to old days of taxes or
that a race information fee in Queensland is not
an application, consider any matters prescribed
levies on Australian licensed operators. That
a matter of cost recovery. Further, it could be
in the regulations.
would be a great pity and would only hurt the
inferred that the control body is not bound by
Aside from the regulation making power, it
good guys. l
Asia Gaming Briefings | August 2014
AUSTRALIA SPECIAL FOCUS 34
Packer’s Sydney dream comes close to reality Jamie Nettleton & Elizabeth Cameron*
O
n July 8 2014, James Packer’s Crown Resorts
only members and guests will be permitted to play; and
passed a probity assessment conducted by
there will be no access for the general public.
the New South Wales Independent Liquor
The licence fees and gaming taxes (29 percent of gambling
and Gaming Authority (the ILGA) over its
revenue and 10 percent of rebated ‘international’ VIP
proposal to operate a second Sydney casino.
gambling revenue) payable to the state government are
The assessment was a critical step for Crown in realizing
expected to generate $1 billion over the first 15 years of
its objective for its Sydney casino to begin operations in
the casino’s operation. Various guarantees were given
November 2019. The proposed $1.3 billion VIP-only casino
to the government over the amount of gaming taxes
is planned to operate for 99 years as part of Sydney’s Barangaroo South’s centrepiece hotel resort. This probity review was completed fairly quickly – in just over six months. This took into account the previous probity review conducted in relation to Crown Resorts’ shareholding in Echo Entertainment, which took over a year. It also contrasts with the
“THE LICENCE FEES AND GAMING TAXES (29 PERCENT OF GAMBLING REVENUE AND 10 PERCENT OF REBATED ‘INTERNATIONAL’ VIP GAMBLING REVENUE) PAYABLE TO THE STATE GOVERNMENT ARE EXPECTED TO GENERATE $1 BILLION OVER THE FIRST 15 YEARS OF THE CASINO’S OPERATION”
probity review of Genting, which
payable to the NSW government over specified periods. Within a week of the execution of the agreement, Crown Resorts was to pay the NSW State government $100 million as a licence fee. Like other gaming licences granted by governments, various undertakings are given by the NSW government to Crown in respect of the security of the licence. This will result in compensation
is still ongoing after almost two years.
being paid if the licence is amended or cancelled, save for
The ILGA investigated the ownership, financial security
breach or wrongful conduct by Crown Resorts.
and viability of Crown Resorts, as well as its management and operations, to assess its suitability to operate a Sydney
NOW THE WORK STARTS IN EARNEST
casino. The investigation took into account business
Crown Resorts is required to lodge a development
associates, both domestic and international, with the
application with the Barangaroo Delivery Authority to
objective of ensuring that its operations are free from
commence construction.
criminal or inappropriate influence.
Under the Barangaroo Delivery Authority Act 2009 (NSW), developer agreements may also impose further
STATE GOVERNMENT AGREEMENTS
developer contribution fees on Crown Resorts. For the
The probity approval was announced nine months after
project to proceed, Crown Resorts will have to secure all
Packer secured the blessing of the NSW state cabinet for
necessary planning and development approvals and enter
Crown Resorts to be an ‘approved applicant,’ following
into agreements with the Barangaroo Delivery Authority
its submission of an unsolicited proposal to develop a
and the developer of Barangaroo South, Lend Lease. This
* Jamie Nettleton is a Partner
second Sydney casino.
will take a considerable period to progress.
at Addisons Lawyers, Sydney
At the same time as the announcement of the probity
In the meantime, the gaming licence process is well
and an AGB Advisor. Elizabeth
approval, the NSW government granted the company a
advanced with the various agreements between the
Cameron is a Law Clerk at
Restricted Gaming licence for the project.
government and Crown Resorts expected to be tabled
Addisons Lawyers
The licence is limited in a number of ways: there will be
before the NSW Parliament during the next sitting period,
no poker machines; there will be minimum bet limits;
which will conclude by the end of August 2014. l
Asia Gaming Briefings | August 2014
AUSTRALASIA
GROSS GAMING REVENUE
SAMOA E $10m Q1 tourism arrivals
+7%
CNMI April arrivals
-1%
25,000 32,035
PACIFIC ISLES
Samoa gets first casino Samoa is set to get its first casino at Aggie Grey’s Lagoon Beach Resort & Spa in August, with a second planned for early 2015, as the South Pacific island seeks to boost tourism numbers, which plummeted after 2009’s devastating tsunami
employs close to 1,000 people in Samoa and 150 in Tahiti and French Polynesia making it the largest private-sector employer on the island. The resorts will also add much-needed jobs to the Samoan community where unemployment stands in the region of 2 percent. Samoa passed a bill legalizing casinos in 2010 to help boost tourism and revenue after the 2009 tsunami. The legislation faced stiff opposition from church groups and opposition
T
parties who threatened to repeal the law if they
CLUB C Saipan, a gaming and entertainment venue, located at Kanoa Resort Saipan, has opened. The facility features 8,000 squarefeet of entertainment space, gaming machines and stadiumstyle electronic table games with a seating capacity of 200. Major suppliers include Aruze and LT Games, and a mix of slots. Club C Saipan comes on the heels of the introduction of the E-Gaming Law signed last December Hong Kong-based Honest Profit International has signed a lease accord on 40,087 square meters of land on Saipan, where it plans to build a $130 million, 300-room hotel. The lease is for 25 years, with an optional 15-year extension for a total of 40 years
he casino at the 145-room luxury
get into power.
hotel will be managed by Australia’s
Aggie Grey’s was handed one of two casino
Indo Pacific Gaming International
licenses, however, the process ran into
and Hong Kong’s Gaming Concepts
controversy. A second license granted to
Group. It will have 12 tables and a variety of
Chinese developer Chengdu Exhibition Tourist
electronic gaming machines.
Group was pulled after reports its Chairman,
2015, but to attract the premium player.
A second casino is planned for 2015 and will
Deng Hong, was being investigated for
Meanwhile, the island of Saipan has given
be in Aggie Grey’s Hotel and Bungalows in
corruption by Communist Party officials over
the go-ahead for a $2 billion resort to Best
the main town of Apia. The casino there will
land deals in China.
Sunshine International, a company owned by
feature 24 tables and more than 200 electronic
The Chinese company had planned a 500-room
Hong Kong-listed Imperial Pacific.
gaming machines.
hotel and casino.
The award of the license, after an acrimonious
Games to be offered initially will be Roulette,
Feeney said it’s considered unlikely the second
legal battle, has proved controversial, with
Baccarat, Blackjack and Poker, while Sic Bo
license will now be granted, with the barrier
some claiming the award was a foregone
will be added at the end of the year. As far as
to entry being the need to build a five-star
conclusion.
electronic gaming machines are concerned,
establishment.
As part of the process to win the license,
the casinos will be offering a mix of brands
Tourist numbers to Samoa now are only
Best Sunshine promised cash handouts
with several jackpots and will look to the New
slightly above 2004 levels. Though in the first
to all residents. It said it will make a $10
Zealand market to determine the best mix.
quarter of 2014 total visitors rose 7 percent to
million contribution to the local community,
The potential size of Samoa’s casino market
25,000 over the same period last year.
distributing the amount through cash vouchers
will rival that of Vanuatu and New Caledonia
Distance however is likely to remain an issue
to all locally born adults.
once the second casino is up and running. The
for Asian travelers, with most studies showing
It will also pledge $20 million in cash to be
resorts will cater only to foreigners, as locals
that the Chinese currently prefer destinations
distributed within 60 days of commencing
are not permitted to gamble, and are expected
with less than five hours flying time.
construction works on its first hotel in the
to generate at least 1,500 visitors a day.
The distance also makes junkets unviable. The
project and at least $20 million in cash every
The Grey family, which owns the two resorts,
casino may look at using the VIP promoters in
year after the first full year of operations. l
Asia Gaming Briefings | August 2014
35
v
AUSTRALASIA
36
GROSS GAMING REVENUE Y13 GGR $2.07b TAB/Sports betting $294m
NEW ZEALAND
SkyCity tightens customer procedures after media expose SkyCity Entertainment, New Zealand’s only casino operator, said it has introduced “customer service ambassadors” to roam its casino floors and monitor client behaviour, tightening its scrutiny of potential problem gamblers
Adelaide and Darwin in Australia. In the first half of the fiscal 2014 year, SkyCity reported that normalized net profit after tax was $66.4 million, compared with $72.1 million a year ago. Normalized revenue was $467 million down from $493.4 million for the corresponding period with the strong NZ dollar affecting revenue from Australia.
+$7m +4%
Lotteries $432m
+3.1%
Casinos $520m
+2.1%
Pokies $826m
-3.3%
Lotto New Zealand has launched a smartphone app that will check the player’s ticket and notify them if they are lucky enough to win. Customers can also use the app to find nearby stores. The app is connected directly to the Lotto gaming system and is available on both Apple and Android smartphones GuocoLeisure, the hospitality company that owns the Clermont Club in London, delisted from the New Zealand Stock Exchange on June 27th this year, but retained its listing in Singapore. Guoco, which was established in New Zealand, moved its primary listing to Singapore in 2000
SkyCity last year won approval to expand its gaming facilities in Auckland in return for
T
building a $402 million convention centre. he move comes six months after a
Meanwhile a recent report on youth gambling
television expose that revealed that
from the University of Auckland and
in gambling activities that are illegal for their
a 76-year old man was allowed to
UniServices found a drop in youth gambling
age group, such as gambling in a casino.
spend 14 hours gambling on slot
in the country.
Students of Maori, Pacific and Asian origin were
machines without being approached by staff.
The report, commissioned by the Ministry
more likely to report worrying about the time
“It is one of several measures we are taking
of Health found there were “small, but
and money they spent on their own gambling
to address the situation,” SkyCity company
statistically significant, decreases in the
than New Zealand European students. Concern
secretary Peter Treacy was cited by local
amount of time and money that students spent
about other people’s gambling behaviour was
media as saying. “We share the concern of
on gambling from 2007 to 2012.”
particularly pronounced for Māaori and Pacific
the department that has the role of monitoring
Nearly one quarter of the 8,500 secondary
youth living in areas of high deprivation (22.2
us, that in this instance we did not approach
school students surveyed reported gambling
percent and 27.9 percent respectively).
the customer and talk to him at any point.”
in some form over the previous year, with most
“The effects of gambling on communities are
SkyCity said the Department of Internal Affairs
saying they gamble to have fun, win money or
strongly linked to deprivation. For example,
investigated the incident and the Gambling
because they want a challenge.
the greater density of gambling outlets in low
Commission was involved in reviewing
The most common gambling activities were
deprivation neighbourhoods can entice people
procedures and looking at staff training.
bets with friends or family, Instant Kiwi
into gambling as a way of making money and
The company operates casinos in Auckland,
(scratchies), and cards or coin games, but
escaping poverty,” University of Auckland
Hamilton and Queenstown, as well as in
some students did say they had participated
researcher Dr Fiona Rossen said. l
Asia Gaming Briefings | August 2014
TO REGISTER, PLEASE VISIT: GAMINGDOWNUNDER.COM
11 - 13 AUGUST 2014 SWISSOTEL HOTEL SYDNEY DIFFERENTIATE YOUR CASINO, CLUB, WAGERING, LOTTERY AND RACING OFFERING CONFIRMED SPEAKERS OF GRWA Brett Clothier, Manager of Competition Integrity, AFL
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AGE 2014 SPECIAL REPORT 38
The Australian Gaming Expo is celebrating its 25th anniversary edition amidst a roll of first time exhibitors and a new venue on Glebe Island
New blood in new venue
A
Asia Gaming Briefings | August 2014
ustralian Gaming Exhibition
compelling some of the world’s most
organizers say this year’s show
prominent suppliers, such as Ainsworth,
has attracted more interest
Aristocrat, Aruze, Bally, IGT, Konami and
than ever before, with over 180
WMS Gaming to be present at the exhibition
companies registered. Over 40 of those are
floor, spanning an area of about 15,000
attending for the first time, while 18 have
square meters (161,458 square feet). Also on
been exhibiting for 25 years. The Expo, now
show will be audio visual equipment, ATM
in its 25th year, is one of the biggest trade
equipment, building services, cash handling
shows in Australia.
& equipment, through to furniture, I.T. and
Running from August 12th to 14th, the AGE
interior design. Last year more than 2,300
has moved to a new venue in Glebe Island
visitors attended each of the first two days.
while the Sydney Exhibition Centre, the
Visitors who attend the Australasian Gaming
traditional venue in the recent past, is under
Expo are also eligible to win a trip for two
renovation.
to the Global Gaming Expo in Las Vegas
“The big talking point this year is the
– including airfares from Sydney and five
venue,” said Ross Ferrar, CEO of organizer
nights at the luxurious Palazzo Venetian
Gaming Technologies Association (GTA).
Resort and Casino. One trip for two will be
“The new venue means a whole new
drawn on each day of the Gaming Expo.
approach from the major exhibitors, with
The event now also has its own app, AGE14,
newly-designed stands taking full advantage
which is available at the Apple Store and on
of the opportunity to best use the new
Google Play. The app features all relevant
space.”
information that visitors to the show might
With direct Sydney Harbour water frontage
need, including how to get to the new venue,
on three sides and captivating views of
transport timetables and booking facilities,
the Anzac Bridge and the Sydney Harbour
an interactive floor plan and a detailed
Bridge, the new venue is bound to make an
exhibitor list.
impression.
Concurrently with AGE, “Gaming, Racing &
A number of entry points, by land and sea,
Wagering Australia”, the region’s leading
have been put in place to cope with the
conference for Australia’s gaming, sports
expected high visitation. Complimentary
betting, lottery and racing executives is
ferries will operate on the event days from
taking place at the Swissotel in Sydney on
Darling Harbour’s Convention Wharf to
11-13 August.
Glebe Island; complimentary buses from
Over 150 senior gaming / wagering executives
Pyrmont and from Central Station, along
nationwide are gathering to learn about new
with a complimentary shuttle bus from the
gaming regulations, strategies to increase
Sydney domestic airport.
growth & profitability, and other new
The Australian gambling market is
developments in the industry.
dominated by its “pokie machine” industry,
AGB is an industry partner to both events. l
39
Asia Gaming Briefings | August 2014
AGE 2014 SPECIAL REPORT 40
Alfastreet has sold 50,000 ETGs to date and the Asia Pacific market accounted for a significant proportion
BALLY TECHNOLOGIES
Bringing momentum to Australia
W
ith Bally’s recent accord with Mohegan Sun that marks their biggest such transaction in North America, the company is
ready to keep its momentum going at the Australasian Gaming Expo (AGE). “Bally is excited to return to the Australasian Gaming Expo to showcase our expansive product lineup following our acquisition of SHFL Entertainment last November,” said Adrian Halpenny,
ALFASTREET
Bally’s Senior Vice President of Australia and Europe.
Design and technology to win customers in Asia
Bally believes its acquisition of SHFL Entertainment will allow them to offer even more, with SHFL’s player-favorite EGMs joining Bally’s stellar product lineup, giving them an even larger footprint in Australia and Asia. Their e-table SHFL Fusion, for instance, offers a wide variety of gaming options and provides a multi-game environment that can be played simultaneously. The award-winning SHFL Fusion is sold in Australia under the Vegas Star brand. In addition to expanding the company’s geographic footprint, Bally
As Alfastreet celebrates their
has been very proactive in strengthening their digital capabilities,
20th anniversary this year,
illustrated by their recent acquisition of Dragonplay.
Alfastreet has a mission to
Ranked among the 10 top-grossing game developers in the social
strengthen the company’s
casino genre, Dragonplay is with top-grossing applications for
position as world-class
Android, as well as a significant presence on Facebook and Apple
producer with distinctive
iOS, exemplified by approximately 700,000 daily active users and
design, high quality and
nearly three million monthly active users across all platforms.
advanced technology.
Bally believes “the strategic acquisition helps position Bally at the
Alfastreet describes the
forefront of social casino gaming by leveraging the company’s world-
Asian market as “extremely
class content, including proprietary table games and award-winning
demanding” but the company
video slots, on Dragonplay’s increasingly popular social casino”.
is confident about their
At this year’s AGE, Bally will feature their signature and new
products as one of the most wanted ETG products in the region.
game titles including Super 88, an addition to its strong Asian-
To date, Alfastreet has sold 50,000 ETG machines and the Asia
themed game lineup on their Pro Series and Equinox cabinets.
Pacific market accounted for a significant proportion. The company
Bally will also showcase their table products, systems and Mobile
is in final negotiation with new partners acquired at this year’s G2E
Concierge Solutions ranging from multi-terminal gaming solution
show. Alfastreet prioritizes product features and player’s comfort
Vegas Star to Bally Enterprise
in their product development. Take R8 roulette for example: not
Progressive System and cloud-
only is it connected to live and automated games, but also it allows
based custom mobile concierge
the player to play two games simultaneously on one screen.
apps for casino patrons. l
Alfastreet has also invested a great amount of time in developing products that suit the player’s body. Alfastreet will not participate in this year’s AGE. l
Asia Gaming Briefings | August 2014
BALLY TECHNOLOGIES WILL BE AT STAND 350.
AGE 2014 SPECIAL REPORT 41
Casino Technology is also eyeing business opportunities in emerging markets, such as Cambodia, Laos and Vietnam
CRANE PAYMENT INNOVATIONS
Further integration to win in Asia and Australia
A
s a result of Crane’s acquisition of MEI in
2013, the newly established company Crane Payment Innovations (CPI)
CASINO TECHNOLOGY
Macau, Philippines prime targets
has expanded its footprints in Asia with an ambition to further increase its market share in the region. Since last year’s AGE, MEI has expanded in the Philippines. Solaire Resort and Casino, Manila’s second largest casino, installed SC Advance note acceptors with EASITRAX Soft Count across its entire floor of 1,200 slot machines.
A
With significant market share in Singapore, the Philippines and s the Asian market expands, Casino Technology sees growing
Macau, CPI also has market footprint in Australia including New
demand for innovative gaming concepts and a wider array of
South Wales, Queensland and Victoria.
investors and manufacturers in the region.
CPI expects a continuous growth of the Asian gaming market
Among Asian markets, Casino Technology’s main targets are Macau
especially if casino gambling is legalized in Japan. CPI also eyes
and the Philippines, but it’s also eyeing business opportunities in
Macau’s gaming market, where gaming remains one of the hottest
emerging markets, such as Cambodia, Laos and Vietnam.
topics and offers tremendous potential for growth.
With the ambition to further strengthen its brand recognition,
To compete in the increasingly competitive Asian market, CPI
Casino Technology relies on precise product selection as well as the
sees its progress as a unified company as an edge. By pooling the
expertise and support of local distributors and partners.
strengths and resources of MEI and Crane Payment Solutions,
To compete in a highly competitive market such as Asia, Casino
CPI positions itself as a solutions provider with commitment to
Technology says that it’s important to offer products and solutions
high standards for customer service and product quality.
adapted to the requirements of the jurisdiction and the local audience.
At this year’s AGE, CPI will be showcasing MEI SC Advance note
At this year’s G2E Asia show, Casino Technology showcased a new
acceptor and EASITRAX Soft Count system, the CashCode SM
series of progressive Asian themed games with HD graphics and
BackLoad note acceptor and a range of Money Controls coin
colorful characters from Chinese mythology such as PEACOCK
hoppers. l
AND DRAGON. Casino Technology will not participate in this year’s AGE. l
CRANE PAYMENT INNOVATIONS WILL BE AT STAND 618.
Asia Gaming Briefings | August 2014
AGE 2014 SPECIAL REPORT 42
EveryMatrix has launched their first Korean operator and will soon launch their first Japanese operator
DLV
EVERYMATRIX
Clear game plan for Asia
Asia and Australasia are the priority
I
n view of the growing importance of the Asian gaming market, EveryMatrix prioritizes the Asian and Australasian markets with
their first Asian office launch in Manila. To unlock the business potential of sports betting, European company EveryMatrix is trying to offer more Asian and Australian live sporting events for their OddsMatrix Sportsbook in-game betting options. As a result, EveryMatrix reported major successes with Korean and Japanese baseball and also with an expanded
D
Australian sports offering.
LV sees tremendous potential
Meanwhile, EveryMatrix has been trying to improve the way they
in Asia and says it has a clear
deliver web services to Asian players. As a full service provider,
game plan to unlock these market
EveryMatrix hosts all of the servers, networking and other technical
opportunities.
functions needed to deliver the core internet services to operators
Among jurisdictions in Asia, DLV
and players around the world and the company has integrated a
has given priority to the Philippines,
Content Delivery Network (CDN) in order to improve their speed
Singapore and Cambodia. Meanwhile,
of delivery.
DLV is undergoing the certification
EveryMatrix also values the importance of language availability
process in Macau.
and casino content. After launching websites in Chinese to meet
The company aims to adapt and
the growing demand on their services, EveryMatrix has launched
customize its products for each client
their first Korean operator recently and will soon launch their first
and says its business proposition
Japanese operator.
includes competitive pricing and high
As operators increasingly demand that Live Dealer games are
quality.
available on mobile devices, EveryMatrix not only makes many of
DLV also has a wide array of products
their games available on their mobile platform, but also continues
that are customized for Asian players
to recruit new Live Dealer providers especially those with Asian
including STD, DWS and HD cabinets,
game variants and mobile capability.
as well as a three-level Dragon
EveryMatrix will not participate in this year’s AGE. l
Jackpot with its combination of red and yellow. DLV considers eye-catching graphics, engaging mathematics, bonuses and free games as some features that appeal to Asian audiences. At this year’s G2E Asia the company showcased its products to Asian audiences. DLV will not participate in this year’s AGE. l
Asia Gaming Briefings | August 2014
AGE 2014 SPECIAL REPORT 43
GLI has added 18 staff members in its Australian labs including the full service labs in Adelaide, Melbourne and Sydney
GAMING LABORATORIES INTERNATIONAL
An exciting time of technological convergence
A
s Gaming Laboratories International (GLI) celebrates its 25th anniversary, the company sees emerging opportunities arising
from technological convergence in the region. With more than 20 years in the Australian market, GLI sees game, system, land-based and online converging from a technological standpoint, and that raises both players and regulators’ expectation on fairness and game integrity. GLI describes the trend as “an exciting and challenging time” and the lab strives to meet the rising expectations with due diligence. To meet the growing demand on land-based and lottery testing
GOLD CLUB
New games to launch in Macau
and certification as well as consultation, GLI has added 18 staff members in its Australian labs including the full service labs in Adelaide, Melbourne and Sydney. The company’s sister lab, GLI Asia assisted regulators for developing the PAGCOR (Philippine Amusement and Gaming Corporation)
S
lovenia-based gaming devices supplier Gold Club is about launch three new slot games in the Macau market.
With a network of distributors, agents and after sales centers, Gold
Technical Standard for Electronic Gaming Machines.
Club has a market presence in 100 countries across the globe and
At this year’s AGE, GLI will take a non-traditional approach; instead
the company has an aggressive game plan to establish itself as an
of showing products, the company will be talking about its service
up-and-coming player in the global gaming industry.
offerings including lottery testing, gaming device and systems
To unlock the business potential of the world’s biggest gaming
testing, online gaming systems and security testing, rule writing,
market, Macau, Gold Club will launch three slot games which are
consultation and professional services. l
adapted to the local market with a new approach to the player and interactivity. The new games, namely Great Wall of China,
GAMING LABORATORIES INTERNATIONAL WILL BE AT STAND 513.
Rainbow Cash and Riches of the Nile, are currently in the process of certification. Also there will be a new 10-station roulette for the market with WAP jack pot to connect to different locations. Asked about the challenges faced in Macau’s market, Boštjan Krašovec of Slovenia-based Gold Club highlighted the need to understand the Asian mentality, as well as keeping pace with ever-changing legislation. However, Krašovec thinks that smallto-medium sized suppliers such as Gold Club may have the edge when it comes to adapting to a changing landscape as they are able to be more flexible than bigger companies. Gold Club will not participate in this year’s AGE. l
Asia Gaming Briefings | August 2014
AGE 2014 SPECIAL REPORT 44
“Australia and New Zealand have traditionally been mature markets with regulatory caps putting a hold on growth and innovation” SABBY GILL, SR VP OF INTERNATIONAL SALES, INTERNATIONAL GAME TECHNOLOGY
INTERBLOCK
Returns to AGE with innovations
INTERNATIONAL GAME TECHNOLOGY
Australasia full of potential
A
A
fter an absence of several years, Interblock is returning to the AGE with its newest and most innovative products and design.
With Australia being one of the largest slot markets in the world, Interblock plans to further expand, in particular in New South Wales. Interblock said there has been a shift in the world’s biggest gaming and entertainment hubs, such as Las Vegas, Macau and Singapore, to large scale integrated casino resorts. To maximize its market penetration, Interblock seeks to continuously
head of this year’s AGE, International Game Technology (IGT)
reinvent the company with new products to meet this trend.
shows optimism in growing its market share in Australia
Meanwhile, Interblock is counting on wider product choices to help
and New Zealand.
reinvigorate demand in the NSW hotel, club and casino markets.
IGT has celebrated major success in New Zealand, where the
At this year’s AGE, Interblock will present products, including NEW
company boasts more than 60 percent market share. The company
G5 IB-HG 55” LCD with 05 G5 Play Stations with NEW mini LED sign,
is also able to amplify its systems footprint, including a full system
NEW Revolutionary G5 MiniStar Roulette with 05 G5 Play Stations
installation into SunnyBank Community and Sports Club.
with one-sided PID and LED sign and G5 Roulette Generator with
“Australia and New Zealand have traditionally been mature markets
05 Play Stations. l
with regulatory caps putting a hold on growth and innovation, but it is a healthy industry and IGT plays a very active role in supporting our customers,” Sabby Gill, IGT Sr VP of International Sales said. IGT also sees opportunities from the recent change in systems requirements in Queensland and other business opportunities in New South Wales. To further grow IGT’s market share in the region, the company is developing more Multistar games that package both classic IGT games with newly released content. At this year’s AGE, IGT will showcase its robust portfolio of thrilling games including Back to the Future – Back in Time, Candy Bars, Spooky Loot and the culturally enriched title Wulin Master. Also on display will be the company’s systems technology such as Advantage Club system and Service Window capabilities. l INTERNATIONAL GAME TECHNOLOGY WILL BE AT STAND 130.
Asia Gaming Briefings | August 2014
INTERBLOCK WILL BE AT STAND 430.
AGE 2014 SPECIAL REPORT 45
Asia is likely to move to regulate betting markets because of increasing international pressure and the recognition of the revenue potential
KONAMI
Unsurpassed results in Victoria and Queensland
I
n the Australian market, where slots play such an important role, Konami sees unique opportunities
in Victoria and Queensland. The company has released Podium Stack, the first slot game with a reel matrix of 7-8-8-8-7 in the company’s target market. Konami says it has achieved unsurpassed results with all the new games and features available in Victoria. It has also bought its KP3 platform to the casino floors in Queensland. Konami also highlights its growth in Asia, including Macau, Singapore and the Philippines, where its newly developed game, Brothers of Fortune, has now arrived.
ODDSLIFE
Asia future revenue driver
S
ocial betting platform provider Oddslife launched its secondgeneration platform ahead of the 2014 FIFA World Cup with
an ambition to expand to Asia.
Konami values AGE as an
The Oddslife platform engages sports fans through a free-to-play
opportunity to meet and gain
social betting game. While the Oddslife platform can work as a
feedback from the region’s
major affiliate, or even as a real-money sports betting platform
leading gaming executives and
for a bookmaker in a regulated market, the affiliate model comes
professionals.
into play in a restricted market, with the option of selling ads for
At this year’s AGE show,
other products. Even in markets where sports betting is banned,
Konami will be presenting an
the option of virtual currency is still available, as well as advertising
array of new releases, such as
and sponsorships.
the KP3 Podium Stack cabinet,
Oddslife describes the global i-gaming markets as being in “a
a new multi-game, multi-
constant state of flux,” which makes “medium- to long-term
denomination product, SeleXion
planning very difficult for some of the most vibrant markets.”
and the Podium Goliath video
Oddslife’s distribution is currently limited to Europe. However,
cabinet. l
it said Asia is likely to move to regulate betting markets because of increasing international pressure over match-fixing, together
KONAMI WILL BE AT STAND 540.
with the recognition of the revenue potential. As a result, Oddslife has identified Asia as an area for major growth and plans to launch in 10 countries in the region by the end of next year. Oddslife is also looking into strengthening its European exposure and making inroads into both North and South America. Oddslife will not participate in this year’s AGE. l
Asia Gaming Briefings | August 2014
AGE 2014 SPECIAL REPORT 46
TCSJOHNHUXLEY boasts one of the largest product portfolios and an extensive installation base across the Asia Pacific region
SPINTEC
Asia challenge for suppliers
S
pintec sees the Asia Pacific market as one of the most challenging gaming environments for suppliers, but says it’s confident
about its strategies in the region. The company notes players and operators are demanding in the fast-growing regional markets. As a result, only suppliers with guaranteed reliability, access to authentic, up-to-date equipment and in-depth industry knowledge can gain a competitive edge. The company said its philosophy is that the finest engineering is an essential ingredient of gaming machine production. Spintec also incorporates a holistic approach to player needs and customer
TCSJOHNHUXLEY
Uniting Australia and Asia
specifics. For example, with its flagship product KARMA, Spintec seeks to guarantee longer gaming sessions by improving player comfort. The product has an automated roulette, virtual wheel and live table connection installation. Spintec credits local partner Asia Pioneer Entertainment for its achievements in Macau, where its products are installed on major gaming floors including City of Dreams, Mocha, The Venetian, Grand Lisboa and Galaxy. In addition to Macau, Spintec also has made inroads into the Philippines and India and expects a solid market entry to the wider
A
s the Asian market continues to expand, TCSJOHNHUXLEY is seeking to leverage its regional experience with a new
management structure.
Asia Pacific region.
TCSJOHNHUXLEY boasts one of the largest product portfolios and
Spintec will not participate in this year’s AGE. l
an extensive installation base across the Asia Pacific region. The company has been supplying chipping machines, roulette wheels, electronic Sicbo, Omni Baccarat systems, electronic terminal games, table displays as well as tables and layouts in the region for years. TCSJOHNHUXLEY supplies products, solutions and support to help drive its customer’s business through innovative technology, such as the real-time game optimization tool, Gaming Floor Live, Supernova Table Bonus System and the Idepsys Intelligent Drop Box. To streamline its business in the APAC region, TCSJOHNHUXLEY brought Australia and Asia together under Rebecca Kingswell’s leadership and appointed Amanda Green as Regional Director for Australia and New Zealand. TCSJOHNHUXLEY will not participate in this year’s AGE. l
Asia Gaming Briefings | August 2014
AGE 2014 SPECIAL REPORT 47
TBS spots a certain standardization among different offerings available in the bookmaking market
TABCORP GAMING SOLUTIONS
Loyalty driving growth
W
ith a strong focus on growth in Victoria and New South Wales (NSW), Tabcorp Gaming Solutions (TGS) seeks to ensure its
venues outperform the market through a whole of venue approach. First launched in Victoria in August 2012 and expanded into NSW in late 2013, TGS is the market leader in Victoria and the only operator of its kind in NSW. For instance, TGS serves almost one third of the Victorian gaming market with more than 170 contracted venues and approximately 8,500 EGMs. Since last year’s AGE, gaming loyalty using the IGT Advantage Club system has been introduced in Victoria. The company has begun the rollout of this new initiative, the first of its kind outside of Melbourne’s Crown Casino. Initial results point to double-digit growth. TGS values AGE as an opportunity to showcase its offering to venue managers. It will demonstrate the TGS offering, as well as
TOTAL BETTING SOLUTIONS
Asia future revenue driver
its InEGM loyalty program and the exclusive Diamonds Rewards kiosk at this year’s AGE. l TABCORP GAMING SOLUTIONS WILL BE AT STAND 222 AND 224.
D
espite intense competition, bookmaking software solutions provider, Total Betting Solutions (TBS), thinks now is a good
time to enter the Australian market. With more than a decade of experience in creating and delivering the online wagering technology needed to compete as a leading corporate bookmaker, TBS provides a full range of bookmaking software solutions to handle the complexities of Australian racing and sports. The Australian market has been widely considered as increasingly challenging due to factors such as rising product fees and minimum bet limits. And yet, TBS believes that with the capabilities to assist wagering operators to deal with the direct impact of the changes, its platform will be able to compete in the Australian market. With the capabilities to service different market segments across sport, casinos and racing, TBS considers “racing” as its dominant strength. In addition, TBS spots a certain standardization among different offerings available in the bookmaking market. As such, it sees the real driver to generate profits as being through differentiation. TBS has developed front-end channels that are unique in regard to both navigation and the ability to encourage interaction between existing and potential customers. Total Betting Solutions will not participate in this year’s AGE. l
Asia Gaming Briefings | August 2014
48
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CALENDAR OF EVENTS 49
AUGUST GAMING, RACING & WAGERING AUSTRALIA (GRWA)
11-12 August 2014
Swissotel, Sydney, Australia www.gamingdownunder.com
AUSTRALASIAN GAMING EXPO (AGE) 12-14 August 2014
Sydney Exhibition Center @Glebe Island, Sydney, Australia www.austgamingexpo.com
CRIMEA GAMING CONGRESS
GAMESBEAT 2014
15 September 2014
INTERNATIONAL ASSOCIATION OF GAMING ADVISORS (IAGA) ANNUAL CONFERENCE
Parc 55 Hotel, San Francisco, California, USA http://events.venturebeat.com/event/ gamesbeat2014
Marriott Downtown, Philadelphia, USA www.theiaga.org/iaga-summit
EGR US POWER SUMMIT 16-17 September 2014
The Montage Laguna Beach, California, USA www.EGRSummitUS.com
ELU BY EUROPEAN LOTTERIES 31 Aug - 5 Sep 2014
Pullman Bordeaux Aquitania, France www.european-lotteries.org/event/elu
SEPTEMBER ASIAN GAMING NETWORKING SOCIAL MONSOON MEET-UP 4 September 2014
71 Gramercy, Makati City, Philippines
EGR MOBILE POWER SUMMIT
NOVEMBER
GLOBAL GAMING EXPO (G2E) 30 Sep - 2 Oct 2014
Sands Expo & Convention Center, Las Vegas, USA www.globalgamingexpo.com
22 August 2014
Yalta, Crimea www.smileexpo.ru/en/crimea-gamingcongress
28-31 October 2014
OCTOBER BIG AFRICA SUMMIT
INTERNATIONAL MASTERS OF GAMING LAW (IMGL) AUTUMN CONFERENCE 5-7 November 2014
Florence, Italy www.gaminglawmasters.com/conference/ autumn2014
RUSSIAN GAMING WEEK SOCHI 5-6 November 2014
6-8 October 2014
Sochi, Russia www.rgwsochi.ru
Emperors Palace, Johannesburg, South Africa www.bigafricasummit.com
6TH ANNUAL MALTA IGAMING SEMINAR
EIG
11-12 November 2014
21-23 October 2014
The Hilton, Malta http://www.maltaigamingseminar.com/
Arena Berlin, Germany www.eigexpo.com
SAGSE LATIN AMERICA
BALKAN ENTERTAINMENT & GAMING EXPO 21-22 October 2014 Inter Expo Center, Sofia, Bulgaria www.balkangamingexpo.com
8 September 2014
MOBILE & TABLET GAMING SUMMIT USA
South Lodge Hotel, West Sussex, UK www.egrmagazine.com/egr_mobile_power_ summit_2014
27-28 October 2014
Bally’s, Atlantic City, New Jersey, USA www.mobilegamingusa.com
10TH EUROPEAN CONFERENCE ON GAMBLING STUDIES & POLICY ISSUES
INTERNATIONAL ASSOCIATION OF GAMING REGULATORS (IAGR) ANNUAL CONFERENCE
9-12 September 2014
29-31 October 2014
Helsinki, Finland www.easg.org/website/conference
Marriott Downtown, Philadelphia, USA www.iagr.org
11-13 November 2014
Buenos Aires, Argentina www.monografie.com/sagse_bsas/ingles/ index.php
MACAO GAMING SHOW 18-20 November 2014
The Venetian Macao Resort, Macau www.macaogamingshow.com
NATIONAL ASSOCIATION FOR GAMBLING STUDIES (NAGS) 24TH ANNUAL CONFERENCE 26-28 November 2014
Jupiters Hotel Gold Coast, Queensland, Australia www.nags.org.au
Asia Gaming Briefings | August 2014
OPINION 50
LAST WORDS
Will they come? *Sharon Singleton
T
his year’s Australalasian Gaming Exhibition
downtown location. The company said it will now bid
takes place amidst an upsurge in activity in
together with Hong Kong’s Chow Tai Fook Enterprises
Australia’s casino industry, with some of the
and Far East Consortium International.
more bullish observers even labelling the
They will go head to head with Crown Resorts, which
country as the next Asian casino hub.
recently joined forces with China’s Greenland Holdings.
Sydney has just won approval for its second casino, with
The state government is banking on the adage that if you
Crown Resorts’ new six-star property scheduled to open in
build it they will come.
Barangaroo in 2019, while the Queensland government is
And they might; the weaker Australian dollar is already
auctioning off three licenses in a bid to boost the tourism
boosting arrivals. Visitor numbers rose by 10.4 percent
dollar. Other properties around the country are also either
in the 12 months through April, with China ranked only second to New Zealand as the
undergoing, or have recently been upgraded and revamped. Without a doubt all eyes are on the prized Asian market, with the key to success seen as being the ability to attract the highspending Chinese VIPs. James Packer has adopted a
“WHETHER AUSTRALIA AND IN PARTICULAR QUEENSLAND CAN TRANSFORM INTO AN ASIAN GAMBLING HUB REMAINS TO BE SEEN”
novel approach sponsoring the
* Managing Editor, AGB
greatest source of visitors. Chinese visitors are already spending more in Australia than travelers from any other country. Queensland, in the far north of the country and therefore significantly closer to Asia, may have the advantage, with studies showing Chinese favour
Sydney Philharmonic Orchestra to trumpet the merits of
resorts within five hours’ flying time.
his new Sydney property on a tour of mainland China.
But the question is how welcome will they really be? The
Not overtly of course, as promoting gambling in China
idea of Queensland’s pristine beaches and rainforest
is illegal, but nevertheless a clever branding initiative to
being the subject of massive multi-billion dollar casino
attract the attention of Chinese, who are said to be big
developments does not necessarily sit well with the local
fans of classical music.
population, or environmental groups, many of which
The Queensland government has given strong preference
have campaigned actively against them.
to Asian-backed ventures in its plans to offer up new
They may have a point. The average hard-cord Chinese
casino licenses.
gambler is still not known for environmental sensitivity
Two of the regional permits will go to Asian companies
and, once damaged, these eco-systems will not be replaced.
pending final environmental assessments, while half
Already the Barrier Reef is under pressure from agricultural
of the bidders for the downtown Brisbane development
runoff and other forms of pollution.
project are Asia-backed.
Then there’s the risk for the operators if the Chinese fail
Hong Kong billionaire Tony Fung is planning to build one
to come. Some locals have called the massive scale of the
of the world’s biggest integrated resorts, with investment
proposed properties “ludicrous.” They point out that the
of about A$8 billion ($7.40 billion), just outside of Cairns,
area has a sparse local population, whose favoured punt
while state-backed ASF China Property Consortium wants
has traditionally been on pokies in local pubs. Therefore
to build a A$7.5 billion casino and cruise ship terminal
the casinos won’t be able to rely much on the local dollar
at the Gold Coast.
should for any reason the tourism trend reverse.
Echo Entertainment, the incumbent operator in Brisbane,
Whether Australia, and in particular Queensland, can
has eschewed plans to go it alone and has teamed up with
transform into an Asian gambling hub remains to be
a rival consortium with the pre-requisite Asia credentials
seen, but it will certainly make for interesting reading
in its bid for a second license in the prized Queen’s Wharf
for anyone following the industry. l
Asia Gaming Briefings | August 2014