SPECIAL EDITION G2E ASIA 2016 GAMES MAGAZINE
INTERVIEW
ALBERT YU, GENERAL MANAGER ARUZE GAMING MACAU ALBERT YU “HUMAN RESOURCES AND R&D ARE VITAL TO SUCCEED”
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INTERVIEW
RAYMOND CHAN, CEO, TGG TAKARA GAMING GROUP
INDUSTRY MEETS AT
MACAU
F
irst
PERSON Your favorite movie: Dead Poet’s Society
A book you’re reading or the last you have read: The Alchemist of Paulo Coelho Your favorite perfume: Coco Chanel A sport you practice or enjoy: Tennis Adventure or relaxed tourism? Always Adventure A city to be on holidays: London and Paris What city would you most like to live in? London A city to go to a casino: Las Vegas Preferred food: Lobster Favorite drink: Champagne The most important invention in History: Internet What historical figure (or movie or magazine character) would you like to be? Gabrielle Bonheur “Coco” Chanel If you were stranded on a tropical island, what two things would you like to be carrying with you? Bear Grylls and water Instagram, Spotify or Vine? Instagram A hobby: Photography A personal defect you should correct: Lateness What is the most satisfying thing about your job? Meeting new people An experience in your life that emotionally moved you: 9/11 A master, a person who is or has been a major influence in your life: My father. A dream to fulfill: Travel all over the world Your preferred personal motto or quote: “Laugh when you can, apologize when you should and let go of what you can’t change”
Dania
Hudiburg Executive Assistant to the President, Ainsworth Game Technology Curiosity and interest for knowledge define Dania Hudiburg. First, she got a Diploma in Fine Arts at Miami Dade Community College (MDCC), and then, she decides to study Industrial Engineering at the University of Miami (UM). Her career is a clear example of her service vocation: she started in the legal field as Senior Assistant at UBS and TYCO International and, subsequently, served as Executive Legal Assistant at Ellis, Ged & Bodden P.A., where she efficiently managed relationship with customers and led initiatives for business development. Later, she moved into sales and marketing for iCare. com, expanding her working experience. She handled the budgets for that department, supervised conferences and events and also enhanced corporate website social network applications for the company. In February 2014, Dania got the chance to enter the gaming industry at Ainsworth Game Technology as Executive Assistant of Miguel Cuadros, AGT President for Latin America. Since then, she is fully immersed in the fascinating world of gaming. Among her many responsibilities, Dania manages AGT social networks. It also contributes to organize company’s presence at major trade shows in the Caribbean and Latin America. In addition to her ability in strengthening bonds with customers, Hudiburg is also responsible for negotiating contracts and managing relationship with external suppliers. She stresses about her favorite activities in the everyday working at AGT: establishing priorities, cooperation with others, tracking projects evolution, solving problems and making the necessary adjustments to meet company’s goals.
diXit
STAFF
Lawrence Ho
CEO and chairman of Melco International YEAR 10. MACAO 2016
“Looking ahead, although Macau is encountering a very tough operating environment, we believe our business approaches are in line with the government’s new direction from a macroeconomic and social perspective. There are some signs of improvement. Difficulties of the Macau VIP market are not over, so we need to focus on the mass market”.
RESPONSABLE EDITOR Marcelo Valsecchi marcelo@revistagames.com EDITORIAL DEPARTAMENT Cecilia Rabinsky cecilia@revistagames.com Román Frymer roman@revistagames.com COMMERCIAL DEPARTAMENT
US$4.100.000.000
It's the cost of the new Wynn Palace megaresort that will include 1,700 rooms and open in Macau in August 2016. This hotel will be the first stop on Macau’s new lightrail system connecting the ferry landing to the Cotai Strip and will cover an area of 450,000 square meters. An aerial tram system, with air conditioned gondolas resembling smoke-breathing dragons, will carry customers across a 3.2 hectare performance lake from the light-rail station into the heart of the resort. The lake, situated at the front entrance, will be lined with restaurants, while flower gardens in various shapes and themes, such as hot-air balloons, will be spread throughout the property. The company recently announced the hiring of about 2,600 local employees for this casino resort.
Bettina Mardyks bettina@revistagames.com Cristina Arévalo cristina@revistagames.com DESIGN Adnow www.adnow.com.ar TECNOLOGICAL CONSULTANT Ing. Gerardo Taccone gerardo@revistagames.com CONSEJO EDITORIAL María Pía Pazzaglini Carlos Cardama Rafael Val PRINT
Sumario
Gráfica Pinter S.A. Diógenes Taborda 48 / 50 (1437) | C.A.B.A. Tel: +5411 4911- 6005
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22 Albert Yu General Manager, Aruze Gaming Macau The leader talks about the company’s aggressive business strategy to overcome the current difficult situation of gaming in Macau. He stresses the importance of the working team and the need to know how to develop a good product positioning to create a win-win situation with the customers.
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G2E ASIA 2016 The show floor will see a number of exhibitors, old and new, use this prestigious platform to create brand awareness, launch new products and expand their reach into the Asian market. iGaming and non-gaming sectors will also have an important role in the event.
Games Magazine is a publication funded in 2005 by Carlos Cardama. This magazine has free distribution. Trade mark of Kingdom Magazine Media S.A..All rights reserved. Intellectual property registration N° 5220950.
INTERVIEW
Printed in Argentina
Raymond Chan, Co-Founder and CEO of TGG, Takara Gaming Group, details the history, characteristics and main business units of the company. He shows a lot of enthusiasm about the ‘Game of Control’ concept.
Maza 1033 (C1220ABK) CABA • Argentina Tel/Fax: (54-11) 4115-7610
OUTLOOK LATAM Changes in the economic model of China announce a break in the traditional structure of trade relations between the blocks. The service sector can take a new value from the decisive bet of Chinese companies on the attractive Latin American gambling market.
GamesMagazineBiz @gamesmagazine_ gamesmagazine gamesmagazine
cover story
Albert
Yu
General Manager, Aruze Gaming Macau
The leader talks about the company’s aggressive business strategy to overcome the current difficult situation of gaming in Macau. He stresses the importance of the working team and the need to know how to develop a good product positioning to create a win-win situation with the customers.
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“Human resources and R&D
are vital to succeed” You have deep knowledge of the Asian gaming market. How would you define the current situation of the company in terms of its position in the region? What is the most important learning you have incorporated about the dynamic of the industry? I believe Aruze is extremely well positioned in the Asian gaming market. We have it all and we include ‘Entertainment for Everyone’, which is our tagline for this year’s G2E Asia edition. With respect to the recent and rapid shift to mass market, I’m confident to say that we are one of the very few suppliers who could offer a wide range of entertaining products to every
gaming operator. The gaming industry is a very specific one; although it seems to generate a huge amount of revenue, it is still an industry that consists of a small group of vendors. Players’ acceptance on gaming products is one of the most important aspects and the performance completely reflects how successful your
products are. Whether it is coin in or net win, these are the type of figures and data both, operators and suppliers, paid the most attention to, and that’s also one of the most important things that I have learnt in the industry: I’m referring to how to position your product and how to create a win-win situation with your customer. After all, like in any industry, relationships play a huge role and you need to offer a long term support for your customer. If your customer doesn’t make money, neither will you. As a sports fan, how do you describe yourself as a leader of your team? In which way you can transmit your vision to your employees and collaborators to build a strong and efficient working group? I’m a Liverpool FC fan. “You Never Walk Alone - YNWA” explains it all. There is no “I” in the word “Team”. You need everyone on the same page in order to achieve any goal. I always refer to my team members as ‘colleagues’ and not ‘employees’. You need to set a good example if you want your team to follow you.
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cover story How important are human resources and R&D to the progress of the corporation? They are both vital to the success of the company. R&D is like a formation in a football match; it’s all part of a strategic planning based on figures and data collected. Human resources are your players: some plays forward, some are midfielders and some are defenders. If one person slips or loses a step, the other team player will cover up immediately. You attack and you defend as a group and as a team, exactly the same in terms of how Aruze works. What has been the company’s strategy for its business in Macau in 2015 and the beginning of 2016? We have been aggressive. It has been a difficult year for gaming in Macau, but when there is a will there is a way. The company increased its games library even though the gaming revenue has been hit hard. We have reinvested in our R&D team in order to bring more fun and entertaining games to the market. We did not shrink, given the traumatic situation.
Do you think the opening of new casinos, the offering of non-gaming entertainment and the decision to expand the market to massive players will help to boost the numbers of the industry and overcome Macau’s economic downturn? It definitely will, but it will take time. I believe it is for the good of the economy. How is the company preparing for G2E Asia show? What are your expectations for that event? We have a similar practice year after year. We generally bring our top games with exciting and innovative products. This edition, Aruze is aiming for a ‘sell out’ show. What are the main challenges and goals for your company in the next year? In any transitional period (to a mass market), everything will be slow and any bad news will be magnified. Staying positive it’s the correct attitude. In terms of our goal, it has been, and always will be, ‘to become the number one company of the sector’. As long as we stay focused, always give our best effort and go for the extra mile, I’m sure that everything will fall into place.
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Women of the sector
Tjasa was born in a family where everybody was obliged to work. She always expected herself to reach a certain job position. “I was dreaming of working in an automotive industry or being an executive director of one of the big industries in Slovenia”, says. After finishing secondary school for Economics, she attended college for Business Administration in Ljubljana. In 2004, she moved to Koper, where she enrolled in a Specialization and in 2010 she earned her Master Degree in Management.
FOCUS ON WOMEN She analyzes the role of women in the industry and explains that, in her opinion, there are no major differences between men and women on any position. “Every worker has its own specialties that can be useful on determined fields. It’s up to the manager to discover these qualities and put them to best use. Perhaps we are more sensible and meticulous. Men tend to be more aggressive when taking decisions, but, at the end of the day, I don’t feel there’s big distinction between us”, states. 8 Games Magazine
She describes herself as a devoted, hard-working, perfectionist person who tries to have all the aspects of the business covered. Tjasa declares: “This job has been a great opportunity for me and I simply enjoy myself doing it. This is probably why it’s not a problem spending extra hours at the office in Alfastreet or on business trips around the world”.
PERSONAL LIFE AND HOBBIES When considering balance between personal and professional time, she explains she has enough energy to divide her day to have some moments for her personal life and some for her professional career. “It’s not hard for me to balance private and work life. I have a really great and understanding family. My parents often babysit my son, what makes everything easier. I spend all of my free time with my family: my husband and my son, who is five and a half years old. I also like to do different sports, especially running. Sometimes, when there’s enough time, I enjoy cycling. But that doesn’t happen very often. I usually only have time on weekends”, comments.
Tjasa Luin Peric CEO at Alfastreet
With lots of energy and intensity for the industry, she tries to improve day by day and knows how to efficiently meet her goals.
ABOUT THE INDUSTRY AND THE FUTURE Regarding her career in the gaming sector, she observes: “It has been kind of a coincidence to enter into this world. I started as an assistant director for the company, getting more and more involved in a wide spectrum of the operations. One thing led to another, and I grabbed the opportunity to prove
Enthusiastic, passionate and dedicated myself as the CEO. It is an industry that I like and the high level of dynamism suits my nature well. I don’t have any extreme ambitions in life to fulfill. Besides, I think I have already achieved a lot. Although, I want to show something better every day, therefore, I am giving it my best at all times, which is what really matters”.
A book you prefer: Professional literature
A place to go on holidays: Croatian coastline
A movie: “Gothika”, “The Wolf of Wall Street” and “Burnt”
A meal: beef steak tagliata con rucola and parmesan cheese
Sport: running, hiking, skiing, cycling, as long as it’s an outdoor activity
A drink: A lot of water
A perfume: Chloe
A defect or obsession: Perfectionism
A beauty secret: fresh air activities
A virtue: Tenacity
A teacher or main reference in your life: My parents
A place to live: Sezana, Slovenia A dream: I consider myself lucky, for I have already fulfilled all my major dreams
Q&A time
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> g2e asia 2016 Josephine Lee, Executive Vice President of Reed Exhibitions Greater China
“The show is an opportunity
to look for solutions and get inspired”
The organizer representative emphasizes the increasing role of iGaming and non-gaming sectors in the event. She also details the wide program of activities and says that is important to rely on the Macau market and support the government strategy to keep pace with the industry’s transformation. On the last year, the show won the Branded Exhibitions Award at the Macao Convention and Exhibition Commendation Awards. What was the value of that recognition for your company and how do you think that drives you to redouble efforts in this new edition? We’re thrilled to be one of the first winners of the Macao Convention and Exhibition Commendation Awards. This achievement is a testament of G2E Asia’s excellence and position at the forefront of Asia’s gaming sector. We focus our energy and efforts on understanding the needs of our exhibitors and visitors so as to ensure that G2E Asia consistently delivers value that meets their needs. 12 Games Magazine
We also pride ourselves on designing a comprehensive program that engages gaming professionals from every sector. We’re very thankful for this award. It will serve as a big encouragement to our team and we will work even harder now to live up to the expectations set by our achieving this honor. 9,867 visitors (69% from abroad), 161 exhibitors, more than 9,000 sqm of exhibit space were some of the records of the last edition. How are you planning to overcome these amazing indicators? We’re very excited at the prospect of welcoming
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Relevant business platform
returning exhibitors, together with new exhibitors to G2E Asia 2016. We will host 180 exhibitors, representing a 12 percent increase from the previous year, with over 40% as newcomers across more than 9,200 square meters of exhibition space. We will also welcome more than 700 VIPs and buyers, in addition to 10,000 visitors from all major gaming operators in Asia and beyond. We’re very optimistic that this year’s show will be even more special in terms of delivering great value to our clients. Which are the most relevant news and changes that you will include in this special 10th edition? There will be a lot of new highlights at G2E Asia 2016 and I am very excited about this year conference with a lot of content on business diversification. Industry experts will lead thought-provoking sessions on the following subjects: Global market developments, the next frontier markets in Asia and Western Asia, and regional market trends and dynamics; The growing importance of non-gaming activities and opportunities for Integrated Resorts, especially as Macau transitions into a premier leisure travel destination; The state of play of iGaming in Asia, innovations and technological advances in online gaming, Daily Fantasy Sports and eSports, and iGaming customer acquisition strategy. We’re glad to have Mr. Paulo Martins Chan, Director of Gaming Inspection and Coordination Bureau (DICJ), who will be delivering an Opening Remarks named “Transformation in Changing Conditions” at G2E Asia Conference. A Gaming Regulators Networking Luncheon, organized for the first time, will precede the Opening Remarks, where experts of regulations and government officers gather to enhance their connections in industry and discuss topical issues. Last but not least, the inaugural Asia Gaming Awards (AGAwards), produced by Asia Gaming Brief in association with G2E Asia and the Innovation Group, will be recognizing operators, regulators, suppliers and service providers for their outstanding contributions to the industry. G2E Asia show is increasing its numbers every year, but Macau’s economy and gaming revenues have been spiraling for 23 months in a row. How do you explain this apparent contradiction? In which way other region’s successful experiences could be an example to imitate for Macau gambling industry? The major factor that contributes to our steady increase is the iGaming sector. Although land-based casino games are experiencing critical moment, iGaming continues to show a steady, healthy growth in Asia’s market. This year, over 50 iGaming exhibitors will bring along their latest iGaming solutions and products from Asia and abroad to G2E Asia. This fast-growing segment will see more than double the number of exhibitors join than in 2015. More than 65% 14 Games Magazine
Global Gaming Expo Asia (G2E Asia), Asia’s leading trade show and conference for the gaming and entertainment industry, is co-organized by Reed Exhibitions and the American Gaming Association. In its 10th edition, this exciting show will be held from May 17th to 19th inclusive, at the Cotai Expo at the Venetian Macao. The show floor will see a number of exhibitors, old and new, use this prestigious platform to create brand awareness, launch new products and expand their reach into the Asian market. Among the event’s major exhibitors will be Ainsworth, Aristocrat, Aruze, Astro, Hydako, IGT, Interblock, Jumbo Technology, Konami, RGB, Scientific Games, SuzoHapp, JCM, GLI, TCS John Huxley, and much more. The new features for G2E Asia 2016 include the Macau Retail Summit, which will look at customer service and technology as ways to improve retailing of non-gaming products and services in the Macau market, and the read of the Asia Gaming White Paper, a document produced in collaboration with CLSA that will be presented during the event. It is said to include projections of future trends for casinos in major Asia-Pacific markets. This year will see too the inauguration of the Asia Gaming Awards. These awards (11 categories) are open to operators, regulators, suppliers and service providers that have made outstanding contributions to the land-based and online casino industries. Returning elements at the 2016 expo consist of the ‘IT and Business Solutions One2One Event’ and The iGaming Zone, for suppliers of online gaming products and services, with conferences such as the iGaming Summit and the iGaming Tech Talk Forum. There will also be a place for The Macau Pavilion, highlighting gaming and entertainment offers in the host city, and The All Asia Dealers Championship, a contest where casino dealers show their skills. G2E Asia will maintain, as it does each year, the expansion of its portfolio of offerings and extend its reach further across the Asian continent. The show continues to evolve, keeping pace with the changing rhythms of the industry and shining a spotlight on the most integral issues to the development of Asian gaming. The combination of insight, accuracy and a comprehensive approach will keep G2E Asia platform relevant and make the 2016 edition a high-priority marketing project for Asia’s growth-focused gaming and entertainment companies. Following a highly successful first ten years in Macau, the next decade will see G2E Asia maintain the same keen focus on creating an annual event that advances industry interests and builds on past successes.
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of these will be new companies. Moreover, in recent years, G2E Asia primarily addressed the needs of those not only in core gaming sector, but also non-gaming sectors such as hospitality, facilities, F&B and entertainment. The local government encouraged casino operators to diversify their businesses and forecasts an increase in the proportion of casinos’ non-gaming revenue to 9 percent by 2020 from 6.6 percent in 2014. G2E Asia has been supporting the government strategy all the way and keeping pace with the industry transformation. The exhibitions organizations have to rely on the market. If the market’s doing well, everything is easier. However, we also think that even when the market’s not so good, the platform becomes more important. When there are challenges, you need a platform to understand your possibilities in order to face these challenges. G2E Asia is an opportunity to look for solutions and get inspired. It keeps evolving and remains relevant, according to the changing rhythms of the industry. That’s why the gaming and entertainment industry, throughout Asia, trusts it as the right exhibition platform via which to drive business forward and why we have developed a track record of sustained and significant growth over the last decade. What is your opinion regarding the current online gambling business in Asia? Can eSports, DFS and skill gaming help increase the monetization of this segment? The Asian iGaming market is a land of opportunity for online gambling enthusiasts and affiliates. Ever since the traditional casino games are some clients, the iGaming sphere has gained more prominence. iGaming sector showed promising growth year by year. We believe that eSports, DFS and skill gaming industry is set for larger growth in upcoming years, with more new participants and spectators set to join the fray. Where do you foresee the industry is actually going? How is G2E Asia show reflecting the increasing trend of online, social
and mobile gaming? The latest report shows that Macau’s April casino revenue dropped less than analysts estimated in a sign of stabilization as casinos shift their focus to attracting more casual gamblers and tourists. We believe the improvements in transportation infrastructure and the opening of large scale integrated resorts in Macau, together with rejuvenated growth created by the mass market, would provide a new set of business opportunities that will allow attracting customers from a wider range of places. As mentioned before, the G2E Asia show floor today also featured a fast-growing iGaming Zone with more than double the number of exhibitors than in 2015. The iGaming Zone at G2E Asia 2016 is a timely, efficient channel for iGaming suppliers to gain market access and network with the growing iGaming
community. Besides, full-day iGaming Summit returns to stimulate the industry with discussions on how to better leverage digital opportunities and forge valuable partnerships, and will feature the new Tech Talk Forum, where iGaming companies can present and pitch their innovations right on the show floor. What are your main challenges and goals for this event? The slogan of Reed Exhibitions focuses on the need to think globally but to act locally. This is one of the keys to the success of G2E Asia. It is an Asian platform that serves the Asian market. A lot of work is invested in understanding the needs of Asian gaming and entertainment. By understanding the market’s needs and the challenges that operators and professionals are facing, we are able to provide solutions and achieve success. Our goal is to ensure that G2E Asia consistently delivers value that meets their needs. To accomplish it, we will keep focusing our energy and efforts on understanding the needs of our exhibitors and visitors and keep enhancing the event, so we can continue to effectively unite gaming enthusiasts from every corner of Asia.
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> interview
Espee de Robillard, Chief Operating Officer APAC, GLI
“We invest in understanding emerging technologies” The executive considers investment, close relations with regulators and new services development as key elements to the company’s strategy. He specifies the main tasks of the working team: assistance, advice, support and provision of information, services and knowledge to help clients achieve their goals. It has been ten years since GLI opened its first Asian gaming testing facility in Macau. In which way do you consider the company was able to install its services and products in the region during that period of time? Gaming Laboratories International (GLI) was able to grow its business based on our philosophy that to do business in a region, one must invest. That is, it is necessary to invest in the local industry by providing jobs, training and supporting the local government (regulators). By being in close proximity to regulators in the South East Asia region, GLI Asia has been able to provide significant support to them for the development of a well-regulated gaming industry in the area. GLI Asia has also been able to provide its global reach to the expanding community of gaming equipment suppliers with our 20 offices around the world. In that sense, how has the company been expanding its portfolio of services for its clients in APAC on the last twelve months? Our company continues to invest in understanding emerging technologies. It’s through our permanent learning and sharing that knowledge with our clients through internal training that has expanded our portfolio of services in APAC. GLI’s Professional Services Division provides a team of world-class professionals and thought-leaders to serve as a global resource a knowledge bank, capable of providing our APAC customers with complete and thorough business solutions. For example, our Professional Services Division has provided IT security audit services and compares audits of your information security processes against recognized leading standards for best practice to meet 18 Games Magazine
security requirements. GLI has also provided IT security consulting services, which are designed to assist an organization in developing a new or enhancing an existing information security program or framework to alight with a recognized IT security standard. How are the Asian companies coping with the changes of technical standards in the industry? We maintain a close relationship with our regulatory clients. This relationship provides us with the opportunity to assist regulators with the development and modification of their technical and public policy standards to address the ever-changing gaming industry landscape. GLI is also able to provide expert advice to our customer base in relation to the impact of the regulatory requirements on new technology. Using this advice allows GLI’s customers to preempt change and adapt to the new circumstance. This is where GLI provides services above and beyond: we understand the implications of change and the discretions this may cause manufacturers and operators. Which are the main challenges for your company in the current APAC’s gaming scenario? GLI Asia continues to look for additional staff that will provide support to our growing customer base. The increasing number of countries looking to establish a well-regulated gaming industry can count on seeing our senior client service staff visiting the APAC region on a more frequent basis. It is our goal to provide our clients with the best resources available, and we look forward to helping the gaming industry in this region expand.
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> interview
Geoff McDowell, Managing Director, SuzoHapp APA
“Our Chinese factory is a state of the art manufacturing facility” The director shows why the company has been very active lately in Asia: they enhanced their factory and recently opened a showroom with a wide array of products. He analyzes the technological advancements in the sector and emphasizes the value of talent and excellence. How many units, approximately, has your company installed in Asia in 2015? How has your company’s commercial operations evolved there on the last twelve months? As we sell many different products in the region, it’s difficult to give a single quantity of units sold. However, 2015 has been a growth year for SuzoHapp APA region. We have been very active in the Asian region throughout 2015, not only in the gaming sector, but in growing our automated cash and coin handling business through South East Asia and India. Which are the keys to explain the company’s successful position in the APA market? Our focus has always been to work with our customers to deliver products and services that make a real difference to their business, or to develop products to solve operational issues or shortcomings. We have strived to build a strong relationship with our customers and suppliers, and to continue to bring high quality innovative solutions to the industry. Why do you think your company has received two awards (Business Awards of Macau) on November 2015 for ‘Innovation Excellence’ and ‘New Talent Excellence’? In which sense does your company stimulate creativity and innovation? We believe that talent and excellence go hand in hand. The depth of talent in our R&D and engineering teams coupled with understanding the needs of our customers has led to the development of several innovative products to our region over the past 12 to 18 months. 20 Games Magazine
How would you describe the technological evolution of the solutions in the gaming and amusement sector in Asia on the last couple of years? There has been many advancements over the past few years, mostly around using technology to help realize operational efficiencies for the operators. We are seeing the use of more self-service solutions in gaming and amusement industries to expedite the transactions between customers and the property, and to ultimately reduce the overall operational costs associated with delivering a service. The continued progress in hardware technologies in both the amusement and gaming industries is delivering players a far more immersive and interactive experience, with the use of larger HD LCD’s, 3D technologies, interactive 10 to 40 point touch screens, LCD buttons/panels and ongoing advancements in processing capabilities to deliver ultra HD graphics and animations. SuzoHapp works closely with the OEM’s in both industries to bring the latest technologies and innovation to the market. Can you explain the major improvements made in the company’s Chinese factory, and give some information about the new showroom that was recently opened in that country? We have focused on building SuzoHapp China factory into a state of the art manufacturing facility. We have invested heavily in equipment, new talent and the development of best practices in manufacturing processes, policies and quality assurance. SuzoHapp China factory is one of our major manufacturing hubs globally and we will continue to invest in its growth and capabilities over the coming years.
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> interview
Raymond Chan, Co-Founder & CEO, TGG Takara Gaming Group
“We will continue bringing innovative ideas to the global market” The leader details the history, characteristics and main business units of the company. He shows enthusiasm about the ´Game of Control’ concept, which increases the interactive element of gaming to respond to the younger players’ preferences. How would you define the current situation of the company in terms of its position in the region? What is the most important learning you have incorporated about the dynamic of the industry? The ability to leverage the network effect of a platform gives an advantage over competitors in every industry. Microsoft Windows in the 90s, Apple’s Apps and the iTunes store over the last decade, Uber and AirBnB in more recent years are examples of the fastest and most disruptive companies in their industry leveraging the network effect of a platform, at the same time bringing valuable creativity to the market and generating revenue growth. TGG Takara Gaming Group is the first Interactive Entertainment company in Asia with a 3-in-1 “Landbased iGaming & Social-Media” cross-channel platform powered by a vast 200+ gaming title library built upon the GLI-11 and GLI-19 international gaming standards which are recognized by 475 gaming jurisdictions worldwide, designed with a strategic focus on bringing together game producers and players into interactions to encourage innovation. This then becomes a competitive advantage, transforming the gaming products in an open, inclusive, thriving ecosystem, making the TGG 3-in-1 platform ready for both landbased and iGaming markets globally. In which way you can transmit your vision to your employees and collaborators to build a strong and efficient working group? I’m responsible for the company’s day-to-day operations, leading the company’s product development and business strategy since its establishment in 2014. I work with Ernie Suek, Co-founder and Chairman of TGG. Besides setting up TGG, Ernie is the chairman of the Neway Group in Hong Kong, a pioneer in the Asian entertainment industry with a total workforce 22 Games Magazine
of 4000+ employees. Listed in the Hong Kong Stock Exchange since 1992, Neway has successfully utilized the cross-business “network effect” by integrating Music, Movie, Concert Productions, Celebrity Management and Social Media into an entertainment hub. This network value has led to a snowball effect that allows Neway to dominate the multi-billion dollar Karaoke Entertainment business by operating thousands of karaoke rooms in four different cities and countries in the region. TGG is also working towards the same advantage by creating a strategically focused platform in the gaming industry. What has been the company’s strategy for its business in 2015 and the beginning of 2016? TGG now has operations or business partners in all five continents including Macau, Taiwan, Korea, Cambodia, Australia, Canada, Mexico, Peru, Colombia, Serbia and Kenya, giving a solid foundation for pursuing new verticals and strategic alliances, well positioned for future revenue growth. We will continue the effort in product promotion and development, bringing innovative new gaming ideas to the global market. What are the main challenges and goals for your company in the next year? The advanced HTML5 technology is becoming mature in gaming development since being introduced to the market and this technology is providing a solid foundation for a real time deployment of games in both the landbased and iGaming sectors with minimal engineering effort. TGG will continue to invest in the research and development using HTML5 technology on our platform in order to better position our company in responding to the increasing market demand.
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> interview
David Orrick, Director of Industry Relations, Merkur Gaming
“This year will be hugely significant for the development of the company”
Newcomer to the company, but with great experience in the industry, the executive highlights the family culture and prestige of the Gauselmann Group, and projects a greater influence of Merkur in various international markets. After your extensive experience in the industry, what made you decide to start working with Merkur Gaming, and how have you been dealing with your new responsibilities so far? In our business, and more generally in life, things can often be seen to be cyclical. ‘What goes around comes around’ is one way to express it. I have previously worked with three of Europe’s leading entrepreneurial companies, but the new challenge of helping Merkur Gaming in its move to broader internationalization was one that I could not resist. Exactly a year ago, my former boss and longtime 24 Games Magazine
friend, the late Jens Halle, told me that he wanted to ‘introduce me to a new possibility’. Sadly, Jens’ time with Merkur was to be all too short, but his memory lives on within the company’s structure and through the many friends that he made. Having only had a few weeks to prepare for ICE was a challenge all of its own but, thanks to the great team that I have joined and with the encouragement that I have been given from the highest level in the company, I felt instantly at home. The goals that lie ahead are simple to state but no doubt harder to achieve. My task is to use my experience, knowledge and contacts to help ensure that the Merkur Sun shines brightly over a range of new markets and so achieves even greater success, and to do it in a timely manner. Which are the most essential qualities of the corporation’s culture that makes you enthusiastic about this position? From my, albeit brief, experience to date I can say that Merkur Gaming has a very real family culture. Being part of the Gauselmann Group brings a long history of experience and history that, together with
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the huge technical, human and financial resources that support our strategies and developments, makes Merkur a market leader in its own right. In fact, I have already been made aware that ‘Merkur’ is the German word for ‘Gaming Excellence’.
Schleswig-Holstein can participate in real money games. As a 100 percent subsidiary of the Gauselmann Group, Edict also distributes well-known and popular Merkur slot machine games exclusively to the online gaming industry.
How is the company partnering with online gaming enterprises to boost its business for that increasing segment of the industry? In addition to the land-based gaming machine business, the Gauselmann Group also stands for online casino solutions ‘Made in Germany’. With its Hamburg-based Edict subsidiary, the Group has specialized in the development and distribution of turnkey system platforms for the online casino market. The gambling license required for the sale and operation of online casino systems had already been granted in 2010 by the Gambling Supervision Commission of the Isle of Man. The server and software solution for the portal operated by its sister company Cashpoint (www.merkurspielcasino.de) was also created by Edict. In addition to adjustments to the specific guidelines set by the licensor state, Schleswig-Holstein, it also had to ensure technically that only users residing in
How do you see this year in terms of challenges to overcome and growth prospects for your company? 2016 will be hugely significant for the development of Merkur Gaming. Our company is making very positive strides in reaching and entering a range of international markets. Further development of our already successful business in Latin and Central America, exciting new opportunities across Africa and, of course, our already reported plans to bring the Merkur Sun to both Native American tribal and a range of State regulated gaming territories. That ongoing process represents significant challenges as well as enormous opportunities. It is a process that is being significantly accelerated at present, one that will continue this year up to and including the G2E show in Las Vegas in September, where we expect to have a major presence and to make some exciting announcements.
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Rebecca Kingswell, Managing Director APAC, TCSJOHNHUXLEY
“Our Gaming Floor Live is transforming the table game space” This businesswoman explains that Macau crisis is a consequence of increased competition and economic downturn in the region. She also comments the company focused on technology and product development, with custom animations that attracts younger players. You have more than 20 years of experience in the Asian gaming market. How would you explain the current situation of gaming in Macau, with 23 straight months of year-over-year decline in revenue? Macau has always been a hive of activity with some of the busiest table games in the world. When the market opened up and new operators were given licenses, new casino growth exploded and the landscape changed forever. Macau has seen year on year growth for many years and I have been very fortunate to be involved as the market has developed and expanded. But like anything, with more competitors coming in and vying for the business, changes in legislation, plus a general economic downturn in the region, there is going to be a slowing or a decline. The market will eventually stabilize and we will find a new normal.
e-FX displays, Automatic Dice Recognition units, Saturn Roulette wheels and layouts.
In that context, what has been the business development of the company in APAC in 2015 and the first quarter of 2016? TCSJOHNHUXLEY is constantly looking at innovative ways to improve our products and to develop new ones. Most of our products are focused on adding value and to optimize our customer’s return on investments and we work very closely with all the operators to see what they need to improve their businesses. As a result of this strategy, we had a better than expected 2015 with openings for Galaxy Phase 2, Studio City, Jeju and Saipan and are looking forward to improving on this throughout 2016. We are extremely pleased to have been chosen to supply the two big openings in Macau this year: Wynn Palace and Parisian. Both properties will feature a wide selection of our products, including GFL Optimisation for Baccarat, Sicbo Blaze, Baccarat, Sicbo and Roulette
What has been the main technical innovations for table gaming products in the last couple of years? Our strategy changed a few years ago when we realized that we had to focus on technology, which saw a major investment in product development. This was not just to underpin our flagship products such as chippers, wheels and displays, but to provide technology that would offer real-time data collection that operators had come to enjoy from their slot systems. Our offering allowed a number of our products to provide this much needed data, but they were all on different platforms that could not all talk to each other. We knew the answer would be to develop one platform that would allow operators to connect each device on the table to existing systems technology. This would provide much needed real-time data, which clearly indicates
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How important is G2E Asia show for TCS? G2E Asia is always an important showcase for us as we continue to hold a strong presence in Asia. Our main objectives are to showcase new products and solutions that reinforce our strategy to innovate and develop our portfolio, delivering products that drive and grow our customers’ businesses. It is also important to meet up with our existing customers as well as making new contacts with potential customers and product partners. As this is the premier show in the region and attracts many visitors from outside of Macau, it gives us the opportunity to showcase our products to customers who may not usually be able to see our range ‘in the flesh’.
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where operational attention is required the most. That platform is Gaming Floor Live. This revolutionary platform is transforming the table game space by providing operators with real-time data through a modular system that is scalable, allowing them to build their own table management platform using the various combinations of GFL Modules. So now it’s possible to see how fast your dealers are dealing, whether your roulette wheels are running efficiently, see dice results on your Sicbo games, schedule or alter your media and displays from a central point, or see how many chips went through your chippers and so much more. Gaming Floor Live continues to develop based on customer needs, by providing operators with powerful information as it happens. In which way is your company helping operators to optimize their gaming floors? Which are the main differences between your products and the ones from your competitors? As I said previously, the Gaming Floor Live platform and its modules allow operators to access real-time table gaming data and statistics, highlighting areas and process that can be improved upon to help the casino operate optimally. The main difference between our products and that of our competitors is that our solutions interface with every facet of table gaming. This allows information collected from one product to be used to make changes to another, providing further benefits and efficiencies for the operator. It’s a unique proposition in the table games space. How are Millennials boosting the expansion of table games and how is your company taking advantage of this trend? The table game market is currently growing and evolving, finding its place in a more technology-driven world. While there remains room for traditional-style live table gaming, many young players are looking for a more sophisticated experience when they visit the casino floor. This means they’re looking for more technology integration into live table games, without losing the human interaction and exciting atmosphere that they love. We are constantly working closely with operators to look at developing products that attract the new gaming customer. Our Blaze product is something that we are very proud of and has transformed traditional table games like Baccarat, Sic 30 Games Magazine
Bo, Roulette & Money Wheel into games that now increase excitement and entertainment for players through our patented animated technology. Energy efficient LED’s fitted below the surface of the table display unique attraction sequences and themed animations, while also highlighting winning numbers. The benefits of instantly seeing these numbers highlighted not only assists players, but also allows casino staff to easily monitor game procedures from a distance. Blaze’s most unique feature is the custom animations that can be tailored to any in-game theme or design. Recent designs have seen dragons breathing exploding fire across the layout or even a giant tiger taking a stroll across the playing surface. These striking animations along with important game prompts and good luck messages build anticipation and add to the thrill of the game. What are the main targets for your company in APAC for the rest of 2016? TCSJOHNHUXLEY has enjoyed a very successful business in Asia over the past years. Flexibility is key to this success and due to our size and structure, we are well positioned to fulfill this criteria. We’re a privately owned and run company with vast experience, a proven track record and the ability to deliver. Our focus has been to deliver our great core products, roll out innovative new solutions and continue to invest and build our customer partnerships. We know that, by focusing on the customer service segment of our business and being responsive, we can do better by our customers. This year has seen us grow the business in the region, with an emphasis on the Australian and New Zealand markets. An important project in the region will see the complete refurbishment of Casino Canberra’s gaming floor. This will be one of the first installations of our GFL Media system and also includes our GFL Bonusing module on some of the 34 tables and accessories we are also supplying, as well as Chipper Champ 2 chipping machines. These are exciting times for TCSJOHNHUXLEY and we look forward to the future.
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> Companies Playson
Debut at G2E Asia with new games
games, with unique math models designed to appeal a wide cross section of players as well as high rollers. All Playson games are released on both desktop and mobile versions simultaneously, allowing clients to market the game to their full player base from day one. Playson launches their suite of 35+, high production quality, online casino games into the Asian market by exhibiting at G2E Asia 2016. Playson Ltd, a European content developer, will debut at this event on stand 1845 to demonstrate their complete
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portfolio of RNG casino table and slot machine games. Already a leading brand in Europe with popular game titles such as Dracula’s Family, Alice in Wonderslots and Bumper Crop, Playson’s 250+ employees work to release beautifully designed
These games are translated into multiple languages and support a wide number of currencies. Playson also offers “Gift Spin” functionality to allow operators to offer players free-spins for
real money as a marketing incentive. Customers of Microgaming Quickfire and Isoft Bet can come to the Playson stand to discuss how to obtain Playson games via those two platforms. Additionally, Playson will perform direct integrations with operators who wish to work directly with their game providers. If someone is looking for unique, quality content for a RNG casino offering, content that will be new for players, then he should come to the Playson stand for a demonstration of the games with the Playson sales staff.
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An option to consider
LatAm
Increasing Chinese investment
China’s performance is a relatively novel but key factor for Latin America’s development, creating both challenges and opportunities. Trade between China and the region has experienced an unprecedented expansion over the past 15 years, multiplying 22-fold over this period. In the period 2005-2014, close to 80% of total Chinese financing went to Latin America to support new infrastructure projects. Attracting Chinese investment to close Latin America’s infrastructure gaps, notably in energy, transport and logistics, is important to overcome barriers to productivity and integration in global value chains. But there’s also the services segment to consider, where entertainment is an important component. A very interesting study about this sector is PwC’s second annual ‘Global Gaming Outlook: The casino and online gaming market in 2015’. According to that report, brick-and-mortar casinos generated US$182.8 billion in global gaming revenues. 30 Games Magazine
Among the five observed regions, the fastest growing one was Asia-Pacific with an 18.3 percent compound annual growth rate (CAGR), followed by Latin America, with a CAGR of 8.1 percent. Overall, PwC calculated that Latin America reached US$5.6 billion in gaming revenues in 2015. Casino gaming market income for Latin America represented US$776 million (2014), a CAGR of +12.8% between 2010 and 2014. Social casino market size in LatAm was about US$269 million (2015). In relation to online gaming, H2 Gambling Capital and iGaming Business communicated the results of their iGaming Dashboard (April 2016). That report anticipated the iGaming Gross Win by Region for 2017 and 2020. The statistic expressed that Asia/MO region will have an iGaming gross win of US$13.83 billion (2017) and US$16.75 billion (2020), while LatAm/Caribbean will get US$795 million (2017) and US$1.03 billion (2020). It’s not a secret that there are lots of opportunities
Changes in the economical model of China announce a break in the traditional structure of trade relations between the blocks. The service sector can take a new value from the decisive bet of Chinese companies on the attractive Latin American gambling market.
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waiting in Latin America for businesses, especially online gambling. For a few years now, many of the biggest players in the iGaming industry have had their sights on the growing Latin American market, a region with a population of over 623 million people in 26 countries. On the last 10 years, global operators such as Cirsa, Codere, Luckia, Sun International; slots manufacturers like Scientific Games, IGT, Novomatic, Merkur Gaming, R. Franco; and companies that provide table games, roulettes, lottery and ETMs, such as TCS John Huxley, Intralot, Interblock, Alfastreet and others have installed in that fertile continent. In order to consider China-LatAm relationship, it’s essential to make a brief analysis on macroeconomics, and then go deep into the current moment of gambling in the main markets of the attractive LatAm region.
LATAM-CHINA. A MACROECONOMIC PERSPECTIVE Organization for Economic Cooperation and Development (OECD), the Economic Commission for Latin America and the Caribbean (UN-ECLAC) and the Corporacion Andina de Fomento (CAF) have elaborated a remarkable report: ‘Latin American Economic Outlook 2016. Towards a New Partnership with China’. According to this study, China is now the region’s second largest import source and third largest export destination for Latin America and the Caribbean. Trade between Latin America and the Caribbean and China is clearly inter-industry: commodities in exchange for manufactures. Exports to China are
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concentrated in a small number of commodities. Nevertheless, between 2000 and 2013, the region nearly doubled the number of products exported to China, from 26% of the number of products exported within the region itself in 2000 to 53% in 2013. Now, lower Chinese demand for commodities, together with a fall in prices, is affecting Latin American commodity exporters, which show different patterns of slowdown depending, in part, on their bilateral relations with China. Latin American governments should invest in innovative productive development policies to remain competitive worldwide and attractive to China. These policies include increasing integration into supply chains, strengthening physical and human capital, enhancing logistics, and forging regulatory improvements in areas such as services, investment, intellectual property rights and competition policy. Four essential points can be set about the business relationship between the parties: 1) trade between Latin America and China experienced an unprecedented expansion, but the region’s current slowdown reveals the structural characteristics of commodity-based growth; 2) in light of this weakening, Latin American governments are looking for ways to remain competitive in and attractive to China, exploring innovative productive development policies to better participate in global value chains and boost economic diversification. Chinese domestic consumption may open new opportunities for Latin American exports in foods, services and tourism; 3) Latin America needs to invest in innovation, skills, regional integration and infrastructure to benefit from China’s new normal; 4) attracting Chinese
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investment to further Latin America’s development can be mutually beneficial. Latin America should expand its range of services to respond to new opportunities created by the structural transformation of the Chinese economy. These include back office and offshore services for the global networks of Chinese multinational companies, providing around-the-clock services. Other examples are entertainment, architecture, urban planning, environmental management, medical and other services for an ageing population and more traditional services such as tourism, transport and logistics. Opportunities for increasing China’s participation in Latin America’s financing should be matched by efforts in transparency and regulation. Latin American governments can be more proactive in strengthening transparency and regulations. A successful Latin America-China partnership needs adequate multilateral governance. China’s transformation introduces new challenges and opportunities for the region. These need to be incorporated into the broader development strategy aimed at upgrading, diversification and integration. For this to happen, China also needs to understand Latin America’s development challenges.
GAMBLING INVESTMENT. A NEW OPPORTUNITY. Latin America presents growing opportunities for investors, operators, equipment and technology suppliers and many more within the gaming and gambling industry. Land-based gaming and gambling activities have traditionally been closely linked to the tourism industry and Latin America
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is a region which continues to successfully attract tourists every year. Travel and tourism in Latin America in 2010 generated approximately US$200 billion of economic activity and is expected to grow by 5.1% per annum between 2010 and 2020. The existing telecoms infrastructure and Internet and mobile penetration levels in Latin America provide interesting opportunities for mobile, Internet and interactive TV gambling applications. The PwC’s ‘Global Gaming Outlook’ research stated that the global casino gaming market in Latin America produced revenue for US$5.61 billion in 2015, with a compound annual growth rate of +8.1% from 2011 to 2015. It is valuable starting to analyze the current dynamics of each market in relation to gambling.
BRAZIL Brazil is a country with one of the longest-standing gambling bans in the world: more than 70 years of prohibition of casinos and ‘jogo do bicho’. This prohibitory legislation did not change the gambling scene in Brazil, which has an annual turnover in illegal bets of over R$19.9 billion (US$5.68 billion), compared to R$14.2 billion (US$4.05 billion) in legal gambling. On the last twelve months, Brazilian organizations such as Institute for Legal Gaming (IJL), Resorts Brazil (ABR), and various social and political bodies as well as other entities have been doing a great effort in order to get the legalization of gambling, with a major advancement through the end of 2015 and the beginning of 2016. The Bill PLS2 186/2014 has been approved by the Special Commission for National Development (CEDN) in the Senate;
this legalizes casino operations, bingo, electronic games and Jogo do Bicho, and also the online gambling. The House of Representatives was also analyzing and condensing the main proposals for legalizing all forms of gambling through the work of the Special Commission for the Regulatory Framework of Gaming in Brazil. However, due to the recent impeachment proceedings against current President Dilma Rousseff, discussions about gambling that were taking place in the National Congress have been delayed. It is estimated that due to political uncertainty and possible government changes in Brazil, the discussion about the legalization of gambling will be postponed to later this year or early 2017. Then, the creation of a regulatory framework for gambling will be back on the agenda of the legislature. As one of the last markets to be legalized, Brazil will have the advantage of being able to make the most of the best practices observed in other countries and avoid mistakes.
MEXICO The strong movement in favor of a new gaming legislation (the last one, a Federal Gambling Law, dates back to 1947) that was supported by politicians and businessmen of the sector in 2014 and 2015 suddenly stopped at the end of 2015. The new gambling bill was quickly approved by the Chamber of Deputies, and then passed to the Mexico’s Senate. Since November 2015, that law didn’t have any progress through the upper house. In words of Rodrigo Galvan, managing director at Juegos y Sorteos de Jalisco (JSJ Gaming): “Mexico can be set for a
gaming explosion in the next few years thanks to the potential changes to the archaic laws and the country’s impressive broadband coverage. The approval of the bill will be a great mechanism to enhance the Mexican gambling market. Despite the current uncertainty, there are enough regulatory conditions to perform legally in Mexico”. Recent good news in the sector were the Supreme Court ruling in January 2016, which declared that video lottery terminals and Class II and Class III machines are allowed in the country. The new bill includes the legalization of online gaming and the creation of a new regulatory body for the nation’s gaming industry, the National Institute of Games and Lotteries. The first 2016 regular session period in the Mexican parliament recently ended, leaving at least 10 major projects pending for approval (one of them is the Gambling Law). Mainly due to lack of consensus, senators failed to advance in those projects. Thus, the long awaited new law for the gaming industry will be postponed until next September. Mexico is certain to appeal to digital
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operators thanks to its 60 million Internet users, 12 million fixed-broadband subscriptions and 11 million mobile contracts, which place it among the world’s top 10 most connected countries. With a population of almost 120 million, there is a magnificent opportunity for huge growth in both online and land-based gaming.
ARGENTINA With the closure of bingos in the City of Buenos Aires and a firm policy of control over tax debts in gaming floors around the country, the new government of Mauricio Macri has decided to go deeper on the analysis of the gaming industry in Argentina. After several years of unusual permits, lack of control and controversial measures, the new authorities now announced they would not seek to extend the already huge panorama of gaming in the country, but to establish a clear organization of the sector. Beyond the internal rigidity, at the international level, the Government of Macri wants to establish a fixed value of the dollar trading, the payment of large debts incurred in the previous government and the opening of exports and imports (a very limited area in the last 10 years), allowing foreign companies to invest in the country and to bring slot machines
and products to stimulate progress in the gaming sector. It’s also in debate the online gaming legalization nationwide. So far, only the provinces of Misiones and Rio Negro gave licenses to operate there in this gaming modality. Argentina is one of the countries of Latin America where the game is more extended, with more than 500 casinos, 70,000 slots and a total of money generated by gaming (2013) between $70 billion to $100 billion (US$4.8 to 6.9 billion).
CHILE Chile is in the process of increasing the number of casinos through different regions. There will be soon new properties in Chillan (company Marina del Sol) and Ovalle (BoldtPeralada). Furthermore, The Superintendence for Gambling Casinos (SCJ) is currently engaged in the final review of the rules for participating 36 Games Magazine
in the bidding process for gambling casino concessions, which will be in force for the upcoming tender of seven municipal casinos around the country (cities Arica, Iquique, Coquimbo, Viña del Mar, Pucon, Puerto Varas and Natales). This process is the first one to be undertaken under Law Nº 20.856, in force since August 2015, and which amends the previous law on casinos, Nº. 19.995. “This new legal framework enforces objectivity and transparency in the process of awarding concessions, which also guarantees the maximum revenues for the state, regions and municipalities,” explained Provisional Superintendent for Gambling Casinos, Daniel Garcia.
PERU Over the past years, the Peruvian gambling sector has shown regulatory stability. Mincetur, the gaming control organism, has been properly regulating all issues related to this industry, preventing both money laundering and illegal gambling. Peru continues to see healthy growth and becomes one of the most active Latin American markets for gambling. The overall economy in Peru has seen stable growth, which has made it very attractive for global firms to install in the region and expand
their business. The market has gained respect for its order, legal seriousness and open policy to direct investment. The increased competition is healthy and will help Peru’s overall gaming industry to grow and develop.
COLOMBIA Undoubtedly, what generates great enthusiasm in the local market is the imminent regulation of online gaming, whose draft was recently published by Coljuegos, the local gaming control body. Coljuegos presented a consultation document in December 2015. Now, it is very close to launching its online gaming official regulation that will kick off a new era for legal online gaming and sports betting in Colombia. The new Colombian regulation will allow licensed online gaming operators to offer RNG casino games including slots, roulette, blackjack, baccarat and bingo, plus poker. It would
authorize sports betting, with fixed-odds, parlay and exchange wagering all getting the green light. Live in-play betting would also be permissible. With the number of players and bettors in Colombia on the increase, the potential of the move is clear to see. Close to 12 million people are over the age of 18, with nearly 60% of those actively playing and betting online. Besides this, Colombia has made great strides with the opening and legalization of new forms of gaming such as sportsbooks, video lotteries and Keno. The great leap into the future will be the online connection to a central “brain” that will receive detail on the operation of each machine in real time, determining the tax that each operator should contribute to the Colombian tax authority. The new system requires the replacement of more than 30,000 slots and that means an important investment for operators, while manufacturers will have to make an unprecedented effort to meet that demand at competitive prices.
PANAMA AND THE CARIBBEAN Panama continues to lead the Caribbean region with the highest projected growth of its economy, especially as far as gaming industry is concerned. It is also true that the offer has grown significantly
in the segment of complete casinos and that represents a great challenge for both operators and manufacturers. Panama is a dollar-bonded economy with signed free trade agreements with the large blocks (USA and CCEE). However, this open economy is presenting some resistance from local banks in providing services to casino operators and industry suppliers. The new Law 27 introduced by the government in May 2015 that applied players a 5.5 tax on cash withdrawal in casinos has started a huge crisis, both in the gaming and in the hospitality sectors. The percentage of money invested on gaming during last year in Panama fell 13.5 percent. There have been 1,200 employees of the gambling industry that lost their jobs from June 2015 to March 2016. The ongoing casino’s revenue crisis in Panama has reflected in hotels. Various hotel operators have reported a significant decline in
their activities since last May, which so far has led to an employment cutback of 6,500 people. There’s an oversupply of rooms: only in the capital Panama City there are 20,000 rooms for lodging, from which about 5,000 were built between 2010 and 2014, while in the rest of Panama there are another 12,000 rooms.
EXPANDING AGREEMENTS The balance of Latin American gambling situation expresses lots of enthusiasm from its players, new legislation, advancement of online gambling and a hug potential for investment. Trade agreements in this entertainment area could be a great possibility to enhance the commercial relationship between LatAm and China. If bilateral trade were to expand in the next few years at the pace recorded in 2013 (6%), it would reach US$500 billion between 2023 and 2024. The 2015-2019 Cooperation Plan, which the Community of Latin American and Caribbean States (CELAC) and China agreed to in January 2015, proposes to achieve this target in ten years. Bilateral investment agreements (BITs) with China could have greater potential to develop in the future. The trade boom with China over the last decade and a half has brought significant benefits to the region. It’s clear that
Latin America’s response to the changing context brought by China’s transformation should be built around three main objectives: diversification, upgrading and integration. Besides this, a deeper and closer inter-regional and extra-regional cooperation could facilitate the realization of these objectives and build the pillars for a solid, durable and resilient partnership. However, the willingness to establish channels of cooperation should go beyond bilateral forms of dialogue and rather be accompanied by a structured dialogue with the region as a whole. Latin America should also pursue more strategic integration efforts to enhance and diversify its services exports. Beyond intra-regional factors, a truly regional agenda given the context is essential. China’s willingness to strengthen ties with Latin America calls for a coordination mechanism for successful dialogue.
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gaming MILLIONS IN REVENUES
ESPORTS
A FANTASTIC GAMBLING OPPORTUNITY This year will be pivotal for the future of eSports. With so many new investors, media companies, game publishers and brands increasing their involvement, 2016 will define the pace and direction of growth for the global eSports economy. China is leading this trend, and the gambling sector can take advantage of all the fuzz around eSports to start monetizing this new segment.
The very idea that people may be willing to watch other people play competitive video games for big money prizes may surprise some. These skeptics often underestimate the global annual market size as being in the millions of dollars only. Conversely, esports advocates overestimate the current market size, believing annual revenues are already in the billions, and comparable to major league sports. Today, a major esports event may attract 40,000 people 38
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watching live, and tens of millions watching over the web. Revenues for esports are predicted to grow 25 percent in 2016, which is better than most mature sports, but not especially impressive for a new entertainment market. However, some believe esports is approaching an upward inection point: american analysts predicts that esports in the Us alone will leap from Us$85 million in 2014 to Us$1.2 billion in 2018: a 94 percent compounded
growth rate, which is triple the projected 2016 growth over 2015.
ATTRACTING YOUNGER GENERATIONS esports is a competitive gaming in an organized format; an event or league, organized by a third party, with a specific goal (i.e. winning a tournament or prize money), with a clear distinction between players and teams who are competing against
each other for a chance to reach that goal. This activity does reach tens of millions of people on a regular basis, and over a hundred million occasionally, making it comparable to some traditional sports. Tech and media companies are paying attention to esports, for both growth opportunities and because it appeals to a narrow and desirable demographic: 75 percent are millennials aged 1834, and 82 percent are men. The latest ‘Global
eSports Market Report’ by Newzoo states that brands will spend a considerable US$325 million across the industry in 2016. This means that the industry as a whole will receive over 70% of total revenue from brands and sponsors this year. This is a sizable increase of 49% growth on last year’s figures, which goes some way in showing why it continues to be a marketing buzzword. In fact, brands are set to pump more than US$800 million into eSports by 2019, the same year the total market will pass the US$1 billion mark. Importantly, these brand revenues don’t include media rights. As the eSports economy matures and more traditional media companies enter the space, the share of media rights in total revenues is expected to increase significantly, and move closer to what it is seen in traditional sports. According to Peter Warman, CEO of Newzoo: “The explosive growth of eSports and the ongoing convergence of games and video provide
the biggest opportunity for the gaming industry since the launch of the iPhone back in 2007”.
CHINA LOVES ESPORTS On the last year, Chinese company Tencent Holdings Ltd. invested US$1 billion into Chinese streaming platform Douyu TV, a games-focused video service, in order to beef up its online gaming business by adding new marketing channels. Nowadays, China is the
world’s largest market by number of gamers, with 530 million. Newzoo also reports that there’s an
eSports Chinese audience of 73 million (42 million enthusiasts). Those eSports fans are mostly men (67%) from 21-35 demographics (60%). They are active iPad users (37% vs 26% of online population) and active in team sports (55% vs 31%). The Chinese government has used the term ‘soft power’ to describe the fans excitement and the generation of revenue implied on eSports. The government has also used eSports tournaments to draw tourism and positive press to locations that have received little of either. By hosting global eSports events in these Games Magazine 39
gaming lesser-known regions and refocusing global attention on digital leisure, the government is trying to rebrand China as a tech-savvy nation that has as much of a stake in the tech entertainment industry as it does in the tech manufacturing industry. Websites such as Twitch and Douyu serve as online channels for game tournaments held around the world, with millions of people watching through streaming services the championships of the world’s most popular online games. although esports might not match or surpass traditional sports any time soon, its potential business value is clearly too significant to ignore.
OPPORTUNITIES FOR GAMBLING Gambling on esports is currently primarily limited to sports betting and fantasy offerings. The former is similar to traditional sportsbook betting, with users betting on live matches. as evidenced by sky Betting & Gaming’s entry into the market in October 2015 (through its partnership with Betgenius), mainstream operators are starting to enter the market. The likes of Betway, William Hill and
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Paddy Power have also started to offer bets on esports. Fantasy esports meanwhile are similar to daily fantasy sports services. Rather than drafting typical athletes into a fantasy team, however, customers select professional gamers, before entering their fantasy team into competitions for the chance to win cash prizes. as with sports betting, traditional daily fantasy sports operators, such as DraftKings, have started to incorporate esports into their offerings, whilst dedicated fantasy esports sites have also emerged. in terms of numbers, expectations for esports
gambling are impressive. Research firm eilers Research estimate that the market is already substantial with 590,000 realmoney fantasy esports customers, 1.72 million esportsbooks customers, and 3.2 million players placing wagers with ingame items via informal betting markets in 2015 alone. Deloitte Global predicts that esports will generate global revenues of Us$500 million in 2016, up 25 percent from about Us$400 million in 2015, and will likely have an audience of regular and occasional viewers of close to 150 million people. eilers’ base case
for esports betting growth, meanwhile, sees 19.4 million individuals wagering Us$23.5 billlion on esports by 2020, generating Us$1.8 billion in revenue. Whilst such predictions may at first glance seem somewhat optimistic, expectations of major growth are echoed by experienced operators already delving into the esports market. Betway, for instance, have stated that esports already regularly features in their daily top ten sports for turnover, and with the launch of their dedicated esports portal they clearly see further growth here.
SPECIAL EDITION G2E ASIA 2016 GAMES MAGAZINE
INTERVIEW
ALBERT YU, GENERAL MANAGER ARUZE GAMING MACAU ALBERT YU “HUMAN RESOURCES AND R&D ARE VITAL TO SUCCEED”
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INTERVIEW
RAYMOND CHAN, CEO, TGG TAKARA GAMING GROUP
INDUSTRY MEETS AT
MACAU