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MAY 2012

MAY 2012 APRIL 2012

MAY 2012

Steve Wynn

Greater China 32 Not so sure Chinese elites less certain that the country will surpass the U.S. as top global power any time soon 34 Thirst for copper China increasingly needs copper as it expands urbanization and industrialization

Legal Affairs 38 Fast-track justice Changes on the way for Criminal Procedure Code

Property 46 Developers get real Market appears unfazed as law regulating the sale of unfinished flats nears an end 50 Slightly off centre Ginza Plaza is failing to attract shoppers and retailers 52 Pyrotechnic unspectacular Plans for a theme park at the old Iec Long firecracker factory still on hold

Survey 56 Losing my religion Most residents are not religious, the latest Macau Business Quality of Life Report shows

MAY 2012

CEO Interview 64 Cotai revolution Wynn Macau’s chairman and CEO Steve Wynn talks about his Cotai project

Gaming 72 New galaxies Galaxy invests HK$16 million in phase two of its Cotai development 74 Forward thinking Sands China is already gearing up for its Lot Three project 78 Sorely tempted Crimes involving dealers are on the rise, leaving authorities worried 80 Shopping around Genting Singapore targets Japan and Korea, possibly Australia 82 Is Matsu game? Residents will vote in a referendum on whether to allow casinos on Taiwan’s islands 84 A change of pace NagaWorld in Phnom Penh offers customers a change of pace from the Macau or Singapore casino resorts

Special 89 G2E Asia Get an insight on what’s happening at this year’s event

SEPTEMBER FEBRUARY MARCH MAY 2012 2011

Photo: Carmo Correia

Bede Barry

Hospitality 122 Top end option Grand Lapa has endured changing times, and is proud of its heritage, says general manager

Business 126 The sunny side Tommy Bahama sets up shop in Macau, the first in Asia 128 At a standstill What if you could tour the city on a Segway?

Technology 130 Patently lagging Macau is behind in registering patents compared to the rest of the world

Human Resources 132 No easy way in No special rules when it comes to hiring mainland students who graduate in Macau

MAY 2012

Arts & Culture 136 Fostering creativity The Cultural Centre plans a summer of entertaining workshops 138 New dimension Artworks of French artist David Wolle on display at the Tap Seac Gallery

Opinion 16 From the publisher’s desk Paulo A. Azevedo 19 Editorial Emanuel Graça 30 Opinions unwelcome Bill Kwok-ping Chou 35 Bad-faith bargaining José I. Duarte 44 Who’s to blame? Keith Morrison 125 When mediocrity rules Gustavo Cavaliere 142 The paranoid style in Chinese politics Minxin Pei

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MAY 2012

Just resign THE LACK OF TRANSPARENCY IN THE ACTIONS of the Lands, Public Works and Transport Bureau must end once and for all, even if that means heads have to roll, starting with that of the secretary who oversees the bureau. If truth be told, Lau Si Io seems not to have what it takes to continue holding such a position. It is unacceptable that the Lands, Public Works and Transport Bureau, led by Jaime Carion, continues shying away from its duty to be more accountable to the people. The public works sector is historically a preferred target for unscrupulous businessmen. It is no coincidence that the biggest corruption scandal unmasked in Macau – one of the few actually investigated by the authorities, and then only thanks to external interference – had as its main figure the secretary who oversaw public works, Ao Man Long. High-ranking officials such as Mr Carion and the head of the Infrastructure Development Office (who was Mr Carion’s number two at the time of the scandal) should be ashamed to say in court that they were only doing what they were told by Mr Ao when they tampered with the results of several public tenders, even if now they say that actually they did not agree with or doubted his orders – as we heard them say again last month, when the former secretary went on trial in a third corruption case. The fact is that those officials carried out Mr Ao’s instructions without complaining to the proper authorities. That alone should be proof enough that they are not worthy of the positions they occupy. Mr Carion and his subordinates were quick to obey, apparently blindly, the doubtful orders coming from a corrupt superior.

MAY 2012

But when it comes to disclosing information to the public, the leaders of the Lands, Public Works and Transport Bureau act differently.

Seeking answers In the latest example, Macau Business wanted to put a set of questions to Mr Carion. After weeks of ignoring our approaches, his office finally agreed to reply by email to a letter we sent. The reply took several days to arrive, in clear breach of the government’s promise to give timely replies to media requests. This alone shows that in the Lands, Public Works and Transport Bureau, Chief Executive Fernando Chui Sai On’s guidelines have their own special place: the rubbish bin. Since gaming is essential to the economy, Macau Business asked Mr Carion the following: • A few weeks ago, you mentioned the government should this year approve two of the three land grant requests submitted by gaming operators for Cotai. Which operators will have their requests approved within this year? • What are the criteria the government uses to decide the approval scheduling of the mentioned land grant requests? • What are the reasons for the non-approval of one of the requests within this year? • When can we expect the approval of the remaining request to take place? • Has Melco Crown Entertainment Ltd. submitted any request to your bureau on the Macau Studio City project and on the resumption of construction? The reply Macau Business received from the Lands, Public Works and Transport

Bureau is unequivocal proof of the lack of respect the body has for the media in particular and for the public in general. Below is the bureau’s reply, in full. “Regarding the handling of requests submitted by SJM, Wynn Resort Macau and MGM for the concession of land in Cotai, it’s important to underline that the Administration has always shown great attention to the management and use of land, and that the concession of land rigorously follows the content of the Land Law and other relevant legislation. Regarding the timeline to analyse the respective requests, it depends on the content of the land usage plans submitted by the concessionaires, including the distribution of areas destined to hotels, gaming and MICE facilities. Simultaneously, during the analysis process, it’s equally necessary to scrutinise the conformity with the urban requirements as defined in the urban plan, as well as with the respective legislations and legal norms, particularly all legislations currently in force regarding civil construction. It is only when all technical and construction demands have been met that the conditions exist to proceed with the land concession process. Since these procedures have not been totally concluded yet, we are not able, for the time being, to provide any information regarding these cases. However, at an opportune moment, the administration will make all this information public.”

The Lands, Public Works and Transport Bureau’s reply means nothing. It plays around with words, running around in circles and simply dodging the questions. All this was an information masquerade, typical of people that are scared, are not aware or could not care less about the people’s right to know. Ironically enough, a couple of weeks later, Wynn Macau Ltd was granted a land in Cotai. It is time for the government to end this nonsense. It is time for it to remove from their posts those who have not kept pace with the changing times, times that should be an era of unquestionable transparency in public administration. Their removal would help us to leave behind a recent past marred by Mr Ao’s crimes, a past that continues to tarnish Macau’s good name.

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MAY 2012

1919 19

Emanuel Graça Editor-in-Chief

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Strife on the front line THE OPENING OF SANDS COTAI CENTRAL PHASE ONE has signalled the beginning of the end of Cotai Version 1.0. There is plenty of hardware development still to come but it has become impossible to escape the elephant in the room: the lack of enough quality software. While gaming concessionaires have kept their end of the deal and poured billions of dollars into Macau to help develop it as an international leisure and entertainment destination, the government has done little to ensure the operators are provided with enough and capable manpower. Let there be no doubt: the skills of the typical worker in a casino resort are in many cases below the quality of the hardware of their workplaces. The mismatch is only getting worse as the demand for labour increases. Any well-travelled visitor will find service standards in Macau often do not match the expectations created by the glittering resorts. Cutlery is thrown onto dining tables in high-end restaurants. Staff speak little or no English. There are plenty of shops that do not provide good service. How can anyone expect an improvement under the senseless human resources rules imposed by the government? The city’s officials vow to live by the populist slogan “local workers first”. The question is what to do when the availability and quality of labour are no longer enough to meet the needs of the economy. The government seems interested only in watching the unemployment rate fall to new all-time lows. It does not see the increasing mismatch between the skills needed by businesses looking to provide a topclass service and those on offer in the workforce. This is a political decision that means the gaming operators have no choice but to lower their standards when they recruit. As the demand for workers outstrips supply, and with few options when it comes to importing labour, the casino resorts are obliged to hire any interested ID-card holder, even if they are less well qualified.

Soft touch

The quality debate is here to stay. Managers complain that many Macau graduates do not meet even the minimum standards expected from them. The reason why graduates do not perform is well known. Some tertiary education institutions in Macau are not demanding enough on their students. They send young adults into the labour market with a degree but not the related skills. For its part, the government does very little to

While gaming concessionaires have kept their end of the deal and poured billions of dollars into Macau to help develop it as an international leisure destination, the government has done little to ensure the operators are provided with enough and capable manpower

solve the problem. Instead, it backs programmes such as the three-year training subsidy of MOP5,000 (US$625) for every resident. Viewed as a way to remedy the shortage of quality labour in the territory, there are few tangible results from the programme, largely because there is little supervision of the quality of eligible courses. The casino resorts are left with one option only: hire whoever they can and spend considerable amounts of time and money on training, hoping their new employees can deliver minimum service standards. Often that is not the case. Firing staff that do not deliver is an unlikely option because the pool of available workers is almost nonexistent. These immense properties need a base level of human resources just to reach minimum operational levels – no matter the quality of workers. When importing labour is actually an option, the government can drag out the process for months. It is another aspect of the city’s unattractive labour regime for expats that scares away the best-qualified candidates. The overall impact of this governmental non-sense is obvious. The international competitive edge that Macau could enjoy in tourism, with a combination of state-of-the-art hardware and world-class software, is not fulfilled. There are however some signs of change. The government has announced it will permit a 10-percent increase in the size of the labour force this year, the equivalent of 30,000 more workers. The majority are expected to be workers from overseas. Changes to the Human Resources Office and the Labour Affairs Bureau may also bring positive changes. Both have new leaders. As usual, Beijing has been much faster in reading the reality here than Macau’s own officials. Less than two months ago, the head of the Liaison Office, Bai Zhijian, reminded the government to be more open to imported workers. Let us see if Fernando Chui Sai On and his team got the message. MAY 2012

INBOX

YOUR LUCKY NUMBER Macau Business celebrates its eighth anniversary Eight years have passed since the first issue of Macau Business hit the newsstands. From May 2004 to today, the publication has grown to become the city’s leading Englishlanguage news magazine. Today, Macau Business is more than just a monthly publication. We have a strong presence online, with regular news updates at www. macaubusiness.com. We publish a free daily newsletter that reaches the city’s top businesspeople, and we have online communities on Facebook and Twitter. The number eight is traditionally associated with prosperity and good fortune. Here at Macau Business we will continue to provide the best stories and exclusive insights to ensure we help build your good fortune and remain worthy of your discerning readership.

EIGHT YEARS, EIGHT FACTS Things you may not know about us The average edition contains more than 50,000 words. That is roughly twice the number of words in Shakespeare’s “Romeo and Juliet” The Macau Business team has written more than 10,000 pages of in-depth features, interviews and opinion pieces. Each issue boasts an average of 70 articles, ranging from news briefs to special reports August 2008 was the biggest edition of the magazine. It had 200 pages, some of which were devoted to a special on the Beijing Olympics. The smallest issues were the first two editions – each had 50 pages Macau Business has subscribers throughout Asia, America, Europe and Oceania. There are readers in places as diverse as Japan and Norway The Macau Business website is a premier source of fresh information, daily. We publish about 200 news stories each month at www.macaubusiness.com July 2010 saw the magazine launch its free Macau Business Newsletter. We have since written more than 500 newsletters, ensuring our subscribers stay abreast of the latest news Macau Business is a media partner of dozens of business-to-business events around the world. We are the official host publication of G2E Asia, the biggest gaming conference and exhibition in this part of the world The annual Macau Business Charity Golf Tournament and Gala Dinner, our flagship corporate social responsibility event, has raised MOP2.5 million (US$312,500) for charities in Macau and around the Pearl River Delta region

MAY 2012

MORE MONEY FOR SOCIAL SECURITY FUND Government to inject up to MOP14 billion in the fund, says Fernando Chui Sai On

The government will inject MOP4 billion (US$500 million) into the Social Security Fund this year. Chief Executive Fernando Chui Sai On said last month during a Q&A session with legislators at the Legislative Assembly that, in addition to these MOP4 billion, the government could reserve MOP10 billion for the fund between 2013 and 2014. Mr Chui also predicted the economy will grow below 10 percent this year. But he stressed that the government has enough financial reserves to face any troubles. The government will also continue to inject funds into the accounts of residents in the Central Provident Fund scheme. The amounts, however, will depend on “public financial conditions,” Mr Chui added. Also during the two-and-a-half hour session, Mr Chui said Macau lacks theme parks and that these would help diversify the economy.

HO CLAN BETS ON WRONG HORSE Stanley Ho Hung Sun and his daughter Pansy Ho Chiu King both donated HK$100,000 (US$13,000) to the Hong Kong chief executive campaign of Henry Tang Ying-yen. Mr Tang eventually lost the race to Leung Chun-ying. According to media reports, Mr Leung raised a total of HK$14.84 million in campaign donations, more than Mr Tang’s HK$11.29 million.

UFC CLOSER TO MACAU DEBUT Macau could host an event from the Ultimate Fighting Championship this year. Mark Fisher, the UFC’s managing director in Asia, was quoted by Reuters as saying that the diversity of conditions in Asia such as that of social, economic and cultural factors means that the UFC would have to be careful about where to stage events. “We’re in pretty detailed discussions about Macau for this year, though we’re not at a point where we can make a formal announcement,” he said.

AIRPORT GETS BUSIER Two air carriers launched last month new route services to Macau. Vietnam Airlines started by-weekly flights connecting Da Nang to Macau, while Taipeibased Mandarin Airlines began to offer regular flights between the central Taiwan city of Taichung and Macau. According to the Macau International Airport Company Ltd, the airport handled more than 1 million passengers in the first quarter of this year, up by 9.5 percent year-on-year.

MAY 2012

MARCH MAY 2012

PRICE WARNING

The same item can cost 20 percent more at different shops under the same supermarket chain, a survey shows The Consumer Council’s latest ‘Supermarket Price Survey’ shows that the same product can cost up to 20 percent more in supermarkets under the same group. Two branches of San Miu Supermarket, located on Rua dos Mercadores and in Taipa respectively, were found to have different selling prices for over 100 items with prices varying up to 20 percent. Similar cases were observed in branches of Royal Supermarket and ParknShop but the price differentials were smaller, the Consumer Council said in a press release. The Supermarket Price Survey, released last month, also shows that price differences exist for the same product being sold in different areas in Macau.

FOOD SAFETY TO HAVE NEW RULES A new bill on food safety aims to give the Civic and Municipal Affairs Bureau the power to supervise the manufacture of foodstuffs. The law proposal was already sent to the Legislative Assembly for a vote. Under the new regulations, the Civic and Municipal Affairs Bureau will have the power to inspect any food production site apart from inside residents’ homes, and recall any food product deemed unsafe. The bill stipulates that offenders could serve up to five years in jail for severe food safety offences.

MAY 2012

GOV’T TO SPEND MOP4.1 BILLION IN CASH HANDOUT The government will spend around MOP4.1 billion (US$513 million) in this year’s cash handout scheme, which started last month. Permanent residents will each receive MOP7,000, while non-permanent residents will get MOP4,200. In addition, the government will also spend around MOP295 million on this year’s health vouchers. This scheme, however, is only for permanent residents and each will be entitled to vouchers worth MOP500 that can be used either in private clinics or at hospitals.

MAKE THAT DOUBLE The University of Saint Joseph’s new campus will cost between MOP500 million (US$62.5 million) and MOP600 million. The new budget is double the initial estimate. In an interview with English-language newspaper Business Daily, the university’s departing rector Ruben de Freitas Cabral was quoted as saying that the initial budget had to be revised and the completion of the project postponed “due to problems with the contractor, who had difficulties finding qualified people.” Early this month, Peter Stilwell replaced Mr Cabral as the rector of the University of Saint Joseph.

MAY 2012

FAIR TREATMENT FOR INVESTORS, PLEASE The U.S. consul wants fairness and transparency for foreign companies investing in the territory

The U.S. Consul to Hong Kong and Macau, Stephen Young, says the United States want an equitable environment for foreign corporations investing in Macau. In a speech delivered last month at the Chinese University of Hong Kong, Mr Young said that is one of the issues the U.S. is addressing with its counterparts in Macau. “We continue to look to the government of Macau to ensure that all foreign investors, including those from the United States, are treated fairly and in a transparent manner, including in recruiting labour and guaranteeing investor rights,” the U.S. consul said. The Macau government’s plan to diversify the economy could open up opportunities for public-private partnerships, Mr Young said, adding that the expansion of the tourism sector could create “promising opportunities.” America is Macau’s second-largest foreign investor, after Hong Kong, Mr Young says. The number of U.S. citizens in Macau is now estimated at over 4,000.

ZHUHAI RESTRICTS DUAL LICENCE PLATES The Department of Transport of Guangdong Province has put an end to granting dual licence plates with the purchase of a home in Zhuhai by Macau residents. The move, announced last month, is meant to cool down the purchase of residential units in Zhuhai by Macau residents since properties are cheaper there than on this side of the border. Many Zhuhai developers offered Macau residents dual licence plate numbers with the purchase of a residential property in the neighbouring Chinese city. Only private vehicles with dual plates can cross the border between Macau and the mainland and drive on both sides, making commuting for owners much easier.

TAXI LICENCE BIDS HIT MOP1.1 MILLION The highest accepted bid for one of the 200 new taxi licences the government put up for grabs last month was MOP1.1 million (US$137,500). The Transport Bureau received more than 2,100 bids. The new licences will be issued in four batches of 50 between July and November. The government had set the asking price at MOP200,000 for the eight-year licence. The 200 new taxis will increase the existing fleet to just under 1,200.

MAY 2012

THREE NEW FERRY ROUTES FROM PAC ON All the three ferry companies that applied to operate new routes sailing from the Pac On temporary terminal had their requests approved, the head of the Maritime Administration, Susana Wong Soi Man said last month. Shun Tak-China Travel Ship Management was allowed to service ferries between Pac On and Shekou in Shenzhen. Yuet Tung Shipping will operate ferry services between Pac On and Wanzai in Zhuhai, while Far East Hydrofoil will operate a new route between Pac On and Sheung Wan in Hong Kong. In February, the government invited parties interested in operating new routes from Pac On to present their proposals.

MAY 2012

MACAU WAGES RANK LOW

The territory is only placed 52nd when salaries are measured by global purchasing power Macau wages rank 52nd when measured by global purchasing power, a recent UN International Labour Organization (ILO) study shows. The territory had an average monthly wage of $758 as measured by purchasing power parity dollars, according to 2009 figures. That was behind Hong Kong in 30th position with an average wage of $1,545. The world average was $1,480 a month, according to the study, that covered 72 countries.

SINOSKY STILL LOSING MONEY

Natural gas supplier Sinosky Energy (Holdings) Co Ltd posted a loss of MOP43.5 million (US$5.4 million) last year. That brings the company’s accumulated losses to MOP92.5 million since 2006, according to the company’s annual report. The company says the losses are due to the increasing renminbi exchange rate, which has meant that import prices have surpassed the selling prices agreed to in the contract signed with the Macau government. The contract allows the company to import gas from the mainland at RMB2.35 (MOP2.99) a cubic metre, while the selling price is set at MOP2.70. The importer is in talks with the government to revise the contract price and terms, the report says.

MAY 2012

BESOR PROFITS ALMOST DOUBLE

Macau-based bank Banco Espírito Santo do Oriente SA (Besor) posted a net profit of MOP32.89 million (US$4.1 million) for last year. That was up 93 percent in comparison with one year earlier, Portuguese news agency Lusa reported. The strong performance was due to an increase in the corporate banking and trade finance segments, Besor said. Besor is a subsidiary of Portuguese banking group Banco Espírito Santo and has operated in Macau since 1996.

CTM WITH STRONG RESULTS

CTM’s earnings before interest, taxes, depreciation and amortization, or EBITDA, increased by 10 percent year-on-year in 2011. The telecommunications company posted an EBITDA of MOP1.3 billion (US$163 million), according to Portugal Telecom’s 2011 earnings release, which has a 28 percent stake in CTM. CTM’s revenue for last year reached MOP3.98 billion, soaring by 44.2 percent year-on-year. The company’s EBITDA margin stood at 33.0 percent, down from 43.2 percent one year before.

REAL ESTATE PAINS Macau’s banking sector started 2012 with a strong performance. In the first two months of the year, the total operating profits of the sector increased 42.5 percent yearon-year to MOP786.7 million (US$98.3 million), data from the monetary authority shows. The total number of banks in Macau currently stands at 28.

RENMINBI DEPOSITS REACH NEW HIGH

Renminbi deposits in Macau’s banking system rose by 14.6 percent in February from a month earlier to RMB47.97 billion (MOP60.92 billion). This represents a new alltime high, surpassing the RMB44.41 billion recorded in October last year. Of the total renminbi deposits, 29.9 percent belonged to individual customers, according to the monetary authority.

GOVERNMENT SPENDS LESS

Public spending fell 14.1 percent year-on-year in the first three months of 2012, to MOP6.1 billion (US$763 million). That is less than 10 percent of the government’s budgeted spending for the overall year. It means the government only spent 20.6 percent of the revenue it raked in for the same period. According to data released by the Financial Services Bureau, public revenue in the first quarter increased by 21.5 percent yearon-year to MOP29.6 billion. From each MOP100 raked in as public revenue, MOP88 came for direct taxes on gaming.

There is plenty of anecdotal evidence showing housing costs have soared over the past decade, well above the inflation rate, which stood at 34 percent for the 2001-2011 period. The final findings of the 2011 population census, released last month, further stress this

MOP7,173

The average monthly mortgage loan instalment in Macau according to the 2011 census. The median monthly instalment stood at MOP5,390, having almost doubled since 2001, when the last census was conducted

120,000

The number of households living in a residential unit they own. The overall percentage dropped to 70.8 percent from 76.9 percent in 2001

MOP4,169

The average monthly rent in Macau as recorded by the 2011 census. The median rent for the same period reached MOP3,204, three times higher than 10 years earlier

24.5%

The percentage of households living in rented homes, up by 5.5 percentage points since 2001. There were over 41,000 households living in let residential units in 2011

190,000

The total number of residential units in Macau, up by 8 percent in comparison with the 2001 census results. Over half were two-room units SOURCE: STATISTICS AND CENSUS SERVICE

POSITIVE START FOR MACAU BANKS

7.0%

The percentage of empty residential units in Macau. This represents a sharp drop from 2001, when 19.2 percent of the residential units available were empty

MAY 2012

30 BILL KWOK-PING CHOU ASSOCIATE PROFESSOR OF POLITICAL SCIENCE, UNIVERSITY OF MACAU

Opinions unwelcome OFFICIALS OFTEN SAY THEY WANT MORE ENGAGEMENT WITH THE PUBLIC IN POLITICS, BUT REALITY TELLS A DIFFERENT STORY he government constantly says it promotes and welcomes public debate on policymaking and good governance. Officials often stress they are open to different points of view. But this does not actually seem to be the case. My latest experiences reinforce this perception. I wrote to the Legal Affairs Bureau and to the Commission Against Corruption recently to offer my suggestions on political reform and on electoral corruption. The Legal Affairs Bureau did not reply at all. The Commission Against Corruption sent me only a bland and halfhearted response. My letter to the Legal Affairs Bureau concerned a seminar held by the bureau in February. The meeting was meant to boost participation in politics by young people. The topic for debate was constitutional development. The day after the seminar, I wrote to the Legal Affairs Bureau to express my concern about several shortcomings in the event. Although the theme of the meeting was constitutional development, only law academics and no political science academics were invited as speakers. Obviously, this compromised the ability of participants to perceive fully what is at stake. Strangely, the scholars invited by the bureau studied law in the mainland, but no academics with legal education from Portugal or Macau who are familiar with the background here, were featured as speakers. Macau’s legal system has a Portuguese and European foundation, and Portuguese is the main language of the law and the courts. Inviting law scholars ignorant of both the legal system and the language it employs could easily lead to misunderstandings.

Obscure agenda Moreover, I learned from previous reports in the news media that the academics invited do not favour a drastic broadening of direct democracy in Macau. Should not the Legal Affairs Bureau have opted for a more balanced panel, also inviting people with opposing points of view? What is more worrying is that the academics just echoed the line taken by the government on political reform. We could be forgiven for thinking that the meeting was held merely to

“Officials often stress they are open to different points of view. But this does not actually seem to be the case. My latest experiences reinforce this perception” MAY 2012

imbue our young people with a narrow-minded view of politics similar to the view of those in power, instead of to promote an open debate. Macau boasts that it is an international city. In democracies in the East or West, political education means giving young people a multi-dimensional perspective of political events. The goal is to equip younger generations with the tools needed for independent analysis and critical political engagement. This makes it harder for particular interest groups to politically manipulate them. The Legal Affairs Bureau should not have been so parochial in restricting the scope of the seminar. But that does not seem to be the agenda of the government here. Most of those that attended the seminar have Cantonese as their mother tongue, but the invited speakers spoke little or no Cantonese. This, too, could undermine the effectiveness of the meeting simply by making mutual understanding harder.

Plodding gumshoes Roughly one week after the Legal Affairs Bureau seminar, I wrote another letter, this time to the Commission Against Corruption. In it I recalled that during the last elections for the Legislative Assembly, a Hong Kong television crew had caught on camera what appeared to be an instance of electoral fraud. The footage purported to show supporters of a candidate treating voters to a buffet meal and then bussing them to polling stations to vote. When this came to light, I wrote to the Commission Against Corruption asking if it was investigating the matter. It replied that it was. More than two years have passed since then, and my latest letter basically enquired about the results of the investigation. I received the same dull reply: “The case is still under investigation”. This suggests that time has been wasted and no results produced, and that the investigators are trying to hide their incompetence under the cloak of confidentiality. If they had been working in the private sector, they would have been fired a long time ago for poor performance. In my latest letter to the commission, I repeated a question I had put to them two years ago: is it planning to use Hong Kong as point of reference in setting stricter rules against electoral fraud, by prohibiting candidates from giving voters free meals and entertainment in return for their support? Again, my question elicited the same dull, bureaucratic reply as before: “The agency will consider your suggestion and report to the relevant authorities as appropriate.” These two episodes illustrate the government’s selectiveness when it comes to political engagement and how it treats unwelcome opinions and enquiries. Under such circumstances, how can we expect the city to move forward?

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Greater China

Not so sure China leaders less bullish on global rise

espite the confidence of China’s public, the country’s elite is becoming less certain that the country will surpass the United States as the top global power, a major survey shows. A wide-ranging poll of opinion in the two countries showed that most Chinese and Americans hold positive views of the other nation despite the frequent tensions between the world’s two largest economies. But the study, released last month by the Committee of 100, a Chinese American group, revealed sharp gaps between public and elite opinion in both countries – especially on the question of whether China will become the premier power. More than 58 percent of the Chinese public said that their country will overtake the United States as the leading power in the next 20 years, a figure that has inched up since the last time the survey was taken in 2007. But elite opinion went in the opposite direction. While 53 percent of business leaders in 2007 predicted China’s rise to the top, only 37 percent said so this year. Among Chinese opinion leaders, the figure declined from 31 percent to 23 percent over the five years. In another striking finding, nearly 75 percent of Chinese opinion leaders gave a negative assessment of their own government’s handling of the U.S. relationship, up sharply from 37 percent in 2007. Coordinators of the survey said it was difficult to pinpoint exact reasons for the swings in Chinese opinion but pointed to an increasing openness to criticise the government. “I can only speculate that it may show some impatience or some high expectations. The world is getting more complex and there are simply many issues to sort out,” said Jeremy Wu, a statistician at George Washington University and co-chair of the project.

Favourable opinions Most experts forecast that China will become larger than the United States economically in the coming decade, although debate is rife on whether Beijing seeks to emulate Washington’s globespanning political and military role. The project carried out 4,153 interviews in China and 1,400 in the United States in December and January. Harris Interactive carried out the U.S. poll, while Horizon Research Consultancy MAY 2012

33 Group conducted the survey in China. Despite often bumpy ties between the two nations, the survey found that favourable opinion of China has increased in the United States and that views of the United States in China have held steady. But U.S. policymakers badly misread public opinion on China. Only 20 percent of U.S. elites, when asked to describe the general U.S. view, believed that the public held a positive view of China. In reality, 55 percent of the US public said that they saw China favourably. Project co-chair Frank Wu, chancellor and dean of the University of California Hastings College of Law, said that the survey showed that U.S. politicians were miscalculating with advertisements that have raised fears about China. “It suggests that campaign rhetoric that is designed to inflame feelings ... is an effort to turn popular opinion against China, not a reflection of popular opinion. Popular opinion is actually much more positive to China than opinion leaders realise,” he said.

In China, public and opinion leaders listed Taiwan as a top concern in U.S. relations. In the United States, few listed Taiwan as a concern in relations. Instead, Americans cited economic issues

In China, 59 percent of the general public had a positive impression of the United States. The figure soared to above 90 percent among elites in China, with many saying that visits to the United States made their opinions more favourable. But the survey also showed a gap on issues of concern to the two nations. In China, public and opinion leaders listed Taiwan as a top concern in U.S. relations. The United States is committed to providing for the defence of the self-governing democracy, which China claims as part of its territory. In the United States, few listed Taiwan as a concern in relations. Instead, Americans cited economic issues, including the perception of job losses to China, and unease over Beijing’s human rights record. A growing portion of Americans expected China to rise, although around half of the public and a strong majority of policymakers believed that the United States would remain the top power in the AFP NEWS AGENCY next 20 years.

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43 incorporate the largest hotel in Macau, Sheraton Macao Hotel, Cotai Central, with almost 4,000 guestrooms and suites. A pedestrian flyover connecting Sands Cotai Central to its two sister properties across the street will open in the first quarter of next year. Shoppes Cotai – consisting of The Grand Canal Shoppes at The Venetian Macao, The Shoppes at Four Seasons at The Plaza Macao and Shoppes Cotai Central at Sands Cotai Central – will be the largest duty-free luxury shopping experience in the territory, with over 600 retailers to choose from when all phases are complete. And with an entire floor at Shoppes Cotai Central dedicated to familyoriented retail outlets, every type of customer will be covered – from luxury-seekers, to savvy shoppers and those just looking for a nice day out with friends and family. Visitors and guests have everything they could want available on the Cotai Strip, all at their fingertips: the best in retail, dining, entertainment, accommodation, gaming and conventions.

Rice Empire

Heaven for food lovers D

Cotai Strip

iversity is on the menu at Sands Cotai Central as it oﬀers an array of dining experiences, with over 20 dining options to choose from. The restaurants and lounges throughout Sands Cotai Central allow guests to go on exciting culinary journeys: an all-day international buﬀet, an international food court (coming soon) and a variety of quality restaurants featuring some of the most popular cuisines in the world, including Mediterranean, northern and southern Chinese, Pan-Asian, Macanese and Indian. One of the highlights is Dynasty 8, the home of classic authentic high-end Chinese cuisine, deriving its inspiration from 2,000 years of culinary wisdom. The visually engaging restaurant evokes a feeling of old world China charm, featuring eight private dining rooms. Each portrays the rich history and decor of one of eight Chinese dynasties, with traditional architectural detailing, carved-wood flourishes and glimmering lanterns. In contrast, Xin is a modern seafood hot pot restaurant with Asian influences and a healthy culinary respect for authentic flavours. It specializes in a number of signatures – Asian hot pot or steamboat styles, live seafood, Asian barbeque and Asian dumplings. Dynasty 8 and Xin are just the tip of the iceberg. From the authentic Macanese cuisine of Tastes, to the surprising rice dishes of Rice Empire, dining at Sands Cotai Central equals enjoying the very best and most diverse selection of food and fine dining yet to be seen in Macau.

MAY 2012

44 KEITH MORRISON AUTHOR AND EDUCATIONIST - kmorrison.iium@gmail.com

Who’s to blame?

DON’T SIMPLISTICALLY FAULT THE SYSTEM FOR MACAU’S ILLS, LOOK TO THE HUMANS

here seems to be an emerging pastime of asserting that Macau’s ills are caused by its gaming industry and economic development. However, these assertions are based on unreliable evidence, or no evidence at all. I am no lover of the city’s so-called development, gaming, streams of tourists coming here to lose their money, and the degradation of our social, cultural, demographic and built environment. But, in an era of evidence-based judgments, we need to be sure that we have robust evidence before we point the finger of blame. This year, two highly questionable claims have been made about economic development and gaming in Macau. In January, Judiciary Police director Wong Sio Chak was quoted as saying: “Economic development causes an increase in crimes related to gaming.” In March the influential General Union of Neighbourhood Associations of Macau was reported to be blaming the gaming industry for a steep rise in the divorce rate. These statements may or may not be true. We simply do not know, as the evidence cited is unreliable. The problem is one of causality. In both cases we have a cause supposedly bringing about an effect. But in both claims the causal links between cause A and effect B are entirely unsafe. That is because the causal chain of events or factors linking the cause and its supposed effect are simply missing. Four cardinal errors have been committed. One is the failure to explore alternative explanations for rising rates of crime and divorce, and to address the myriad of possible factors that could be causing them. The second is the assumption that a correlation is the same as a cause. The third is the assumption that factors as general as economic development and gaming cause rising rates of crime and divorce, with no mention of personal responsibility for actions. Fourth, the direction of causality is misplaced. Let me address these.

Missing links Rising incidences of crime have many causes and none may concern economic development. Similarly, the increasing divorce rate may be totally unconnected with the gaming industry. There is a multitude of explanations for the rising rates of crime and divorce. Researchers, public associations and officials alike must rule out, or control for, other factors so that they can say, with evidence to back them, that it is economic development and gaming that are the causes of rising rates of crime and divorce respectively, and not other factors. Where is such evidence? Second, we can calculate associations between economic development and rising crime, or more gaming and increasing divorce rates. These are correlations but neither satisfies the evidentiary warrants for causality. MAY 2012

Put simply, they do not show that cause A is responsible for effect B. I have written elsewhere that rising crime is statistically more strongly correlated with the weather, demographic change and the number of marriages than with economic development. Correlations can be calculated between any factors: between the rising crime rate and the increase in the number of cars, new babies, marriages, crimes, dogs, tourists, branded goods shops, handbags, meals eaten or even ferry passengers. Correlations can also be calculated between the rising divorce rate and gross domestic product, inflation, increases in apartment prices – almost anything at all. In March we even had a press statement from a football club mentioning the disparity between Macau’s 199th ranking in the world by FIFA and its GDP. Such correlations do not tell us anything about connection. Where is the evidence that gaming actually causes, rather than happens to correlate with, divorce? There may be a causal link, but we simply do not know.

For poorer, for richer To say that general factors such as economic development or gaming cause a particular outcome – rising crime or more divorces – is ill-judged. People – not economic development – commit crimes. People cause divorces, not gaming. Individuals are not the context in which economic development or gaming do their work. Rather, it is the other way around: economic development and gaming are the context in which the individuals do their work. And contexts are not the same as causes. We should not simply blame the system. People must take responsibility for their actions, be they crimes or divorces. Maybe this is the lesson: breakneck economic development and more gaming may weaken people’s sense of personal responsibility. Finally, the examples here show a supposed causal direction from cause A to effect B. However, it could be argued that B causes A. A rising divorce rate may cause a rise in gaming. Rising crime may increase economic development as it brings about more regulatory controls and policing. As any novice researcher will tell you, establishing a causal link is elusive. Simply to say that two factors which happen to fluctuate in a patterned way actually cause each other, or are even connected, is dangerous. Those that make such assertions must provide evidence that cannot be reasonably doubted. In both cases I’ve addressed here, that was not done. Making simplistic statements such as saying economic development is responsible for rising crime or that more gaming means more divorces may grab the attention of the media, but only by connecting two possibly entirely unrelated factors. Let us stop this nonsense of making outrageous claims on the basis of little or no evidence. We should attribute blame only if it is shown to be deserved.

NOW ON SALE To subscribe, call (853) 28331258 or email sub@macaubusinessdaily.com www.macaubusinessdaily.com MAY 2012

Property

Developers get real A long-awaited law regulating the sale of unfinished flats is in the final stages of preparation but the market appears unfazed BY ALEXANDRA LAGES

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MAY 2012

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47 eal estate insiders appear cool, but they are hardly in an uproar over new rules for developers currently before the Legislative Assembly. On the contrary, they believe the proposed changes regarding the pre-sale of unfinished flats will lead to greater transparency and safeguard buyers. A draft law sent to the Legislative Assembly last month — concluding a process that was first floated in September 2010 — states that developers must seek authorisation from the Lands, Public Works and Transport Bureau before selling flats or buildings still under construction. The government’s authorisation depends on developers meeting a few preconditions: the project must have a construction licence; work on the foundation, basements and ground floor must be complete; and horizontal property must be registered. These preconditions are designed to ensure that buyers face fewer risks of the project not being completed. The government expects the new rules to be in-place by the end of the year but that depends on how fast legislators can vote on them. Meanwhile, government guidelines on the matter were already issued almost one year ago. Midland Realty (Macau) Ltd chief executive Ronald Cheung estimates transaction volumes may drop by 10 percent after the new rules come into force. Nevertheless, it will be only a short-term effect. “In the long run, buyers will welcome the rules. They are clearer and minimise the risks for buyers,” he says.

Time to adapt Jones Lang LaSalle’s head of residential property in Macau, Jeff Wong, does not expect big disruptions. “It will cause a delay in supply,” he says. “But it will not be a big change. Maybe, in the short term, some developers will need to delay the launch of their projects.” Mr Wong estimates a medium-sized project takes around three years to be completed. Compliance with the preconditions the bill seeks before pre-sales start might take up to 18 months. “In one or two years, all projects will get used to

the new procedures,” he says. A major objective of the bill is to protect buyers. “It’s the right direction,” Mr Wong says. “Macau is becoming an international city, more international buyers are coming in and the market needs these rules.” Real estate expert Rose Lai Neng, associate professor of finance at the University of Macau, agrees. “The new rules will only make the market better, more transparent and less fraudulent, although there is still plenty of room to improve.” Under the proposed changes, any transaction contract on unfinished property must be recorded in a mandatory database within 30 days. Based on past form, there is chance that registration could take years. There are cases of people who have already moved into apartments or sold them again without the property registration process being finished. Nova City Owners’ Association expressed their concern on the same issue two years ago. They were complaining about not having received property registration, although the pre-sales had taken place four years earlier. In the first quarter of this year, the Consumer Council received only one complaint regarding the pre-sale of unfinished flats. There were 13 cases last year. In 2010, it received two enquiries involving residential units that turned out to be different from what was described in the pre-sales brochure. This is also another issue the new bill aims to address. It states that the pre-sales contract must include several details about the unit, including area and construction materials used.

A gesture Mr Cheung does not find the proposed provisions as stringent as Hong Kong’s current rules. “It’s just a gesture by the government to tell people that officials are working hard to regulate the market,” he says. “It’s not tough enough but it is a good move.” If a developer starts selling unfinished units without authorisation, sales will be deemed void and the company

MAY 2012

Property

The Macau bill says that if a developer uses a real estate agency to market the pre-sale of unfinished units, a contract must be signed between both parties might have to pay a penalty. The fine will be proportional to the value of the property sold. Mr Cheung says the punishment is “minimal”. The Hong Kong government is also pushing for new rules to enhance transparency in the pre-sale of first-hand private residential properties. The bill there says offenders could face a maximum penalty of HK$5 million in fines and imprisonment up to seven years. The Macau bill says that if a developer uses a real estate agency to market the pre-sale of unfinished units, a contract must be signed between both parties. It should mention the unit’s standard price, discounts offered and the realtor’s commission. A copy of this contract must be sent to the Lands, Public Works and Transport Bureau within five days.

Obsolete policies The bill is part of the package of policies announced by the government in September 2010 to curb real estate speculation. Other measures are yet to MAY 2012

be enacted, including the bill regulating real estate agencies and their brokers. It has been under review by legislators for more than a year now. Some measures have been scrapped. The auction of two plots of land earmarked for private residential units never happened. The government said the land would instead be used for public housing. The plan to push ahead with the conversion of run-down industrial buildings into residential units is another idea the government has not pushed hard. A lack of interest has seen the programme extended. During its first year, only eight conversion projects were presented but none have received the final go-ahead. Mr Wong says the programme is a difficult one to implement. The rights to old industrial buildings are usually dispersed among several owners, making it harder to go ahead with a conversion proposal. Among the measures announced in September 2010 that did go ahead, were

tighter restrictions on mortgages for residential property. These restrictions were imposed in December 2010 and further tightened in April last year. A reduction in the property tax, approved by the Legislative Assembly in February last year, and changes in the transfer duty were also introduced. Ms Lai says the government found some of the measures initially announced “too obsolete and in need of change”. The academic says some real estate policies take time to plan. Others, like the construction of more public housing, take time before their impact is felt. “Since the property market is also one of the few active markets in Macau that brings economic growth and growth in wealth to many people, a sudden cool down would actually not be good for society. A slowdown in growth might be preferred,” she says. She acknowledges that the most effective real estate policy introduced was not even included in the 2010 package. The special stamp duty on residential

49 transactions was announced in April last year and first imposed in June. “It is a matter of the right policy launched at the right time for the right situation,” Ms Lai says.

‘No speculators’ The new stamp duty levies 20 percent on the sale of residential property put back on the market within a year of its purchase. The duty is reduced to 10 percent if the resale takes place between one and two years after purchase. Mr Wong agrees the special stamp duty has been the most relevant real estate policy introduced so far. “There are no speculators in the market now, only end users and investors,” he says. Even so, the average transaction price of residential units continues to go up. In March, it reached MOP53,011 (US$6,626), up by 28.7 percent over the previous month, according to data released by the Financial Services Bureau. On a yearly basis, the average transaction price was higher by 9.4 percent. The number of transactions in March reached just 1,265. That is well below the 2,100-plus monthly average

In the near future, two new bills likely to impact the real estate market are those on heritage protection and urban planning

recorded in the first half of last year, before the stamp duty was introduced. In the near future, two new bills likely to impact the real estate market are those on heritage protection and urban planning. The bill on heritage protection has already been submitted by the government to the assembly. It spells out specific rules for construction in buffer zones around the city’s heritage sites. Any new project or building renovation in those areas needs to be approved by the Cultural Affairs Bureau. A draft of the urban planning law is currently under public consultation. Wong Chan Tong, head of the office of the Secretary for Transport and Public Works, said the goal was to have the urban planning bill ready for legislative vote by this year. The draft proposes the creation of an advisory urban planning council, which would have a say on where to locate relevant public facilities, apart from reviewing urban plans. The council could have between 20 and 40 members from various sectors, including architecture, transport and infrastructure.

MAY 2012

Property

Slightly off centre The Ginza Plaza shopping centre has been open for more than a year and a half but many shops there have failed to last that long BY LUCIANA LEITÃO

ocation, location, location – the usual real estate motto seems not to apply to the six-storey Ginza Plaza shopping centre. The centre, just a stone’s throw from touristy Senado Square, is struggling to attract retailers and walk-in shoppers. The Ginza Plaza complex combines housing, shops and a car park in Rua de Pedro Nolasco da Silva. Its position could hardly be better, but after its first year and a half of business, most of the retailing area is empty. Rents are not high by city-centre standards. While a shop in nearby Rua de S. Domingos was let in March for HK$306.18 (US$39.46) per square foot, rents per square foot in Ginza Plaza can be as low as HK$50 on the ground floor, estate agent Savills Macau Ltd says. Ginza Plaza is run by Hong Kong conglomerate Sun Wah Group Ltd, which has real estate projects in the mainland, Hong Kong, Macau, Vietnam and Cambodia. Managing director Lawrence K. S. Cheung believes it is time for a change of strategy. The shopping centre’s opening ceremony took place in August 2010, and around two- thirds of the 12,000 square metres of retailing space had been let at the time. But tenants soon found that they did not have enough customers. Mr Cheung says Sun Wah offered discounts on rents of up to 30 percent but even this failed to stop many shops from either closing down or moving. A vicious cycle began, as fewer shops meant even fewer walk-in shoppers and, in turn, even fewer shops, making Ginza Plaza unattractive to prospective tenants and customers alike. Not all of the retailing floors are managed by Sun Wah. The basement and ground floor are run by Smart Dynasty Ltd, a Hong Kong company. “They also had the same problem, so we all agree rental should not be so high,” Mr Cheung says.

MAY 2012

Ginza Plaza is run by Sun Wah Group. Managing director Lawrence K. S. Cheung believes it is time for a change of strategy

About three-quarters of the shops still in business sell fashions, but “not top-class fashions”, he says, so “business is not good”.

Tarnished reputation Up to two-fifths of the shops that were there at the beginning have folded. The upper floors are nearly deserted.

Ginza Plaza has had no similar problems with its homes and car park. “We had no experience in shopping malls,” Mr Cheung says. He says a greater variety of shops is needed instead of the preponderance of small clothes shops. The aim is to have fashion and toy shops, food and drink outlets, and a supermarket. Sun Wah now usually leases retailing space in lots of 30 to 40 square metres instead of 10 square metres. Discounts on rents will continue for the time being. Ginza Plaza also intends to advertise itself more. If business fails to improve, Sun Wah may convert the retailing space into office space. “For now, the best is to have several floors for the mall,” Mr Cheung says. Jeff Wong of estate agent Jones Lang LaSalle thinks Ginza Plaza should reposition itself, aiming for a clearly identified market. “It is very important for a shopping centre to have a clear positioning and clear target customers, both in terms of tenants and buyers,” Mr Wong says. Ginza Plaza had a good occupancy rate in the beginning but the tenants “didn’t have enough business experience, so the success rate was a bit low,” he says. The ensuing closures of shops gave the centre a bad image. “Customers may feel this shopping centre does not have enough merchandise to choose from or not enough shops to buy [from], so they visit less.” Mr Wong says Ginza Plaza could reposition itself with food and drink outlets and shops such as convenience

If business fails to improve, Sun Wah may convert the retailing space into office space stores that cater to people in the area. “These types of shops have the power to import labour and solve labour issues more than small shops.”

Shining example Jane Liu, executive director of Ricacorp (Macau) Properties Ltd, says it takes time to make a new shopping centre successful in Macau. “People like to go on the street instead of going up the shopping mall, except if it has been there for a lot of time,” Ms Liu says. “You can see some shopping centres in Avenida de Horta e Costa are not so busy as the shops in the street.” She recalls how the Macau Square

STOPS AND STARTS C

onstruction of the Ginza Plaza complex began 20 years ago. Lawrence K. S. Cheung, the managing director of the developer, Sun Wah Group Ltd, says: “After one to two years of construction, only one-third was finished. The buyer failed to pay, so the project was suspended.” A new buyer was found and construction resumed. However, the new buyer decided to convert the 12 floors intended for offices to residential use. “We started to build but we had problems with the Lands, Public Works and Transport Bureau and the licence took a very long time. Only after we got it did we restart building again,” Mr Cheung says. The project underwent more changes. What was supposed to be a private car park became a public one. The new buyer decided to add two more storeys to the building for residential use. Eventually, the only outstanding requirement was government approval for the interior of the shopping mall. Then came the corruption scandal involving the former Secretary for Transport and Public Works, Ao Man Long, and approval was delayed. It finally came only in 2010, and Ginza Plaza was at last allowed to open its doors to the public.

shopping centre, also in the city centre, struggled in its early years. “The first two floors were okay, but the upper floor was much more difficult [to let]. Since the strategy was not working, it was rented to a supermarket.” But Ginza Plaza suffers from additional problems, Ms Liu says. “The ground floor did not open at the same time as the first and upper floors. If the ground floor has no shops, it is difficult to draw people to the upper floors.” Opposite Ginza Plaza is the Sun Star City shopping centre, which was refurbished in 2009. Its tenants are similar to Ginza Plaza’s but it is more successful. “Ginza Plaza is newly built but right now Sun Star City is already a landmark for local people, especially young people,” says Jones Lang LaSalle’s Mr Wong. Sun Star City’s age gives it the edge, he says. “The existing tenants have been doing business there for so many years that they’ve adjusted to the local environment.” Ms Liu remembers how Sun Star City struggled 10 years ago. “It had three or four storeys with no shops, but it put in small shops for young people,” she says. Sun Wah’s Mr Cheung says Sun Star City suffers from the same problems as Ginza Plaza, with shops folding after just six months in business. Macau Business invited Sun Star City’s management to comment, but received no reply. MAY 2012

Property

Pyrotechnic unspectacular The plan to convert the old Iec Long firecracker factory into a theme park is still on hold BY JOÃO FERREIRA DA SILVA

alking through Taipa Village, one cannot help but notice the old Iec Long firecracker factory. Its yellow walls hide the neglect that has transformed a piece of Macau’s history into a battlefield for weekend warriors playing airsoft-simulated battles. The property is in one of Taipa’s prime areas, within walking distance of Cotai. The government says it wants a theme park built on the site to celebrate the city’s heritage of firecracker manufacturing. The development could include a teahouse, two galleries, an amphitheatre and play areas for children, according to reports in the media. But the project has gone nowhere for four years, partly because the land that the Iec Long factory sits on has many owners, including the government. Various legal titles to the land were issued during the Portuguese administration, making it harder for officials to tidy up the mess. A spokesperson for the Lands, Public Works and Transport Bureau says successive attempts by the government to solve this matter have encountered problems, but that it has

now made some progress. The Iec Long factory closed in the 1980s. It is the size of a small village, occupying around 20,000 square meters. Its design evolved according to the needs of industrial firework production. Those needs dictated the meticulous positioning of the buildings to separate the stages of production and so minimise the risk of an explosion, and the availability of access by water to make shipping easier. The first scheme to rejuvenate the factory premises dates back to more than 15 years ago. Architects Mário Duque and Helena Pinto drafted a renovation plan for the premises in the final years of Portuguese administration. Mr Duque says that the idea behind his project was to “equip Taipa with a much-needed green area within which the factory’s buildings would function as a landscape element”. He describes the factory’s renovation as an “opportunity to preserve industrial heritage”.

Up in smoke Mr Duque says his project envisaged some of the decaying buildings, old trees and wild vegetation being left untouched. It also included shops, a library, areas for eating and drinking, a teahouse and galleries. Ideas about reviving the Iec Long factory premises have evolved since then. The latest scheme was first announced in 2008. The government insists that the Iec Long theme park project’s main purpose is to protect Macau’s history and culture. The Lands, Public Works and Transport Bureau’s spokesperson says the bureau wishes to preserve awareness of the tradition of industrial firecracker production here through public campaigns and other activities. The spokesperson says the project

MAY 2012

Photo: Manuel Cardoso

The property is in one of Taipa’s prime areas, within walking distance of Cotai. The government says it wants a theme park built on the site to celebrate the city’s heritage of firecracker manufacturing

is part of a broader strategy to “improve the urban image of Taipa’s old neighbourhoods, better the livelihoods of its residents and promote the development of small-and-medium-sized enterprises in the area”. The spokesperson says the bureau will continue working with the other owners of the land to untie the knot they are entangled in. Making firecrackers used to be one of three main crafts in Macau, the others being making joss sticks and making matches. The craft of making firecrackers arrived in the city late in the 18th century. When the industry was at its peak, Macau was among the biggest exporters

of firecrackers in Asia, supplying countries such as the United States and Australia. The city had several factories and the industry employed thousands. The industry began to fade after World War II, as workers were drawn to better-paid and safer work in textile and toy factories, and as the mainland established itself as a firecracker-manufacturing behemoth. The industry fizzled out in the 1990s with the closure of the Po Sing Firecracker Factory. Today, some old factories still stand as reminders of the old days. Besides the Iec Long factory, one other example of those days is the Kwong Hing Tai workshop by the Inner Harbour. MAY 2012

54 54

Property | Market Watch

Notable residential property rentals - 01/03 to 31/03, 2012

Source: Centaline

Property

Unit

Macau

Lake View Tower

Block 1, L/F, unit O

1,689

28,000

Macau

One Central

Block 7, L/F, unit B

1,272

24,000

18.87

Macau

Lake View Tower

Block 1, M/F, unit D

1,608

23,000

14.30 13.36

District

Floor area (sq. ft)

Rent price (HK$)

Price per sq.ft. (HK$) 16.58

Macau

Lake View Tower

Block 1, M/F, unit D

1,497

20,000

Taipa

Supreme Flower City

Block 1, H/F, unit C (with car park)

2,060

19,000

9.22

Macau

The Residencia Macau

Block 1, H/F, unit C

1,570

18,000

11.46

Taipa

Prince Flower City

Block 3, M/F, unit O (with car park)

1,674

18,000

10.75

Macau

The Residencia Macau

Block 4, M/F, unit A (with car park)

1,693

18,000

10.63

Macau

The Residencia Macau

Block 1, M/F, unit B

1,693

18,000

10.63

Taipa

Supreme Flower City

Block 3, M/F, unit I

2,060

18,000

8.74

Taipa

Nova City

Block 14, L/F, unit F

1,340

13,000

9.70

Taipa

Nova City

Block 8, L/F, unit D

1,050

12,000

11.43

Taipa

Nova City

Block 14, L/F, unit A

1,088

12,000

11.03

Taipa

Flower City

Edf. Lei Wai, H/F, unit P

1,260

12,000

9.52

Macau

The Bayview

Block 2, M/F, unit A

1,582

12,000

7.59

Macau

The Bayview

Block 2, L/F, unit A (with car park)

1,582

12,000

7.59

Macau

La Baie du Noble

Block 5, M/F, unit U

1,675

12,000

7.16

Macau

The Residencia Macau

Block 5, H/F, unit C

1,207

11,500

9.53

Taipa

Edf. Mei Keng Garden

Block 2, M/F, unit H

1,647

11,500

6.98

Taipa

Flower City

Edf. Lei Mau, L/F, unit AA

1,422

11,000

7.94

Macau

La Cite

Block 5, L/F, unit B

1,494

11,000

7.36

Taipa

Ocean Gardens

Apricot Court, L/F, unit P

1,268

10,000

7.89

Macau

Marbela Garden

Block 2, M/F, unit F

1,559

10,000

6.41

Taipa

Edf. Palรกcio do Sucesso

Block 1, L/F, unit C

1,100

9,500

8.64

Taipa

Nova Taipa Garden

Block 30, M/F, unit K

1,177

9,500

8.07

Taipa

Treasure Garden

Block 3, L/F, unit L

1,197

9,500

7.94

Taipa

Ocean Gardens

Cherry Court, L/F, unit K

1,514

9,000

5.94

Macau

The Praia

Block 2, H/F, unit MM

1,099

8,800

8.01

Macau

The Praia

Block 2, H/F, unit H

1,016

8,500

8.37

Macau

The Praia

Block 4, H/F, unit U (with car park)

1,046

8,500

8.13

Macau

The Praia

Block 2, H/F, unit G

1,099

8,300

7.55

Taipa

Chun Fok Village

Wai Tou Kok, L/F, unit E

700

8,000

11.43

Taipa

Nova Taipa Garden

Block 28, L/F, unit E

830

8,000

9.64

Macau

Grandeur Heights

Star Tower, H/F, unit I

1,224

8,000

6.54 4.79

Taipa

Edf. Jardim de Wa Bao

Block 5, M/F, unit AB

1,671

8,000

Taipa

Edf. Kinglight Garden

Block 2, H/F, unit J

987

7,000

7.09

Macau

Edf. Kin Wa

Block 6, L/F, unit A

696

5,500

7.90

Macau

Edf. Weng Lei

L/F, unit C

715

4,000

5.59

Note: L/F - Low floor; M/F - Middle floor; H/F - High floor

Notable commercial property rentals - 01/03 to 31/03, 2012 Type

Unit

Property

Source: Centaline

Floor area (sq. ft)

Rent price (HK$) Price per sq.ft. (HK$)

Shop

Rua de S. Domingos

Shop

7,512

2,300,000

306.18

Shop

Avenida de Almeida Ribeiro

All whole

1,500

155,000

103.33

Shop

Avenida de Horta e Costa

Shop

436

47,000

107.80

Shop

Avenida de Horta e Costa

Shop

371

43,000

115.90

Shop

Avenida de Horta e Costa

Shop

412

42,000

101.94

Shop

Pรกtio de Fernรฃo Mendes Pinto

Shop

500

24,000

48.00

Shop

Avenida do Almirante Lacerda

Shop

928

22,000

23.71

Shop

Avenida de Horta e Costa

Shop

830

21,500

25.90

Shop

Avenida do Almirante Lacerda

Shop

535

11,000

20.56

Note: L/F - Low floor; M/F - Middle floor; H/F - High floor

MAY 2012

55 55 Notable residential property transactions - 01/03 to 31/03, 2012 Unit

Source: Centaline

District

Property

Taipa

One Grantai

Block 4, L/F, unit P

3,041

17,637,800

Macau

Lake View Tower

Block 2, H/F, unit M

3,079

16,000,000

5,196

Macau

Lake View Tower

Block 2, M/F, unit M

3,076

15,600,000

5,066

Taipa

La Scala

Block 2, L/F, unit B

1,928

11,925,000

6,185

Taipa

The Manhattan

Block South, H/F, unit A (with car park)

2,314

11,790,000

5,095

Taipa

The Manhattan

Block South, M/F, unit A (with car park)

2,314

11,692,000

5,052

Taipa

The Manhattan

Block South, L/F, unit A (with car park)

2,314

11,157,000

4,821

Taipa

The Manhattan

Block South, M/F, unit A (with car park)

2,314

11,013,000

4,759

Taipa

The Manhattan

Block South, M/F, unit A (with car park)

2,314

10,906,000

4,713

Taipa

The Manhattan

Block South, M/F, unit A (with car park)

2,314

10,871,000

4,697

Taipa

The Manhattan

Block South, L/F, unit A (with car park)

2,314

10,693,000

4,621

Taipa

The Manhattan

Block South, L/F, unit A (with car park)

2,314

10,693,000

4,621

Macau

One Central

Block 7, H/F, unit F

1,349

10,100,000

7,487

Taipa

The Manhattan

Block South, H/F, unit C (with car park)

2,082

9,850,000

4,731

Taipa

The Manhattan

Block South, H/F, unit B (with car park)

1,681

9,710,000

5,181

Taipa

The Manhattan

Block South, M/F, unit C (with car park)

2,082

9,657,000

4,638

Macau

One Central

Block 1, H/F, unit B

1,374

9,618,000

7,000

Taipa

The Manhattan

Block South, M/F, unit C (with car park)

2,082

9,561,000

4,592

Taipa

Pearl on The Lough

Block 2, L/F, unit E (with car park)

2,055

9,500,000

4,622

Taipa

The Manhattan

Block South, M/F, unit C (with car park)

2,082

9,465,000

4,546 5,531

Floor area (sq. ft)

Sale price (HK$)

Price per sq.ft. (HK$) 5,800

Taipa

The Manhattan

Block South, M/F, unit B (with car park)

1,681

9,298,000

Macau

One Central

Block 7, M/F, unit G

1,178

9,200,000

7,809

Taipa

Nova City

Block 7, M/F, unit D

2,503

9,135,950

3,650

Note: L/F - Low floor; M/F - Middle floor; H/F - High floor

Notable commercial property transactions - 01/03 to 31/03, 2012 Unit

Source: Centaline

Type

Building/Street

Floor area (sq. ft)

Shop

Avenida da Praia Grande

All whole

1,400

85,000,000

60,714

Shop

Rua Sul do Patane

Shop

2,354

46,000,000

19,541

Shop

Av. Governador Jaime Silvério Marques

Shop

1,000

32,000,000

32,000

Shop

Av. Governador Jaime Silvério Marques

Shop

2,100

25,200,000

12,000

Shop

Avenida de Horta e Costa

Shop

630

24,000,000

38,095

Shop

Alameda Dr. Carlos d’Assumpção

Shop

1,680

17,000,000

10,119

Shop

Rua de Coelho do Amaral

Shop

2,200

14,500,000

6,590

Shop

Av. Governador Jaime Silvério Marques

Shop

1,258

14,000,000

11,128

Shop

Av. Governador Jaime Silvério Marques

Shop

1,200

13,440,000

11,200

Shop

Avenida da Longevidade

Shop

1,700

11,000,000

6,470

Shop

Rua Quarto do Bairro da Areia Preta

Shop

1,500

9,000,000

6,000

Shop

Rua de Berlim

Shop

1,199

7,953,000

6,633

Shop

Avenida da Longevidade

Shop

1,150

7,650,000

6,652

Shop

Rua de Paris

Shop

1,123

7,404,000

6,593

Shop

Rua Nova à Guia

Shop

992

7,000,000

7,056

Shop

Rua de Paris

Shop

1,046

6,896,000

6,592

Shop

Avenida da Longevidade

Shop

800

6,800,000

8,500

Shop

Avenida da Longevidade

Shop

810

6,800,000

8,395

Shop

Rua de Martinho Montenegro

Shop

1,024

6,800,000

6,640

Shop

Avenida da Longevidade

Shop

1,140

6,380,000

5,596

Shop

Rua de Berlim

Shop

946

6,268,000

6,625

Shop

Avenida do Conselheiro Borja

Shop

1,042

6,000,000

5,758

Shop

Rua Central da Areia Preta

Shop

500

5,938,000

11,876

Shop

Rua de Berlim

Shop

464

3,079,000

6,635

Sale price (HK$)

Price per sq.ft. (HK$)

Note: L/F - Low floor; M/F - Middle floor; H/F - High floor

MAY 2012

56 Survey

LOSING MY RELIGION THE MACAU BUSINESS QUALITY OF LIFE REPORT FINDS MOST OF MACAU SAYS IT HAS NO DEEP RELIGIOUS FAITH BY SARA FARR

In matters of faith, most Macau residents are not firm believers. The latest Macau Business Quality of Life Report found that just about 42 percent of respondents call themselves either “religious” or “very religious”. The report took a snapshot of people’s religious beliefs, an area lacking in research. A team of researchers from the University of St. Joseph conducted the survey commissioned by Macau Business and sister publication, the Chineselanguage Business Intelligence. More than 1,000 people were surveyed last month for this edition of the Quality of Life Report. The findings show that religion is not a major concern for residents. When asked to rate the importance of a range of factors in their lives, 91 percent said family came first. Friends were next most important. Religion was ranked a distant sixth with a score of 55 percent. “This is a good indication of the centrality of family in Macau culture,” researchers say. Overall, researchers concluded that Macau was an “open and tolerant” society. Most people surveyed did not consider themselves very religious and did not attribute a high importance to the role of either a “God” or religion in life. “Nonetheless, most people believe that God or a higher power exists,” even if with different levels of confidence, the researchers say. The proportion of people who call themselves religious here is higher than in the mainland. A recent study found that only 31.4 percent of the Chinese population considers itself “religious”.

Keep the faith About one quarter of the respondents in the Macau Business Quality of Life Report chose to remain “neutral” when asked to rank how religious they MAY 2012

are, while around 30 percent said they were not religious. “This is an interesting result,” researchers say, given that 56 percent of respondents said they had attended religiously-sponsored schools. “It seems that many people in Macau do not believe that the religion that they learnt at school is relevant to their daily lives.” Catholicism is the most represented religion amongst locals, with 38.7 percent of the respondents saying they most closely identify with it. However, 31.1 percent said they didn’t have any religion – the second most popular answer. The study also found that although more than 40 percent of the respondents say they are religious, well below 10 percent of the overall sample attends religious services at least a few times a week. A mere 0.7 percent said they go to church or a temple every day. When asked how often they prayed or meditated outside religious services, the majority of respondents (39.6 percent) said they only do so on certain occasions. More than one-third admitted they never prayed or meditated outside religious services. Researchers also say their findings show that the “Macau population does not attribute too much importance to the religion of their spouse and partners, children and children’s spouse and partners”. Data shows that only around a tenth of respondents consider “important” or “very important” that their spouse or partner share the same religious views. Or, still, that their children have the same religion as them. The percentage further dropped to 5.6 percent when respondents were asked about how important it was that their children marry someone with the same religion as them. “It is not fully clear whether this is a matter of tolerance or indifference,” researchers say.

Photo: LuĂs Almoster

58 Survey

30.8% 47.6%

37.1% 39.6% 11.9% 7.7% 14.8% 3.0% 19.6% 5.1% 8.2% 20.1%

Photo: LuĂs Almoster

17.2%

Photo: Carmo Correia

Survey 61

HAPPY AT HOME

SATISFACTION WITH LIVING IN MACAU REACHES AN ALL-TIME HIGH, ACCORDING TO THE LATEST QUALITY OF LIFE REPORT BY SARA FARR

Residents have never been more satisfied with living in Macau, according to the Macau Business Quality of Life Report for the second quarter of this year. The National Wellbeing Index for the second quarter is the highest it has been in the 11 surveys done so far since 2007. The 64.4 percent score is well above the 60.2 percent average. The most recent score soared by 3.2 percentage points from the previous quarter. The biggest variation in a category was in satisfaction with the business environment. It was up by 4.2 percentage points. This might be related to the opening of Sands Cotai Central, researchers at the University of St. Joseph say. The university conducts the Quality of Life Report for Macau Business and Business Intelligence each quarter. Data for this edition was collected at the beginning of last month. Although the survey detected a slight fall in

the category measuring satisfaction with the city’s economic situation, researchers say the outlook is still “extremely positive”, particularly when compared with Europe, Japan and the United States. “Other issues that have been impinging on local’s satisfaction with life in Macau, such as pollution and inflation, might probably be de-emphasised in this period of economic uncertainty.” Satisfaction with the government has continued to increase. Scholars say that may be explained by the on-going cash handout scheme, measures to control surging property prices, the recent wage increase for public servants and more subsidies for education. The overall level of satisfaction with the government is however still relatively low. “Despite substantial improvements in the two most recent quarters, satisfaction with the government continues to be well below the aggregate National Wellbeing Index score, and is still the second

TRUST IN QUALITY

he Macau Business Quality of Life Report is a project by De Ficção – Multimedia Projects, the publisher of Macau Business and its sister publication, the Chinese-language Business Intelligence magazine. Extensive objective economic indicators already exist for Macau, so this series of surveys focuses solely on subjective indicators, or how people perceive their living conditions in Macau. Every quarter, the University of St. Joseph surveys a sample of about 1,000 respondents in order to measure their Personal Wellbeing Index and National Wellbeing Index. The Personal Wellbeing Index measures subjective quality of life in seven different categories: standard of living, personal health, life achievement,

personal relationships, personal safety, communityconnectedness and future security. The National Wellbeing Index measures respondents’ satisfaction with the territory’s conditions in six categories: economic situation, state of environment, social conditions, government, business and national security. Every quarter, researchers also look at a special topic, considered to be particularly relevant. Previous topics have included people’s understanding of the housing market, civic participation and satisfaction with the development of the gaming industry. The special topic this quarter focused on people’s values and religion. The Macau Foundation and Wynn Macau Ltd sponsor the Macau Business Quality of Life Report.

MAY 2012

62 Survey Personal Wellbeing Index

National Wellbeing Index 66.0%

66.7%

67.0%

64.4%

63.7%

64.0%

66.0%

61.2%

62.0%

60.2% 60.0%

65.7%

65.5%

65.1% 65.0%

64.4%

59.9% 64.0%

58.0%

63.4%

63.0% 56.0% 62.0%

54.0%

61.0%

52.0%

1Q2007 2Q2007 3Q2007 4Q2007 4Q2008 1Q2009 2Q2009 3Q2009 4Q2011 1Q2012 2Q2012

lowest-scoring domain,” researchers say. The laggard component of the National Wellbeing Index was the state of the environment. It has been the lowest component in the index for the past two surveys.

Slight drop Failing to follow the upward trend of the National Wellbeing Index, the Personal Wellbeing Index dropped in this survey. Researchers found that respondents’ overall level of satisfaction with their own lives was now at 65.1 percent, a drop of 0.6 percentage points over the previous reading. Even so, the level is above the average recorded since 2007, which stands at 64.4 percent. “This value is within the expected values for an Asian society, which normally varies within a normative of 60 to 70 percent,” the researchers say. One interesting phenomenon in this quarter’s survey is that the numerical values of the National Wellbeing Index and the Personal Wellbeing Index are both close. Typically, citywide satisfaction has lagged behind personal satisfaction. Researchers say that this is because general issues are presumably not of immediate concern to individuals. The Personal Wellbeing Index

1Q2007 2Q2007 3Q2007 4Q2007 4Q2008 1Q2009 2Q2009 3Q2009 4Q2011 1Q2012 2Q2012

VARIATION

NATIONAL WELLBEING INDEX

2Q2012

1Q2012

(percentage points)

Territorial security

69.2%

66.1%

3.1

Economic situation

64.5%

64.8%

-0.3

Business

65.4%

61.2%

4.2

Social conditions

64.3%

60.9%

3.4

State of the environment

61.0%

57.6%

3.4

Government

61.9%

58.9%

3.0

OVERALL

64.4%

61.2%

3.2

PERSONAL WELLBEING INDEX

2Q2012

1Q2012

(percentage points)

Personal relationships

67.4%

70.4%

-3.0

Safety

65.7%

67.5%

-1.8

Health

65.6%

66.7%

-1.1

Standard of living

64.0%

63.9%

0.1

Community connectedness

66.0%

65.5%

0.5

Future security

64.3%

65.4%

-1.1

Achievements in life

63.0%

60.6%

2.4

OVERALL

65.1%

65.7%

-0.6

shows that people in Macau are most satisfied with their personal relationships, community connectedness, safety and health. They are least satisfied with their achievements in life, standard of living and future security.

“Overall, it seems that ‘steady as she goes’ characterises the current situation at a personal level, with little notable change in the Personal Wellbeing Index since the previous survey,” researchers say.

Congratulations on the 8th Anniversary of Macau Business

MAY 2012

VARIATION

MAY 2012

EXCLUSIVE CEO INTERVIEW

Photo: David Hartung

MAY 2012

EXCLUSIVE CEO INTERVIEW

After years of waiting, Wynn Macau Ltd was officially granted a piece of land in Cotai earlier this month. The plot is nearly 206,000 square metres, is located behind City of Dreams and will be home to the gaming operator’s first Cotai property. In this exclusive interview — the first since the land grant announcement — company chairman and chief executive Steve Wynn unveils details about the project. Only the fallout with former business partner Kazuo Okada was off-limits, since courts are handling the dispute BY EMANUEL GRAÇA AND PAULO A. AZEVEDO

MAY 2012

EXCLUSIVE CEO INTERVIEW

66 ongratulations on getting the Cotai land after waiting for so long. You must be thrilled.

Steve Wynn - I certainly am. I am glad and grateful that it is finally done. But it wasn’t a question of whether we were going to be allowed to build a hotel on Cotai. From the time we got the permission for the land in 2006 and we put a fence around it, that property was intended for our eventual usage. The government slowed things down [in early 2008] when the market got overheated and the schedule was convenient for them and for us. We were building Encore and the government wanted to see it finished before we started anything else. Frankly, that is the way I wanted to do it anyway, because when I was building Encore here, I was building Encore in Las Vegas. So, I wasn’t anxious about when we would get into Cotai. When the designs got really far along in the last ten months, we were ready to begin working on the soil. There’s a lot of work to be done at Cotai before you can just get into the building. So, I was anxious to get started with the ground but the process was moving along in a direction that was positive and consistent with everything that had been said to us all these years.

There were no surprises. I understand that things don’t always move at the speed that people want, but I never had any indication that they weren’t moving. The building drawings are finished. We can start tomorrow but I want to negotiate the best deal with the builders. I’m going to take the next couple of weeks to pick one of them.

I’m grateful that we got to see the competition because it has gotten better. Galaxy Macau is a good job. Venetian and the Four Seasons are a good job. City of Dreams is a real place. I want to make sure we have the upper hand and that we put up a better job. To be able to see the competition is a terrific advantage because I can take that into account. I’m happy to say we’re well over the line.

How much will it cost?

You will be opening around 2016?

When do you expect to start work?

I’m not ready to give a budget yet. But from the terms I am getting from builders, around US$3.5 billion (MOP28 billion) to US$4 billion. We’re talking about a serious piece of money. Can construction still start before the end of the first half of this year?

I’ll be on the ground and working before June.

TIMING IS EVERYTHING How will you finance the property?

From our own cash, retained earnings and some borrowings. We will build it like we did Encore: out of cash flow and if we need any help, the banks are all there for us. So cash in hand, cash flow and debt. No issuing of new equity?

No, I have no plans of doing that. You are arriving in Cotai almost five years after the first property

SERVICE IS EVERYTHING While many believe customer service in Macau’s casino industry is substandard, the chairman and chief executive of Wynn Macau Ltd thinks otherwise. “The service level in Macau is as good as in Las Vegas,” says Steve Wynn. “The service level gap is closing very fast.” Mr Wynn recalls that the lack of a hospitality culture in Macau was his main point while bidding for a gaming license back in 2001, during the liberalisation process of the casino industry. His proposal to upgrade service quality convinced the government and opened the doors to Macau for him. Ten years on, Mr Wynn says much has changed. SJM Holdings Ltd, the successor of monopoly holder Sociedade de Turismo e Diversões de Macau SA, “is running entirely differently,” he says. “Competition tends to sharpen everybody’s game.” Even with rivals catching up, Mr Wynn still argues customer experience is the main business differentiator in the casino industry. He says that is driven by software, not hardware. “If you can deliver a warm and friendly environment, where people can really take note that they are treated better, you don’t even have to have the best marble or the fanciest chandelier. If you have got the warmth and if you have got the twinkle, you got the business.”

MAY 2012

there opened. Is that a handicap?

Late 2015 or early 2016. Will you only build one hotel in Cotai?

The 50-odd acres of land lends itself to one beautiful hotel. There are pieces of property on the corners that represent opportunities to add more amenities, which may occur in the future. But that property has not been set up for two hotels. It is set up for one hotel. Several analysts say Cotai needs more affordable accommodation. Will you go ahead with the initially planned five-star hotel?

There are only four five-star hotels in China: three in Hong Kong and one here, the Wynn Macau. There is going to be one more when the next Wynn opens. The typical room in that hotel is like at Encore, with around 100 square metres. They are all petite suites. What about the surroundings?

A lake. It will be almost 300 metres long. It is bigger than the one at the Bellagio [in Las Vegas]. And where the future light rail transit system stops, at the front, you will get on a gondola and go all the way down and round the lake. The hotel will have an ‘X’ shape?

Yes. So it’s going to be a unique design for Macau?

Yes. [The X shape] shortens the walking distance. It makes you walk no more than 45 metres to your room, no long hallways. The building takes on a shape to suit the public, with big atrium lobbies. What’s the one thing people don’t have in China? It’s real estate. So, there will be five villas each with a 4.5-me-

EXCLUSIVE CEO INTERVIEW

“The Cotai project is the opportunity of a lifetime. I don’t know that I will ever be able to spend this kind of money in my lifetime again on a resort. This is the greatest opportunity of my career” Race Course

THE FUTURE OF COTAI SANDS Venetian Macao

Galaxy Galaxy Macau Galaxy Grand Waldo

SANDS Four Seasons

Existing property pro

MPEL City of Dreams

Pipeline property pro

Wynn Cotai SANDS Cotai Central

MGM Cotai SJM Cotai 2

SANDS Lot 3 Site 7 SJM Cotai 1 “Pearl”

Lotus Bridge

MPEL Macau Studio City

Site 8

Customs

Cotai

Coloane tre wide pool that goes out 45 metres. These are villas that have a 45-metre backyard that goes out. Luxury of a different kind.

LANDMARK BUILDING Are you overseeing every single detail of the property as always?

I draw them with my own felt pen, hour after hour. This is my 28th month of working every single week on that building. The architecture is what gives the building its emotion. There is so much that goes into the drawing before we go

Source: Union Gaming Research

Caesars Golf Macau - Phase I (Harrah’s)

Macau Golf & Country Club

into interior decorating. By then, Roger Thomas and his design team, which is Wynn Design and Development, take over, giving me choices of carpet, stone and the likes. But the spaces, that’s my job. Will Wynn Cotai be a Macau landmark?

I’m absolutely positive that it will. We would not spend this money if I could not say that. I have to be sure. What about location? It’s not on the main road of Cotai.

We might have the best location. We’re the first light rail stop from the Taipa ferry terminal and the airport. How can it get any better than that? And you can come across from City of Dreams or [the yet-to be approved] MGM – we’re in walking distance. You were not authorised to build a property higher than 120 metres.

No. We knew it was 120 from the beginning. We appealed to the Civil Aviation Authority to see if we could move it and we had to stick with the 120 metres. MAY 2012

EXCLUSIVE CEO INTERVIEW

68 Did that impact your design?

I went to 2,000 [hotel room] keys. I would like to have 2,500 but then again I wouldn’t [make the property larger and] extend the hallways to an inconvenient length. If I had more height I could have more rooms, but I won’t sacrifice customer and user-friendliness. I want to make sure the experience you get at this hotel is deluxe. The Wynn hotel in Cotai is nothing like you have ever seen here or in Nevada. We are setting a new level. What about the retail offering at the property?

We will have around 11,000 square metres of retail, twice as many as at Wynn Macau. We will do a similar thing. We basically surround the casino with retail. We have 4,800 square metres of retail at Wynn Macau. The sales on those 4,800 square metres last year were US$1 billion. It’s the best Louis Vuitton store per square metre in the world, the best Hermes, Bulgari, Christian Dior, Chanel, Cartier, Prada. Can you keep up with those numbers in Cotai?

Good question. We’re doubling. And we’re adding more retail at Wynn Macau to 5,600 square metres because some spots are changing. Our rents were US$130 million last year with 4,800 square metres. It’s unheard of. What will the retailer profile at the new property be like?

We will have the same shops as at Wynn Macau. They all will go with us, plus some new ones. I didn’t have room for a bunch of A-brands who wanted to get in at Wynn Macau – they will come. How many stores will you have?

It will depend on how much space I give each brand. If I was using the 280 square-metre model, I would probably have 40 stores.

ON DINING What about food and beverage offering?

For one of the restaurants, we’ll go for a high-level dining experience as we did with the Golden Flower [at Encore]. But for most of the restaurants, we’re learning today in Nevada, and Macau MAY 2012

is the same, the big deal is the excitement and energy of the venue. People want an entertainment experience more than they demand the finest French or international cuisine. Think of the most popular restaurants in Macau and in Hong Kong. They are not the ones that have Michelin stars, they are the ones that are fun. So the restaurants won’t be as highend as at Wynn Macau?

They will. But I try to make the restaurants fun. I haven’t got a full-on French restaurant like Robuchon at Wynn Macau. I have had those restaurants in the past and I don’t have it at Wynn Macau on purpose. I don’t think it is necessary. I am more interested in what is going on in the restaurant — fountains, shows and entertainment attractions — and making sure that my food is AA-quality. I’m more inte rested in the entertainment and food quality combination, than I am in drop-dead, Michelin cuisine. Will there be any changes t Wynn Macau’s senior staff now that you are gearing up for the new property?

We will try to grow from within, as we have done in the past. It’s clear that one person can’t run both places in the last 18 months ahead of the Cotai opening. The pressure of human resources engineering, the coordination of the end game of construction and all that is so intense on a US$4-billion hotel that you need complete focus. There is an argument you can make that for the first year of construction, with the foundations, drying out the land, pilings and all that, there is not that much to do over at Cotai. However, we have to start deciding who is going where. Do we have enough people now? The answer is no. We will have to add to our family. We have been interviewing new people and thinking about transferring people from Las Vegas. In the top positions, if there are new people coming, I would like to have them here just to double up for some months [with the Wynn Macau executives] so that everybody gets in the same culture. We have time, though. It’s a

36-month job at best before we open. And I think we probably have six months to sort this out. Are you dropping anyone from the current top management team?

I have no plans to do that.

PUTTING ON A SHOW The new property will also include a convention centre, according to the land grant contract published in the Official Gazette.

It will be 9,300 square metres, and have high-end ballrooms and a 1,750seat theatre. We won’t have an exhibit building like Venetian. Will the theatre have a resident show?

I haven’t decided yet. We’re working on a new show in Las Vegas. It’s a kind of thing that could be in both places. The theatre is built to take in a resident show. I can set it up to take a production show if I want. I consult with a friend of mine, Guy Laliberte, who owns Cirque du Soleil, and his people help me. I might take one of his touring shows. I don’t know if a sustaining production show would have a long life in Macau. There is no evidence that this is the answer here yet. That doesn’t mean it might not be a good thing for a month or two. I want to have stars as well, so I will build the theatre for concerts as well as for a sustaining show. Some of the most successful attractions at the Wynn Macau property are public entertainment like the “Tree of Prosperity”. They have low running costs and are quite effective. Will Wynn Cotai have them too?

We definitely will have that in several positions in the hotel. And the fountains in the front will be the biggest of all. They will cost up to US$90 million. Imagine the Bellagio, only newer fountains, more advanced, more exotic shapes and a much bigger scale. It will be the photo-op of China. What about the nightclub that is also planned?

We’re talking about sensory

Photo: David Hartung

EXCLUSIVE CEO INTERVIEW

70 overload. The entire club is a special effects platform, with 1,100 square metres. We are going to build it in America first. It’s called Climax. Then we are going to build one here. Finally, the casino. How many tables and slot machines do you expect to have?

Same as Wynn Macau: 500 tables and about 1,000 slots. That is enough. Are you worried about the 3-percent growth per year table cap that will be in place starting next year?

No. Do you have government assurance

that you will have the number of tables you want for Cotai?

I don’t have any assurance. I have a confidence level. The government has been steadfast and intelligent in regulating expansion and apportioning assets, whether it was real estate or tables. I know that the right size casino is 500 tables. We would never be allowed to build a casino if the government wasn’t going to let us have the tables. What will be the mass-market and VIP relationship?

At Wynn Macau, we are about 60:40 between VIP and mass. There it will be around 50:50. We will have 12 junket rooms in the new property, plus

INTO THE TIEN CHIAO DEAL art of the process that got Wynn Macau Ltd into Cotai had previously been unclear. It relates to the details of a one-time, US$50-million (MOP400 million) payment the company needed to make to Macau-incorporated Tien Chiao Entertainment and Investment Company Ltd for it to relinquish its rights to any development on the Cotai land. Wynn Macau’s chairman and chief executive, Steve Wynn, says this was the technique open to the gaming operator to enter Cotai. Tien Chiao was incorporated in 2005 with the goal of investing in entertainment and tourism, according to its registry documentation. It has two shareholders: Hong Kong ID-holder Ho Hoi, who is the controlling shareholder, and Zhang Luchuan from Beijing. There is very little other information available on the company. “I came to Cotai late,” Mr Wynn says. “In early 2006, I started asking, as a concessionaire, for consideration to acquire land in Cotai for future use”. At the same time, Wynn staff also began looking for sites that had been committed but were not yet developed. It was then the company came into contact with Tien Chiao’s lot. The land had already been “committed [by the government] to some people from Beijing, for a Taiwan House,” Mr Wynn says. He said the project had been given a commitment for 10.9 hectares and would foster relationships between both sides of the Taiwan Strait. Although the commitment between Tien Chiao and the government was never official, Mr Wynn says that was how things worked in Macau back then. “Nothing was on paper for anybody,” he says, recalling Sands China Ltd only received the official land grant for Venetian Macao a few months ahead of opening. “The government suggested that I get involved with negotiating with the Taiwan House people,” Mr Wynn says. Eventually, a deal was reached. Wynn was to pay Tien Chiao US$35 million and give the company a 12-percent stake in its Cotai property. Tien Chiao would keep 2 hectares to build the Taiwan House. “As time went by, they [Tien Chiao officials] were more and more anxious about when I’d get started in Cotai,” Mr Wynn says. The gaming operator’s decision to focus on building Encore first only added to that. Mr Wynn says that gave him an opportunity to buy out Tien Chiao by paying them US$50 million. Later, Wynn was able to get a commitment from the government to expand the lot to 21 hectares. Mr Wynn dismisses rumours about connections between Tien Chiao and any government officials. “We vetted the people in the group. We did investigations. We had them sign papers that nobody was involved with any governments.” Mr Wynn says the United States Securities and Futures Commission probed the deal under the U.S. Foreign Corrupt Practices Act, which prohibits American companies from bribing foreign officials.

MAY 2012

Wynn Club, which is our own VIP programme.

PHASED OUT Will you open Wynn Cotai all at once?

Absolutely. We don’t do phases. In my kind of business, everything has to do with first impressions. You start right, you finish right. Are you worried about having enough construction workers?

You are right to worry about it. There is so much going on, between public works and the competition. That’s why I am taking an extra couple of weeks working on who the contractor is and getting commitments about who is assigned to the job and who is going to be the supervisor. Do you have plans to build a third Wynn property in Macau?

I hope so. But it will come in due course. Do you think some analysts were unfair in labelling Wynn Macau’s MOP1.1-billion pledge to the University of Macau as an attempt to gain government goodwill to speed up the Cotai land grant?

I don’t think anyone connects our land concession to the donation to the university. We have had the land for six years already. We built a warehouse there four years ago. I made the decision about the university when I saw a picture of [former chief executive] Edmund Ho Hau Wah, [chief executive] Fernando Chui Sai On and [Chinese President] Hu Jintao and I found that land from Guangdong province had been given to the university. I said: ‘This is a big priority for this community, education is a thing we are into, so here is our moment.’ I would do it again in two seconds. Would Wynn Macau be interested in developing a non-gaming resort at Hengqin Island?

I haven’t given it any thought. I’ve been so busy with our own stuff. The Cotai project is the opportunity of a lifetime. I don’t know that I will ever be able to spend this kind of money in my lifetime again on a resort. This is the greatest opportunity of my career.

ISSUE 7 ON SALE

APRIL MAY 2012

Gaming

Photo: Manuel Cardoso

New galaxies Galaxy Entertainment Group Ltd plans to invest HK$16 billion in the second phase of its Cotai project BY SARA FARR

ile driving operators are already working on the deep foundations for phase two of Galaxy Macau in Cotai, which will virtually double the size of the property to 1 million square metres. Galaxy Entertainment Group Ltd announced late last month that it would invest HK$16 billion (US$2.1 billion) in the project’s second phase, with a scheduled completion for mid-2015. Company executives expect it to be “significantly accretive” to the group’s earnings. “We have decided to accelerate the rollout of phase two based on the suc-

MAY 2012

cess of phase one,” said Lui Che Woo, the chairman of Galaxy Entertainment Group. Phase one cost HK$16.5 billion and opened in May last year. The project helped the gaming operator more than triple its profits for 2011. The property’s second phase will be funded, according to Galaxy’s president and chief operating officer Michael Mecca, through a combination of existing cash, cash from operations and debt. “We do not intend to issue equity,” he told a media conference in Hong Kong. According to Mr Mecca, Galaxy

Entertainment Group has HK$7.7 billion cash in hand. The new tower included in phase two of Galaxy Macau, along with the existing two, will only use around 50 percent of the total land area Galaxy Entertainment Group owns in Cotai. “That leaves plenty of room for further development,” Mr Mecca said. Phase two will have the capacity for up to 500 gaming tables and 1,000 slot machines. Galaxy Macau currently has around 450 tables and 1,500 slots. In addition to enlarging the gaming space, the retail boulevard will be

73 expanded to more than 100,000 square metres to accommodate around 200 luxury stores, an increase of 160 shops. Food and beverage outlets will double to more than 100.

Hotel partners Galaxy’s executives hope the property’s second phase will benefit from increased visits to Macau as major infrastructure developments in the mainland improve accessibility. That includes the expansion of the border checkpoints in Macau and Zhuhai and the construction of the Hong Kong-Zhuhai-Macau Bridge, among others. “These developments will serve as a catalyst for future growth and diversification of Macau’s tourism and leisure market,” Mr Lui said. To complement phase one, phase two will offer a 250 all-suite hotel by Ritz-Carlton and what is set to be the world’s largest JW Marriott hotel with about 1,100 rooms. Marriott International Inc owns both brands and these will be its two first properties in Macau, operated under a long-term management agreement inked with Galaxy. Together with the three hotels from phase one, Galaxy Macau will offer 3,600 rooms, suites and villas after phase two is completed. “The Asia-Pacific region and China, in particular, are Marriott’s fastest growing markets,” said Paul Foskey, the group’s Asia-Pacific executive vice president of hotel development. “We wanted to make sure that we were partnering with the best location in the market,” he added.

Phase two of Galaxy Macau will have the capacity for up to 500 gaming tables and 1,000 slot machines

On track Grant Govertsen from research and equity firm Union Gaming says this is a “very exciting” time for Galaxy Entertainment Group and its investors. The gaming concessionaire is moving forward for a second development in Cotai as other casino operators, namely SJM Holdings Ltd and MGM China Holdings Ltd, are still waiting to get in. Union Gaming analysts estimate Galaxy Macau phase two is worth HK$6-plus on share value for Galaxy Entertainment Group. Just a few days ahead of announcing phase two, the gaming operator had already surpassed Wynn Resorts Ltd in terms of market value, with its shares soaring over 4,300 percent in less than four years. Galaxy Entertainment

Group, which has a market capitalisation of US$12 billion, surpassed SJM Holdings Ltd by late March, according to data from Bloomberg. Mr Govertsen says he does not think announcing a floor capacity of up to 500 gaming tables and 1,000 slot machines for Galaxy Macau phase two is “optimistic”. Once the property does open in mid2015, the new cap on the number of live gaming tables will already be in place.

It allows for an average growth of 3 percent per year in the number of tables, meaning up to 510 new tables between 2013 and 2015. Union Gaming analysts also believe the table cap is somewhat flexible and subject to possible waivers based on prevailing supply and demand trends. “So there will be several gaming tables available. Galaxy might well be the first in line to claim those tables,” Mr Govertsen says. MAY 2012

Gaming

Photos: Manuel Cardoso

Forward thinking The dust has not yet settled on Cotai Central but Sands China is already working on Lot Three he first phase at Sands Cotai Central opened last month and construction workers are still on the site, but Sands China Ltd is already gearing up for its next project in

Cotai. Piling works at Lot Three could be in by the end of the year, chairman Sheldon Adelson said last month at the Cotai Central opening. It might then take up to 30 months until the property is complete. Sands China was granted the rights to develop Lot Three years ago. The project, next to the Four Seasons hotel, is likely to have 3,600 hotel rooms and gaming areas in a casino resort environment. The completed property will be connected to Sands’ other Cotai properties, building the company’s concept of creating “the world’s first integrated resort city”. Sands Cotai Central itself welcomed more than 84,000 visitors in the first six hours of operation, with queues snaking over more than 400 metres, the company says. Union Gaming Research Macau says that with the opening of Sands Cotai Central, “Sands China Ltd assets represent the perfect mousetrap to capture an outsized share of the Macau revenue pie going forward, particularly with respect to highMAY 2012

margin, high-visibility, mass-market, gross gaming revenue.” Deutsche Bank analysts Carlo Santarelli and Kelly Knybel said in a note to investors last month they expect the company’s market share to increase from last year’s 15.6-percent share to 19.4 percent this year, on an underlying market growth of 21.2 percent. Sands China has already invested about US$4.4 billion (MOP35.2 billion) into Cotai Central. When a fourth tower is

Piling works at Lot Three could be in by the end of the year, chairman Sheldon Adelson says. It might then take up to 30 months until the property is complete

HIGHER PROFITS, DOUBLE DIVIDEND S

ands China Ltd offered good news to shareholders last month. The company announced its first quarter profit had risen and that it would offer a second HK$0.58 a share dividend. The gaming operator reported a net income of US$277.4 million (MOP2.2 billion) for the first three months of this year. That was up 5.8 percent year-on-year. The gaming operator reported a 20.5-percent increase in earnings before interest, taxes, depreciation and amortisation, or EBITDA, to US$450.6 million. Separately, Sands China’s board of directors recommended the payment of a final dividend of HK$0.58 a share for last year. The decision is subject to shareholder approval at the June 1 annual general meeting. This is Sands China’s second dividend ever, after announcing an interim dividend of also HK$0.58 a share in January.

complete, the total bill should reach US$5 billion. Visitors to Sands Cotai Central expecting to see a replica of the Playboy Mansion, as previously announced, will be disappointed. It was announced last month that the gaming operator and Playboy Enterprises Inc. terminated the licensing agreement at the end of March. The move means Playboy will leave Macau for the time being. There will be no more bunnies or a Playboy Club. “The decision was based on both parties’ mutual decision to explore new opportunities to reach Macau’s visitors,” a Sands China spokesperson said. When the first Playboy Club opened in November 2010 at Sands Macao, Playboy and Sands China were hoping to open a much bigger 2,800-square-metre venue at Sands Cotai Central. The bunnies moved to the Venetian Macao last year, leaving the space to create a VIP gaming area at Sands Macao. Playboy even had plans to open in Cotai before it joined forces with Sands China. The company had an agreement with the developers of Macao Studio City to open a club there but backed out in 2009 when the project was at a standstill, as the joint developers fought a series of court battles in Hong Kong over the project’s control and direction.

we live inside ideas.

+853 2833 1258 info@goldfishmacau.com www.goldfishmacau.com

MAY 2012

Gaming

Gross revenue from different gaming activities 1Q 2012

4Q 2011

3Q 2011

2Q 2011

74,596 74,314 52,678 15,131 3,306 1,354 697 346 147 91 74 65 71 55 6 27 30 8 n/a 51 0.3 139 88 54 102 36 2 0.0002

73,802 73,517 53,267 13,943 3,042 1,302 750 363 255 72 71 57 71 48 8 27 54 8 n/a 27 0.4 114 104 58 103 19 2 0.0012

70,521 70,224 51,750 12,656 2,832 1,268 657 344 189 70 67 55 58 48 11 28 36 10 n/a 17 0.3 89 113 82 84 17 2 0.0007

65,900 65,605 48,539 11,512 2,828 1,137 643 300 152 75 71 53 52 48 14 29 36 8 1.6 16 0.4 56 107 81 87 18 2 0.0012

1Q 2011

4Q 2010

3Q 2010

2Q 2010

1Q 2010

55,398 55,106 40,472 9,698 2,407 947 627 265 222 57 64 43 38 38 21 24 88 7 1 9 0.4 46 98 72 92 29 2 0.0005

47,723 47,384 34,047 8,884 2,236 884 528 255 154 52 52 52 38 33 20 23 34 8 1 10 0.4 44 107 85 134 11 1 0.0006

45,219 44,902 32,368 8,310 2,028 856 541 266 161 55 52 43 41 30 24 20 22 9 0.2 8 0.4 41 110 91 102 12 1 0.001

41,248 40,951 28,761 8,024 1,948 869 594 273 135 55 48 45 39 29 28 19 19 8 2 7 0.5 22 124 91 52 27 2 0.0002

16.1% 16.3% 18.9% 9.2% 7.6% 7.1% 18.8% 3.9% 44.2% 9.6% 23.1% -17.3% 0.0% 15.2% 5.0% 4.3% 158.8% -12.5% 0.0% -10.0% 0.0 4.5% - 8.4% -15.3% - 31.3% 163.6% 100.0% -16.7%

5.5% 5.5% 5.2% 6.9% 10.3% 3.3% -2.4% -4.1% -4.3% -5.5% 0.0% 20.9% -7.3% 10.0% -16.7% 15.0% 54.5% -11.1% 400.0% 25.0% 0.0% 7.3% -2.7% -6.6% 31.4% -8.3% 0.0% - 40.0%

9.6% 9.6% 12.5% 3.6% 4.1% -1.5% -8.9% -2.6% 19.3% 0.0% 8.3% -4.4% 5.1% 3.4% -14.3% 5.3% 15.8% 12.5% -90.0% 14.3% -20.0% 86.4% -11.3% 0.0% 96.2% -55.6% -50.0% 400.0%

13.1% 13.2% 15.2% 10.5% 7.0% 11.6% 16.7% 4.2% - 47.5% 22.2% 14.3% 7.1% 5.4% 7.4% 0.0% 46.2% - 26.9% 14.3% 100.0% 16.7% 0.0% n/a 21.6% - 17.3% - 35.0% 28.6% 100.0% - 80.0%

Macau Patacas (Million)

Total Games of Fortune (total) VIP Baccarat Baccarat Slot Machines Cussec Black Jack Stud Poker Roulette 3-Card Baccarat Texas Holdem Poker Fantan Casino War 3-Card Poker Fish-Prawn-Crab Paikao Craps Lucky Wheel Makccarat Mahjong Tombola Live Multi Game Horse Racing Greyhound Racing Sports Lottery - Football Sports Lottery - Basketball Chinese Lottery Instant Lottery

58,835 58,521 42,570 10,558 2,723 1,067 663 303 188 65 67 46 45 46 18 30 25 8 2 10 0.3 52 116 76 89 33 1 0.0006 QoQ%

Total Games of Fortune VIP Baccarat Baccarat Slot Machines Cussec Black Jack Stud Poker Roulette 3-Card Baccarat Texas Holdem Poker Fantan Casino War 3-Card Poker Fish-Prawn-Crab Paikao Craps Lucky Wheel Makccarat Mahjong Tombola Live Multi Game Horse Racing Greyhound Racing Sports Lottery - Football Sports Lottery - Basketball Chinese Lottery Instant Lottery

1.1% 1.1% -1.1% 8.5% 8.7% 4.0% -7.1% -4.7% -42.4% 26.4% 4.2% 14.0% 0.0% 14.6% -25.0% 0.0% -44.4% 0.0% n/a 88.9% -25.0% 21.9% -15.4% -6.9% -1.0% 89.5% 0.0% -83.3%

Source: Gaming Inspection and Coordination Bureau MAY 2012

4.7% 4.7% 2.9% 10.2% 7.4% 2.7% 14.2% 5.5% 34.9% 2.9% 6.0% 3.6% 22.4% 0.0% -27.3% -3.6% 50.0% -20.0% n/a 58.8% 33.3% 28.1% -8.0% -29.3% 22.6% 11.8% 0.0% 71.4%

7.0% 7.0% 6.6% 9.9% 0.1% 11.5% 2.2% 14.7% 24.3% -6.7% -5.6% 3.8% 11.5% 0.0% -21.4% -3.4% 0.0% 25.0% n/a 6.3% -25.0% 58.9% 5.6% 1.2% -3.4% -5.6% 0.0% -41.7%

12.0% 12.1% 14.0% 9.0% 3.9% 6.6% -3.0% -1.0% -19.1% 15.4% 6.0% 15.2% 15.6% 4.3% -22.2% -3.3% 44.0% 0.0% -20.0% 60% 0.3 7.7% -7.8% 6.6% -2.2% -45.5% 100.0% 66.7%

6.2% 6.2% 5.2% 8.9% 13.1% 12.7% 5.7% 14.3% -15.3% 14.0% 4.7% 7.0% 18.4% 21.1% -14.3% 25.0% -71.6% 14.3% 100.0% 11.1% -0.3 13.0% 18.4% 5.6% -3.3% 13.8% -50.0% 20.0%

ANGELA LEONG CALLS FOR ASSEMBLY SEAT FOR GAMING

NEW SYNDICATED LOAN FOR PONTE 16

Directly elected legislator and SJM Holdings Ltd’s executive director Angela Leong On Kei is pushing for an indirectly elected seat for the gaming sector at the Legislative Assembly. “In an attempt to embody an equal participation in politics, I ask whether the tourism and gaming sector should have its own indirectly elected seat in the legislature as well as representatives in the chief executive election committee,” she said last month. Previously, SJM Holdings chief executive officer Ambrose So Shu Fai also had said the gaming sector should be represented in the Legislative Assembly with an indirectly elected seat.

The funds are to be used to finance third phase of the casino resort

Pier 16 - Property Development Ltd, the owner of Ponte 16 casino resort, announced last month the signing of HK$1.9 billion (US$245 million) and RMB400 million (US$63.6 million) five-year syndicated loan facilities with 11 financial institutions. The proceeds will be used primarily to refinance existing credit facilities, to repay shareholders’ loans and to fund the construction of the third phase of the Ponte 16 development, the company said. The loan facilities are guaranteed by the borrower’s shareholders, Sociedade de Jogos de Macau SA and Success Universe Group Ltd at the ratio of 51 percent and 49 percent respectively. The third phase of Ponte 16 will feature a riverside commercial complex with a total floor area of approximately 40,000 square metres. The complex will also encompass space for the expansion of gaming areas and car parks, with construction expected to be completed by 2014.

MACAU REACHES TOP-THREE IN GAMING

Macau became the world’s third largest gambling jurisdiction in 2010, according to a new report from consultancy firm Global Betting and Gaming Consultants released last month. Macau leapt into third place with total gambling revenues of US$23.83 billion (MOP190.6 billion) in 2010, ahead of Italy and the United Kingdom. Only the United States and Japan now lie in front of the territory in the rankings. “Macau entered the top five in 2010 and if its growth continues at a similar pace for the next few years it is not inconceivable it could take second place from Japan,” said Global Betting and Gaming Consultants’ director Lorien Pilling.

MGM RESORTS GETS GREATER CHINA EXECUTIVE

MGM Resorts International announced last month the appointment of William M. Scott IV to serve as senior resident executive for Greater China. In this role, Mr Scott will serve as resident director for MGM China Holdings Ltd, which owns MGM Macau. He will also act as the resident director of Diaoyutai MGM Hospitality, Ltd, MGM’s joint venture with Diaoyutai State Guesthouse to promote hospitality projects in the mainland. Mr Scott will facilitate cooperation, communication and synergies between MGM’s Asian and U.S.based teams.

MAY 2012

Gaming

Sorely tempted

The authorities are increasingly worried about crime involving croupiers BY LUCIANA LEITÃO

he Public Prosecutions Office stated last month that casino crimes involving croupiers are on the rise. It has advised casino staff to “maintain their professional integrity in order to avoid irreversible mistakes”. The warning came on the heels of the discovery of a casino fraud case involving four people, including a Macau resident who worked as a croupier. The croupier is suspected of helping the other three to cheat the casino, after another suspect, so far unidentified, lent him money in exchange for his complicity. The Public Prosecutions Office said in a note sent to Macau Business that it did not have figures for casino crimes involving croupiers. However it did say that the increase it had detected in such crime might have various causes – “for example, loose supervision of casino management and low ethics of croupiers falling into money temptation and thus taking risk”. Macau had more than 22,300 croupiers at the end of last year, 16.7 percent more than a year before. The Judiciary Police investigated 21 casino crimes involving croupiers last year, the same number as in 2010. Five such crimes were recorded in the first quarter of this year. They are typically cases of embezzlement or fraud. The Judiciary Police say they have been building a network for cooperation with gaming concessionaires to act on such cases. “While casino operators are responsible for supervising and monitoring their employees, including croupiers, each has their own control mechanism,” the Judiciary Police said in a written reply to questions from Macau Business. To prevent crime, the Judiciary Police organise occasional meetings with casino operators where they exchange

MAY 2012

information. They also have investigators deployed around the clock in casinos.

Cruel world The vice-president of the Macau Gaming Industry Employees Association, Lawrence Tai, says that from March 2007 to March 2012 there were 45 cases of casino crime involving croupiers. The number is based on reports in the news media compiled by the association. Two-thirds were cases of fraud or embezzlement. In 10 cases the suspect ended up committing suicide, Mr Tai says. He says more than 80 percent of the croupiers involved in these crimes became entangled because they had gambling debts. Four out of every five rogue croupiers were under the age of 30. The Gaming Industry Employees Association advocates the government should forbid croupiers from gambling. Part of the problem is that croupiers are ill-prepared to resist temptation, Mr Tai says. With the gaming industry boom and a seller’s market for labour, many residents became croupiers because the pay is above average. “Suddenly, thousands of Macau citizens who are neither welleducated nor mature enough rushed into the gaming industry,” he says. The warning from the Public Prosecutions Office brought to the attention of the Gaming Industry Employees Association the phenomenon of “youths who don’t have enough ability to control themselves and resist outside attractions,” Mr Tai says. Some start gambling and borrowing money from loan sharks. As their debts pile up, they take the risk of stealing chips from their casinos or committing

fraud to recoup their losses. The liberalisation of the gaming industry has made gambling by croupiers harder to control, Mr Tai says. “In the past, there was only one gambling enterprise. Under the employee regulations, they couldn’t take part in any casino gambling activities. Moreover, it was easier for the company to check whether the gambler was its employee or not.” Now, with more than 30 casinos in Macau, the tables are turned. “A croupier who works in Casino A can easily take on gambling in Casino B after work. [There is] no effective checking whether he or she is a croupier or not.” Mr Tai says working from day to day surrounded by huge amounts of

money may tempt croupiers to try their luck. With no law forbidding them to gamble, it is easy to fall into temptation.

Steady on Carlos Siu Lam, an associate professor in the Gaming Teaching and Research Centre at the Macau Polytechnic Institute, says the increase in casino crime committed by croupiers may be a result of immaturity. “They may think winning money is an easy thing. They see in VIP rooms wealthy patrons waving millions of dollars,” Mr Siu says. This may deceive croupiers into thinking it is easy to steal chips or defraud the casinos or their customers, he says. Croupiers are particularly suscep-

tible because they are in direct contact with the chips. The scholar says new recruits should be mentored by more experienced colleagues so they can learn how to handle the pressure. “By telling them real-life stories, incidents that happened and so on, these young people can benefit a lot.” Mr Tai suggests pre-emptive measures coupled with forbidding croupiers from gambling. He says a licensing system for croupiers should be adopted as soon as possible. The authorities have been considering a licensing system for more than four years. “It could help the government to build up a central information system,” Mr Tai says. “Assigned government in-

spectors can check the customers’ IDs to know if they are croupiers right at the entrance of the casinos.” The government and employers should also put more effort into promoting responsible gambling among casino employees, he says. The Public Prosecutions Office advises casino managers to be cautious in recruiting staff, to emphasise professional integrity and to enforce corporate regulations. Macau Business invited the six casino operators to give their views on the matters raised in this article, but none replied. The Gaming Inspection and Coordination Bureau also declined to comment. MAY 2012

Gaming

Resorts World Sentosa

Shopping around Japan and Korea seen as targets for cashed-up Genting Singapore BY MARTIN JOHN WILLIAMS*

enting Singapore’s issuance of up to S$2.5 billion (MOP16 billion) in perpetual subordinated bonds in the opening months of 2012 has intensified speculation about its next investment targets, with one analyst adding Australia to the company’s stated target markets of Japan and South Korea. Lee Shi Ruh, chief financial officer of Genting Singapore, was quoted by Malaysian media as saying that the war chest would facilitate “expansion and ventures into new acquisitions or greenfield projects”. “Should the opportunities arise, Japan and Korea are the options we can look at,” she said. “The funds will put us in a strong position for potential overseas investments.” Yee Mei Hui, an analyst with

MAY 2012

HwangDBS Vickers Research, wrote on March 28 that Genting Singapore “is looking at Japan, Korea and new markets outside Singapore” for new investment opportunities with a timeline within the next 18 to 24 months and potential capital expenditure of US$1.5 billion (MOP12 billion) to US$10 billion. “We see Japan as the most interesting given its large size (based on existing pachinko market), global tourism appeal, and ready infrastructure — albeit a long and complicated legislative process to liberalise gaming,” Ms Yee wrote. The company “is unlikely [to] be interested in Korea if existing restrictions on locals gambling in casinos remain,” she added. Still, “while competition will likely be intense for new markets, [Genting Singapore’s] chances are high given its

strong balance sheet (US$4.2 billion cash pile post-perpetual bonds issue), healthy operating cash flows (US$1.1 billion per annum), and strong track record with global reach”. The timeline of up to two years cited by the DBS analyst, however, may not be such a good fit with Japan’s notoriously slow legislative process and policy unpredictability in Korea, calling into question the company’s strategy should expansion into those markets stall.

Aussie play Genting Singapore, a unit of Malaysian group Genting Bhd, has already been linked to two casino resort ventures in Vietnam, one in central Quang Nam province and the other in Quang Ninh province, which lies on the Chinese border. Even more than Korea, however,

Resorts World Sentosa casino

Deutsche Bank analyst Chia Aun-Ling said the latest fundraising announcements by Genting aim to “further strengthen [the company’s] war chest for new investment opportunity/expansion of business” prospects for expansion into Vietnam remain uncertain given the refusal of the government to lift restrictions on access to casinos by locals. The Genting group is also at the forefront of one of four projects at Entertainment City in Manila Bay in the Philippines, a crucial national tourism draw card that has been subject to controversy and divided analyst sentiment amid extravagant government revenue projections. Gary Pinge, a Hong Kong-based senior research analyst with Macquarie Group, said Genting Singapore is able to make a move on Echo Entertainment, the owner of the Star casino in Sydney and three casinos in the state of Queensland. Echo Entertainment, which has been under sustained pressure over its

management of the Star casino amid a new regulatory enquiry, is already fending off interest from Crown Ltd’s James Packer. But Mr Pinge suggested Genting had the capacity to fund an acquisition, according to a research note cited by the Wall Street Journal. However, it was not immediately clear if the Macquarie report was simply speculative or whether Mr Pinge had received information from Genting Singapore with regard to any plans for a move against Echo. Deutsche Bank analyst Chia AunLing said the latest fundraising announcements by Genting aim to “further strengthen [the company’s] war chest for new investment opportunity/expansion of business”. Ms Chia noted that the company was in a net cash position at the end of the 2011 financial year and

predicted its operations will generate free cash flow of S$0.9 billion in 2012 and S$1.6 billion in 2013 amid improving earnings momentum. She said in a previous note also last month that the Singapore Casino Regulatory Authority’s approval of two Malaysia-facing junkets at the company’s Resorts World Sentosa gaming resort “marks a turn in sentiment for Genting Singapore”. “This approval gives Genting Singapore a head start to work with junkets... and could potentially help arrest its falling VIP rolling volume in 2011,” Ms Chia wrote. “Coupled with the recently completed 172-suite Equarius Hotel and 22 villas, Genting Singapore should be in a better position to regain VIP market share, in our view.” * EXCLUSIVE GAMBLINGCOMPLIANCE/MACAU BUSINESS MAY 2012

Gaming

Is Matsu game? Taiwan’s Matsu Islands will vote in a referendum on whether casinos should be allowed verybody seems to want a piece of the gaming pie in Asia. Taiwan’s outlying Matsu island group, formally Lienchiang County, is gearing up for a July 7 referendum on the issue of gaming. The authorities have received a petition with more than the 385 signatures needed for such a vote. “Should Matsu establish a vacation district with a tourist casino attached?” That is the question. “We hope that the people of Matsu will grant themselves this opportunity by passing the referendum,” Yang Suisheng, the elected head of the county, was quoted in the press as saying. He said that allowing for casinos would boost the island group’s economic development. Mr Yang was speaking during a two-day presentation last month by Weidner Resorts, run by former Las Vegas Sands Corp president and chief operating officer William Weidner, on its casino resort project for Matsu. According to a report from online publisher Gam-

MAY 2012

ing Compliance, the bid might have secured the county government’s support. With the referendum date marked down as July 7, anti-gaming activists are saying this would unfairly benefit pushes for a “yes” vote. They say the date coincides with school holidays, and many teachers and public servants, who are said to largely oppose gambling, would likely be away from Matsu. Weidner Resorts’ subsidiary in Taiwan has also been accused of violating vote-buying rules by giving out tablet computers, digital cameras and MP3 players as gifts in raffles at the end of its two-day public presentation of the project.

No guarantees The meetings were said to have been “fully attended”, with county government employees reportedly assisting Weidner Resorts staff in handing out information packs and other tasks. Lin Chung-chao, head of the Lienchiang County Chamber of Commerce, which submitted the petition for

the casino referendum, said that the Taiwanese central government did not care about remote Matsu’s transportation issues. This, he added, forced the island to turn to the corporate sector for development opportunities. Weidner Resorts has pledged to help fund the construction of a bridge, upgrade the airport to an international facility, fund construction of a new university and develop a welfare fund for the island’s residents. Councillor Lee Chin-mei warned that voting “yes” in the referendum could mean a deterioration in law and order and an influx of drugs and prostitution into Matsu. The Ministry of Transportation and Communications is revising a draft law that covers the operations of offshore casinos and the wider investment parameters and other requirements for the integrated resorts that will contain them. However, it is not clear whether Weidner Resorts’ current proposal would meet the requirements of the law, if it is passed.

NOT FOR KIDS

Change in casino age entry could be enacted in July

The new law raising the minimum age of entry to casinos to 21 years could be in force as soon as July 2. At least, that is what the latest version of the bill says. The new version was sent last month to the Legislative Assembly by the government. The bill was approved on its first reading in June last year, but still needs to be voted on by legislators one more time ahead of being approved. One of the novelties of the new version is that it makes it clear that gaming operators cannot allege negligence if under-21s are detected either playing or working at their casinos.

SJM DIRECTOR LAUNCHES FOUNDATION

SJM Holdings Ltd executive director Rui Cunha last month inaugurated a foundation to encourage research into Macau’s legal system. Through his foundation, Mr Cunha, who is also a prominent local lawyer, will support publications on Macau law and sponsor new and up-and-coming artists. Mr Cunha plans to use the ground floor of the building where his firm, C&C Advogados has its offices, to host conferences, debates and art exhibitions.

CITY OF DREAMS OPENS NEW RESTAURANT

City of Dreams announced last month the opening of The Tasting Room. The contemporary European restaurant highlights “a creative concept of tasting selections that range from wines and jet-fresh delicacies to desserts and cheeses”, a press release said. Located at level 3 of Crown Towers, The Tasting Room is headed by French chef de cuisine Guillaume Galliot.

PALTRONICS’ KYLIE ROGERS GETS PROMOTION

Gaming system solutions provider Paltronics last month announced the creation of a new position, vice president – Asia Pacific. Kylie Rogers was chosen to be the first person to hold this post. Ms Rogers joined Paltronics in 2001. In 2006 she was appointed as regional sales manager, Macau.

MAY 2012

Gaming

A change of pace The NagaWorld casino resort in Phnom Penh is a laid-back alternative to the mega-gaming complexes in this part of the world BY MUHAMMAD COHEN IN PHNOM PENH

ndochina’s largest entertainment complex offers a choice of casinos, five-star accommodation and service, a world-class spa and several kinds of cuisine. But for many guests of NagaWorld in Phnom Penh, even their first visit feels like a homecoming, the managers say. Many visitors from Asia say Cambodia’s capital reminds them of their own country a few decades ago, says Na-

MAY 2012

gaWorld’s managing director for casino operations and property, Mike Ngai. “I grew up in Hong Kong,” Mr Ngai says. “When I came to Phnom Penh, I said, ‘Hong Kong used to be like this.’” NagaWorld offers customers a change of pace from the Macau or Singapore mega-casino resorts with its smaller size, more relaxed atmosphere and lower prices. A five-star hotel room costs about US$60 (MOP480), with buf-

fet breakfast included. In Cambodia virtually everything is priced in U.S. dollars and the greenback is widely used, rather like the Hong Kong dollar in Macau. There is more than nostalgic appeal to NagaWorld. “Quite simply, it is the best and only Western-style casino in Indochina, effectively making it the only game in town for regional customers,” says Union Gaming Group lead analyst

85 chard Huang, an analyst at independent brokerage and investment firm CLSA. “The region is populous, with a strong pent-up gaming demand, fuelled especially by the Vietnamese.” NagaCorp holds a casino license that expires in 2065 and is exclusive within a 200-kilometre radius of Phnom Penh until 2035. NagaWorld began operating as a floating casino on the Bassac River in 1995. Play moved ashore in 2003 to NagaWorld’s present location further upriver, about one kilometre south of Cambodia’s Royal Palace and Phnom Penh’s bustling riverside promenade. NagaCorp floated its shares on the Hong Kong Stock Exchange in 2006, becoming the first pure-play gaming company to be listed there. The initial public offering was more than 100 times oversubscribed and raised HK$95 million. NagaCorp used the proceeds to complete a hotel wing with 508 fivestar rooms that began opening in phases from 2007. Chief executive Chen Lip Keong, a Malaysian businessman and an economic adviser to the Cambodian government, controls more than 60 percent of the shares. NagaCorp’s annual net profit grew by 109 percent to US$92 million last year, and it had a net profit margin of 41 percent. Shareholders received 70 percent of the net profit in dividends. “Our property has a regional reach throughout Asia, with an Indochina focus,” says Mr Ngai. “Logically, [Singapore casino resorts] Marina Bay Sands and Resorts World Sentosa were seen as competition, but that hasn’t been the case.”

Not too taxing

Grant Govertsen. Parent company NagaCorp Ltd nimbly seeks niche opportunities, leverages the advantages of doing business in Cambodia and limits credit exposure. Mr Ngai says: “If people want to come here, they have to bring cash. That tells you how attractive this property is.” “We’ve built a facility for US$200 million that would cost US$1.5 billion in Macau,” NagaCorp chairman Timothy

McNally says. NagaWorld has 600 rooms, 70 massmarket tables, 68 VIP tables, 1,300 gaming machines and 25,000 square metres of space for meetings and conventions.

On terra firma “The most appealing feature of NagaWorld is its exclusive right to operate a casino in Phnom Penh, one of the major cities in the Indochina region,” says Ri-

Union Gaming’s Mr Govertsen says, “The regional jurisdictions are only competitors to Naga at the margin. They largely go after different customers. For example, a VIP player at Naga might not be on the radar screen of a Macau or Singapore casino as he would be too small. “Ho Tram is unlikely to be a significant competitor either, since Vietnamese locals, Naga’s bread and butter, won’t be allowed to gamble there,” he says. Ho Tram, in Vietnam, is due to get an MGM casino resort next year. Gross gaming revenue at NagaWorld grew by 51 percent last year to US$211.5 million, roughly equivalent MAY 2012

Gaming

to a good weekend for Macau’s casinos. Growth was spread almost evenly across the VIP tables (38 percent of gaming revenue), electronic gaming (32 percent) and the mass market tables (30 percent). By special arrangement with the Cambodian government, NagaWorld pays a fixed monthly sum in tax, now US$360,000, which rises by 12.5 percent annually until 2018. The sum includes corporate tax, gaming tax, value added tax and employment tax. Last year’s tax bill was the equivalent of 1.8 percent of the company’s gaming revenue. NagaWorld croupiers earn on average US$150 a month, more than double

Cambodia’s minimum wage but only a fraction of the salaries in Macau. Macau casino operators can only envy NagaWorld’s single-digit staff turnover rate. The resort is an employer of choice. A drive to fill 100 positions attracted 40,000 applicants. Of NagaWorld’s 3,600 employees, fewer than 10 percent are expatriates.

Fasten your money belts Lower costs help NagaWorld exploit the lower end of the VIP market, with buyins of US$15,000 a visit, far below the requirements in Macau or Singapore. Commissions are between 1.3 percent

By special arrangement with the Cambodian government, NagaWorld pays a fixed monthly sum in tax, now US$360,000, which rises by 12.5 percent annually until 2018. Last year’s tax bill was the equivalent of 1.8 percent of the company’s gaming revenue MAY 2012

and 1.7 percent of rolling chip turnover for junkets, while rebates of 1 percent are offered on direct VIP play. Management has reduced credit to junkets in recent years, trying to limit earnings volatility. “We’re a small company, so we have to be careful,” Mr Ngai says. Instead, NagaCorp purchased a luxury jet, which will enter into service this quarter. With 18 seats and a range of 6,000 kilometres, the aircraft can bring VIP players from as far away as central Russia or Australia’s east coast. About two-fifths of mass-market players come from neighbouring Vietnam. Another two-fifths come from the rest of Asia, Malaysia and Singapore being the next-biggest sources of players. Vietnamese account for one-third of VIP rolling, and Hong Kong and mainland Chinese for about one-eighth. Most other players are Western expatriates or tourists, or Cambodians with foreign passports. Ordinary Cambodians cannot gamble legally here or in smaller casinos in resort and border areas.

THE NICE STAGE I

n the 1980s “Holiday in Cambodia” was a satirical song and bad joke in view of the Khmer Rouge regime that killed 2.5 million people in the late 1970s. But Cambodia recorded 2.9 million international arrivals last year, 14.9 percent more than in 2010, and the number is forecast to reach 6 million by 2020. Angkor Wat, the ninth-century temple complex in Siem Reap, remains the most popular attraction for visitors to Cambodia. But last year, for the first time, more than half of foreign visitors included Phnom Penh, 314 kilometres southeast of Angkor, in their itineraries. Those tourists may be onto something. The Cambodian capital is a cheap destination, attracting attention as stability and prosperity return to the country. “It’s at the stage of development where people are nice,” says casino resort NagaWorld’s managing director for casino operations and property, Mike Ngai. Security expert John Muller says Phnom Penh is much safer than it used to be. “Five to 10 years ago, tourists were robbed at gunpoint,” says Mr Muller, the managing director of Global Security Solutions in Phnom Penh. “There’s much less petty crime now.” Mr Muller says corruption is rife in the judiciary, but adds: “If you see a policeman, don’t be afraid. I wouldn’t have said that five years ago.”

NagaWorld does not simply sit milking its cash cow, making instead all kinds of efforts to improve the customer experience and investor returns. “I think they’ve done a great job,” Mr Govertsen says. “Frankly, the numerous changes made to the property over the years have been necessary and reflect management’s ability to adapt as its customer base has grown. This is reflected in the revenue and cash flow generation story, which has been quite compelling over the past several years.” Even with more tables and machines, yields keep rising. Last October, NagaWorld introduced a new rapid gaming area with 91 electronic terminals for roulette and baccarat with live croupiers. The terminals have been producing US$100 per hour in bets, more than double the rate at the tables, spurring construction of a second rapid gaming area.

Leap to hyperspace NagaRock, the latest in a series of what the managers call the resort’s “lifestyle casinos” in a reference to NagaWorld’s

differently themed gaming areas, opened in February. NagaRock’s gaming floor, with 16 tables and 200 slot machines, introduced Phnom Penh to Texas hold ’em, played amid performances by live bands and dancers. Saigon Palace, with 15 tables and 80 machines, will open later this year. It is part of a comprehensive effort to attract more Vietnamese. In March, NagaWorld began a luxury coach service to Ho Chi Minh City, a six-hour drive away. Half of a new 220-room hotel wing meant for Vietnamese customers is already open. The rooms there cost just US$30 a night, the purpose being to keep budget-conscious players in the resort. It is due to be completed this year. NagaWorld also intends to attract players from Thailand, Cambodia’s neighbour to the west, which has a smaller but richer population than Vietnam. It means to start with junket groups. The company is opening sales offices in Bangkok and Ho Chi Minh City. The grand vision is to make NagaCorp a “regional powerhouse”, its latest financial report says. A US$369-

ANOTHER WORLD T

hree ways that NagaWorld differs from Macau casinos: • Noise: Jackpot winners and passionate baccarat players abound but decibel levels are far lower than in Macau • Language: English is the default language at the tables and throughout the resort, and the money that talks is U.S. dollars • Décor: From touches of nature in the Garden Casino to the flashiness of NagaRock to broken-heart ballads in Rapid Gaming, players can choose different settings to suit their moods, all under one roof MAY 2012

Gaming

Half of a new 220-room hotel wing meant for Vietnamese customers is already open. The rooms there cost just US$30 a night, the purpose being to keep budget-conscious players in the resort. It is due to be completed this year million expansion will more than double the number of hotel rooms, triple the number of gaming tables, quadruple the amount of space for meetings, incentives, conventions and exhibitions, and introduce high-end retailing. “We are running out of space,” Mr Ngai says. “For us to grow, we need more space.” A new development called Naga2, scheduled to open in 2015, will have a 24-storey tower containing 50 VIP suites with personal gaming facilities. Mr Ngai describes it as “something totally unique”.

Tunnelling for riches A separate 26-storey tower will have 1,033 five-star hotel rooms, and the company will construct a third tower for government use, in exchange for the land. The company will also create a riverside park for public use. “Naga2 will add on significant capacity, enabling the company to monetise the strong gaming demand in the region,” says CLSA’s Mr Huang. The new towers will be about 250 metres from NagaWorld, across one MAY 2012

of Phnom Penh’s broad colonial boulevards. A two-level underground shopping corridor called NagaCity Walk will link NagaWorld with the new development. A section of the mall is scheduled to open in July, and will have the first Cambodian outlets for Cartier, Piaget and Rolex. Overall, Naga2 will have 18,000 square metres of retail space, including NagaCity Walk and a three-level mall in the tower podium. The podium will have 3,000 square metres of meeting and convention space and a 4,000-seat theatre. “We want to make Naga a regional entertainment centre,” says Mr Ngai. Mr Govertsen says “Naga2, as currently planned, should be quite successful as it should allow the company to ramp up its VIP business, while also adding a significant number of muchneeded hotel rooms in this capacityconstrained market.” Mr Chen, the chief executive, will finance and construct the development and turn it over to the company upon completion in exchange for shares and convertible bonds. With full conver-

sion, Mr Chen’s stake in the company would rise to 78.9 percent, raising concern among some investors.

Whiter than white “We agree that the corporate governance risk is higher for NagaCorp,” CLSA’s Mr Huang says, “but it has already been factored in to the share price, with the company trading at a steep discount to the other Asian gaming names despite delivering higher earnings growth.” Sources who request anonymity allege that there are disreputable practices at NagaWorld, ranging from unrestricted access for Cambodian players to money laundering. NagaCorp uses independent security consultant Hill & Associates to monitor compliance with international anti-money laundering regulations, in part because Cambodia falls short of global standards. The managing director of Global Security Solutions in Phnom Penh, John Muller, first came to Cambodia in 1991 and started the country’s first private security firm in 1995. He brushes off the various allegations, saying: “I haven’t heard anything bad about Naga.”

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OVERVIEW

Great times This year’s G2E Asia promises to be a sweet one

eading gaming industry players are getting together again from May 22 to May 24 at the Venetian Macao for the sixth edition of Global Gaming Expo Asia (G2E Asia). Popular culture has it that traditional symbols for six-year marriage anniversaries are iron and sugar. Things are no different in the union between Macau and Asia’s largest gaming conference and exhibition, with many expected to sweeten the three-day event by ironing out multi-million dollar deals. As usual in Macau, several changes have taken place in the competitive landscape since last year’s G2E Asia. Gaming mogul Sheldon Adelson has opened his fourth property here, Sands Cotai Central. The US$4.4-billion (MOP35.2 billion) project is the world’s biggest casino resort. Galaxy Entertainment Group Ltd has also announced plans for phase two of its Cotai property. The company has already launched construction works for the HK$16 billion project. Wynn Macau Ltd too has just secured a plot of land in Cotai. That is not all. Macau enacted its new technical standards for electronic gaming machines just a couple of months ago. The rules came into effect in February but there is a grace period for non-compliant machines that lasts until October 1. Singapore also pushed ahead with a similar change in March. Attendees at this year’s G2E Asia will have the opportunity to hear more about these novelties during the event’s conference programme. On the exhibition floor, gaming suppliers are expected to showcase their latest products and the newest gaming technology trends. The American Gaming Association and Reed Exhibitions are again organising G2E Asia. In this special report by Macau Business, we speak to a number of executives from the fast-growing slot machine sector. We also look at the latest products and developments they will feature at this year’s event. And we give attendees a detailed rundown of the three-day schedule. With that, we wish all participants and attendees a great and successful G2E Asia.

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G2E ASIA 2012

MAY 2012

G2E ASIA 2012

PROGRAMME PROG RA A MM E SCHEDULE SC CHE ED DULE E MAY 22

MAY 23

Global Markets Forum 9.30 – 12.00

Opening Ceremony 9.30 – 10.00

Lunch break 12.15 – 13.30 Global Markets Forum 13.30 – 17.00

Senior Management Track 10.15 – 11.15

Middle Management Track 10.15 – 11.15

General session 11.30 – 12.30

MAY 24 Global Gaming Women Breakfast Meeting 8.00 – 9.30

Gaming Management Certificate Programme 9.30 – 18.00

General sessions 9.30 – 13.00

G2E Asia 2012 Conference Luncheon 12.45 – 14.00 General session 14.00 – 15.00 Senior Management Track 15.00 – 17.00

Middle Management Track 15.00 – 17.00

WORKSHOPS GAME PROTECTION WORKSHOP – with Sal Piacente Game Protection – Blackjack | May 23, 15.00 – 16.00 Game Protection – Craps | May 24, 14.00 – 15.00 Up close with Sal | May 23, 10.30 – 11.30; 16.00 – 17.00 | May 24, 15.45 – 16.45 SECURITY AND SURVEILLANCE WORKSHOP – with Vlado Damjanovski May 24, 10.30 – 12.30 EXHIBITS May 22: 11.30 – 16.30 (exclusive for conference delegates, invited VIPs and media) May 23: 10.00 – 17.30 May 24: 10.00 – 17.30 MAY 2012

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See these themes and more at the upcoming G2E Asia. Konami Australia Pty Ltd. 28 Lord St Botany NSW Australia 2019 Tel: +61 2 9666 3111 Email: reps@konami.com.au www.konamigaming.com

MAY 2012

G2E ASIA 2012 96

In the cards

G2E Asia is set to deliver the latest insights into what is happening in the gaming industry

rom learning about the latest trends in Asian and global gaming to hands-on workshops, the Global Gaming Expo Asia (G2E Asia) conference programme aims to offer the best insights of industry professionals. “For the past five years, G2E Asia has been the premiere conference event for the Pan-Asian region, providing gaming industry professionals with the education they need to succeed,” says Frank J. Fahrenkopf, president and chief executive officer of the American Gaming Association, which co-organises the event. “Now in its sixth year, the 2012 conference will again offer attendees unmatched networking opportunities and access to the industry experts who are leading the way in this rapidly evolving marketplace.”

Luck of the draw Day One kicks off on May 22 with a full-day “Global Markets Forum”. It features a series of in-depth discussions on how various economic and regula-

MAY 2012

tory issues are affecting current and emerging gaming jurisdictions in the pan-Asian region. The first session is dedicated to Macau. Panellists will talk on the challenges current gaming operators face, future developments, the growth of the mass market and non-gaming attractions. The second panel is on Cambodia and Vietnam. Speakers will exchange ideas on what markets drive business in each country and discuss the impact of infrastructure on the integrated resort model. Panellists will examine the likely players in each of Japan, Korea and Taiwan’s jurisdictions in “If Not Now, When? Legalization in Japan, Korea and Taiwan”. A panel solely focused on the “Manila Makeover: The New Philippine Market” will shed light on the Entertainment City project. The development promises to bring four US$1-billion (MOP8 billion) casino resorts to Manila Bay and wants to be a regional game changer.

Two years after the opening of Singapore’s two integrated resorts, experts will speak at “Success in Singapore: Has Gaming Delivered on Its Promise?” During the session, which concludes Day One, panellists will also debate on the recent approval by Singaporean authorities of the city’s first junket operators.

One for the managers The Day Two conference programme will split into two, with senior management following one track and middle management the other. Each track’s content is tailored to its target audience. Sessions designed for senior management include “Regulatory Review: Lessons for the Emerging Market”, “The Asian IPO: How to Evaluate an Emerging Company” and “More Than Gaming: How the Integrated Resort Can Work Across Asia”. During these three sessions, participants will learn how compliance works in Asia, whether standard financial valuations are applicable to Asian gaming companies and understand how to balance operations with political realities, among other topics. Sessions for middle managers include “Beyond Baccarat: Cultivating Non-Gaming Business”, “Spreading the Word: Marketing Across Asia” and “Excellent Employees: How to Grow and Retain Talent in Asia”. Topics

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G2E ASIA 2012 98 under examination will include the meeting and convention industry in Macau, a review of what has been successful in the city, as well as the best practices for casino staff training and retaining.

Food for thought Day Two of the conference programme also includes two general sessions, open to all attendees. G2E Asia will once again feature a general session on VIP junkets titled “Very Important Business: The Evolution of Junket Operations.” At this session, conference attendees can learn how junket operations have changed during the past five years, how licensing and regulations are imposed and what the future holds for the often tenuous relationship between junket operators and casinos around the world. Gaming technology in Asia will be on debate at “Leading the Charge: The Expansion of Gaming Technology in Asia”. As the performance of electronic table games exceeds expectations in markets like Singapore, new technology is spreading quickly across the region. At this session, panellists will discuss the most successful products in the market today – from new games to customer relationship software – as well as learn about potential growth in the Asian slot market. Day Three kicks off with a closer look at the Chinese gaming market. Despite its monopoly on casino gaming, Macau is not the exclusive provider of regulated gambling in the country. Several large, legal lotteries already operate in the mainland. At this session, experts will examine the Chinese gambling market to estimate its size and depth, as well as the behaviour of its gamblers. “The Big Picture: How Asian Economic and Social Trends Impact Gaming” session aims to cover the growth of disposable income across Asia, including which countries are expanding the fastest and why. Changing social structures as well as political and economic developments relevant to foreign investment and the potential growth of gaming will be discussed. To round up the conference programme, “Game On: Harnessing the Power of Social Media” will discuss the topic of proliferation of social media and how the gaming industry can take advantage of it, be it through mobile gaming or marketing. MAY 2012

Queen of hearts Global Gaming Expo Asia (G2E Asia) will host Asia’s first Global Gaming Women meeting. Scheduled for May 24, it will include a networking breakfast and speed-mentoring event for women executives. It will also feature a roundtable discussion among female leaders from the Asian gaming market. Global Gaming Women is a new development programme launched by the American Gaming Association to nurture emerging female leaders in the international gaming industry. The initiative is an on-going effort by the association to foster stronger relationships between top female executives and promising managers.

Sweeten the pot Global Gaming Expo Asia (G2E Asia) provides several hands-on learning opportunities during its three-day programme. Already a fixture in the event’s schedule, the game protection seminar has been revamped. World-renowned gaming expert Sal Piacente will again take attendees step-by-step through the latest cheating tricks in intensive one-hour live demonstration sessions on May 23 and 24. CCTV expert Vlado Damjonovski, one of the world’s most recognized CCTV experts, will also be at G2E Asia. He will conduct an interactive workshop on CCTV surveillance systems on May 24. The G2E Asia Gaming Management Certificate Programme will take place on May 24. It includes interactive educational workshops designed to help new casino managers in Asia further their knowledge of current gaming trends. The day-long programme is produced in partnership with gaming professors at the University of Macau and the University of Nevada, Las Vegas campus in Singapore.

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MAY 2012

G2E ASIA 2012 100

High expectations

G2E Asia is a premium chance for gaming suppliers to showcase their latest products, exhibitors say

xpectations are high for this year’s Global Gaming Expo Asia (G2E Asia). Over 100 exhibitors will be showcasing their latest technology and newest products there. This year’s G2E Asia trade show will feature everything from gaming equipment to security and surveillance, to lifestyle products and components for slot machines. Last year as many as 120 exhibitors from 23 countries took part in the three-day exhibition. The event welcomed 5,700 industry professionals, an increase on the previous year. G2E Asia 2012 is expected to feature around the same number of

MAY 2012

exhibitors but some booths will be significantly bigger. Leading suppliers like Aruze, Konami and Shuffle Master have announced they will have bigger floor spaces than in 2011.

Looking for deals “The global gaming industry is poised for another record year, with Asia leading the way once again. Asia is the world’s fastest growing gaming market and a driver of a significant portion of worldwide revenue,” says Brian Thomas, vice president of Reed Exhibitions Hong Kong, one of the co-organisers of the event. “Industry insiders recognise this dramatic shift and top businesses are re-

serving larger floor spaces for G2E Asia 2012 to be at the heart of the action.” International Game Technology, Inc (IGT) “is very excited about G2E this year,” a spokesperson for the gaming supplier company says. “Over the last year, IGT has been investing in our team in Asia, with a new head of IGT Asia, Mark Michalko, who has a strong history in gaming in Asia.” IGT will have at its G2E Asia booth “the entertainment and global blockbuster brands that we are famous for, but we will also have many games specifically designed for Asian player styles with several options for linked progressives.” Konami Gaming, Inc says it is a relatively new manufacturer in Macau, who is “increasing [its] product development resources, and plan[s] on producing a much greater number of targeted games for the region.” “We have an exciting new array of market specific products for release this year, so we hope to receive some excitement and positive feedback at the expo,” a company spokesperson says. While some are still newcomers to Macau, others have been posting strong sales here, like Gaming Partners International Corp (GPI), a provider of casino currency and table game equipment worldwide. Just last month the company announced a US$4.7-million (MOP37.6 million) deal to supply casino chips and plaques to two local gaming operators. “We will debut several new products [at G2E Asia] that include new currency security features and new RFID [radio-frequency identification] products,” a spokesperson for GPI said. Aruze Gaming America, Inc says one of its expectations for the three-day event is to “demonstrate to the Asian gaming market that Aruze Gaming continues to provide the industry with innovative technologies.” Be it slot machine suppliers or service providers, all exhibitors at G2E Asia are looking to hit a business jackpot there.

G2E ASIA 2012 102

Keeping ahead

With a market share of around 60 percent in Macau, Aristocrat is focused on creating the right product for the region BY SARA FARR

acau will not be opening up new large-scale casino properties at least until mid-2015. While this could be a concern for some slot machine providers, as no big deployments are to take place for the next three years, Australia-based Aristocrat Leisure Ltd is taking the opportunity to boost its Asian-dedicated game portfolio. David Punter, Aristocrat’s general manager for Asia Pacific, says that growth for the gaming supplier is going to come out of making the right product for the region. “It’s a big opportunity to get a better understanding of what the players are like,” he says. “It’s not all about quantity but also about quality.” Aristocrat is one of the most successful slot machine providers in Macau, claiming a market share in the range of 60 percent. The company has 63 percent of the gaming floor at Galaxy Macau, and around 47 percent at Sands Cotai Central, which opened just last month. “We’re very happy we’ve put that market share in, and we’re hoping to grow on that success,” Mr Punter says. “We’re confident we can increase our floor in Sands Cotai Central over the next six months,” as the property’s second casino opens its doors. Aside from Macau, there is also a lot of growth potential for Aristocrat elsewhere in Asia Pacific. Manila Bay’s Entertainment City, in the Philippines, is scheduled to open its first two properties next year. There is also MGM Grand Ho Tram opening up in Vietnam, also in 2013. “We’re working closely with representatives from the MGM management group to make sure we’ve got a large percentage of that [gaming] floor,” Mr Punter says. Although the United States is Aristocrat’s number one market, followed by Australia, the Asia Pacific region sits comfortably in third place. Nonetheless, the latter has contributed significantly to the company’s growth in revenue and profit. But Mr Punter admits regional competition is getting tough, not just in Macau but also Singapore and the Philippines.

Virtual gaming Internationally, Aristocrat has been among the top gaming suppliers betting heavily on creating online casino solutions. Mr Punter says this is something the company would like to bring to the Asia Pacific region. “The strength of that is that we’ve got good content, good games and good math, and we can take it to a virtual environment,” Mr Punter says. The online casino solutions Aristocrat as so far developed are play-for-fun, not pay-for-play. “We’re creating a free-play environment. So you sit in MAY 2012

David Punter, Aristocrat’s general manager for Asia Pacific, says that growth for the gaming supplier is going to come out of making the right product for the region your casino hotel room and you potentially play a game with random credit set up there without having to pay for it,” Mr Punter says. Although this is yet to be done in Macau, he says Aristocrat is “looking to see if there’s an acceptance for that type of product here via the regulators and operators.” Mr Punter says the Philippines and Singapore are other markets that Aristocrat may try to explore. For this year’s G2E Asia, Aristocrat is focusing on showcasing products specifically developed for Asia Pacific as well as taking projects from other markets that, according to Mr Punter, are “very suitable” for this region. “This is the Year of the Dragon so we’re very excited to bring a lot of products related to the Dragon out,” he says.

103

Lucky dragon

Aristocrat is celebrating the Year of the Dragon by designing and releasing several dragon-themed games

ristocrat Leisure Ltd is set to take the G2E Asia show by storm. Its key message for the exhibition is: “We create Asia’s greatest gaming experience”. “This year is about our commitment to Asia through supporting our customers with dedicated content for Asia,” the company says. That takes shape in the release of several Asianthemed products, namely an array of Dragon-related games to celebrate the Year of the Dragon. One of Aristocrat’s highlights for G2E Asia is “Keys of Fortune”. It is the first symbol driven link progressive from Aristocrat and will be officially launched at the show. “Keys of Fortune” is extending on Aristocrat’s Hyperlink model with the first integrated free games jackpot feature, meaning that players are now collecting key symbols to enter a jackpot feature, replacing the mystery Hyperlink trigger. “Dragons on the Lake” will be unveiled at G2E Asia and made available in the second half of the year.

“Dragons on the Lake” is built specifically for the Asia Pacific region. For the first time in a Hyperlink, the jackpot feature will be symbol-triggered coupled with a ‘choose your volatility jackpot’ feature allowing players to target which jackpot they wish to play for.

Advanced graphics “Dragon Superior” will also be in the limelight at G2E Asia. It is Aristocrat’s latest advanced graphics package to be released in the Xtreme Mystery jackpot range. “Dragon Superior” is the first Xtreme Mystery package available with an LCD topper, designed specifically to suit the new suite of Aristocrat games with top box interaction. Aristocrat is also making its “Fa Fa Fa” Hyperlink available on the Widescreen cabinet for the first time. Recognising the success of this product across Asia, the company has provided the top four most popular games under “Fa Fa Fa” on Aristocrat’s latest platform – Viridian WS. The company has enhanced the

graphics of the base games (Five Dragons, 50 Dragons, Five Koi and Fortune King) and provided a new jackpot graphics package that takes advantage of the increased graphics capability of the Widescreen platform. “Legends” is the new series of games that extends Aristocrat’s best titles and most successful brands with new product features. “Five Dragons Legends” was the first game in this series and now “Five Koi Legends” will be unveiled at G2E 2012. The Legends series will be continued next year with further titles joining the portfolio. Aristocrat plans on having a product demonstration for its ‘TruServ’ server-based gaming casino system at G2E Asia. The TruServ product demonstration will feature dynamic game management, Chinese and English language support and the ability to run the TruServ game client on traditional casino slot machines or mobile devices. Aristocrat says the TruServ system is performing well at a trial in a major Macau casino. There are plans to release the product for sale to other casinos later this year. That is not all from Aristocrat. The company will also be showcasing its latest lottery solutions at G2E Asia as well as online and mobile gaming products. The Aristocrat display is located at booth 201. MAY 2012

G2E ASIA 2012 104

Strong start Bally Technologies is on a winning streak in 2012, with double-digit revenue growth and more awards under its belt

he year of 2012 has been a sweet one so far for Bally Technologies, Inc. The company just recorded eye-catching revenue growth in the first quarter, while it continues to see its products widely acclaimed. “The past several months have been momentous,” says Richard M. Haddrill, Bally’s chief executive officer. “Our results are showing the payoffs from multiple investments as we execute on our growth initiatives. Bally continues to have a bright future as we partner with our customers to innovate the gaming experience.” The company posted record revenue of US$229 million (MOP1.8 billion) for the first three months of the year, up by 20 percent year-on-year. Bally showed continuing progress in all of its major business areas. “Our Alpha 2 Pro Series titles are performing well in various parts of the world, our gaming operations installed base is expanding driven by products like ‘Grease’, and our Systems business MAY 2012

continues to move forward at a healthy pace both in terms of product improvement and the number of new customers joining the Bally Systems family every month,” says Ramesh Srinivasan, the company’s president and chief operating officer.

Record setter Bally’s products also continue to collect several prizes worldwide. In March, Bally took five spots on the annual Top10 list organized by U.S.-based Casino Enterprise Management magazine ranking the best slot floor technology. That included first place for Bally’s DM Tournaments solution, which enables operators to simultaneously change iView Display Manager-enabled terminals into tournament mode and back in seconds, even if the terminals run base games from other vendors. No other gaming manufacturer had more than one product on the Casino Enterprise Management list. “We have received more than 40 awards for product innovation over the

past four years,” says senior vice president of technology Bryan Kelly. “It is a true testament to the innovative and customer-focused work being done by Bally. We always want to ensure our customers can provide their guests with exceptional service, an exciting gaming experience, and most of all, a good return-on-investment.” Earlier, in February, Bally products had already powered “The World’s Largest Slot Machine Tournament” at Pechanga Resort & Casino in Temecula, California. At the time, Bally also earned a Guinness World Records achievement for the most slot machines running the same game simultaneously at the same venue. Throughout the duration of the tournament, all participants played Bally’s “Hot Shot Blazing 7s” as part of DM Tournaments. The record-setting event featured more than 1,100 players simultaneously competing in a tournament in one location on slot cabinets made by five different slot machine manufacturers. “This is a great example of how server-based technology can create contagious excitement on games from multiple manufacturers,” says Bally’s senior vice president of strategy and customer consulting Bruce Rowe. For Bally, 2012 is just starting. With a history dating back to 1932, the Las Vegas-based company is working to make it a year to remember.

105

King of play Bally brings Michael Jackson to Macau, plus a large selection of Asian-themed games

ally Technologies, Inc will exhibit a wide array of gaming and systems solutions at G2E Asia. Taking center stage at Bally’s exhibit will be “Michael Jackson King of Pop”, which features one of the most influential artists of all time. The music-filled game runs on Bally’s new Pro Series V22/32 cabinet with the custom, Pro surround-sound chair. Offering everything from mystery wilds bonuses to free games bonus events, and featuring hit songs like “Bad” and “Beat It”, this game is highlighted by a ‘U-Spin Platinum Record Bonus’ and video clips showcasing Michael Jackson.

“Grease” is inspired by Paramount Pictures’ 1978 American musical film about two love-struck teens in a 1950s high school. It is Bally’s first doubleplay game, featuring two, 25-line games, enabling the player to play two games at once. “Betty Boop’s Fortune Teller”, the new companion game to the hit “Betty Boop’s Love Meter”, offers an unprecedented 15 bonuses at any bet. “Fortune Teller” also features the ‘USpin’ fortune wheel and a ‘U-Choose’ bonus that gives control to the players, letting them pick their preferred bonus. Both “Grease” and “Betty Boop’s Fortune Teller” are available on Bally’s

Alpha 2 Pro Hammerhead cabinet. As part of Bally’s commitment to developing products designed specifically for the local market, the company will exhibit a large number of Asian-themed titles including “Blazing Dragon”, “Moon Dynasty”, “Rainbow Dragon”, “Tiger Treasures” and “Lucky Dragon” on the Pro V22/22 cabinet. Additionally, “Sakura Festival” and “Dragon” will be showcased on Bally’s Pro V32 cabinet. Lastly, for the award-winning Pro Curve cabinet, featuring the industry’s only curved LCD to emulate spinning reels on a video slot, G2E Asia visitors will experience the titles “Beijing Treasures” and “Great Wall of China” among others. Another highlight of Bally’s exhibit will be the award-winning game “Fish’n for Loot” and “Total Blast”. These new games introduce Bally’s U-Shoot virtual shooting gallery bonus-game play mechanic, in which the player touches the iDeck to create weapons for “shooting” at targets on the main game screens. Asia Pacific casino managers can experience at G2E Asia live demonstrations of iView Display Manager, an interactive communication tool used by players and controlled by the gaming operator. This picture-in-picture style player-user-interface is backward compatible on any gaming device with a touch-screen display. It provides a way for casino operators to present self-service player-account access, marketing messages, and secondary bonus games on the main game screen – without interrupting play. Another showstopper will be Bally’s Elite Bonusing Suite. When combined with the iView and iView Display Manager player-user-interfaces, it adds new levels of excitement to the slot-play experience. The Elite Bonusing Suite applications deliver floor-wide, interactive promotions, second-chance-to-win events and the ability for players to earn valuable rewards. The Bally Mobile team will also be on hand to give live demonstrations of the company’s cloud-based custom mobile apps and mobile websites for casino patrons and internal-facing apps for casino employees. Bally Technologies’ products will be on display in booth 1003. MAY 2012

G2E ASIA 2012 106

Raising the bar

Shuffle Master’s products are already spread all around Asia but the company wants more BY ALEXANDRA LAGES

ompetition is growing tougher across Asia but gaming supplier Shuffle Master, Inc believes there is room for further expansion. The U.S.-based company has set its eyes on the Philippines, while also looking to boost market penetration in Malaysia, Cambodia, Laos and India. But Macau continues to be a top priority. “We are working strongly in the Philippines. We see the country as obviously a strong growth market,” says Ken Jolly, Shuffle Master’s executive vice president for Asia Pacific. To achieve its growth goals, the company has recently strengthened its Asian team. “We’ve brought in some more people. We’ve penetrated the market better than we were probably some months ago and we’re excited,” Mr Jolly says. “The rapid and electronic products are stronger outside of Macau. We are the number one supplier in Singapore.” Shuffle Master posted double-digit growth both in profit and revenue for the quarter ended January 31. The company’s performance in this part of the world was a net contributor to that. “Asia has grown considerably,” Mr Jolly says, without disclosing figures. He is bullish about 2012. “We got a comfortable budget and we are comfortable with the products that we are getting ready for the market. Some will be released at G2E Asia.” Shuffle Master provides products in five distinct categories. The company is a well-known supplier of utility products, which include automatic card shufflers and roulette chip sorters. It also provides proprietary table games, namely live games, side bets and progressives, as well as electronic table systems. A fourth area of Shuffle Master’s portfolio covers video slot machines. Newly introduced Shuffle Interactive is the company’s latest product category, which features online versions of Shuffle Master’s table games, social gaming and mobile applications.

Top solutions Mr Jolly says Shuffle Master dominates the Macau market in the utility products segment. But the company is still lagging behind in other categories. To catch up with competitors, Shuffle Master has been investing heavily in product research and development. The goal is to roll out solutions that give it the ability to be head and shoulders above the competition. Work doesn’t stop there. “We are now in a very comfortable position in electronic tables. But there are a lot of new developments in this segment and we have to keep raising the bar,” Mr Jolly says. “In virtual games, we have been updating the graphics and languages, making dealers more realistic,” he says. The company also plans to make more games available in a virtual environment, like craps. Last year Shuffle Master debuted its Equinox slot MAY 2012

Ken Jolly, Shuffle Master’s executive vice president for Asia Pacific, says he is bullish about 2012. “We are comfortable with the products that we are getting ready for the market” cabinets in Asia. The product has already been deployed on gaming floors across Laos, Cambodia, Malaysia, Singapore, Macau and the Philippines. Shuffle Master is now working to adapt its portfolio to Macau’s new technical standards for electronic gaming machines. From October onwards, all machines will have to comply with the new rules. Mr Jolly doesn’t regard the new specifications as too demanding. Instead, he sees them as an opportunity to grab some market share away from more dominant players. “It is probably a bigger challenge for manufacturers with a larger market share. A large company with hundreds of titles will have to pick each title and re-write it. It will take their focus away from new games,” he says.

G2E ASIA 2012 108

Back-to-back innovation From semi-electronic gaming tables to the latest deck checkers, Shuffle Master is bringing it on at G2E Asia

huffle Master, Inc is set to display a strong lineup of products at this year’s G2E Asia. The exhibit will spotlight key innovations from its five categories – utility solutions, proprietary table games, electronic tables, slot machines

and iGaming. One product the U.S.-based company will be highlighting at G2E Asia will be its i-Table platform. The i-Table integrates a variety of Shuffle Master products to create a new table game experience. Utilizing touch-

screens embedded in a standard-sized gaming table, the i-Table combines an electronic betting interface with a live dealer who deals the selected game. By automating the betting process, the i-Table increases game accuracy and speed, resulting in an estimated 30 percent increase in rounds per hour. It also enhances game security by eliminating dealer errors in game transactions as well as card manipulation cheating. It also helps reduce chip theft. Another Shuffle Master product being featured at this year’s G2E Asia is its Super Top Box multi-feature games, which are randomly triggered. Super Top Box games include Random Magic and Legend of the Lamp. The Super Top Box games combine Shuffle Master’s Equinox cabinet with a 32” LCD top-box display surrounded by a themed trim.

Shuffle away Shuffle Master will showcase the new MD3 shuffler at G2E Asia. It features card recognition technology that can read and verify every card being shuffled. This brings a new level of security to multi-deck tables like blackjack and baccarat. Its patented platform and gripper system counts and shuffles up to eight decks of cards and alerts the dealer of missing or added cards. The MD3 increases game speed by reducing downtime for shuffling. That increases net win by permitting dealers to deal more rounds as opposed to spending time shuffling multi-deck games by hand, Shuffle Master says. The MD3 works with all card types and reduces card wear and tear. Shuffle Master will also present its Deck Checker at G2E Asia, which has recently been re-engineered and brought up to date with all-new components. This includes touchscreen controls and Shuffle Master’s latest card recognition technology. The Deck Checker can check and verify up to eight decks of cards in less than two minutes. It identifies missing, extra or unknown cards. Shuffle Master’s presence at G2E Asia aims to highlight how its products are designed to deliver more profitability to casino operators and more fun to players. Product demonstrations will be available at the company’s exhibit, at booth 801. MAY 2012

109

Game on Spielo introduces new products and a new face at G2E Asia

pielo International has a lot to show at this year’s G2E Asia, starting with a new face. At the show, customers are invited to meet the company’s new Macaubased sales director, Maria Garcia, who joined the company in April. Ms Garcia and newly-appointed general manager of casino systems for Asia Pacific, Lai Fatt Chiang, will be demonstrating dozens of new games Spielo is rolling out for the Asian market, including three “Egyptian Gold” titles: “Cleora”, “Nefturi” and “Ramosis”. “Egyptian Gold” is Spielo’s first progressive link using Episodic Gaming. As players progress through the game during one session, they can save and re-activate their achieved status during the next play session. Game progression unlocks more features and additional bet options become avail-

able. When players reach the highest status, an additional award is randomly revealed. “Kitty Cash” is the latest addition to Spielo’s Atronic multi-level progressive links. It features the cuddly cats from the Artlist Collection’s “The Cat” on an Oxygen cabinet. On top of the three supporting game titles – “KC Royals”, “KC Playgrounds” and “KC Music” – this multi-level progressive features two bonus rounds. Visitors to G2E Asia can also explore two new Diversity game suites, “Absolute Azure” and “Gambling Green”. Each Diversity game suite features up to 10 games grouped into categories that can be selected by players via touch screen, with roulette now available as a selection. In addition, Spielo’s new core games on display at G2E Asia include

“Moving Moments”, “Goldify 2”, “Golden City”, “1421 Voyages of Zheng He”, “Mayan Magic”, “Dolphins Moon”, “Magic Pharaoh”, “Sphinx Wild” and “Master Roulette”.

System to go Spielo will also showcase its System2go. This is the company’s new packaged, affordable slot floor management solution for small-scale, multi-site slot halls. It’s a simple, one-stop solution to help slot venues install an on-line system with minimal effort. System2go networks the entire floor to provide automated readings, reports and additional casino features, depending on the package selected. It is available in four packages: Advantage, Gold, Platinum TK (for use with tickets) and Platinum CC (for use with magnetic stripe cards). Spielo’s complete range of Galaxis casino systems solutions will also be presented at G2E Asia, with a special focus on Star Tables, Star Jackpots and Star Bonus modules. Spielo International will be showing its latest product line-up at its longtime distributor RGB’s booth 527. MAY 2012

G2E ASIA 2012 110

Stay attuned IGT has appointed a new sales head for the Asia Pacific region BY ALEXANDRA LAGES

Going Chinese In order to accomplish his business growth goals, Mr Michalko says he is placing all chips on new products especially tailor-made for the Chinese market. He calls them “market-attuned products with an Asian focus”. “This is really the reason we are confident in growing the business here. We already have some machines specifically tailored for the Macau market, but they are not enough,” Mr Michalko says. IGT has not simply changed the language of the existing games from English to Chinese or adjusted the colours and other visual details. “We’ve actually done a great deal of market research.” In February, Macau introduced a set of new standards for slot machines, which will be fully in-place by October. IGT is not worried about any eventual impact on business. “One of the standards is that machines should be in dual language and we already do that,” Mr Michalko says. “As for the other standards that are more technical, all our staff say that will be no problem for us.” In the first three months of 2012, IGT saw its total revenue increase by 13 percent year-on-year, to US$541 million (MOP4.3 billion). Revenue outside North America grew by 15 percent, to US$126 million. “We had substantial growth,” Mr Michalko says. “So far, MAY 2012

Photo: Manuel Cardoso

ark Michalko is the latest addition to the Asian arm of International Game Technology, Inc (IGT). Mr Michalko took over as sales director of IGT Asia (Macau) Ltd in February, after 35 years of working in the lottery and racing industry. The new head of sales is part of IGT’s pledge to boost its business in Asia. The U.S.-based slot supplier wants to sell more machines in this part of the world and gain a larger market share. “For a long time, most of IGT’s business came from Las Vegas, but in the last two years the focus of growth has been primarily on international business outside North America,” Mr Michalko says. “As a high level strategy for the company, Asia is on the top of the list and will be so for the next couple of years.” IGT Asia team has a heavy task on its shoulders, but the new sales director is confident that the company’s new products will win the hearts and minds of Asian players. “My first task is to grow the footprint of IGT all across Asia, starting with Macau. IGT is a huge company internationally, but we’ve got a relatively smaller footprint in Macau than what we would expect,” he says. Mr Michalko says IGT’s Macau market share is below 10 percent, although it has products deployed in all major casinos. “Our goal is to grow that substantially over the next few years.”

“My first task is to grow the footprint of IGT all across Asia, starting with Macau. IGT is a huge company internationally, but we’ve got a relatively smaller footprint in Macau than what we would expect,” says Mark Michalko, IGT Asia (Macau) Ltd’s sales director the good news is that we are on track to grow the business according to our sales plan.” Although he comes from a non-slot background, Mr Michalko says he is comfortable with his new position. “Players’ motivation and mentality is quite similar” in both casino and lottery gaming, he says. The Asian market is not new for IGT’s new sales director, since he worked for three and a half years in Hong Kong and in the Philippines.

G2E ASIA 2012 112

Regional feel Over 80 percent of IGT’s game portfolio at G2E Asia will be Asian-centric

nternational Game Technology, Inc will be showcasing a huge range of products across several categories at G2E Asia. The U.S.based gaming supplier will feature new market-attuned games, progressive links, blockbuster pop-culture themes and systems solutions. This year, more than 80 percent of the IGT games at G2E Asia have been created with themes, dual languages (Chinese and English) and math models that Asian casinos and players are seeking, the gaming supplier says. Those game designs were developed with the help of extensive player surveys the company conducted in Macau. That is the case of “West Journey Treasure Hunt”, designed specifically

for Asian players with high volatility. It is based on the great Chinese classic story “Journey to the West”. The base game features ‘Stacked Wilds’ like the highly successful ‘Golden Goddess’ game from IGT. In addition, a random multiplier appears if three or more reels are covered with the same symbol. Another game designed for the Asian markets, “Four Great Chinese Beauties” is a low denomination game with a Chinese theme. “Pearl Dragon”, an IGT progressive link with an Asian flavour, will also be on display at G2E Asia. And that’s not all. The company will be showcasing its heritage brand – IGT Classics – under which “Great Escapes”, a game that still performs well in Asia, has been redeveloped.

Global blockbusters IGT will also bring some of its most successful games worldwide to exhibit in Macau. These include “Godzilla”, a well-recognised Asian theme with powerful game play, “Elvis” and “Ghostbusters”, just to name a few. IGT’s gaming management solutions on display at G2E Asia will cover leading server-based gaming tools offering dynamic ways to communicate with players, and tools to manage the casino floor, promotions and operations. Highlighted products include the Tournament Manager and also the IGT Service Window, which runs on any LCD touch screen machine and takes personalised system messaging to a whole new level. With more than 10 years experience in legalized online and mobile gaming markets, IGT will have expertise on hand to discuss its latest interactive gaming portfolio of slots, poker, sports betting, table games and bingo offerings including “Monopoly: You’re in the Money”, “Cleopatra”, “Da Vinci Diamonds”, “Kitty Glitter” and “Cats”. IGT’s portfolio of games and systems solutions will be available at booth 700. MAY 2012

113

The full deal Aruze takes on G2E Asia with a strong hand

ruze Gaming America, Inc is placing a double bet at this year’s G2E Asia. The company wants to use the event as a platform to highlight its proven performing products within Asia, as well as to showcase and introduce new games. The goal is to present Aruze as a complete gaming product supplier from standalone slot machines to link products, to its latest advances in online slot system connectivity. This is all part of the company’s business strategy to increase market share in existing markets across Asia Pacific, while looking to penetrate new jurisdictions. The list of products to be showcased at G2E Asia is therefore a long one. One definitely worth mentioning is “The Gold”. Featuring a gold-bar topper, this five-reel, 30-line Innovator stepper game features theme music that evokes feelings of the gold rush and true 3D gold bar reel symbols. Aruze will also present its “Crystal” game, a new 30-line stepper with scatter pays and an engaging bonus feature, based on a strong game package and proven mathematics. Worth highlighting are the “Cherry Chance” series of games, Aruze’s new five-reel, five-line stepper games that

play all lines for 30-credit minimum bets. Featuring large reels with variable speeds of up to 200 revolutions per minute and lighting effects from 240plus LEDs, they bring a new twist to a classic gaming concept.

Spin the wheel Aruze’s new G-Deluxe game, “Franken Mama”, will also be on display at G2E Asia. This five-reel video game is played on the company’s G-Enex 22 widescreen video slot machine and contains several bonus features. Also making use of the G-Enex 22, “Dragon Fever” contains a wide array of bonus features that are enhanced with a large interactive top box. Aruze plans to feature at G2E Asia the new “Lucky Big Wheel”, its latest G-Station game. This multi-station version of the popular table game puts the spin of the big wheel in the hands of the player, boosting the level of interaction. Each “Lucky Big Wheel” station is equipped with a lever. By pulling it, players can spin the giant wheel and determine their own fate; up to 50 stations can be linked to the host. “Lucky Big Wheel” is also set to capture players’ interest with its vivid illuminations and sharp sound effects. Aruze’s products will be on display on booth 519.

MAY 2012

G2E ASIA 2012 114

Fun multiplier Interblock has grand plans for this year’s G2E Asia

lektronček, the Slovenian company renowned for its Interblock multi-player games, has been making its presence felt at international trade shows for the gaming industry. After Enada Primavera 2012 in Rimini, Italy in mid-March, the company was seen at Interazar in Madrid, and then at the National Indian Gaming Trade Show, in the United States, at the beginning of April. Interblock is now preparing for its appearance at G2E Asia. In Macau, Interblock will present MAY 2012

its Organic product range, one of the most advanced multi-player platforms available on the market. This is part of its fourth-generation product line, aptly named G4, which has been available for a little more than a year. “The flexibility and great look of all of our products and the ability to be able to customize an area with both real and virtual product options really peaks the interest of our blue ribbon customer base,” says Danny Oulette, sales manager at Interblock USA. Interblock’s products are present in most of the major casinos in Las

Vegas, with more machines being rolled out. Although the company is seeing huge growth in North America, it also remains very active on the European and Asian markets, constantly looking for new opportunities. At G2E Asia, Interblock will be featuring its Organic Virtual multiplayer-station, one of the most attractive video table products currently available. It comes with two basic versions, for playing with cards games or a roulette wheel respectively. The version of Organic Virtual that will be featured at G2E Asia will

115 include a baccarat game with a new community display and the possibility of “revealing” both Player’s and Banker’s cards. The Organic Virtual products feature multiplayer generators, as the outcome of each individual game is identical on all connected play stations and not different for every play station. Generators are totally independent and automated, as they do not require any human assistance when simulating traditional table games.

Roll the dice One of Interblock’s most acknowledged products to be showcased at G2E Asia is the G4 Organic Dice. It is designed to randomly generate results for craps, sic bo, fish–shrimp-crab or even all three at once. The dice are evenly weighted and are equipped with unique RFID chips, capable of reading and displaying the results of each roll. The electro-mechanical generator enables between 60 and 80 results per hour and is equipped with a camera that conveys footage of the dice either to the play stations or the live image display. A glass dome that prevents unauthorized access into the machine’s interior covers the generator. Beneath the dome is a computer, which controls all components for operating the dice shaker, and it communicates with play stations. Interblock offers a wide range of products from the Dice family, as they come in different shapes with four, six, eight, 10 or 12 play stations. This gives the casino operators an option to optimize the floor layout and maximize their turnover. Also on display will be Organic Twins, which belongs to the Multicenter family. It can be designed in different shapes with 12, 14 and 16 play stations in a trendy football shape design with individual player information displays. This multi-game, multi-denomination, multi-player platform can offer operators the possibility of selecting between any combination of available games: roulette (single zero or double zero), dice (craps or sic bo) and video games. Twins allows players to flip between games as they desire, with the objective of increasing play on each in-

dividual station by giving punters what they want, when they want it. Elektronček was established in 1989 and was repositioned in the gaming industry in 1997, introducing its first generation of multiplayer gaming

machines two years later. In 2011, its Interblock’s G4 Organic Roulette became the first ever electro-mechanical roulette approved in Nevada. Interblock’s Organic product range will be on display at booth 1019. MAY 2012

G2E ASIA 2012 116

Beating the field Konami brings its top-performing cabinets and titles to G2E Asia

acau and the Asia Pacific region are growing more important for Konami Gaming, Inc. That is one of the reasons why the company is bringing its top products to showcase at G2E Asia. “We are gradually increasing

our foothold in the market and the recent performance of several games, especially those on the Advantage 5 stepper, is very pleasing,” a company spokesperson said. “It is a highly competitive region and we are being methodical in our research and deployment of products.”

At this year’s show, Konami is highlighting three cabinets: its Podium K2V Video, the Advantage 5 Stepper and the Advantage Revolution Stepper. Konami will only be bringing its very best games to Macau. “Beat the Field” is one of them. It is the latest community style link from the company. “Beat The Field” takes all the excitement of a day at the races to the gaming floor environment. Available as a four-level progressive, it supports both video and stepper platforms. When the mystery jackpot is triggered, horses are allocated to eligible players based on bet level. The horse race begins and players compete for a jackpot prize. Konami’s “Free Spin Dragons” is a new free game link progressive. Instead of a cash amount incrementing, the number of free spins awarded continues to rise until the ‘Free Spin Dragons’ feature is triggered by a contributing player. The feature is played on a three-reel, three-line screen and three matching symbols on any pay line awards a corresponding prize.

Rocking fun Bonus Betty, Rockin’ Rick and the other characters from the “Rock Around the Clock” band will be turning up the volume at Konami’s G2E Asia stand. The game is available as a Podium video link or an Advantage 5 standalone stepper. It includes multiple progressive jackpots that can be won during ‘Rock Around the Clock’ features. A special Konami release for the Year of the Dragon is the Advantage 5 stepper theme “Gigantic Dragons”, which features several bonus features. For instance, the ‘Gold Dragon Free Game Bonus’ is triggered when three or more bonus symbols appear in any position on any reel. Three, four or five bonus symbols trigger 10, 15 or 20 free games, respectively. Konami will be showcasing its products at booth 811. MAY 2012

117

Show me the chips GPI to present a full range of casino currency and table equipment products at G2E Asia

uring G2E Asia, visitors will have a unique opportunity to see some of Gaming Partners International Corp’s (GPI) latest products. The company, a leading provider of casino currency and table game equipment worldwide, will be presenting its most prestigious solutions and state of art technology. The Macau and Asia Pacific markets have been, and will continue to be, a primary focus for GPI in the near future, a spokesperson says. “We expect to continue providing casinos with table game products that help to increase their operational efficiencies, provide greater currency security and enhance overall performance in the coming years.” One of GPI’s highlights for this year’s show will be its B&G Premium Chips. They combine unprecedented chip design flexibility with the industry’s largest selection of visible and invisible security features.

B&G Premium Chips give casinos the ability to custom-design their American-style chips to match their individual operational and branding objectives. By incorporating a wide range of colors with up to six individual injections, casinos can create an intricate chip mold design that is both visually distinctive and unique as well as more counterfeit resistant. GPI’s Dual Level Chip Tray will also be on display at G2E Asia. By automating chip tray inventory, it increases table efficiency, productivity and security by eliminating the need for manual counts. On top of that, the Dual Level Chip Tray can help eliminate human tray accounting errors.

Valuable insight There is more coming out of GPI’s headquarters in Las Vegas. For instance, its Chip Inventory System 2.0. This RFID system tracks the loca-

tion and status of all enabled and authorized chips throughout the casino. This increases inventory movement efficiency and security while providing valuable insight into a casino’s operations. The Chip Inventory System 2.0 real-time monitoring and authentication of inventory provides instant and accurate validation of chip amounts and serial numbers. It can be linked automatically to any third-party casino management system. Last but not least, GPI’s Table Top Authenticator solutions will also be featured at G2E Asia. Using an easyto-conceal reader installed underneath the table layout, the device quickly and accurately reads anywhere from a single chip to three stacks of 20 in mere seconds. That information is then relayed to the dealer and pit boss for chip and amount verification. The GPI team will be present at booth 1113. MAY 2012

G2E ASIA 2012 118

Cracking jackpots See the next generation of Paltronics products at G2E Asia

he latest casino management solutions by Paltronics, Inc will be on display at G2E Asia, including its One Link 3E systems and its Mystery Madness jackpot link. Paltronics is a leading provider of jackpot and media systems in Asia. The company is already well established in Macau. Paltronics has also experienced success in Singapore, Vietnam and the Philippines, and plans to make further progressions in Asia Pacific. At G2E Asia, the firm will be

featuring its One Link 3E systems, the next generation of Paltronics One Link systems. It contains a numerous new functions, representing a whole new product layer for slots, tables, and marketing/media. Paltronics’ One Link 3E Slot System, for instance, is a highly scalable, Ethernet-based, slot jackpot progressive and bonusing system. It is extremely reliable and easy-to-use in casino gaming floor and property wide applications. Linked through a casino’s existing local or wide-area network, One Link

3E Slot System provides a powerful solution for monitoring slot activity and creating more rewarding player experiences in order to increase casino revenue. Paltronics’ One Link 3E Media System, on the other hand, gives casinos the ability to centrally create, edit, manage and “narrowcast” a full range of media content playlists on a multitude of display types at one or more properties. Casinos can integrate their brand messaging, marketing communications and promotional strategies across their digital signage displays using a combination of video, audio, animations, live streaming television broadcasts, text and more.

True madness Paltronics’ Mystery Madness, a mystery jackpot link that can have more than one winner, will also be showcased at G2E Asia. Mystery Madness Jackpot operates by pairing two levels of a jackpot controller. The first level (the Mystery Level) is a larger jackpot and the second level (the Madness Level) is a smaller jackpot. The Madness Level begins at $0 and increments very quickly in comparison to the Mystery Level. When these smaller jackpots (Madness Level) are hit, they are stored in the controller without being awarded to any machines. The stored jackpots will be highlighted on a “firecracker tree”, which will be shown on the jackpot display. When the Mystery Level is hit, the Mystery Jackpot is awarded to the electronic gaming machine and all the stored Madness Level Jackpots are awarded to all eligible players including the Mystery Jackpot winner at the same time. This is where the cracker tree explodes to highlight the Madness jackpots being won. Paltronics products are available at G2E Asia in booth 100 and also live in operation at Galaxy Macau, Sands China Ltd properties, MGM Macau and Wynn Macau. MAY 2012

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PALtronics Macau Tel: +853 6628 1453 E-mail: kylie@paltronics.com.au www.paltronics.com.au AIA Tower 18th Floor, Unit 4, No. 251A-301 Avenida Commercial de Macau

G2E ASIA 2012 120

Better couponing FutureLogic is showcasing its intelligent promotional couponing system at G2E Asia

utureLogic, Inc is presenting version 2.0 of its intelligent promotional couponing system PromoNet, with new features and functionalities, at this year’s G2E Asia. The latest version was launched earlier this year at ICE Totally Gaming 2012, held in London. FutureLogic designs and builds electromechanical assembly solutions for printing needs. As a leader in super-robust thermal printer technology, FutureLogic is one of the industry’s ppremier suppliers pp of thermal pprinters

MAY 2012

for casino gaming equipment, among several other products. PromoNet’s Version 2.0 aims to excel in its connectivity and flexibility. It includes PromoNet Player Rewards v2.0, PromoNet Mobile Couponing and PromoNet Standalone. “Version 2.0 also ensures connectivity across the casino floor with all the major gaming machine brands approved, making the PromoNet couponing system a fantastic marketing tool for the Asian market,” says Alfred Hwee,, FutureLogic’s Business Develop-

ment Manager for Asia. “We have had a lot of interest from major operators over the last few months and are excited about showing PromoNet Version 2.0 at G2E Asia.” Other functions of version 2.0 are mobile couponing issuance and redemption via a hand-held device. Another of the system’s new functionalities is its network-less solution.

Know the difference Moreover, PromoNet Version 2.0 interfaces to multiple third-party slot accounting and player tracking systems enabling operators to differentiate between carded and non-card or anonymous players. “I’m excited to be launching PromoNet v2.0 at G2E Asia and proud that we are continually improving and developing PromoNet,” says John Edmunds, FutureLogic’s vicepresident for international markets. “The product has got an impressive development roadmap ahead with great new features, additional modules and innovative ideas.” The presentation of PromoNet Version 2.0 at G2E Asia will be accompanied by FutureLogic’s range of printer products, including the GEN3 Evolution printer and CouponXpress desktop printer. Also on display at this year’s G2E will be the company’s TableXchange, a device designed specifically to enable players to use cashout vouchers at table games. The TableXchange device connects table games to a casino’s existing ticketin-ticket-out network. This technology creates a common currency across the casino, bridges slots and table play, and helps casinos identify valuable crossover players, FutureLogic says. The TableXchange device further streamlines casino operations by virtually eliminating the need to replenish chips at table games. FutureLogic products will be on display on booth 1027.

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G2E Asia Stand

1027

122

Hospitality

Top end option The Grand Lapa hotel prides itself on a heritage that has endured the passage of time, expansion and ownership changes BY SARA FARR

nyone who has been in Macau for the last three decades will have witnessed not only the changes that the city as a whole has undergone, but also the changes at the former Mandarin Oriental Hotel, which was renamed the Grand Lapa hotel three years ago. The most noticeable difference is how the space has grown since the hotel opened in 1984, under the name of the Excelsior Hotel. Situated beside one of the city’s busiest roads, the hotel has undergone several renovations and expansions, including the addition of the 15,000 square metre resort behind it in 1999. The hotel was renamed the Grand Lapa after the Mandarin Oriental Hotel Group and its equal partner in the business, Shun Tak Holdings Ltd, sold it to Sociedade de Turismo e Diversões de Macau SA. Despite the ownership and name changes, the Mandarin Oriental group continues to manage the 416-room hotel. General manager Bede Barry says there have been no big changes in management or operations under the new owners, as Mandarin Oriental still applies its standards to the hotel. “We’re very established in the market place,” says Mr Barry. “Visitors to Macau have more and more choice. They experience other hotels, but we still have a very high return guest factor.” The hotel’s position beside Sands Macao and near the Outer Harbour Ferry Terminal, is one important reason that guests keep coming back. Another is the hotel’s heritage. When it first opened, it was the obvious choice for any top-end visitor to Macau, boasting perhaps the best service in town. Although several five-star hotels have opened since the liberalisation of the gaming sector, the Grand Lapa has not felt much competitive pressure. “We’re very unique. We have this amazing resort at the back so we have longstanding loyal guests staying,” Mr Barry says.

Wealth supplement Among the Grand Lapa’s competitors is the new Mandarin Oriental Hotel, opened in 2010 in the One Central complex. The waterfront hotel is co-owned by Shun Tak and Hongkong Land Co Ltd and Mandarin Oriental manages it, just as it manages the Grand Lapa. One of the Grand Lapa’s strengths is the custom that Macau residents give it. During the summer, the swimming pool and resort area are favourites with locals. Mr Barry says the resort has around 500 members, who can use the pool, gym and spa. The Grand Lapa also prides itself on the food and drink it offers in its three restaurants and one bar. It renovated its Cantonese restaurant last year, renaming it Kam Lai Heen. This was the first phase of a major renovation project announced in March 2011. MAY 2012

The hotel is also popular with tourists from the mainland, the number of which increases every year. In the first three months of this year 6.9 million visitors arrived in Macau, 7.9 percent more than a year before, according to the Statistics and Census Service. About 60 percent were mainlanders. Mr Barry says new visitors from the mainland supplement the Grand Lapa’s core of regular guests. “We’re very fortunate to be in a city where there is a very healthy growth,” he says. The average number of nights a visitor stays at the Grand Lapa fluctuates with the seasons. During the Lunar New Year holidays, it is generally higher. Over the years, however, “it has pretty much remained the same”, Mr Barry says. The average length of stay in five-star hotels in Macau was 1.8 nights in the first two months of this year, official data shows. The average occupancy rate was 84 percent, 3.6 percentage points more than a year before.

Land of opportunity Staff turnover at the Grand Lapa has been low since it opened. Mr Barry admits that with other businesses short of manpower, it is a challenge to find new staff, but says some of his hotel’s longest-serving employees have been with the property for 20 years. “Even after retirement they still elect to stay with us.” This means that after retiring, some employees return as casuals. “They could go out and get a job in a casino or in another hotel. But we do promote a family atmosphere,” Mr Barry says. Mandarin Oriental’s philosophy and employee programmes “encourage and create that loyalty”, he says. The group has an employee satisfaction programme for everybody from beginners to senior managers. It also has an exchange programme “where we send our colleagues to our other hotels for training and colleagues come to us for training,” Mr Barry says. The Grand Lapa expects to send some of its staff to help with the opening this year of a Mandarin Oriental hotel in Guangzhou. Another Mandarin Oriental hotel will soon open up in Taipei. Others are being planned for Beijing and Shanghai. “In the Asia-Pacific area we have a lot of growth happening so there will be a lot of opportunities, also for transfers as well,” Mr Barry says. “It’s a career growth opportunity.” He is confident about the Grand Lapa’s prospects this year. “It’s going to be a strong year for us. Visitor arrivals will continue to be strong, so I think that just translates into room nights for the hotel.” The Grand Lapa focuses on its heritage, as do all Mandarin Oriental hotels, but also keeps its eye on the future. “We do want to develop and improve and we want to be around here for another 28 years, if not more,” Mr Barry says. “We do need to continuously improve our product.”

EXPERIENCED HANDS

Photo: Carmo Correia

ede Barry has been the Grand Lapa hotelâ&#x20AC;&#x2122;s general manager since February 2010, when he replaced Michael Ziemer. He has close to 20 years of international hotel management experience, gained mostly with Hyatt Hotels Corp. His last post with Hyatt was director of marketing operations in the companyâ&#x20AC;&#x2122;s office in Chicago. Mr Barry joined Mandarin Oriental Hotel Group in 2007 as resident manager of the Mandarin Oriental Hotel in Hong Kong.

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Tourism

THREE HOTELS SCORE TOP GREEN AWARD

A total of 10 hotels have been granted the 2011 Macau Green Hotel award Three hotels received the highest category of the 2011 edition of the Macau Green Hotel Award, the Environmental Protection Bureau announced last month. They were Crown Towers, the Venetian Macao and Hard Rock Hotel. This award was first launched in 2007 and has been designed to promote the importance of environmental management within the sector. For the 2010 edition, the government introduced three categories – gold, silver and

bronze – but at the time no hotel scored the top award. Overall, 10 hotels were awarded in the 2011 edition. The Environmental Protection Bureau, with the support of several local trade associations, organizes the award. The awards presentation ceremony is scheduled to take place next month. A total of 23 hotels currently hold the Macau Green Award, which is valid for a period of three years.

‘ZERO-FARE’ TOURS BACK

SMOOTH SAILING

The government wants to increase the number of yacht berths in Macau and simplify the paperwork for berthing. A statement released by the Maritime Authority says this along with promoting a new “individual travel scheme” for yacht travellers would benefit the city’s tourism industry. The new travel scheme would aim to make travelling in yachts from Guangdong, Macau and Hong Kong easier.

MAY 2012

The Hong Kong Travel Industry Council says ‘zero-fare’ tours to Hong Kong and Macau are back. According to media reports, the body has received a number of reports from travel agencies in the mainland offering four-day tours to Hong Kong and Macau for HK$200 (US$26). The ‘zerofare’ tours are those in which tourists don’t need to pay any fees or only a small amount that doesn’t cover all the costs. When they arrive in Macau, they are usually forced to visit several shops, with the operators insisting that they purchase goods, many of which are of low quality and at exaggerate prices. Both the Macau Government Tourist Office and its mainland counterparts have pledged in the past to fight such kinds of tours.

MORE TOURISTS IN CHING MING AND EASTER

Macau welcomed close to 800,000 tourists from April 2 to April 8, during the Ching Ming and Easter holidays. The number was up 4.9 percent in comparison with the equivalent period last year, the Public Security Police said. The Border Gate continued to be the most used checkpoint in Macau.

125 GUSTAVO CAVALIERE HOSPITALITY INDUSTRY EXPERT - gustavo.cavaliere@gmail.com

When mediocrity rules GETTING BY WITH WHAT IS “GOOD ENOUGH”, JUST TO GET THE WORK OUT OF THE WAY, IS A HABIT AT SEVERAL HOTELS AND IT CARRIES A HEAVY PRICE ne of the most revolting things I hear all too often from hotel managers in Macau is that the quality of service at their hotels is “good enough”. “Good enough” is an acknowledgment that things could be better and a polite way to disguise mediocrity. People should set their standards high, especially in the luxury hospitality business, and expect everyone else to live up to those requirements, not just settle for “good enough”. Striving for improvement starts with accepting one’s flaws. There is no shame in this. It is often the first step towards better performance. Note that I am not particularly advocating perfection. Rather, I am endorsing the view that every member of staff should complete his or her assigned tasks to the best of his or her ability, every time. You may question my disdain for “good enough”, arguing that at least it gets the job done to a minimum standard. Allow me to explain. Mediocrity gives way to free-riding. High-performers, in turn, become less likely to contribute fully to a team’s performance if they feel other members of the team are slacking. This is a vicious cycle. Eventually teams will spare only the minimum amount of effort required to get by within the minimum acceptable standards. While some high-performers may never settle for less than all-out effort in order to achieve something they are proud of, the burden is often too heavy for an individual to carry. A new culture is created from mediocrity – a “yes” culture. If we take mediocrity as a standard, the chances are that you will get people who are quick to pay compliments but who would rather bite their tongues than point out that something could have been done better. Having one’s views challenged is not necessarily a bad thing. It is a basic step on the road to improvement. If one’s opinions are not questioned regularly, sooner or later one’s ego and self-importance will get in the way and performance will suffer.

Just take it... Take a stroll around any of Macau’s five-star hotels. You see it all around you, day in and day out. Mediocrity is everywhere, from the poor leadership down to the uncaring responses of those whose job it is to serve the customers. Getting by with what is “good enough”, just to get the work out of the way, is a habit in many hotels. If people find themselves in such a working environment, it is easy to slack off and do the same, and even get some pats

on the back for being able to accomplish a task with minimal effort. That should not be the way. Hospitality staff in particular and all workers in general should not lose sight of what is important and should always do their best. To do that, workers must take risks, even if it means failing miserably. Failing when you try your best teaches you valuable lessons. Failing when you have opted for what is just “good enough” will always leave you wondering if the outcome could have been different with a little more personal effort. It gives me an uneasy feeling seeing mediocre service being rendered at most of Macau’s hotels when the potential to achieve excellence is right around the corner. It is just a matter of changing mentalities.

...or leave it It is true that there are obstacles that hamper the performance of hospitality workers here, including time pressure, budget constraints, leadership shortcomings and customer demands. But neither members of staff nor managers should hide behind these obstacles in an attempt to justify their tendency simply to get the work out of the way without giving a hoot about the quality of their service. Problems arising from the “good enough” habit usually go unnoticed at first. On the surface it does look as though things are actually getting done. The deficiencies in quality are labelled “acceptable”, in view of the high level of productivity that hotels require. Worrying signs gradually emerge but managers continue to think the end justifies the means. Instead of trying to stop the decline in the quality of service, they accept the “good enough” habit as “the way we do things here”. Customer satisfaction takes a hit but workers just carry on with the same routines, like automatons. Those members of staff that question the habit are forced to conform or risk the criticism of the majority. Hospitality workers must go beyond this mindset. They must strive for better and have a broader vision of their role. Rejecting mediocrity does not necessarily mean giving up financial security for personal integrity. The two can live side by side. Of course, mediocre members of staff do not like this way of thinking. They do not like whistleblowers that remind society they are underperforming. Likewise, they will not like this column. Unfortunately, the onus is with the “doers”, those who strive to do their best. They are a minority in Macau’s hospitality sector. I wish them the best of luck in changing the industry. It is not going to be easy.

MAY 2012

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Business

The sunny side U.S. lifestyle brand Tommy Bahama chooses Macau for its first shop in Asia BY ALEXANDRA LAGES

or Tommy Bahama, life is just one long weekend. So why not dress as comfortably as you can? This is the challenge the United States lifestyle brand is bringing to Macau and other Asian cities. Tommy Bahama Group Inc, which owns the brand, opened its first shop in the city last month, at the Venetian

Macao. It is also Tommy Bahama’s first Asian outlet and will be followed by two others later this year. The company’s Asian expansion is set to be gradual. The strategy is to learn about a market instead of plunging in head first, says Tommy Bahama Group chief executive Terry Pillow. Even so, he says he expects the Asian market to account for 15

percent of sales within three to five years. The second Tommy Bahama shop in Asia will open its doors in Singapore this month. Hong Kong comes next. It should have an outlet by the end of the year. Next year, Tokyo will get a combined shop and restaurant – a concept popular with Tommy Bahama customers in the United States.

Tommy Bahama plans to open up to four shops a year in Asia. It says it is not looking for fast expansion. Instead, it wants to make the brand more conspicuous in the region and take it from there “We do have high expectations for these stores. It’s hard to tell the figures. But when we signed the leases we clearly had plans to hit very promising numbers,” Mr Pillow says. The company plans to open up to four shops a year in Asia. It says it is not looking for fast expansion. Instead, it wants to make the brand more conspicuous in the region and take it from there. Macau was chosen as the first place in Asia for a Tommy Bahama shop because of “timing issues”, Mr Pillow says. But there are obvious similarities between this market and others where the brand already has a foothold. “We have five stores in Las Vegas, one in Atlantic City and one in Mohegan Sun in Connecticut, so we are familiar with the casino business. Macau fits MAY 2012

127 right into that. This [Venetian Macao] is obviously a premium location, consistent with what we do as a brand,” he says.

Loosen up Tommy Bahama is eyeing the Macau tourist market in particular. “For us, not to be in a place where 28 million people go doesn’t make any sense,” says the managing director of Tommy Bahama Asia, Brian Pearce. “There are not only mainland Chinese but Koreans and other Asians,” Mr Pearce says. “This will help us when opening future stores.” He says the brand is choosy about where it opens shops. This is evidenced by its choice of the Venetian, which handles more tourists than any other resort, as its location here. The Tommy Bahama shop covers more than 230 square metres. It has a variety of merchandise, including men’s and women’s island-lifestyle-inspired clothes and accessories, and home décor items. It is the first Tommy Bahama shop to carry the new “international fit” size, meant for Asian shoppers. Mr Pearce believes Asians are starting to change their attitude to clothes and becoming more relaxed. That, he says, means business for Tommy Bahama. “There are a lot of stores out there still selling suits and ties. That has been the business model here. But I think people are becoming much more casual about their approach to work and life.” Soaring rents are a problem for companies wishing to set foot in Macau, but Tommy Bahama is confident that its sales volume will make the rent bearable. “Rents are more expensive than back in the U.S. but that is the cost of doing business here. That’s not going to keep us away. We definitely want to be in this market,” Mr Pearce says. Finding workers has not been much of a problem. “We spent some time training staff. We have 10 employees in total and nine are local,” he says. Apart from expanding in Asia, Tommy Bahama intends to increase the number of shops it has in the United States to 12 this year. They will include a shop-cum-restaurant in Fifth Avenue in New York, due to open in the fourth quarter, and an outlet in Michigan Avenue in Chicago.

WELCOME TO THE TROPICS T

ommy Bahama designs and sells men’s and women’s clothes and accessories, and home décor items that have in common an “elegant island living” theme. The goods are meant for affluent men and women aged 35 or more that have a relaxed and casual approach to day-to-day life, the brand’s owner says. Established in August 1992, with its headquarters in Seattle, Tommy Bahama Group Inc was acquired by another U.S. company, Oxford Industries Inc, in 2003. Tommy Bahama Group posted net sales of US$452 million (MOP3.6 billion) for the year ended January 28, 13 percent more than the year before, and its operating profit jumped by 26 percent to US$64 million. Tommy Bahama operated 96 shops at home and abroad in January, seven more than a year before. They included 13 shops-cum-restaurants. The combination of shops and restaurants has been successful, with net sales per square metre in shops that have adjoining restaurants outpacing net sales in ordinary shops, Oxford Industries says.

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Business

At a standstill The distributor of Segway’s green personal vehicles is trying to build a tourism niche in a market ruled by red tape and awkward roads BY ALEXANDRA LAGES

everal tourism destinations worldwide already use two-wheeled, battery-powered personal vehicles for city tours. JCAM Advanced Mobility Co Ltd, the exclusive distributor of Segway Inc products in Hong Kong, is striving to do the same in Macau. The company has sold Segway vehicles in Hong Kong since 2005. It made its first deals in Macau two years later with Sands China Ltd as the gaming operator opened the Venetian Macao. JCAM has planned to introduce Segway city tours in Macau for a while already but a company official says it faces some hurdles. Sales manager Benny Ng says the Segway personal transporter vehicles are not ideal for some parts of Macau because of the city’s “non-user friendly” layout, with several narrow, often congested roads and streets. Government bureaucracy is another problem, Mr Ng says. The city tours project remains on hold due to lack of regulation.

Going in circles “We wish to have routes in Macau’s central area, maybe by the sea, or a tour around Galaxy, Venetian, City of Dreams. We aren’t looking for an approval for using Segway in the whole city, as we just want to use it only in areas it doesn’t affect traffic,” Mr Ng says. He says Segway tours would help diversify the city’s tourism offering. Paris and Bangkok are cities that already have similar tours. Segway vehicles can travel up to a maximum speed of approximately 20 km/h. “We always get support from the Macau Trade and Investment Promotion Institute about this idea. However, from our experience, the most difficult part is regulation. It takes a long time for the government to look into it,” Mr Ng says. JCAM is planning a new approach to bypass the problem. The company

JCAM has planned to introduce Segway city tours in Macau for a while already but a company official says it faces some hurdles MAY 2012

129 plans to present the Macau government with relevant regulations from Portugal, Europe and the United States. Segway vehicles have faced similar problems in other jurisdictions. They are still outlawed for use in public areas by most Australian states, for instance. Mr Ng is urging Macau officials to change their approach towards green mobility and electric vehicles. “The government should be more aggressive so that the green industry can be more confident in co-operating with Macau and introducing new technologies and products.” A tax break on electric vehicles has recently been introduced but importers complain about the lack of regulations for the sector. The Environmental Protection Bureau is still conducting a study on the feasibility of eco-vehicles in Macau. There is no roadmap so far for the introduction of such vehicles.

It’s your daily business

Green machines A more aggressive plan to introduce electric vehicles might include the government buying vehicles for their own use, Mr Ng says. “Do not always just wait for results from other places to learn.” JCAM has done better business in Hong Kong and the mainland. Mr Ng said there were regulations in-place in both markets, transmitting enough confidence to consumers to invest in these types of products. Mr Ng says that Macau, much like Hong Kong, is a gateway through which to reach the mainland. Its value as a window display for products is increasing as more mainland tourists visit Macau. For now, the obvious clients for the company’s Segway products are the city’s casino-resorts, whose staff – particularly security guards – travel several kilometres every day. Mr Ng is expecting to do more business with the city’s gaming operators as Cotai continues welcoming more resorts. “We expect not to only apply Segway on security but also mobile marketing.” JCAM was established in 2005 and is co-founded by actor Jackie Chan. It distributes eco-friendly electric vehicles. The company represents Segway and electric motorcycles from Brammo Inc. Last year, the Hong Kong government chose a Brammo model to replace some petrol-powered motorcycles used by the police and other government departments. MAY 2012

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Technology

Patently lagging Applications for patents are on the rise worldwide but Macau is bucking the trend BY SARA FARR

ost indicators of development have risen in Macau in recent years, owing to the economic boom. But one that has not been rising is the number of invention patent applications. Data from Macau Economic Services shows the number of applications submitted has been dropping since 2008, having reached a peak of 292 in 2007. Only 56 applications were made last year, six fewer than in 2010. The slowdown has continued this year. In the first quarter, only five applications were submitted, half the number of a year before. This bucks the global trend. The World Intellectual Property Organisation says 10.7 percent more patent appli-

MAY 2012

cations were made worldwide last year than in 2010, the biggest increase since 2005. The mainland was the world’s fourth-biggest source of patent applications last year, accounting for 9 percent of the total. The United States was the biggest source, with 48,600 applications, Japan the second-biggest and Germany the third-biggest. In all four countries, more patent applications were submitted last year than the year before. The growth was fastest in the mainland, where there were 33.4 percent more applications than the year before. In Macau, fewer than 1,100 invention patent applications were made between 2001 and March this year. Most

were gaming-related, a spokesperson for Macau Economic Services says. Only 13 published applications were made by resident individuals or local entities.

Academic blues Worldwide, academia is one of the main sources of patent applications. Macau is different. “Patenting is important for top universities in that it shows their excellence in a number of diverse fields,” says Rui Martins, vice-rector for research at the University of Macau. He says Hong Kong University and the Chinese University of Hong Kong together have “a great portfolio”. The University of Macau has had nine patents registered, and has

131 applied for several more, according to its website. But most of those registered are registered in the United States, the mainland or Taiwan, not Macau. The reason is that there is little or no competition to be first to claim intellectual property here. “We tried doing it in the past but all we patented was software for translations from Chinese to Portuguese, as well as a Macau map software for mobile devices,” says Mr Martins. Mr Martins has himself co-written three U.S. patents and submitted applications for another four. The University of Macau, with two national key state laboratories for Chinese traditional medicine and microelectronics established last year, is expected to apply for more patents. Abroad, it is common for educational institutions to commercially exploit patents that they hold. “But the University of Macau isn’t as advanced,” Mr Martins says. “We don’t have the space and physical conditions to do it.” However, once the university moves to its new campus on Hengqin Island, this could change. “There are plans for it,” “Mr Martins says. “But for that, there needs to be venture capital.”

OWNING AN INVENTION What is a patent?

A patent gives an inventor the exclusive right to exploit his or her invention for a limited period. A Macau inventor must apply for a patent to the Economic Services. The application is examined and either a patent is granted and registered or the application is rejected. The holder of a patent is free to sell it during its period of validity.

What does a patent protect?

The holder has the exclusive right to manufacture, use and sell the product or method described in the patent. The owner also has the right to prohibit others from using the patented product or method without authorisation. Unauthorised use constitutes patent infringement.

What kinds of patents are there?

There are three main kinds in Macau: an invention patent, a utility patent (also called utility model) and an industrial model and design. Invention patents and utility patents cover new technical schemes for products or methods, or the improvement of previous technologies. The technical standard of a utility patent is lower than that of an invention patent. An industrial design right protects shapes, patterns, colours or combinations of them applied to a new design of a product which are aesthetic and capable of being applied on an industrial scale.

Source: Macau Economic Services

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Human Resources their student visas beyond the duration of their studies, mainland students are obliged to leave the city after graduating, regardless of their willingness to stay or interest from employers to hire them. If they wish to work in Macau, they must go through the regular procedure for imported labour, complying with the quota system. Mainland students are not even allowed to work part-time or as interns to complement their studies. The rules allow them only to do internships that are components of their programmes of study. That said, there have been reports of mainland students working as private tutors.

What a waste

No easy way in

Macau is short of manpower but there are no special rules favouring the employment of mainland students that graduate here BY SARA SILVA MOREIRA

he unemployment rate reached an all-time low of 2.0 percent in the first three months of this year. With just 6,800 people unemployed and soaring demand for qualified labour, some businessmen and human resources experts say it is time for an easier way to hire mainland students that graduate here. The idea is opposed by the labour unions. More than 8,000 non-resident students are enrolled in Macau’s 10 institutions of higher education, data from the Tertiary Education Services Office show. They comprise close to one-third of the total number of students. Although the office does not give

MAY 2012

a breakdown by place of origin, data from previous academic years shows that mainland students account for over 90 percent of the non-resident students in Macau. Nearly 30 percent of the nonresident students in local institutions of tertiary education are in post-graduate programmes. This batch of qualified workers of the future could help satisfy Macau’s need for labour, but there are no special measures that allow this. While mainland students who graduate in Hong Kong can apply for a special immigration status which lets them work there, things are different in Macau. Prevented by law from extending

The government says it is considering eventual changes to these restrictions. The Tertiary Education Services Office is looking at how other places handle students from abroad, to see if they offer special arrangements allowing non-resident students to work there after graduating. There is no deadline for arriving at any conclusions. “It’s a waste of qualified personnel that could contribute to Macau’s development,” says Ming Chang, who heads the Chinese Mainland Higher Education Students Union. Some human resources experts argue that these qualified youngsters could be an asset to the tourism and associated industries, and to small and medium enterprises, which face a grave shortage of labour. They point out that mainland graduates already know the business environment here and are good at languages. Macau’s strict rules are a consequence of the government’s desire to protect present and future job opportunities for residents, says Zenon Udani, a human resources development trainer and expert, and teaching fellow at the Honours College of the University of Macau. He does not expect changes any time soon. Mr Udani says adopting a scheme such as Hong Kong’s could be a shortterm solution while the government comes up with something more detailed. He says allowing mainland graduates to work for one or two years in local SMEs would be beneficial to employees and employers alike: graduates would get work experience and companies would get the labour their need. Trade unionist and member of the Legislative Assembly Kwan Tsui Hang

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opposes any change. She says there are already ways for companies to import labour for positions that residents cannot fill. Ms Kwan, who is the vicechairwoman of the Macau Federation of Trade Unions, also fears that local universities would try to attract more mainland students with promises of immediate employment upon graduation.

Most unsuitable Even the business sector has differing views on how useful it would be to allow mainland graduates to directly enter the labour market here. A representative of DFS Group Ltd, an international retailer of luxury goods and duty-free goods which is short of employees in its Macau stores, complained last month about the red tape in taking on mainland graduates. But the head of the Macau Businesswomen’s Association, Kong Mei Fan, is sceptical that mainland graduates would suit the needs of SMEs. Ms Kong says most of these companies are seeking low-skilled staff to work in service, retailing, and food and beverage businesses. She also says opening up the job market to mainland graduates would reduce the chances of resident students finding employment. Small and Medium Enterprises As-

sociation director Kenneth Lei suggests allowing non-resident students to work in Macau part-time. They would be subject to restrictions such as a maximum number of hours per week, a prohibition on their working in businesses associated with nightlife, and a prohibition on their working for more than one employer. Finding the right formula for Macau to make the best use of mainland students graduating here should be a joint effort by the government, universities and businesses, Mr Lei says. Mainland students are usually aware of the restrictions when they apply to study in Macau. Ms Ming of the Chinese Mainland Higher Education Students Union says most come here looking for a more open and international learning experience. And it is cheaper to study in Macau than in Hong Kong.

Fortunate few Some mainland students only just failed to win places in top universities in the mainland and have come to Macau in preference to enrolling in a secondranked mainland university. Lei Muxue comes from Beijing and is taking a course at the University of Macau leading to a Bachelor of Science in Accounting degree. Her plan is to get

some work experience in Shenzhen for a couple of years after she graduates, before returning to Beijing to pursue her chosen career. Many of her contemporaries also intend to return to the mainland after graduating, she says. They do not consider staying mainly because they know they have no easy way in, even though there is growing demand for accountants in Macau. “Of course many of us would like to stay in Macau, even if just for a few years, to put into practice what we learned at university,” Ms Lei says. The president of the China Mainland Students Association, Angie Yu, says: “The Macau government welcomes and encourages mainland people to come here to study, so it should also have adequate policies to allow these students to work during or after their studies.” Representatives of mainland student associations estimate that at least half of all students would like to start their careers in Macau after they graduate. Only a few, usually outstanding students, succeed in doing so. On one hand, graduates struggle to find an employer with any of its labour import quotas unused. On the other, many are unwilling to hang around for a long time waiting for a work permit. These graduates prefer to start working elsewhere immediately after graduating. Ms Yu says that before changing the rules, Macau society should change its way of thinking. Mainland students are still viewed with some suspicion and shunned by their resident fellowstudents, she says, because of language and cultural differences. Ms Ming of the Chinese Mainland Higher Education Students’ Union says she expects more favourable conditions for mainland students to be introduced in two years’ time, to mark the 15th anniversary of the return of Macau to Chinese rule, despite some public opposition.

bizintelligenceonline.com MAY 2012

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If you know of an event that you believe should be listed with Macau Business, please drop us an e-mail: calendar@macaubusiness.com. In the subject bar, type in “List me as an event”. TBA : To be advised |

: A Macau Business partner event

June

May Date: Event:

1st – 3rd

Date: Event:

Venue: Organiser: Address: Tel: Fax: Website: E-mail:

Dubai International Convention & Exhibition Centre (UAE) Annual Investment Meeting Organizing Committee P.O.Box 10161 Dubai, UAE (971) 4 392 3232 (971) 4 392 3332 www.aimcongress.com info@aimcongress.com

Venue: Renaissance Harbour View Hotel, Hong Kong Organiser: Beacon Events & Mining Journal Address: 20/F Siu On Centre, 188 Lockhart Road, Wanchai, Hong Kong Tel: (852) 2219 0111 Fax: (852) 2219 0112 Website: www.hkgoldinvestmentforum.com E-mail: info@beaconevents.com

Date: Event: Venue: Organiser: Address:

10 th – 12th

Tel: Fax: Website: E-mail:

UAE Ministry of Foreign Trade Annual Investment Meeting

GTI Asia Taipei Expo

Taipei World Trade Center, Taiwan Haw Ji Co., Ltd 2F, No. 17, PaoChing St., SongShan Dist., Taipei City 10585, Taiwan (886) 2 2760 7407 (886) 2 2742 0522 www.gtiexpo.com.tw gametime@taiwanslot.com.tw

Date: Event: Venue: Organiser: Address: Tel: Fax: Website: E-mail:

25th – 27th

Hong Kong Gold Investment Forum 2012

27th – 28th

SAGSE Gaming Panama

ATLAPA Convention Center Monografie S.A. Av. Alvear 1883 Loc. 21, (C1129AAA) Cdad. Aut. de Buenos Aires, Argentina (54) 11 4805 4623 (54) 11 4805 4791 www.sagsepanama.com info@monografie.com

July

Date: Event: Venue: Organiser: Address: Tel: Website: E-mail: Date: Event: Venue: Organiser: Address: Tel: Fax: Website: E-mail:

22nd – 24th

G2E Asia

The Venetian Macao-Resort-Hotel Reed Expo 39/F Hopewell Centre, 183 Queen’s Road East, Wan Chai, Hong Kong (852) 2824 0330 www.g2easia.com info@g2easia.com

29 th – 31st

5th Annual Retail Asia Congress

Renaissance Harbour View Hotel, Hong Kong Beacon Events 20/F Siu On Ctr, 188 Lockhart Rd, Wanchai, Hong Kong (852) 2219 0111 (852) 2219 0112 www.beaconevents.com info@BeaconEvents.com APRIL 2012

Date: 6th – 8th Event: Macao Franchise Expo 2012 Venue: The Venetian Macao-Resort-Hotel Organiser: Macao Trade and Investment Promotion Institute Address: World Trade Centre Building, 1st & 4th Floors, 918, Avenida da Amizade, Macau Tel: (853) 2871 0300 Fax: (853) 2859 0309 Website: www.mfe.mo E-mail: ipim@ipim.gov.mo August Date: Event: Venue:

2nd – 5th

2012 Guangdong & Macao Branded Products Fair

Macao Fisherman’s Wharf Convention & Exhibition Centre Organiser: Macao Trade and Investment Promotion Institute and Department of Foreign Trade and Economic Cooperation of Guangdong Province Address: World Trade Centre Building, 1st & 4th Floors, 918, Avenida da Amizade, Macau Tel: (853) 2871 0300 Fax: (853) 2859 0309 Website: www.guangdongmacaofair.com E-mail: ipim@ipim.gov.mo

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Arts & Culture

THE MACAU CULTURAL CENTRE PLANS A SUMMER OF ENTERTAINING WORKSHOPS, CATERING FOR DIFFERENT AGES AND AUDIENCES BY ANNIE CHAU

uffering headaches from scheduling your child’s summer activities timetable? Worry no more. The annual ARTmusing Summer festival, organised by the Macau Cultural Centre, is back with a new edition of activities targeting not only children, but also youths and families, and even arts practitioners. From June to September, a full schedule of 17 workshops and 33 classes has been specially prepared for children aged 2 and older. The workshops are designed to boost creativity and encourage selfexpression. Most of the activities are related to performing arts and culture, from dance to puppetry, theatre and music, and are led by local and international performers and educators. Among the highlights of this year’s programme are ‘Cloud Gate Dance’, ‘Beatboxing with Bibap’ and Commedia dell’Arte from Italy. The Cloud Gate Dance workshop is tutored by a group of dancers from Taiwan’s Cloud Gate Dance Theatre. There are two programs available; one targeted at children aged 6 to 12, and another for youths aged 16 and above. The tutors will introduce participants to the basics of Chinese martial arts and Chi Kung, the practice of aligning breath and movement. Cloud Gate Dance Theatre of Taiwan was founded by award-winning choreographer Lin Hwai-min in 1973, and was called “Asia’s leading contemporary dance theatre” by The Times of London. Cloud Gate Dance Theatre is MAY 2012

named after the oldest known form of dance in the mainland, and the company was the first contemporary dance ensemble from any Chinese speaking community. Through Lin’s choreographies, the group transforms ancient Asian aesthetics into modern celebrations of motion, by combining martial arts and Chi Kung with ballet and modern dance.

Tasty rhythms A second, world-class workshop in this year’s ARTmusing Summer festival is ‘Beatboxing with Bibap’. In hip-hop culture, beatboxing plays a role as one of the basic elements to the performance. With two members from Korean group Bibap as their tutors, participants will have a learning experience to produce unique drum beats, rhythm and musical sounds by just using their mouths. The workshop targets those aged 13 and above. Bibap, a name taken from the popular Korean dish bibimbap (rice mixed with vegetables and beef), provide an innovative and dynamic performance. Their stage show combines eats with beats – and performing arts including breakdancing, beatboxing and a capella. The team came together in 2009. Each of the eight “chefs” has a talent taken from the kitchen. Beatboxing and singing are merged with the sound of rinsing, cutting, frying and eating. The team has travelled widely and

Beatboxing with Bibap

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Cloud Gate Dance

Enrico Bonavera

Kurama Singers Music workshop

been well received at global festivals, including the 2010 edition of the Edinburgh Fringe Festival. They have been heralded as the pioneer of “eatertainment”, combing eating and entertainment in one, but at the same time promoting Korean culture. Two shows of Bibap are scheduled at the Grand Auditorium in September. A must-attend workshop for anyone with a professional interest in theatre is that dedicated to Italy’s Commedia dell’Arte. It provides a unique opportunity to interact and share with the expert comedian Enrico Bonavera. This seven-session workshop for people aged 16 or above and with theatre experience draws upon Bonavera’s 20 years’ experience in theatre both as an actor and educator. Commedia dell’Arte was famous as one of Italy’s most successful art exports to Europe in the 16th to 18th century. The style of performance is often referred to as “mask comedy”, with characters identified by their own elaborate mask. Conventional plot lines revolve around adultery, jealousy, old age and love. Most of the basic plot elements can be traced back to comedies from the Roman Empire that were, in turn, rediscovered during the Renaissance. This traditional art came to life again in Europe in the early 20th century, with the mask allowing performers to remove distractions and heighten an audience’s focus on the story-telling, as well as serving to heighten their sense of imagination. Participants will be expected to showcase what they have learnt, such as background, improvisation rules and techniques of Commedia dell’Arte, in a final internal demonstration. MAY 2012

138

Arts & Culture

Blouple 6 | Oil on canvas | 50 x 54cm | 2008

The pasteret | Oil on canvas | 50 x 50cm | 2011

Dux e Pesetetey | Oil on canvas | 30 x 30cm | 2008

Cousbidou | Oil on canvas | 35 x 35cm | 2011

NEW DIMENSION LOCATED IN A WORLD BETWEEN REPRESENTATIONAL AND ABSTRACT ART, DAVID WOLLE’S WORKS DEFY THE VIEWER TO LEAVE THEIR COMFORT ZONE MAY 2012

139 he Tap Seac Gallery welcomes the works of French artist David Wolle this month. His oeuvre presents a new artistic alphabet, halfway between the abstract language and more representational views of reality. This is the first time Wolle has shown paintings in Asia. Previously, most of his exhibitions have been held in France. His works have been considered of a high enough standard to enter the collections of the French National Fund of Contemporary Art and the Regional Contemporary Art Fund of Languedoc-Roussillon. Born in 1969, Wolle graduated from the Saint-Étienne School of Fine Arts. He has developed a peculiar working process that begins with making small and unrecognisable plaster models. They are represented on a bigger scale on canvas, hazily bringing to mind objects that could belong to the real world. The colourful plaster models are subject to a number of transformational fantasies during the process, evoking organic forms, unbridled anthropomorphisms and chance discoveries. The shapes depicted are moderate in size, inexact, assembled together in massive or conversely elongated shapes. Wolle plays with the viewer who tries to recognise reality in his works. The paintings are frustrating in the sense that they make one look for more clues among the depictions to connect the work to reality, often without success. The artist’s goal is to communicate with the viewer while deterring those who insistently always try to define what they are looking at. In Wolle’s works, there is something to see on the canvas but it defies both the abstract language as well as any attempt to regard it as a representation of reality. Wolle’s Macau exhibition is featured in the official programmes of two of the most important art festivals in the region. It is included in the Macau Arts Festival, organised by the Cultural Affairs Bureau, and in the line-up for Le French May. Organised by the Consulate General of France in Hong Kong and Macau, and dedicated to the promotion of the French arts and creativity, Le French May celebrates its 20th edition this year.

BM pouponne 2 | Oil on canvas | 54 x 46cm | 2009

Brain | Oil on canvas | 50 x 40cm | 2000

The Fantasy Land - Works by David Wolle May 27 to August 5 – 7pm VENUE: Tap Seac Gallery, Avenida do Conselheiro Ferreira de Almeida, No. 95 ORGANISER: Cultural Affairs Bureau DATE:

TIME: 10am

Consulate General of France in Hong Kong and Macau, Alliance Française de Macao and Bernard Ceysson Gallery TICKETS: Free entry MORE INFORMATION: www.icm.gov.mo or phone (853) 8399 6699 CO-ORGANISERS:

MAY 2012

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Moments

WELCOME ABOARD! Business Daily, Macau’s first English-language business newspaper, hosted its launch party last month, after hitting the newsstands on April 2. Over 150 guests flocked to the Mandarin Oriental, Macau to show their support for the project. Business Daily is a new product of De Ficção – Multimedia Projects, the publisher of Macau Business and its Chineselanguage sister publication, Business Intelligence. The officiating ceremony

Eileen Stow

Teddy Kwong, Alfred Liu, Paulo A. Azevedo and Francis So

Rafael Gama and Tiago Azevedo MAY 2012

José Costa Santos

Rui Borges is already a proud reader of Business Daily

Mimi Chan and Victor Chan

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141 Photos by Gonçalo Lobo Pinheiro

Stella Ng, Lytton Ao and Filipe Senna Fernandes

Jennifer Welker and Luciana Leitão

Vitor Quintã, Mimi Chan and Katharine Liu

Paulo A. Azevedo and Melina Leong

Eric Sautedé

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Lurdes and Ivo Carneiro de Sousa

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Business Daily just got two more readers

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Naty Torres, Laurentina da Silva, Elsa Vong, Emanuel Graça, Reddy Leong, Tiago Azevedo and Kelsey Wilhelm MAY 2012

142 MINXIN PEI PROFESSOR OF GOVERNMENT, CLAREMONT MCKENNA COLLEGE

The paranoid style in Chinese politics IT IS DIFFICULT TO SAY WHETHER A PARANOID WITH REAL ENEMIES IS EASIER TO DEAL WITH THAN ONE WITHOUT ANY. BUT, FOR THE CENTRAL GOVERNMENT, PARANOIA ITSELF HAS BECOME THE PROBLEM enry Kissinger, who learned a thing or two about political paranoia as Richard Nixon’s national security adviser and secretary of state, famously said that even a paranoid has real enemies. This insight – by the man who will be known forever for helping to open China to the West – goes beyond the question of whether to forgive an individual’s irrational behaviour. As the scandal surrounding Bo Xilai’s dramatic fall from power shows, it applies equally well to explaining the apparently irrational behaviour of regimes. Most reasonable people would agree that the world’s largest ruling party (with nearly 80 million members), with a nuclear-armed military and an unsurpassed internal-security apparatus at its disposal, faces negligible threats to its power at home. And yet the ruling Communist Party has remained brutally intolerant of peaceful dissent and morbidly fearful of the information revolution. Judging by the salacious details revealed so far in the Bo affair, including the implication of his wife in the murder of a British businessman, it seems that the Communist Party does indeed have good reason to be afraid. If anything, its hold on power is far more tenuous than it appears. Indeed, Mr Bo, the former Party chief of Chongqing, has come to symbolize the systemic rot and dysfunction at the core of a regime often viewed as effective, flexible, and resilient. Of course, corruption scandals involving high-ranking Chinese officials are common. Two members of the Communist Party’s Politburo have been jailed for bribery and debauchery. But what sets the Mr Bo scandal apart from routine instances of greed and lust is the sheer lawlessness embodied by the behaviour of members of the mainland’s ruling elites. The Bo family, press reports allege, not only has amassed a huge fortune, but also was involved in the murder of a Westerner who had served as the family’s chief private conduit to the outside world.

Power struggles While in power, Mr Bo was lauded for crushing organized crime and restoring law and order in Chongqing. Now it has come to light that he and his henchmen illegally detained, tortured and imprisoned many innocent businessmen during this campaign, simultaneously stealing their assets. While publicly proclaiming their patriotism, other members of the mainland’s ruling elites are stashing their ill-gotten wealth abroad and sending their children to elite Western schools and universities. MAY 2012

The Bo affair has revealed another source of the regime’s fragility: the extent of the power struggle and disunity among the Communist Party’s top officials. Personal misdeeds or character flaws did not trigger Mr Bo’s fall from power; these were well known. He was simply a loser in a contest with those who felt threatened by his ambition and ruthlessness. The vicious jockeying for power that the Communist Party faces during its leadership succession this year, and the public rift that has resulted from Mr Bo’s humiliating fall, must have gravely undermined mutual trust among the party’s top leaders. China’s history of political turmoil, and the record of failed authoritarian regimes elsewhere, suggests that a disunited autocracy does not last very long. Its most dangerous enemy typically comes from within. Moreover, the amateurish manner in which the Communist Party has handled the Bo scandal indicates that it has no capacity for dealing with a fast-moving political crisis in the Internet age. While political infighting obviously might lie behind the Chinese government’s hesitancy and ineptness in managing the scandal, the party undermined its public credibility further by initially trying to cover up the seriousness of the affair.

Overcoming paranoia After Wang Lijun, Mr Bo’s former police chief, very publicly sought asylum in the United States’ consulate in Chengdu, a city some four hours from Chongqing, the Communist Party thought that it could keep the Bo skeleton in the closet. Using language that would make George Orwell blush, officials declared that Mr Wang “suffered from exhaustion from overwork” and was receiving “vacation-style treatment”; in fact, he was being interrogated by the secret police. What made the Communist Party’s top brass lose face – and sleep – was the failure of the mainland’s famed “Great Firewall” during the Bo saga. Attempts to censor the Internet and mobile text services failed miserably. Chinese citizens, for the first time in history, were able to follow – and openly voice their opinions about – an unfolding power struggle at the very top of the Party almost in real time. Fortunately for the Communist Party, public outrage over the lawlessness and corruption of leaders like Mr Bo has been expressed in cyberspace, not in the streets. But who knows what will happen when the next political crisis erupts? China’s leaders, we can be sure, are asking themselves precisely that question, which helps to explain why a regime that has apparently done so well for so long is so afraid of its own people. It is difficult to say whether a paranoid with real enemies is easier to deal with than one without any. But, for the central government, which rules the world’s largest country, paranoia itself has become the problem. Overcoming it requires not only a change of mindset, but also a total transformation of the political system.

LESSONS IN DEMOCRACY

THE CITY THAT NEVER SLEEPS Macau is on the way to stealing another title from another American city. After overtaking Las Vegas to become the world’s biggest gaming centre, Macau is close to becoming “the city that never sleeps”. It is not because Macau’s nightlife is ready to rival New York’s, nor is it because we have cultural events taking place round the clock as the Big Apple does. It is simply because Macau is getting too noisy, even at night. The latest available data from the Environmental Protection Bureau show noise levels in most of the city constantly exceed internationally recommended limits, even from midnight to 8am. Traffic noise is one of the main contributors. Frozen Spy strongly advises government officials to sleep on it. That is, if the noise will let them.

iWONDER The world of finance was caught by surprise when Apple Inc announced a couple of weeks ago it would pay a dividend for the first time since 1995. The mainstream media were quick to applaud, noting that the maker of iPods, iPhones and iPads is sitting on a mountain of money. But some analysts said that the tremendous cash reserve could, instead, indicate Apple was running out of investment ideas. The company’s only option was to return the cash to its shareholders, they said. The Macau government has a similar problem. The difference is that instead of dividends, it has been giving its “shareholders” cash handouts since 2008. The latest data shows the government spends just around 20 percent of its revenue. The rest just piles up in the city’s reserves. Has our government also run out of ideas?

The last session in the second round of public consultation on reforming the city’s electoral system ended on a sour note. The session was open to everyone, but just 24 of the more than 100 people that had asked to speak managed to do so because time ran out. Two trade unionists were expelled before the session started for holding up a critical banner. Another three people were hustled away. One of the trio was outspoken activist Lee Kin Yun. He wore a T-shirt critical of the Tiananmen Square massacre. Surprisingly, he was removed by three individuals in plain clothes supposedly belonging to the Macau Security Forces, according to TV footage. Frozen Spy is worried. Is this the future direction of our political system? Will it become a system that gives ordinary citizens insufficient time to express their opinions, that silences dissenting voices and that sends plain clothes police to mingle with the crowd?

EYE-POPPING RESULTS The final results of last year’s population census have been released to the public. They depict Macau and the changes it has undergone in the past decade in rich detail. Most of the data paints a rosy picture, with the median income per household more than doubling and more people boasting higher levels of education. But the census results also give an insight, albeit a limited one, into how poverty and inequality persist. In a city that has one of the world’s highest per capita gross domestic products, there are still families of six or more living in a single room. Almost half of all households do not own even a motorcycle, while others have three or more motor vehicles. If evidence was needed that ad hoc measures such as universal cash handouts are not enough to ensure a “harmonious society”, this is it. What is needed is proper governance.

MAY 2012

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Aristocrat

Pages 03, 39 & 90-91

www.aristocratgaming.com

Aruze Gaming

Page 97

www.aruze-gaming.com

Bally Technologies

Pages 23 & 99

www.ballytech.com

BNU

Pages 27 & 62

www.bnu.com.mo

Business Daily

Page 71

www.macaubusinessdaily.com

CEM

Page 129

www.cem-macau.com

FutureLogic

Page 121

www.futurelogic-inc.com

Galaxy Entertainment Group

Pages 04, 11 & 25

www.galaxyentertainment.com

Goldfish

Pages 31 & 75

www.goldfishmacau.com

GPI Gaming

Page 93

www.gpigaming.com

Hotel Okura

Page 33

www.hotelokuramacau.com

Hutchinson

Page 62

www. three.com.mo

IGT

Page 111

www.igt.com

Interblock

www.interblock.eu

IPIM

Page 07

www.ipim.gov.mo

Konami

Page 95

www.konamigaming.com

Macau Cultural Centre

IBC

www.ccm.gov.mo

Macau Post Office

Page 131

www.macaupost.gov.mo

Melco Crown

Page 21

www.melco-crown.com

MGM Macau

Pages 02, 09 & 18

www.mgmmacau.com

MGTO

Page 05

www.macautourism.gov.mo

Morton’s The Steakhouse

Page 47

www.mortons.com

Ocean Gardens

IFC

www.oceangardens.com.mo

Paltronics

Page 119

www.paltronics.com.au

Sands China

Pages 06, 31, & 40-43

www.sandschinaltd.com

Shuffle Master

Page 107

www.shufflemaster.com

SJM

Page 49

www.sjmholdings.com

Spielo

Page 101

www.spielo.com

Sports Development Board

Page 63

www.sport.gov.mo

Welfare Printing

Page 62

www.welfareprinting.com

Wynn Macau Ltd

Page 15

www.wynnmacau.com

Zung Fu Motors – Mercedes

Page 01

www.zungfu.com.mo

To advertise call 28331258 or email us at pub@macaubusiness.com Go to www.macaubusiness.com/advertising for media kit MAY 2012