Games Magazine G2E Asia 2017 Special Edition by Games Magazine

SPECIAL EDITION G2E ASIA 2017 GAMES MAGAZINE

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MACAU OPERATORS: TIME TO HARVEST

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STAFF

Sheldon Adelson Chairman and CEO of Las Vegas Sands Corp.

YEAR 11. MACAU 2017

“After a challenging period, the Macau market is growing again, and its growth rate has been accelerating for three consecutive quarters. During the first quarter of 2017, we generated strong cash flow across all of our operations in both Macau and Las Vegas. In Macau, we experienced broad-based gaming progress in our mass gaming and non-gaming segments”.

EDITOR IN CHIEF Marcelo Valsecchi marcelo@revistagames.com EDITORIAL DEPARTAMENT Sebastian Heredia sebastian@revistagames.com Román Frymer roman@revistagames.com COMMERCIAL DEPARTMENT

US$2.520.000.000

It is the casino gross gaming revenue (GGR) in Macau for April, 2017. This MOP20.16 billion income represents a year-on-year April rising of 16.3 percent. According to data from the city’s regulator, the Gaming Inspection and Coordination Bureau, for the year-to-date (1Q 2017), Macau’s gaming revenue totals MOP83.64 billion (US$10.46 billion), up 13.8% over the same period of the last year. April’s percentage gain and overall revenue figure were both smaller than those posted in February and March, but the gains nonetheless extended Macau’s current winning streak to nine straight months of year-on-year improvements after a two-year-plus stretch of negative monthly numbers. Fitch Ratings, the credit rating agency, forecast that Macau’s gaming revenues would grow by 12 percent year-on-year in 2017.

Bettina Mardyks bettina@revistagames.com Cristina Arévalo cristina@revistagames.com Franco Aboy franco@revistagames.com DESIGN Adnow www.adnow.com.ar TECHNOLOGICAL CONSULTANT

Ing. Gerardo Taccone gerardo@revistagames.com EDITORIAL COUNCIL María Pía Pazzaglini Carlos Cardama Rafael Val

Content

G2E ASIA 2017 The three-day event for Macau gaming sector will feature lots of activities, including the Integrated Resort Experience, the iGaming Summit and a complete program of conferences. Besides, hundreds of companies will display its innovative products to more than 11,000 attendees.

Macau operators: TIME TO HARVEST

INTERVIEW Fivos Polymniou, Vice President of International Sales at VizExplorer, announces his company is planning to build an interoperable ecosystem of solutions for its customers. He also details the main characteristics of an effective CRM tool.

After years of overcoming difficulties, the main groups of casinos reoriented their strategies and sown for the future, with investments and a constant commitment to the progress of gaming in Macau. Now is the moment to reap the rewards of those efforts.

OUTLOOK MACAU Since the third quarter of 2016, the gaming industry in Macau has shown signs of a revival that is gaining traction in 2017. This article explains some of the major factors that fueled that rebound and anticipates future perspectives for the sector.

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A NEW AND EXCITING SCENARIO

maCaU oPeraTors

Time To harvesT 10 Games maGazine

There is an old Chinese saying that states: “Chéng qián bì hòu” (Learn from past mistakes to avoid future ones). This can perfectly apply to the recent years of the gambling sector in Macau. Some mistaken decisions generated lots of difficulties to main operators. In the first place, the overall economic slowdown in China affected the popular gambling hub and the operations of its casinos. In addition to this, Chinese President Xi Jinping launched a massive anti-corruption campaign in 2013, which resulted in fewer high rollers from Mainland China making the short ferry ride to Macau and playing at local casinos. With Macau’s gambling facilities losing the biggest spenders among their players, gross gaming revenue at the gambling hub went down for two years and a half. After a terrible 2015 for the former Portuguese territory’s profits (-34.3% vs. 2014) and a weak first half of 2016, the uptick started in August, when gross gaming revenues turned positive for the first time in 26 months. The numbers for September continued the good trend and so on up to now, with April 2017 being the ninth consecutive month of growth. The gaming revenue rebound has been partly driven by a combination of disciplined cost savings efforts and a favorable shift in mix between mass and VIP segments, and an increase in non-gaming offerings. It was also important the confidence in the market recovery expressed by some big operators, with the openings of two mega-resorts on the city’s glittering Cotai Strip: Wynn Palace (Wynn Resorts’ USD4.2 billion project) debuted in August 2016, followed by the USD2.9 billion Parisian Macao, a Sands China property inaugurated in September 2016. To get a clearer idea of what has happened in recent months, it is essential to consider the data provided by the six main operators in the market.

RECOVERY AND RENEWED GROWTH Some people like the proverb: “After a storm comes a calm”. Others prefer the following one: “Pǐ jí tài lái” (When misfortune comes to an end, good fortune is at hand). The 2016 full balance for Macao revealed the first indicators of an improvement for the sector. At the end of December 2016, Macau had a total of 113 hotel establishments supplying an aggregate of 37,634 rooms, up by 14% from the previous year. The industry employed a total of 24,039 dealers, a year-on-year (YoY) decrease of 2.4%, according to a survey released by the Macau Statistics and Census Service. The number of licensed gaming tables increased by 330 units during the same period, for a total of 6,287, up by 5.5% in YoY

terms. The overall gaming floor space available in Macau also increased in 2016. In the fourth quarter of 2016, Macau’s gaming industry had a total of 55,794 full-time employees, an increase of 0.8 percent YoY. With respect to the six stronger Macau casino operators (Galaxy Entertainment Group, Sands China Ltd., MGM China Holdings Limited, Wynn Macau Limited, Sociedade de Jogos de Macau -SJM- and Melco Melco Resorts & Entertainment Limited), they reported their full-year 2016 and Q1 2017 performances. Hong Kong-listed Galaxy Entertainment Group saw its net profit soar by 51% YoY to HK$6.3 billion (USD784.4 million) for the whole year of 2016, while total gaming revenue increased 2% YoY to HK$49.5 billion (USD6.39 billion). The group’s EBITDA increased by 18% YoY to HK$10.3 billion (USD1.33 billion). Revenue from mass table games stood at HK$21 billion (USD2.71 billion), a climb of 19% YoY. Non-gaming revenue for 2016 at Galaxy Macau was up 21% from the prior year, at HK$2.80 billion (USD361.3 million). The Q1 2017 figures for this company showed a 5% YoY progress to HK$14.1 billion (USD1.82 billion). The adjusted EBITDA elevated 31% to $3.2 billion (USD412.9 million). The company reported strong growth in mass gaming performance at its Galaxy Macau property, up 21% to HK$4 billion (USD516.12 million). Regarding Sands China, the company posted a 16.1% fall in profit in 2016, down to USD1.2 billion from USD1.5 billion in 2015. Net revenue was USD6.65 billion, down 2.4% on the year prior, while adjusted EBITDA for the year increased 0.9% to USD2.24 billion. The situation was completely different for Q1 2017. Total net revenues for Sands China boosted 15.3% to USD1.88 billion. Net income for the Macau-based firm expanded 11.9% to USD349 million, thanks mainly to last September’s launch of the Parisian Macao resort. Adjusted EBITDA was USD624 million, an upsurge of 20.5% compared to the prior year quarter. Mass gaming business grew 17%. There were also good numbers in the Q1 2017 for other properties of the group, such as The Venetian Macao and The Plaza Macao. Another operator, MGM China, generated total revenue in 2016 of HK$14.9 billion, down 13.37% from HK$17.2 billion in 2015. Adjusted EBITDA margin increased 290 basis points from a year ago to 30.1%, while net profit margin grew 230 basis points to 20.4%. The group recorded main floor table games win of HK$7.7 billion, a raise of 2% from a year ago. MGM Macau occupancy rate was 95.4% for the year. During the first three months of 2017, MGM Resorts net income reached USD207 million (+67.63% vs. Q1 2016), and operating income was USD477 million, which represents +31% over the prior year. Net revenues advanced

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cover story USD353.3 million (+42% YoY). These great results were attributed to strong performance in rolling chip and mass market table games segments. Moreover, City of Dreams Macau saw net revenue of USD693.2 million with adjusted EBITDA increasing 4% to USD213.5 million. Studio City recorded net revenue of USD277.9 million (+35.7%), and adjusted EBITDA rose to USD67.8 million.

EXPERTS’ OPINIONS 29% over the prior year quarter to USD2.1 billion. The adjusted EBITDA grew 34% over Q1 2016 to USD648 million at the company’s domestic resorts. In respect to MGM China’s Q1 2017 results, net revenues were USD502 million (+7%). Main floor table games revenue boosted 17%, while VIP table games revenue decreased 5%. Operating income was USD73 million compared to USD47 million in the prior year quarter (+35.6%). Adjusted EBITDA climbed 25% to USD143 million. For full-year 2016, Wynn Resorts reported net revenues of USD4.47 billion, an increase of 9.6% compared to USD4.08 billion in 2015. Net income for 2016 was USD242.0 million, a 19.3% more than USD195.3 million of the previous year. For the Q4 2016, total operating revenues for Wynn Macau were USD917.1 million (+65.1% over revenue for the same period in 2015). Operating profit was USD86.1 million, a 7.5% increase in YoY terms. In the Q1 2017, net profit at Wynn Macau rose 26.5% to USD103.6 million. The casino announced a downturn in different indicators compared to the Q1 2016: net revenues (-3.5%), adjusted EBITDA (-5.3%), casino revenues (-2.9%), table games turnover (-1.4%), table games win in mass-market operations (-14.0%), slot machine handle (-21.9%), slot machine win (-23.6%) and non-casino revenues (-15.5%). As for SJM Holdings, the company posted 5.6% fall in full-year 2016 net profit that was HKD2.33 billion (USD300.2 million), compared to HKD2.47 billion a year earlier. The annual EDITDA was HKD3.42 billion in 2016, a decrease of 11.5% from the previous year. Gambling revenue also fell by 14.5% to HKD41.3 billion. There was also a decline in VIP gaming revenue (-20.5% YoY), mass table gaming revenue (-8.7%), slot machine and other gaming revenues. SJM Holdings’ flagship Grand Lisboa casino hotel showed a decline in revenue (-14%) and profitability (-18.2% in adjusted EBITDA) during the year. For the first quarter of 2017, SJM said first-quarter net profit rose 3.3% to HK$580 million (USD74.6 million) from a year ago, in part because of an increase in mass-market gambling revenue (+1.9%). Adjusted EBITDA jumped by 0.7% over Q1 2016 to HK$843 million (USD108.77 million). Total revenue fell 5.2% to HK$10.53 billion (USD1.36 billion). Besides, VIP gaming revenue descended 12.0% and slot machine (and Tombola) revenue plunged 3.7%. Finally, for the full-year 2016, Melco Resorts & Entertainment reported net revenue of USD4.5 billion (+11.11% vs. the prior year) and adjusted EBITDA of USD1.08 billion (+17% YoY). In the first quarter of 2017, the operator had a total net revenue of USD1.3 billion, representing an increase of approximately 16%, and adjusted property EBITDA of

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With results from Macau’s six gaming operators in, Union Gaming analysts noted a 15.1% rise in mass table GGR in the first quarter of 2017. This growth outstripped VIP GGR’s 11.2% increase. “This, of course, is further good news for the market as a mass-led recovery is what we (and the government) want to see”, said the brokerage. The International Monetary Fund declared that Macau’s economy has begun a process of “significant transition”, adding that the government has taken up the opportunity of adopting a less volatile economic model with more sustainable funding sources. When it comes to look at the words and thoughts of operators’ leading executives, they seem to share the same ideas for the current business climate of Macau’s gambling sector. For instance, Lawrence Ho (CEO and chairman of Melco) expressed: “Looking ahead, we believe our business

cover story approaches are in line with the government’s new direction from a macroeconomic and social perspective. Macau’s long term success relies on its ability to cater to the rapidly evolving demands of leisure and entertainment seekers from around the region, most notably from Mainland China”. For his part, Ambrose So Shu Fai (CEO of SJM Holdings Limited) commented: “SJM’s first quarter 2017 results saw a resumption of growth in mass market gaming revenue, quarter-to-quarter and year-on-year, which resulted in an increase in adjusted EBITDA. Our Grand Lisboa Palace project on Cotai continues to make great progress and remains on budget”. Lui Che Woo (chairman of Galaxy Entertainment) stated: “We hope to attract more tourist and leisure customers to increase our mass market revenue. My way of doing it is combining Chinese and Western elements and non-gaming, meaning that we have less gaming-oriented facilities, but more for tourism, family gathering and culture”. Likewise, Steve Wynn (chairman and CEO of Wynn Resorts) affirmed: “Business is good for us. We’re enjoying a resurgence of activity at the top end in China”, while Ian Michael Coughlan, president of Wynn Macau, said: “There’s a lot more confidence and there also appears to be more liquidity in the market, particularly with the junkets, and it’s being sustained. The outlook is pretty promising”. From his point of view, casino mogul Sheldon Adelson (chairman and CEO of the Las Vegas Sands Corporation) repeated he is observing “stabilization and recovery in Macau”, and suggested he is “completely confident” that Macau would continue on an upward trajectory. In general, Macao’s six biggest gaming players’ representatives consider the share of income from their non-gaming businesses in their total revenue will keep increasing.

A COMMITMENT TO THE FUTURE As the proverb goes: “Wàn shì kāi tóu nán” (All things are difficult before they are easy). It seems that it will be hard to sustain cost cutting in 2017 with all the investments in new resorts. The 13, a USD1 billion hotel project from The 13 Holdings Ltd. on the border of the Cotai and Coloane districts in Macau, will be opened by the end of July. The USD3.1 billion MGM Cotai is going to open in the fourth quarter of 2017. Other new future buildings are Morpheus Hotel (fifth hotel tower of Melco’s City of Dreams; opening: early 2018) and Grand Lisboa Palace in Cotai (SJM’s USD4.6 billion project; opening: Q2 2018). How these gaming giants are going to get their investments back? Market trends in recent quarters seem to provide the right answer: diversification is the key to success. “With this industry, we realize that if you’re static and just relying on the same product, you’ll be falling behind. You need to constantly make new investments, reinvent your properties. That’s what you see main operators are doing in the markets where they have properties. That’s what keeps this industry fresh and competitive”, said Geoff Freeman, president of American Gaming Association. All the ingredients seem to be there: a stable growth in Macau’s tourist numbers, a new transportation infrastructure,

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some recovery in the VIP segment, a resurgent mass market. “As we move through Q2 2017, we look for VIP and mass to both accelerate closer to 20% growth”, noted Union Gaming analysts. The respective bosses of SJM and Melco expect the city’s gaming sector to see positive growth in casino GGR in calendar year 2017. Ambrose So Shu Fai anticipated that overall casino GGR in Macau for full 2017 should increase by about 10% YoY. For Lawrence Ho, year-on-year GGR growth in 2017 will range between 5% and 9%. The near-term future for Macau indicates a continued recovery process. The long-term future just looks bright. According to Lui Che Woo’s (Galaxy Entertainment Group) vision: “We are pleased to see that Macau is transitioning to a sustainable market recovery lead by mass. The continuing growth in the emerging middle-class in the Mainland and their appetite for leisure, tourism and travel gives us confidence in the longer term outlook for this territory”. The Macau’s gaming scenario is still exciting. While gaming is the pillar industry, operators are increasingly focusing on the wider tourism market, entertainment and non-gaming revenue streams, along with cost-cutting initiatives and efficiencies to drive profitability. With Macau in the midst of a development boom, operators will also need to provide competitive differentiation, while looking to future-proof investments.

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> INTERVIEW

Michael Hu Vice President of Asia, Interblock

“Asia is one of Interblock’s fastestgrowing markets” The businessman stresses on ETGs benefits for the sector. He also remarks that his company has created a dedicated customer service department and announces the new Interblock eTable solution. Six months ago, you were promoted from Sales Director to VP of Asia for the company. What’s the balance of your activities in this new position?

In this new role as VP of Asia, I have been focusing on building a stronger business infrastructure and foundation that will further support our sales and customer service initiatives. Interblock is a sales-driven and service oriented company that has steadily increased its footprint throughout Asia over the last two years. Making sure our customers are supported during this time of growth is a key. How would you describe the company’s position in the Asian gaming market?

Asia is one of Interblock’s fastest-growing markets, and continues to lead the ETG segment in record numbers with large-scale product placements. We recently introduced a 50-seat Stadium at Resorts World Genting; a 40-seat Stadium at One Opera Hotel, Vietnam; a 32-seat Stadium in New World Hotel, Vietnam, and a 10-seat stadium at Okada casino resorts, Philippines. We also installed 248 stations in Sands/Venetian Macau, and 100 stations at Melco’s Mocha Club properties. What is your analysis about a possible ending of the crisis that the gaming sector experienced in Macau, with some positive numbers since August 2016? What are your perspectives on this market?

In certain Asian markets where the

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government has put a cap on live table games, ETGs have been finding their niche. I believe this is why we are seeing an increase in large ETG installations. ETGs are essentially aiding the overall health of Asian markets as they recover from the collapse of the VIP market and current caps on live table game limits. ETGs are also improving operators’ bottom line, due to their ability to be active 24/7 with or without a live dealer. They also eliminate collusion and dealer error, and increase game speed, multiplying the number of games per hour for increased revenue. How to be innovative, trendsetting and responding to customer needs in such a competitive environment?

As I said before, ETGs offer a variety of player benefits that appeal to Asian players: a true table game experience, more privacy and more games per hour. They also offer players lower buy-ins than live table games, and even provide beginner players the opportunity to learn games at their own pace in a low-stress environment. Interblock is an operator and player favorite due to our products’ radiant appearance, cutting-edge technology and intuitive player experience. Our products are bold and create a strong focal point on any casino floor, large or small. To support these products, we have created a dedicated customer service department as part of our commitment to be our customers’ partner of choice. Our company has increased its number of service personnel, adopted a

preventive maintenance approach, and opened new markets across the globe in order to respond properly to our customers in a timely manner. Our customer service division ensures that our customers can rely on us to deliver the experience their players want and expect. What plans does the company have for Asia for the rest of the year?

Our main direction and goals emerge from our customers’ changing needs and demands, as we proactively lead the Electronic Table Games sector with new product development. Current trends also rely on what players want, and we are finding that players are looking for new and innovative ways to wager in casinos. Although the Stadium gaming concept has been a popular fixture in casinos throughout Asia for years, I believe we will continue to see this trend grow as new casinos open and as operators look to introduce new wagering experiences to their players. At G2E Asia, we are launching a new product, the Interblock eTable, which will be offered with Baccarat or Blackjack in a five-seat configuration. The eTable allows operators to simply press a button to change the game to play with or without a live dealer. If the operator chooses to have a dealer, the dealer presses a button to initiate and confirm the game. This option gives operators the flexibility to generate revenue with or without a dealer, depending on their needs throughout the week or at any time of day. We plan to release other products for this market, and look forward to making those announcements before the end of the year.

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> g2e asia 2017 Josephine Lee, Chief Operating Officer of Reed Exhibitions Greater China

“This is truly the best

marketplace for gaming business” With some changes and positive additions that respond to the evolution of the sector, the event will seek to cover all segments of the industry in order to continue supporting Macau’s economic development.

What are the main changes and innovations that will surprise attendees at the 2017 edition of G2E Asia? How important is the iGaming Zone and iGaming Summit during the event? This year, G2E Asia will showcase a dynamic expo hall, featuring top exhibitors and exciting educational presentations. The show floor spans nearly 28,000 sqm gross. First-time exhibitors make almost half of the 180 exhibitors (45%) and 70+ companies will be demonstrating innovative online gaming solutions. The final conference day will also feature the iGaming Summit. There will also be a new approach to Integrated Resorts Technology and Solutions. As the casino industry’s increasing interest in non-gaming amenities and attractions grows, we welcome a dozen companies to showcase integrated resorts (IR) technology and 18 Games Magazine

business solutions. Moreover, a new networking event called “Future Technology Leaders’ Get Together” will convene over 120 emerging technology executives from integrated resorts, suppliers and government to get inspired, exchange ideas and discuss the application of innovative solutions to better customer engagement. We will also include the Parts & Components Pavilion, with the most advanced parts and components in the industry. The Asia Lottery Forum will take place again at the show. Topics of focus will include Japan’s Lottery Industry and Strategic Measures to Boost China’s Lottery Industry. Following the successful launch of the Gaming Regulatory Luncheon last year, this year’s event has been expanded to become the Gaming Regulatory Briefing and Networking Luncheon. This will be a great place for regulators to exchange views, share updates and explore cooperative opportunities to drive development in Asian gaming. Last year’s edition of G2E Asia marked a decade of growth. Why do you think this event has become such a success for exhibitors and visitors? What relevance does the AGA’s support have for Reed Exhibitions? We remain relevant to the industry by gathering customer feedback and insights to ensure G2E Asia addresses the needs of the industry, and we work in close collaboration with American Gaming Association (AGA) to ensure that we’re leveraging their arsenal of staff and AGA members’ expertise. Industry professionals from across the continent rely on G2E Asia to gain deeper insights into the latest industry trends in Asia and to source new

Larger and richer edition products and solutions. G2E Asia is truly the best marketplace for gaming business. What do you think about Macau’s revenue recovery (from August 2016) for the gaming sector? Which are the main causes for this amazing positive twist in the numbers? This is possibly a result of Macau government’s drive to diversify the economy that appeals to a broad spectrum of entertainment, retail, dining and hospitality offerings tourists and leisure visitors. Mass play is more sustainable and is less vulnerable to the political factors and policies. VIP gaming also rose 13% in the final quarter of 2016, according to Macau’s Gaming Inspection and Coordination Bureau (DICJ). Mass market, meanwhile, improved 7.3% during the second consecutive quarter of growth. How do you think the gaming industry in Macau can attract new generations of players, more interested in social and mobile gaming? It takes the entire industry value chain to make it work, from operators to suppliers and the government working together. These sectors are developing games

within the boundaries of gaming regulations and compliance, and yet meeting the next generations’ interest, from game content to gaming experience, not bounded by the gaming floor. Considering the increase in VIP and massmarket casino GGR in Macau for the first quarter of 2017, are you optimistic about the future of the gaming sector’s economy? In bad and good times, G2E Asia will stay close to the industry and develop the event based on industry needs and to support Macau’s economic development. We hope everyone can join us at the Venetian Macao to see all that our great industry has to offer.

G2E Asia 2017 show will run from May 16th to May 18th at the Venetian Macao, and is comprised of five tracks: the Asian Market Forum, Gaming Operations and Technology, Integrated Resort Operations and Marketing, the iGaming Summit and the IAGA Best Practices Institute. With the organization of Reed Exhibitions Greater China and the American Gaming Association, and the support of the Macao SAR government, this 11th edition will attract over 11,000 trade visitors from more than 80 countries and regions. According to the organizers, the 2016 exhibition generated business for more than USD28.7 million. While its finger firmly remains on the pulse of the Macao gaming industry, the three-day event will feature an Integrated Resort Experience (IRE) at the core of its 2017 offerings. Along with developing non-gaming attractions, Macao is energetically looking to develop its MICE businesses. The IRE will centralize sourcing of new products, technologies and services that drive revenue and value from non-gaming sources from entertainment, clubs, bars, IR technology and business solutions. There will also include a new Parts & Components Pavilion, with one hundred research and development engineers, buyers and technical and product designers. One of the most important activities will be the conferences, a fantastic opportunity to engage like-minded professionals, join relevant discussions and learn from top experts to discuss the hot topics today. Highlights of this year include a Keynote delivered by Francis Lui (Galaxy Entertainment); ‘The Analyst’s Perspective: Asian Markets Update’, with panelists and specialists from Morgan Stanley Union Gaming; a conference from Paulo Martins Chan, Director of The Gaming Inspection and Coordination Bureau (DICJ), Macao SAR; the dynamic session of “Executive Roundtable: Content and Amenities for the Mass Market”, with leaders of the Asian gaming industry, such as Wilfred Wong (Sands China), Mitchell Bowen (Aristocrat Technologies), Derik Mooberry (Scientific Games) and Walter Bugno (IGT International). Other spaces and meeting opportunities can be mentioned, as the iGaming Zone, the Asia Lottery Forum and 7th China Lottery Industry Salon, the launch of the Global Gaming Legal Guide to Serve the Global Gaming Industry, coordinated by the legal firm Lex Mundi, and the second edition of the Asia Gaming Awards.

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> g2e asia 2017 Aristocrat

Newest game and cabinet creations Aristocrat strives to lead the gaming industry in creating combinations of innovative cabinets and games that really entertain. At booth #637, the company will exhibit its newest game and cabinet creations, designed to help operators cater to all types of players and gaming floor segments. Aristocrat’s global slot sensation Lightning Link has new games that have been

customized to the Asia-Pacific market. The third title Eyes of Fortune will be on display. Regarding Asian games, attendants will access to the new Long Teng Hu

Xiao slot game and 5 Dragons title, including 5 Dragons Empire, 5 Dragons Empire Link with two launch titles: 5 Dragons and 5 Dragons Deluxe, 5 Dragons Grand and 5 Dragons Rapid. There’ll also be new versions of player-favorite games: Fortune King Rapid and Lucky 88 Extra Choice. It is important to highlight some other products, such as the Spin It Grand slot game, a new game

concept in the standalone progressive jackpot category (and part of Aristocrat’s ongoing commitment to growing the mass market), the Games

of Fortune collection, and new Multiline Baccarat, Baccarat 88, Baccarat Streak and Baccarat Zhuan Zhuan Fa slot games on the Arc Single cabinet.

Alfastreet

Exciting Multi Touch Roulette The beginning of the year 2017 marked the presentation of a brand new Alfastreet’s product, the Multi Touch Roulette. It’s a fully

Automated or Live Roulette game, featuring a 65” HD central monitor 20 Games Magazine

and eight gaming stations. The Multi Touch table is combining industry’s leading experience in the field of electronic table games, latest technology and the sublime art of transferring the touch and feel of a live game into an automated electronic version. The clear and entertaining graphic animations from the central monitor provide complete immersion to the players on the individual betting screen. This is the

only machine of its kind that provides eight gaming stations in such a compact and efficient format. Multi Touch can be fitted with both live and automated roulette wheels, depending

on operator’s requirements, and can be aesthetically fully personalized to best fit into the venue environment. The main advantages over classic roulette tables are the absolute

security and ease of operation, since there’s no need for a highly skilled professional dealers and supporting personnel. This machine is also completely inter-connectable with other systems and can be easily expanded with range of Alfastreet products. Interaction between players is also worth the notice, as this game displays all the bets on the community screen and the players are able to compete, compare and strategize, based on the betting information provided.

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> g2e asia 2017 BetConstruct

Sportsbook, VR Casino, SlotBuilder and much more This year, BetConstruct will travel with its innovative and proven offerings to G2E Asia 2017 in Macau to display an extensive range of marketleading products, including Sportsbook, Data Feed and Marketing Solutions, Casino Suite, Live and Virtual Reality Casinos, SlotBuilder and many more. The

company is proud to showcase at booth #1808 the renowned Sportsbook with an Asian view specially developed for the region. It appeals to

as well as regular updates of odds. Besides, RNG Casino Suite of BetConstruct counts more than 3,000 exciting games. The range is provided

Asian players who demand a more timefocused and uniform layout of markets,

by multiple partners and is always freshened up with highresolution graphics

and attractive design. Live Casino provides 24/7 HD quality streaming maintaining the real casino atmosphere with multilingual and multicurrency options. For an over-the-top experience, visitors must try the demo version of VR Casino, an exclusive product in the iGaming market. Moreover, the SlotBuilder gives

an opportunity to personally design a favorite very special slot machine. With highly customizable units, all operators can make a truly personalized and crafted design for their casino machines from choosing the number of lines and changing the reels layout to uploading images to start integrating into slot machine logic.

Casino Technology

New tailored games and slot machines

In its booth #351, the innovative series of linked Asian themed progressive games of Casino Technology are presented in a multigame suite 8 Peacocks with five compelling titles: Magic Pearl, Great Warlord, Peacock and Dragon, Five Blessings and Clover and Peacock. A Chinese 22 Games Magazine

mythology inspired games will be displayed with the premium product of Casino Technology, the Arch. This slot machine has set a new trend in the gaming industry and is a preferred choice for many operators, seeking excellence. The winning concept of the premium Arch has its natural

continuation with the brand new Arch Titan slot machine that includes the Five Blessings Delux game (also presented in the EZ Modulo machine). The new wave Casino Technology slot machines are amongst the highlighted products on the company’s booth. Red Bird and Golden Dragon is another tailored to the Asian market single game that will be showcased. The T3 and Tower slant top stand out with the implemented newest patented Combo concept of Casino Technology, which combines standard

casino slot machine and online gaming terminal in one, thus allowing the player to play simultaneously the casino standalone games on the main

gaming experience that is empowered even more by the unique seamless multichannel gaming solution of Casino Technology: The

screen and online games on a secondary screen. Both machines featuring the Combo concept pave the way to unified

Big 5. The suite of systems includes the Elephant Remote Game Server and the Leopard Online Gaming Platform.

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> g2e asia 2017 DRGT

First class technology

DRGT, a renowned provider of solutions for casino and EGM systems, confirmed its participation in the G2E Asia 2017 event. Its team will receive clients and

attendants at booth #1225 with an array of its leading-edge technology products. The company will present its drAccounting, drCashless, drTable, drPlayerTracking and

drScreen modules so that the operators can decide which best adapts to their requirements, while understanding that they may complement them whenever they consider it necessary. The installation of these modules is a quick and simple process carried out by highly qualified staff and meets the requirements of each casino.

DrScreen solution is ideal to capture the attention of the player with its three screen options: drScreen, drScreenMini and drScreenMicro. Additionally, the company will offer drWideArea, which facilitates data connection among multiple casinos. The player’s card and tickets can be used in different casinos from the same group. It also allows

the DRGT Jackpots to link machines that are in different casinos in real time. These products transform traditional promotions and expand the concept of entertainment. The operators who placed their trust in the company increased their profits, as well as the excitement in their wagers in a short amount of time, therefore captivating new players.

IGT

Innovative and customized solutions IGT’s booth #601 will host a range of gaming products that reflect the company’s G2E Asia 2017 theme: ‘Innovations for Asia’. From leading casino management systems solutions

24 Games Magazine

and high-definition gaming cabinets to immersive True 4D gameplay and skillbased novelties, IGT’s portfolio is fueled by the company’s passion for delivering customized solutions for its

Asia-based customers. As a leading systems provider in Asia, IGT will showcase its globally successful casino management systems solutions such as IGT Advantage, along with a series of other

systems solutions and bonuses. The company will also spotlight its Table Manager solution and its Lucky Chip Bonus. G2E Asia attendees can experience IGT’s awardwinning PlaySpot mobile software solution that enables players to place wagers on live roulette and baccarat games that are taking place on the casino floor, from their mobile devices, from any location within the casino. Besides, this show will be the world debut for IGT’s True 3D title Phoenix Rising 3D, housed

on the Axxis 3D cabinet. The game includes the Surrounding Wilds feature, a Free Games Bonus and a Wheel Progressive Playoff Bonus. Other products that IGT will display at Macau are the award-winning Cardless Connect mobile solution, the innovative Sphinx 4D game on the CrystalCurve True 4D cabinet, the multilevel progressive title Cai Yun Heng Tong, and the four-level progressive video slot game Rong Hua Fu Gui on the CrystalDual cabinet.

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> g2e asia 2017 FBM

Video bingo experts For another year, FBM announces it will be exhibiting at the Global Gaming Expo Asia, booth #337, and will showcase products and innovations at the most import conference and trade show for the gaming market in Asia, attracting more than 10,887 visitors from 83 countries and regions.

The international brand has an important position in the video bingo segment in Asia. The company looks forward to meet old and new customers and introduce its novelties to the global market, which consist of a significant increase to the products offerings like new bingo games as

Rubingo, Arctic Blast and Bingolicious. In addition to that, on this year’s event, FBM will celebrate

the return of its line of video slots games to the market. The games 88 Festivals

and Xing Fu Fortune are the first two titles of a totally new line of slot games, developed specially to the Asian market. All this releases come up with the commitment to be launch onto the market over the next coming year. The sophisticated new designed gaming machine Phantom

Xtreme can also be seen at the booth. The machine spotlight spectaculars features as the brand-new curved round-top model, interactive led lighting, ergonomic setups, USB port and dual-play bottom that will make players’ excitement levels be elevated to new heights.

GLI

Tom Horn

World-class services

Full suite

Ian Hughes Gaming Laboratories International is pleased to participate in G2E Asia 2017 because it is a unique opportunity to share its global expertise with those who visit the booth #906. The company has had a strong presence in Asia for the past 10+ years, and it’s very familiar with local challenges in the region. At G2E Asia, their experts will discuss a wide range of services: Network 26 Games Magazine

Marina Wong

Ricky Manalo

Risk Assessments, Network Security Review, iGaming Testing, Regulatory and Jurisdictional Consultation and Quality Assurance Testing. Important to many clients is the Gaming Labs Certified mark, which is recognized globally. The product has passed the most challenging tests and meets the most rigorous industry standards. With over 1,000 experts located on

six continents and in over 20 locations worldwide, GLI brings a truly global and local perspective to the show. For over 25 years, GLI has delivered land-based, lottery and iGaming testing and consulting to over 475 jurisdictions all over the world. By offering so much more than just testing, GLI has become a trusted partner for many regulators, suppliers and operators.

of attractive casino games

On booth #910 at Venetian Macau, Tom Horn is going to showcase new games: an Asian-themed Dragon Riches and a saucy adventure, The Red Lights. Apart from games targeted at the Asian market, it will also present Monster Madness and 243 Crystal Fruits, which might appeal to a more global audience. For almost a decade, Tom Horn has provided its partners with some of the best-of-the-breed gaming products and has teamed up with the world’s most successful e-gaming operators. The product offerings comprise full suite of casino games, with support to all distribution channels. The games are fully localized for all major languages, and available both in Flash and HTML5. Recently, the company has extended a longterm partnership with Vivo Gaming, which has their seamless Live Dealer Gaming. Tom Horn’s cutting-edge RNG games, such as Geisha’s Fan, Shaolin’s Tiger and Panda’s Run, have attracted worldwide audiences, proving the company’s capability to capitalize on its long term presence in the industry, coupled with an extensive research of new technologies, animation techniques, market requirements, gaming legislation as well as the demographics and players’ needs in particular parts of the world.

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> g2e asia 2017 JCM Global

Real connections for APAC operators

JCM Global is world-famous for its innovative and award-winning products that help make automated cash transactions as secure and accurate as possible. Now,

on stand #1325 at Macau, JCM Global will help casino operators throughout Asia-Pacific move beyond transactions to making real connections with their customers.

Leading JCM’s exhibition is the landmark and awardwinning iVizion, one of the most widely used bill validators in the global gaming industry. Operators of all sizes will appreciate JCM’s iPRO-RC bill validator, which combines the highest levels of security with the convenience of note recycling. JCM’s award-winning ICB (Intelligent Cash Box) system eliminates multiple points of human error for faster, more accurate drops. The company will also show two leading

printing solutions. First is the Gen2 U, equipped with ITH (Intelligent Ticket Handling), large paper capacity and an expanded graphics memory. Second is the new Gen5 printer that adds an even faster processor, dual channel communications, and Fuzion-ready technology. Last,

JCM will show the all-new PromoNet 2.0, the floor-wide couponing solution that delivers the right promotion to the right customer at the right time.

SuzoHapp

Wide array of gaming products SuzoHapp is ready to welcome visitors at booth #1125 to show a variety of unique components and solutions that meets the demands of various gaming market segments. One of the biggest highlights will be the new Picture Key Technology (PKT) button panel, which enables dynamic content within a tactile surface. The Loyalty Kiosk, integrated with a number of Loyalty 28 Games Magazine

system providers and POS companies, will also be a highlight. This solution is available in two configurations: a freestanding cabinet for foyer use, or a countertop for

bar or counter use with an external ticket printer. Other new products will be the BoothTV and the DisplayPRO, featuring a 42” HD screen ideal for visual campaigns. As the global partner for Elo and TransAct, great focus will be placed on the Elo solutions, such as the 23.8” and 21.5” LCD open-frame touchscreens, and on the award-winning Epic 950 and the

Epic 880 printers. The catalog of solutions is completed with cash handling tools, such as the CashComplete’ SDS-25 and SDS-30, the innovative Smart Deposit Solutions and a selection of Scan Coin desktop products, including the best-in-class SC8220 note counter. The

flexible and compact VC100D currency counter, the latest SH1950 video topper, the Comestero RM5 HD electronic coin validator and the ‘Charge N Play’ USB charger will be displayed as well.

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> g2e asia 2017 Spintec

Gaming terminal and electronic table games tool At booth #953, Spintec is presenting two product lines: Karma line, already proven in Macao and well-known for its compact solutions; and a completely new product line Aura, which is perfect for multigame amphitheater setups. Both product lines

offer variety of games (Roulette, Sic Bo, Craps, Baccarat) in different setups with any technological solution (automated, virtual, live). With a revolutionary new approach in design, Aura aims to have the

most comfortable and ergonomic gaming terminal on the market, combining live, automated and virtual games in one multigame experience. Besides, Spintec’s core product line Karma consist of compact electronic table games solutions. Is presented with three products: automated Roulette, automated Sic Bo and

Craps, stand-alone virtual playing station with wider monitor and multigame option for a player to choose between virtual Roulette, virtual Baccarat and virtual Sic Bo. All products hold the known Spintec’s promise of longer gaming session gained through comfort of the player, proprietary technical

solutions and psychological knowledge of the player.

Novomatic

Machines, cabinets and system roducts Sharing a stand with Ainsworth Game Technology (AGT) for the first time at G2E Asia, a range of Novomatic product innovations will be on prominent display at the Venetian Macau. The latest slot and bingo machines with market-attuned content will be featured on booth #1305, alongside key system solutions, and demonstrate the ongoing expansion of Novomatic in the Asia-Pacific region. A bank of sleek Gaminator Scorpion cabinets will be at the front of the stand, featuring a wide range of content including the 30 Games Magazine

Novo Line Interactive Macau 1 game mix. From the V.I.P. cabinet line will be the space-optimized V.I.P. Lounge with brand new content, as well as a special version of Globe Roulette that has recently been approved in Macau. On show for the first time at G2E Asia will be cutting-edge video bingo machines by Otium, which became part of the Novomatic Group last year. A spotlight will be on the OT100 cabinet, which is already proving a major success in the Philippines. The machines will feature leading bingo titles

such as Bingosaurus and Multi Dragon, as well as standalone and linked jackpots. With an increasing number of installations throughout Asia, the Octavian ACP -Accounting Control and Progressives- casino management system will be returning

to this show. The systems specialist of Novomatic will be on hand to present new modules, including intelligence, reporting, player loyalty and marketing. In addition, as part of the ACP system, will be diverse progressive and mystery jackpot solutions.

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> g2e asia 2017 Zitro

New Bryke video slots for the Asian market Zitro will be exhibiting in booth #1315, sharing space with its distributor, RGB, a company of recognized prestige in the region. In Macau, the Spanish group will offer its most recent Video Bingo solutions. For the Asian market, the company will also introduce Big Time that includes new casino and bingo games specifically targeted for the Philippines market, where Zitro

32 Games Magazine

has a significant share. Big Time promotional systems allows operators to program promotions in a more dynamic and flexible way. Another new product for G2E Asia show will be Bryker, the new video slots brand with its first multi-games of the Pick & Win series. This series had a surprising performance in Latin America, where it has been tested with unprecedented success.

Games Magazine 33

> interview

Fivos Polymniou Vice President International Sales, VizExplorer

“We will show the difference our products can make for casinos” The experienced VP says his company is planning to build an interoperable ecosystem of solutions for its customers. He also details the main characteristics of an effective CRM tool and highlights the importance of Macau’s gaming market. In which Asian countries is the company doing business?

Currently, VizExplorer is proud to serve customers in the Philippines, Macau and Australia What have been the most recent partnerships VizExplorer has established?

We recently partnered with technology providers Everi Payments and OpenWager to expand the scope of our product offerings, and we have a few other strategic partnerships we plan to announce soon. We’re also proud to have installed our solutions more than 1,380 times at casinos worldwide. We serve 25% of North American casinos, including large multi-property gaming operations like Boyd Gaming and Foxwoods Resort Casino. We have agreements with gaming operators in the Philippines, Macau and Australia. Which were the new solutions the company launched in 2017? Are these products going to be part of the company’s portfolio for G2E Asia show?

VizExplorer has a robust operational intelligence platform and a set of core solutions for intelligent player development (hostViz), marketing (campaignViz), gaming floor optimization (floorViz), and technical operations (techViz). We aim to expand on our core competencies by building an interoperable ecosystem of solutions that give our gaming customers additional capabilities. Just last month, we announced two new products, resulting from our technology partnerships with OpenWager and Everi Payments: SocialLink for OpenWager, for social player and campaign analysis, and CashInsite with Everi IQ, for player loyalty and transaction analysis

34 Games Magazine

Why is it important for an operator to have an intelligent customer relationship management system?

Good data on your players starts with a robust CRM in which to house that information. We advocate for casinos to get the CRM solution that makes the most sense for their needs, i.e., the ability to use the data they collect from machine performance and player loyalty programs to make strategic revenue generating decisions. The ideal CRM solution should be simple to use, accessible across the organization, scalable for any property size and robust enough to give hosts the right player information when they need it and to provide casino marketers with player behavior insights that inform their marketing campaigns. What do you think about the remarkable improvement in the Macau’s gambling market situation in the last nine months?

As the shining star of the Asian gaming landscape, Macau is a relevant market for international companies, both operators and suppliers. The growth of the Macau gaming market is important for two reasons. First, it helps to instill confidence in the region overall. Second, it tells companies like ours that the opportunity exists to expand our customer base and drives us to continue to invest in our operational intelligence product portfolio. What are the prospects and aspirations you have for the company’s future?

At G2E Asia this year, we look forward to showing Asian gaming operators the difference our products can make for their casinos, and to expanding our customer base in the region in 2017.

Games Magazine 35

>â&#x20AC;&#x2030;Outlook

nine StrAiGHt MOntHS OF inCreASe Since the third quarter of 2016, the gaming industry in Macau has shown signs of a revival that is gaining traction in 2017. This article explains some of the major factors that fueled that rebound and anticipates future perspectives for the sector.

Macau Back in business

36â&#x20AC;&#x192; Games Magazine

The sun seems to have risen again for the Macau gaming market after more than two years of darkness. Macau gambling revenue fell every month for more than two years straight beginning in mid-2014 and ending in August 2016. Now, the 2017 April’s GGR gains extend Macau’s current winning streak to nine straight months of yearon-year (YoY) improvements after those times of negative numbers. In 2016, visitor arrivals to Macau increased 0.8% YoY to 30.95 million, with the aggregate annual number of overnight visitors exceeding same-day visitors for the first time in 10 years, said the Macao Government Tourism Office (MGTO). On the Q1 of 2017, the number of visitors rose 5.6% YoY to over 7.87 million, according to the city’s Statistics and Census Service. These indicators mark a trend that keeps going over time: the game in Macau has reborn and anticipates a promising future.

wInDS OF CHAnGE Early signs of recovery started to show in August 2016, when Macau’s casino GGR grew 1.1% YoY. It was the first time in 27 months that such revenue had not contracted. Then, in the last quarter of 2016, the market aggregate for all casino GGR was MOP60.42 billion (USD7.5 billion), a YoY increase of 10.2%, with a 12.6% expansion of the VIP segment. Of course, that wasn’t enough to modify the fullyear 2016 GGR of MOP223.2 billion (USD28 billion), a drop of 3.3% vs. 2015. The Macau gaming market had also fallen 2.8% YoY in 2014 and 34.3% in 2015. But the wind began to blow stronger in 2017 to change the landscape of the sector’s earnings. Thus, the GGR remained firm in the positive trend towards the end of 2016, with revenues of MOP19.26 billion (USD2.41 billion) in January 2017 (+3.1% YoY); MOP23 billion (USD2.9 billion) in February 2017 (+17.8%); MOP21.2 billion (USD2.6 billion) in March 2017 (+18%), and MOP20.16 billion (USD2.52 billion) in April 2017 (+16.3%). The Q1 2017 indicators revealed an aggregate for all

casinos GGR of MOP63.48 billion (USD7.92 billion), a year-on-year increase of 13%. The results for Macau’s market GGR in the first four months of 2017 was MOP 83.6 billion (USD10.43 billion), up 13.8% year-on-year compared to the same period in 2016, according to data from the Gaming Inspection and Coordination Bureau (DICJ). In terms of visitors segment analysis and their influence in GGR in the first quarter of 2017, high rollers expanded by 16.8% YoY, and mass-market players rose by 8.5%. The GGR from slot machines was up by 13.3% from the prior-year period. Even if regional casino industry is shifting from an emphasis on VIP business to one of serving mass-market customers, VIPs are still too important in the current outlook of the sector. There was also an interesting rebound in visitors’ non-gaming spending. Visitor arrivals to Macau increased 0.8% YoY to 30.95 million in 2016, with the aggregate annual number of overnight visitors exceeding same-day visitors for the first time in 10 years, explained the Macao Government Tourism Office (MGTO). Close to 28 million (90%) of visitors came from the Greater China market, namely mainland China, Hong Kong and Taiwan, a slight YoY increase of 0.1%. The aggregate number of overnight visitors in 2016 exceeded 15.7 million, up by 9.8% YoY. International visitor arrivals rose by 7.9%. South Korea continues to rank first as a source market, contributing more than 660,000 visitors to Macau last year, up by nearly 20%. There was a 4.6% growth in the number of visitors from the United States. The numbers for the Q1 2017 were also positive: visitors to Macau were over 7.87 million (+5.6% vs. Q1 2016). The total of overnight visitors from all markets in this period grew 12.1% YoY to over 3.93 million. The number of sameday visitors declined by 0.2% to over 3.94 million. Which are the main factors to explain this upturn in terms of gaming revenue? There has been a strong impulse derived from the opening of new casinos, both in the Cotai Strip, such as Wynn Palace (Wynn Resorts, August 2016) and the Parisian Macao (Sands China, September 2016). This has helped

Games Magazine 37

> Outlook

to draw high rollers and more casual gamblers to the region. There are also more entertainment facilities and attractions for non-gaming visitors and a slowly shift to mass market along with the increase in ETG demands.

GOvERnMEnT: InCOME RISE AnD FUTURE PLAnS The recovery of the city’s gaming industry boosted the government’s total revenue to a YoY upsurge of 9.6% in the first quarter of 2017, according to the Financial Services Bureau (DSF). The city collected MOP22.34 billion (USD2.79 billion) in fiscal revenues from direct taxes on gaming (+8.73% vs. Q1 2016).Direct taxes from gaming brought in 84.5% of the Macau government’s total revenue in that period. Besides, the government is working very hard in an ambitious plan of infrastructure improvements in Macau that would be beneficial for further growth of the overall Cotai market. There are a number of public sector projects including: the Hong Kong-Zhuhai-Macau Bridge, likely to open in 2018; Macau’s coming new Pac On Ferry Terminal at Taipa, due to launch in May 2017, and an ongoing expansion of China’s high-speed rail network that will include new links to Macau’s neighboring mainland city, Zhuhai. The new Pac On Ferry Terminal will be essential to attract more gamblers to Macau’s properties. The terminal’s 18 berths will move over 400,000 passengers a day. It will shorten or eliminate the need for shuttle bus routes or taxi rides to key casinos. The terminal also includes a new helipad, a proven transportation plus for VIP business. On many fronts, this is good news for casino operators and particularly welcome news for those located on Cotai. Regarding non-gaming, the government

38 Games Magazine

has a goal for the industry in order to increase revenues from that segment. In Macau’s Five-Year Development Plan -a package of public policies and initiatives covering the period 2016 to 2020-, the non-gaming target was set at 9% per year by 2020. However, that goal had already been achieved by the end of 2015. That year, non-gaming accounted for 9.39% of overall revenue in the casino sector. It’s clear that diversification of the local economy beyond gaming (and in particular, beyond high-stakes, credit-based play) has been identified by the city’s government as a key policy aim, and one that coincides with the run-up to the expiry of the current casino concessions.

OPTIMISTIC FORECAST FOR THE MARKET The latest gaming revenues have signaled renewed optimism in Macau over the industry’s future growth. Looking back, it took a couple of

Games Magazine 39

> Outlook

years for Macau to weather the storm. However, the continued growth in the territory would only be moderate in comparison to the unprecedented growth of the pre-2004 era. Macau’s Chief Executive, Fernando Chui Sai On, forecasted that the city’s 2017 casino GGR would total MOP200 billion (USD24.95 billion). That is the same number the government gave as an estimate for 2016 casino GGR. The latter forecast undershot by 11.6%, as the year’s final tally amounted to MOP223.21 billion (USD27.84 billion). The government has said it expects to collect a total of MOP71.86 billion (USD8.96 billion) in fiscal revenue from direct taxes on gaming this year. That would represent 79.1% of the MOP90.86 billion’s (USD11.33 billion) public revenue currently being anticipated for the city. Some industry analysts are sharing its predictions for Macau’s gaming industry. For instance, international credit debt watcher Fitch Ratings projects Macau’s gaming revenue will grow 12% in 2017 amid the possible monetary tightening and increased real estate restrictions in mainland China. Fitch also expects the Chinese economy to grow 6.4% this year. According to the opinion of specialists from financial services firm Morgan Stanley: “We believe the Macau cycle has turned and 2017 could show 10% GGR and 13% EBITDA growth, the first in four years. We see both mass and VIP growth tracking better than expected. Infrastructure improvement will drive higher visitation and potentially higher spending per capita”. A report from Japanese brokerage Nomura indicated that Macau is likely to record an overall 6% compound annual growth rate in casino GGR in 2017 to 2019 inclusive, with the mass table games segment’s expansion likely outpacing that of the VIP. “Contributions from big-spending VIPs are expected to drop to 12% of total operators’ earnings this year from 34% in 2012, before reaching 10% in 2018. On the flipside, the mass market will grow to 71% this year from 54% five years ago, while the non-gaming contributions will expand

40 Games Magazine

to 17%”, said Nomura analysts Richard Huang and Joyce Yang. While Macau has been focusing on boosting its non-gaming offerings, a scholar notes the future of Macau’s economy will still be based on gaming earnings for years to come. Philip Xie, dean of the Faculty of Hospitality and Tourism Management at the Macau University of Science and Technology, argued that it would still take some time for the territory to develop a sustainable model that would attract non-gaming tourists. “This is a dilemma for Macau, because when you break down the revenues, probably 80-90% of it comes from gaming”. This researcher suggested that the region should make use of the gaming industry as a base to further develop a wider range of offerings, including a convention industry, art and culture, and culinary tourism. Xie however believes that the industry is moving towards providing diversified offerings that suit clients with different lifestyles. The truth is that the challenge is raised. There is a new focus in thinking the game in Macau and various possibilities open up to an attempt of a sector reborn that will benefit not only Macau, but also the entire APAC region.

Games Magazine 41

> interview

Raymond Chan Co-Founder and CEO, TGG Interactive

“We bring creativity and innovation to our Hiro platform” The leader of the company explains how they are introducing new ways and ideas to develop attractive products, allowing more choices to players and operators. He also underlines the value of the Japanese market. What has been the business development of the company in APAC in 2016 and the first quarter of 2017?

In 2016, we put a lot of effort in developing our presence around the world. For example, we had our first participation at G2E Asia 2016, connecting us with global clients, especially those based in APAC region. Our products have finally received the official GLI approval in November 2016 and we’re now deploying them globally. In the rest of 2017, we will continue to introduce our Hiro platform to the industry. Hiro is made available under one of the most progressive, developer-friendly and open-platform licenses, giving developers and gaming operators significant freedom and flexibility to design and deploy products that meet global regulation requirements. Nevertheless, we have put lots of efforts and resources in the Japanese market. I’ve recently took part as a panelist in the Japan Gaming Congress and unveiled some of the insider’s thoughts to the Japanese too. How important is G2E Asia show for TGG and what’s the recognition your brand has in the Macau gaming market?

G2E Asia is always important for TGG. Since I will be attending Casual Connect in Singapore and will be one of the speakers for casino gaming, I would be visiting G2E Asia on the first day only. Nevertheless, the TGG team will be at the show and will be happy to meet visitors. What has been the main innovations for the online gaming platforms on the last couple of years?

Innovation is in high demand in either gaming or game industries, either in land-based or online gaming. Indie game developers and game studios are welcoming the millennial generation with their groundbreaking creativity. From our observation of Game Developers 42 Games Magazine

Conference in March, in San Francisco, they demonstrated their best of the best in the show: perfect graphics, motions, story plots, not to mention the application of technologies like VR, AR and AI in the games. The creativity and innovative ideas are exactly what we are looking for in our industry, and we do hope to bring such creativity and innovation in our Hiro platform for global casino operators and players, in both land-based and online operations. How would you describe the current gaming scenario in Macau considering the boost in revenues from August 2016 up to now?

This is a good sign of the industry. We do believe more and more people will be able to enjoy the fun of gaming with more innovation and creativity available from the market. How are your company’s products attracting millennials and social and mobile casino players?

TGG is providing an alternative to the market. We want to bring in innovations gaming concept via the marketplace, and allowing more choices to players and better terms for operators. That’s why we are building and sharing open API on our platforms for global developers, and so they can build new games on it on the fly. We are working hard on the SDK kits these days as well, and once completed, it will further expand our game integration speed and capacity. What are the main targets your company has in APAC for the rest of 2017?

Japan is a market with strong cultural background. We not only hope to bring our international experience into the Japan market. At the same time, we also hope to bring forward the creativity of the Japanese to the global stage. This would be a win-win situation for both the industry and also the players.

Games Magazine 43

Lotterynews CHINA

First-quarter 2017 lottery sales jump 4.9% Strong performance in provinces and cities has propelled mainland China’s lottery sales in the first quarter of 2017. Data from the country’s Ministry of Finance showed that mainland China’s total sales from official lottery products improved 4.9 percent year-on-year in the first three months ending March 21 to reach an estimated RMB95.25 billion (USD13.84 billion). Welfare lottery sales was also up 3.5 percent year-onyear to RMB51.34 billion (USD7.46 billion), while sports lottery sales climbed 6.6 percent year-on-year to RMB43.91 billion (USD6.38 billion). Sales were up in 22 of the 31 provinces and cities of mainland China that were authorized to sell lottery tickets. The provinces that recorded strong performance in sales include Hubei, Jiangxi, Chongqing, Shandong, and Gansu. In full year 2016, sales from Chinese official lottery products increased by 7.3 percent to approximately RMB394.64 billion (USD57.53 billion),

SOUTH KOREA

Government to allow online lottery During a recent Korea Lottery Commission meeting, the Ministry of Strategy and Finance of South Korea decided to permit online lottery in the country by the end of 2018, after analyzing that the new measure will improve buyer convenience. he government also said it would introduce the 5% cap as well as limiting the amount for which each individual can buy Lotto, the popular lottery online, due to concerns over individual speculative drive. However, local authorities are convinced that online sales would not surpass 5% of its total sales. According to the Korea Lottery Commission, Lotto sales reached USD3.04 billion last year. Those sales were the highest since 2003.

44 Games Magazine

PHILIPPINES

Plan to tax lottery winnings The Philippine Charity Sweepstakes Office (PCSO) expressed concern over the Department of Finance’s proposal to impose a 20% tax on lottery winnings, as part of its Comprehensive Tax Reform Program. PCSO chairman Jose Jorge Corpuz said it would be hard to market the PCSO’s games if that decision is finally approved by the government. “It will affect the market and pull down our sales. How can you sell the lotto if it has a tax?”, Corpuz expressed. According to this executive, a decrease in the PCSO’s sales would affect the government’s charity and health programs. In 2016, the PCSO generated P39.7 billion (USD795 million) in revenue, more than six percent higher than the 2015 income. From that money, the organism remitted to government more than P4.9 billion (USD98 million) in mandatory contributions.

Games Magazine 45

gaming nEW PoSSIBILITIES on THE onLInE SEGMEnT

LATAM: OPEN WINDOW FOR ASIAN INVESTMENT

After the recent Colombian legalization of iGaming, lots of markets in the region are planning to follow those steps. In this report, there’s an analysis of each territory and a definition on how Asian companies can take advantage of this promising scenario.

The current example of Colombia helps to understand costs and benefits of regulating online betting. The regulation of online gambling in that country was born in late 2016. since then, there has been a constant battle from Coljuegos regulator against illegal gambling. illegal gambling contributes neither to state revenue nor to the efforts of companies working in regulated gambling. Latam is a ﬂourishing and potential region for online betting. in fact, many companies and operators both local and foreign (especially from spain) participated in the last edition of the Fadja Colombia show (april 26th 46

Games maGazine

and 27th in Bogota) with the intention of investing in a business with clear middle to long-term benefits. Consequently, regulating online betting is an essential process for fighting illegality, receiving authentic working capital and contributing to the state’s revenue. Different Latin american territories are currently following this path.

TECHnoLoGY THAT MAKES A CHAnGE according to ‘Latam: Fastgrowing online and mobile gaming market’ report by BtoBet, at the end of 2017, Latin america

is expected to generate Us$4.9 billion in total betting revenues, including Us$1.9 billion in the mobile phone segment (it will be Us$3 billion from mobile by 2018). The experience in the world of online betting shows that the impact is even greater in a regulated and safe environment. Currently, in lots of Latin american countries, people usually bet online from their mobile phones into foreign companies’ platforms.

CoLoMBIAn PoSITIVE EXPErIEnCE in Colombia, during Q1 2017, more than 200 sports betting websites

were blocked by the local government and Coljuegos, including the most renowned and prestigious firms in the betting world. Of course, with this new regulation, companies must ask for an online oﬃcial license and pay some taxes to the state. Juan B. Pérez Hidalgo, president of Coljuegos, explained: “Our regulation is not only based on the most advanced legislation in this matter, such as the ones from spain, France or the United Kingdom, but also counts on the collaboration of the best technicians in the field. These elements will guarantee the bets without scams and that the proceeds are destined to the health of the Colombians”. The license can be acquired with a presentation of the technical requirements, but also with the payment of about Us$200,000 for operating rights. it will be used in three modalities: internet betting, enroute machines and sports betting online. “We must take care of all the details. This is a very large operation. Related companies would bring the country between Us$3 and Us$8 million at the beginning of the process”, commented

Juan Andrés Carreño, president of Asojuegos, the Colombian Association of Game Operators that gathers and represents the gaming industry in the country. At recent Fadja trade show, it was revealed that Sirplay, the Maltese software house that provides sportsbook betting solutions, has become the first sports betting software provider to be certified. This company will provide its platform to ColBet, the first operator to request a contract for online gaming operations to Coljuegos.

THE rESt oF LAtAM mArKEtS Argentina has not advanced yet in a legislation for online gambling. Early in 2017, there were different changes in the gaming industry (mostly on gaming taxes), but that

discussion was postponed. Consequently, such activities are illegal within the country. Meanwhile, in Brazil, there is an increasingly concrete goal of privatizing the lottery. The government will divide the group of lotteries into two companies to be auctioned: Lotex (the instant lottery, like the scratch card), that already exists in Brazil, and ‘SportBeting’ (lottery betting, for example, on the team that will win, scores, forecasts made through the Internet). SportBeting has not yet been created in the country, but Brazilians participate in this type of bet using sites from abroad. In 2016, a special commission in Brazil amended a new draft of law for gambling referred to online gambling regulation, described as “electronic bets”, including games offered on

the Internet, mobile and other channels. Mexico is still waiting for the new gaming bill that is delayed in the Senate. Current law dates back from 1947. Even though online gambling is not specifically regulated, local authorities have interpreted that license holders are allowed to take bets via the Internet. That’s why a number of international companies have partnered with local license holders to offer online gambling. In Paraguay, the partnership between the licensed game operator Enfield Group and the platform provider BtoBet generated a great impact. The agreement sees BtoBet become lead supplier of platform and software provisions for Paraguayan betting brand Apostamina. bet. Enfield Group is one of the few regulated gambling

operators for Paraguay’s market. The operator has a land-based and digital presence serviced through its Conajzar regulatory license. Now, Apostamina.bet will be able to offer its clients with technology for a great insight into players’ data and behavior. On the other hand, Bolivia’s Autoridad del Juego (AJ) regulator is considering a project for legalizing iGaming. The AJ is in talks with the national government over the need to create a new gaming law which would allow the gaming board to intervene in clandestine online gaming and take legal action against those found to be operating outside of the law. In this country, there is a number of online gaming companies using legal loopholes in order to take advantage of gaming laws, especially via mobile phones.

Games Magazine 47

> interview

Joji Kokuryo, Senior Compliance and Operations Manager, Aruze Gaming Macau

“Our market position in Macau remains very strong” Based on the success of its product Lucky Sic Bo and the high hopes for the recently launched Dragon Sic Bo, the company is very focused on satisfying its clients’ needs. In that sense, the executive states that new technologies and designs should be combined with fun and entertaining games.

How has your company’s commercial operations evolved in Macau on the last 12 months? Which titles have had the best performance in that market?

Are you noticing any new trends in your customers/players? Are they requesting new types of games, related to more participation of players or skill based games?

Aruze has consistently evolved with the market, particularly in Macau, where we have seen an upturn in terms of gaming revenue. Nonetheless, the market is still as competitive as ever, and considering Aruze has long been focusing on creating fun and entertaining games, we believe our market position and competitiveness remains very strong. With the shift to mass market along with the increase in ETG demands, our Lucky Sic Bo is one of the best performing products in the market, and we have high expectations of success for our recent launch of Dragon Sic Bo.

New technologies and designs are eye-catching, but to be successful, you will need to combine it with fun & entertaining games that can retain and engage players.

Can you use five words that better describe the values and characteristics of your company?

I think the characteristics that define us are fun, entertaining, loyalty, service and quality What’s your analysis on Macau’s positive rebound for the gaming sector? How long do you think this optimistic scenario will continue and why?

The shift to target mass market has long been overdue, heavy reliance on VIP, junkets & high rollers are not sustainable. The gaming revenue growth will continue. However, it may be a steady climb. More entertainment facilities & attractions for non-gaming visitors will be essential and will play a major part in the maturation of the gaming market.

48 Games Magazine

What are the main goals for your company in the rest of 2017?

As always, aim to be number one and create more exciting games for our markets.

Aruze Gaming agrees with IGT Aruze Gaming, a well-recognized company that designs, develops and manufactures slot machines and gaming devices for the global casino market, has recently signed a patent cross-licensing agreement with casino supplier International Game Technology. Under this arrangement, Aruze can offer game products, including patented game features from the IGT portfolio, and will pay licensing fees to IGT. The terms of the agreement have not been disclosed. “This cross-licensing agreement with Aruze Gaming continues IGT’s positive momentum toward investing in the growth of the gaming industry while protecting our intellectual property. We are very pleased that IGT’s patented game features have inspired a significant amount of licensing interest from such a diverse range of gaming companies”, said Michael Prescott, IGT Senior Vice President and General Counsel, North America Gaming & Interactive.

SPECIAL EDITION G2E ASIA 2017 GAMES MAGAZINE

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MACAU OPERATORS: TIME TO HARVEST