AGBriefings September 2019 by Asia Gaming Brief

Jurisdiction Updates September 2019 Edition

In focus pg.16

Making money in the Mekong CAMBODIA Naga3 to have high tech focus pg.6

Vietnam Hoiana gears up for debut pg.8

MALAYSIA

Genting feels heat from competition pg.14

Philippines China puts POGOs in crosshairs pg.10

MEKONG 2019 SUPPLIER SPECIALS pg.32

Asia Gaming Briefings | September 2019

CONTENTS 4

INDOCHINA

SOUTH ASIA

SOUTH EAST ASIA

CAMBODIA

PHILIPPINES

INDIA

Vietnam

MALAYSIA

nepal

AUSTRALASIA

Join the one and only conference to provide a thorough, balanced assessment of investment and market opportunities in the SE Asian markets of Cambodia, Vietnam, Thailand, Laos and Myanmar. 28

9 September 2019 WELCOME COCKTAILS, SOFITEL, PHNOM PENH 30

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10-11 September 2019 CONFERENCE, SOFITEL, PHNOM PENH GALA COCKTAIL RECEPTION, NAGA 2

special focus

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LAST WORD

12-13 September 2019 CASINO TOUR, SIHANOUKVILLE

Speakers

Join the one and only conference to provide a thorough, balanced H.E. Mey Vann Timothy McNally Steve Wolstenholme Daniel Li Katrina Nepomuceno Director COO CEOin Cambosia Member of the assessment of General investmentChairman and market Group opportunities the SE Asian Ministry of Economy & NagaCorp Hoiana International markets of Cambodia, Vietnam, Thailand, Laos and Myanmar. Philippine bar Finance

H.E. Nguon Sokha Secretary of State, Ministry of Economy & Finance

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10-11 September 2019

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GALA COCKTAIL RECEPTION, NAGA 2Supporting Sponsor Lanyard Sponsor 12-13 September 2019 CASINO TOUR, SIHANOUKVILLE

Speakers Agbriefings A s iMekong a Gam i n g B r i AD.indd e f i n g s 1| S e p t e m b e r 2 0 1 9

23/07/19 19:23

MESSAGE 5

Indochina rising

ver the last few years, Indochina has transitioned

keen to join the league, is the upcoming Hoiana complex,

from being an alternative market to an industry

which is to be the country’s largest and most ambitious

hotbed for the casino gaming industry.

project to date, spanning over 985.5 hectares of prime

Cambodia and Vietnam, in particular, have

beach-front. Lastly we take a fresh look at another market all

experienced galloping speeds of development, though

operators would love to open its doors. Thailand’s ongoing

Myanmar and Laos are also coming along. Reminiscent of

ban on all forms of gambling is proving a gold mine for

the gold rush, many an operator has flocked to the region

casinos elsewhere in the region.

to open shop, while tip-toeing gingerly due to a lack of

In these pages you’ll find the most relevant developments

regulatory frame-work.

throughout the Asian markets, namely how PAGCOR said

As we strive to remain at the forefront of the industry,

it was suspending the acceptance of applications for new

Asia Gaming Brief is organizing a two-day event dedicated

online licenses following Beijing’s move to put Asia’s online

to the Mekong to convene the region’s foremost experts

gaming industry on notice that it won’t tolerate operations

in gaming and hospitality, financing and investment,

targeting its citizens.

marketing and operations.

Resorts World Genting, one of Asia’s oldest casino

This edition of Asia Gaming Brief Jurisdiction Updates is

resorts, is thought by analysts to be at risk of losing its

launched in tandem with the inaugural Mekong Gaming

dominant position to upcoming jurisdictions in the region.

Summit, to be held on 10-11 September 2019 at the Sofitel

Meanwhile, Nepal expects further expansion of its casino

Phnom Penh, in Cambodia. The Summit is designed to give

industry as five-star hotels spring up ahead of a major

the industry much-needed insights into the exciting but

tourism initiative next year.

oftentimes opaque markets of IndoChina.

Down under, Australia’s gaming industry is feeling the heat

Highlights of the conference include keynote addresses by the

from regulators after an investigative news report levelled

Ministry of Economy & Finance on the future of casinos and

allegations of links to Chinese crime syndicates and money

gaming in the Kingdom, panels on the main markets in the

laundering at Crown Resorts’ casinos.

region and their progress towards regulation, and practical

As we dedicate this new edition to the first Mekong Gaming

sessions on how to set up your business in SE Asia.

Summit, our Supplier Special lifts the veil into what some of

Throughout our Focus we examine the macro-economic

the major industry suppliers have in store for the region.

figures of the Mekong, the tourism potential, and the

If you’re attending the event, or are around Phnom Penh

opportunities in the gaming industry, which are by no means

and would like to book a meeting with us, please write to

without risk, as recent events have clearly shown.

mekong@agbrief.com.

Cambodia, at Beijing’s bidding, has apparently now moved to

Come and find out what everyone’s talking about!

shut down its online gambling industry. We’re counting on

Rosalind Wade

Luis Pereira

On behalf of Asia Gaming Brief

our experts to shed some light on this delicate matter.

Rosalind Wade & Luis Pereira

While these markets continue to present robust growth, providing significant investment opportunities for operators, they are also likely to need deep pockets as established capital markets are wary of these grey jurisdictions.

Publishers

Connect with us:

Featured in these pages are arguably two of the region’s

@agbrief

biggest winners, NagaWorld in Phnom Penh and Crown International Club in Danang, Vietnam. Also in Danang, and

Asia Gaming Brief

www.agbrief.com

SEPTEMBER 2019 EDITION Series II • Issue XIX

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Asia Gaming Briefings | September 2019

INDOCHINA

CAMBODIA

Naga 3 to be 90 percent non-gaming with focus on tech NagaCorp has revealed details of the third phase of expansion at its NagaWorld property in Phnom Penh, which will have a strong focus on non-gaming activities and high tech. Asia Gaming Briefings | September 2019

INDOCHINA

he group says 90 percent of the $3.5 billion expansion will be nongaming and the enlarged property will create the largest “riverine” integrated resort in the world, overlooking the Mekong River in Cambodia. The resort will be built over a maximum of 544,801 square metres and will feature five hotel towers, with 4,720 rooms. It will be linked to the existing Naga 1 and 2 through an underground walkway. The property will be designed by Steelman Partners, the firm of architects behind some of the world’s most iconic casino properties, such as Las Vegas Sands’ The Venetian. Nagacorp says one of the key components will be a three-floor digital entertainment zone. “The Naga 3 Project will showcase a life-style product consisting of gaming and non-gaming spaces and comprise amenities and facilities which are not available at Naga 1 and Naga 2, notably hi-tech virtual reality interactive indoor theme parks, more shopping and MICE facilities and family recreational areas etc. to impart a more satisfying, penetrating and complete visitation experience,” it says. This theme park is designed to occupy over 28,000 sq m over three levels. The design features 30 of the latest digital attractions, with a forecast annual attendance of more than 1.65 million people per year. The attractions are to be focused on the

GDP PER CAPITA

(in thousand US$)

digital future as well as showing a digital representation of the glorious past of Cambodia’s Age of Angkor Wat. NagaCorp says they will be constantly updated to spur visitation. Other design features include a lobby zip line ride through a digital landscape, that Steelman expects to become one of the most instagrammed sites in the region. Work is expected to start in September this year and be completed by the end of September 2025. NagaCorp says it will fund half of the project through its internal cash flow and the remaining amount will be funded by the group’s controlling shareholder, Tan Sri Dr. Chen Lip Keong, who will buy subscription shares in the company.

In April, Moody’s Investor Services forecast the company’s revenue will rise at about 10 percent a year until 2020. The group said it’s optimistic it will maintain that growth through to the end of 2025, due to strong tourism growth in Cambodia and inbound investment. It also points to its monopoly position within a 200km radius of the capital and to the fact it has no restrictions on the number of gaming tables and machines it can add. It says it’s in a position to add 800 new tables and 2,500 electronic gaming machines. The casino design will be in a “cell concept” pioneered by Dr Chen, with gaming floors of different design and amenities interspersed in the non-gaming areas.

Police arrest 8 for alleged Sihanoukville kidnappings Eight Chinese men were arrested in Sihanoukville in July for their alleged involvement in two kidnappings at the Queenco casino, according to local news. Police confiscated a Lexus 570, ten phones, 13 ATM cards, 3 passports, 4 Chinese IDs and other objects. The suspects have been sent to the police station for questioning. Over the years, a number of Chinese kidnappings have taken place in the Cambodian coastal town, which has become known as a hub for Chinese gaming. In a recent report, it was revealed that as many as 95 percent of all businesses in the town are owned by Chinese nationals.

1.55 1.50 1.45 1.40 1.35 1.30

Cambodia sets up AML working group

1.25

The Cambodian government has announced a new working group and action plan aimed at cracking down on money laundering in the nation. “The police measures have not been effective. We are going to strengthen our enforcement, and not only at border crossings,” police spokesman Chhay Kim Khoeun was cited as saying by the Phnom Penh Post. Around $4 million in cash has been seized at Phnom Penh International Airport alone this year, while around $10 million in dirty money has been detected flowing through banks. It is unknown how the crackdown may affect Cambodia’s online and land-based gambling industries.

1.20 1.15 1.10 1.05 2014

2015

2016

2017

2018

(Source: Nagacorp)

Asia Gaming Briefings | September 2019

INDOCHINA 8

VIETNAM

Vietnam set for second major opening of 2019 Vietnam is set for its second major debut of 2019, with the $4 billion Hoiana scheduled to open its doors towards the end of the year.

he Hoiana will be the country’s largest and most ambitious project to date. To be built out over phases, the resort will span 985.5 hectares of prime beach-front land in Da Nang, Central Vietnam. It will have 140 tables and more than 300 gaming machines. The resort will include 1000 hotel rooms in Phase 1, retail space, an 18-hole championship golf course and food and beverage outlets. It will also have serviced

Asia Gaming Briefings | September 2019

apartments with 270 units. Phase 2, being finalized at the moment, is set to include 100 villas, two hotel brands boasting 2,000 rooms, a commercial village with retail stores and a theme park. A total of 4km of beach line will be part of the project, as well as more than a dozen restaurants. Macau’s biggest junket operator, Suncity Group, has an equity stake in the project, which it’s developing along with local investment group Vinacapital and Hong

Kong-based VMS Investment Group. “With Hoiana being the first integrated resort we have developed, we have high expectations,” Suncity executive director Andrew Lo told AGB in a March interview. “It is totally different from hotels in Macau, in terms of the target market and operation strategy. The market positioning of Hoiana is a resort destination, [so] the revenue will not only come from the tables, but from other facilities.”

INDOCHINA 9

Its location in the tourist hotspot of Hoi An is seen as one of the most promising areas for casino development in the country. The area is well connected to surrounding nations through international flights from Da Nang airport, which is a 50-minute drive from the resort. It is also close to some of Vietnam’s key tourism attractions. Hoi An, which is famed for its colourful French colonial architecture, was classified as a UNESCO World Heritage Site in 1985, while the nearby Cu Lao Cham Biosphere reserve on an island off the coast boasts rich biodiversity. This year, Da Nang has a target to attract 8.19 million visitors, including 3.19 million foreigners, a year-on-year rise of 6.9 percent and 11 percent, respectively. Industry experts say an existing casino in the area, the Crown International Club, is one of the best-performing in Vietnam. Although low profile, it has proved highly successful in pulling in VIP gamers from China and analysts estimate it may have similar VIP volume to Macau’s integrated resorts.

Hoiana’s ties with Suncity are also seen as a key advantage, guaranteeing access to the junket’s extensive database. Suncity has a 34 percent stake and will also provide management and consultancy services. Lo said he expects the IR to be 75 percent VIP initially, although planned infrastructure improvements in the area may be conducive to expanding the mass market. Under Vietnam’s recently revised gaming legislation, developers must invest a minimum of $2 billion in their resorts, with a condition that at least $1 billion must be disbursed. It has also opened up the possibility of locals gaming for the first time. Two resorts will form part of a three-year pilot scheme, which may be extended if successful. The first to allow in Vietnamese residents was the Corona Resort on Phu Quoc island in the far south of the country, which opened early this year. The other is in Van Don in the far north and is still under construction. Hoiana will not be allowed to host locals initially.

VISITORS ARRIVALS International Arrivals 7 months 2019 vs. 7 months 2018 (%) Thailand

+14.82%

Taiwan

+12.76%

South Korea

+12.21%

Japan

+11.29%

China

+9.72% (Source: GSO)

Vietnam seeks to boost night economy Prime Minister Nguyen Xuan Phuc has ordered the government to find ways to develop more nighttime activities and increase tourist spend. Nguyen has pointed to the Beijing model, in which shops and restaurants that are open from 8pm to 6am could receive a subsidy of $70,000 and areas which operate at least 12 hours straight a night get $700,000. An industry expert, Nguyen Cong Hoan, deputy director of travel agency HanoiRedtours, told VnExpress International that tourists tend to spend more generously on entertainment and shopping at night, and thus a nighttime policy would be beneficial for the company. “Major cities like Hanoi and Ho Chi Minh City have night markets, but there is demand for more activities. The country needs more restaurants, malls and entertainment areas remaining open after midnight to attract tourists.”

Police bust multi-million gambling ring Vietnamese authorities have smashed their largest Chinese illegal gambling ring to date, with transactions of about RMB3 billion (US$435 million). Police raided a residential area in late July and found 20 servers and hundreds of client computers carefully hidden in different rooms in different buildings, likely to be used in the ring’s cross-border gambling, sports betting and lottery betting activities. According to local media reports, the suspects were aged between 18 and 24 and had come to Vietnam as tourists. The suspects were divided into small groups and took their turns working in shifts. They were not allowed to go outside and all their activities took place within the urban area.

Asia Gaming Briefings | September 2019

SOUTH EAST ASIA

PHILIPPINES

Philippines puts hold on POGO expansion Beijing has put Asiaâ&#x20AC;&#x2122;s online gaming industry on notice that it wonâ&#x20AC;&#x2122;t tolerate operations targeting its citizens and the Philippines has taken note.

SOUTH EAST ASIA

worded statement from the Chinese embassy in Manila warning all forms of gambling involving Chinese gamblers, or targeting the mainland, are illegal and will be stamped out. “The embassy urged the Philippine government to take effective measures to prevent and punish the Philippine casinos, POGOs and other forms of gambling entities for their illegal employment of Chinese citizens and asked the Philippine government to crack down on related crimes that hurt the Chinese citizens,” the statement said. It went on to say that the proliferation of POGOs employing Chinese was posing a threat to China’s financial security and supervision. It said that a conservative estimate shows hundreds of millions of yuan are flowing illegally out of the country every year through underground banks and funds are being laundered cross border. It also expressed concern about the thousands of Chinese working illegally for POGOs in conditions described by the media as “modern slavery.” “Their passports are taken away or confiscated by the Philippine employers. They are confined to live and work in certain designated places and some of them have been subjected to extortion, physical abuse and torture as well as other illtreatments,” it said.

n August, the Philippine Amusement and Gaming Corporation said it was suspending the acceptance of applications for new online licenses. The regulator was cited as saying in local media that it needs to “stop first and look at other concerns that we have not met comfortably,” when it comes to Philippine Offshore Gaming Operators (POGOs). There are currently 58 licensed operations in the country and a further three applications are pending. POGOs have proved a highly lucrative source of revenue for the government and PAGCOR had been actively marketing the Philippines as an online gaming hub. It expects to generate an additional P8 billion (US$156.5 million) in gaming revenues in 2019, making a total of P20 billion in just three and a half years. “We will finish the assessments by the end of the year. We don’t want problems,” PAGCOR Chair Andrea Domingo was cited as saying. “We should be able to come up with a viable and good program,” she said. “We expect to have a little bit of a problem, because of this crackdown. We have to assure them (markets outside Asia) that here, everything is up and above board,” Domingo said. The announcement followed a strongly

CASINOS GROSS GAMING REVENUE Pagcor

(in million PhP)

Clark

Thunder Bird

Entertainment City

9,433

2,816

442

9,066

2,185

533

Total

18,499

Total

“At the same time, dozens of kidnappings and torture cases of Chinese citizens who gamble or work illegally in gambling entities in the Philippines have taken place. Some Chinese citizens were physically tortured, injured or even murdered.” Beijing said it planned to step up action to stamp out illegal gambling, but also warned its citizens that if they are gambling overseas they may be committing a criminal act. “The Judicial Interpretation of the Relevant Laws on the Application of Online-gambling Crimes jointly issued by China’s Supreme People’s Court and the Supreme People’s Procuratorate clearly stipulates that Chinese citizens gambling overseas, opening casinos to attract Chinese citizens as primary customers may constitute gambling crimes.” Around 138,000 Chinese are estimated to be working in online gambling firms in the Philippines. Concerns have been mounting for months that many of them are not on legal work permits and are not paying the correct taxes. Manila has stepped up efforts to collect tax and ensure foreign workers have the correct visas, but with limited success. It was a proposal to house the workers in two hubs that finally caused Beijing to lose patience and intervene.

5,001

Total

976

39,829 40,514

Total

80,343

Subtotal Lincensed

52,520

Total

104,819 86,320

43,087

52,298 43,232 (Source: Pagcor)

Suncity opens RWM VIP club Suncity Group held the soft opening of a new VIP club at Resorts World Manila on August 15. The Resorts World Manila Suncity VIP Club is located on the 2nd floor of Grand Wing Building of Resorts World Manila, offering a total of 5 salons and 22 tables. Suncity, Macau’s largest junket operator, already has VIP clubs in Melco Resorts & Entertainment’s City of Dreams Manila, Bloomberry’s Solaire Resort & Casino and Universal Entertainment’s Okada Manila.

Asia Gaming Briefings | September 2019

SOUTH EAST ASIA 12

Tiger Resort Leisure and Entertainment Okada Manila, owned by Japan’s Universal Entertainment, is the largest resort in Entertainment City and the last to enter the market, with a soft opening in 2016. The property spans 44 hectares and at the completion of Phase One, Okada will have 994 hotel rooms and operate 500 tables and about 3,000 slots. Its centrepiece is the world’s largest coloured fountain, as well as a giant inner city beach complex, known as “Cove Manila.” Okada, which releases monthly gaming figures, said July revenue spiked 48 percent and it’s adding more rooms to accommodate visitors. Parent company, Universal Entertainment, said several rooms in the Coral Wing (Tower B) were now in operation, which should enable it to attract more customers. It didn’t specify how many rooms it had added.

Bloomberry Resorts Bloomberry Resorts’ Solaire was the first IR to open in Entertainment City and is a 16-hectare integrated resort. The Bay Tower of Solaire consists of a casino with an aggregate gaming floor area of approximately 18,500 square meters (including 6,000 square meters of exclusive VIP gaming areas), with about 1,400 slot machines, 295 gaming tables and 88 electronic table games. The Sky tower consists of a 312 all-suite hotel, additional ten VIP gaming salons with 66 gaming tables and 223 slot machines. Bloomberry posted a 52 percent jump in Q2 net profit, fuelled by strength in all gaming segments. Net profit rose to PHP2.45 billion ($47 million) from PHP1.61 billion a year earlier. Total revenue rose 21 percent to PHP11.6 billion, while gross gambling revenue was up 19 percent to PHP14.6 billion. The company said its VIP volume had declined 5 percent, but a higher hold rate of

3.49 percent helped to boost revenue to 33 percent to PHP6.18 billion. Conversely, the company recorded its highest level of mass table drop of PHP12.5 billion, up 14 percent, though revenue declined 3 percent due to lower hold of 32.6 percent from 38.3 percent a year earlier.

City of Dreams The $1.3 billion City of Dreams Manila is owned by Belle Corp and Melco Crown Entertainment’s local unit. City of Dreams Manila has six hotel towers with approximately 950 rooms in aggregate, including VIP and five-star luxury rooms and high-end boutique hotel rooms, a wide selection of restaurants and food & beverage outlets and a 4,612.44 square meters family entertainment center in collaboration with Dreamworks Animation. Formerly, the Melco group’s key revenue driver, the property reported lacklustre Q2 results. Revenues edged higher to $176.1 million compared to $173.9 million, while adjusted EBITDA slipped to $82.8 million from $87.3 million in the comparable period of 2018. Rolling chip volumes totaled $1.9 billion down sharply from $3.0 billion in the second quarter of 2018. Mass market table games drop decreased to $192.8 million from $196.9 million. The comp any blame d incre asing competition for the declines.

Resorts World Manila

Travellers to delist from PSE Travellers International Hotel Group says it plans to delist its shares from the Philippine Stock Exchange to avoid disclosing its business strategy to competition. The operator of Resorts World Manila will be the second gaming stock to delist in the Philippines after Melco Resorts & Entertainment’s local unit. Travellers said it will make a tender offer for more than 1.58 billion shares. It said the offer is conditional of receiving tenders from more than 825 million shares held by investors not linked to the group. After the offer, at least 95 percent of outstanding shares will be held by non-public shareholders, which include Alliance Global and Megaworld. “The conversion from a public entity into a private company will allow the company to timely address evolving market demands and rapidly changing customer needs without compromising its business strategies to competition,” it said in a stock exchange statement.

Asia Gaming Briefings | September 2019

Travellers International Hotel Group, a joint venture between Genting Hong Kong and Alliance Global, is the owner and operator of Resorts World Manila. The hotel room count for the group’s three hotels (Maxims Hotel, Remington Hotel, and Marriott Hotel Manila) remains at 1,226. The property is currently in the third phase of its expansion, which will add approximately 940 rooms. It will also include new gaming and retail spaces. For Q2, Travellers reported a 52 percent drop in net profit as costs rose and a onetime gain reported last year wasn’t repeated, though revenue growth was strong. Net profit was PHP599.2 million ($11.4 million), down from PHP1.24 billion the prior year. The company posted a gain from other income of PHP1.47 billion last year, compared with none in this quarter. Net revenue jumped to PHP6.72 billion from PHP4.68 billion in the same quarter of 2018.

SOUTH EAST ASIA 13

Asia Gaming Briefings | September 2019

SOUTH EAST ASIA 14

MALAYSIA

Resorts World Genting threatened by regional competition Resorts World Genting is one of Asia’s oldest casino resorts, opening its first hotel in 1971, though analysts say the property is now at risk of losing its dominant position to upcoming jurisdictions in the region.

enting’s founder Tan Sri Lim Goh Tong conceived the idea of a mountain resort in 1963 when he was working on a hydro-electric project in the Cameron Highlands. The company still enjoys a monopoly license in Malaysia and was one of the only true resorts offering legal gambling in South East Asia. Now, after the opening of two integrated resorts in Singapore and the rapid pace of growth in Cambodia and the Philippines, analysts at JP Morgan estimate it will lose its position as the third-largest gaming market in the region to Cambodia.

Asia Gaming Briefings | August 2019

“We think this shift accelerates with regional property ramp-up at a time when Genting Malaysia looks to cut promotional spending, driving visitation away from its property. Reiterate ‘Underweight’ on Genting Malaysia,” it said. The Malaysian operator has been cutting back on marketing and other costs to offset the impact of greater-than-expected tax hikes in last year’s budget. Analysts have warned the cuts may harm its ability to woo VIPs. Mainland Chinese visitors to Cambodia have increased over a third over the last two years.

“We think a large part of these visitors are gamblers, given the correlated growth of gross gaming revenue (GGR) with tourism in Cambodia and our channel checks. We believe Malaysians may be the second-largest contributors of GGR in some of the larger casinos in Cambodia,” JPMorgan stated. “In Malaysia, only 39 percent of the population is allowed entry into casinos in a highly penetrated market and major capacity expansion are ‘once-in-a-decade’ events entailing large investments,” the firm said, referring to the fact that Malaysia’s predominantly Muslim population is banned from entering casinos.

SOUTH EAST ASIA 15

GROSS GAMING REVENUE US & Bahamas

Revenue

Malaysia

UK & Egypt

14%

15% 70%

Adjusted EBITDA 6%

10%

84%

(Source: Genting Malaysia)

Malaysia bars police from gaming outlets

Still, after a raft of negative blows, the company in late July announced that it had reached a legal settlement in a dispute with Fox Entertainment Group and its related companies and as a result will be permitted to use some Fox intellectual property in an outdoor theme park that is under development. The theme park with Fox was seen as the key draw and a central plank of a major property revamp launched in 2013, known as the Genting Integrated Tourism Plan. Fox and its parent Disney pulled out of the project in late 2018, casting doubt as to whether Genting would go it alone and triggering a series of lawsuits. “As part of the settlement terms, the parties have entered into a Restated Memorandum of Agreement dated 25 July 2019 granting GENM a license to use certain Fox intellectual properties,” it said. “GENM is currently updating its development and construction plans to complete the outdoor theme park utilising both Fox and non Fox intellectual properties. The outdoor theme park shall also be renamed,” it said, announcing the settlement. Analysts are now optimistic Genting will

open the park earlier than they had anticipated, providing a new revenue catalyst. Maybank said the group had been putting out full-page hiring ads for staffing the park in late July. As Genting had previously implied a lead time of six to nine months between hiring and opening of the theme park, the latest moves could signal a theme park opening for 20Q1, rather than the previously forecasted 21Q1 from Maybank. In other news, Genting recently announced plans to privatize the currently-loss-making Empire Resorts Inc, the company which owns and operates Resorts World Catskills in New York. Genting said the acquisition will be made by its wholly-owned subsidiary Genting (USA), which will acquire 13.2 million shares in Empire Resorts Inc from its single largest shareholder, Kien Huat Realty III (KH) for $128.6 million. Genting said the move will better position the Resorts World brand in the northeastern US gaming market through more effective cross-marketing with Resorts World Casino New York City.

Inspector-General of Police Abdul Hamid Bador has barred policemen from entering any entertainment and gaming outlets, in efforts to prevent police corruption. Hamid said the move was in reaction to officers being offered bribes in the form of freebies from outlets. “There are police officers who celebrate birthday parties in these premises for free. That is corruption,” said Hamid. He said the Integrity and Standard Compliance Department would be monitoring officers with disciplinary action taken against offenders. “If we receive information about their presence at entertainment outlets, they will be subject to the same process as civilians and undergo urine and blood tests,” he said.

KL renews intent to update gambling laws The Malaysian government has again called for amendments to the country’s laws on gambling to include online gambling, local media reports. Home Minister Muhyiddin Yassin said that the existing laws governing gambling were drawn up in the 1960s. “(They need) updating because, at that time, there was no online gambling,” he said. “The government is fully aware of the rampant illegal gambling activities in the country, including in Sibu, Sarawak.” Yassin added that there were some syndicates earning up to RM300,000 a day, operating without a license and with only two to three workers. “The number of syndicates is increasing,” he said.

Asia Gaming Briefings | September 2019

FOCUS 16

Making money in the Mekong A quick look at the macro-economic figures of the Mekong region clearly shows why there is so much interest in the tourism and gaming potential.

ambodia, Vietnam, Thailand, Myanmar and Laos have seen their populations grow from 233 million a decade ago to an estimated 262.5 million this year - an enviable and steady rate at a time when many nations are experiencing declines amidst an aging population. This potential consumer base is also increasingly wealthy, with the income levels of residents in the region rising to an estimated $3,475 a head this year from just $816 in 2000. In terms of gaming, Vietnam introduced new regulations to cover casinos in 2017 and sports betting a year later, triggering a steady stream of investment, including the $4 billion Hoiana resort, which will open later this year. Cambodia is also expected to soon reveal its new gaming regulations, while Myanmar recently passed legislation that will officially allow casinos. Laos has the Savan Legend property and its owners, Macau Legend, are embarking on an expansion to add facilities, such as a new golf course and more VIP gaming. The operator is also in talks with the government over other potential resort projects in the country. Only Thailand has steadfastly maintained its opposition to IRs, although analysts expect that it will eventually also open its doors.

Asia Gaming Briefings | August 2019

In our Mekong edition of the magazine, the focus is therefore on some of the issues facing investors in the region, coupled with the market’s potential. Our first article looks at financing. Although returns from projects in the Mekong region can be high, there are also significant economic and political risks from investing in emerging markets. As a result, raising capital can be an issue and often requires a strong stomach. We look at some of the key challenges. Our second article focuses on Thailand, both in terms of the opportunities if that country legalises gaming, as well as the growing importance of the Thai gamer in the region’s casinos. Thai’s have long-been the key target audience of many of Cambodia’s border casinos, though now, as income levels rise, they are making up a significant portion of VIP revenue in many regional properties. As a result, many are positioning themselves to attract these wealthy individuals. For our last article in the focus section, we take a look at some of the IRs already open in the Mekong and assess their fortunes. While some are undoubtedly doing well, many have faced considerable challenges. We ask regional experts their views on the recipe for success.

FOCUS 17

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Asia Gaming Briefings | September 2019

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Navigating Indochina’s investment risks Indochina’s casino markets continue to present robust growth, providing significant investment opportunities for operators with a strong appetite for risk, but they are also likely to need deep pockets as established capital markets are wary of these grey jurisdictions.

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iven double-digit growth in gaming revenue across the Indochina region, which outpaces major markets such as Macau and Singapore that are facing low gains to declines, the appeal for investors is high,” says Margaret Huang, global gaming and lodging analyst for Bloomberg Intelligence. “For instance, Vietnam, which rolled out new regulation to cover its casino and sports betting industries a couple of years ago, has witnessed an influx of overseas investment.” Governments in Indochina do not provide annual figures for gross gambling revenue, though Cambodia has said it collected $46 million in casino taxes last year and it expects that number to jump to $70 million in 2019, giving an indication of the growth rates. A handful of IRs and casinos have sprung up across the country, while Phase 1 of the ambitious $4 billion Hoiana project, near Da Nang, is due to open this year. Meanwhile, neighboring gambling hub Cambodia has

Asia Gaming Briefings | September 2019

issued over 160 casino licenses, the majority of which have been used to open Chinese-owned and -backed properties in Sihanoukville. However, finding the finance to construct these resorts is no easy task. “The opportunity to raise money in the formal sector via debt or equity from public markets globally are few and far between, there simply isn’t the appetite from big investors outside the industry,” said a long-term investor in Indochina who is currently raising finance for a project. “From within the industry established players do not appear to have too much of an issue raising the cash e.g. Sun City Group at Hoiana.” He said many of the projects are self-financed by large local conglomerates which have cash and whose subsidiaries provide services. Outside of these two models is a much more informal sector, with many wondering where the millions are coming from to build resorts in Sihanoukville, Poipet, or Bavet.

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Those that do succeed will be paying premiums of 300 to 350 basis points to account for the risk in Indochina, Huang adds. Grabbing a slice of the action doesn’t come cheap in Vietnam, for example. To qualify for a casino licence there, foreign investors have to total stump up total investment capital of $2 billion. The threshold was previously set at $4 billion in the draft bill. While $2 billion certainly isn’t small fry for many regional operators, the international casino giants are more turned off by the lack of robust regulation in the region. The likes of Laos and Cambodia don’t have explicit and comprehensive regulations covering gaming, although a long-awaited regulatory framework is due soon in Cambodia. Indeed, Indochina could be described as various shades of grey. “With the exception of Vietnam – and even those regulations are lacking – there is no gaming regulatory acts in place,” says Shaun McCamley, managing partner of Euro Pacific Asia Consulting and a 40-year veteran of the gaming industry. “So, for investors it’s a real risk coming into these locations, and certainly for publicly listed companies, the lack of a transparent audit process is a real issue that they cannot overcome. The attraction is the perceived opportunity to make substantial revenues, and that is simply not the case.” A fellow Asia-based consultant, speaking on the condition of anonymity, tells Asia Gaming Brief proper regulation would instantly make Indochina more of a draw for global investors. He says: “If these locations could get their acts together, which is not likely to happen in my lifetime, they would become much more attractive to a greater number of investors. For a US company it would be very difficult for them to operate in an environment like Cambodia, Laos or Vietnam where corruption is a daily way of life.” He adds: “I think the biggest risks [for investors] are bribery and corruption, political influence and a lack of a properly regulated industry.” These problems, however, haven’t stopped regional operators and Chinese investors from flooding into Indochina, especially Cambodia. Other what you could call ‘safer’ markets like Macau have their own challenges and risks, such as higher barriers to entry and fears of not securing a new license in the Portuguese colony beyond 2022 when operators and investors have pumped in billions of dollars already. “IRs in Asia have shown they can generate very fast payback periods, but that is because investors require quick ROI because of the exogenous risks that exists for those types of investment,” says Huang.

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Operators eye Thai potential Thailand’s ongoing ban on all forms of gambling is proving a gold mine for casinos elsewhere in the region, with a growing number taking steps to specifically target the Thai VIP base.

enowned economist Pasuk Phongpaichit, an economics professor at Chulalongkorn University in Bangkok, estimates that 70 percent of the country’s adult population gamble regularly. New generations are also showing an interest. A poll last year by U-Report found that more than half of 2,280 teenagers in the country would be willing to use their own money on a betting website, even though online gambling is not permitted. As long ago as 2013, the Bangkok Post was reporting that the “underground gambling economy” was larger than the national lottery, which was introduced in 2003 and sits alongside domestic horse racing as one of only two ways to gamble legally in the country. Sharp growth in mobile and online gambling is also inevitable given the increasingly tech-savvy nature of Thailand’s population. Internet penetration has rocketed by nearly 250 percent in the country over the past six years and the

Asia Gaming Briefings | September 2019

Global Digital Report 2019 ranked the country at No.1 for mobile banking, No.2 for cryptocurrency ownership and No.3 for mobile commerce. The lack of casinos in Thailand has led to opportunities for neighbouring markets that embrace such facilities, especially as, according to the World Bank, the number of trips abroad by Thai nationals has doubled over the past 10 years. Visanu Vongsinsirikul, a lecturer in Economics from the College of Innovative Business and Accountancy at Dhurakij Pundit University in Thailand, says that most VIPs from Thailand “prefer to gamble in Macau, Singapore and Australia.” Around 15,000 visitors per month visited Macau from Thailand last year, although the number has dropped by nearly one quarter since 2016. Meanwhile, growing casino markets like Vietnam have experienced a surge in tourists from Thailand. According to official government statistics, visitors

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arriving in Vietnam from Thailand in the first six months of 2019 rocketed by 145 percent year-on-year to 245,000 – a higher rise than any other country. Traditionally, Thais have flooded across the border to dusty Cambodian border towns, such as Poipet to gamble. Though, improved transport links and a higher standard of new properties coming online is attracting a different clientele. Donaco International hired five Thai junkets last year to target VIPs for its Star Vegas property in Cambodia, while Macau Legend’s Savan Legend property, a short drive over the border into Laos has a website in both English and Thai. Savan Legend reported a drop of HK$4 billion for 2018, with gross gaming revenue of $224 million. It said a total of 185,700 of its guests had crossed the Savan-Mukdahan border from Thailand. The resort is being expanded to add a new hotel wing, a pool, spa and gaming facilities, while Macau Legend is exploring further expansion opportunities in Laos. Malaysia’s Genting also recognizes the potential, opening a marketing and public relations office in the Kingdom in 2016.

In the Cambodian border city of Poipet, 95 percent of tourists are from Thailand. According to Forbes, in a good year up to $400 million in revenue has been generated across the city’s casinos. “I think the number of Thai VIP gamblers is slightly increasing because of the increasing income, on average, and the exchange rate appreciation,” Vongsinsirikul adds. “Around 95 percent of Thai VIP gamblers love to gamble on baccarat.” However, there appears to be little prospect of Thailand’s political establishment opening up to casinos imminently. When an attempt was made to push through casino legislation four years ago, Prime Minister General Prayut Chan-O-cha insisted that casinos would not become a reality on his watch. In June 2019, he secured another term. Moreover, the authorities are continuing to crack down on illegal operations, rather than turn a blind eye. During the 2018 Fifa World Cup, about 10,000 people in Thailand were arrested for gambling on the football tournament, according to Deputy Police Commissioner General Chalermkiat Srivorakhan. Vongsinsirikul is confident though that,

perhaps a decade from now, there will be a legal casino in Thailand. He believes that a potential casino model that is similar to the UK would work well in Thailand, with “not as many” casinos as Macau, but also venues that are not necessarily linked to entertainment complexes, such as in Singapore. That said, Thai travel preferences certainly indicate there may also be demand from Thai gamblers for an Integrated Resort (IR) casino like Marina Bay Sands in Singapore. Although Marina Bay Sands says that it does not track the nationalities of all visitors to the IR, the city-state welcomed 546,000 visitors from Thailand in 2018 – a 2.7 percent year-on-year rise – and Thai nationals “make up a meaningful segment” at the resort, according to president and chief executive George Tanasijevich. However, Tanasijevich, who is also managing director of global development at Las Vegas Sands Corp, acknowledges that Thailand would be an “ideal location for a Las Vegas Sands MICE and entertainment-focused IR.” Whilst insisting that “the people of Thailand will decide” when the time is right to enter the increasingly competitive casino market in Southeast Asia, Tanasijevich would favour “a central location in Bangkok near other tourism attractions, hotels and the Central Business District.” He says: “This would maximise convenience for tourists and the opportunity for existing businesses to benefit from the economic growth generated by our IR.” Tanasijevich also says that, like any operator seeking to establish a base in Thailand, it would be essential to operate “in a manner that is respectful of local culture and adequately addresses any social and religious sensitivities.” The opportunity to use such resorts to drive high-spending tourists is difficult to ignore, even for a country that already pulls in nearly 40 million foreign visitors annually. “Casinos represent a small portion of our properties, typically less than 3 percent, but serve as a significant means of attracting foreign tourists to the markets where we operate,” Tanasijevich says. “We aspire to develop an IR in Thailand that includes a casino that allows open access to foreign tourists and restricted access to Thai people. If granted this opportunity, foreign tourists would be the primary target customer. “The addition of a Las Vegas Sands IR would significantly strengthen Thailand’s ability to attract substantially more high-value foreign tourists and grow an industry that is critical to the performance of its economy.”

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On a winning streak Over the past 20 years, parts of Indochina have become a real hotbed for casino gaming. Yet while this corner of Southeast Asia can be a challenging environment and not a guaranteed license to print money, certain casino operators have struck gold there. Arguably two of the region’s biggest winners are Crown International Club in Danang, Vietnam and NagaWorld in Phnom Penh, Cambodia.

o how have they managed to do so well? If we take Crown International Club first, this property’s number one asset is that it is situated in a desirable location on Vietnam’s coast, less than seven kilometers from Danang International Airport. The country’s third busiest airport offers scheduled direct flights to and from major cities across Asia, including Bangkok, Tokyo, Singapore, Seoul, as well as nine destinations in Mainland China. Junkets also lay on regular charter flights for VIPs from China to Danang, where they are greeted by warm weather, sandy beaches and luxury relaxation away from the tables. “The reason why Crown has been successful is that the hotel is in a beautiful spot like Danang and 20 minutes from a very big airport with flights everywhere and many flights from China,” says Tim Shepherd, director of Fortuna Investments. “There is no proximity to market, but you have got fantastic air access into Danang.” First opened in 2010 under the name Silver Shores and positioned adjacent to Crown Plaza Hotel, Crown International Club has also enjoyed a certain degree of market exclusivity. Yet the property will soon have a worthy

Asia Gaming Briefings | September 2019

competitor when the Hoiana project 40 kilometers south of the airport is completed. The first phase is slated to open this year and it will be interesting to see if this US$4 billion luxury IR will prise away Crown’s international high rollers. NagaWorld, on the other hand, hasn’t had to worry too much about nearby rivals stealing its players as no other casinos are permitted by law within a 200 kilometer radius of Phnom Penh. This monopoly goes a long way to explaining why the NagaCorp-owned casino, which from 1995 to 2003 operated from a boat moored on the Mekong River, grew into Cambodia’s largest casino and one of the world’s most profitable gaming properties. It also made its founder, Malaysian businessman Chen Lip Keong, a billionaire. “A monopoly license in Asia is obviously rare,” says Shepherd, “so when you get a monopoly that’s enormously helpful.” The nearby $700m Naga 2 property flung open its doors in 2017, while the ambitious US$4 billion Naga 3 project is earmarked to be ready by 2025. Last year, Naga 2 helped the NagaWorld complex to post net profit of over US$390 million – a 53 percent increase over 2017. Gross

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gaming revenue leapt 55 percent to US$1.4 billion in 2018. Hong Kong-listed NagaCorp attributed much of the rise to an influx in VIP gamblers and Chinese tourists. NagaWorld also benefits from the fact Cambodia’s capital is home to a sizable expatriate population from China and Malaysia. “Perhaps Naga’s greatest strength is that their management team understands the wants and needs of their customers,” says Andrew Klebanow, senior partner at Global Market Advisors. “Naga offers a great gaming, dining and entertainment experience, while for mass market customers, its lodging, dining and gaming are priced lower than Macau. For junket promoters, Cambodia’s low tax rate allows Naga to offer a more generous commission structure than Macau while providing players with an equally luxurious lodging experience.” NagaWorld and Crown International Club are magnets for gamblers from China due mainly to the accessibility by air, though the same can’t be said for Grand Ho Tram in Vietnam’s Ba Ria-Vung Tau Province. Opened

six years ago, the opulent beachside resort is more than 110 kilometers by road from Ho Chi Minh City’s airport, making it an unappealing destination for certain overseas VIPs. “While a stunning property, the Grand Ho Tram Resort has, and always will, suffer from a relatively poor location,” says Klebanow. “It is a miserable two-and-a-half-hour drive from Tan Son Nhat International Airport and while an improved highway will eventually reduce travel time, it will always be at least two hours away from Ho Chi Minh City.” Furthermore, Vietnam’s first IR wasn’t an immediate beneficiary of the country’s pilot program permitting locals to gamble. If and when Grand Ho Tram can accept Vietnamese gamblers, the property will face stiff competition from casinos in Bavet on Cambodia’s border for a share of the greater Ho Chi Minh City gaming market. MGM Resorts walked away from managing the property in 2013, choosing instead to focus on markets like Macau, Taiwan and Japan. Indeed, despite Indochina becoming a casino resort hotspot, the major international

operators have tended to stay away. This is partly due to the fact projects lack scale, while the prospect of a casino in isolated border towns in Cambodia, Laos and Myanmar means you are reliant upon gamblers crossing frontiers. And what happens if Thailand did ever decide to legalize gaming? In addition, bureaucracy, corruption and lax regulatory frameworks can be a deterrent. “The vast majority of public companies will not enter a market without a robust regulatory regime,” Klebanow states. In Cambodia, where a staggering 163 casino licenses have been issued, regulation is coming, yet first-mover advantage has been key in gaming hubs like Poipet where, says Shepherd, the likes of Star Vegas, Holiday Group and Crown Group have done “extremely well.” Assessing the region more broadly, he concludes: “Winners I would narrow down to those who opened early, opened proximate to a big market, or got a monopoly. The losers are the ‘me-toos’ who built later and with no real USP, or built in a market with no access to players.

Asia Gaming Briefings | September 2019

SOUTH ASIA

INDIA

Mandovi deadline looms as politicians wrangle The fate of Goaâ&#x20AC;&#x2122;s floating casinos is still unclear as a deadline for their removal from the Mandovi River looms, with industry experts urging the government to proceed with caution when it comes to moving them onland. Asia Gaming Briefings | September 2019

SOUTH ASIA

elocating the six casino ships has the license conditions which the government been on the cards for years and agreed to. The casino operators would be has dominated the debate in the justified in seeking judicial intervention if that current session of the legislative happens,” Singhania told AGB. According to Singhania, the casinos should assembly, which ends on Aug. 9, but no be permitted to remain on the Mandovi river decisions have been made. The casinos were given a further six-month as long as the situation remained unclear. extension in March this year, but after that they “They should also be allowed to avail of a longer transition period,” he added. The Goa will be asked to move from the river. In theory, operators are keen to make government had previously said that the casinos the move. A site has been set aside near the would have three years to make the move. Roland Landers of the All India Gaming new airport in Mopa, with the idea to create a dedicated gaming zone, which analysts have Federation agreed with Singhania. “The Goa government needs to move said will be a gamechanger for the industry in India. It would allow the development of higher in a fair and planned manner. The casinos quality integrated resorts, which the country bring revenues to the state’s exchequer. All the stakeholders should be considered and is currently lacking. Land-based casinos are only legal in Goa and consulted before any decision is taken.” Currently, the casinos generate US$150 Sikkim, though the country’s biggest operator, Delta Corp, has applied for a license for its five- million in revenue, but Union Gaming has star property in the Union Territory of Daman. forecast that number could rapidly rise to $1 The trouble in Goa is that the government billion were the casinos to be moved onshore. Delta, which operates is torn between public as the Deltin brand, has opposition to gambling already made clear it’s in and the need to attract favour of relocating to tourism revenue in its It’s a win, win Mopa and has invested highly tourism dependent for everybody, for in land for development. economy. Pressure groups the government, “The new Gaming have also complained Polic y proposed by about the noise from the for the people and the state of Goa is also river boats and argue they for the industry. expected to bring several are dumping their waste positive changes. Onshore into the river. casinos are far easier to Goa attracts around 3 scale up, as well as more million tourists annually and around 12 percent of all foreign tourist stable from a business perspective and offer arrivals in India, who spend around $350 significant cost benefits,” the company said in its annual report for the FY 2017-18. “We have million annually. The government levies a 15 percent tax on acquired 100 acres of land and are looking to gaming revenue, comparing favourably with acquire an additional approximately 50 acres many jurisdictions around Asia, though it’s not of land for an entertainment destination or a recreation zone,” the report added. expected to issue any further licenses. “The travel time is less, there is no traffic The trouble with the upcoming deadline for shifting the casinos is that the new airport in the river and all the allegations on so many is a few years from being completed and key other aspects of being in the river goes away. It is infrastructure requirements are still to be fulfilled. a win-win for everybody, for the government, for An alternate site, Aguada Bay, has been the people and for the industry. It makes a lot of discussed in media reports but none has been sense,” Chairman Jaydev Mody told local media. Delta owns three of the six offshore confirmed by the government. Vidushpat Singhania, a Delhi-based lawyer licenses in Goa and has a property in Sikkim, specialised in gambling laws, cautioned that providing a total of 1,700 gaming positions. the Goa government needs to consider the If it gets approval for Daman, the number of concerns of the casino operators before making tables will almost double. In its analysis of Delta’s future prospects, any move. “The government needs to bear in mind that the casino operators have paid to the financial analysis firm Motilal Oswal acquire the licenses. Moving them out of the predicted that the company is likely to see Mandovi river without making sure that the compound average growth in its gaming other locations are ready would be a breach of business of 38 percent this year.

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GROSS GAMING REVENUE GGRE $60b

Lottery $12b - $14b

Casinos $200m

Horse racing $250m - $400m (Source: KPMG and ICRA)

Skill games tipped for strong expansion India’s skill-based gaming market is expected to grow by more than three times its current level in the next four years, driven by rising smartphone connectivity and growth in rural areas, according to Naveen Goyal, CEO of Adda52.com. Goyal told delegates at the World Gaming Executive Summit in Barcelona that the market will hit $2 billion by 2023 from its current $600 million level. The market stood at just $20 million five years ago. Over the next four years smartphone penetration is forecast to rise from 350 million to 600 million. Skill-based games, such as rummy, poker and fantasy sports, are legal in India, though pure games of chance are banned.

Dream11 is India’s first gaming unicorn Dream11, a fantasy sports start up, has become the country’s first gaming unicorn, attracting a valuation of $1 billion or more, local media reports. The valuation followed an investment by Hong Kong and London-based Steadview Capital. Dream11’s existing backers, Kalaari Capital, private equity firm Multiples Alternate Asset Management and San Francisco-based hedge fund Think Investments, sold a portion of their stakes in the decade-old company, valuing it at $1-$1.5 billion, local media cited sources as saying. The secondary deal is in the range of $60 million, sources said.

Asia Gaming Briefings | September 2019

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NEPAL

Hotel boom leads to new casino plans in Nepal Nepal is expecting further expansion of its casino industry as five-star hotels spring up across the country ahead of a major tourism initiative next year.

If permitted, this will be second casino he Himalayan nation launches Visit Nepal 2020 in January, with a target after Tiger Palace Resort outside the capital. Nepal is set to have eight operating to attract two million tourists. The hospitality sector is already enjoying casinos after the launch of the Deltin Royale strong growth, rebounding after a major Kathmandu in mid-August. The casino is earthquake in 2015, to attract a record 1.7 the first in Nepal for India’s Delta Corp, that country’s largest operator. million tourists in 2018. Others include Casino Pride at the Hotel The Kathmandu Marriott Hotel opened in the capital city on July 19, bringing the number Hyatt Regency, Casino Bally’s Nepal at Hotel of five-star hotels in Nepal to 14. Full casinos Malla, Casino Palace at Hotel Del’ Annapurna, are only permitted in five-star properties, while Millionaire’s Club and Casino at Shangri-La mini-casinos which only offer electronic gaming Hotel, Tiger Palace Resort in Bhairahawa, Casino Mahjong at Hotel Soaltee, Casino are allowed in four-star hotels. Royale at Yak and Yeti “All five-star hotels Hotel and Casino Rad at are expected ask for Hotel Radisson. These last casinos. But they will two operate on the basis have to meet our criteria. Nepal is set of an interim order from We’ll allow them to to have eight the Supreme Court. open if they meet it,” In a ddit i on , t he said Narayan Prasad operating casinos Department of Tourism Bhattarai, an officer after the launch of expects a Chinese business who heads the casino group to invest in a casino and hotel section of the the Deltin Royale at the five-star Aloft Department of Tourism. Kathmandu in Kathmandu Hotel, which Hotel Central Plaza, mid-August. recently began operations located in the southwestern in Chhaya Devi Centre, city of Nepalgunj, was the country’s largest given a five-star rating shopping complex. Mechi by the Department of Tourism in March. While in the same city, Crown, a five-star hotel under construction which serves as a gateway for Indian pilgrims in eastern Nepal, will also reportedly house travelling to Kailash Mansarovar in China’s a casino, while rebuilding at the earthquakeTibetan region, Soaltee Westend Premier was damaged five-star Everest Hotel, which earlier housed Casino Everest in Kathmandu, is awarded a five-star rating earlier this year. The rise in five-star hotels outside Kathmandu nearing completion. Much of the optimism about the potential was prompted by a government policy to encourage tourism across the nation. In Pokhara, the for Nepal’s casino sector stems from its country’s second-largest city, a Swiss hotel chain proximity to India, where casinos are banned, apart from in the states of Goa and Sikkim. launched Swiss International Sarovar in June. Local company, Imperial Nepal, has The country’s rapidly expanding middle applied to operate a casino in the Soaltee class, coupled with a strong propensity to Westend Premier in Nepalgunj, near Nepal’s gamble, is expected to fuel outbound travel to neighbouring casino resorts. border with India.

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Asia Gaming Briefings | September 2019

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Tourism officials said the arrival of the Deltin Casino signaled that foreign investors were keen to invest in Nepal, while operators say there is enough Indian and Chinese demand to support the growth as long as the market remains well regulated. “Their entry in Nepal will encourage more players from India,” Surendra Thapa, the spokesman for the Department of Tourism, told AGB. “It also shows that casinos (are) one of the attractive options for foreign direct investment.” Nischal Chapagain, an operations manager for Bally’s Nepal Casino, said that for the vast majority of Indians, both Goa and Sikkim are too far away. “So Kathmandu is best placed to attract them,” he said. However, he cautioned that the April collapse

of low-cost carrier Jet Airways may slow growth. The Mumbai-based airline was offering fares up to three times cheaper than its rivals. Nepal has also seen a significant uptick in investment from China, which is also expected to help fuel growth in the gambling sector. At an investment summit in March, Chinese investors made up 250 out of the 620 attendees, while at the prior year’s summit, nearly two thirds of the pledged investment was from China. In 2018, 153,602 Chinese visited Nepal, an increase of 48 percent compared to 2017. Their number is expected to grow next year. “Most Chinese gamblers are tired of Macao. So, they want to try Nepal. We see a lot of potential in that category,” Chapagain said.

VISITORS ARRIVALS

Jan - Jun 2018

Jan - Jun 2019

100,000 80,000 60,000 40,000 20,000 0

India

China

USA

Sri Lanka

Silver Heritage gets offer for Nepal ops. Silver Heritage said it had received an offer with an enterprise value of $33.9 million to buy its Nepal operations from a local business man. Indra Bahadur Thapa, represented by I. Hugh Holmes, of Hotel Investment Partners, will buy the Silver Heritage unit that holds the Nepalese assets for $20 million. The assets include the Tiger Palace Resort and The Millionaires’ Club and Casino. The enterprise value includes a loan of $13.9 million entered into by the Nepal unit, Tiger One, with a consortium of local banks. The buyer will assume that loan. Silver Heritage said it has conducted a careful analysis of the offer, including the absence of a superior bid and uncertainty as to whether it can continue as a going concern, before deciding to grant exclusivity to the buyer.

Government relaxes border restrictions The Nepalese government has relaxed the minimum distance requirement for setting up casinos near international borders to 3km from 5km previously. “The government has shown flexibility by allowing casinos to operate at a distance of up to 3 km from international borders in the context of the upcoming Visit Nepal Year 2020 campaign,” said Ghanshyam Upadhyaya, spokesperson for the ministry. A number of operators in Kakarbhitta, Biratnagar, Birgunj, Nepalgunj, and Dhangadhi had raised concerns over the restrictions, he said.

Asia Gaming Briefings | September 2019

AUSTRALASIA

AUSTRALIA

Regulators launch probes after Crown report Australiaâ&#x20AC;&#x2122;s gaming industry is feeling the heat from regulators after an investigative news report levelled allegations of links to Chinese crime syndicates and money laundering at Crown Resortsâ&#x20AC;&#x2122; casinos.

Asia Gaming Briefings | September 2019

AUSTRALASIA

he joint report from The Age, 60 the regulatory arrangements of junket Minutes and the Sydney Morning operators.” Herald claimed to have studied In New South Wales, the regulator said internal documents and based it was launching a probe into a planned sale much of its evidence on testimony from a of a 20 percent stake in Crown to Melco whistleblower. Resorts & Entertainment. Jenny Jiang, a former administration and The NSW Independent Liquor & Gaming logistics officer of Crown Resorts, was one Authority will conduct an inquiry under of 19 Crown employees arrested in China the NSW Casino Control Act, it said in a in 2016 and she spoke to the media outlets news release. about the company’s business activities on “The Authority is inquiring into this the mainland. transaction under section 35 of the Act Crown’s board of directors issued a together with various matters raised in statement vehemently denying the allegations, recent media reports published by the pointing to falsehoods and clarifying that it Nine Network, the Sydney Morning Herald is standard practice for international casinos and the Melbourne Age relating to Crown to work with junket operators. Resorts,” it said. In a letter posted on its website, Crown’s “The Authority is to have regard to the 11 directors said they were highly concerned primary objects of the Act in exercising its for the company’s staff and shareholders, as functions. This includes ensuring that the “much of this unbalm a n a g e m e nt a n d anced and sensationaloperation of a casino ized reporting is based remain f re e f rom on unsubstantiated criminal influence Much of this allegations, exaggeror exploitation, that unbalanced and ations, unsupported gaming in a casino is connections and outright conducted honestly sensationalized falsehoods.” and controlling the reporting Crown blasted what potential of a casino it said were mistakes in to cause harm to the is based on the reporting, including public interest and unsubstantiated the fact that a cousin to individuals and allegations. of Chinese President families.” XI Jinping had been According to The found on one of the Guardian, Crown sold company’s private the stake to a director jets by law enforcement authorities. The of a banned company. Melco CEO Lawrence jet was not owned or chartered by Crown, Ho was a director of Lanceford, a company it clarified. owned by his father, up until June 28th, the Also, CCTV footage showed a person newspaper reported. handing over a bag of cash in a vegetable A list of companies and people associated market, but did not mention that person with Stanley Ho and therefore banned, was had been barred from Crown’s casinos six tabled in NSW’s parliament, the report said. years ago. One of the conditions of Crown’s license to Still, Australian regulators are taking the operate a high-end property in Sydney was report seriously and were swift to announce that Crown should not do business with their own investigations. anyone on the list. Victoria’s minister for gambling, The allegations have come at a time Marlene Kairouz, said she has ordered the Australia’s international VIP business was state gaming regulators to conduct a “snap already cooling off due to a slowdown in investigation” into the allegations made China’s economy and increased scrutiny against Crown Resorts, which also included on the junket business is seen as a further claims of expediting visas for high rollers. negative for high roller revenue. “I’ve asked the regulator to re-examine Macau’s largest junket operator, Suncity the allegations raised as a matter of priority Group, in August announced it was pulling and report back to me as soon as possible. out of the country. It said its decision was I’ve also asked the department, with the purely commercial due to high operating assistance of the commission, to examine costs and a lack of demand.

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GROSS GAMING REVENUE Casinos $5.19b

+0.4%

Gaming machines $12.07b

+4.2%

Sports betting $920.6m Racing $2.94b Total gambling expenditure 2017 $23.65b

+13%

+4.1%

+3.9%

Crown settles sightline dispute Crown Resorts has settled a legal dispute with Infrastructure New South Wales (ISNW) and will retain the view of Sydney Harbour from its new VIP property in the city. A court previously ruled in favour of Crown to stop the construction of a development that would have blocked the sightline from its new resort. However, the government in February sought leave to appeal the ruling. As a result of the settlement, INSW will not proceed with the appeal, Crown said. The terms are confidential. “Crown is satisfied with the outcome of the settlement and the retention of the sight lines across Central Barangaroo from the Harbour Bridge to the Sydney Opera House,” the company said. “Crown remains focused on the delivery of the Crown Sydney Hotel Resort and welcoming our first guests in early 2021.”

Consumers bear brunt of POCT Higher costs associated with Australia’s Point of Consumption Tax (POCT) has ultimately been passed over to gamblers, according to a note from JP Morgan. While the intent of the POCT was to tax corporate bookmakers, JP Morgan says round pricing indicates that POCT pricing has been passed along to the gambler, which will ultimately reduce turnover. “We maintain our view that gamblers, not corporates are paying for POCT; a catalyst for reduced industry turnover,” said the brokerage. “Short term, price increases can garner better wagering margins, albeit at the cost of overall turnover. The impact of decreased turnover, especially for horse/harness/greyhounds is concerning when prices increase and gamblers lose wallet quicker,” added the brokerage.

Asia Gaming Briefings | September 2019

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New zealand

SkyCity tackles licensing issues SkyCity Entertainment is grappling with capacity issues, as licensing regulations in New Zealand make expansion of its properties difficult.

he company this week reported its annual results, posting an almost 15 percent drop in reported profit and a slight increase in normalised profit. Management also presented investors with an update on the status of its projects and future plans. New Zealand’s only listed operator has three properties in its home country and one in Australia. The company made a significant comment in relation to its position in Queenstown where it has recently acquired 1.01 hectares of prime development land on the edge of town. SkyCity currently owns both casino licences in the town, but neither of the downtown sites is in premises the company regards as satisfactory and expansion on either site would be very difficult; hence the attraction of a whole new site. However, there is a significant legal difficulty. SkyCity cannot get a new casino licence because there is a government-imposed freeze on the granting of licences and the current law does not allow licences to be transferred from one set of premises to another even within the same city. This means that the only way SkyCity can operate its proposed new hotel with a casino is to persuade the government to amend the law to allow a transfer to take place. CEO Graeme Stephens explained that the company will do a feasibility study of the project with the assumption built in that the hotel has a casino licence. And if the project is attractive, then it will seek regulatory approval to make this possible. The company would talk to industry regulator, the Gambling Commission and the Minister of Internal Affairs about getting amending legislation put through Parliament. If amendments were not possible, SkyCity would then look again at whether the hotel development was a sound investment in its own right. All of this will take time, perhaps several years.

Asia Gaming Briefings | September 2019

The company also has another regulatory issue on its hands, but a solution looks more immediately achievable. In Hamilton – a 170 000 person city south of Auckland in a prosperous farming area – the company’s casino is small and the present site is capacity constrained although SkyCity does own more land adjacent to its current casino. Stephens said demand for gaming machines was greater than for gaming tables and particularly when the casino was busiest on Friday and Saturday nights it was unable to meet demand. Gamblers were being turned away, and he thought they simply went to clubs and pubs or gambled online. The company is seeking to surrender three tables in return for 60 more machines, on the basis that the total amount of gambling would likely not increase but would take place in SkyCity’s premises rather than elsewhere. “Surely we are a better and safer place than other venues in the city,” he said. Gambling legislation explicitly allows a tables for machines swap although SkyCity’s move was unprecedented and has never been sought in New Zealand before. There has been strong opposition locally to any increase in the number of pokie machines or a greater concentration of machines regardless of ownership. Industry regulator, the Gambling Commission, is holding a public hearing on the company’s application in Hamilton in November. Stephens noted that if the swap were allowed, it would encourage the company to develop a new hotel next door to the casino, which he said would be good for the city. In Adelaide, the expansion was “on track, on time and on budget,” although the disruption from construction would continue through to the end of September 2020, and “we hope to be open fully for business again in October 2020.” In Auckland, the opening of its $700 million International Convention Centre development

has been pushed back a couple of months “towards the end of 2020”, and a dispute with the construction company Fletcher Building for nearly $40 million over delays and cost overruns is still to be resolved. In terms of the annual results, Stephens said management was “happy with that.” “We are now lower geared and focused on efficient capital allocation,” he told an analysts briefing. The flat result was attributed to a challenging operating environment and a series of one off factors, including the sale of the Darwin casino during the year, settlement of a tax dispute in Australia, and adjustments to revenue to meet new accounting standards. “In total all the adjustments largely offset each other, CFO Rob Hamilton said.

AUSTRALASIA 31

GROSS GAMING REVENUE

NZ eyes ban on credit cards for online gambling

Government mulls tighter i-gaming rules

2018/2019 GGR $2.38b

Using credit cards to gamble online may be banned in New Zealand as the country’s gaming regulator looks at measures to minimize harm. The Department of Internal Affairs, the industry regulator, is reviewing the laws around online gambling to “ensure that they are fit for purpose,” a spokesman said. New Zealanders are free to gamble in offshore casinos and SKYCITY estimates up to $160 million (US$110 million) is invested each year. Lotto currently has weekly spending limits of purchases but permits credit cards sales online and over the counter. A spokesman for the Racing Board which owns and runs the TAB said it was looking at introducing spending limits for some customers. At present, it does allow the use of credit cards to bet on horses but cards can be used to top up individual betting accounts at the TAB, and about two-thirds of account holders use this method.

A government consultation document on online gambling has raised the possibility of greater regulation including a licensing regime similar to that operating in the United Kingdom. Tracey Martin, the government minister with responsibility for gambling says she was “absolutely shocked” by the amount New Zealanders spend on online gambling through offshore operators each year. Latest figures put this at $2 million a month (US$1.4 million). Currently, only the government-owned Lotto and the TAB, owned by the racing industry, can offer online products but it is legal for New Zealanders to gamble through offshore providers.

+2%

Casinos $578m

+1.1%

Lotteries $561m

+3.6%

Pokies $870m

+1.1%

TAB and sportsbetting $350m

+2.9%

Asia Gaming Briefings | September 2019

SUPPLIER SPECIAL REPORT 32

MEKONG 2019

Introducing the Mekong Gaming Summit The inaugural Mekong Gaming Summit launches this week, held on 10-11 September 2019 at the Sofitel Phnom Penh in Cambodia.

he event is designed to give the industry muchneeded insights into the exciting but sometimes opaque markets of Cambodia, Vietnam, Laos, Myanmar, which are seen as the next growth market for gaming in the region. Organized and produced by Asia Gaming Brief, the two-day event gathers the region’s foremost experts in gaming and hospitality financing and investment, marketing and operations. Highlights of the conference include keynote addresses by the Ministry of Economy & Finance on the future of casinos and gaming in the Kingdom, panels on the main markets in the region and their progress towards regulation, and practical sessions on how to set up your business in SE Asia.

Asia Gaming Briefings | September 2019

There are also a number of networking events, including welcome drinks on Monday 9th September at the Phokeethra Sky, Drinks in the Foyer on Tuesday 10th September, as well as a Gala Cocktail Reception and Property Tour at Nagaworld on the same night. The event also features an optional one-day tour through Sihanoukville, giving attendees insights into the inner workings of some of Cambodia’s most successful casino resorts. With the launch of the Mekong Gaming Summit, the event becomes part of Asia Gaming Brief’s stable of events, which includes the ASEAN Gaming Summit in March, the Asia Gaming Reunion Dinner in May, Australasian Gaming Expo Seminars in August, and AGB’s Networking Socials held at different locations throughout the year.

Join the one and only conference to provide a thorough, balanced assessment of investment and market opportunities in the SE Asian markets of Cambodia, Vietnam, Thailand, Laos and Myanmar.

9 September 2019 WELCOME COCKTAILS, SOFITEL, PHNOM PENH 10-11 September 2019 CONFERENCE, SOFITEL, PHNOM PENH GALA COCKTAIL RECEPTION, NAGA 2 12-13 September 2019 CASINO TOUR, SIHANOUKVILLE

Speakers

H.E. Nguon Sokha Secretary of State, Ministry of Economy & Finance

H.E. Mey Vann Director General Ministry of Economy & Finance

Timothy McNally Chairman NagaCorp

Steve Wolstenholme Group COO Hoiana

Daniel Li CEO Cambosia International

Katrina Nepomuceno Member of the Philippine bar

Register now at events@agbrief.com or visit the website at www.mekonggamingsummit.com With thanks to our sponsors: Platinum Sponsor

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Asia Gaming Briefings | September 2019

SUPPLIER SPECIAL REPORT 34 APE

APE pioneers new tech in new SE Asian markets

sia Pioneer Entertainment Ltd. (APE) is a Hong Kong-listed public company based in Macau. As Macau’s largest supplier agent, APE is involved in the sales and distribution of electronic gaming equipment, spare parts and repair services of gaming machines as well as supplier consulting. The group’s success comes from its portfolio of proven equipment manufacturers, including Jumbo from Taiwan, Konami Australia, Spintec from Slovenia and Transact from the U.S. “Although the Macau market has been the main base of APE’s business, we are expanding to Southeast Asia where the land-based casino markets are showing high growth potential,” says Tony Chan, APE’s chief financial officer. In Southeast Asia, the management of the group sees high growth in demand for

Asia Gaming Briefings | September 2019

new electronic gaming equipment (EGE) as markets like the Philippines, Vietnam and Cambodia are sprouting new casinos. “We also actively pursuing opportunities in equipment sales of EGE in emerging Asian markets, namely Cambodia, Laos and we are exploring new financing methods like finance leasing and participation,” Chan says. In 2018, APE made two financial lease sales of an aggregate amount $3.9 million from Cambodia’s Galaxy Casino and The Palace Casino in Cebu, Philippines. In Macau, APE launched the first of three orders of Konami’s “Fortune Cup” electronic horse racing Multi-Terminal Gaming Machines. One of them is already installed in a Cotai resort, whilst the other two machines are expected to be released by the end of 2019. Casinos also showed interest in the Bao Ni Fa linked progressive

jackpot slot machines from Jumbo, and also Spintec’s blackjack video game, as well as Konami’s new concerto SAP and Progressive links. Some of them have already started trials in some casinos. “Being a HK-listed company gives confidence to our customers that APE does things, not just professionally, but reliably and transparently. This allows APE to get on the approved suppliers list of all the major casinos in Macau and some of the largest Integrated Resorts in Asia, such as Genting in Malaysia, Hoiana in Vietnam and Golden Galaxy in Cambodia,” Chan says. “We take proven products that work in the Macau casino market and we introduce them to emerging Asian casino markets with the addition of new financing models. In other words, we are pioneering new technology to new casinos in new markets.” he adds.

SUPPLIER SPECIAL REPORT 35 betradar

Sportradar continues to expand in Asia

s the world’s leading supplier of sports betting and data services, our major focus are our partners and clients, working with them to ensure we meet both their needs and the industry as a whole. To do this it is important to maintain a regional focus as well, which is why we have representatives across the globe who are continuously meeting with clients at events to share our knowledge and expertise as well as gather feedback. We use this feedback to continuously shape and update the scope and focus of our comprehensive range of products and services. As many are aware, for Asia, esports is continuing to grow in size and popularity and, as such, it is an area that we are focusing on in the region. As such, earlier this year we launched Bayes Esports Solutions, a joint venture between Sportradar and DOJO Madness. This will see game data from League of

Legends esports competitions delivered to business customers, including betting companies, esports broadcasters and general media. The deal will increase access to League of Legends esports data, enabling the community and third-party operators to create a wide array of services to help bolster the sport. We also recently announced a groundbreaking partnership with video game developer and leading esports competition organizer, Riot Games. The deal will see all domestic and international League of Legends esports competitions that are organised by Riot Games monitored by our world-leading Integrity Services to protect from bettingrelated threats. One of the biggest developments Sportradar’s betting arm, Betradar, made in Asia this year was within our Gaming Solutions. Adding to our comprehensive

virtual sports offering, which includes Virtual Football, Virtual Basketball and Virtual Tennis In-Play, we launched a new virtual Asian Cup and Virtual Football Champions Cup. Both enhance the opportunity for operators in Asia to tap into the popularity of football. As part of our mission to continue expanding our solutions, we are also set to launch Virtual Baseball and Virtual Cricket, two popular sports in Asia that continue to show increasing demand. Betradar’s Gaming Solutions are a great way to supplement any licensed sportsbook. They are also available as part of the company’s Managed Trading Solutions (MTS), which is an all-in-one package complete with the company’s market-leading Pre-Match and Live Odds, Betting Stimulation and their expert trading and risk management, which can be utilised and tailored to suite a range of operator’s needs.

Asia Gaming Briefings | September 2019

SUPPLIER SPECIAL REPORT 36 NOVOMATIC

Panthera paves way for the future

he Novomatic cabinets branded Panthera feature eye-catching designs that have made an impact on international gaming floors, in the dual-screen Panthera 2.27 and curve screen Panthera Curve 1.43 versions. The cabinets were primarily designed to address the requirements of the latest Novo Line Interactive and Impera Line HD gaming platforms – with their broad base of multi-screen content and a constantly growing number of single-screen curve games, the cabinet was required to launch in two versions. The Panthera 2.27 as a dualmonitor machine with 27” screens and the Panthera Curve 1.43 with its 4K PCAP monitor and 43” screen generate a homogenous appearance on the gaming floor and are ideally fit for common positioning. With the acceptance of tablets in the area of consumer technologies, this concept has been worked into the Panthera cabinets in the form of a 15.6” TouchDeck display that serves as the central player interface. Nevertheless, taking into account the preference of players who stick to the traditional feel and audible ‘click’ of a physical start button, the most emotionally-occupied buttons – ‘Start’, ‘Auto-Start’ and ‘Collect’ – are still integrated as physical push buttons. Key corporate design elements have been further refined to lend Novomatic gaming equipment a distinct look and feel. Elements like the newly developed ergonomic hand rest and button positioning, as well as the optimized angle and positioning of the monitors, were determined through intensive internal analyses and test series. As a black edition with subtly accentuated chrome elements, it exudes an elegance that clearly positions the Panthera in the premium segment. With the Panthera product line, a trend-setting and innovative icon has been set for future generations of Novomatic cabinets.

Asia Gaming Briefings | September 2019

CALENDAR OF EVENTS 37

SEPTEMBER

November

Mekong Gaming Summit 10-12 September 2019 Sofitel, Phnom Penh, Cambodia https://www.mekonggamingsummit.com/

Asia Gaming Summit 5-7 November 2019 W Hotel, Taipei https://taiwan.asiagamingsummit.com/

Gaming, Entertainment & Tourism Summit 23-25 September 2019 Tiger Palace Resort, Nepal https://www.eventus-international.com/gets

Affiliate Conference and Expo. 21-22 November 2019 Solaire Resort & Casino, Manila https://www.eventus-international.com/ace

October International Association of Gaming Regulators annual conference 30 September - 3 October 2019 Montego Bay, Jamaica https://iagr.org/conference

DECEMBER G2E Asia, the Philippines 3-4 December 2019 Marriott Hotel, Manila https://www.g2easia.com/philippines/

Vietnam Entertainment and Investment 21-22 November 2019 Tan Son Nhat Pavilion Convention Center, Ho Chi Minh http://www.gaming-vietnam.com/

G2E 14-16 October 2019 Sands Expo, Las Vegas https://www.globalgamingexpo.com/

Become a member Exclusive access to AGB Intelligence BE the first to receive our daily briefs priority registration for our events

Asia Gaming Briefings | September 2019

LAST WORD 38

iGaming feels Beijing’s sting Sharon Singleton

Managing Editor, AGB

In our January lookahead for 2019, our industry experts predicted a likely crackdown on online gambling in Asia and in light of recent events their forecasts have proved highly prescient.

“T

he Chinese will make it increasingly Philippine Amusement and Gaming Corp. (PAGCOR) difficult to move money in and out, said it would put a temporary halt on new licenses to access the sites and to service for Philippine Offshore Gaming Operators while it what’s needed by pressuring various reviews regulations. But PAGCOR Chair Andrea Domingo was quick governments to not accept illegal immigration in the sector,” said Harmen Brenninkmeijer, managing to add that the assessment would be completed by the end of the year and she was optimistic that partner Dynamic Partners. While Frederic Gushin, managing director of the regulator could find a way forward for further Spectrum Gaming said: “The online gaming facilities in expansion of the sector, which has proved such a the Philippines and Cambodia will come under increased lucrative money spinner for the Philippines. There are 58 POGO licensees, with three scrutiny by regulators and law enforcement and cryptocurrencies will become more widespread and even more applications still pending. PAGCOR estimates that they will generate PHP8 billion controversial in 2019.” this year, a healthy contribution After months of mounting to its budget for nation building. pressure and attempts by Manila Despite PAGCOR’s suspension, to bring its online sector into Praising the rumblings from Beijing line with employment and tax Cambodia’s ban, have continued. regulations, Beijing finally said a China Foreign Praising Cambodia’s ban, enough was enough. a China Foreign Ministr y In a strong ly-worde d Ministry spokesman spokesman in a regular briefing statement issued through its in a regular briefing urged Manila to do the same. embassy in the Philippine capital, So far it has resisted, with Beijing urged the government urged Manila to do Victor Padilla, a senior manager to protect its citizens working the same. of PAGCOR’s policy and licensing in the country and vowed division, insisting there are no a crackdown on any firms Chinese corporations operating targeting its nationals. in t he PO GO s e c tor. His Cambodia, the recipient of billions of Chinese investment into industry and explanation was largely a technicality, that they infrastructure, sat up and immediately took note. It are offshore corporations with a local unit in the has banned the issue of any further online licenses and Philippines. He avoided mention of the fact that said it won’t renew existing ones when they expire. hundreds of thousands of Mainland Chinese actually In the government directive, Prime Minister Hun were working in the business. Beijing’s periodic campaigns have a major impact Sen said “foreign criminals have taken refuge in the form of this gambling to cheat and extort money on gambling across Asia. President Xi Jinping’s antifrom victims, domestic and abroad, which affect the corruption drive sent Macau’s high rollers running for cover, with gross gambling revenue down sharply security, public order and social order.” The Philippines, which under President Rodrigo from a 2013 peak. But now, it’s clawing its way back up. This time it’s the turn of the online gaming sector Duterte has shifted his country’s allegiance from the and it remains to be seen how long, or determined U.S. to China, has been more circumspect. It has acted, though not with enthusiasm. The Beijing’s push will be.

“

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Asia Gaming Briefings | September 2019

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