AGBriefings February 2015

JURISDICTION UPDATES February 2015 Edition

2015, year of mass • AGB Advisors’ gaming industry predictions - pg.28 • Infrastructure key to drive Macau growth - pg. 6

SINGAPORE At a standstill pg.12

PHILIPPINES

Growth to outpace rivals pg.16

KOREA

The next best thing pg.24

ICE TOTALLY GAMING ‘15 SPECIAL REPORT p.36

2

Asia Gaming Briefings | February 2015

MESSAGE 3

Get your skates on

2014

was quite a year for

You’ll also find our regular jurisdiction reports, keeping

Asian gaming. Macau

you updated on the status of each market, their plans,

soared Icarus-like to

and the fortunes of the companies operating in them.

ever greater highs in

By all indications, it’s going to be another breakneck

the first half, then dropped like a stone in the second.

year. Macau will see new openings, the new supply

The Philippines continued its march towards being

hopefully re-stimulating demand, but it remains to

a respected alternative gaming destination with

be seen whether infrastructure will catch up and if the

extensions and new openings in Entertainment City.

promise of Hengqin will deliver. The rest of the region

Japan got everyone excited then failed to deliver.

will also see a rash of new openings, plus several

Australia, Vietnam, CNMI and Russia attracted huge

jurisdictions are debating the regulation of online

amounts of potential investment. And more of the

gaming. Meanwhile, we won’t hold our breath for

same looks set to continue in 2015.

Japan to legalize casinos, and perhaps Taiwan will beat

The year has got off to a great start and we are excited

it to the post.

to participate in the first event of the gaming calendar

One thing is for sure, it won’t be a dull year. AGB has

- ICE TOTALLY GAMING - which marks its 20th

some exciting projects ahead, not least of which the

anniversary of becoming a stand-alone exhibition

All Asia Dealers Championship which will be held

this year. With over 500 exhibitors, more than 23,000

alongside G2E Asia in May 2015. The event will bring

visitors and eight conferences running concurrently,

the regional gaming industry together to celebrate and

the event is the biggest and one of the most influential

showcase the talents of their dealers, who will compete

in the world. The 2015 edition will see several new and

in three games: Baccarat, Black Jack and Roulette.

innovative elements being included such as the Sports

The event will take place on the show floor, with the

Betting Tours and the 2nd Game to Watch competition.

winners selected and announced on the final Thursday.

We have a preview of select suppliers in this edition,

Ask us at enquiries@agbrief.com how you can get

as well as a special feature on predictions for the year

involved, or if you’d like to know how AGB can help you

ahead by some of our most esteemed advisors and

stay ahead of the game in Asia.

friends - David Green, Ben Lee, Steve Karoul, and

Here’s to a great year! l

Rosalind Wade

Luis Pereira

John English. It’s interesting to see how people’s perspectives differ, but also how consensus views

On behalf of Asia Gaming Brief

have formed. Make sure you check out the feature in

Rosalind Wade & Luis Pereira

these pages.

PUBLISHERS

www.asiagamingbrief.com FEBRUARY 2015 EDITION SERIES II • ISSUE VI

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AGBRIEF PARTNER EVENTS

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Asia Gaming Briefings | February 2015

CONTENTS 4

NORTH ASIA

GREATER CHINA

MACAU MAINLAND CHINA

06 10

SOUTH EAST ASIA

REGIONAL SPECIAL FOCUS

JAPAN

20

2015 PREDICTIONS

30

RUSSIA

22

HORSE RACING STRUGGLES

32

SOUTH KOREA

24

SOUTH ASIA

SINGAPORE

12

MALAYSIA

14

SRI LANKA

25

PHILIPPINES

16

NEPAL

26

INDIA

27

INDOCHINA

AUSTRALASIA

AUSTRALIA

34

PACIFIC ISLES

35

SUPPLIER SPECIAL REPORT

36

CAMBODIA

18

CALENDAR OF EVENTS

52

VIETNAM

19

OPINION

54

Asia Gaming Briefings | February 2015

GREATER CHINA 6

MACAU

Infrastructure key to Macau growth Macau’s infrastructure has failed to keep pace with the territory’s rapid rise to become the world’s largest gambling hub, placing pressure on creaking transport systems and creating bottlenecks, industry experts say

Asia Gaming Briefings | February 2015

F

rom taxis, to highways and light rail,

Kong-based gaming analyst, Aaron Fischer,

Macau’s authorities face challenges on

with finance house, CLSA.

a broad front to put systems in place to

Hotel occupancy has been averaging almost 95

support further growth, especially in light

percent and Fischer says a 70 percent increase

of planned added capacity by gambling operators.

in hotel rooms between 2015 and 2017 as

Macau’s average population density is one of the

new properties open will be “one of the key

highest globally at 19,409 per square kilometre.

infrastructure improvements.”

The total population is around 607,000 people

“The additional supply of rooms will give more

living on a land area of 31.5 square kilometres,

choice to those who visit us and, secondly, ease

leaving a density some 2.6 times greater than

the pressure on the peak periods, especially

Singapore and three times that of Hong Kong.

in Chinese New Year and other peak periods,

Visitor numbers were close to 30 million in

when we’re really struggling to get rooms in

2014, with 80 percent from mainland China.

Macau,” De Senna Fernandes said.

Growth in arrivals in 2014 was around 8.0

However, improvement to transport infrastructure

percent year-on-year. But the outlook is for

is needed if Macau is to support additional

more growth in the coming years. A Pacific

visitor numbers.

Asia Travel Association (PATA) report released

A key area of criticism has been over standards

last year forecast Macau’s tourism revenue to

of service from the local taxi industry. Taxis are

reach $269.9 billion by 2018 – from just $43.7

said to avoid regular passengers and instead

billion in 2012.

focus on ferrying tourists between hotels and

The rapid development and rise of the gaming

casinos. Macau has just over 1,000 taxis in

industry in Macau has brought both benefits

service for the local population plus the 30

and challenges, says Maria Helena de Senna

million visitors.

Fernandes, director of the Macau Government

A key development to ease these concerns will

Tourist Office.

be the 21-kilometre Light Rail System, however,

“It always brings questions in terms of

the project is long delayed and over budget.

how sustainable it can be and to make that

First proposed in 2003, work began in 2008,

sustainable, I think a lot of work has to be done

and it is scheduled to begin services in 2015,

some both internally and also externally,” de

scaling up to full operations in five years.

Senna Fernandes said in an interview with AGB.

The system’s initial capacity will increase

Internally, hotel room shortages have been a

from 8,000 passengers per hour (pph), rising

major challenge for the industry, says Hong

to 14,200 pph by 2020. The project has also

GREATER CHINA 7

GROSS GAMING REVENUE Y14 $44b -2.6% Y15E -5% -4% -7%

UBS Wells Fargo Morgan Stanley

-4%

Citi Research

MARKET SHARE AS OF JAN. ‘15 (Source: Sterne Agee)

been dogged by rising costs and conflicts over

Kong government recently said it doubts this

tendering processes.

deadline will be met.

SJM HOLDINGS (880:HK) 22.9%,

The Macau Commission of Audit estimates at

The structure is the first major combined bridge

GALAXY ENTERTAINMENT GROUP (27.HK) 22.9%

least 900 days of delays to the project with the

and tunnel crossing project in China. Among

construction budget likely to total 14.2 billion

the benefits is a reduction in travel time from

patacas, about three times the initial estimates.

Hong Kong to Macau or Zhuhai from over

However, travel industry observers say once

three hours to just half an hour and is seen as

open the location of the line’s 21 stations will

a game-changer for transport in the region.

be a windfall for Wynn Resorts’ $4.0 billion

CLSA’s Fischer said the bridge will allow for

development and Melco’s Studio City project

easy access from Hong Kong’s International

on the Cotai Strip.

Airport to Macau. “Once people land in Hong

The first phase of the development runs along

Kong, they’ll have a choice either to travel to

the eastern coastal corridor and connects on

Hong Kong or to Macau which will also be 30

are we going to actually cope with the new

the north-east boundary with Taipa. Phase two

minutes away. So Macau would be a very viable

number of visitors?” she said. The investment

includes the Western Harbour area with main

option for people landing in Hong Kong,” he said.

in land reclamations, including new roads and

service points at the Macau Peninsular, Taipa

But local taxis from Hong Kong and Macau will

the Light Rail system are an important step to

and Cotai, and stations at the Border Gate, Outer

be unable to transport people over the bridge

solve that problem, she said.

Harbour, Ferry Terminal, Lotus Bridge Border

route and a shuttle bus service is now being

“A lot of transportation infrastructure is under

and Macau International Airport.

considered, according to reports.

way, but obviously it doesn’t come at the same

There have also been long-standing plans have

The bridge’s real potential, analysts say, lies in

time. But still, essentially slowly but surely,

been to expand the Macau’s International Airport.

its role as part of the wider economic integration

the transportation network will improve a lot

The initial aim had been to boost passenger

around the Delta region and Macau. A 2014 report

from what we have right now.”

capacity to 7.5 million a year. At present passenger

by the Hong Kong Trade Development Council,

Another factor expected to help ease bottlenecks

volume, rising about 10 percent a month, was

said while the Pearl River Delta region accounts

is extended border opening hours with the

forecast to reach 5.1 million for 2014.

for just 4.2 percent of China’s population, or

mainland. The relaxation, including all day

But as one analyst told AGB on background, plans

around 60 million people, it accounts for over

access, came into effect just ahead of President

for the airport expansion may be redundant once

9.0 percent China’s gross domestic product.

Xi Jinping’s visit to Macau to mark the 15th

the Hong Kong-Zhuhai-Macau bridge opens.

But another challenge for Macau has been land

anniversary of the handover to China.

The project is to build an up to 50 kilometre,

area. This has led to moves by the government to

The changes are set to result in a sharp rise in

$133 billion bridge across the Pearl River Delta

reclaiming some 350 hectares of land from the sea.

numbers at the Lotus Border and at least a 15

region. It was launched in 2011 and was set

“It’s just a small place after all,” says Macau

percent increase at the Border Gate currently

for completion in 2016. However, the Hong

Tourist Office’s de Senna Fernandes. “So how

processing some 300,000 to 350,000 persons a day.

SANDS CHINA (1928:HK) 18.3% MELCO CROWN ENTERTAINMENT (6883.HK) 14.6% WYNN MACAU (1128:HK) 11.5% MGM CHINA HOLDINGS (2282:HK) 9.8%

Asia Gaming Briefings | February 2015

GREATER CHINA 8 in Cotai, meaning it has more potential for

in the first half of 2016, with approximately

revenue growth if it fills the rooms. The

2,000 rooms and 500 table games. Wynn

Holds 22.9 percent as of early Jan. with 20

company’s new developments include the $3

Macau Q3 revenues dropped 5.6 percent

casinos. Its $3.2 billion Palazzo Versace

billion The Parisian that is scheduled to come

to $942.3 million, while adjusted property

development is scheduled to come online

online in late 2015. It recently expanded retail

EBITDA fell 1.1 percent to $325.5 million. Table

in 2017. The company is currently building

space at its Sands Cotai central property, with

games turnover in the VIP segment was $25.1

The Lisboa Palace on Cotai. The casino will

the addition of 150,000 square feet of space,

billion for the third quarter of 2014, a 17.4

have 700 gaming tables and over 1,200 slot

with shops designed to appeal to families.

percent decrease from $30.3 billion in the third

machines across a gaming floor area of

Sands China total net revenue for Q3 was

quarter of 2013. Table games win in the mass

approximately 27,000 square metres. The

down 0.4 percent to $2.33 billion, while net

market segment increased by 36.4 percent to

total production cost is estimated at about

income rose 4.3 percent to $644.6 million.

$327.2 million. In Q3, it invested about $301.1

HKD$30 billion ($3.8 billion), although the

The company’s Venetian property saw a 10

million in the Cotai project, taking the total

company has expressed concern over costs.

percent gain in non-rolling chip turnover

investment to date to $1.4 billion.

SJM Holdings said its Q3 profit declined 16.4

to $2.2 billion, though rolling chip volume

percent and its share of the Macau market

dropped 28 percent to $10.1 billion in the

slipped as VIP revenues fell, while its mass

quarter. At the Sands Cotai property rolling

market performance lagged rivals. The

chip volume was down 32 percent, while mass

company reported profit attributable to

market revenue jumped by 32.3 percent.

SJM HOLDINGS (880:HK)

MGM CHINA (2282:HK)

Has a 9.8 percent market share while operating

owners of the company of $1.53 billion ($197.3

a single casino in the peninsula. Its new

million). Gaming revenue fell 14.1 percent to

developments include the MGM Cotai, which is

$18.1 billion. The company said VIP gaming revenue dropped 23.6 percent to $10.37 billion, while mass market revenue edged

MELCO CROWN (6883.HK)

a $2.9 billion project scheduled for completion mid 2016. In the third quarter, Macau net

Has three casinos and a 14.6 percent market

revenues came in at $794 million, down

up 3.1 percent to $7.35 billion. Slot machine

share. Melco recently awarded France’s

about 2 percent, and above the consensus of

revenue gained 5.4 percent.

Bouygues a $488 million contract to build a

$765 million. Q3 VIP volumes fell 19 percent,

six-star hotel. The 39-floor building will be

while mass revenue jumped 34 percent. MGM

part of the City of Dreams and will have 783

China’s Q3 EBITDA was $213.8 million versus

bedrooms, a casino, restaurants, conference

the consensus of $191.6 million. l

GALAXY GROUP (27.HK)

room and a sky pool. The company’s $3.2

Has a 22.9 percent market share with six

billion Studio City is scheduled to open

casinos. The company is investing $2.5

in mid-2015. The resort will also feature

billion in the second phase of its Galaxy

a 5,000-seat multi-purpose theatre, a

Macau development, which is scheduled to

permanent magic show, jungle-themed river

come online in 2015. A recent fire prompted

rides, and a Ferris wheel, as well as a Batman

the evacuation of 6,000 workers but isn’t

attraction. The resort aims to diversify its

expected to delay the project. The expansion

attractions away from pure gaming. In Q3,

will nearly double the capacity of the resort.

adjusted EBITDA and revenue both fell

Galaxy Entertainment posted a 6 percent

10 percent due to a decline in rolling chip

gain in Q3 revenue, with gains seen in both

revenues. Net revenue was $1.12 billion down

the mass market and VIP segment. The

from $1.25 billion for the comparable period

group had quarterly revenue of $17.3 billion

in 2013 and in line with estimates. Adjusted

($2.23 billion). Adjusted EBITDA increased by

property EBITDA was $305.7 million compared

1 percent in the same period to $3.3 billion.

to $339.0 million in the third quarter of 2013.

Total gaming revenue grew a market leading

Reported net income was $132.2 million,

6.5 percent year-on-year to $17.1 billion

or $0.24 per ADS, compared with $179.4

driven by a 12 percent gain in mass market

million, or $0.33 per ADS, in the year ago

revenue to $4.8 billion. VIP revenue climbed

quarter. Adjusted EPS was $0.28, missing the

5 percent to $11.8 billion. The company is

consensus view by one cent. The company also

also expected to break ground on its hotel on

recently said it plans to delist its shares from

Hengqin Island this year. Galaxy is planning

the Hong Kong Stock Exchange in favor of its

a “Maldives-style” resort.

primary listing on Nasdaq.

SANDS CHINA (1928:HK)

WYNN MACAU (1128:HK)

Has a market share of about 18.3 percent and

Has an 11.5 percent market share and currently

has four casinos. Analysts say the company

has one casino. Its $4 billion Wynn Palace

has had a lower room occupancy than rivals

development is scheduled to come online

Asia Gaming Briefings | February 2015

MGM China is eyeing an investment in a project on Hengqin island, neighbouring Macau. Mainland authorities are currently considering whether to give the go ahead for the land to be used. The project would not contain gaming facilities as they are not permitted on Hengqin.

The island is likely to eventually be able to provide the lower-cost accommodation that is lacking in Macau, helping to further develop the mass segment of the market.

Macau regulators are strictly enforcing a rule requiring junket operators to ensure that their agents do not have criminal records. The Gaming Inspection and Coordination Bureau issued a formal notice to junkets on Dec. 19 saying they would be required to file documentation verifying no criminal activities.

GREATER CHINA 10

GROSS GAMING REVENUE (Source: iResearch)

Y14E Y15E

MAINLAND CHINA

Jockeying for a slot in the race Hong Kong-listed companies continue to jockey for position in China’s booming lottery market as the prospect of online and mobile sales edges closer

T

$61b $73.3b

Y13 Lottery sales $51.1b

+18.3%

Nov. sales ‘14 $5.2b

+24.4%

Sports Lottery Nov.‘14

+31.6%

Welfare Lottery Nov.‘14

+18.8%

Sales 11 months to end Nov.‘14 $55.8b

+24.1%

AGTech chairman and CEO calls the acquisition of China’s Score Card “a major milestone.” “As well as strengthening our hardware business, we are now positioned as a potential first-mover in the hugely exciting mobile smartphone lottery system and content supply market in China.”

he New Year heralded a new set of deals,

gradually expanded from an initial base of

with AGTech Holdings announcing its

simple, weekly-draw lotto games to a range

Silvercreek Technology Holdings unit

which includes weekly draw games as well as

has completed the acquisition of Score

high frequency games, scratch cards, video

Value, positioning itself for the opening of the

lottery terminals, sports betting and virtual

mobile lottery market.

sports betting.

The total price was HK$489.5 million ($63.1

Despite the growth, the market is still seen as

million), which is subject to downward

under penetrated by international standards,

adjustments. It comprised an initial consideration

while the illegal market is estimated at between

of HK$189.5 million and a deferred consideration

10 and 20 times bigger than the regulated lottery,

of HK$300.0 million.

showing the potential value. The planned opening

Score Value is involved in research and

of online and mobile distribution channels is

development, quality assurance and the sale

expected to provide a major boost.

of handheld lottery sales equipment, as well

China Vanguard said recently one of its indirect

as the design of lottery games and systems. It

units has reached an accord with the Shaanxi

is currently seeking approval from the relevant

Province Sports Lottery Administration to roll

government authority for the system and content

out interactive self-service lottery solutions

of a lottery game to be played on mobile smart

in the province.

phones in China.

The group will be responsible for the joint

“The successful completion of this acquisition

planning of marketing, advertising and training,

is a major milestone for AGTech. As well as

as well as the development, provision and

strengthening our hardware business, we are

maintenance of the systems.

now positioned as a potential first-mover in

Shaanxi Sports Lottery Administration Centre

the hugely exciting mobile smartphone lottery

will pay the group a proportion of total sales

system and content supply market in China,”

generated on a percentage basis. To date, the

Bestinfo’s team specializes in the research

AGTech chairman and CEO John Sun said.

group’s lottery-related business has expanded

and development of lottery transaction and

The Chinese lottery market likely swelled to

into 20 provinces and regions in China and the

management systems, and is responsible for

about $61 billion in 2014 and is forecast to hit

board said it sees huge potential in the interactive

a number of firsts in the Chinese lottery sales

more than $73 billion this year, according to

self-service lottery business.

systems market, including establishing the

estimates from iResearch. Lottery sales have

As 2014 drew to a close, China LotSynergy Holdings

first computer ticket game hotline system in

increased at a compound annual growth rate of

announced its Beijing Kexun Tiandi Technology

Dongguan, Guangdong Province and the first

approximately 33 percent between 1987 and 2013.

unit completed the acquisition of Beijing Bestinfo

hotline CTG sales system in China, which was

During this time, the products on offer have

Cyber Technology for $75.4 million.

implemented in Zhejiang Province. l

Asia Gaming Briefings | February 2015

A two-month pre-Christmas clampdown by Chinese authorities resulted in the detention of 30,000 people involved in gambling and pornography, according to state media. Police recently raided an online gambling racket in Huizhou City which involved funds of up to 30 million yuan ($4.8 million).

SOUTH EAST ASIA 12

GROSS GAMING REVENUE Y14E $6.12b

+1%

Y15E $6.06

-1%

(Source: Citi Research)

$6.9b $6.4b $6.4b $6.6b

$7.4b

SINGAPORE

At a standstill

Y14E

Y15E

Y16E

Y17E

Y18E

(Source: JP Morgan)

improve capacity, leading to a 2 percent gain

Singapore’s two casino properties are likely to face another lacklustre year in 2015 as Chinese visitation remains weak and regional competition mounts

in mass GGR in 2015.

“Despite the new Jurong hotel opening, the Singapore gaming market remains unexciting, in our view,” it said.

Citi expects GGR to decline 1 percent to $6.06 billion this year, while analysts at JP Morgan are slightly more bullish seeing a slight uptick to $6.6 billion.

Despite the sluggish growth Fitch Ratings says the two properties are well positioned to weather the downturn, which is unlikely to pose major problems for their underlying credit rating.

Analysts are not expecting any initiatives from the government to help provide a boost to the

G

enting Singapore and Marina Bay

casino industry either, with all signs pointing

Sands both reported declines in Q3

to a desire for tighter restrictions.

profit, the latest figures available,

The government sent the online industry reeling

amid a steep drop off in VIP revenue.

with the passage of the draconian Remote

Genting, which owns the Resorts World Sentosa

Gambling Act in October. The legislation is

property, said the Asian gaming and tourism

among the toughest in the world and means

industry is facing “significant” challenges.

that the entire spectrum of remote gambling

One of the main issues facing the Singapore

activities in the country will be criminalized. The

market has been the sharp downturn in Chinese

restrictions are extremely broad and will be felt

visitors, with mainland China arrivals falling

by operators, agents, brokers, service providers,

29 percent in the first eight months of the

advertising networks, payment processors,

year. Tourism numbers were hit hard by the

financial institutions, ISPs and players.

Singapore’s National Council on Problem Gambling has appointed Addiction Advertising as its creative agency for its 2015 campaign targeting gambling addiction. As the appointed agency, Addiction would be responsible for the provision of strategic counsel, creative direction and conceptualization of a brand new campaign, it said.

The nationwide campaign is expected to run in Q1 of 2015 across multimedia platforms that include broadcast, print and online.

Singapore casinos are mature properties, which will be able to withstand “moderately declining revenues and margin compression without impairing their underlying credit profiles,” Fitch Ratings says in its 2015 outlook.

disappearance of flight MH370, which also cut travel to Malaysia and Thailand.

Citi Research said in a recent report that it

GENTING SINGAPORE

expects the decline to stabilize in 2015, but

Operator of the Resorts World Sentosa IR,

doesn’t expect total China visitors to return to

reported a 43 percent drop in Q3 net profit and

the high levels recorded in 2013 any time soon.

warned the Asian gaming and tourism industry

MARINA BAY SANDS

Weakness in the VIP sector is also expected to

is facing “significant challenges.”

Posted a 5 percent decline in Q3 revenue to $735.5

continue and is likely to drop about 3 percent this

The group posted a net profit of $127.1 million

million, while casino revenue was down 8.7 percent.

year, Citi says, though the firm is more optimistic

($98.5 million). Revenue declined 17 percent to

The company posted adjusted property EBITDA

about the prospects for the mass market.

$644.8 million, while adjusted earnings before

of $351.7 million, down 5.9 percent. Rolling chip

That’s mainly because Genting will be opening

interest, tax, depreciation and amortization was

volume was down almost 34 percent, while mass

a new 500-room hotel in Jurong, which will

S$253.9 million.

revenue dipped 1.6 percent. l

Asia Gaming Briefings | February 2015

SOUTH EAST ASIA 14

GROSS GAMING REVENUE

MALAYSIA

Genting’s domestic plans support overseas growth Genting’s ambitious overseas expansion plans are facing headwinds, hitting a snag in the U.S. and delays elsewhere, but analysts remain optimistic over the mid-term prospects for Malaysia’s only operator thanks to a US$1.4 billion plan to revamp its operations at home

T

he company failed to secure a license

Century Fox World theme park scheduled for

in New York state despite submitting

late-2016; two new hotels with 2,300 rooms

two bids, while political uncertainty has

for 2018; as well as the Sky Avenue and Sky

stalled the passage of a bill to legalize

Plaza shopping malls, and a new cable car

Y15E $5.6b

+7%

Y16E $6.12b

+10%

(Source: Citi Research)

$1.7b

$1.8b

$1.9b

$2b

$2.2

Y14E

Y15E

Y16E

Y17E

Y18E

(Source: JP Morgan)

There’s more smoke than fire in Malaysia’s threats to clamp down on online gambling overseas, according to industry insiders.

The Attorney General has ordered a review of the Common Gaming Houses Act 1953, one of the main laws restricting gambling, because the Act does not cover betting through the internet. However a gambling company director in Kuala Lumpur discounted fears that the government genuinely wanted to eliminate offshore gambling.

casinos in Japan, where the group also has

station by 2016.

ambitions. Meanwhile a more than $2 billion

Alliance DBS Research analyst Cheah King Yoong

resort planned for South Korea’s Jeju Island

was also positive over the domestic prospects for

still has to break ground following resistance

the group. Cheah recently attended a corporate

from the local governor.

event organized by Genting Group, and was

“Despite fielding two convincing bids (Sterling

updated on the GITP.

Forest Resort and Resorts World Hudson Valley),

“We understand that progress of the GITP

Genting did not win one,” Maybank Investment

remains on track,” he said.

Bank Research analyst Samuel Yin said, referring

With the impending successful implementation

to the New York bids.

of the GITP, Genting is positive that the

The New York Gaming Facility Location Board

number of visitors to Resorts World Genting,

acknowledged that the Orange County proposals

about an hour’s drive from Kuala Lumpur, is

were attractive in terms of gaming experiences,

set to increase from the current 20 million to

loyalty programs and supplemental license

26 million by 2018, and 30 million by 2020,

fees, the analyst said.

Cheah added.

However, local opposition, environmental

Citi Research said the renovations have led to

concerns, traffic issues, the financial strength

lacklustre mass market growth in 2014, down

of certain bidders and its proximity to New York

low single digits. However, with much of the

City resulting in potential cannibalization, were

work due to be completed in 2015, it expects

among the factors prompting the board to drop

an improvement this year as new hotel rooms

a license in Orange County, he added.

become available.

The board on Dec 18th, chose to award only

“We expect this 13 percent increase in hotel

three out of four potential licenses for the state.

capacity will increase local players’ time

Genting’s indirect subsidiary, RW Orange County

spent at the Highlands and lead to a decent

LLC, had proposed to build two casinos -- one

recovery in mass GGR. We currently expect

in Tuxedo and another one in Montgomery.

mass GGR at Genting Highlands to grow 7

However, the analysts noted that the new

percent in 2015 and 14 percent in 2016, but we

casinos aren’t likely to hurt Genting’s existing

maintain our view that VIP volume growth will

racino facility at Aqueduct which offers slots

remain muted.”

and electronic gaming.

It said competition from new properties elsewhere

“On that note, we do not believe the upcoming

in the region, including Macau, the Philippines

Montreign will negatively impact Resorts World

and Cambodia, may dampen VIP potential.

New York City as they are far apart at 2.5 hours

The firm sees overall Malaysian GGR growing

away by road,” said Yin, who maintained a “buy”

7 percent in 2015 to $5.6 billion and 10 percent

call on Genting mainly based on its Genting

in 2016 to $6.2 billion.

Group net profit for the July-to-September

Integrated Tourism Plan (GITP).

Genting on Nov 21, 2014 posted an almost 24

quarter fell to RM352.7 million from RM462

The GITP in Malaysia involves investing

percent drop in third-quarter profit, due to

million in the corresponding period a year

RM5 billion to build a 1,300-room three-star

lower revenue from high-rolling gamblers at

earlier. Genting controls Genting Singapore,

hotel due for completion by mid-2015; a 20th

its Singapore casino.

which saw a 43 percent slump in net profit. l

Asia Gaming Briefings | February 2015

A letter from Malaysia’s Home Minister Datuk Seri Ahmad Zahid Hamidi allegedly supporting gambling kingpin Paul Phua was withdrawn from a Nevada District Court on the request of the government. The government said the contents of the letter were not meant for public consumption and objected to it being used in the defense of Phua, who is on trial for organizing an illegal online sports betting ring during the World Cup.

SOUTH EAST ASIA

Frank Schuengel / Amadeus Photography

16

PHILIPPINES

Growth to outpace rivals

The Philippines is expected to be the fastest growing gaming jurisdiction in Asia in 2015, though as new properties open the market may not be as deep as some had hoped

G

ross gambling revenue is likely

De Niro and Hollywood producer Meir Teper.

of 29.4 percent compared with 28.8 percent

to surge 32 percent in 2015 on the

JP Morgan analysts have also called the

at RWM, it said.

back of new openings, according to

opening of the resort a “game changer” for

The signs of cannibalization are alarming,

a report from Citi Research, taking

the Philippines.

“as it shows that the “pie” might not be big

the size of the market to $2.7 billion in 2015,

“Locally, its diverse non-gaming offering with

enough for everyone to see GGR growth in this

from $2.05 billion in 2014, a gain of 9 percent.

well-branded hotels, as well as clustering effect

growing market.”

“We believe the exceptional growth in the

with Solaire would finally help Entertainment

GGR at RWM is likely to have fallen 9 percent

Philippines gaming market seen in 2014 was

City to build the critical mass,” it said in a

in 2014 and may fall a further 6 percent in 2015

a perfect example of “build it and they will

recent report.

as COD comes on line.

come,” the report said.

Bloomberry Resorts’ Solaire Resorts and Casino

Still, healthy economic growth and improvement

Melco Crown Entertainment recently held the

also recently opened its new Phase 1a addition.

in infrastructure in the country are expected

soft opening of its City of Dreams resort in

The expansion provides an additional 66 VIP

to underpin demand.

Manila in what is expected to be a game changer

gaming tables and 223 slot machines. It will

“On our estimates, City of Dreams Manila will

for Manila’s goal to become an entertainment

also include a 312-room all-suite boutique hotel

become the market share leader and capture 23

hub. Melco will be able to provide its Macau

tower and a 1,760-seat Broadway-style theatre.

percent of total market share by 2018, followed

experience and has a tax incentive to grow

The expansion is important for Solaire as it

by Solaire at 20 percent and Resorts World

the VIP business given the lower rates in the

adds more non-gaming attractions, making

Manila at 16 percent.”

Philippines than Macau.

it into a more all-round resort.

The attraction of the Philippine market hasn’t

By far the biggest resort in the Philippines so

That said, Citi Research has scaled back its

escaped other casino majors, with U.S. casino

far, COD has more than 365 gaming tables,

previous assumptions for the Philippines from

operator Caesars Entertainment recently saying

1,700 slot machines and 1,700 electronic

growth of 42 percent as it is seeing signs that

it would be prepared to make an investment

table games. The integrated resort will have a

the cannibalization rates from the existing

of about $1.5 billion in an integrated resort in

strategic mix of hotel brands, spread across six

Resorts World Manila property may be worse

the Philippines and is eyeing a site next to the

hotel towers, including the 260-room Crown

than had been expected.

international airport.

Towers hotel, which will cater to the high-end

Travellers reported gross gaming revenue of

Comments by executives of their plans for the site

VIP and premium mass market segments, and

PHP 7.2 billion ($159.6 million) in 3Q14, lower

prompted Philippine Gaming and Amusement

the 321-room Nobu Hotel Manila, a project

than the P7.7 billion at Bloomberry Resorts.

Corp. chairman Cristino Naguiat to say that he

spearheaded by celebrity chef Nobu Matsuhisa,

Solaire has become the largest casino in the

doesn’t expect any new licenses to be issued in

and championed by Hollywood actor Robert

Philippines, with an estimated market share

the country until 2016.

Asia Gaming Briefings | February 2015

SOUTH EAST ASIA 17

SOLAIRE RESORT & CASINO

RESORTS WORLD MANILA

Bloomberry Resorts’ Solaire Resort & Casino

Travellers International Hotel Group, a joint

was the first to open in Entertainment City

venture between Genting Hong Kong and

and is now set to open its 200,000 square-

Alliance Global Group, was scheduled to

meter extension in October this year. The

GROSS GAMING REVENUE Y14E $2.05b

+9%

break ground by the end of this year on the

Y15E $2.71b

+9%

$400 million add-on will feature more VIP

$1.1-billion Resorts World Bayshore along

(Source: Citi Research)

gaming sections, 300 all-suite hotel rooms,

Manila Bay. The opening has been delayed

a shopping center with 30 to 40 high-end

to 2018.

shops, a 1,800-seat entertainment theater,

The company is also pushing ahead with the

3,000 parking spaces, a nightclub and more

expansion of Resorts World Manila. It has

restaurants. The initial outlay was boosted

allotted $600 million for the second and third

to $680 million, $60 million more than

phases of the resort to boost retail space by 60

previously announced.

percent. It will add 1,100 rooms to the existing

“This is definitely going to drive visitation

1,226 rooms in Resorts World Manila’s

to Solaire not just from locals but more so

Maxim’s, Marriott and Remington hotels.

from foreign VIPs going forward,” said Leo

In a disclosure to the Philippine Stock

D. Venezuela, director of investor relations

Exchange in April, Travellers said Pagcor

at Solaire Resort and Casino.

approved new gaming capacity of 420

Bloomberry Resorts Corp. Q3 total revenue

gaming tables and 4,148 gaming machines.

was 5.85 billion pesos ($130 million),

At end-2013, Resorts World Manila housed

compared with 4.11 billion the previous year.

287 gaming tables for the VIP and mass

Gross gaming revenue jumped 57.5 percent

markets, 1,822 slot machines and 210

to 7.7 billion pesos.

electronic table games. Travellers says it has

Bloomberry said as of September 30, 2014,

so far used about 1.11 billion pesos ($25.5

the group has 58 junket operators that

million) of the 16.8 billion pesos that it

actively bring in foreign VIP players. Solaire

raised through an initial public offering on

Rewards Club registered 370,000 members

the Phase 2 expansion of the Marriott Hotel

and visitation for 2014 has reached 3.24

and the Maxim’s Hotel and facilities.

million.

CITY OF DREAMS.

MANILA BAY RESORTS Pagcor chairman and CEO Cristino Naguiat

Belle Corp and Melco Crown held the soft

Jr. has said that Universal Entertainment’s

opening of the City of Dreams casino resort

Manila Bay Resorts would not be allowed to

project in December, and the grand launch

open its casino until outstanding issues were

is scheduled for Feb. 2. City of Dreams

resolved, including foreign equity limits on

will also bring luxury brand, Nobu to the

land ownership. The bribery charges filed

Philippines, as well as an educational

against Japanese billionaire Kazuo Okada

entertainment center in a venture with

have recently been dropped following an

Hollywood studio, Dreamworks. Melco has

investigation.

also teamed with the Ault Group to add two

Former joint venture partner, Century

renowned nightclubs -- Pangaea and Chaos

Properties, recently said it wants to resume

In June, Melco upped its estimate for the

talks with Universal on their accord, which

Entertainment City resort by about a third,

was terminated in March, on the original

from $680 million to $832 million.

terms. Successful conclusion of negotiations

The property will feature 365 gaming tables,

would put the Japanese company back in

1,680 slot machines and 1,680 electronic table

compliance with Philippine laws on foreign

games upon opening, catering to both the VIP

land ownership.

and mass market, and 950 hotel rooms.

The company is seeking to open its $2-billion

Melco Crown Philippines posted a net loss of

gaming complex by the third quarter of 2015.

P1.78 billion for the third quarter compared

The casino will feature 2,000 rooms, state-

with P684 million in the year-ago period.

of-the-art gaming facilities, and an indoor

Pre-opening costs were P1.39 billion, an

man-made beach club covered by a huge glass

increase of 313 percent from the prior-year

dome, high-end and casual dining restaurants,

period.

upscale retail shops, trade halls and cinemas. l

$3.7b

$4.1b

$4.5b

$3.2b $2.6b

Y14E

Y15E

Y16E

Y17E

Y18E

(Source: JP Morgan)

Share of global gaming industry Y14 Global share Y18E

3.3%

4.5-5%

(Source: Fitch)

South Korea’s Widus Hotel and Casino plans to spend $100 million to expand its casino operations at the Clark Freeport Zone in the Philippines. The company also plans to seek a stock market listing there, local media cited CEO Daesik Han as saying in a round-table interview. That would take its total investments in Clark to $200 million.

Philippine market regulator, the Philippine Amusement and Gaming Corp says it’s unlikely to award new gaming licenses until current President Aquino steps down in mid-2016. Pagcor chairman Cristino Naguiat Jr. said existing players also need time to develop their business in a still-untested market. The four existing licenses were all granted under the previous administration with no new approvals under the current president.

Asia Gaming Briefings | February 2015

INDOCHINA 18

GROSS GAMING REVENUE

CAMBODIA

(Source: JP Morgan)

Nagacorp seen benefiting from increased China visits “Although there is no minimum rolling chips

NagaCorp is expected to continue to reap the benefits from its focus on China’s VIPs in 2015, with revenue from the high roller segment likely to outstrip that from the mass market, Citi Research estimates that VIP volumes at NagaCorp will rise 25 percent in Y15, although it expects a slowdown in the mass market rate to 15 percent for the same period

Y14E GGR $0.5b

NAGACORP 9-month GGR, Y14 $271.8m

+26%

Junket, VIP, Y14E $2.71b

+25%

VIP volumes, Y15E Mass Market, Y15E $2.71b

+15% +15%

volume requirement for these junkets, we believe the attractive junket commission (70 percent gaming revenue sharing compared with about 45 percent in Macau) is sufficient

TOURISM ARRIVALS

incentive for the junket to bring the VIP

10 mo. to Oct. ‘14

players to NagaWorld,” Credit Suisse said in

+5.9%

a recent note.

In the first 10 months of 2014 tourism arrivals were up 5.9 percent. That’s a slowdown from the same period the previous year, however inbound visitors from China remained strong gaining 21 percent and making up 12.7 percent of the market. The slowdown was mainly due to weak arrivals from Vietnam, the country’s biggest tourism source, making up about 20.1 percent of the total.

The government has also said it may consider opening up its casino market to local residents in light of planned moves by Vietnam to do the same.

Phnom Penh fears the loss of millions of dollars

Kiron Interactive and its partner IPG International have launched their new Keno game in Nagacorp’s NagaWorld casino in Cambodia as part of a strategy of supplying products across the region. The two companies signed a multi-year agreement in September 2014 to provide players with a gaming platform customized to conform to Naga World’s local requirements.

a year in revenue that the country currently

T

gets from Vietnamese citizens crossing the he company last August said it had

border to gamble. Citi estimates that players

signed two Macau junkets to escort

from Vietnam represent roughly 15 percent

mainland VIPs to its resort near

of Naga’s total.

Phnom Penh and expects to sign

Meanwhile, Donaco International still has to

more. It also has a strategic partnership with

reveal details of a planned casino acquisition

Bassaka Air, leasing two A320 planes to bring

in Cambodia.

gamblers to the country.

The Australia-listed company said last year

The company owns the largest casino resort in

that it has signed an exclusive term sheet for

Cambodia and has an exclusive license within

a major purchase of a gaming and hospitality

a 200km radius of the capital. In October, the

venture in Cambodia. In late November, it told

company said the government has confirmed

investors that the target company is highly

those exclusivity rights for a period of 70 years.

profitable, has a good market position and

The first of the two Macau junkets – Asia

generates strong cash flows.

Nation – started contributing to NagaWorld

It said it will pay 6X EBITDA for 2014 through

operations from end-August, while it also has

a mixture of cash and debt and the property

an agreement with Suncity Group, one of the

is expected to generate very strong earnings

largest junket platforms in Macau.

per share accretion. l

Asia Gaming Briefings | February 2015

Koh Puis Investment Group plans to build a luxury resort and casino on Morakot Island off the coast of Sihanoukville. It plans to develop one six star, two five-star hotels and one four-star casino hotel, a VIP casino, marina yacht and beach club, high-end restaurants and bars, a luxury spa and wellness centre, a 150-unit marina village, meeting and conference facilities and various villas.

INDOCHINA 19

Y14 DONACO REVENUE Gaming & hospitality $2.05b

+33%

VIP $2.71b

+67%

Slots $2.71b

+144%

VIETNAM

All in the details Operators interested in the Vietnamese market are still waiting to hear details of the country’s new casino legislation, which may allow locals to gamble for the first time in what could be a game changer for the industry.

L

ast summer, preliminary details of

integrated resort.

the new legislation were revealed

The Ho Tram Strip, Vietnam’s largest integrated

that showed local access was being

resort, also found a new financial partner last

considered. However, some of the

year. Asian Coast Development (Canada) said

provisions were viewed as a potential deterrent

NewCity Capital, a company established by

to foreign investment, imposing conditions on

American investor Chien Lee, will be the new

locals that were seen as largely unenforceable

financial investor, though it gave no further

and unrealistic.

details.

Article 10 of the draft decree stipulates Vietnamese

Vietnam has seven licensed foreigner-only

citizens must have a minimum monthly salary

casinos and allows a limited number of slots

of 15 million Vietnam dong ($700), and show

in five-star hotels for the most part in the

“financial competence” or some valuable assets

capital Hanoi and in Ho Chi Minh City. There

(saving books, etc.). Foreign passport holders

are also Electronic Gaming Clubs in Da Nang

and overseas Vietnamese can enter without

and Vung Tao.

any restrictions.

Five casinos are in the north of the country,

Some of the stipulations in Article 10 of the draft

mainly on the coast or close to the Chinese

decree have raised eyebrows with the vague

border, with the biggest currently at Halong

use of words such as “financial competence.”

Bay, some 150km from Hanoi, which boasts

In the meantime, some long-delayed projects

18 live tables. The remaining two casinos are

appear to be moving ahead despite the lack of

located in southern (Ho Tram) and central (Da

clarity on regulations.

Nang) Vietnam.

Hong Kong jewellery chain Chow Tai Fook

Several other locations around the country are

Enterprises revealed in December that it’s

also being touted as possible casino destinations

considering investing in the $4 billion Quang

as officials seek to boost tourism and the local

Nam casino project in central Vietnam, providing

economy.

a replacement for Malaysia’s Genting, which

A senior Vietnamese banker recently urged for

pulled out in 2012.

a development on the central island of Ly Son

“We are interested,” company director Henry

and an islet off its coast. Tran Bac Ha, chairman

Cheng told Bloomberg in an interview. “We are

of the Bank for Investment and Development of

doing something now to secure this project.”

Vietnam, said the 69-hectare Be Island should be

He gave no further details.

set aside for a “high-end entertainment area.”

VinaCapital, an asset management firm focused

Vietnam’s politburo has also reportedly agreed

on Vietnam, had said in October it was finalizing

to the opening of a casino on Phu Quoc Island in

talks with a foreign investor partner and expects

the Mekong Delta, as part of plans for a special

to start construction soon on the long-delayed

economic zone. l

Y14 VISITATION Tourism arrivals 7.8m China Arrivals 1.9m

Prime Minister Nguyen Tan Dung has recommended that agencies waive visa requirements for more nationalities and urged them to streamline inefficient visa procedures. He asked the ministries of public security, tourism, and foreign affairs to work with agencies to come up with a list of visa waiver countries.

Possible exclusions include the U.K. Germany, France, Spain, Italy, Australia and New Zealand.

The green light has been given by the local govenment for a tourism and entertainment complex, including a casino in the Phu Quoc Island district in the south of the country. Spanning an area of 583.23 square kilometers and with a population of 96,940, the island district is a special administrative economic zone, an international luxury eco-tourism and entertainment site and a regional financial centre.

Asia Gaming Briefings | February 2015

NORTH ASIA 20

JAPAN

Casino debate throws spotlight on Pachinko industry A consequence of the casino debate is a renewed attention on Japan’s massive pachinko industry, the game that operates on the margins of Japan’s current anti-gambling laws

Asia Gaming Briefings | February 2015

J

apan’s casino bill has been put on the

However, these figures have been in steady

back burner, with no realistic prospect

decline since the industry’s peak year of 1995.

for the enactment of basic legislation

With the ageing of the Japanese population

authorizing casinos until at least the

and years of sluggish economic growth, the

second half of this year.

number of players is now less than half of

However, the re-election of Prime Minister

what it once was.

Shinzo Abe, one of the bill’s key backers, has

With their deep roots in the Japanese gaming

reignited hope that there is still political will

industry, pachinko-related companies could

to establish what is expected to become the

potentially exercise a large impact on the fate

world’s third largest gambling market.

of the casino bill, either by becoming active

A proposal being debated among lawmakers is

participants in developing casinos themselves,

that the rules governing pachinko parlors be

or negatively by throwing their political weight

revised to formally allow players to receive their

against the initiative.

cash winnings. Exchanging pachinko balls for

When AGB originally contacted the Okinawa

cash is the reality of the current system, with

Prefecture Amusement Industry Cooperative

players walking just a short distance “off-site”

they claimed to take a neutral position on

to receive their earnings. The proposal is that

whether or not the bill should be passed. The

this reality finally be acknowledged and that

spokesman for the cooperative, said that their

pachinko parlors begin to pay out in cash instead

assessment was that the customer base for their

of gifts within the establishments themselves.

pachinko businesses and that of future casinos

Such a legal change, though it may accord better

would likely be quite distinct.

with common sense, would be quite unwelcome

This same perception was held by a small, local

to some sections of the pachinko industry if it

pachinko operator in Okinawa Prefecture, who

were accompanied by a requirement that they

anticipated “no impact” on his business as the

then begin paying gambling taxes and lose their

result of the possible establishment of casinos

current formal status as simple leisure facilities.

in future years.

The pachinko industry in Japan is huge: There

Indeed, there is plenty of reason to believe

are about 11,000 pachinko parlors around the

that the establishment of casinos would

nation and it has revenue of about 8.8 trillion

have a marginal effect on the direction of the

yen ($153 billion), according to The Leisure White

pachinko industry.

Paper 2014 published by the Japan Productivity

In the first place, some versions of the integrated

Center. The parlors also employ some 310,000

resort plan suggest that Japanese casinos could

employees, which is approximately 1.5 times

be limited to, or predominantly aimed at,

the number employed by Japan’s top ten

foreign tourists instead of the Japanese people

automotive companies.

themselves, similar to the South Korean model.

NORTH ASIA 21

PACHINKO/PACHISLOT ANNUAL REVENUE

PACHINKO/ PACHISLOT ANNUAL REVENUE

$153b

(Source: Japan Productivity Center)

CASINO GAMING VENUE ESTIMATE Y1

$10b (Industry median estimate)

CASINOS GGR ESTIMATES But even if Japanese citizens are indeed the

However, as is pointed out by Kazuaki Sasaki,

main target customers for future casinos, all

Assistant Professor at Nihon University’s College

indications are that the integrated resorts created

of Economics, the impact of such a development

thereafter will be extremely limited in number.

would likely fall hard on the majority of small

The most likely locations appear to be the Tokyo

pachinko operators, but could open up new

waterfront and Osaka. Okinawa was seen as a key

opportunities for the larger companies with

contender but recently ruled itself out of the race.

substantial capital to invest in renewal strategies.

The skepticism of the Japanese general public

Some of these larger operators are also looking

about hosting casinos could reduce that number

abroad for their expansion prospects.

even further to perhaps one or two—assuming

Hong Kong-listed Dynam Japan Holdings has

that some new legislation is passed at all.

invested about $85 million in Macau Legend

It’s difficult to imagine such casinos posing

Development in the past year and is seeking

any serious threat to the pachinko industry.

approval to locate pachinko machines in the

Every small, local community in Japan boasts

company’s casinos.

its pachinko parlors, even in areas which are

Sega Sammy has teamed up with South Korea’s

otherwise underdeveloped. Pachinko has

Paradise Co. to build a $1.1 billion integrated

become the habit of housewives going to the

resort on the island of Yeongjongdo Island,

market and businessmen on their way home

Incheon. This joint venture partnership expects

from their day’s work. The customer base

to complete the foreigner-only property by

indeed seems that it would be quite different,

July 2017. Paradise has a 55 percent stake in

with only those pachinko parlors that happen

the firm, while the Japanese partner holds the

to be placed in the immediate vicinity of the

remaining stake.

handful of casinos potentially affected.

Sega Sammy has said the venture will help it to

If there is a threat that casinos indirectly pose

learn how to operate casino resorts, suggesting

to the pachinko industry, it is the one already

that they are eager to take their experience back

alluded to above—that the debate may bring

to the home market in future years.

unwanted public scrutiny to pachinko, especially

Dynam says it still sees potential for growth inside

in relation to issues like gambling addiction,

Japan, but says the industry needs to consolidate.

public morals, and the dubious legality of its

“The pachinko industry is highly fragmented

cash prizes.

and hall operators operating networks of over 10

Most of all, the threat is that the spotlight on

halls is limited to the few in the entire industry...

casinos may encourage the tax authorities to

We believe that there is significant potential to

take a hard look at pachinko and wonder if they

expand in terms of both scale of operations and

ought not be demanding a bigger cut of pachinko

market share,” it said in a recent results filing

revenues on behalf of the public interest.

to the Hong Kong Stock Exchange. l

Y20E (UBS)

$9.4b

Y25E (CLSA) Y30E (UBS)

$40b

$18.4b

The prefectural government in Okinawa, Japan won’t seek to attract integrated resorts if the country passes a law legalizing casinos, due to opposition from new Governor Takeshi Onaga who took office in December. The previous administration had been researching a potential casino project for the past eight years, but the government will not now allocate funds in its fiscal 2015 budget.

Universal Entertainment says the Philippines has decided to terminate an investigation into claims the Japanese company paid a bribe to officials of the Philippine Amusement and Gaming Corp.

There was insufficient evidence to support the allegations after a year-long investigation.

Asia Gaming Briefings | February 2015

NORTH ASIA 22

RUSSIA

Optimism despite economic deep freeze

Russia’s crashing ruble, falling oil prices and an almost doubling in capital outflows, have done little to dampen enthusiasm for two upcoming casino projects in Russia’s Far East, with experts saying the current economic woes will have little impact on their longer-term viability

T

he First Gambling Company of the

to generate $5.2 billion in revenue by 2022, with

facilities. The China mass market and VIP

East is scheduled to open its casino in

a major attraction being the low taxation rate.

business will be very much a part of our overall

Primorye in May 2015, while Hong Kong-

The Russian government has set one of the

strategy,” he told AGB.

listed Summit Ascent Holdings is also

lowest tax rates in the world to attract investors,

With more than 150 million Chinese within a

aiming for the “second quarter” of next year.

at between 3 percent to 7 percent, compared

2-hour flight of Vladivostok, McNally described

NagaCorp is also pushing ahead with its plans.

with 39 percent in Macau and 22 percent in

Vladivostok as “Russia’s gateway to the Far

The First Gambling Company of the East had

Singapore.

East” and “a very important city” in terms of

originally planned to open its resort in the

“To date, we have signed investment agreements

enhanced commercial and political ties with the

Primorye Integrated Entertainment Zone (IEZ)

with two world leaders, namely Melco and

Asia Pacific region. He also showed confidence

in the first quarter of 2013. The company says

NagaCorp. We are also in discussions with other

that “the Russian government, most particularly

its Tiger de Cristal entertainment complex,

key industry players such as Global Gaming

the Ministry of Tourism, recognizes the potential

including a casino and hotel with 120 rooms,

Asset Management,” Vladimir Miklushevskiy,

economic impact with increased tourism from

will be “the largest of its kind in Russia.”

governor of the Primorsky Territory told AGB

China, Korea and Japan.”

Despite the delays, the project now appears to

without giving further details.

Nevertheless, there were only 86,450 overseas

be on track, with representatives of the regional

Miklushevskiy said China was the zone’s

visitors, including over 50,000 Chinese and

government having begun their examination

primary target market, followed by South

about 6,000 South Koreans to Primorsky Krai

of the resort facilities and a recent job fair held

Korea and Japan. “We have a common border

in the first quarter of 2014. Andrew Klebanow,

to recruit staff, including dealers. The fair was

with China and the close proximity between us

principal of Gaming Market Advisors, said that

attended by hundreds.

gives Primorsky Krai an advantage in attracting

the relatively small number was because of the

Primorye IEZ is commonly referred as a “seaside

Chinese tourists,” he said. “We expect that

less than ideal weather, a shortage of tourism

Las Vegas” or “Russia’s Macau” by local media.

there will be 10 – 12 million people coming

activities and a minimal budget for the Primorsky

The zone is located in the area of Muraviinaya bay,

here annually after Primorye IEZ is opened.”

Krai administration to promote tourism.

about 15 km from Vladivostok International Airport

Timothy McNally, chairman of Hong Kong-

Klebanow said the opening of casinos is likely

and 50 km away from the region’s administrative

listed NagaCorp, with plans for a $350 million

to significantly boost visitation.

centre of Vladivostok. Currently there is a railway

integrated resort in Primorye IEZ , was also

“The opening of the IEZ and, more importantly,

network that connects the airport to Vladivostok

optimistic about the region’s potential.

casino-resorts within the IEZ will stimulate

city but does not connect to the zone.

“We are confident of this business decision and

incremental demand to the region. The IEZ will

US-based research firm, Gaming Market Advisors,

firmly believe the China/Korean markets will

substantially increase tourist visitation to the

has estimated that the region has the potential

respond well to our gaming and entertainment

region as the operators will spend significant

Asia Gaming Briefings | February 2015

NORTH ASIA 23

GROSS GAMING REVENUE (Source: Goldman Sachs)

ILLEGAL MARKET (E) $0.5b AZOV Y14E $300m Summit Ascent Y20E

$1.7b

Primorye Y22E

$5.2b

Sochi mayor Anatoliy Pakhomov has said that the Sochi gambling zone will open its doors in May 2015. He says an open sky regime coupled with a possible 72-hour visa-free transit and the zone’s location in Krasnaya Polyana will attract more tourists to Sochi. advertising dollars in key market segments

gambling zone was originally scheduled to

and leverage their relationships with junket

open in 2010 and has been postponed at least

operators to bring in players.”

three times. But the casino finally opened in

However, the resort projects in the Vladivostok

November this year. Located near the border of

area, like those in other Russian gambling

China and Kazakhstan, the casino also targets

zones, have made slow progress.

Chinese gamblers.

Hong Kong-listed Summit Ascent Holdings

Experts also largely dismissed other potential

has also said the construction of its Primorye

problems, such as Russia’s unstable economy,

resort has been delayed “due to unforeseen

the Chinese government’s clampdown on

obstacles.” The opening is now rescheduled for

corruption, which is hurting VIP revenue, and

the second quarter of 2015. Even if the project

visa restrictions.

meets the new target date, it will still be a year

Steven Gallaway, principal at Global Market

behind schedule as its construction was to be

Advisors, stressed that the Primorye IEZ is not

completed in April 2014.

vulnerable to the drastic changes in the Russian

The company says delays in getting re-design

economy as the zone won’t be targeting locals.

approval from the local authorities, slow

“Russia is Russia and there will always be an

certification in the procurement of import

‘instability’ factor. However, as the gaming

“Vladivostok will attract tourists and gamers

materials and equipment, as well as delays in

revenue is coming from the Chinese and other

that simply live too far from Macau and will

getting approval for foreign workers are the

Asian gamers, the poor Russian economy has

find Vladivostok a more convenient gaming

key factors causing the hold ups.

very little impact on the revenue potential for

destination,” Gallaway commented. “At the

McNally acknowledged that NagaCorp’s project

Vladivostok.”

end of the day, the Chinese have the highest

timeline is “conditional upon the Primorsky

In fact the plunging ruble, now at record lows

proclivity to gamble of any group and will always

government’s approval of design and building

against the U.S. dollar despite government

find ways to get to the casino.”

plans.” NagaCorp is expecting a favorable

efforts to support the currency by jacking up

To improve Primorye IEZ and Vladivostok’s appeal

judgment from local authorities in the next couple

interest rates, may make Russia a cheaper

to Chinese tourists, governor Miklushevskiy said

of months and it plans to begin development

destination for those holding foreign currency.

that there is a possibility of up to 72-hour visa-

in the summer of 2015.

Gallaway said the tightened visa restrictions

free entry for Chinese tourists into 11 Russian

“We will start phase I, which will be a hotel

for Chinese citizens visiting Macau as part of

airports including the one in Vladivostok.

and gaming facility. This will be followed by

China’s anti-corruption campaign might benefit

Local media added that it would also apply to

additional phases. If we obtain approval for

some markets as “premium gamers shift their

South Korean, Japanese, Singaporean tourists

phase I in a timely basis, we would hope that

activities to lower profile gaming destinations”.

and visitors from a few other Western countries

we might open the first phase in late 2016 or

He also pointed out that “restrictions on visas

if the bill comes through. Nevertheless, the

early 2017,” he said.

tend to impact frequent gamers living in

72-hour visa waiver would be on a condition

However, despite the delays, there is movement.

Guangdong province,” and not the Chinese

that visitors would have to travel with Russian

The Siberian Coin casino in the Altai special

gamblers Vladivostok targets.

carriers. l

Ukraine looks set to legalize casinos to reap extra revenue after a bill was registered on Dec. 22nd. Gambling was banned in the country in 2009. Prior to the ban there were more than 10,000 gambling venues in Ukraine, of which 97.7 percent were slotmachine parlors, 1.6 percent bookmaking office counters and only 0.7 percent casinos.

Asia Gaming Briefings | February 2015

NORTH ASIA 24

GROSS GAMING REVENUE (Source: JP Morgan)

$2.7b $2.9b

Y14E

SOUTH KOREA

The next best thing

Y15E

$3.1b

$3.3b

Y16E

Y17E

$3.8b

Y18E

PARADISE CO. Y14 GGR

+3.8%

CASINO VISITORS South Korea is seen as one of the key beneficiaries of Japan’s stalled plan to open its market to casinos, with the government in Seoul keen to boost tourism through integrated resorts

S

ince last summer, the government

intent on Nov. 16 with Incheon City.

appears to have warmed towards the

Chinese property developer Landing International

idea of IRs in a bid to meet its goal of

Development has also said it was stepping up

doubling inbound tourists by 2017.

its investments in South Korea, with a plan to

Standard Chartered said Seoul is seeking to

buy the owner of the Alpensia Casino at the

expedite the license approval process and is

Holiday Inn Resort in Pyeongchang for HK$868.6

preparing a master plan for IR projects. It hopes

million ($112 million).

to create casino clusters, such as on Yeongjong

The company said there is significant potential at

island, where existing plans are proceeding.

the resort given the planned 2018 Pyeongchang

The foreigner-only casino market has been led

Winter Olympics. It said it plans to help the

by the increase in Chinese outbound travel. Citi

company that currently owns Alpensia to

Research said it expects the overall Chinese

expand the casino business from the existing

inbound traffic to Korea to continue to grow

16 gaming tables to 70 gaming tables. It also

in 2015 at a rate of about 35 percent. Overall

plans to help market the resort to VIP clients.

visitor arrivals gained 16.6 percent in the 11

At present, the casino has 3 Blackjack tables, 9

months to November to 13.1 million, according

Baccarat tables, 1 Tai Sai table, 1 Roulette table,

to government figures.

1 Poker table, 42 slot machines and 1 big wheel.

In the meantime, several multi-million dollar

“The acquisition offers a valuable opportunity

projects are moving ahead. In December, a

for the group to broaden its market share in

consortium made up of the Lippo group and

the casino industry in Korea, and to diversify

Caesars Entertainment said they agreed to buy

its investments from Jeju Island to Gangwon-

plots of land in Incheon, South Korea for $95.9

do Province,” it said in a release to the Hong

million to develop a casino. The plots have a

Kong Stock Exchange.

total area of approximately 89,171 sq. m.

The company already has two projects in Jeju

While in November, local operator Paradise and

Island in the south of the country with units

Japan’s Sega Sammy said they have broken ground

of Malaysia’s Genting. The Jeju Hyatt casino

on a $1.1 billion integrated resort and casino

reopened on Jan 18th.

complex in Yeongjongdo Island, Incheon. The

Citi said the companies’ plans for Resort World

joint venture partnership expects to complete

Jeju received regulatory approval on Nov. 28th,

the foreigner-only property by July 2017.

2014 and include a foreigner-only casino of

Hong Kong-based Chow Tai Fook Enterprises

10,683m2 area, a hotel with 2,038 rooms,

has also expressed an interest in developing a

condominiums with 1,518 rooms, a water park

project on Yeongjongdo and signed a letter of

and theme park. l

Asia Gaming Briefings | February 2015

TOTAL 8.4M 5.7m

2.7m

Locals

Foreigners

Prime Minister Chung Hongwon has urged the country’s parliament to pass 14 pending motions aimed at boosting the economy, including one for promoting the cruise business.

The bill, initiated by President Park Geun-hye, would expand ports and marina facilities, provide tax relief for tour operators and provide state support to increase the workforce.

The bill would also allow Koreanowned vessels to have foreigneronly casinos.

South Korea plans to approve two more foreigner-only casinos and the construction of about 5,000 new hotel rooms as it seeks to boost tourism investment by about 3.5 trillion won ($3.2 billion).

The government would choose operators to invest around one trillion won each in two integrated resorts by the second half of this year, part of a three-year plan to boost the economy.

SOUTH ASIA 25

Y14 VISITATION

SRI LANKA

Industry in a tailspin the same time – the $300 million Queensbury

Sri Lanka’s fledgling casino industry is in the balance after the opposition candidate Maithripala Sirisena beat incumbent President Mahinda Rajapaksa in a keenly contested poll, called two years before elections were due

resort developed by Sri Lanka’s Vallibel One group and another $850m project by the local conglomerate John Keells Holdings - are likely to include casinos. The Queensbury is planned

Tourism arrivals 1,527,153

+19.8%

China arrivals 128,166

+136.1%

Tourism target Y16E 2.5m

Sri Lanka’s 2015 budget set out proposals for changes to the Betting and Gaming Levy Act, including a $100 entrance fee for casinos as well as a 10 percent gaming levy on turnover. It would also include a 5 percent tax on the gross collections of casinos.

at a location on the same road as the Crown project while the John Keells project is located elsewhere in Colombo.

The John Keells Project has begun construction and was expected to be operational by 2018.

In April when the Crown Project came up for parliamentary approval, the Jathika Hela Urumaya (JHU) a hard-line Buddhist party, reneged and did not support it. Now the party has officially left the government and is supporting the

“There is a lot of lobbying by the business sector to invest in casinos, but there has also been an equal push the other way by religious groups and hardliners,” said a gaming expert based in Nepal but working on projects in Sri Lanka.

opposition candidate.

T

The announcement by the opposition that he opposition victory at the elections

incentives for the new projects would be

is expected to send all casino new

withdrawn is seen here as a move to appease

in since they are facing stricter regulations

projects into a tailspin. The opposition

religious groups, such as the JHU that have

elsewhere, especially in East Asia.

manifesto released on December 19 said

opposed casinos.

Sri Lanka appears a lucrative investment, more so

that all tax breaks given to new casino related

“There is a lot of lobbying by the business sector

with the government giving handy concessions

projects, including those granted to James

to invest in casinos, but there has also been an

to large investments. All three projects with

Packer’s Crown Resorts, will be withdrawn.

equal push the other way by religious groups

casinos that got parliamentary approval in April

Adding to the uncertainty, parliamentary

and hardliners,” said a gaming expert based

were given ten year tax concessions. It was the

elections are also likely to be called within the

in Nepal but working on projects in Sri Lanka.

tax holidays that mandated the projects get

first half of 2015.

The interest in Sri Lanka is driven by multiple

parliamentary approval.

There are three multi-million projects that

factors including an increase in tourist arrivals

Former President Rajapaksa told a meeting

include casinos that have been approved by the

since the end of a civil conflict in May 2009, and

with the Foreign Correspondents Association

Sri Lankan parliament in the last year.

the gambling industry’s keen interest to tap

in August that there were no plans to give

By far the most prominent was Crown’s $400

into the lucrative Indian market and Chinese

concessions, or approvals for new casinos.

million investment in a new casino on D R

spenders outside East Asia.

He said the concessions were given for new

Wijewardena Mawatha street in the business

India is the single largest source for Sri Lankan

hotel projects.

heart of the capital, Colombo.

tourist arrivals making up 15 percent of the

The casino operations at the new projects are

The Sri Lankan parliament gave approval for the

total, while Chinese tourist arrivals rose by over

expected to use the two licenses issued to Sri

project without a casino on April 25 this year. The

90 percent between 2012 and 2013 to 54,000.

Lankans.

casino is likely to be set up using a license of a local

India’s swelling middle-class is expected to

The Nepal based expert said that delays in

partner. However the project has faced severe

balloon to 580 million by 2025, with about

setting up the projects and especially those

criticism from hard-line Buddhist parties some

50 million likely to travel overseas by 2020,

faced by the Crown project were unlikely to

of whom were constituents of the government.

compared to just 4 million in 2000, providing

dent investor interest in Sri Lanka.

Despite the approval no progress has been made

huge potential for the Sri Lankan market.

“It still remains a good prospect and people will

on the Crown casino project since. Two other

The Nepal based expert said that gaming groups

wait till the political uncertainty eases before

projects that got the government nod during

were also looking for new countries to invest

they make any decisions.” l

Asia Gaming Briefings | February 2015

NORTH ASIA 26

GROSS GAMING REVENUE (Source: WTTC)

Y13 DIRECT TOURISM CONTRIBUTION $714.6m or 3.9% of total GDP Y14E $785.2m Y24E $1.2b or 4.7% of GDP

NEPAL

New year, brighter prospects Nepal’s lawmakers have stepped up pressure on the Tourism Ministry to take the necessary steps to create an environment to reopen the country’s casinos after a disastrous year for the industry and tourism in 2014

T

The Casino Royale reopened in October, only to be closed again in November following a police raid. The casino had resumed business after getting the go-ahead from the Supreme Court, though tourism officials subsequently said it was operating illegally, adding to the confusion in the industry.

Nepal’s newest casino -- The Millionaire’s Club & Casino -planned for Q1, will be a boutique casino with 22 live gaming tables and 40 electronic gaming machines.

he Nepal government shut down the

related accidents. As a result, the government

from the growing Indian and Chinese markets,

country’s casinos for the first time in

in July slashed the annual royalties by 10 million

as well as the growing expatriate community

their history last April after their failure

rupees and is said to be considering further

living in Nepal. It is expected to open its doors

to comply with new regulations that

amendments.

during Q1 2015.

involved a significant hike in fees.

The casinos are now expected to slowly begin

The company said it sees a huge potential in

According to the new rules, casinos were required

reopening their doors, though the timetable is

Nepal given its proximity to both India and

to have a paid-up capital of at least 250 million

unclear. The Casino Royale did open up again

China with their large and growing middle-

rupees ($2.6 million), with the minimum set

in September, only to be closed a few weeks

class consumer bases.

at 150 million rupees for slot parlors, known

later following a raid by police.

“We believe the work we are undertaking

as mini-casinos.

In December, the prospects for Nepal’s casino

in Nepal will help the Nepali government

A new annual license fee, to be paid to the

industry were given a major vote of confidence

achieve their goals by encouraging inbound

tourism ministry, was set at 20 million rupees

by news that Hong Kong-based Silver Heritage

tourism, particularly from India and China,

for casinos and 10 million rupees for mini-

is opening a casino in the Shangri-La Hotel

and stimulating the local and national economy

casinos. Similarly, the annual royalty fee, paid

& Resort in Kathmandu as part of a planned

through our planned phased investment of more

to the inland revenue department, was doubled

$100 million in phased investments in five-

than US$100 million in developing a chain of

to 40 million rupees for casinos and set at 20

star facilities across Nepal.

5 star resort facilities across Nepal,” COO Tim

million rupees for mini-casinos and was made

The new casino, The Millionaire’s Club & Casino

Shepherd said at the time.

payable in advance rather than in arrears.

will be a boutique casino operating under the

The casino project needs to be put forward

The casinos cried foul saying the fees were

new Nepal gaming regulations, and will house

to the Tourism Ministry for final approval,

too high.

22 live gaming tables and 40 electronic gaming

though Tulasi Gautam, director general of the

However, the closure had a severe impact on

machines.

Department of Tourism said the company has

the kingdom’s tourism industry, which was

The casino will be primarily aimed at providing

met all the requirements. l

also reeling from a series of mountaineering

expanded gaming opportunities for customers

Asia Gaming Briefings | February 2015

NORTH ASIA 27

GROSS GAMING REVENUE Delta GGR Y13/14

+59%

Tourism arrivals Y14

+7.1%

Foreign exchange earnings $19.6b

INDIA

Floating casinos to stay

The Deltin Group expects to re-launch its Casino Caravela offshore casino boat in the near future after a year of refurbishing to create a luxury floating resort.

T

+6.6%

An Indian Supreme Court panel in November has cleared senior cricketing figure Narayanaswami Srinivasan of corruption and betting scandals, opening the way for his return as the head of the sport in India.

Srinivasan, considered one of the most powerful men in world cricket, was among a list of senior officials probed by a Supreme Court-appointed panel looking into scandals in India’s highly lucrative Premier League in 2013.

Gauselmann Group removed its Hindu god Shiva-themed slot gambling game titled “Shiva” after a group of upset Hindus protested, calling it highly inappropriate. The “Shiva” slot gambling machine showed a blue, four-armed Lord Shiva with dark red lips carrying a damru in one hand. Aside from the Lord Shiva symbol, the gambling game also showed symbols of cobras, the Taj Mahal and monkeys.

he ship, to be renamed the Deltin

licenses, but the existing businesses will be

Caravela, will be a five-star hotel. It

permitted to stay as a valuable revenue source.

will join sister ships the Deltin Royale

His comments followed threats by the previous

and the Deltin Jaqk. The Royale was

administration to shut down the casino boats.

re-launched in August last year, giving the

Meanwhile Deltin opened its integrated resort

company 2,000 gaming positions at the time.

in Daman in March last year. The property is

“The ship can be operated either in North or

spread over 10-acres with 176-rooms, over

South Goa depending on the availability for

60,000 sq.ft. of gaming space and over 29,000

mooring. We have identified Britona (North Goa)

sq.ft.of indoor event (MICE) space.

as one of the places for mooring the ship, but

The group has obtained five-star accreditation

of several Provisional Licence holders, Indian

nothing has been finalized,” Deltin chairman

from the Ministry of Tourism, which is one of the

lottery giant Future Gaming Solutions (FGS).

Jaydev Mody said, referring to a possible location

final requirements needed ahead of acquiring a

The license will be valid only in Sikkim, one of

for the Caravela.

land-based casino license in Daman.

the smallest and least populated states in India

The hotel will have 15 suites, a spa and restaurant

In the online space the small, north-eastern

with about 600,000 inhabitants, and services

and will also have a small casino onboard. The

Indian state of Sikkim in October awarded

cannot be offered outside of the state’s borders.

company is in the process of getting approvals

its first remote gaming license. After almost

However, it’s seen as an important milestone,

from the government for operating the ship,

seven years of waiting for clarification from

even though many questions remain.

Mody said.

the central government, the Himalayan state

Experts said it’s within the realm of possibility

Goa Chief Minister Laxmikant Parsekar recently

finally granted the first regular license to start

that other states in India will follow Sikkim’s

said that the state won’t allow new casino

online gaming operations on Indian soil to one

example. l

Asia Gaming Briefings | February 2015

SPECIAL FOCUS 28

Russia, China and mobile winning hands for 2015 As a serial entrepreneur in the gaming industry for more than 28 years, John has had a lengthy career specializing in global business development for the regulated gaming industry. Given his expertise in account wagering, mobile betting, IPTV, and most forms of gaming technology and content provision, as well as experience in Asia, U.S.A., Latin America, and the Caribbean, AGB asked John for his predictions for the year ahead, and got a wide-ranging and fascinating reply

H John J. English*

ere is what this veteran gaming executive

operations and expect to receive licenses through the

foresees for 2015.

form of partnering with a resident of the region. With Japan off the table for a while it is expected that eyes will

Cyber Security:

turn to Russia for expansion both for casino developers

This will definitely be a topic of large concern as we

and online operators. This change in the law could prove

move forward to the information-is-easy era. We have

to be a boom situation and hopefully the economy and

witnessed firsthand with the recent hacking of Sony

ruble will hold up to the large investments that will likely

Pictures which proved that not even the biggest of the big

be made given the names joining the race. Also we have

are safe from cyber terrorism. Target, Home Depot, and

to keep in mind what happened in 2009 under the same

Sheldon Adelson ‘s Venetian are all victims. Hackers have

watch. Knowing that these large operators have teams

made it clear that nobody’s data is completely safe and

of analysts, legal advisors, and lobbyists you would have

in some cases dangerously vulnerable. For this reason I

to assume they have done their homework and assessed

expect to see a large rise in the visibility of cyber security

their risk appropriately. We will see all the usual suspects

companies with new and updated software and hardware

line up for licensing and the vendors will be ready to

solutions. Land Based and online gaming companies face

provide new technologies, and with that I am sure we

an ominous issue: They can’t scale fast enough to meet

will be hearing a lot about Russia this year.

growing threats. They can’t easily hire enough people or buy enough technology to be totally secure – usually they will

Chinese Lottery:

need outside help. The stage is not yet set for companies

Last year was an amazing year for the Chinese Lottery,

taking new approaches to this issue. The ramifications of

the operators, and the vendors. The significant growth

these security breaches are getting worse by the hour, and

in both the sports lottery and the welfare lottery were

in some cases are detrimental. A couple of decades ago,

astounding and growing as I write this article. Obviously

a breach was mostly an operational problem that would

having a World Cup year never hurts but numbers have

cost you time and money. Today, it is a huge strategic

remained consistently on the rise. The addition of new

issue that could virtually destroy your business, customer

games, new technology, and a growing player base has

trust, and put your valued subscribers’ finances at risk.

made the Chinese Lottery the one to watch in 2015. The big suppliers and resellers are reaping the rewards and

The Race to Russia:

companies like China LotSynergy, AGTech, and 500.

I can still vividly remember the closing of casinos dotting

com have all seen benefits from the continued growth.

Moscow’s streets in the summer of 2009 when the

Recent technology advancements allow operators to offer

Russian government abruptly put a halt to gambling.

sports and welfare lottery on your mobile Smartphone

Well here we go again! The Race to Russia is on and at full

or computer, however government approvals have been

speed it appears. Casino mogul Lawrence Ho has made

very limited to only two test studies. One such study is

a commitment to build a casino site. So far Russia has

with 500.com and their ability to offer sports lottery and

designated Sochi’s Olympic site and the annexed Crimean

incentives online allowing for ease and convenience to the

peninsula as gambling areas in a bid to boost investment

customer and giving a boost to ticket sales. Approved by

developer, and distributor of

and tourism. By law casinos are restricted to four special

the Chinese Ministry of Finance this model is proving to

sports betting, social, casino, and

areas in Russia, all pretty far away from Moscow.

be very successful and if the government deems that long

lottery products for the regulated

In short order the likes of William Hill, Betfair, Ladbrokes

term this is a viable method of offering content safely and

gaming industry, and an AGB

and others have made their way to Russia, though the

responsibly we can expect to see others join the party.

latter has recently exited the country. These savvy

Operators of land-based locations are also expanding

operators are looking to capitalize on online gaming

and even smaller groups are emerging as either IPO or

*John J. English is president of WEBE Gaming, a global operator,

Advisor.

Asia Gaming Briefings | February 2015

SPECIAL FOCUS 29 acquisition targets. Look for a lot of creativity

the technology. Adding to the excitement for

you definitely want to visit in 2015. Saipan,

in some of the smaller and younger operators

mobile developers is the addition of some

Incheon, Cambodia, Vietnam, and Taiwan

as they work toward offering their own online

great distribution channels like WhatsApp,

also all merit a mention. For all the reasons

ventures in the future. Groups like Happy

Viber, WeChat, as outlets for social gaming

mentioned above, this is the region to watch.

Color and HaHa Lotto are taking advantage of

environments. Companies like Caesars Interactive

technology and are utilizing it to compete with

Entertainment and Playtika as well as many

US Online Gaming:

larger conglomerates. Embracing technology

others have launched their social platform

Online gaming in the United States has been a

like mobile apps, IPTV, and social gaming

across these mobile platforms to great success

trending topic for years now and guess what,

content will make David a Goliath. Licensing or

and growing. Don’t take your eyes off mobile;

it never gets old. After a mediocre start on a

approving these smaller lottery shop operators

most likely it will be impossible to avoid it.

state-by-state offering in Delaware, Nevada,

and arming them with potential online licenses

and New Jersey the hype is settling down and New Asia Model:

realities of critical mass and lack of liquidity

Reports over the last few months are talking

in a limited population base became apparent

Mobile, Mobile, & Mobile:

about the slump in GGR in Macau and how its

in 2014. So what’s happening that’s keeping

Did I mention mobile? Ok so granted mobile

ratings are being cut far below projections.

it on the radar? California for one, New York

has been on my hot list for years but I just

Personally I think Macau has its challenges,

for another, and Washington for kicks. In

can’t get enough and my obsession with my

most recently President Xi’s crackdown on

light of not having a federal bill allowing for

electronic leash has me writing about it again. I

corruption, has been putting a big damper on

nationwide online gaming, states took up their

recently bought my new iPhone 6plus and I am

the junket and high roller rooms and hence

own battle with Delaware offering online gaming,

wondering why I need my laptop anymore? The

the overall performance of the Macau casino

Nevada offering poker and sports betting, and

new technology in smart phone applications is

industry. Macau is not going anywhere anytime

New Jersey offering full casino and no sports

through the roof, your phone could soon control

soon and in fact is just settling in on its first

betting. Although they have leveled off and the

your life, it does mine. Bigger screens, better

real major setback. Mega casinos realize it’s

results are more in line with reality based on

resolution, faster processors, have made super

time to reinvent the junket model and how

the population the future still looks promising.

cool technologies like virtual reality (VR) and

credit is issued, and I can assure you that with

If the federal government never chooses to

Augmented Reality (AR) well… a real world

billions on the line that there are the smartest

regulate gaming and it needs to be a state-

reality! Using hi tech programs like VR and AR

people on earth in a room somewhere in Wynn,

by-state movement the sharing of liquidity

is all the rave at game studios worldwide and

Galaxy, or Venetian surviving on pizza and Red

between states could help alleviate the critical

expect to see it on the gaming floor and right

Bull until the model is modified and it works,

mass issues. Now throw California and its 38

on your mobile phone this year. Having been in

within the law, and to the satisfaction of Beijing.

million people, add New York’s 19 million

the gaming industry for over a quarter century I

Meanwhile, Manila is booming with cranes on

people and Washington’s 7 million and now

feel like a kid all over again when working with

the waterfront and their Entertainment City is

it’s working and worthy and the rush will be

this medium on mobile and I can say it takes

coming to life with mega resorts like Solaire,

on once again. California has sharp and open-

the game to a whole new level.

Manila Bay Resorts, and City of Dreams which

minded regulators but has some issues to be

Innovations in mobile gaming will hit all time

includes big names like Crown and Nobu, and

settled between racetracks, card rooms, and

highs this year with submersive new content

even tying back to the tech I described earlier,

tribal casino operators and how they all work

both in real money gaming and especially in

a Dreamworks Animation play center called

harmoniously together. There is another new

social gaming environments where the user

Dreamplay. The resorts are world class and

bill on the table so I expect a lot of activity this

experience and engagement could really utilize

with the new offerings coming on line soon

year on the US Online front. l

will certainly be something exciting to watch.

Asia Gaming Briefings | February 2015

SPECIAL FOCUS 30

As 2015 kicks off to a flying start, AGB asked some of our most esteemed advisors and friends for their top three predictions for the year ahead. Some common themes emerged, even if opinions differ, such as the future for Macau, Japan, the Philippines and Vietnam, but the advisors also took macro-themes into consideration when making their forecasts. See if you agree with our experts about what might lie ahead for the Asian market, and for the gaming industry as a whole in 2015.

Y15: Year of mass 1.

2.

Vietnam gets its act together, adopts a

back and witnessed phenomenal growth in

gaming regulatory framework, and starts to

Macau as a result of casino gaming. Therefore,

attract attention from casino developers. With

I believe that it may be possible to see a change

casinos, in the context

Crowne Danang leading the market, and news of

in attitude where the China government may

of allowing integrated

a potential mega resort to be developed in Hoi

look to capitalize on the opportunity and open

resort developments.

An by a joint venture which includes the Chow

a second gaming zone either in the North or

Social safeguards, and the

Tai Fook group, Vietnam could be the next hot

possibly on Hainan Island so they may benefit

treatment of existing pachinko and pachislot

spot and a real alternative to Macau. Similar

more from the tax revenues generated from

operations remain key issues to be resolved,

flying times, familiar culture and a super low-

casinos. The pie is huge, so carving out another

but the in-principle decision to legalize will

cost operating environment, are the dynamics

slice will not cripple Macau but may segment

be made.

that have proven to be effective in attracting

the business into two areas. The same thing

The Philippines and Vietnam will both be

junkets to its markets. All it requires is for the

happened in the United States starting with

beneficiaries of the migration of junket

government to finalize its gaming decree, and

Las Vegas, but with continuing growth there

business to jurisdictions out of the direct

the VIP business model would not even require

are now over 1,000 casinos spread across North

purview and influence of China’s anti-corruption

them to grant access to the local market.

America. The same is true of Europe where there

After an incredibly long gestation pe-

riod, Japan will legalize

David Green*

2.

crackdown. This unanticipated externality may give their respective casino industries a shortterm boost, at the expense of jurisdictions such as Singapore, Macau and Australia.

3.

3.

Japan once again gets everybody’s hopes up only to dash them before the end of

the year. T ​ he governors of two prefectures that were previously leading the way in seeking IRs to

are now over 1,000 casinos. So why not China?

2.

Many land-based casino operators do not view online gaming as a threat, but with the

advent of new technology, high speed broadband

With no major new property openings in

boost their local economy (Okinawa and Tokyo)​

Internet and new live dealer opportunities,

Macau since April 2012 (Cotai Central),

have now switched their stance, which has got

online casino gaming will grow in popularity in

this year should provide guidance as to the

to be seen as an indicator of the emergence of

jurisdictions where it is legal or allowed. Online

likely impact of the pipeline of new openings

anti-casino sentiments.

casinos do not have the same high overheads

scheduled on Cotai over the next two years, with

Prime Minister Shinzo Abe has been returned

as land-based casino operations and therefore

both Galaxy Phase 2 and Studio City expected to

albeit with a slightly reduced mandate and is still

will be able to operate more efficiently, allowing

open. Don’t expect a “Sands effect,” but there

obsessed with the constitutional amendment

them to be more competitive. They will never

should be a strong positive impact on tourist

he has been trying to push through as part

replace the experience of gaming in a real casino

spend, length of stay and on GGR associated

of his father’s and his own legacy. With his

but the convenience factor combined with new

with those openings.

second priority, the economy now technically

technologies will make them more appealing

in recession and requiring intensive care, it

to players, which will allow them to gain more

Macau stages a minor

would be difficult to see Abe using his political

and more market-share as well as a “share of

recovery in May 2015,

credits to push through a contentious issue such

wallet” from existing players.

led by the opening of

as gaming, when he needs all the leverage he

Galaxy’s Phase 2,

can muster for his two long standing priorities.

1.

​w ith the mass growth

3.

A casino is a casino is a casino. A Baccarat hand is a Baccarat hand is a Baccarat hand.

So what really influences a player’s decision as

exposed for what it is ie.

Many of us casino executives

to which casino to visit? Aside from the normal

VIP players hiding in plain

are old enough to remember

list of convenience, casino credit, betting limits,

sight. The performance of the real mass market

the lyrics of Bob Dylan’s

customer service, etc. I predict that more and

can be seen in the year-on-year decline despite

famous song titled “The

more casinos will begin to focus upon creating

ever increasing record visitation numbers.

Times They Are A-Changin.”

“unique experiences” for their players to help

Nothing could be more true

differentiate themselves and become more

today than relating that to

competitive in an already crowded market of

Ben Lee**

With the VIP segment adversely affected by

Stephen Karoul***

both the anti corruption drive and a dearth of capital as a result of the Huang Shan scam

the casino industry. I don’t have a crystal ball

in April, Galaxy’s opening this year will once

but my gut feeling tells me that we can expect

again stimulate the market as it did w ​ hen they

to see some industry-wide changes that will

opened Galaxy Cotai. A fresh round of liquidity

begin in 2015 but also continue into the future.

*Principal, Newpage Consulting

1.

***President & CEO, Euro-Asia Consulting

in the form of new credit facilities on the back of a new Chinese-focused property should see the start of a minor recovery in mid 2015.

Asia Gaming Briefings | February 2015

China’s economy is slowing down just like the rest of the world. Its leaders sat

casinos. l

**Managing Partner, iGamiX Management & Consulting

SPECIAL FOCUS 32

Horse racing industry struggles against online challengers Online betting exchanges CITIbet and AA-Star have come to the attention of racing authorities across the region, which see them as a threat to racing integrity and a drain on betting turnover

T

he secretary general of the Asian Racing

the low margin operations do not pay licensing fees to

Federation (ARF), Andrew Harding, hasn’t

racing bodies.

given up on reaping a financial return to horse

The ARF is the over-arching association chartered with

racing from the so-called “Asian betting

protecting the interests of racing in the Asia region,

exchanges,” but admits it will require a long-term and

including Australia and South Africa. Harding says

systematic approach.

wagering operators should pay to field on racing, wherever

The exchanges are licensed in the Philippines’ special

they are based.

economic zone known as the First Cagayan, which critics

“It’s about gaining recognition of the fact that racing’s

have labeled a “Wild West” of offshore wagering. But

business model is built upon a reasonable rate of return

defenders of the operations within the special economic

from wagering to the sport. If that is broken and you are

zone say that racing jurisdictions are to blame for having

left with what we call the “Free rider phenomenon” - that

take out rates that are uncompetitive with the online

is, wagering operators using racing without contributing

operations.

to its costs. When this happens it is a case of market

Citibet and AA-Star are similar in nature to legalized

failure and if there is nothing done to address that then

betting exchange Betfair in that they allow customers

you end up with under-supply in economic terms and

to match bets and therefore bet on individual horses to

the industry cannot be viable in the long term. The sport

lose. The primary concern for authorities, other than a

will be limited in its growth or go into decline.”

drain on turnover, is that, unlike Betfair, the exchanges

Harding says recent legislation dealing with online betting

do not work with authorities and provide account

in Australia and Singapore has provided an example on

information for use in inquiries, making them a clear

how to gain a return from the exchanges.

threat to racing’s integrity.

The head of a leading Asian bookmaker presented a slightly

A lack of transparency means the total amount wagered

different take on the issue. While agreeing in principle

on the exchanges - which also hold bets on financial

that “betting on a horse to lose is an unacceptable and

markets - is difficult to calculate, but judging from the

damaging proposition”, he said that totalisator operators,

numbers displayed on websites and expert opinion, the

especially a monopoly operation like the Hong Kong Jockey

turnover on racing far exceeds that of Betfair and is equal

Club, only have themselves to blame for the pirated use

to, or more than, the legal totalisator pools in Hong Kong

of its product.

and Singapore. The Hong Kong Jockey Club last season

“The HKJC tote model doesn’t represent ‘Value’ to the

boasted a record betting handle of more than HK$100

Asian Punter – the take out rates are too high and this

billion and is on target to exceed that again this season.

in itself helps to create an alternative market,” he said.

The exchanges use starting odds, race field information

“The HKJC is a premium product – but they should

and television pictures without permission from race clubs

allow international operators to contract with them,

and, unlike Betfair and other more regulated exchanges,

integrate into their pools such that HKJC increase their

Asia Gaming Briefings | February 2015

SPECIAL FOCUS 33

global reach. The bets taken would add value

future, saying if similar legislation was adopted

racing with the smaller betting pools of Macau

to their pools, improve liquidity and therefore

elsewhere it could provide further leverage to

and Malaysia particularly prone to late “bet

reduce volatility.”

the sport.

backs”, with bookmakers managing liability

Chris Eaton a sports betting expert from the

Matt Pollins is a sports gaming law expert and

by “laying off” large bets or manipulating

International Centre for Sport Security is outspoken

associate at Olswang Lawyers in Singapore and

tote prices.

in his criticism of what he says is the low level

says the Remote Gambling Act is less “grey”

Racing officials across Asia have taken to closely

of scrutiny placed on the First Cagayan-based

than the anti-offshore gambling laws in other

monitoring the sites for suspicious activity. The

operations, and called for governments around

Asian jurisdictions.

exchanges are also extending their reach into

the world to unite in holding them to account.

“Even though the law hasn’t come into effect

America, although there the main problems

Eaton also pointed to the fact the exchanges are

the a lot of the sites have shut down Singapore-

are major price manipulation in harness racing

now operating on financial markets and have

based accounts,” Pollins said. “It now stands

and greyhound racing, which the exchanges

“all the hallmarks of criminal organizations:

out as a jurisdiction where it is clear that you

also offer bets on.

a lack of transparency, and structures clearly

can’t take bets from when a lot of countries it is

J. Curtis Linnell is the Vice President of operations

designed to maintain anonymity and secrecy.”

quite grey. In terms of its international reach,

and wagering analysis at the Thoroughbred Racing

“It’s the wild west and out of control,” Eaton

the law is deliberately territorial - which means

Protection Bureau, and says his organization has

said “These operations are turning over billions

if I am based in the UK and operating a site that

been aware of what is termed “price steaming”

weekly and governments are not pursuing them,

takes bets from Singapore, I am committing an

for the past two years.

and no one even knows who owns them - this

offence in Singapore, which means I could be

is outlandish. Pressure should be applied to the

extradited to face charges there.”

exchanges, and have a followed their infamous

Philippines government to do something about

Harding suggested the best chance of eventually

exploits,” Linnell said. “We have seen some

it. They need to be made open up and be made

bringing the exchanges into line in the short

effect, starting about two years ago, with some

transparent. Clearly a joint government effort

term was the Philippines authorities seeing

steam betting on some lightly handled tracks.

is required, perhaps even with United Nations

other jurisdictions receiving a bigger financial

Tracing that steam betting back through accounts,

supervision. The agent-based structures of

return, and asking for the same.

it seemed to trace back to South East Asia, and

these operations are ready made for abuse by

The biggest holds on CITIbet and AA-Star are on

in particular Malaysia. The first instance there

criminals and money launderers.”

Hong Kong racing, and the movements on the

was some very large wagering. The individuals

Harding, in his role as the former head of the

exchanges are thought to be the main catalyst

probably over bet what they needed to - but

Australian Racing Board, was also at the forefront

for late tote fluctuations, or “price stomping”

since then we have seen about 50 or 70 races

of the court battle to force Australian bookmakers

as it is known.

in total affected.

to pay fees to field on racing. Harding said the

Although there is some conjecture over how

“I am trying to get to the actual licence holders

High Court ruling there, which determined that

much the exchanges affect the Hong Kong Jockey

- CItibet, AA-Star - that would be the practical

operators like Betfair would have to deliver a

Club’s escalating year-on-year turnover, the

way to do it, because we want to be in touch

return based on turnover to racing for use of

late price movements have become a headache

where there is liquidity on our events. We haven’t

information, created a precedent that could be

for the club.

been able to, which leads one to suspect that

adopted elsewhere.

Price movements in other Asian racing

there is a lack of transparency - and that’s not

Harding also pointed to Singapore’s recently

jurisdictions are also a major issue, making

a good thing.” l

passed Remote Gambling Act as a hope for the

overseas betting operators cautious of fielding on

“We had heard about the Filipino-based

Asia Gaming Briefings | February 2015

AUSTRALASIA 34

AUSTRALIA

Build and they will come The Aquis project will be located on a 40

Australia’s casino industry attracted billions in potential new investments in 2014 as companies competed for new licenses in Queensland and revamped properties elsewhere, but their success is likely to hinge on attracting Asian high rollers

hectare ‘island,’ surrounded by a 33 hectare

CASINO GAMING REVENUE (Source: Citi Research)

Y14E A$4.4b Y15E A$4.6b

+5.7%

MARKET SHARE AS OF JAN. (Source: Queensland Treasury)

artificial lake. Key features include 7,500 hotel rooms across eight separate luxury hotels; a 23,000sqm convention and exhibition centre; entertainment facilities including two casinos, two theatres, an indigenous cultural centre and a large aquarium.

Meanwhile, China-based ASF Consortium is planning a $7.5 billion Gold Coast development.

The IR will have 2,885 hotel rooms spread across six hotels, including a six-star property. It will feature more than 20 restaurants, four night clubs and an eco Marine Park.

ASF said it expects 1.9 million tourist arrivals a

TOTAL GAMING $17.4b (INCLUDING POKIES AND LOTTERY) CASINOS $4.11b

year on completion with the creation of 15,200

RACING $2.7b

long-term permanent jobs.

SPORTS BETTING Y12/13 $484.78m

The size and scale of the Queensland resorts has raised eyebrows in some quarters, with question marks over whether or not the projects will be viable given their expected heavy reliance on

Q

inbound tourists, especially given the downturn

Crown Resorts and BetEasy have confirmed their plans for a joint venture, combining BetEasy’s sports book business with the sports book business of Crown’s Betfair unit. The venture will be 67 percent owned by Crown and 33 percent by BetEasy’s owners. BetEasy recently beat out larger bookmakers in Australia to win the rights to be the exclusive wagering partner of the Australian Football League for the next five years. It has signed more than 110,000 new registered customers in fiscal 2015 to date.

ueensland is set to decide early

in the China VIP market and weakness in the

this year on who will win a license

local economies.

to redevelop the Queen’s Wharf in

However, Citi Research in its outlook for the

central Brisbane, while two other

year said Australia’s casinos may benefit from

regional licenses are edging through the

the crackdown on corruption on mainland

regulatory process.

China as VIPs seek to avoid the scrutiny of

All of the groups involve Asian investors and

being close to home.

are expected to rely heavily on the capacity to

Citi Research predicts that gross gambling

bring in Chinese tourists.

revenue will rise 5.7 percent in 2015 to A$4.6

Initially there were four bidders for the Brisbane

billion, in large part driven by the VIP sector.

site; James Packer’s Crown Resorts, incumbent

It says VIP revenue is likely to rise 7.6 percent

operator Echo Entertainment; China property

to A$1.33 billion this year, though most of the

developer Greenland and a consortium made

growth is likely to be in the first half of the year.

up of Hong Kong’s Chow Tai Fook and Far East

“VIP is central to the stronger performance as

Consortium.

Australia benefits as an alternate destination

A few months into the process and that was

from Macau for VIP gamblers. Mass gaming

whittled down to two, with Crown teaming

growth is also expected to accelerate as large

with Greenland and Echo joining forces with

domestic gaming markets in Sydney and

other properties around the country have also

Chow Tai Fook.

Queensland benefit from stronger household

undergone multi-million dollar face lifts.

Among the regional licenses, Aquis plans an

incomes,” it said in its outlook for 2015.

Crown Resorts’ casino will be a six-star VIP

$8.15 billion ($6.7 billion) resort at Yorkey’s Knob

At present, Australia’s casinos make up just

only resort.

near Cairns, which would be one of the most

3 percent of the Asian VIP market, Citi says.

“Crown Sydney will help bring international

expensive tourism developments in the world.

Though much of the action was focused on

and domestic tourists to Sydney, create over

In December, that project moved a step forward

Queensland, Sydney is also scheduled to get

1,200 jobs and generate significant economic

after winning approval from environmental

a second casino after Crown Resorts paid

benefits for New South Wales,” CEO Rowen

regulators.

$100 million for a license in July, while many

Craigie said at the time. l

Asia Gaming Briefings | February 2015

AUSTRALASIA 35

VISITATION

PACIFIC ISLES

CNMI under the spotlight The casino industry on the Commonwealth of Northern Mariana Islands heated up in 2014, attracting pledges of multi-billion dollar projects, though some analysts express doubts as to whether the islands can support such large-scale investment

A

Nov14 total arrivals

+16%

Korea arrivals 16,277

+31%

China arrivals 13,874

+44%

U.S. Citizenship and Immigration Services denied a petition from Tinian Dynasty to allow its migrant workers to stay because of alleged illegal activities by the casino operator. “This flagrant use by an employer of a USCIS program to facilitate a pattern of law-breaking supports discretionary denials of further petitions filed by your business even if the petitions were otherwise approvable, which for reasons stated above in detail, they are not,” the decision read.

The island’s gaming regulator says it doesn’t expect the casino to close as a result.

unit of Hong Kong-listed Imperial

“I don’t think anyone believes that a seven

Pacific won the bidding for a license

billion [dollar] investment would make sense

to build the first casino on the island

in a place like Saipan. It’s unclear what type

of Saipan. The company has since

of revenue they would be able to generate

more than doubled its proposed investment

and returns on investment [achieved],” one

to $7.1 billion.

analyst said.

The company was granted the 25-year license

Imperial Pacific also recently said it was getting

to build and operate a casino on the Northern

less revenue than it had anticipated from its

Marianas island in August, with an option to

investment in Hengsheng as the VIP market

extend for a further 15 years. It plans 4,200

has dried up.

hotel rooms and 1,600 gaming tables.

The company said the actual profit stream received

However, some industry insiders remain

from its investment in the Hengsheng Group

skeptical about the project.

was HK$10.73 million ($1.38 million). That’s

“Imperial will get their junket room that they

less than half of the $24 million guaranteed

can fly VIPs to. The government gets money so

under the original agreement.

they can pay their people the back-wages that

As such the vendor will make up the shortfall.

they owe. But they’re not going to invest US$7.1

Convertible notes have been deposited with

billion,” one insider was cited as saying in local

Imperial Pacific as a guarantee for the payment.

media. “They’re going to say ‘Oh, the situation has

With Imperial Pacific’s Best Sunshine International

changed’… and it will drag on for 20 or 25 years.”

Group owning the monopoly on Saipan, investor

Imperial Pacific, which is also an investor in

interest has turned to neighbouring Tinian,

Macau’s Hengsheng group, said it planned to

which has also attracted multi-billion dollar bids.

finance the project through equity and or debt

Bridge Investment Group is planning to build

financing, but, except for unsecured borrowings

a $130 million, 300-room casino hotel by

of HK$220 million, “has not yet formulated any

the Tinian harbor and Mega Stars Overseas

concrete fund-raising plan.”

is planning to develop an integrated resort

The company said it would pay $20 million within

on Puntan Kastiyu -- another multi-million

60 days of starting construction on its first hotel,

dollar project targeted at China’s high rollers.

and recently bought 155 hectares of public lands

which is due to begin early next year, and $20

Then there’s Shanghai-based Saipan Jinghua

for the development.

million a year after the first full year of operation

Investments Ltd. which aims to develop a $4

The islands’ relative proximity to China, natural

of the first hotel, scheduled to open in 2016.

billion integrated resort on 300 hectares of

beauty and U.S. regulatory environment are all

However, gaming analysts are concerned about

public land located at Pina Plateau on Tinian.

seen as draws for investors, Maggie Ralbovsky,

how the company plans to make it financially

While Alter City Group plans to invest $360

managing director with investment consultant

viable in a location that is quite distant from

million and is ready to begin construction

Wilshire Associates says.

mainland gamblers. Although closer than

following compliance with regulatory agencies.

“Whether the trend continues in the next five

destinations in Australia, Saipan is still a five-

The developer will tap $120 million in working

years will depend on the experience of the first

hour flight from Shanghai.

capital for the initial phase of the construction

group of investors,” she adds. l

Chinese Strategic Holdings says its Tinian Realty International unit is in talks with a Nasdaqlisted operator with operations in Macau over a hotel-casino project on the island of Tinian in the Commonwealth of Northern Mariana Islands. “The parties have been in active negotiations on the key structural framework of the possible engagement,” Chinese Strategic Holdings said in a Hong Kong regulatory filing.

Asia Gaming Briefings | February 2015

SUPPLIER SPECIAL REPORT 36

ICE TOTALLY GAMING

‘Unmissable’ ICE In 2014 ICE secured an independently audited 23,506 attendees who traveled to the ExCeL Centre from a record 156 nations to see the 515 exhibitors who chose the London show as their international shop window

T

Asia Gaming Briefings | February 2015

hanks to the imagination and creativity

taking place at what has become the world’s

that ICE exhibitors apply to their

unmissable gaming exhibition.

presentations, ICE has become an

The ICE 2015 conference program comprises a

adventure where gaming professionals

voyage through eight high-level, targeted events

and entrepreneurs discover new suppliers,

that cover all of gaming’s vertical markets,

discover ground breaking technologies and

including the International Casino Conference,

discover those landmark products which have

World Regulatory Briefing, BetMarkets and

the potential to transform the way the industry

Lotteries for the Future.

does business.

Other events include the Digital Think Tank -

The new dedicated ICE app. will allow visitors

a free-to-attend seminar theatre that features

to access the show’s full event schedule,

product demonstrations, tutorials and master

browse the latest product launches and receive

classes from some of the most respected thought

information on all of the ICE Conference and

leaders within the gaming industry. A total of 15

Seminar speakers. It also features a personal

exhibitors will be holding 30-minute thought

event planner, an interactive floor plan to

leadership discussions and presentations.

help delegates navigate the 60,000+ square

The International Masters of Gaming Law will

meters of floor space, and a social feed that

hold its Masterclass on Wednesday, February

allows visitors to post updates and comments,

4, where key regulatory stakeholders will share

share photos, and earn points and badges for

knowledge on current industry updates.

participating.

Tribal Gaming will also be in the spotlight, as

Although ICE is primarily about seeing the

will a study by Atlantic Lottery Corporation into

most powerful and smartest innovators in

what the lottery and gaming industry might

gaming - all under the same roof, there’s an

look like in 2030, and how a gaming company

awful lot more to the event. There will also be

might respond to remain relevant.

meetings, conferences, seminars and out of

ICE Totally Gaming - leading the way in innovation

hours networking and hospitality activities

and future strategy. l

37

Asia Gaming Briefings | February 2015

SUPPLIER SPECIAL REPORT 38

SCIENTIFIC GAMES

Brave new games Scientific Games' string of acquisitions promises a future of cost-saving strategies, but how will the conglomerate be able to cultivate a cohesive organizational culture and allow the multiple brands to achieve long-term organic growth Gavin Isaacs shares his vision

S

cientific Games completed one of the

calendar 2016. The company also increases its

Scientific Games takes pride in being one of

most significant industry mergers last

target of annual cost synergies from the WMS

the top market players, particularly in the

year – acquiring Bally Technologies at US$5.1

acquisition to US$115 million by the end of

lottery industry. In the United States, the

billion. This followed the acquisition of WMS

calendar 2015.

company has a market presence in 40 out of

Industries at US$1.5 billion in 2013.

Notwithstanding this promising future from a

44 jurisdictions where lotteries are legal.

With the consolidation of WMS, Bally,

cost-saving perspective, the question remains

The company is also eyeing opportunities in

SHFL and Scientific Games, the company

as to whether Scientific Games will be able to

Asia. “Asia has been a high-growth market

has become the industry’s most diversified

cultivate a cohesive organizational culture and

as the market is always underpenetrated,”

supplier, serving lotteries, casinos, and

bring the multiple brands together to achieve

Isaacs notes.

gaming operators across the world.

long-term organic growth.

In Asia, Scientific Games has a strong market

“Scientific Games has transformed itself into

Isaacs, who has more than 15 years of

presence with contracts signed with operators

one of the largest suppliers with the best

leadership experience in the gaming industry,

in Australia, New Zealand, and China among

products, services and facilities in the gaming

was named chief executive officer last year.

others. Last year the company also signed a

industry,” says Gavin Isaacs, president and

Given his extensive past experience as chief

new contract to provide instant games for the

chief executive officer of Scientific Games.

executive officer of SHFL and as executive vice

Taiwan Lottery.

At the upcoming ICE show, Scientific Games

president and chief operating officer of Bally

Scientific Games has also noticed the potential

will exhibit together with Bally Technologies

Technologies, he sees common ground to

in China. As early as 2007, the joint venture

for the first time since the acquisition was

nurture an inclusive, creative, and productive

of Scientific Games and Chinese technology

completed.

organizational culture across the subsidiaries.

company, Inspur, launched instant tickets in

Isaacs says that the company’s “new global

“The transformation starts with leadership

Shandong Province.

organization is unmatched, bringing together

from the top,” says Isaacs. “We reinforce

According to the Xinhua news agency, sales

under one roof the powerful Bally, WMS,

principles that are sensible, create an open

of China’s Welfare Lottery alone, the bigger

Shuffle Master, SG Gaming, Williams, and

workplace without office politics, and

of the two official lotteries, increased 16.67

Barcrest brands, and a suite of products

encourage innovation that will shape future

percent in 2014 to RMB 205.96 billion (US$33.6

and services that address casino operators’

industry trends. We pick the best practices

billion). Other trends such as online lottery

diverse needs across their land-based and

from each company that has joined the

are emerging and the online gambling market

interactive channels.”

Scientific Games family to create even greater

is on the rise.

“We not only diversify our product portfolio

value for our customers.”

To prepare for this brave new world of gaming

by bringing these exceptional brands together,

While the transformation of Scientific Games

in Asia and globally, Isaacs says the company

but also save duplicate costs so that we can

is underway, Isaacs acknowledges that the

will focus on innovation, superior execution,

reinvest in innovation,” he adds.

industry is undergoing some vast changes.

and a client-centric approach.

The integration process is well underway

He notes: “Since the world economic crisis in

Asked about his forecast for the year ahead,

and on track, according to Isaacs. His view

2007, people have been reprioritizing the way

Isaacs says: “As the gaming industry rapidly

is in line with a report released by brokerage

they deal with their income. And the evolving

consolidates, Scientific Games will launch

firm Wells Fargo Securities early this month,

technology landscape continues to transform

some groundbreaking innovations with scale

saying that Scientific Games “is already

players’ gaming experiences.”

which will be better than ever.”

making progress with its synergy program”.

“There are constant needs to innovate new

As the saying goes, the bigger the better. That

The report cites Scientific Games’ Q3 2014

products and provide greater entertainment

may not always be the case but, for a company

announcement that the company targets

as we compete with many other forms of

with a 40-year legacy, there is very good

annual cost synergies ranging from US$220

leisure activities for the consumer spend,”

reason to be positive. l

million to US$235 million by the end of

he adds.

Asia Gaming Briefings | February 2015

SUPPLIER SPECIAL REPORT 40

MICROGAMING

Online guru goes mobile “T

As one of the earliest online casino software providers, Microgaming developed and launched its very first online casino software in 1994. With more than 20 years’ gaming experience the online guru has placed its bet on mobile and other digital channels as the next big thing in the gaming industry.

echnology has to be the biggest trend

“There was no real-money casino app in the

for 2015 for both desktop and mobile”.

– it has been and will continue to be

Windows Phone Store to specifically target

This will include a branded content game

the driving force of our industry,” says Neill

the Windows Phone players. We saw a gap

in the summer, having signed a licensing

Whyte, head of product channels.

in the market and an opportunity to provide

agreement for the breakout Universal

“Take yourself back to 1991 and the

a gaming solution to these players, and we

Pictures comedy, Bridesmaids, according to

introduction of the World Wide Web; a life-

jumped at it,” he adds.

Whyte.

changing creation which has shaped the

Microgaming says there is a handful of

To start off the New Year with momentum,

Internet that we know today. Back then, the

Microgaming and Quickfire operators

Microgaming will be unveiling a new

likes of Amazon and Google didn’t even exist

planning to launch with the app in Q1 2015

development for its Quickfire platform, a

and mobile phones were in their infancy;

and the app will continually evolve with new

game management module, Quickfire iQ,

‘the brick’ phone was even considered

features, new games and updates to ensure

that “enables operators to manage their

revolutionary. It’s hard to conceive that was

it meets the requirements of the Windows

online casinos quickly, effectively and

only 25 years ago,” he adds.

Phone platform.

intelligently”. Quickfire iQ is also capable

To date, the Internet has moved beyond

Whyte notes that player behavior is

of integrating seamlessly with third-party

simply transforming the way we live, from

different between online and mobile. While

systems and providing business intelligence,

communication to commerce and payment.

online players “will engage for longer

game settings, incentives, free games,

We are entering an era where we spend more

periods of time, generally in the comfort of

player segmentation, achievements and

time in the virtual world, through multiple

their home”, mobile is “short bursts of play

recommendation tools.

devices from laptop to tablet to mobile and

throughout the day whilst on the go”.

While Microgaming is optimistic about the

even wearable technology. The number of

However, the rise of mobile does not mean

year ahead, the company is particularly

smartphone users worldwide is estimated

the decline of online. As Whyte puts it:

excited about the potential of the Asian

to reach 1.75 billion in 2014, according to

“What we are seeing more and more is

market.

market research company eMarketer.

that players aren’t sticking to one form

“2015 is set to be another busy year for

Whyte comments: “Most recently we’re

of technology or one way in which they

Microgaming,” Whyte says. “As a whole

seeing it with mobile. It’s estimated that

consume our product - players are becoming

the Asian market is an exciting area to

mobile gaming will account for 31% of

‘multi-device’ and we expect this trend to

monitor, especially with the booming

global gaming in 2015 and that percentage

continue for the foreseeable future.”

smartphone industry. Devices are becoming

is predicted to increase further in 2016.

As the gaming industry goes digital,

more affordable, in turn increasing mobile

Whilst mobile is very much ‘here and now’,

Microgaming has experienced changes in its

adoption, which shows great signs of growth

it will still be a big industry topic for the

customer base.

for mobile gaming.”

foreseeable future.”

“Not only has our number of clients

What makes this industry so exciting

Microgaming takes pride in having launched

grown, but over the years the profile of our

is that no two days are ever the same,

the industry’s first real-money casino

customer base has gone through waves,

and Microgaming is preparing itself for

app on the Windows Phone Store last

from entrepreneurs, to listed companies,

inevitable regulatory changes. Whyte

December. The app features more than 35 of

to government and more recently, media

concludes: “Regulation will play a huge

Microgaming’s premium games, including

companies,” says Whyte.

part in how the iGaming landscape evolves.

online slots, progressives, table games and

Driven by the changing customer base,

Further regulation is inexorable; it’s just a

video poker.

Microgaming has been adapting and shaping

matter of when and how.”

Asked about the rationale of developing

its product offering accordingly.

Microgaming will be at Stand N5-220. l

an app specifically for the Windows

Despite evolving industry landscape and

Phone market, Whyte explains: “We are

customer expectations, Microgaming still

continuously analyzing the mobile phone

positions itself as a software provider who

market and recent data shows that the

develops “market-leading software” for

Windows Phone market share is growing

operators.

in several large European countries, and is

Speaking of 2015, Whyte says the company

projected to continue to increase.”

has “an exciting roadmap of new content

Asia Gaming Briefings | February 2015

SUPPLIER SPECIAL REPORT 42 ALFASTREET

Building momentum

ARISTOCRAT

Hollywood star studded lineup

B

Wonder Wheels dual-seat immersive pods.

new Spring platform.

The company will be demonstrating

The platform will offer BetConstruct’s

recently launched attractions, as well as

partners additional capabilities to

those for imminent release and those under

power their continued growth, with new

development for European gaming floors.

products offering access to new verticals

Pending imminent release in Europe, the

and increased manageability with a new

first title in the Wonder Wheels series is

powerful back office suite of tools.

the Batman Classic TV Series slot game,

In the past year, BetConstruct has expanded

featuring characters and animations from

its global footprint opening additional

the original 1960s hit television series,

offices in the USA and Latin America.

with the legendary Adam West and Burt

Additionally they have launched new

Ward fending off The Joker, The Riddler

verticals such as Fantasy Sports and Free

and Catwoman.

Play betting to complete their product

Follow-up titles in the towering Wonder

portfolio and become a “one-stop-shop”

Wheels range will also be displayed

for operators looking to set up from scratch

on Aristocrat’s ICE stand. The first

or to build on their existing product base.

involves Superman The Movie and Ted,

BetConstruct has expanded its live sports

featuring actors Mark Wahlberg and Seth

betting to cover over 20,000 events every

MacFarlane and a real-life teddy bear.

month, and has continued to roll out new

Ted’s close to the knuckle capers helped

games such as OGWIL, an innovative online

the film became the highest-grossing

lottery game which could see a player

R-rated comedy of all time upon its release

winning up to $6 million in an instant, and

in 2012, grossing $550 million worldwide.

more recently Open Face Chinese Poker, the

Another eagerly-awaited arrival, the first

fastest growing poker variant and popular

link game in Aristocrat’s hugely popular

with professionals and amateurs alike.

E*Series, Pixie Wishes will be making its

Vigen Badalyan, founder and chairman

first showing in Europe at ICE 2015. Two

of BetConstruct, has observed that

of this entertainment segment’s most

“ICE Totally Gaming has always been a

successful games of 2014.

particularly successful show for us, and

The company will be at

we’re expecting this year to be bigger and

S2-250 in the South

better than ever. “

Hall of the ExCeL

BetConstruct has a full team available at

Centre. l

Booth S1-350. l

place at ICE will be three globally

known brands that will be hosted on its new

A

London will be a great opportunity

to present its new product line and to position the company on a different competition level.

2014 was a very important year for Alfastreet as there were many projects that the company needed to complete by the end of the year. Most of the projects were related to launching several new products, some being very much outside of its electronic table games product line.

The new product line is expected to open new markets for Alfastreet and upgrade the existing ones, with the first orders already in even though some of the new products are not being revealed at this time.

Due to the additional product lines Alfastreet needed to reconfigure its manufacturing facilities. A considerable upgrade was completed in 2014 in most of the departments, but mainly in production, development and storage.

This change was needed for Alfastreet to keep up with the ongoing demand for their established products, and also, to prepare and accommodate a new product line.

Albert Radman, sales director for Alfastreet commented: “The new developments that we are about to release will open many new doors for us and will also help us enter a new level of manufacturing. I am more than positive that Alfastreet will gain more ground in the 2015 and make another step towards re-confirming its leading position in the world of the electronic table games.”

Alfastreet is exhibiting at S5-130. l

Asia Gaming Briefings | February 2015

Spring platform breaks the ICE

A

ristocrat Technologies says pride of

lfastreet says this year’s ICE show in

BETCONSTRUCT

etConstruct will be using ICE to showcase its new products and services

which have been developed as part of its

SUPPLIER SPECIAL REPORT 43 BETRADAR

“Benchmarksetting” innovations

BMM

European expertise for a global industry

CAMMEGH

Cammegh to deliver a fabulous spread at ICE 2015

B

B

C

the introduction of its Managed Trading

Austrian and Spanish offices, as well as key

recently approved by the UK Gambling

Services, the launch its new Live Channel

leaders from the South Africa, Australia and

Commission, at ICE 2015. The unveiling

Online and Betting Software, as well as

US businesses.

of Cammegh Spreadbet Roulette gives

the development of new virtual gaming

The experts will be available at the show to

operators the opportunity to offer a wider

solutions in combination with its new

offer advice and assistance on compliance,

range of roulette bets with exciting new

Game Server.

certification, testing and training services

payout levels. Operators with existing

The company provides all the necessary

for both land-based and iGaming.

Cammegh 360 wheels and Billboard

services to run a bookmaker operation,

“BMM has gone through a significant global

displays can offer the thrilling new

such as fixtures, results, odds compiling,

expansion over the last three years, with

roulette-based side bet, with configurable

trading tools, in-running services, front-

specific emphasis in Europe,” said Kirk

payouts from even money up to 1,200 to 1.

end content solutions and live streaming.

White, executive vice president & general

In addition to Cammegh Spreadbet

In particular, the company says the launch

manager - international. “In 2014 we

Roulette, a brand new range of

of Managed Trading Services represents

opened new offices in Vienna and Bologna,

Billboard display panels will be shown.

a key milestone in the execution of its

employing both local and international

Complementary to the current range, the

strategy of becoming the industry’s unique

staff in those locations. In Europe we are

new slim double sided screens conceal a

“one-stop-shop” provider, offering a

seeing the gaming industry really embrace

host of new features together with pin

diverse portfolio of turnkey sports betting

technical innovation and competition to

sharp, customizable graphics. Cammegh

solutions.

lower costs and improve efficiencies, and

will also be showing its EyeCard Plus card

Managed Trading Services helps to

BMM is filling this demand with quality

recognition system, Slingshot 2 automated

optimize the profit of each bookmaker by

testing, compliance and certification

wheel and a roulette bundle which

externalizing labour-intensive tasks and

services,” he said.

combines Cammegh’s renowned Mercury

dealing with them efficiently and cost-

BMM is able to test online, land-based

360 wheel, with Bally Technologies’

effectively.

social and mobile in European jurisdictions.

Chipstar, roulette table and colour wheel

The service puts Betradar’s experts in

It has been certifying gaming products for

checks as part of a single source solution.

global betting markets to work for their

more than 33 years.

All this will be on show alongside the

clients and enables them to completely

BMM Testlabs will be at booth N3-420. l

Billboard MediaPro, MultiBoard and

etradar, a brand of Sportradar, says 2014 saw “benchmark setting

innovations” for the company, including

MM Testlabs will be represented from across the globe at this year’s ICE

show, with staff attending from its Italian,

ammegh, makers of the world’s finest roulette wheels, will debut Spreadbet

Roulette; dynamic new roulette side bet,

or partly outsource their trading. From

complete array of analysis options from

providing the fixtures to compiling the

Cammegh.

odds, monitoring the liabilities to finally

The ICE 2015 show in London will also

confirming the results.

mark the 25th anniversary of Cammegh

Betradar also claims to offer the most

and the whole team looks forward to

comprehensive and reliable Live Odds

welcoming everyone to their stand to

& Live Scouting service and is the only

celebrate this very special occasion.

supplier in the market that controls the

Cammegh will be at stand S6-120. l

entire chain of its in-running offer – from the data collection at the venue right through to the compilation and delivery of odds. In total, the coverage amounts to over 18,000 live events in 18 sports around the clock each month, providing over 350 unique odds types.

The company can be found at Stand S1-150. l

Asia Gaming Briefings | February 2015

SUPPLIER SPECIAL REPORT 44 DLV

CPI

Payment solutions for the industry

EVERYMATRIX

Celebrating 20th anniversary

Turnkey software solutions in focus

C

PI Payment Innovations will be displaying what it claims is the largest

portfolio of payment systems in the gaming industry, including the new MEI SCR note recycler, which has been yielding impressive results across multiple field trials.

SCR will be released to the European AWP market, beginning with Germany, in the first quarter of 2015. CPI is now entering commercial agreements with the OEMs. SCR is the latest extension of the SC product line, which has achieved an installed base of more than 1.5 million units worldwide.

The product provides a more secure and cost-effective way to handle cash. By combining proven components with new technology, SCR opens new possibilities for what note recycling can offer as part of a total cash management solution.

Its value proposition begins with the reliability associated with the same acceptor head and 600-note cashbox as the SC Advance. Two 60-note recycling drums also provide SCR with the capacity to meet the needs of diverse applications within a small footprint.

In games that traditionally pay jackpots in coins, SCR virtually eliminates hopper starvation by paying out higher value notes instead – using the same notes it accepts and stores on its recyclers from previous transactions. As a result, SCR requires less maintenance and can run for longer periods of time, lowering the overall cost of operation.

In addition to SCR, the CPI booth will feature a variety of solutions for casino slot machines, AWP applications, VLTs and more.

CPI will exhibit at booth N3-320. l

Asia Gaming Briefings | February 2015

D

LV is celebrating its 20th anniversary with a busy year planned, including

the creation of subsequent versions of its series of games, and work on online offers for its clients.

At the ICE exhibition in London, DLV will showcase its modern STD, DWS and HD cabinets and jackpot series Dragon Jackpot, Jewel Jackpot III, Gauya Quest and Vollinstars, as well as its series of multi games for standalone machines with the most recent versions - Diamond Games Premium VII, VIII and IX. Its 25-games multi game Diamond Ultra will also be featured with a novelty for ICE show – its continuation Diamond Ultra II. DLV also plans to present its new online totalizator dlvbet, which will provide clients with the possibility to make bets 24/7 on the outcome of a great number of sports, political and other kind of events.

The company will be at booth N4-160. l

E

veryMatrix, an iGaming software provider with offices across Europe,

Asia and North America, says it will be showcasing its award-winning software solutions at ICE. These include OddsMatrix, a fully-managed sportsbook providing more than 15,000 live events monthly, GamMatrix, a complete gaming and payment processing platform integrated with more than 80 third-party software APIs, and CasinoEngine, the largest casino content aggregator on the market offering a world-beating selection of games from top providers.

Visitors are invited for chat and unwind over a cocktail on Tuesday and Wednesday, between 4 and 6 pm, and on Thursday, between 2 and 4 pm. EveryMatrix will also organize its second annual Pre-Ice Party for its esteemed clients and partners on Monday, February 2nd, 2015, at the exclusive venue Hawksmoor Spitalfields in London. “We are thrilled to be attending the most exciting gaming event of the year, where we look forward to meeting new prospective partners, greeting esteemed colleagues, and finding out the latest trends in this fast-changing industry,” said Ebbe Groes, Chief Executive of EveryMatrix.

The company will be at stand S1 – 110. l

SUPPLIER SPECIAL REPORT 45 GAMING INCUBATOR

Industry Advisory makes ICE debut

T

GLI

GTECH

Shining a spotlight on auditing services

The Money Drop makes global debut

G

he Gaming Incubator, an established

TECH will be introducing several

advisory company with extensive

additions to its True 3D game library at

experience in land-based, online and

ICE that are specifically designed to appeal

social gaming to cover the broad spectrum

to different player segments.

of the gaming industry, will be making its

Titles include Bejeweled 3D, Dragon´s

debut appearance at ICE 2015.

Temple 3D, Dreams of Asia 3D and Aladdin’s

The company has a physical presence in the

Fortune 3D. Emphasizing its expertise in

UK and Hyderabad, India, with a number of

linked gaming products, GTECH will also be

partners located in the U.S. and Asia.

featuring several new linked products in its

The company, whose mission is to help

booth. Peruvian Riches and Secrets of the

entrepreneurs navigate from start-up

Sea are two powerful multi-level mystery

through growth to exit, says it aims to find

jackpots. These concepts allow operators

“raw diamonds.”

to select nearly any title from GTECH’s

These are companies or individuals with a

core game library and insert them into a

winning combination of the talent and drive to succeed, together with a gaming concept/ product with the potential to develop into a scalable and profitable business.

Ben Dodds, founder and the general manager, explains: “Our focus is on unique gaming technology, business models and operating opportunities. We believe that in mature markets with limited product differentiation our ability to recognise, qualify and support the growth of innovation makes us an ideal strategic partner, advisor and investor.”

For investors, Dodds says the company’s attraction lies in its ability to provide packaged opportunities with the aim of delivering the ‘diamonds’ whilst supporting and leveraging growth”.

He says that The Gaming Incubator works hard to support teams and companies that have the potential of having an immediate and long-term impact.

The company will be at booth N7-366. l

G

aming Laboratories International will shine a spotlight on its auditing

services at ICE, which range from WLA compliance to IT security.

The company says these services help regulators, operators and suppliers to improve governance, risk and compliance processes across the entire operation.

In addition to auditing, GLI offers its clients an extensive portfolio of services, including lottery testing, gaming device and systems testing, online gaming systems and security testing, rule writing, consultation and professional services.

GLI’s professional services division has four main areas, each specifically designed to make doing business in the lottery and gaming industries faster and more effective.

Those categories are: Project Management; Governance, Risk and Compliance; Technical Services; and GLI University Training.

At an average of 120,000 per month, GLI issues more certifications than any other lab for more than 475 global gaming global gaming jurisdictions worldwide.

GLI University conducts training for many groups all over the world. Most recently GLI University completed its first Master’s Level Commissioner Certification Training for the National Indian Gaming Association (NIGA).

GLI is also a leading gaming consultancy,

progressive bank.

The Money Drop will be making its global debut at ICE. The multi-level progressive is a title licensed by Endemol and features an innovative risk-based progressive play-off.

GTECH will also present a new suite specifically adapted to U.K. requirements.

On the interactive gaming side, visitors will be able to experience GTECH’s total iGaming solution, including entertaining interactive casino games, bingo, poker, sports betting, and iLottery products, as well as exciting new mobile additions for players on the go. GTECH´s open architecture platforms allow fast integration of third-party products to easily create a successful online solution tailored to customer needs.

New casino games include favourites from the popular SPIELO casino games library, with many new titles launched for desktop and mobile devices, such as Moving Moments, Goldify, Egyptian Dreams and Treasure Blast. GTECH’s networked bingo and poker solutions will also be on show.

GTECH will be at Booth N3-160. l

and GLI President James Maida will offer insights on the panel “How to do Business in Indian Country,” which takes place Tuesday, 3 February at 12 pm.

GLI will be on stand N3-210. l

Asia Gaming Briefings | February 2015

SUPPLIER SPECIAL REPORT 46 IGT

IGT launches “Out of the Blue”

INSPIRED

Multi-channel innovations

I

I

from “Out of the Blue.”

The company’s Virtual Sports portfolio

The CrystalDual cabinet

has undergone huge expansion in the last

has won praise for

year, supporting the development of a €1b

boasting “beauty, brains

annual market in Italy alone.

and brawn.” It embodies

Inspired prides itself on offering the best

modern cabinet design,

Virtuals content library with the widest

delivers the ideal player

range of sports and bet markets.

experience and gives

Inspired’s Virtual Sports Bet Management

operators superior levels

System, BetBOX, allows an operator to run

of serviceability and

a virtual sportsbook with multiple content

reliability, IGT argues.

feeds and new events to bet on every

The CrystalDual is backed

three minutes.

by an industry-leading pipeline of themes

Mobile omni-channel gaming is a

including IGT-favorites such as Di Vinci

strategic priority for Inspired. It was one

Diamonds and Siberian Storm and new

of the first suppliers in the industry to

releases including The Fates, Golden Eagle

launch new games simultaneously on

and King Reels.

VLT, online and HTML5 mobile. Leading

IGT’s S3000 cabinet will also make its

titles include White Knight, Goddess of

international debut at ICE. The S3000 is

the Amazon, Merlin, Drop it, Spirit of the

the evolution of the spinning-reel slot

Samurai and Centurion.

experience - preserving the essence of the

The company’s Remote Game Server,

spinning-reel cabinet that continues to

Virgo, allows operators to integrate

appeal to genre purists, while also piquing

Inspired and selected third-party games

the interest of video slot players seeking a

with its current platform and offer players

new gaming experience.

access to new hits and player favourites

“Our ICE 2015 portfolio is a direct

from land-based gaming.

reflection of our commitment to our

In order to strengthen its international

customers and IGT’s leading role in

expansion in distributed VLT markets,

cultivating thrilling gaming experiences,”

Inspired is launching two new gaming

said Eric Tom, IGT EVP of Global Sales.

machines - “Optimus” and “Inceptor”.

“The cross-platform content, hardware

Optimus is a modern and customisable VLT

advancements and casino management

cabinet, optimized for multiple market

systems that IGT will spotlight at ICE will

tiers. With dual 21.5” screens, bottom

speak volumes about our laser focus on

touchscreen and customisable Plus, Pro

meeting our customers’ demands of today

and Elite variations.

and capturing the opportunities of the

Inceptor is designed for lottery point of

future.”

sale in emerging markets and can easily be

Continuing IGT’s legacy of bringing

manufactured in-country, resulting in a

Hollywood to the casino floor, the

very cost-effective and versatile product,

company’s latest blockbuster hit Sherlock

using 21.5” monitors with a 16:9 ratio.

Holmes Video Slots will make its world

Inspired will be at stand S2-310. l

GT says its focus at ICE will be the introduction

of two pioneering cabinets

debut. The all-new Premium Plus title is housed on IGT’s Triple Wheel hardware and will put players right in the middle of their favorite movie moments.

IGT’s stand is at N2-240. l

Asia Gaming Briefings | February 2015

INTERBLOCK

Diamonds come in multi formats

nspired Gaming Group will be exhibiting its innovations in mobile omni-channel

entertainment and Virtual Sports at ICE.

I

nterblock says it will be presenting its upgraded diamond products at ICE, a

series of poker games that feature a variety of titles that can be displayed in two distinct formats.

They are available as a single game, or part of a multigame or even multiplay setup.

An important advantage is that the game is also available on a StarBar - a new play station which is playable directly from the bar’s counter and has been specially designed to maximize casino space and fit into any bar area.

“All the products that will be displayed at ICE London 2015 show are our latest, newest and most innovative design ever in the industry,” it says.

The products include MiniStar Roulette with five Play Stations with Single Sided PID and LED Sign Straight Single Sided: MiniStar Roulette with eight Play Stations with Double Sided PID and LED Sign Round: MiniStar Roulette with 10 Play Stations with Double Sided PID and LED Sign Round and Progressive Jackpot System named Golden Chip.

The Interblock booth is at # S3 - 310. l

SUPPLIER SPECIAL REPORT 47 JCM

Connecting the gaming world

KONAMI

Versatility and variety lead the way

J

K

printer technology and systems solutions.

Rapid Revolver for the first time, together

On display will be JCM’s bill validation

with a range of titles designed to highlight

technology featuring iVIZION, iPRO and

“versatility and variety.”

iPRO-RC.

“Over the past year, Konami has achieved

The company says iVIZION has the most

continued momentum across Europe,

advanced validation security features and

especially for the SeleXion multi-

anti-stringing technology available.

game product with advanced language

iPRO has a high first-time acceptance

settings and operator-configurable

rate, a fast note-to-note acceptance rate,

game packages,” said Matt Reback,

and JCM’s innovative sensing and anti-

vice president, marketing at Konami.

stringing package.

“Versatility and variety are two key

It will also showcase printer technology

factors for our development strategy

and the PayCheck 4, GEN2 Universal,

internationally. Konami has earned a

TableXchange and Coupon Express.

reputation for reliability and performance,

TableXchange brings the convenience of

allowing our customers to recognize more

TITO to the table by both accepting and

value from our products at each and every

paying out with TITO tickets, allowing full

gaming position.”

two-way transactions compatible with

Each SeleXion machine at ICE 2015 will

existing casino TITO systems, increasing

showcase different game packages for

convenience for players and streamlining

Spain, Sweden, Holland, and other unique

operations by virtually eliminating the

configurations by jurisdiction, including

need to replenish chips at table games.

a variety of new multi-language, multi-

JCM will also be presenting its system

currency titles like Inari Riches, Exotic

solutions, including Dynamic Network

Princess, Glamorous Peacock, Spellbound

Applications (DNA), PromoNet and

Princess, and Solstice Celebration.

Ticket2Go.

Konami will also bring its tall-top Podium

PromoNet intelligent couponing identifies

Monument cabinet and video/mechanical

valuable players, targets both carded and

hybrid machine Rapid Revolver to ICE for

non-carded players, links promotions to

the first time.

game-play and delivers promotions where

“Our first international release on Podium

and when they are needed.

Monument is an arctic sports-themed

Ticket2Go is a retrofit ticketing solution

game called Snow Stars: White

for gaming and AWP devices that do not

Winter, and our two debut

support standard ticketing protocols

titles on Rapid Revolver

and delivers a single ticketing

are Rising Dragon and

solution across the

Northern Treasure,” said

gaming floor.

Reback. “Both machines

JCM will be at stand

demonstrate our continued

N3-220. l

commitment to robust

CM Global says it’s helping operators create better connections with better,

smarter, faster bill validation technology,

ORTIZ

Redefining floor metrics

onami Gaming, Inc., a leader in casino gaming and systems, will be presenting

games such as Podium Monument and

game content combined with novel entertainment experiences that empower casino operators to get more from their floor.”

Konami will be at booth S5-110. l

O

rtiz Gaming, a multinational gaming manufacturer, says it’s seeing strong

demand for its products, with a white paper recently demonstrating how its Ortiz Standard increases win- per-unit, slot floor average, and time-in-chair.

The paper showed the Standard’s combination of complex mathematical models and engaging player-centric features increase slot floor revenue.

“The Ortiz Standard, found on Ortiz Gaming machines, has redefined slot floor metrics and as a result has created additional demand for the Ortiz Gaming products,” it says.

ICE Totally Gaming attendees will have a chance to see the Ortiz Standard in action as well as the newest O-Future and O-Circle cabinets.

O-Circle has a 42” evolutionary immersive curved high definition display, reaching toward the sky and wrapping around the player for full immersion into the game.

The O-Future has a cutting edge design, adaptable lighting for different types of games, and HD dual-array screens. The O-Future provides Ortiz Gaming games and animations with amazing realism and definition.

The new O-Gaming platform of online/ mobile products will also be on display.

The company says its gaming concepts are a proven model in more than 14 countries, encompassing North America, Europe, Latin America, and Asia.

Ortiz is at booth N3-360. l

Asia Gaming Briefings | February 2015

SUPPLIER SPECIAL REPORT 48 PLAY’N GO

Play’n GO launches in Philippines

SBTECH

Chameleon shows its colors

SCIENTIFIC GAMES

Stronger together

P

S

C

Investment (PGI) and its subsidiary IEST,

products at this year’s ICE.

brands - Bally, WMS, Shuffle Master, SG

the operator of the (PAGCOR) authorized

Chameleon 360 is a fully comprehensive

Gaming, Williams and Barcrest - at ICE

INSTAWIN outlets in the Philippines.

gaming and betting platform and

2015. The company will showcase more

Players are able to enjoy a large selection of

management system, allowing multi-

than 125 gaming products that address

Play’n GO games together with four system

product and multi-channel control of

casino operators’ diverse needs across

wide Mystery Jackpots via the INSTAWIN

operations, with a portfolio of leading

all of their land-based and interactive

outlets throughout the Philippines. The

gaming titles from providers such as

channels, thereby demonstrating the value

system is already in successful operation in

Microgaming, Net Entertainment and

of the Company’s recent merger with Bally

several outlets and will be launched shortly

others on top of a premium sportsbook

Technologies. Gavin Isaacs, president and

on the remaining and upcoming outlets.

offering.

CEO of Scientific Games, said, “ICE 2015 is

Johan Törnqvist, CEO of Play’n GO, said:

The platform’s single sign-in allows players

our first global opportunity, as a combined

“We are very pleased to see our gaming

a seamless gaming experience across

company, to demonstrate our ability to

system and games available to PGI as well

multiple providers, content and channels,

leverage high-earning product brands and

as our Mystery Jackpot system and I look

while the payment gateway integrates all

leading technology solutions that benefit

forward to the additional installations

leading payment methods from a variety of

our customers and help them grow their

being completed. Our server based gaming

jurisdictions.

businesses.” Highlights of new for-sale,

system and games are perfectly suited for

SBTech will also present its new suite of

gaming operations, systems and interactive

the players in the INSTAWIN outlets, and

mobile products, including SBTech Touch,

products on display in Scientific Games’ ICE

the addition of four system wide jackpots

which has been designed specifically for

2015 exhibit include, from WMS, the Blade

gives the players even more entertainment

tablet and touch screen terminal devices.

s23, a hybrid slant cabinet that combines

and fun with our games.

The retail/land-based section will introduce

the key player-favorite features of the

Play’n GO is a gaming specialist and

SBTech’s new solution for sports betting

Blade cabinet and dual 23-inch HD displays

leading developer of smart systems

terminals, which offers top-of-the-

along with the latest Blade cabinet content.

and content especially designed for

range pre-match and live sports betting

Bally Systems is highlighting its award-

performance on mobile phones, tablets,

capabilities via touch screen terminals

winning Elite Bonusing Suite which, when

game terminals and websites. Play’n GO

that allow players to bet quickly and easily,

combined with iVIEW Display Manager,

independent e-gaming platform GAT –

while operators can manage the entire

enables player-centric bonusing events

Games Account Toolkit - delivered with a

system from a single console.

that add dramatic new levels of excitement

complete and comprehensive back-office

“We’re really excited to be showcasing all

and anticipation to the slot-play

gives operators a unique foundation to

our latest developments at this year’s

experience.

tailor their offerings. Play’n GO ensures

ICE Totally Gaming expo and we expect

The Shuffle Master will be featuring the The

that its clients are equipped with superior

to see a lot of interest in our fully

Tablemaster running blackjack. The e-table

back-office administration tools for

comprehensive new gaming platform,

transports the fast-paced excitement

surveillance & marketing in addition to

Chameleon 360. It’s like a one-stop-shop

of live table gaming to a fully electronic

premium gaming content. With 60+ games

for real and true gaming and betting online

platform on enhanced graphics.

in 30 languages and especially adapted for

and retail operations but with full control

Scientific Games’

use on most smartphone and tablet devices

and flexibility for every business owner,”

group of companies

using Apple iOS, Android, Blackberry &

CEO Itai Zak said.

is exhibiting at

Windows 7/8 - Play’n GO is the undisputed

SBTech will be at stand S2-210. l

#N1-440. l

lay’n GO is supplying it’s server based gaming system with system

wide Mystery Jackpots to Pacific Gaming

market leader when it comes to Mobile Casino Games.

Play’n GO is at stand N6-340 l

Asia Gaming Briefings | February 2015

BTech plans to showcase its turnkey gaming platform, Chameleon360,

and new generation of mobile and retail

asino operators will experience first-hand the strategic benefits of

the combination of Scientific Games’

SUPPLIER SPECIAL REPORT 49 SUZO HAPP

Celebrating 60 years in the gaming industry

TRANSACT TECHNOLOGIES

Ask us how

T

VERMANTIA

The lottery connection

ransAct Technologies, a global leader in printers and software for the gaming

and other industries, invites ICE attendees to “Ask Us How” Epicentral increases casino revenues by enabling operators to deliver real time promotions and bonus offers directly to their players at the slot machine or electronic table game.

“Epicentral deployment is delivering fabulous results,” said Bart Shuldman,

I

CE Totally Gaming is set to be a memorable occasion for Suzo-Happ, as the company

celebrates 60 years in the gaming industry.

“We are in celebratory mood,” commented Harald Wagemaker, Suzo-Happ executive VP sales & marketing, gaming and casino EMA. This will be the first ICE that Comesterogroup will be exhibiting as part of the Suzo-Happ family. The Italian expert for change machines and cash handling was brought into the Suzo-Happ Group in 2014.

ICE will also mark the first international exhibition for Suzo-Happ as exclusive global distributor for TransAct with the agreement having being extended to Europe as from 1st January 2015. The Epic 950 printer from TransAct is the perfect solution for ticket-in, ticket-out (TITO) applications. Currently installed in over half a million slots in casinos throughout the world, its success stands out significantly in Europe. Operators are invited to see just how many benefits the Epicentral, the promotional software system can offer.

The extended Suzo-Happ product range will be on display, including the Bill-to-Bill bank note recycler that is the preferred choice in a whole range of applications around the world.

Suzo-Happ is known as the ‘hopper and topper company’, with products including the Cube, Flow and Evolution hoppers and the Xenon LED, Towerlight and Video Topper alongside a number of RBG lightstrips to brighten up any slot machine. Naturally

chairman and CEO of TransAct Technologies, “as it creates innovative, real-time promotions and bonus offers which have been proven to generate results such as a 34 percent increase in customer return visits and a doubling of average daily theoretical.”

TransAct’s promotion and bonusing software suite is an enterprise-level solution that allows casino operators and their marketing teams to deliver targeted coupons and bonuses to players directly at the slot machine or electronic table game, all in real-time, and all at the click of a button. Deployed in conjunction with both ServerPort and Epic 950 ticket printer installed in each gaming device, Epicentral connects to all slot machines and electronic table games, regardless of manufacturer, providing flexibility and allowing operators to address their entire floor with a single solution.

“Epicentral has demonstrated its ability to deliver significant benefits to slot floor marketing programs. These benefits are crucial differentiators in today’s industry environment, allowing operators to best optimize their marketing efforts to drive revenue growth,” Shuldman adds.

TransAct will showcase Epicentral and its other printing solutions for gaming devices and self-service kiosks at ICE Totally Gaming 2015 in conjunction with its exclusive global distributor Suzo-Happ at Stand N4-110. l

V

ermantia will present a full suite of virtual sports, lottery, casino and

social games that it has developed for the China Sports Lottery at ICE Totally Gaming 2015, alongside its other product lines and services.

2014 was a transformative year for Vermantia with significant corporate and content development undertaken, and several Tier 1 operators signed up to its content services. Alongside the heavy investment into the company’s products, Vermantia has also brought in an international experienced and proven executive to bolster the management team.

Vermantia’s stand promises visitors an immersive, interactive experience, centred around the company’s core offering of virtual sports, available to both retail and interactive operators. The company is excited to showcase a range of new sports for release in 2015 with a focus on groundbreaking 3D graphics that enhance the player experience. The recently completed development of Badminton, Table Tennis, Cycling and Archery, in partnership with the China Sports Lottery, represents the most advanced quality graphics in the industry to date.

Filippos Antonopoulos, CEO of Vermantia said that “ICE is the annual meeting place for the Gaming Industry and we are very excited to present our new product portfolio to our current and future partners. The introduction of our newest products will

Suzo-Happ will be exhibiting the solutions

allow retail and interactive operators to

of further key distribution partners, such as

deliver a market-leading offering to their

ELO, Innovative Technology, MEI and Assa.

customers whilst simultaneously boosting

The Suzo-Happ team invites visitors to

their gaming revenues.”

Stand N4-110. l

Vermantia can be found at stand S3 – 110. l

Asia Gaming Briefings | February 2015

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CALENDAR OF EVENTS 52

FEBRUARY ICE TOTALLY GAMING- ROS 3-5 February 2015 ExCel, London www.icetotallygaming.com EGR AUSTRALIA POWER SUMMIT 18 February 2015 The Shangri-La Hotel, Sydney www.egraustraliasummit.com

MARCH IGAMING ASIA CONGRESS (IGA) 17-19 March 2015 Grand Hyatt, Macau www.igamingasiacongress.com CARIBBEAN GAMING SHOW 18-19 March 2015 Caribe Hilton, San Juan www.caribbeangamingshow.com ENADA SPRING 18-20 March 2015 Rimini Italy Expo Centre, Rome www.enadaprimavera.it

GIGSE 21-23 April 2015 Hyatt Regency, San Francisco www.gigse.com

MAY GTI ASIA TAIPEI EXPO 7-9 May 2015 World Trade Centre, Taipei www.gtiexpo.com.tw SAGSE CENTRAL AMERICA AND CARIBBEAN 13-14 May 2015 El Panama Hotel, Panama City www.sagsecc.com

EAST COAST GAMING CONGRESS 27-28 May 2015 Borgata Hotel Casino & Spa, Atlantic City www.eastcoastgamingcongress.com G2E ASIA 19-21 May 2015 The Venetian Macao www.g2easia.com

JUNE

IMGL 2014 SPRING CONFERENCE 29-31 March 2015 St Thomas, U.S. Virgin Islands www.gaminglawmasters.com/conferences/spring/overview/2015

RUSSIAN GAMING WEEK 3-4 June 2015 Sokolniki, Moscow http://rgweek.ru/en

INDIAN GAMING TRADESHOW 30 March - 2 April 2015 San Diego Convention Center www.indiangamingtradeshow.com

PERU GAMING SHOW 10-11 June 2015 Centro de Exposiciones, Lima www.perugamingshow.com

APRIL IGAMING NORTH AMERICA (IGNA) 14-16 April 2015 Planet Hollywood Resort & Casino, Las Vegas http://www.igamingnorthamerica.com/ ANDEAN GAMING TRADE SHOW 8-9 April 2015 Corferias, Bogota http://www.fadja.com

Asia Gaming Briefings | February 2015

N. AMERICAN GAMING REGULATORS ASSOCIATION (NAGRA) ANNUAL CONFERENCE 15-18 June 2015 The Inverness Hotel & Conference Center, Denver www.nagra.org CANADIAN GAMING SUMMIT 16-18 June 2015 Caesars Windsor, Ontario www.canadiangamingsummit.com

IGAMING SUPER SHOW & AMSTERDAM AFFILIATE CONFERENCE 23-26 June 2015 RAI Amsterdam www.igamingsupershow.com

JULY WORLD GAMING EXECUTIVE SUMMIT 8-10 July 2014 W Hotel, Barcelona, Spain www.terrapinn.com/conference/wges CASINO MARKETING & TECHNOLOGY CONFERENCE 14-16 July 2015 Rio, Las Vegas www.casinomarketingconf.com

AUGUST GAMING, RACING & WAGERING AUSTRALIA (GRWA) 11-12 August 2014 Radisson Hotel, Sydney www.gamingdownunder.com AUSTRALASIAN GAMING EXPO (AGE) 12-14 August 2014 Sydney Exhibition Center @Glebe Island www.austgamingexpo.com ELU BY EUROPEAN LOTTERIES 31 Aug - 5 Sep 2014 TBA www.european-lotteries.org/event/elu

SEPTEMBER 10TH EUROPEAN CONFERENCE ON GAMBLING STUDIES & POLICY ISSUES 9-12 September 2014 Helsinki, Finland www.easg.org/website/conference GLOBAL GAMING EXPO (G2E) 30 Sep - 2 Oct 2014 Sands Expo & Convention Center, Las Vegas www.globalgamingexpo.com

OPINION

Is phone betting legal?

54

António Lobo Vilela*

AGB sought the legal counsel of a Macau based lawyer to answer the question everyone has been asking: Is phone betting/proxy betting legal in Macau? AGB Advisor António Vilela’s professional opinion is a resounding no. IF it were legal, the concession would be autonomous from that of the casinos.

I

s phone betting/ proxy betting for casino

Macau Legislative Assembly, there was a clear

In fact, one of the grounds specially and expressly

games of chance currently legal in Macau?

intention to not only relegate the legal regulatory

stated in the gaming concession/sub-concession

The short answer is no.

framework on interactive [or remote] gaming for

contracts that may lead to the unilateral termination

Phone betting / proxy betting is a system

casino games of chance to a later stage, but also

by the Macau SAR is the deviation of the gaming

that allows patrons outside the casino premises

to prevent the casino gaming concessionaires

concession/sub-concession scope by way of the

to place bets through a phone, by proxy.

from exploiting interactive games.

exploitation of unauthorized games.

Under Macau law, phone betting/ proxy betting for

The initial draft bill proposal of the Macau

The unilateral termination of a gaming concession/

casino games of chance is a form of interactive,

Gaming Law submitted by the Macau government

sub-concession is one of the forms of extinction

or remote gaming.

to the Macau Legislative Assembly provided

of the concession/sub-concession. It leads to the

Law 16/2001 (Macau Gaming Law) defines

not only for the possibility for casino gaming

immediate reversion of all casinos and gaming

interactive games as the games of chance in

concessionaires to be awarded an interactive

equipment to the Macau SAR and carries for the

which: (i) a prize in cash or equivalent is offered,

[or remote] gaming concession, but also for the

gaming concessionaire/sub-concessionaire a

or may be won in the terms of the respective

grant of a priority right to that effect. Yet, those

contractual duty to indemnify the SAR.

rules, (ii) a player enters or participates in the

provisions were removed from the final draft bill

The Macau government may also resort to the

game via telecommunication means, namely

proposal submitted following discussions with

first demand autonomous bank guarantee

phone, fax, internet access, data network,

a Legislative Assembly commission that was

provided by the gaming concessionaire/

transmission of video signals or digital data,

specially set up to analyze the draft bill proposal.

sub-concessionaire to guarantee, inter alia,

making or agreeing to make payments in cash

This said, the exploitation of interactive games

the exact and prompt fulfillment of all legal

or equivalent; and (iii) the game is equally

by the current casino gaming concessionaires/

and/or contractual obligations to which the

offered, or approved as a game of chance, or as

sub-concessionaires is a clear violation of the

concessionaire/sub-concessionaire is bound.

a gaming machine game in the Macau casinos.

Macau Gaming Law, as well as of the respective

On the criminal side, under the Law on Illicit

The commercial exploitation of every modality

gaming concession or sub-concession contract,

Gaming the exploitation – in casinos – of

of gaming in Macau -- casino games of chance,

being an unlawful practice.

interactive games by an entity not holding the

pari-mutuel betting, operations offered to the

When it comes to consequences there is a

proper legal entitlement, in casu a concession

public and interactive gaming for casino games

probable direct, negative and adverse impact

granted by the Macau SAR to that specific effect

of chance -- is reserved to the Macau Special

on the continuous and permanent assessment

might be configured as a criminal offense

Administrative Region and can only be carried

conducted by the Macau gaming regulator on the

punishable with up to 3 years imprisonment

out by an entity other than the Macau SAR by

suitability of casino gaming concessionaires/

or with a pecuniary penalty.

means of a concession.

sub-concessionaires, its qualified shareholders,

Furthermore, the impossibility to identify

As of today, the Macau SAR has not granted any

directors and key casino employees. Aside

the ‘real’ patron placing the bets through the

concession for interactive [or remote] gaming

from that, such a violation is deemed as an

phone/by proxy raises significant AML concerns

for casino games of chance, thus the exploitation

administrative infraction.

and does violate the AML legal regulatory

of any type of interactive games is illegal.

So far there is no pecuniary penalty for such an

framework currently in force, in particular the

The Macau Gaming Law also specifically states

infraction, since no administrative regulation

KYC rules. The violation of these constitutes

that a casino gaming concessionaire cannot

dealing with administrative infractions for

an administrative infraction sanctioned with

exploit any type of interactive game and asserts

violations of the casino gaming legal regulatory

a pecuniary penalty ranging (for legal persons)

that the concessions to exploit interactive

framework has been enacted, despite the

from MOP$100,000 ($12,820) to MOP$5,000.000

games are autonomous from those for casino

mandatory precept for such enactment enshrined

($640,000) or equivalent to twice the economic

games of chance.

in the Macau Gaming Law.

benefit obtained in case this benefit exceeds

Reflecting this legal injunction, the gaming

It may however trigger the unilateral termination

MOP$2,500.000 ($20,000). l

concession/sub-concession contracts stipulate

of the gaming concession/sub-concession by

--

that the concession/sub-concession granted

the Macau SAR on the grounds of a violation of

for the exploitation of casino games of chance

fundamental legal and/or contractual obligations,

does not cover the exploitation of interactive

in particular the obligation to exploit the

games, i.e., such exploitation is outside the

concession/sub-concession in the terms and

scope of the said concession/sub-concession.

conditions set forth in the gaming concession/

For further reading on interactive [or remote] gaming for casino games of chance and other gaming modalities in Macau, see Carlos Lobo and António Lobo Vilela, Chapter 42 – Macau, “Internet Gambling Report – An Envolving Conflict Between Technology and Law”, Eight Edition, Mark Balestra (Editor) and Anthony Cabot (Founding Editor), River City Group, p. 615.

In fact, by the time the draft bill proposal of

sub-concession contract, which expressly bans

the Macau Gaming Law was discussed in the

the possibility of exploiting interactive games.

Asia Gaming Briefings | February 2015

*António Lobo Vilela is an AGB Advisor, Partner at LVT Lawyers and former legal advisor to the Macau Gaming Commission