June 2011 • MOP 30 • ISSN 2070-7681

Destination Achieved Galaxy Macau gives critical mass to Macau’s integrated resort market

INSIGHTS: Featuring LVS President and COO Michael A. Leven

Sky’s the Limit: MGM Grand Ho Tram

Market Impact of Galaxy Macau: Pie Squared? | Steve Wynn: “Wynn Cotai Will Be My Best Ever” Sheep in Wolf’s Clothing | Pansy Ho, MGM and STDM: Thin End of the Wedge? Win Per Unit: Is it the Best Way to Measure Performance?

CONTENTS June 2011

Destination 12 Achieved

12 Pie Squared? 18 Destination Achieved 28 New Blood 30 Sky’s the Limit 38 Towering Ambition 40 Revolution At Your Fingertips 43 Firing on All Cylinders 46 Strong Showing 47 Star Quality 48 Win Per Unit: Is it the Best Way to Measure Performance? 50 INSIGHTS–Michael A. Leven 60 Currency Revaluation 62 Sheep in Wolf’s Clothing 40 66 “Wynn Cotai will be my best ever” 69 Evolution in Action 70 The One 72 Thin End of the Wedge?

28 74

CONTENTS June 2011

Destination Achieved

74 Mind Power 76 Enhanced Testing 77 Toast of the Town 78 Noted Success 80 Long Live the Revolution 81 Breath of Fresh Air 82 Game On and On 83 Experience Counts 84 Treasure Island 85 Know Your Customer 87 Quick March 88 Inspired Offering 88 Strong Suit 89 Bigger, Faster, Smarter 85 90 Poised for Success 91 Blue Chip Investment 92 Regional Briefs 94 International Briefs 96 Events Calendar

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Editorial

Risky Business

In late May, the Chinese-language press in Macau ran a story saying a visitor from Shanghai was demanding compensation from the newly-opened Galaxy Macau. The tourist alleged a light fitting fell on his head while he was at the resort. But the story added that after the management had reviewed security footage they concluded the complainant had not been hit on the head at all, but may possibly have been lightly grazed on his hand. Welcome to the compensation culture that Las Vegas and other Western casino operators have been battling for years. While it’s unfortunate when gravity takes hold of any fixture or fitting at an inappropriate time, the incident does throw into sharp contrast the different attitudes of mass market consumers in East and West. Inflated claims of personal injury and suffering are the norm in the West, as if the court system there were a kind of giant lottery game—but with much better odds of winning a prize at the end. In Asia, such litigious attitudes are currently rare, for a complex range of reasons, including a tendency to assume that those in authority are also in the right. Publisher In Asia, respect for authority extends to the retail end of the investment market, which Kareem Jalal in Greater China is a very big market indeed. Most Chinese people don’t have access to the Director kind of generous state or private pension provision still available to many in the West. As João Costeira Varela a result, saving and investment for the future are virtually written into their DNA. This self- reliance is a laudable trait when contrasted to the average mollycoddled Westerner with Editor his addictions to personal debt, instant consumer gratification, and the double whammy of Michael Grimes untrammelled public spending combined with low personal taxation. But the investment Business Development Manager hunger of Chinese and other Asians does make them vulnerable on occasions to the José Ho blandishments of plausible salespeople. Even with respected and well-regulated companies with unimpeachable records, there Contributors is a tendency when selling investments into Asian markets to gloss over certain issues in Desmond Lam, Steve Karoul I. Nelson Rose, Richard Marcus ways that would simply not be possible when dealing with more cynical and more bolshie James Rutherford, Sudhir Kale consumers back in the West. James J. Hodl, Jack Regan An example is a recent press conference in Hong Kong for MGM Resorts International’s William R. Eadington and Pansy Ho’s initial public offering for MGM China Holdings. The prospectus for the IPO Graphic Designer filed with the Hong Kong Stock Exchange contained no fewer than 11 pages on Pansy Brenda Chao Ho’s relationship with MGM Resorts. Those pages spelled out the fact that after the IPO she would occupy a unique position in the history of Macau gaming—namely being a Photography director and shareholder of one casino operator while simultaneously being a director Ike ,Alice Kok, James Leong and shareholder for the parent company of a rival casino operator. (Those companies are MGM China and STDM, the investment vehicle started by her father Dr Stanley Ho and the Inside Asian Gaming is published by parent company of SJM Holdings.) Must Read Publications Ltd And yet at the IPO press conference by MGM Resorts’ management, not a single 8J Ed. Comercial Si Toi question was allowed on the topic of the MGM China-Pansy Ho-STDM love triangle. As one 619 Avenida da Praia Grande prominent Hong Kong journalist put it when he found this line of questioning closed down: Macau Tel: (853) 2832 9980 “It was in the prospectus—so I thought it was fair game”. Any Asian investors subscribing to the MGM China Holdings share issue might like to For subscription enquiries, ask themselves what they’ve actually bought into. One answer seems to be Pansy Ho’s please email retirement fund, given that a significant portion of the money raised by the IPO is going [email protected] towards buying out nearly half of the 50% stake that Ms Ho had in the MGM Macau joint For advertising enquiries, venture. (Only US$5 million of the Ho family’s original US$80 million equity in the MGM please email JV actually came directly from Pansy Ho’s pocket, according to a 2009 report by the New [email protected] Jersey Division of Gaming Enforcement in the US. Her sister Daisy put in US$3 million and or call: (853) 6680 9419 their father Dr Ho chipped in US$72 million, according to the report.) www.asgam.com So the rich get richer, the IPO arrangers take their fees and everyone goes home happy. But watch out—in China the days of relying on smooth talking if gravity takes hold of Inside Asian Gaming fixtures and fittings may be over. is an official media partner of: Michael Grimes We crave your feedback. Please email your comments to [email protected]

http://www.gamingstandards.com 10 INSIDE ASIAN GAMING | June 2011

Pie Squared? The opening of Galaxy Macau seems to have spurred real market growth

wo weeks’ trading doesn’t make a business revolution— but it does appear that Galaxy Macau actually expanded Tthe Macau gaming market in May rather than merely cannibalising its rivals. At the time Inside Asian Gaming went to press, Lusa—the Portuguese news agency—was reporting market sources saying gross gaming revenues (GGR) for May were likely to hit MOP24 billion (US$3 billion). This implied an average daily gross for the month of MOP774 million. That’s around 13% higher than Macau’s MOP683 million average daily gross in April 2011. April was itself a year on year record, bringing in MOP20.5 billion across the month. There are good reasons to be cautious, however, about such comparisons and using them to extrapolate in relation to Galaxy Macau. One is that April has one fewer day than May. A second is that seasonal variations in market-wide visitor traffic make month on month comparisons less useful than year on year ones. A third is that the Macau market is dominated by live table baccarat, and that game has a lot of volatility in the amount the operator gets to ‘hold’ and thus what profit the operator makes from that part of the gaming Before the flood—publicity photos of Galaxy Macau’s main floor prior to business. Some weeks and some quarters can be particularly lucky opening

12 INSIDE ASIAN GAMING | June 2011 June 2011 | INSIDE ASIAN GAMING 13 Galaxy Macau

for the players, and other periods can work well for the house—even though over the long-term this volatility gets ‘smoothed’ for all the operators, thus reflecting the underlying (and very low) house advantage in the baccarat game. But for the financial community— focused on quarterly, half-yearly and year on year business trends— these win-rate variations are an important variable to be factored in. Despite all those very necessary caveats, there does appear room for a larger than normal dose of optimism about the trajectory of the Macau gaming market and Galaxy Macau’s place in it. If the MOP24 billion figure for total May revenue comes to pass by the time readers see this, it will have meant a year on year growth in GGR of 41% when compared to May 2010’s total of MOP17 billion. Galaxy Macau’s operator, Hong Kong-listed Galaxy Entertainment Group, said 20,000 people visited the Cotai resort in the very first hour-and-a-half of its phase one opening on Sunday 15th May. Even taking into account the opening ‘bounce’ in visitors that every new property in Macau has experienced, that looks impressive. The issue is, can Galaxy Macau maintain a consistent and above market average performance in the coming months, even if—as many observers expect—the initial frenzy dies down and daily guest numbers drop somewhat. And one visitor through the door is not the same thing as one gambler at the tables. Sources at Sands China, for example, said The Venetian did more revenues Winning lines—industry experts generally agree Galaxy Macau got its slots offer over the first two days after Galaxy Macau opened than it had been right averaging on a month-to-date basis. This was despite the fact it appeared to IAG and some other observers that The Venetian’s foot slots are in sociable clusters and integrated with table areas rather traffic on the main floor was down from its normal levels inthe than spread out in endless rows often extending well away from week of the Galaxy Macau opening. table areas in the manner of Las Vegas Sands’ Marina Bay Sands in IAG’s observations of Galaxy Macau and anecdotes from other Singapore, or The Venetian on Cotai. At RWS, all of the slot zones sources—while not scientific— do suggest sustained high use are on the way to somewhere, naturally creating foot traffic and of the gaming tables and also the slots in the first two weeks of the potential for casual play. The same principle seems to apply at the property opening. The slot performance—in terms of people Galaxy Macau. actually queuing to get on machines—is particularly interesting Peter Johns, Vice President of Electronic Gaming at Galaxy given that in Macau during 2010 the contribution of slots as a Macau, and his team seem to have succeeded in producing both a percentage of the gaming gross actually fell compared to 2009. portfolio of ‘hot’ games appropriate to the market and one that is Galaxy Macau may have taken a leaf out of Genting Singapore’s visually appealing across the floor in terms of top boxes and other book over at Resorts World Sentosa in the Lion City. At RWS, the electronic promotional media. The return to player percentage at Galaxy Macau (how much the machines give back to the playing public as a percentage of total money wagered) is—for the time Signs of change in Macau mass marketing being at least—a well-kept secret and could stay that way given that there is currently no legal minimum RTP for slots in Macau (unlike Singapore). But it seems likely that at Galaxy Macau, a combination of competitive RTP and word of mouth among players is providing at least some of the enthusiastic slot traffic. As one industry executive told IAG: “From his days opening and running slots at MGM Macau, I would expect his RTP at Galaxy Macau to be among the most competitive in the market.” Window shopping Another important factor in the apparent success of Galaxy Macau’s slots and mass market tables could be the property’s unambiguous player rewards scheme. Examples of the gifts players can get for their points are actually on display in glass cases at the Galaxy Privilege Club desk, which takes up a significant portion of the eastern side of the main gaming floor. Most of the mass market membership desks and schemes IAG has seen in rival operators’ venues focus on abstract concepts

14 INSIDE ASIAN GAMING | June 2011 Galaxy Macau

such as precious metals to denote membership levels in the relative lack of live operational experience on the part of at least manner of credit cards. Galaxy Macau gets right to the heart of some of the cage staff. If the issue persists, an easy fix should be the matter. to move some of the banks of slots further in from the side of the room, though the same issue might be slightly harder to fix in the Divided but united table zones without creating a sense of crowding. The main floor at Galaxy Macau is vast but not nearly as intimidating as The Venetian. Like Wynn Macau, it is broken up A big VIP offer into zones, but unlike Wynn Macau you still get a sense of the Much comment and analysis has naturally focused on what whole and you have a horizon to work with. This allows guests to Galaxy Macau will do for the mass market. But in a place where navigate their way around easily. If you want to find Elektroncek’s around 72% of gross revenues come from high roller baccarat, no new 34-station three-game Organic Island installation (sic bo, new property can afford to overlook the VIP segment. Galaxy Macau roulette and fish ‘shrimp’ crab), for example, that’s no problem. has a lot of product and variety, with eight main VIP rooms around The sightlines are such that you can see the overhead display of the property as well as high limit tables and slots as the bandstand- the installation from almost any point when you’re in that half like centrepiece of the main floor (a characteristic shared with the of the floor. unsung SJM-licensed Babylon casino at Fisherman’s Wharf). The feedback we got from industry sources is that commission Let there be light rather than revenue share is most commonly the business model being used in the Galaxy Macau VIP rooms (at least in this opening phase). Perhaps the more important general point is that Galaxy doesn’t try and rob Peter to pay Paul in its dealings with junkets. In other words, it doesn’t try simply to restructure its offer and claw back its profit in some other way, such as squeezing the junkets on soft costs such as player ‘comps’. Galaxy has built a reputation for building solid and mutually beneficial relationships with the junkets.

Centrepiece—the high limit slots and tables on the main floor

Some Western observers have commented that the illumination of the main floor looks too bright. They might like to consider the fact that in many working class and lower middle class Chinese homes in Hong Kong and Macau as well as in the PRC, living rooms are powered by bright strip lights, not by tiny lamps dotted around the place as in many Western homes. And for Chinese people—who value baccarat as ‘the fair game’ because of its low house advantage—a well-lit gaming table can only be a good thing. “There’s less chance of someone at the table cheating and getting away with it,” is the likely outlook of the average mass market player. As one executive of a rival operator said to us on the opening day: “I really think—probably for the first time in the mass-market in Macau—an operator got the lighting just right. No cage fighting There are plenty of cages located along the sides of the mass floor—unlike some properties we could mention where guests deserve a marathon winner’s medal by the time they a) locate; and b) walk to; the cage. One glitch we did notice, though, is that the queues of people at the cages on the second day were snaking back into the slot and table playing zone. That could be a function of several things, including the unusually high traffic levels and the

June 2011 | INSIDE ASIAN GAMING 15 Galaxy Macau

away from The Venetian to be a comfortable walk in a muggy Macau summer. Getting a taxi away from The Venetian often requires a long, uncomfortable wait outdoors. City of Dreams has vulnerabilities— the Hard Rock casino is not a well-known brand in China and is often sparsely populated, in our experience—but it is only a short walk from The Venetian, making it a natural number two destination for Sands China’s Cotai customers. IAG is aware, however, that Galaxy’s management has been very focused on creating the right infrastructure in terms of marketing, bus services and greeters to develop the pipeline of ‘first stop’ visitors to Galaxy Macau. That’s important, and is likely to be key in ensuring the sustained success of the property.

The Venetian Macao—still to be first stop on Cotai?

As one VIP room executive put it to us: “The Chinese way in business is to share so that you all get rich together. The Western way is to beat the other guy and get rich at his expense.” Cotai is not a zero-sum game. The ‘stickiness’ of The Venetian as a first stop on Cotai probably resides in the fact that it’s a photo opportunity entirely independent of its gaming offer. That allows it to capture gamblers and non-gamblers. It has a lot of shops, even if conventional wisdom suggests there are rather too many mid- market, underwhelming brands (to Chinese consumers at least). Some analysts we spoke to—while very impressed by Galaxy Macau’s gaming offer in both key segments— still wonder if the property can carve a role as a tourism stop in its own right. They cite some doubts that the artificial beach—impressive as it is—will achieve that. After the initial opening rush, Galaxy Macau needs to establish itself as a first gambling stop on Cotai. The shopping offer by itself won’t be a crucial draw. There are also important logistical reasons why it will be a challenge to make Galaxy Macau a ‘second stop’ on Cotai for Venetian customers. Galaxy Macau may be just a little too far Pleasure to meet you—Galaxy Macau’s impressive marketing push

16 INSIDE ASIAN GAMING | June 2011 June 2011 | INSIDE ASIAN GAMING 17 Destination Achieved The 15th May unveiling of Galaxy Macau marks a milestone in the development of integrated resorts in Macau

he shimmering Galaxy Macau façade, adorned with its distinct T gold cupolas, stands in marked contrast to the exteriors of its two Cotai neighbours—Venetian Macao and City of Dreams. One reporter unkindly likened the former structure to a “giant penitentiary”, while the latter has a distinct contemporary office-tower look to it, especially when the lights are switched off during the daytime. “We wanted to have a façade that when people look at it, their first reaction is ‘this is a destination resort,’” remarks Francis Lui, deputy chairman of Galaxy Entertainment Group (GEG). “One look at the building, you know that this is a resort. There’s some uniqueness to it.” Welcome reception—Galaxy Entertainment Group President and COO Michael Mecca (left) and Vice The property’s uniqueness flows from Chairman Francis Lui (right) greet the opening day crowd

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Cover Story

the façade to the small details, and is imbued by GEG’s “World Class, Asian Heart” philosophy. GEG opted to offer Asian, rather than Western, hotel brands at Galaxy Macau. The property’s combined 2,200 five-star rooms, suites, and villas are distributed across the internationally renowned Banyan Tree and Okura brands, as well as GEG’s own Galaxy Hotel. The Hotel Okura Macau is Macau’s first Japanese hotel brand, and Mr Lui hopes it will drive greater visitation from North Asian customers. Another differentiator is Galaxy Macau’s centrepiece attraction, the 52,000-square- metre rooftop Grand Resort Deck, where a 350-ton white sand beach surrounds the 4,000-square-metre Skytop Wave Pool, and which “offers guests the ultimate in relaxation amidst an enchanting network of swimming pools, luxurious bungalows, soaring palms and lush tropical gardens.” The outdoor Grand Resort Deck stands as a distinctly different attraction to the Venetian’s indoor canals and the ‘House of Dancing Water’ show at City of Dreams. Galaxy Macau’s differences continue through to the pan-Asian selection of F&B outlets, the bright lighting in the main casino floor and even the diverse selection A nod to North Asia—Galaxy Macau allows guests to experience a traditional Japanese tea ceremony of slot games. GEG has been operating in Macau since five or ten years, it is probably somebody like has been very encouraging. 2004, and its brand identity really began to me, who has been there doing business in There’s something I’d like to emphasise. emerge in 2006, when it opened its hitherto China, seeing them evolving. We are not concerned about market flagship property in the city, StarWorld Hotel “The product was designed in such a share. Our emphasis has always been on and Casino. Owing to StarWorld’s small way that we are not going to be obsolete creating a new market, and hopefully the footprint, however, GEG’s brand-building to in five or ten years’ time. If you look at customers are going to stay longer. This date has largely been driven by its strong some of the properties that have been way there will be enough money for six of service mindset and relationship building built in Macau recently, some of them us to continue to be profitable. And this is skills. Galaxy Macau finally provides the might have a problem five years in the the only way to do it. platform for the company to convey its future, especially the ones built with a If we create an environment that broader identity. more gaming-focused design. I think attracts customers from all walks of life to The HK$14.9 billion (US$1.9 billion) the customers will evolve so that they come enjoy the experience of Macau, it’s Galaxy Macau has been shaped by GEG’s prefer a more integrated and wholesome good for Macau and good for the industry. determination to “give our customers what experience.” Cannibalisation—trying to take market they want,” states Mr Lui, “whether they are Inside Asian Gaming caught up with a share from other people—is the wrong the mass market, hotel guests, diners, or very busy Mr Lui ten days on from the Galaxy approach. our VIP guests. We want to make sure we Macau opening, and spoke to him about the We are happy that we’re part of the not only give them what they want, but overwhelmingly positive reaction to the industry, we’re happy we’re going to grow also to anticipate what they may want in property and his prognosis for the Macau the market, we’re happy we’re bringing new the future. Saying ‘these are our customers gaming and leisure market. and different products into the place, and over the next five years,’ and asking ‘what attracting people from different walks of life do we need to do in order to keep them IAG: Although it’s early days yet, the to come stay with us. coming back to us?’ initial results a week after Galaxy The next thing we’d be looking at is to “It starts from knowing your customer Macau opened seems to suggest it extend the stay of the customers here. Right well. I have been working in China since has expanded the overall market, now it’s about 1.5 days. In Vegas it’s about 1985, so I keep saying that if there is a rather than cannibalising other existing 3.6, in Hong Kong 3.5, Singapore 4.2. So person in Macau who understands what the properties. there’s still a lot of potential for us to make Chinese customer will look like in the next We would like to think so. The first week the customer stay longer.

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Different positioning—the casino at Galaxy Macau

What would you like to see the other probably be fighting above our weight in operators do to help extend the stay terms of dollars invested. of visitors in Macau? I’d like them to bring in new products. Return on investment is something We are not coming in with the intent of you always emphasise. How long do competing with the others with the same you think it will take to recoup your product. We are coming in here with a investment in this property? different positioning, different product, We’re confident that we will give our and hope that again our competitors in this shareholders a very satisfactory return, industry would be able to see and learn from as we did at StarWorld. At StarWorld, that as well. our return on capital I believe was in the seventies range. We have high hopes for You seem to have accomplished a this one, but it’s still early days for us to High spirits—Galaxy Macau boasts the world’s first lot with the money you spent on this be able to predict how much margin we’re Macallan Bar property. going to make. I can say with confidence we’ve spent With this casino the key is we have put We are a learning corporation. We our money well. Every dollar and cent that a lot of emphasis on the mass market, while listen to everybody. We listen and see we spent makes an impact. A lot of people StarWorld is more VIP-centric. So the return what our competitors are doing. And ask me, ‘how did you do this with this sum we are going to make here we believe is going we talk to our customers, especially of money?’ Everybody is just overwhelmed to be substantially better than at StarWorld, VIP operators, on a frequent basis to by the kind of experience we’ve created, simply because this is mass market driven understand what they need. considering the money we invested. [where margins are significantly higher]. And at StarWorld we did the same What kinds of entertainment do you thing. We spent only HK$3.4 billion Although Galaxy Macau is mass plan to bring to Galaxy Macau? (US$436 million), and created the casino market focused, the VIP rooms and In the long term, we would like to do with the third highest turnover in Macau. sections have been carefully planned bigger things in entertainment. But I want Dollar for dollar, we have been fighting and beautifully executed. Did you to start a little bit smaller and experiment, above our weight at StarWorld. And I’m work closely with your VIP operations leading to bigger things. Because we still sure you will find the same thing happens partners in coming up with the layout need to explore what types of entertainment here [at Galaxy Macau]—that we will and positioning of the rooms? will appeal to Asians. What works in the

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Cover Story

Western world, if you just basically transfer mixed bag of people coming from Australia, I continue to believe that Macau will be it to Macau, I think it will be challenging. Singapore, Malaysia, China, Hong Kong, the only city in China that will allow gaming So we want to take a bit more of a prudent Macau, America, coming together to work in the future. This is why we’re so optimistic approach to it, and we would probably see as a team. about the future of Macau, as long as we can a little more how the market develops in I was born and raised in Hong Kong, but continue to evolve, diversify and live up to future before we take a big step. I went to school in the US. So I know a little expectations. Macau is going to be the world You could be lucky, but you could be bit about how American people think, and leading leisure, recreation and entertainment unlucky too. If you pour let’s say HK$1.5 understand Western style management, but centre. Macau’s future is limitless. billion dollars into an entertainment venue, I’m still Asian at heart. But apart from that, I’d be very interested you’ve got to be right. So although we have I consider Macau my home turf, and in in a big marketplace such as Japan, and also the financial muscle to be doing it, we want this part of the world, I know the customers, in Taiwan. These are the usual suspects [for to test the market a little bit first, before we I know the place, I know the government, I future gaming expansion] that everybody decide to do anything major. know the people, much better than many of should be interested in, including Galaxy. the others. I’ve been doing business in China What is the most important thing to be since 1985, and our family has been doing Can Macau’s infrastructure support mindful of when operating in Macau? business here since 1955, so all that actually Galaxy Macau’s ambitions? You are always an invited guest in Macau. plays to our strong suits. I think the government is acutely aware You have to show respect, and you also have The only thing we didn’t have when we of the pressure. Visitation in Macau reached to help the community in general. This is came to this market is gaming experience. almost 25 million last year, and it continues why you see Galaxy in the last couple of But why did the government at the growing. This year, to date, it’s been growing years engaged heavily in community work. time choose Galaxy? We have Chinese at least 15-20% year on year. So there’s experience, we run the construction great pressure on the infrastructure, but I You are well known for your humility— business and real estate business, and we understand that the central government, something some of the other casino run a big time hotel portfolio as well. The the Guangdong government and the Macau operators in Macau might be reason in eight short years we’ve been able SAR government are all doing the best they lacking, especially in their dealings to be successful is because we can build can to improve it. We understand the [Hong with business partners and the local property economically, quick enough, and government. we hit the positioning right. In the casino industry, as you know, If we didn’t have gaming experience we have a lot of very big personalities. But ourselves, take a look at how many people Galaxy and I came into the industry from we hired from overseas to come and work very humble beginnings. I had a clean slate. for us to fill the gap. I’m a good listener, so if I wasn’t even in the industry eight years ago. I’m not that good at gaming, I’m prepared to So I came with Asian heart, I came here to listen to what other people suggest to me. learn, respect other people, and see what I can do to integrate all the lessons I learnt Gaming can be learnt, but perhaps into my own creation. relationship building is something Really it’s up to our clients, our friends, much harder to learn. and business associates in the industry to The VIP business is all about servicing let us know whether we’re doing a good job. and customer relations. We handled that Even though we have achieved a lot with well in our VIP business, and now we are this product, I’m still driving myself and my about to prove that in the mass market, executive team to get better. we will be as successful. Only time will tell, but we are quietly confident that with Your father, Dr Lui Chee-woo, set up our capacity and our service mindset, we the first K. Wah company in Hong should not be doing too badly. Kong in the 1950s, and the group has grown into a multinational What are your expansion plans? conglomerate covering construction We want to be the leading gaming materials, property development, corporation in Asia. We have the biggest hotels and entertainment and leisure. land bank on Cotai, and Macau is still What did your father teach you about going on this explosive growth curve. business? Everybody wants to be in Macau, so I’m My father told me the best management fortunate enough to have the best piece style is probably to blend a Western of land in Macau right now, and for the management style with Chinese culture. time being we will be focused on making Filial piety—Francis Lui pays respect to his father, And I think we have achieved that, both in sure Galaxy Macau works, and then we Galaxy Entertainment Group Founder and the larger K. Wah Group, where we have a will plan for the future Chairman Dr Lui Che Woo

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Cover Story

Kong-Macau] bridge will be built, the Lotus countries. So will Macau’s labour force be Bridge depot will be enlarged, there are able to keep up with the economy growing plans to expand the airport, and the high at 25% a year? speed train is coming. It is an issue that needs to be addressed One good thing is you manage to for us to continue to grow the economy in keep hold of your labour. You have Macau, but more capacity is on the way. one of the lowest staff turnovers among Macau’s casino operators. What do So far this year, Macau’s growth you attribute that to? continues to be stellar. But are there We have this Asian heart culture, where any risks that you’re conscious of that we look after not just our customers, but could slow growth? Asian heart means we take care of and Definitely infrastructure is an issue that respect our colleagues too. we need to pay attention to, because bridges I also think all our people are proud to be and railway stations and roads are not built part of Galaxy, because in these eight short in one day. Even if you make a decision now, years we have achieved a lot. All the staff feel it’s going to be at least four or five years’ time they have had a little contribution to make before you see the thing working. So I think towards making the company so successful. there’s a sense of urgency there. This makes them want to stay with the Another critical issue is the labour force. company. Of course, you have to pay market Right now, we practically don’t have any [salary levels], no question about it, but at unemployment in Macau. Every person of the same time people have choices. I like to legal age, able to work, can find a job, and think that Galaxy, at the moment, we are the Asian heart—frontline staff at Galaxy Macau with good pay too, compared to other Asian preferred employer in Macau.

Right now, we practically don’t have any unemployment in Macau. Every person of legal age, able to work, can find a job, and with good pay too, compared to other Asian countries. So will Macau’s labour force be able to keep up with the economy growing at 25% a year?

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HYDAKO

New Blood HYDAKO is turning heads at Galaxy Macau’s freshly opened main floor

(Left to right) Martin Tam, Lam Iao and Paul White

hat happens at Galaxy Macau will for HYDAKO’s distinct looks—the slick dual- heads when it makes its way out of the determine the shape of Macau’s 32” Deblucean cabinet and exceptionally HYDAKO showroom in Laxino’s offices Wmass market. rich game graphics. The Macau side not onto the floors of Macau’s increasingly The property has experimented with only created the game mathematics, but mass market-focused casino resorts. several tweaks to conventional Macau casino also manages local marketing, product The epic 4 Weapons depicts virtual wisdom, from the extra bright lighting on management and technical support. fantasy-world warriors who engage in the main casino floor to a bold mix of slots “Galaxy Macau provides HYDAKO a great bonus round battles similar to those fought offering players a wide selection of games showcase and gives us an opportunity to by legions of PC and mobile gamers around from many lesser known manufacturers. show the market our product can hold its own Asia. Laxino Mathematics Manager Martin Inside Asian Gaming has observed against the best products the big suppliers Tam observes: “4 Weapons has the potential players and gaming executives alike flocking have brought to the table,” comments Laxino to bring slots to a whole new demographic to Galaxy Macau over the past two weeks to CEO and Executive Director Lam Iao. of PC gamers.” test out several new games that made their The initial attention garnered by Inside Asian Gaming spoke to Messrs city-wide debut at the property’s May 15th HYDAKO at Galaxy Macau undoubtedly Iao, White and Tam from Laxino about opening. stems from its daring design. “HYDAKO’s HYDAKO’s early results at Galaxy Macau Although it’s early days yet, several of looks will get it attention on the floor and and its plans for Asia. the new games look like they have potential maybe some plays, but its maths will earn to develop enduring appeal in Macau’s it [return] players,” states Laxino Business IAG: It’s early days yet, but are expanding slot market. Director Paul White. HYDAKO games performing well at One brand that’s making an impression Galaxy Macau only displays a small Galaxy Macau? is HYDAKO—a South Korea-based slot sample of the HYDAKO catalogue— Mr White: We’ve consistently observed manufacturer working in a unique strategic namely, the 32” cabinet, including the close to 100% utilisation at each of our two partnership with Macau-based gaming flagship game title, Amazing Golf. The even banks [of four each]. services provider, Laxino Technology Ltd. more eye-catching 42” cabinet, featuring Since the opening, Galaxy Macau has The South Korean side is responsible 4 Weapons, is bound to turn even more been getting kudos throughout the industry

28 INSIDE ASIAN GAMING | June 2011 HYDAKO

for its bold mix of e-games. We’re really pleased to have been part of the opening of this exceptional new property. We’ve certainly benefited from all the player traffic stopping by to try out our games. With so many new slot products fighting for attention at Galaxy Macau, we are fortunate to have a strong product that really stands out to players.

What have you learnt from the public reaction to the HYDAKO games at Galaxy Macau? Mr Iao: The debut at Galaxy Macau was the fruition of two years of our product development and management partnership with HYDAKO. We’re glad to see players have reacted positively to our key product strengths—graphics and hardware design.

What sets HYDAKO games apart from other popular games in Asia? Mr White: Slot suppliers have been pretty conservative in terms of their hardware design—especially with the products they sell into Asian markets. One of our biggest differentiators, of course, is our cabinets, which are backed up by the game graphics. Mr Tam: As for the maths on the HYDAKO games, since we’re aware our product appeals to casual players, we’ve attempted to satisfy the entertainment goals of those casual players, while also increasing their time on device.

The graphics on HYDAKO games are a clear draw for players. What is the secret behind HYDAKO’s stunning graphics? Mr Iao: South Korea is a well known centre for the development of media content and technology. HYDAKO draws its multimedia team from this rich and experienced resource pool. The company was actually established back in 2001, so they’ve been working for ten years to get to the level they’re at.

HYDAKO is at Booth #1419

“HYDAKO’s looks will get it attention on the floor and maybe some plays, but its maths will earn it [return] players” – Laxino Business Director Paul White

Cutting edge—4 Weapons

June 2011 | INSIDE ASIAN GAMING 29 MGM Grand Ho Tram hotel tower takes shape in Vietnam

Sky’s the Limit Vietnam’s MGM Grand Ho Tram gaming resort has pedigree and first mover advantage on its side

everal Las Vegas casino operators like to claim credit for the the country’s largest metropolis, Ho Chi Minh City, and its population invention of the integrated gaming resort concept. What’s of over 10 million people. The first of five resorts, branded as MGM Sbeyond doubt is that MGM—in its different corporate Grand Ho Tram, is to be launched in two phases. Phase one, featuring incarnations over the years—is a pioneer in putting gambling, a 13,600 square meter casino with 90 live table games and 500 entertainment and corporate events all on one site. It did that electronic games, is currently under construction and will open in initially in Las Vegas, but has since exported the model to other the first quarter of 2013. That initial stage will also feature the launch markets. It’s also a pioneer in developing networks of such venues of high quality leisure and entertainment products, including the and then marketing the network—both within specific national five-star MGM Grand Ho Tram hotel with 541 rooms. The second markets and cross-border—in an integrated way. That has helped phase will see a further 500 electronic games added to the casino MGM and the industry as a whole build the revenues of all three offer, another 559 hotel rooms and villas, plus a full range of retail, business segments within the integrated resorts (gaming, hospitality dining and conference facilities. There is also an 18-hole golf course and MICE), rationalise the costs base of the businesses and smooth designed by champion golfer Greg Norman. the seasonal volatility previously associated with Las Vegas and other If any casino operator in the world can make the MGM Grand Ho gaming resorts as holiday venues. Tram a success, then it must surely be MGM Resorts. The entertainment Now MGM Resorts International—in a branding and and resort part of the offer will be not merely a bolt-on—as happens management agreement with owner and developer Asian Coast in some other Asian projects touting ‘integrated resort’ status—but Development (Canada) Ltd—is bringing that principle to a new Asian central to the scheme. gaming and entertainment resort. The Ho Tram Strip—a coastal When Jim Murren, the Chairman and Chief Executive Officer of development in the south of Vietnam, is around 120 kilometres from MGM Resorts International, visited the Ho Tram site in November, he

30 INSIDE ASIAN GAMING | June 2011

MGM Grand Ho Tram

for creating all-round entertainment venues and feeding them customers via the company’s sophisticated marketing system is likely to be central to guaranteeing MGM Grand Ho Tram’s success. In other words, MGM Resorts already has extensive experience of operating environments where leisure and entertainment—rather than pure gambling—are the key drivers of revenues. Inside Asian Gaming spoke to three key executives involved in developing the Ho Tram project for their thoughts on what the market can expect. They are: Gamal Aziz, CEO of MGM Hospitality; Lloyd Nathan, CEO of Asian Coast Development (Canada) Ltd; and John Shigley, President and COO of MGM Grand Ho Tram. Previously, Mr Nathan was President of Global Gaming Development for MGM MIRAGE, the predecessor company to MGM Resorts.

IAG: What’s the significance of the Ho Tram Strip project? Lloyd Nathan: We are the only licensed integrated resort in Vietnam under construction. We’re now nine storeys out of the ground and it’s a project with the best blue chip partners—from Finished product—how MGM Grand Ho Tram will look after construction MGM Resorts to Steelman Partners [architects] to Rider Levett was in no doubt about its significance for the company—as second Bucknall [project managers and quantity surveyors] and Meinhardt only in the Asian region to the company’s joint venture in Macau. [engineering consultant]. “Vietnam is an integral part of our strategic plans for ambitious It’s also the only realistic short- to medium-term large-scale developments in Asia. We believe the Ho Tram development gaming opportunity in the Asia region. Macau and Singapore is perfectly suited to complement Vietnam’s rapid growth in are lock ups for the foreseeable future. Malaysia is a monopoly. international visitation, expanding domestic tourism, and increasing Cambodia is in effect a monopoly because NagaCorp has an demand for luxury leisure opportunities,” stated Mr Murren. exclusive casino licence in Phnom Penh and a large radius around On the one hand, the fact that Vietnamese citizens will not it, and while there are numerous border casinos, there are no be able to use the casino at MGM Grand Ho Tram—unless they’re integrated resorts there. Myanmar and North Korea present one of the approximately 3.7 million Vietnamese with access to a insurmountable issues for today. Laos is a very small market, foreign passport—could be seen by some potential investors as a Indonesia has shown minimal desire for gaming and the current downside for the project. On the other hand, Vietnam boasts one of political situation in Thailand is unlikely to lend itself to liberalised the fastest growth rates in the region for the number of millionaires, casino gaming for the foreseeable future. according to a report by wealth management company Merrill Lynch There are two different viewpoints on whether Japan will and consulting company Capgemini. MGM Resorts’ reputation liberalise, given the recent and very unfortunate tsunami and

John Shigley, Lloyd Nathan and Gamal Aziz at the Ho Tram construction site

32 INSIDE ASIAN GAMING | June 2011

MGM Grand Ho Tram

earthquake. Some believe it will accelerate the idea of them bringing casino gaming—Sheldon Adelson is one. And some believe it will decelerate the process and make it less likely—Steve Wynn among them. My views are closer to those of Steve. Given the level of political consensus that would need to exist for there to be liberalised casino gaming, I believe Japan has far more weighty affairs to worry about right now. South Korea, with 16 foreigner-only casinos and one—Kangwon Land—for domestic gaming, has not indicated any driving appetite to expand domestic gaming outside of Kangwon Land. In Taiwan, we’ve seen great moves. I think they’re real moves. I think they’ll result in something one day. But if you take a close look at the draft rules, as well as the Offshore Islands Development Act enabling referendums, it appears the timing is again not in the very near future. The Philippines is a great commercial market—we’d love to be there. One of the challenges there from a regulatory perspective is the current structure whereby PAGCOR is both the regulator and an operator. So the only short- to medium- term large-scale gaming opportunity in the region is Vietnam. Asian coast—Ho Tram has an attractive beachside setting And we have a licence from the government of Vietnam, namely an investment certificate allowing large-scale gaming. And it’s the “We’re putting tremendous support behind only one funded, under construction, and rapidly coming out of Ho Tram and as far as the Hospitality the ground as we speak. division of the company is concerned, this will be our flagship when it comes to gaming.” Gamal Aziz Vietnam is a very special opportunity that we have. Lloyd and myself have been working on it for many years. Lloyd, being highly engaged with the opportunity and working to bring it to life, brings a unique perspective on what to do in Ho Tram. It’s about differentiating and distinguishing ourself from the rest of the market. The non-gaming product—what I saw recently with Lloyd and John on a visit—is going to be truly extraordinary. It will shine compared to any product that is in the [Vietnam] market. Add to that the excitement and energy that MGM the brand can bring to the table, from the restaurants to the pool amenities to the music— just that sense of fun that exists throughout the resort will be something that will bring in guests from all over the world to stay. MGM has positioned Ho Tram on the absolute top priority for Opulence—how Ho Tram Strip phase one will look inside our future. We have appointed John Shigley who has worked for our company for many, many years—to lead this opportunity for us in What can the market expect in terms of the hospitality offer Vietnam. at Ho Tram? We’re putting tremendous support behind Ho Tram and as far as Gamal Aziz: The hospitality offering of MGM was built many, the Hospitality division of the company is concerned, this will be our many years ago on the concept of ‘non-traditional’ hospitality. flagship when it comes to gaming. We really are putting all of our That’s in the sense that it allows you to spend your entire time resources behind it. within the confines of the hotel and never be bored and never be wanting to leave. MGM is traditionally and culturally known in Will Ho Tram become a regional destination for big sporting Las Vegas for energy, excitement, fun—MGM venues have always events? Perhaps big boxing matches such as a Manny got a buzz about them for one reason or another—it can be a Pacquiao fight? concert, a boxing match. All the amenities we have added over GA: Lloyd, John and myself have talked about making Ho Tram the years have given us a unique view and a unique interest in the an entertainment destination and entertainment comes in many hospitality business. It’s actually a testament to the strength of forms. We’re going to look at every opportunity aside from golf and the brand that within the last couple of years— during the most all the activities associated with golf. difficult times economically, globally—we’ve been able to sign more than 18 deals around the world, starting with India and all How will the resort look and feel? the way to the Middle East. John Shigley: It will be not only the most beautiful but also the

34 INSIDE ASIAN GAMING | June 2011

MGM Grand Ho Tram

highest level of service that’s offered in Vietnam and in this particular laid off, casinos having to reduce other costs and customers taking part of the world. Steelman’s done a fantastic job designing a their business out of state. It can happen anywhere but thankfully beautiful product and we intend to bring the level of service to it there are jurisdictions—Nevada and Singapore among them—that that people expect from MGM Grand and MGM Hospitality. understand the wider economic benefits and investment that We’ll have a lot to offer not only to the gaming customers who come from low, stable and predictable tax rates. As I said, the come from all over the world, but also the local people here in Government of Vietnam understands the issues and has shown Vietnam. We’ll offer them a level of entertainment and a quality of consistent thinking. service that they haven’t previously experienced here in Vietnam. “I’ve not seen the government falter Where do you expect your gaming customers to come from given that Vietnamese won’t be allowed to gamble on one promise they’ve made to MGM unless they have access to a foreign passport? and/or ACDL.” – Lloyd Nathan JS: I think they’ll come from mainland China, I think they’ll come from Thailand. I think we’ll see that many customers that today I have had the privilege of speaking to governments all over are going to Macau will come here for a change. I think you’ll see the world. I gave evidence before the UK parliament on gaming; customers that go to Singapore [casino resorts] come here for a I’ve also given evidence to the Japanese diet. And I can say that the change. I think a lot of people are going to want to come and check it Vietnamese government is very, very well versed in the intricacies out and find out what MGM Grand Ho Tram is all about. of gaming. They have gone out of their way to visit several gaming destinations around the world. They’ve met with the Nevada Gaming Commission and other regulators several times. And their approach to date has shown a desire absolutely to create a properly regulated environment; one with the right fiscal structure and which at the same time enables commercial enterprises to thrive.

Does that clarity also apply to corporate tax rates? LN: Under our investment certificate—which is the governing document of businesses in Vietnam—we have certain tax breaks codified there. So we know up front what breaks we have and are appropriately entitled to. I’ve been involved in this project for four years—three years wearing an MGM hat and one year as the CEO of the company. I’ve not seen the government falter on one representation they’ve made to MGM and/or ACDL.

Has the Vietnamese government confirmed that Ho Tram is part one of a three-part plan for gaming resorts in the Game on—an artist’s impression of the gaming floor during phase one country—the other two being at Da Nang on the central coast, and Halong Bay in the north? Will you be able to market to VIP players who are already LN: I cannot presume to speak on behalf of the Vietnamese customers of MGM Macau? government. They will do as they see fit. I will stress again how JS: We expect to work closely with MGM Resorts International on well versed they are in gaming and how well versed they are in the how we bring customers here to Ho Tram. competitive dynamics around Asia when it comes to fiscal [tax] rates and within their own country. It has been suggested that they are Has ACDL had any assurances from the Vietnamese looking to create those three licences. We haven’t seen anything to government on the tax rates for gaming? contradict that. LN: The Government of Vietnam is in the process of drafting a Da Nang has 750,000 people and very poor ‘airlift’ [flight Gaming Decree that among other matters will bring clarity to its connections]. Competitively I’m not concerned. And if they do come existing gaming structure, including fiscal. They are a government in, I would suggest it would give extra weight to the push for an well versed in the intricacies of gaming, as well as the competitive appropriate regulatory environment and everything that comes with dynamics in the Asian region, and based on what has happened to it. The project in the north I don’t have a comment on because my date, we are confident there will be an appropriate regulatory and understanding is that’s not out of the gate. fiscal structure. We are 120 kilometres from a metropolis of over 10 million people [Ho Chi Minh City] and we have significant airlift with a new airport One industry practitioner with experience of Vietnam coming online. expressed concerns to IAG that gaming tax rates in Vietnam can change without notice. If sports betting is legalised for Vietnamese citizens as LN: In 2003, the then Governor of Illinois decided to double the proposed, would you be able to offer it on site to your local top gaming tax in his State to 70%, the second hike in two years. It guests? was a bolt out of the blue for many and resulted in people being LN: The current sports betting decree that is going through a

36 INSIDE ASIAN GAMING | June 2011 MGM Grand Ho Tram

consultative process calls for sports betting on a limited number local vendors and providers of tourist services. When they see of events including some European soccer, and in limited venues the MGM card and logo, people’s eyes light up. It really creates around Vietnam and for a limited amount [of stake money]— a buzz. US$50 a day. We see it as a very interesting development LN: Vietnam is a country where 65% of the population are because obviously it legalises and regulates something that has under the age of 35. When you talk about ‘being in the right likely been going on underground and illegally. At Asian Coast place at the right time,’ that applies absolutely to Vietnam. Development Ltd we would welcome with open arms the ability Demographically, there’s an expansion of people with more and to have sports betting on our site. But I think it’s going to be a step more disposable income, and people who want to spend that by step process, and I don’t think that we, sitting here today, can income—and that doesn’t have to be on the gaming, but on the guarantee we will have that. non-gaming amenities that we will create. We’re on schedule to open our first resort in Q1 2013. We’re working on level nine of the high rise. The clout of MGM both in terms of marketing and reach should not be underestimated. They’ve been doing business in Asia for 30 years. They have a huge marketing organisation around the world. And what Gamal has achieved with the Hospitality division in such a short space of time is nothing short of miraculous. He has planted flags with the MGM brand all over the world and it’s clearly going to be of great advantage to us here at Asian Coast Development Ltd. To have the operator of our first resort having all these different marketing channels—including their hotels around the world; some of them in mainland China—is going to help bring people to our resort. Finally, the selection of John—such a highly talented veteran executive—as president of the property is also a testament to MGM’s commitment to the project.

Building dreams—and a new team of staff—at Ho Tram

How would you summarise your feelings about this project? GA: We’re incredibly proud and honoured to be part of this project and to put our brand on the MGM Grand Ho Tram. We’ve been visiting the site quite often and seeing the incredible team that’s been built. Our employees over the years have found MGM the best place to work in the industry and our Vietnamese employees will find the same open arms in MGM Grand Ho Tram. I think it’s going to be an extraordinary success when we open in the first quarter of 2013.

“When they see the MGM card and logo, people’s eyes light up. It really creates a buzz.” – John Shigley

JS: We’ll have a lot to offer not only to the gaming customers who come from all over the world, but also the local people here in Vietnam. We’ll offer them a level of entertainment and a quality of service that they haven’t previously experienced here in Vietnam. We’re also working with local schools on the staff recruiting and internship aspects of the business and working with a lot of MGM Grand Ho Tram

Towering Ambition US casino operator Pinnacle takes US$95 million stake in Asian Coast Development

n operator of US regional casinos has managed to do something that Athe mighty Caesars Entertainment— formerly Harrah’s—has so far signally failed to do. That is, establish a deal for a gaming operation in Asia. Pinnacle Entertainment Inc has acquired for US$95 million a 26% equity interest in Asian Coast Development Ltd (ACDL), the owner and developer of the Ho Tram Strip—a five-resort integrated gaming project to be developed on the coast of southern Vietnam. Pinnacle will not be a silent or ‘sleeping’ partner in this Asian project. It will actively manage the second of five resorts scheduled under the master plan for Ho Tram. It also has a clear incentive to contribute to the success of the whole development because it will be entitled to a share of the revenue streams of the whole project proportionate to its equity stake in ACDL. The US market positioning of Pinnacle Entertainment Inc may have been a Night vision—how the Ho Tram Strip may look in future phases contributing factor in achieving the right ‘fit’ with the Ho Tram project—a development rate experience, and their proportional gaming properties on the Ho Tram Strip.” that already includes the Las Vegas giant representation on our board, only enhances That final sentence is a key part of the MGM Resorts International as a branding our plans for growth.” equation. Management income from the and management partner. Pinnacle operates It’s not easy to set precise financial second of Ho Tram’s five resorts is the bread seven casinos in Louisiana, Missouri, Indiana markers in terms of how much the equity and butter. Income share on the whole and Nevada, plus a racetrack in Ohio. The deal could be worth to Pinnacle in a project is the potential jam. company is also developing a further casino fledgling market such as Vietnam. It seems The entire Ho Tram project has a price tag and hotel in Baton Rouge, Louisiana due to likely however that Pinnacle’s investment of US$4.2 billion. The first phase of the first open in the summer of 2012. While Pinnacle will prove an efficient deployment of capital resort has an approximate cost of US$430 is a strong regional brand in the United compared to opportunities in US domestic million. So Pinnacle’s equity contribution of States, it is not yet a global brand in the markets. US$95 million represents about 22% of that manner of MGM and Caesars. Union Gaming Research said in a capital cost. Lloyd Nathan, the CEO of ACDL, was note to investors: “Assuming a typical “The split on funding is approximately the key executive in brokering the deal management contract (2% of revenues and 50:50 debt to equity,” says Mr Nathan. with Pinnacle. He described the situation 5% of EBITDA) and a healthy return profile “There’s a syndicate of Vietnamese banks as follows: “The chemistry with Pinnacle of 25% plus (management expects gaming providing the debt, and Harbinger Capital was right from the very beginning. These tax rate to be favourable and closer to that Partners and Pinnacle are providing the are great guys. We’ve enjoyed dealing with of Singapore than Macau), we estimate equity.” them from the day we met them. Pinnacle’s management fee income from The second resort to be built at Ho “We are philosophically aligned in terms the second integrated resort could be in Tram will have a brand identity developed of operational efficiencies, appropriate the range of approximately US$13 million collaboratively by ACDL and Pinnacle. governance, and they absolutely share our to US$16 million in 2015 dollars. In addition “That brand will initially be for Vietnam, broad vision for Vietnam and Asia. Their to the management contract, Pinnacle will but we will be looking at the possibility management team, led by their CEO Anthony be eligible to receive income share from of expanding further into Asia,” says Mr Sanfilippo, is first rate. And having that first ultimately all five of ACDL’s gaming and non- Nathan.

38 INSIDE ASIAN GAMING | June 2011

Multiloteri

Revolution at Your Fingertips Multiloteri’s MLT® - mobile lottery terminal™ opens up a host of new possibilities for both players and casinos

Multiloteri MLT® - mobile lottery terminal™. To protect it, we applied for patent protection for all of our products even before their introduction in the market. Patent protection is a very lengthy process, but for a small firm like ours, it is the only way to break through and succeed. We wanted to publish information and present our products several months later, but as we noticed the attempts of some firms to introduce a similar product in the market, we decided to announce our products immediately. Our goal is to distribute MLT throughout the world, but arranging for production and operation of such a number of MLT devices and their parts is difficult from financial, technological and logistical points of view. These are the main reasons why we are David Čechmánek, founder of Muliloteri, currently looking for reliable, ambitious and aced with a shortage of dealers, a cap is hopeful that hand-held gaming devices prestigious partners to ensure production on the number of live gaming tables will find greater acceptance in the future. Mr and distribution. Fand imminent restrictions on smoking Čechmánek spoke to Inside Asian Gaming areas at their properties, Macau casino about the company’s MLT® - mobile lottery Do you see potential for MLT in Asia? operators are becoming more interested terminal™—a portable gaming device using Any product that does not require too in finding new ways for players to bet on state of the art wireless technology. much space has potential in overpopulated games away from the tables. Asia. One solution could be to introduce IAG: Please tell us about the But it is not only about giving the a remote gaming platform that enables development of your main product. operator independence from space and players to gamble anywhere within a Mr Čechmánek: For a long time, our location, but also about giving more options casino resort property. Although the company, Multiloteri®, has been dedicated from a design point of view. idea of applying wireless technology to to the development of a gaming device: MLT consists of multiple portable support and augment land-based gaming operations is not new, the introduction of such technology has been moving very slowly due to legal issues and security concerns. Czech Republic-based Multiloteri®, a pioneer in the research and development of wireless gaming technology, is about to launch one of the first wireless gaming platforms designed specifically for land- based casinos.

40 INSIDE ASIAN GAMING | June 2011 Multiloteri’

terminals (tablet PCs) connected to one central control unit (if necessary, an The difference between playing in integrated control unit may be used to a casino and playing on a mobile connect with the server). Its purpose is to enrich the variety of gaming options and to phone could be compared to the extend gaming experience to places where difference between picking up a other gaming devices cannot be placed or beautiful girl in a bar and buying an operated for various reasons. Such reasons might include aesthetics of given place, size inflatable doll in a sex shop. It is the or rules of the facility (casinos). As most of same game but on a completely the countries, particularly Asian countries, different playground. have restriction on the size of casinos, implementation of the MLT system has the potential to maximise the profit per square foot within any casino premises.

Smart phone technology has radically changed the way entertainment is consumed, but it still has not had much effect on the way gambling is consumed. Why has the gaming industry been so slow to adopt such new technologies? I would say the gaming industry has always been slow to develop. On the one hand there is certain indolence—‘as long as it keeps earning money, there is no need to hurry’. On the other hand, there are the laws. It is not easy to develop a new gaming device and market it, because one needs to acquire necessary permissions, licences, certificates, etc., which takes an incredibly long time in the gaming industry. Thus the device becomes obsolete before it is even put into application. This means a combination of slow and difficult procedures. With iPhone and similar technologies, the situation becomes even more complicated, and it remains a question whether gambling could ever be allowed on mobile phones. There are many shortcomings which can never be removed (perhaps they could be merely tolerated). The main problem is a complete lack of control whether such gambling is accessible to minors—it could not be prevented in any way. Other problems are insufficient control over money transfers and the lack of privacy— while bank reports might reveal gains and losses to the authorities (tax office) or at best ‘only’ to wives. And there is yet another factor, which is the absence of human interaction associated with gambling on the phone. It is gambling for the sake of gambling as opposed to entertainment in a casino

June 2011 | INSIDE ASIAN GAMING 41 Multiloteri

resort environment. The difference does Multiloteri use to allow players to control server which feed data to the hand- between playing in a casino and playing on make bets from their devices? Please held devices through a series of firewalls. a mobile phone could be compared to the elaborate on how you deal with the difference between picking up a beautiful security problems that stem from Do Multiloteri products offer players girl in a bar and buying an inflatable doll wireless technologies. the option of betting on games with in a sex shop. It is the same game but on a With regard to the constant live dealers? completely different playground. development of wireless technologies, it MLT® is not an unchangeable gaming Therefore, MLT is an ideal solution, is not necessary to insist on one particular platform, but it is a means of delivering somewhere in between. With our devices, technology only. Therefore, the patent gaming content. The patent protection players can enjoy their favourite games document (within the terminological is aimed particularly at this direction. It such as slots or roulette, in the bar, coffee limits) defines the connection as “wireless” means that after some modifications to the lounge, spa or pool deck of the casino hotel, without any further specifications. This hardware, it can be used as a self-service within the network reach. If you like, it can information is interesting, especially for betting terminal which is quite common be totally anonymous. Many would also our investors and licence partners. in Europe. The same applies for online appreciate privacy while playing, because The security of the data transfer is interactive reel and other casino games. you may meet various people in a casino consistent with common VLT (video who might even bother or disturb you. lottery terminal) and IVT (interactive video To learn more about Multiloteri’s terminals) standards. This means that all MLT - mobile lottery terminal, visit http:// What kind of wireless technology the algorithms take place in the central multiloteri.com/

Branching out—wireless technology is making its way to gaming

Advertise with Inside Asian Gaming For advertising enquiries, please email: [email protected] or call +853 2832 9980

42 INSIDE ASIAN GAMING | June 2011 Bally

Firing on All Cylinders The latest innovations in Bally’s high-performing casino management systems and slot products will be on display at G2E Asia

ally Technologies, the global leader things, including ordering drinks, requesting in the supply of casino management their car from valet parking, and reviewing Bsystems, has extended that global their player rewards offers. dominance into Asia over the past few years. The casino at Galaxy Macau, unveiled on 15th May, runs the Bally system. That follows Galaxy Entertainment Group’s corporate decision to switch from another supplier to Bally at its StarWorld property on Macau peninsula in 2010. One of Bally’s greatest coups came when it concluded an expansive technology contract with Las Vegas Sands Corp (LVS) to supply casino management But the real benefit is the way this systems for all the company’s resorts technology can add new levels of in the US, Macau and Singapore. Bally excitement and anticipation to game play. systems were also chosen by SJM in When combined with Bally’s Elite Bonusing Macau in 2009. Suite™ applications which deliver floor- Cath Burns Cath Burns, Managing Director and wide, interaction promotions, iVIEW DM Vice President of Asia-Pacific for Bally Automatic value offers a second-chance-to-win and the Technologies, is proud that Galaxy Macau is Bally Technologies has tailored its systems ability for players to earn valuable rewards, now also an important Bally customer. to suit the table-focused casino markets all without interrupting play on their base “Galaxy Macau is a great property. We of Asia. Bally’s TableView™ is an innovative game. These interactive applications are honoured to be a part of the opening table-management solution that allows enable players to spin wheels, select and with both our systems and games,” says Ms operators to replace their existing manual cheer for their favourite contest-driven Burns. rating process with the ease and simplicity car or horse, get instant rewards on their “On the system side the opening was of electronic automation. With TableView, birthday, and participate in floor-wide slot smooth and our systems performed as it is possible to create an almost paperless tournaments. expected. This is the best result for any environment in the pit and eliminate the system implementation. This was our 11th delays of entering and updating ratings into system implementation in Macau and the casino management system. TableView Singapore in the past couple of years. also provides a higher standard of customer “All the credit goes to the Galaxy team, service by reducing the amount of time Another trailblazing product that our software developers and our local required by supervisors to capture and reiterates Bally’s leadership in the systems support teams who planned and executed register player ratings. Bally’s TableView business is Bally Business Intelligence™. this project so smoothly. Bringing together system was designed to provide floor This enables gaming operators to analyse a smooth opening with a wide array of operations staff with a fast and easy solution and visualise the extensive data they business systems is not an easy feat. It was for entering player ratings, managing gather every hour of every day. Bally achieved by a great team effort.” requests for chip fills and credits, handling Business Intelligence takes data from the Ms Burns reveals Bally systems will table closers, and issuing customer comps various business systems, and integrates soon have greater reach in the region. “We and markers in real time. it into consistent, actionable, information are currently working on our first system Bally’s iVIEW Display Manager™ (DM) across all the departments and casino implementation in New Zealand with the is a picture-in-picture style player-user- locations within the organisation. Using SkyCity group. This is an exciting project for interface for slot machines. This backwards- Bally Business Intelligence, casino operators us as it marks our first system in the Australia compatible technology, which works on can now easily analyse customer, slots, and New Zealand market. In Macau we are any manufacturer’s gaming devices with a tables, bingo, poker, hotel, point-of-sale, also implementing a system at one of SJM’s touch-screen display, has evolved into a self- and other information with more than 500 slot clubs.” service ‘kiosk’, enabling players to do many key performance indicators built into the

June 2011 | INSIDE ASIAN GAMING 43 Bally

system. Bally Business Intelligence includes campaign management, predictive modelling, reporting, and analytics as well as visual analysis. Feature richer Making its debut in Macau is the iDeck™, the new touch-screen deck with virtual buttons. iDeck redefines player-game interaction. Its versatility offers extensive customisable features, virtual games, and mystery bonusing. Bally describes the iDeck as revolutionary—the first full video player interface in the gaming industry. With iDeck, when new game content is installed, the button configuration instantly changes to match the game, meaning operators will never need to change a button deck again. “The iDeck offers an additional opportunity to reach out to the player and market to them and make the gaming experience even better,” points out Ms Burns. “Given the take up of Apple-style iDeck button configuration products globally, the iDeck will appeal to all generations of players. We will be able to configure the iDeck with specific Asian preferences in mind, whether that is player-preferred colours, messages, or as an additional game screen. It is the future.” New cabinet and games Bally regards G2E Asia as the ideal setting to launch officially the state-of-the-art Pro Series™ cabinets for the Asia-Pacific region. These modern cabinets are highlighted by various energy-saving features and were built for easy serviceability and maximum player comfort. They support downloadable content and are ready for networked and server-based gaming floors. The Pro Series iDeck Lamp feature cabinets are driven by the power of Bally’s new ALPHA 2™ platform that enables new levels of interactivity and visual quality with 3D-graphic animations. The ALPHA 2 operating system allows for more impactful, interactive, and graphically stunning games, taking Bally’s core video product to a new level of development. A game that utilises the power of Bally’s ALPHA 2 platform to its full extent is Cash Wizard™. Players are immersed in a rich and visually stunning world of magical potions and mysterious spells, artfully depicted with on-screen animations. Play is synchronised on the iDeck and two 22-inch, touch-enabled game screens, offering a rich iDeck level 3 immersion iDeck-Spinning U-Spin feature gaming experience.

44 INSIDE ASIAN GAMING | June 2011 Bally

Bally’s Pro Series V22/22 cabinet stands bet is required to win one of the progressive mix which in turn will intensify competition out thanks to its cutting-edge design, amounts. The ‘attract loops’ playing on the and keep manufacturers focused on custom surround sound, interaction, and overhead sign package that includes large delivering innovative competitive products,” unrivalled player comfort. Some of the games LCD screens feature dramatic animated Ms Burns added. presented on this cabinet will be Seagull sequences of festive celebrations, dragon Sam™, Bacchus Gold™, and Ole Jalapeños™. dancing, sword fighting, and fireworks Bally Technologies will exhibit an ample Seagull Sam and Bacchus Gold offer the erupting as the winning jackpot level is array of exciting and groundbreaking games, popular play mechanic Holding Wilds. In displayed and celebrated. systems and server-based innovations at G2E Holding Wilds, during the free games bonus, Exhibiting for the first time in Asia will Asia in its Booth #1003. any wild symbol that appears will ‘lock’ in be Bally’s award-winning game Code Red™. that position and hold for the remainder of Presented on Bally’s new Pro Curve cabinet the free games feature. Both Ole Jalapeños’ featuring a first-of-its-kind 22-inch “curved” titles—Mild & Wild and Hot & Spicy—offer a LCD display, the Pro Curve offers players the Code Red™ on the V22- three-level progressive and an entertaining look and feel of a traditional reel-spinning 22 cabinet bonus event in which players get to interact slot with the modern convenience and with Bally’s trailblazing touch-screen iDeck. technology of video. Code Red offers a On display as well on the V22/22 number of interactive features currently cabinet will be Playboy Hot Zone™, Bally’s only seen in video games. Featuring Bally’s newest Playboy title, which is arguably one award-winning U-Spin™ gesture-control of the premier licensed gaming brands play mechanic to award free games, ever developed. Playboy Playmates are progressive jackpots, or bonus credits, animated over both of the 22-inch touch- Code Red is highlighted by a new “Free enabled LCD displays for an incredible Games” play mechanic that showcases visual presentation. This seductive game prizes on each reel—above the reel strip. features Bally’s patented new Hot Zone play Players can win either bonus credits, locked mechanic, in which a “Hot Zone” overlay wild symbols, or a locked wild reel during appears on the reels during the base game the free games feature. and free games, and all symbols under the Another game that utilises U-Spin overlay become “Wild.” technology is the brand new Hot Spin™. In Hot Spin, players get to choose their own risk and reward levels by picking one of six reel symbols which determine how often they will get the U-Spin Wheel Bonus and how much they can win. A dynamic pay table means that the prizes on each wedge of the game’s giant touch-screen wheel change depending on which reel symbol is chosen and the player’s bet level. The opening of Galaxy Macau with many Bally games so close to the date of G2E Asia, has been a great opportunity for operators to see Bally slot products in Golden Empire™ — an ancient land filled with lavish riches and rewards action where it counts the most—on the live gaming floor. “On the games side Bally will also introduce the Golden Galaxy was focused on providing the best Empire™ Mystery Progressive link to selection of new and current performing casino operators in Macau. This is the first products to their customers,” explains Ms theme in Bally’s new mystery progressive Burns. “They gave us an opportunity to link family. The Asian-themed and locally showcase some of our new products created Golden Empire takes players to an like Cash Spin which has been one of ancient land filled with the possibility of our most successful products ever lavish riches and rewards. Players can win launched. It has been fantastic to one of the three or four randomly triggered see such great slot occupancy. The progressive jackpots, depending on the players are clearly embracing the operator’s configurations. The Golden Galaxy slot product. Empire Link—over standalone video slot “Slot growth in Macau continues to machines—allows jackpots to be triggered trend well along with all other growth. randomly during game play; no maximum Galaxy has raised the bar with its product

June 2011 | INSIDE ASIAN GAMING 45 Aristocrat

Strong Showing Aristocrat grabs the major share of the new Galaxy Macau slot floor

sia’s leading slot machine provider, Aristocrat, unveiled its latest VIRIDIAN AWidescreen™ cabinet, as well as a diverse game portfolio, at the opening of Galaxy Macau™ in Cotai. Aristocrat has secured well over 60% of the slot installation on the gaming floor at the Galaxy Macau resort, which opened on 15th May. David Punter, General Manager Asia Pacific, said Aristocrat is committed to maintaining its market dominance in Asia through its broad range of market specific products for the region. “Not only has Aristocrat secured the majority of slot machines in the main gaming floor of Galaxy Macau, but this is also the highest market share of any casino opening in Asia and we are very proud to be a part of Heavy in the Galaxy Macau mix—Aristocrat games on the VIRIDIAN cabinet in the foreground, and on the what will be one of the finest destinations in VIRIDIAN Widescreen™ in the background Cotai, Macau,” commented Mr Punter. Galaxy Macau features Aristocrat’s advanced technological capabilities Manager Asia Pacific David Punter said, “This best performing Asian titles—including offered by VIRIDIAN WS. is the most exciting, most diverse product 5 Dragons™, 50 Dragons™, 50 Lions™, Powered by the GEN7™ platform, the offering we have shown at G2E Asia in years, Choy Sun Doa™, Fortune King™ and VIRIDIAN WS provides players with 24% and operators and players have every reason 100 Dragons™, along with both the FA more graphics area, high resolution graphics to be very excited.” FA FA™ Hyperlink and Yellow Dragon™ and enhanced stereo sound. It is an example A range of new titles displayed on our Hyperlink—all benefitting from the of how Aristocrat is leveraging the latest new Widescreen Viridian™ cabinet include technology to deliver a more dynamic player Dragon Emperor™, Dragon Empire™, experience. Peeking Duck™, Tiger Garden™, Choy Sun “We are excited about the gaming Doa™ and Fortune Fantasy™, as well as experience that this product portfolio will the grand return of a long-time player bring to the gaming floor at Galaxy Macau. favourite, Mr. Cashman™, now starring “We believe our VIRIDIAN WS cabinet, in the all-new Cashman Fever™. One of new product categories, a solid games the main attractions will be Aristocrat’s library, and innovative product packages, 50 Dragons™ and FA FA FA™, selected will deliver the performance and diversity “Best Stand Alone Slot in 2011” and “Best customers and operators will be looking for Progressive Slot in 2011”, respectively, from the new casino,” added Mr Punter. by the judges in Inside Asian Gaming’s The mass gaming hall of Galaxy Macau Supplier Awards. stretches the entire length of the casino at almost 300 meters (1,000 feet) long Aristocrat will reveal four exciting new with 15-meter (50-feet) high ceilings and game categories at G2E Asia: is lined with a wide assortment of retail • Mega Pay™: In this unique game delights and restaurants. series, one game can become four games. Games include More Hearts™, Stellar games line-up at G2E Asia Gazellions™ and Fortune Firecracker™. At G2E Asia 2011, Aristocrat will • Remix™: Showcases Aristocrat’s unique showcase an exciting line-up of new games shuffle feature where symbols or reels David Punter and new game categories. Aristocrat General are rearranged randomly on the screen

46 INSIDE ASIAN GAMING | June 2011 to award additional shuffles and wins which provides players with a 24% larger are awarded. Don Quixote™ and Dragon screen image, high resolution graphics, Emperor™ are the first products in the enhanced stereo sound and is an example Remix category. of how Aristocrat is leveraging the latest • Win Your Way™: A completely new game technology to deliver a more dynamic player category that allows players to choose experience. their volatility. Players can choose one Aristocrat will unveil a wealth of other of three volatility levels; Low (Green), innovations at G2E Asia, showcasing new Medium (Yellow), and High (Red). With Nteractiv™ LCD programmable button user friendly buttons and onscreen technology, which will be utilised with images, players have the freedom to the company’s future product range, and choose their winning experience. Win Wealth Capital Bonanza™, Aristocrat’s first Your Way™ is available on Big Sky™ and new community and tournament game. Captain Cutthroat™. Asian themed games also get a new and • Drag ‘N’ Drop™: For the first time players innovative spin with Aristocrat’s exclusive can choose their WILD position and Xtreme Mystery™ and the newest product in multiplier options during the feature the category, Dragon Riches™. with the innovative Drag ‘N’ Drop™ Mr Punter concluded, “Aristocrat functionality. During the Drag ‘N’ Drop™ is dedicated to maintaining its market Wild Feature, players drag the WILD onto leadership in Asia and looks forward to any symbol position on reels 2 to 5 to releasing more games leveraging the latest receive different multiplier options. Drag technologies and tailored specifically to the ‘N’ Drop™ is available to experience in region in coming years. Imperial House™. Aristocrat’s new VIRIDIAN Widescreen Powered by the GEN7™ platform, all cabinet and latest games and concepts will be Next big thing— Dragon Empire is one of new games feature on the VIRIDIAN WS™, on display at G2E Asia Booth #201. Aristocrat’s new game titles on the VIRIDIAN WS™

Astro Corp Star Quality Astro Corp gears up with new multi-player and slot games for G2E Asia

stro Corp and its expanding stable of multi-player games will be on show at G2E Asia 2011. Astro Roulette and Astro 66 Poker will Abe joined by an Astro Sic Bo game played on a 46” touch screen layout with real dice in an automated shaker. All three games have a compact footprint—a much sought after characteristic on Asia’s crowded slot floors. They also have advanced player recognition technology and extensive connectivity. Nine new slot games will make their debut, including Chili King, Polar Bear, Viking Warship and Adventure Island along with two multi- level jackpot displays, Zodiac Cash and Ping Ball, plus a number of video lottery terminal games aimed primarily at European markets. “What you will see from us at G2E Asia is not a conceptual showcase—these are real products designed for real clients in a number of international markets,” says Simon Herbert, Astro’s Chief Executive. “Our in-house development team is large by gaming industry standards, some 300 strong, and this is because we’re totally market orientated. They are a fantastic team who live and breathe their work. We believe that their passion shows through in the games which will be on display.”

Astro Corp’s products can be found at Booth # 519

June 2011 | INSIDE ASIAN GAMING 47 Feature

Win Per Unit: Is it the Best Way to Measure Performance? By Todd Haushalter

slot manager recently installed two new banks betting the maximum and would play for hours. This told of 10 slot machines each. Both were installed him that he could likely generate the same win with just A on the same day, are in the same area of the five games. Even though the win per unit would double casino, and are the same denomination and number to $600, the total contribution to the casino would be of lines. They even have similar features. Machine A the same. The bank that was generating $170 per unit won $300 per unit per day for the last 60 days, while per day regularly had players on all ten games with Machine B earned just $200. The floor average is players waiting to get a seat. Therefore, by adding $170, so both games are performing well. After a 10 more games the casino was able to capture this careful analysis of the data he decides to not only business in a more efficient way. add 10 more of the Machine B that won $170/day but It is all too common for an operator to just assume that to reduce Machine A by five units. Why would the slot the number of machines originally installed on trial is the manager add more of the weaker game and reduce the exact number of games the casino needs. Sometimes a games that were generating $300 per unit? We will explore bank of eight games may do 80% of floor average and all of his reasoning shortly, but first let’s look at what the “win per unit” the games are removed, when the proper decision may have been to (WPU) measurement is all about. keep four of the games and see the performance move up to 160% The figure can be expressed over any period of time, but typically of floor average. it is expressed as WPU per day. This measurement, which is used in This question of having the right number of units should not slots and to a lesser extent in table games, is calculated as follows: just be limited to new games, but should be applied to games that Total win ÷ Total Units ÷ number of days. are being considered for removal as well as games that are steady It is not uncommon for a new game to be installed on a trial basis performers month after month. with the stipulation that it will only be purchased if the game can Certainly other factors must be considered such as floor layout, meet the floor average or exceed it by some certain amount. Often game cost, depreciation schedule, game mix, and trying to determine times this will be the only criterion on which a game is evaluated. It if a game contributes incremental win or if it just moves money from seems like a great measure and certainly the CFO will understand one side of the slot floor to the other. its meaning. After all, you can’t fake the cold hard cash that a game Win per unit is a good measure when it is coupled with other wins, and isn’t that what really matters most? While it is true that pieces of data such as theoretical win, utilization, handle, and the a game can not fake win, it can get lucky or unlucky, which is why like, but taken as a stand-alone statistic it can be misleading. So next operators will often look at the theoretical win of a game as well. This time you hear that a game is performing below floor average, you is the expected hold percentage times the handle on a slot machine may want to look at the headcounts to determine if the game can be or times the drop on a table game. turned from a weakling to a star by removing some of the units. The “U” in WPU is often ignored and can lead to misleading results. In our opening example, the slot manager decided to add Todd Haushalter has worked as a dealer, run a scheduling more of the game that was generating $170 per day and reduce by department and opened properties, but mostly he is the guy who five units the game that was generating $300 per day. The reason figures out ways to make major casinos more profitable—most for his decision had nothing to do with win per unit obviously, but notably Wynn Resorts, where he spent four years before joining Shuffle everything to do with game utilization. What he found after digging Master. Now, as Shuffle Master’s Director of Product Development, he into the detail was that the bank of games generating $300 per travels the world working closely with casinos’ management teams to unit per day rarely had more than three players, but they were all identify new ways to help make casinos more successful.

Sometimes a bank of eight games may do 80% of floor average and all of the games are removed, when the proper decision may have been to keep four of the games and see the performance move up to 160% of floor average.

48 INSIDE ASIAN GAMING | June 2011 June 2011 | INSIDE ASIAN GAMING 49 INSIGHTS

INSIGHTS – Inside Asian Gaming In the first ofIAG ’s new series of video interviews with leading members of the Asian gaming community, Las Vegas Sands Corp President and Chief Operating Officer Michael A. Leven shares his thoughts on growth in Macau and Singapore and the company’s plans for regional expansion. INSIGHTS can be viewed online at the IAG website, www.asgam.com, and below is a transcript of the interview

n September last year, Las Vegas Sands Corp (LVS) Chairman Sheldon Adelson floated the idea of dropping the ‘Las Vegas’ from Ihis company name in favour of the all-encompassing ‘international.’ Although no progress has been made on the proposed name change, such a move would reflect the company’s ambitions to develop sprawling mega resorts in several new jurisdictions. LVS already derives over 80% of its annual revenues from Asia (namely, Macau and Singapore), and it’s been eyeing markets including Japan and Vietnam for possible further expansion in the region. 18th May was a significant day for LVS, as it marks the seventh anniversary of its initial foray into Asia, with the opening of Sands Macao—the property that officially ended Stanley Ho’s 42-year operating monopoly in Macau. Inside Asian Gaming publisher Kareem Jalal caught up with LVS 2IC [second in command] Michael A. Leven on the 18th for the first inIAG ’s INSIGHTS interview series, produced in collaboration with Aomen TV.

Kareem Jalal: Today marks seven years to the day since Sands Macau opened; your first property in Macau. Has the market here shaped up the way you’ve expected? Michael Leven: If you look at the numbers here, Macau is now five times the size of the gaming market of Las Vegas. I don’t think Michael Leven anyone would have predicted that seven years ago when we got mass market is nowhere near being topped out over the years . So I here the first time, Macau would generate such a massive amount think you’re going to see the mass market get closer to VIP. It won’t of gaming revenue compared to Las Vegas, which was the leading pass it, but it will get closer in terms of percentage. revenue in the world. I know our founder, Mr. Sheldon Adelson’s vision for Cotai strip and for what could happen here was very Has anything held it back do you think? Do you think perhaps significant. But even he was surprised by the size of the numbers. infrastructure or even because the VIP is so dominant the operators haven’t been focused enough on it, especially Do you have a timeframe for when the mass market might the other operators? catch up to the VIP market in Macau? I think the infrastructure hasn’t been here so much for the mass I think in terms of number, VIP is always going to be pretty market. We didn’t have enough hotel rooms. We’re getting more now. significant here because of the size of the wagers and the amount With the opening of Sands Cotai properties 5 and 6, there’ll be more being wagered on the table on a per person basis is very significant. hotel rooms, more popularly priced rooms that will drive people in. But I think the key to Macau’s future is still going to be the mass I think where so much of the business has come from contiguous market, because that’s what’s going to stay no matter what. In the areas in China, as opposed to further away in China, that market’s VIP area, there is considerable amount of times that you watch credit, going to continue to grow. And the bridge, more runways, more it will vary with the size of the growth of the very large players. You planes, more international visitors, more MICE business, everything don’t know when that’s going to get topped out. But I think in the points to the fact that over the years, the Macau mass market is just

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going to continue blossom. do that very easily without even selling an asset like our mall, which we expect to sell maybe in 2013 or 2014, which can provide as Do you feel that perhaps there is a bottleneck coming soon much as US$4 billion back for our US$6 billion investment just on following the Galaxy Macau opening, especially the big the mall alone. I think Singapore is sort of in some way an anomaly. queues at the ferry to get in? Do you think there might be There’s only one competitor. There won’t be any more than one for a some issues in the next couple of years? considerable time, if ever. The market is very, very vibrant in all areas. There are those bottlenecks but if you look at Golden Week or So it was a great decision to go for it, get it and build it. I’d like to have Chinese New Year where the bottlenecks have been, if there can be two or three, I wouldn’t have to do very much. a spread over time, there is still an awful lot more visitors that could come in under the same infrastructure. You can still handle millions You speak of your one competitor in Singapore, that’s more people. But that infrastructure thing will improve. The light rail Genting of course. People actually expected Marina Bay is going to improve it and more and more immigration situations. I Sands to take the lion’s share of the market very quickly, think Macau has yet to find how significant it’s really going to be. It but Genting has somehow managed to hold on to the is the largest gaming destination in the world already, but it’s got a lead. Why do you think that is? What have you learned long way to go to use the capacity that’s nearby. from Genting over the past year? Well, in the early days, Genting won both the market share Singapore is now on its way to becoming number two game in VIP gaming as well as mass market. We are now winning possibly. And Marina Bay Sands, your property there’s the mass market game and they continue to lead in the VIP game been running for just over a year now. Is that on track to for a variety of reasons. We think over time, there is a significant achieve your expectations there, to achieve ROI within the product differentiation between us and Genting and a location timeframe you’ve expected it? differentiation. They are in more of a family area, more in a resort I think our investment there is close to US$6 billion. We expect to area, it’s a little off the beaten path, and we are very close to where do – we did over a billion dollar in our first year in EBITA. We expect the city is, so basically we’re advantaged on the mass market. On that to grow. I think a four or five year payback in that situation, the VIP end, they’ve more aggressive than we’ve been and doing anybody would be happy with that return on investment. We should a better job. But they had a head start on us because of all their

“We should [be able to recoup our investment in Marina Bay Sands] very easily without even selling an asset like our mall, which we expect to sell maybe in 2013 or 2014, which can provide as much as US$4 billion back for our US$6 billion investment.”

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contacts in Malaysia. And we’ll eventually catch up and probably that market will be split, but I think we’ll continue to dominate the mass market.

There are a few things you changed in terms of your strategy in Singapore. It started, you were going for a very baccarat mix with the tables, and now you realised that roulette is more important, things like that. What have you changed in Singapore in terms of your strategy? The mass market floor in Singapore constantly changes. One of the Landmarks new and old—Marina Bay Sands as seen from Singapore’s Merlion Park things we learned from Genting was the electronic table games, which they put, and the stadium table games. We didn’t know about a lottery for instance, where they can play pennies or dollars, can that. We saw that there and we immediately ordered them and put take chances on a lottery. But I think when you come into a large them in. They’ve been very good. casino like ours or Genting, their Resort World, the fee structure But we’ve made over two thousand changes in the last six only inhibits those low end people. It doesn’t inhibit people from months on our floor—changing machines, changing different slot coming in for an evening of entertainment. So I like it. Frankly, I machines, changing tables, putting new games in. Most people would be surprised if when we expand in other countries in Asia don’t realize that there is both an art and science to the gaming that we don’t have an entry fee in almost every country, if not every business. Not just getting people in there to play, you have to put country. the right game in the right place so that revenue per square foot is maximised . And we have some very, very good people in Singapore There is some speculation that the Singapore government that do that. might crack down a bit more and maybe try more to limit locals’ access to the casinos. One thing was they stopped Of course, you are very willing to learn and adapt. the bussing of people from the so called ‘Heartland, which Well, I hope so. If we don’t learn, we don’t adapt and we don’t is, obviously, again it’s more lower income people. Do you continually improve, you end up in a status quo environment. When think they are mainly interested in preventing lower income you’re in the kind of business we’re in and we’re a public company, people from coming or do you think they might also try to we can’t be in status quo. Status quo is the prescription for failure. We have more blanket measures to prevent all Singaporeans have to continually grow and change. from coming? We are basically told that as long as only about 30% of the In Singapore because of the entry levy , which is S$100 people coming in are Singaporean, then it shouldn’t be a problem. a day, that was something that people thought would If the amount of Singaporean attendance gets much higher than dissuade locals from coming, but it doesn’t seem to have that, there may be some cause for concern. But to this day, only deterred them at all really. about three percent of the population of Singapore has ever played We didn’t concern ourselves with the entry fees and I don’t think in a casino. anyone else did either. The entry fee does prevent the very low income person from coming in. and I think that’s very important. Is that 30% thing unspoken? I think casinos need to be careful not to attract the kind of people It’s not published but it has been talked about. That’s what our that can’t afford to come in. The people who would normally play numbers have been roughly 30% Singaporean. That doesn’t seem to cause any problem. You are always going to have in the casino business some people who over-play. That’s part of the business, but the great majority of people can control themselves and I don’t think we’re creating more poverty in Singapore because of our presence. But if that were to happen, the government would have every right and every reason to come in and try to restrict play.

Governments across Asia do not like their locals playing as a rule. So there are casinos in Vietnam and South Korea, but in general they’re off limits to locals. You’ve said that you’d be interested in expanding into those markets, but only if the governments reserve that policy and allow locals to play. Do you see that happening anytime soon? It is true that we said that. In South Korea, there is one casino that gets local business. That casino does 90%t of the revenue of all the casinos in Korea.

One of seventeen. Yes, one of seventeen casinos. In Vietnam locals don’t play. Our

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INSIGHTS

conversations with the governments both in Vietnam and Korea it is a 5km bridge from the mainland. The government would like to have been about restricting locals with a payment, or restricting have it because they are losing traffic coming out to play here and locals with a certain amount of payment that they can enter in the other places. But I am not positive about that passing. We would be course of a year or the course of month, to be able to prevent them not interested in having a 5km bridge to get to us. If we could be from coming too frequently or not being able to afford it. But we on the mainland near Taipei, we would be interested because there must have the support for the kind of infrastructure that we put in, are 28 million people in Taiwan. For the same reasons that we’d be in terms of an integrated resort, we have to have some local play interested in Korea, or Japan or any of these countries because we in order to be consistent when we don’t have convention and we can do convention, meetings, MICE and entertainment business as don’t have tourists. Otherwise, you’ve got an awful lot of overhead well as gaming for the population as well as foreigners. So getting sitting there not generating any revenue. to the island, the infrastructure would be difficult for us and would be difficult for employees. We need a big employee base to run one Do you find those government attitudes somewhat irrational of these places. There are 15 thousand people in the building we’re because there’s nothing to stop these people from going in right now. overseas and playing? I wouldn’t call it irrational. Governments are governments. Depending on where you come from, you can say whether they are irrational or not. My sense is that in our discussions with Japan, with Korea, with Vietnam, that in these particular countries, they have political reasons why certain constituencies have concerns about local gaming even though they have betting in all these countries— boat races, horse races and a lot of things like that. So they begin to see the virtue of our system because our system drives tourists and drives conventions and meetings and entertainment and builds an enormous amount of jobs. I think Macau’s an interesting example. If you look at City of Dreams, if you look at Galaxy, you are seeing other operators coming in who are sort of attempting to follow a somewhat integrated resort pattern. And that’s going to drive tourism, other types of visitations, other than gaming. Although in an Asian market, gaming is always going to be very important, compared to a US market or European market. But still for a destination to maximize the contribution, our type of facility does that. Hard going—India’s bureaucracy can make doing business in the country difficult

India is often discussed but doesn’t seem to be going anywhere right now. There have been quite a lot of Indians coming to Macau and specifically to Venetian. But do you see them gambling? Oh yeah, Indians play. There are very few countries in the world where people don’t gamble. It’s just a question of how often and how much. But they play. They play during certain times of the year; Diwali time, special times for Indians. There are casinos in Goa in India. I don’t know how successful or unsuccessful they are. India lacks a really good trade show and exhibition centre as well big conventions in order to compete in the Asian circular convention market. They don’t have that. There is some small place in Delhi but it’s not nearly big enough. And I think outside of Mumbai or in Delhi would be an ideal position for one of our kind of integrated resort. Once again, The Venetian Macao I wouldn’t expect the play level to be the same as this part of Asia. But there’d be significant other business that could make it Are you in discussion with any other countries in the region? attractive. But getting anything done in India is not easy. Taiwan is another one that could be happening now that the government is increasing its effort to lobby there. There was One of the things that you mentioned is that you might a ‘no’ vote on the Penghu referendum but now it seems the be looking for someone to manage your relation with the government is doing more to lobby there. Do you have any government in Macau. Is that going anywhere? Can you thoughts on whether the next referendum in Taiwan might be shed some light on that? successful? We have an arrangement with a gentleman by the name Well, I think the referendum is coming in another island. I think of Bowen Leung, who originally worked for the Hong Kong

56 INSIDE ASIAN GAMING | June 2011

INSIGHTS

government and spent many years in Beijing, who’s now affiliated want to throw our weight around—we don’t. But I think we want with us. He works for us a few weeks a month. He just joined us to be cooperative and help them. I think if you look at Macau a few weeks ago to help us in our relationships with Beijing and going back to 2004, seven years ago when we opened Sands, and Macau in particular. you look at it now, a lot of what you see, we have been somewhat responsible for. Not entirely, but somewhat. So we hope that Is political risk something you’re conscious of in Macau continues over the years. and in your dealings with China? Frankly, I don’t spend a lot of time worrying about political Over those seven years, what is the greatest lesson you’ve risk. I think if you play by the rules and you act accordingly when learnt from operating here? you’re in someone else’s country, I don’t think there’s anything That’s a very good question. We learn lessons everyday operating more to fear about it. We are a big producer for the economy anywhere actually. There’s an old statement, ‘when in Rome,’ that in Macau. We represent, I think, 25-30% of the employees in they say in our country, ‘when in Rome, do as the Romans do.’ I think Macau—a big number. And the trickle down for the economic basically the best thing here, like in any place, is that you follow the benefit of the community from us is very significant. So we don’t rules, you pay attention to what’s important to the government and the people, and you can be successful.

You have an immense responsibility overseeing so many properties in so many jurisdictions. What is the biggest challenge to that? Is it even difficult to keep track of what is going on in each jurisdiction? Listen. I have a wife. I have three children. I have five grandchildren. That’s a bigger challenge than what I do for my own living.

Your Asian operations, are they supporting your operation in Las Vegas? No. Vegas is self-supporting, but I would say our Asian operations are 88% of our profitability as a company. But none of our units in Las Vegas, Bethlehem nor Pennsylvania are non-self-supporting for themselves. But our profits are overwhelmingly coming from Asia.

Vegas has been in decline for the past couple of years. But have your properties, do you think, fared better than the others because of your Asian connection? Self-supporting—The Venetian Resort Hotel Casino, Las Vegas In the VIP Asian gaming area, I think our property does a little

“We have an arrangement with a gentleman by the name of Bowen Leung, who originally worked for the Hong Kong government and spent many years in Beijing, who’s now affiliated with us… He just joined us a few weeks ago to help us in our relationships with Beijing and Macau in particular.”

58 INSIDE ASIAN GAMING | June 2011 Product obsolescence in Las Vegas—the Sahara Hotel and Casino closed last month better because of our Asian connections. Vegas, at its height, did about US$75 million dollars more a year than it does today. It’s a lot of money, but it is not really significant. That would be, let’s say, about 25% off the high of 2007.

When do you think the real Vegas recovery will happen? There seemed to be one last year, but it turned out to be premature. That depends a lot on what you called a recovery. If it’s purely on a money basis, it’s going to be a while because room rates have not yet recovered, and it will take four or five years for that to happen. Although most of the properties in Vegas have reduced their staffs and their costs, it’s still very difficult to obtain 2007 profitabilities. So I would say it’s at least five years before you see Vegas get to those levels of income that they were. In terms of visitation, Vegas this year will do about 37 million people. At the height, I believe it was 39 million or so. So it’s about roughly 10% off the top, the visitation.

We see some properties being imploded in Vegas right now. Is Vegas overbuilt—especially for right now? I think in some areas it’s overbuilt. It’s overbuilt at the middle and low end. A lot of that is product obsolescence. We just closed the Sahara hotel, it’s been there since 1952. There aren’t too many hotels that have been around since 1952, and if there are, you probably wouldn’t stay in them. So some of those are just natural a natural attrition of things. At the high end of the market in Vegas, it is somewhat overbuilt which, keeps a little bit of a cap on the rate structure.

While Mr. Adelson is known as the visionary of the company, you are often referred to as the man who gets things done. What do you think has earned you that reputation? I suppose you get a reputation like that when you do things. I have been doing this for nearly fifty and half years now, and a good part of that was as a chief operating officer—maybe 30 years as a chief operating officer, and I’ve been a chief executive officer for ten years as well. But I think when you’re a chief operating officer, the job is getting things done. You can do some strategy, but you better make sure it gets executed, so I’m the one that has to take Mr Adelson’s vision and make sure it happens.

And is one of the things you’re on the lookout for someone to fill your shoes one day? I certainly am. I’m on my second contract with Las Vegas Sands, and when this one ends, part of my job is to make sure I get somebody to replace me. We have people in the pen waiting patiently, and at some point in time, we’ll turn the reins over to them. GPI

Currency Revaluation Gaming Partners International continues raising the bar for supplying secure and versatile casino chips, plaques and jetons

alaxy Macau, which opened 15th May, authenticate individual RFID chips and gave Gaming Partners International chip stacks that contain up to 20 chips. G(GPI)—the world’s leading It can also quickly authenticate up to provider of casino currency—its 200 chips that are still in their trays, biggest ever order with a new and all validation information gaming venue, and extended is displayed on an easy-to- the dominance of the read LCD display that shows company’s products in Asia. both the number of pieces The chips and plaques being authenticated as well for Galaxy Macau are from as the total value amount. GPI’s prestigious Bourgogne Additionally, its high-speed & Grasset® line of casino reading capabilities make it currency products. They include a possible to read up to 400 chips variety of styles, shapes and colour per second while simultaneously combinations, as well as a number of identifying whether the chips are authentic, security features, including RFID. GPI has valid casino currency. This makes it possible Portable Chip Reader supplied a number of chip sets that are for casino staff to easily identify and remove customised to meet the casino’s aesthetic, foreign, non-casino chips. Designed for operational and security requirements. its high security, high-capacity production ease-of-use and reliability, its durable design The RFID technology offered with facilities. The company’s products have is easy to transport throughout the casino, all GPI’s lines of casino currency allows been used in casinos all over the world and it has a universal power supply that casinos to verify the authenticity and since 1925. works with any voltage. value of each chip instantly, reducing A full range of products from Gaming the possibility of counterfeiting, staff Partners International will be on display Chip Inventory System 2.0 pilferage or miscounts. With specialised at G2E Asia, including two highlight new Using radio frequency identification readers and software, this technology products, the Portable Chip Reader and Chip (RFID) technology to track the location enables casinos to track individual chips Inventory System 2.0. and status of all enabled chips throughout throughout the gaming floor as well as your casino, GPI’s Chip Inventory System follow payments, fills and credits, tips, Portable Chip Reader helps casinos increase inventory movement and wins and losses per table at any time GPI’s Portable Chip Reader gives casinos efficiency and security and gain valuable of the day. the ultimate flexibility in authenticating insight into their operations. By tracking and validating RFID-enabled gaming chips, currency from the cage or vault to its plaques and jetons. By enabling casino staff authorized location on the gaming to quickly and accurately read, authenticate floor, it allows real-time monitoring and and count their RFID currency items from authentication of inventory and provides any location at any time, the Portable Chip instant and accurate validation of chip Reader extends RFID currency protection amounts and serial numbers. Additionally, from the cage or chip bank to the table, it increases the accuracy of chip cash in and the pit podium or even to back-of-house out transactions by verifying manual counts counting areas. and can be integrated with third-party table Utilising the latest RFID high-frequency management systems. technologies, the Portable Chip Reader To learn more, contact your local Gaming combines the latest Magellan MARS 24 Partners International account executive or GPI’s casino currency products include reader with a two-dimensional antenna that call +1 702 384 2425. high-quality chips, plaques and jetons, all can read RFID chips in mass, in stacks or in available with a variety of security features racks. Encased in a sleek, portable case that To check out the latest developments in and customisation options. GPI’s products, includes a chip reading surface that can be securing your casino currency, visit Gaming which also include other table game customized with the casino’s individual logo, Partners International at G2E Asia Booth equipment, are manufactured worldwide in the Portable Chip Reader is able to quickly #1113.

60 INSIDE ASIAN GAMING | June 2011

Market Outlook

Sheep in Wolf’s Clothing A long-expected ban on slot parlours in Macau residential zones could be less problematic for the industry than feared

he Macau government is likely to parlours will not be caught by the new expectations. We estimate that Mocha clubs introduce a regulation that slot ‘proximity’ regulation. will generate about US$31mm in EBITDA in Tmachine parlours will only be 2012, relative to consensus expectations of permitted to operate within a 500-meter Impact US$608mm.” radius of an existing casino or within the Union Gaming Research said in a note in All this raises the question of why the same distance of a five-star hotel, Inside late May: “Of MPEL’s eight Mocha clubs, six of ‘proximity’ test for Macau slot parlours is Asian Gaming has been told. them are located within hotels. As recently being considered at all. The answer may Macau’s slot parlours—unlike slot as 2009, a government official with the DICJ lie in domestic Macau politics. The Macau zones in general casinos—are specifically indicated that only one of the Mocha clubs government is anxious that problem marketed to and aimed at local players. So (Mocha Marina Plaza) is located within a gambling is a growing issue in the territory the proximity test looks like a way of trying to residential area. As such, we believe this is the among locals. A recent study by Dr Davis tackle the issue of such venues deliberately only Mocha club at risk of potential closure. Fong, Director of the Institute for the Study being placed in residential neighbourhoods. We also note that Mocha Marina Plaza is of Commercial Gaming at the University of It will apply retrospectively to current slot the largest Mocha outlet, at 10,800 square Macau, suggested school age children in parlours as well as to any new ones. feet, or 20% of total Mocha square footage Macau have been observed gambling with In practice, the policy may not be of 52,500. Assuming Mocha Marina Plaza their peers on playground games for money, as draconian as it sounds. Macau only generates the same proportion of Mocha during break times. occupies 29.5 square kilometres, so very EBITDA relative to its size (20%), it would “Young people often believe money can few slot parlours are more than half a be therefore responsible for US$6.2mm in buy happiness and that gambling is a fast kilometer from either a casino or a five- EBITDA, or just 1% of consensus expectations way to become rich. Their experience with star hotel. The Macau government has for company [MPEL] EBITDA of US$608mm games is at a much lower technical level, so also previously allowed development of in 2012. they think it’s easy to beat casinos,” explains casinos in suburban areas. Unless those Union added: “In a worst case (and in Dr Fong. are to be closed as well, they effectively act our opinion extremely unlikely) scenario Macau’s Civil Servants’ Framework and as an insurance policy for a number of slot whereby MPEL would have to exit the the Gaming Industry Regulatory Framework parlours already in residential areas. slot parlour business, we estimate a 5% ban public servants, including police officers, The most recent and most famous impact relative to consensus 2012 EBITDA from entering gaming areas, “except when example of a suburban casino is Crown authorised or while in the performance of Macau (now Altira), opened at Taipa in May their duties”. 2007. Given that it cost US$580 million and Currently casino and slot parlour is owned and operated by Melco Crown employees are only excluded from gambling Entertainment, a key investor in the Macau at the property or group of properties gaming market, the chances of it being controlled by their employer. closed or demolished are somewhere “I’ve heard that the Macau government between nil and zero. will announce a casino staff licensing As a result of those legacy planning framework this year,” says Dr Fong. policies for casinos, and the fact that “It could be a good opportunity to many Mocha Clubs and SJM Slots parlours acknowledge casino work as a high-risk are either inside or adjacent to upmarket occupation when it comes to problem hotels, it seems most of Macau’s slot Macau Canidrome—slot parlour under threat? gambling. Many casino employees are

62 INSIDE ASIAN GAMING | June 2011

Market Outlook

on the Macau peninsula and at the Macau costs, and no construction cost debt to Jockey Club racetrack on Taipa—have service on the buildings. predominantly low-income customers But the Canidrome slots and MJC slots that can least afford to spend money on do suffer from a much more powerful gambling, on race days or otherwise. They handicap. They are friendless in political are also, however, reported to have some terms. Dr Stanley Ho, who helped to of the loosest machines in Macau and develop these facilities in the first place, Could slot facility at Macau Jockey Club also go? thus offer the best value to players. There’s has now retired from SJM and its parent some irony in the fact that the fairest slots STDM, so there’s no loss of face to him if young and, according to a study conducted in Macau (for players) could be the victims the slot parlours there are closed down. in Las Vegas, young staff are more likely to of a policy apparently designed to protect The Canidrome and MJC already have become problem gamblers. So it’s advisable consumers. If the Canidrome and MJC slots sporting events for punters to bet on, so to create this rule.” do close, then many locals disposed to from the perspective of local politicians, Another plank of the government’s policy gamble may still be willing to travel a few having slot machines there as well is a form is a likely move to raise the casino entry age minutes up the road—and it is always only a of double jeopardy for the local patrons. in Macau from 18 to 21. This latter initiative few minutes in tiny Macau—to the majority The fact that many state governments in is also designed to encourage local people of parlours not affected by the likely ruling. the United States see race tracks as one to pursue tertiary education. That’s because Those slot venues—while making a modest of the few acceptable public locations for raising the entry barrier to 21 will mean they contribution to SJM’s gross—are probably slots—on the basis that the people who go can no longer get a job as a casino dealer some of the most profitable for the operator. there have already identified themselves as after graduating from senior high school. They have old equipment and therefore— gamblers so might as well be given some The two SJM Slots parlours most likely to barring any unforeseen costs due to outright consumer choice and fresh opportunities be affected by the ‘proximity’ test—located electro-mechanical failure of machines— to put taxes in state coffers—appears to cut at the Canidrome (greyhound racing track) some of the lowest capital depreciation no ice in Macau.

64 INSIDE ASIAN GAMING | June 2011

Steve Wynn ‘Wynn Cotai will be my best ever’ Steve Wynn tells Inside Asian Gaming it takes time to create the right product in Cotai

asino companies never seem to operator’s favour. The gross gaming revenue arguably damned if he tries to introduce question market share statistics statistics only become ‘meaningless’ when the certainty of a timetable in a situation Cwhen they’re working in that the company is lower down the pecking dependent on Macau’s domestic politics— order. Steve Wynn, Chairman and Chief Sheldon Adelson knows how that feels Executive of Wynn Resorts, joined that over at Cotai 5 and 6—but Mr Wynn is also debate recently. damned if he doesn’t nail things down for Mr Wynn’s assertion that he will ‘double’ the market. his Macau numbers when he joins the The provisional timetable for Wynn Cotai party has led some to ask the obvious Cotai announced last June was for ground question: ‘Why isn’t he there already?’ breaking this year and an opening in 2014. “I don’t know what measurements you But then a table cap and moratorium on use—revenue, profitability, total visitation, future Cotai projects were announced but we could be easily twice as big,” Mr Wynn by the Macau government, throwing a said in interview with Bloomberg television spanner in the works. There were also some recently. additional complications as a third party As one analyst explained to IAG: “I had an involvement in the land deal on the always ask operators not just ‘What’s your proposed Wynn Cotai site. future story?’ but have a frank discussion on After a recent board meeting in Macau No Wynn in sight – Wynn Cotai still awaiting the execution timetable.” Mr Wynn was asked about analyst concerns approval In Macau, that’s not easy. Mr Wynn is that he doesn’t yet have a Cotai story to tell

66 INSIDE ASIAN GAMING | June 2011

Feature

and that the two properties he does have on Macau peninsula are too VIP-centric. Mr Wynn gave short shrift to the suggestion of being slow off the mark on Cotai. “This business of building these buildings that has entertainment and food and beverage and casinos and private casinos and VIP services and fancy suites— building them, designing them, getting it right, keeping them operating efficiently— it’s not exactly automatic. It takes time to learn how to do it. If you have a monopoly it’s easy. It’s hard to make a mistake when you’re the only game in town. “The danger here [in Macau] is the second rate property. We’re trying to attract people from all over the Pacific Rim. For that, you need to pay attention. “My gang and I always need to do one more hotel. Because we think maybe, just maybe, next time we’ll get it right. “As we get ready to launch Cotai that’s the best thing we’ve ever done.” Mr Wynn also dismissed the idea Wynn Macau and Encore at Wynn Macau was too VIP-focused. “We’re not VIP centric. We just have a lot of VIP business. But we also have the best win per table in the general casino, in Macau. Our business is up over 40% in the general casino. For the size of our building, we can’t get any more customers in here.” Wynn Macau’s unaudited first quarter results for 2011 show a 46.6% increase year on year in net gaming revenue—to US$865.7 million from US$590.6 million a year earlier. “Let’s deal with market share,” Mr Wynn said in comments following the results. “When you have 33 casinos in a city like Macau, gross market share—that number Too VIP-focused?—Encore at Wynn Macau the government puts out every Monday—is a meaningless number. Because if you have money in free chips for example? money would be 1:1. Or you could call it just one building like this one, and you have 15% “Here’s a way to look at it. Take a look the number ‘1’. of the market—and someone else has 12 at each casino and see what percentage “But if the percentage of the money buildings or 20 buildings, they have 20 times of the equipment—the tables and the slot is less than the percentage of equipment, as much depreciation, more interest, more machines they have—compared to the then that number is less than ‘1’, and payroll, more expenses. whole [market]. And then take a look at the you are a net donor of people to your “In getting to the bottom line of how total revenue in the market and see what neighbour (if you have rooms). If, however, successful are the enterprises, you can see percentage of the revenue they have. In a your percentage of the money is greater that from the financial information that is perfect city where everybody is equal, your than your percentage of the equipment published. But more importantly, the way percentage of revenue would be the same then you are a net receiver of business to gauge the effectiveness of management as your percentage of tables. It would also and you’ve made a bit of a dormitory out in one of these buildings is real easy. Don’t mean your slots each won the same percent of your neighbours. And that means you look at the top line market share. It means per day as your neighbour, that your tables have a positive ‘fair share’. As competition nothing. What good is it if you get more had the same activity as your neighbour. has increased in Macau, our fair share of the market share if you give away 95% of the That would mean the ratio of equipment to money has climbed.

68 INSIDE ASIAN GAMING | June 2011 FutureLogic

Evolution in

The GEN3 Evolution® printer offers Action dual-processing capability

FutureLogic’s GEN3 Evolution® ticket printer The GEN3 Evolution printer is designed to keep pace with and PromoNet® promotional coupon current—and future— demands of server-based gaming, promotional system lead the way in casino floor couponing and continually evolving TITO markets. The printer’s TITO game ports include RS-232, Netplex and USB 2.0 (supporting the technology following protocols: Gaming Standards Association, Gaming Device Standard, single personal computer/IGT, server-based gaming). his year at G2E Asia, FutureLogic will demonstrate live the Promotional ports include Ethernet, USB 2.0 and RS-232. benefits of its new GEN3 Evolution® ticket printer working in The GEN3 Evolution printer features PBS™ (Programmable Tconjunction with its PromoNet® promotional coupon system. Bursting Scheme) that can be used to ‘burst’ single or multiple The new GEN3 Evolution printer was specifically designed with joined coupons directly into the player’s hand during or after a play promotional couponing in mind. An on-board promotional system session. Like the GEN2™ series of printers, the GEN3 Evolution is ‘hot available as an option can create separate and secure processing swappable’, i.e., it can be removed from the game or replaced without environments for both TITO [ticket in ticket out] and promotional shutting down the game or the system. couponing. Soon after its introduction, the GEN3 Evolution It offers ITH® (Intelligent Ticket Handling) which ensures tickets printer received an honourable mention in the Best Productivity are only available after they are fully printed and burst from the Enhancement Technology category of a major industry magazine’s machine. The product also has an IntelligentBezel™ feature, to reduce annual awards. paper jams. “The PromoNet solution, together with our new GEN3 Evolution PromoNet can also work with FutureLogic’s earlier GEN2 printer, can deliver photographic-quality coupons into the hands Universal™ printer, turning the latter, like the GEN3, into a multi- of carded and non-carded players through specifically targeted functional marketing tool, linking promotional campaigns to specific intelligent triggers and promotions,” said John Edmunds, Vice player actions, activities or behaviour. President FutureLogic International Markets. “Operators can, for With its unique ability to create campaigns for both carded and example, automatically reward anonymous players in real-time at non-carded players, the PromoNet solution can help casinos boost the slot machine after they have spent a predetermined amount of club membership and reach out to all players. It allows casinos to time or money in their first play session through to their last.” trigger a marketing campaign automatically based on game play metrics, player tracking information, POS [point of sale] systems The GEN3 Evolution utilises the latest printing and and redemption terminals. This gives casino marketers the ability communications technologies to offer: to issue a coupon at the game to attract and retain customers. For • Easy, reliable direct system connection over an Ethernet players, these offers provide valuable savings and incentives, thereby (Transmission Control Protocol/IP) interface enhancing their casino or casino resort experience. • Photographic-quality printing • Large 450-ticket capacity tray In addition to the GEN3 Evolution printer and PromoNet • Ability to print and present tickets in less than solution, FutureLogic will also exhibit the following products one second at the show: • An optional expansion card providing 32GB of • The GEN2 Universal™ server-based printer supports a variety of additional memory. network protocols and can be configured to communicate with multiple hosts simultaneously. With industry-exclusive Advanced • The CouponXpress™ printer brings all of the popular GEN2 Graphics Printing and room for 450 Universal™ gaming printer’s features, functions and flexibility tickets in less than three inches from the slot floor to the desktop. of vertical space (the standard • The Eclipse™ universal ticket and receipt printer is designed for height of all TITO printers), the Video Lottery Terminals (VLTs) and unattended kiosks. GEN3 Evolution printer can • The TableXchange® printer/scanner connects table games to save operators over 30 refills or the casino’s existing network by scanning and printing TITO US$300 per year per game. vouchers.

PromoNet links to FutureLogic’s new The GEN3 GEN3 Evolution printer and PromoNet solution can be experienced Evolution® printer (right) as well as the GEN2 printer (left) at FutureLogic’s Booth # 537, G2E Asia 2011. Paltronics

The One Paltronics aims to be a one-stop shop for casino management systems—not just an expert in jackpots, bonuses and gaming media

Paltronics’ One Link® 3E product has been installed at Galaxy Macau

hen a slot jackpot is triggered on a casino floor, it’s a Paltronics says the demand for it to supply such a product has been memorable experience for all. But behind the shouts of driven by the operators themselves. Inside Asian Gaming spoke to Wdelight from players, onlookers and the bells and whistles, Stephen Cowan, Managing Director, Paltronics Australasia, and the hard effort required for this seamless operation is often the work Kylie Rogers, Regional Sales Manager, Paltronics Macau Ltd, about of the Paltronics One Link System. jackpots, bright lights, and even brighter ideas for adding value to Paltronics Macau Ltd has an interesting and a uniquely casino floors. challenging job—to offer a unified system for bonusing, jackpots and media management across Asian slot floors. That unified system must delight the operators, the slot manufacturers, the players and—crucially—satisfy the needs of the regulators. The core business of Paltronics has been managing bonusing, jackpots and casino media, but now the company is taking the next logical step to offer a complete Casino Management System (CMS).

70 INSIDE ASIAN GAMING | June 2011 Paltronics

through just one system. Having worked with Galaxy management previously on other projects, they purchased our 3E Slots and Media System without hesitation.

Please explain more about your bonusing products SC: The Paltronics Bonusing system, unlike others, collects the bonus points live and not just at the end of the day. So if someone is promoted from gold to platinum, you as the operator are instantly informed. Operators can reward their players with a message in real time saying ‘Congratulations, you have just advanced to being a platinum member’. It also allows the operator to reward their player an extra spin to play for say another 100 credits, just to name one of the many options now available within the 3E System. Stephen Cowan, Managing Director, Kylie Rogers, Regional Sales Manager, Paltronics Australasia Paltronics Macau Is there any appetite at the moment in Macau for a wide area jackpot across multiple operators? IAG: What new products are Paltronics launching or SC: We get nibbles of requests that indicate there’s an interest. developing in Asian markets? But to get to the stage where they understand the complexities of Kylie Rogers: My customers are pleased we are finally coming the system and the security in the system for each venue so that the out with a complete system which incorporates casino accounting, data is not shared, and that they understand that the player fairness cage, player tracking, full slot reporting and monitoring, progressive/ and accuracy of accounting is correct—and it is—that’s where we mystery jackpots, bonusing and a complete user friendly media need to be. Once they can sit down and be shown the security of the system. In addition, Galaxy Macau have installed our One Link® 3E system, that will reassure people. Slot System and One Link 3E Media System, which is a first for the Asian market. I understand that many slot manufacturers have chosen Paltronics to run their premium jackpot product. What is the difference between the new 3E system and your KR: Yes, correct. Thanks to our strong relationships and proven existing systems installed at The Venetian Macao, MGM product you can find our controllers running almost all slot Macau and Wynn Macau? manufacturers’ jackpots. This is such an exciting time for us. I am KR: We have breathed new life into how you manage bonusing, really looking forward to this year’s G2E Asia for the unveiling of our slots and media. Firstly with slots we have eliminated jackpot next generation of products. controllers, so now all changes are made from the host and sent directly to the networked slots. This alone reduces the initial outlay Why have your jackpot systems been successful? and significantly reduces the installation time. SC: Security, stability and reputation. We’ve been in the Macau One Link 3E Media System is not only more powerful but also market for the past eight years. operator friendly. It uses a drag-and-drop interface with the ability From our strong reputation in the Australian market we were to preview actions in real time right at your desktop. It’s so simple asked to provide Sands Macao with One Link Slots and Media. Word even I can use it. One Link 3E Media has eliminated the need for the of mouth travelled quickly throughout the region, but ultimately the operator to have knowledge of XML [programming language]. product spoke for itself and we were then successful in placing our Stephen Cowan: Resources are no longer tied up so much in products in MGM Macau, Wynn Macau, The Venetian Macao and of process, and more in the actual business of creating fresh value—i.e. course now the recently opened Galaxy Macau. Our products can more effective marketing. now be found across the Asian region. We’re very honest about what our systems can do. If we can’t When you were talking to management at Galaxy, what do something we will say so. We are willing to be flexible and work were they really excited around an issue, but we’re not afraid to say if something can’t about? technically be done—even if that means we don’t win the contract. I SC: The quality of the think we’ve got a good reputation in that regard. name and the brand in the market place. Everybody Paltronics is at Booth # 111 at G2E Asia 2011. knows how stable Paltronics products are and that they perform. They were also impressed by the depth of the variations available in the jackpot engine. For example, in Marina Bay Paltronics’ new One Link 3E Media Sands [in Singapore] we have System—now with user friendly drag-and- 150-200 levels operating drop capability

June 2011 | INSIDE ASIAN GAMING 71 Thin End of the Wedge? Pansy Ho’s ‘non-compete’ deal with MGM Resorts has some scratching their heads; and others holding their noses

s MGM Resorts International’s ‘non-compete’ agreement with Pansy Ho compatible with Macau’s legal framework for its gaming Iindustry? If ‘yes’, what if anything will the agreement do to the competition landscape in Macau? If ‘no’, what is the Macau government going to do about the deal? The non-compete deal has come about because it looks as though for the first time ever, an individual—Ms Ho—will be allowed to be a shareholder and director of two supposedly competing companies in the Macau gaming market—MGM China Holdings and her father Stanley Ho’s former investment holding company STDM, the parent of SJM Holdings. Even Dr Ho never managed a feat like that in his long career. The reason it is being allowed now looks due in part to Dr Ho’s fragile health and the succession battle that this sparked among his surviving consorts and children for control of STDM and SJM. The Macau government seems to think letting Pansy Ho have some control over MGM China and STDM simultaneously is a lesser

Happy families? Stanley Ho’s illness led Pansy Ho to simultaneous directorships in two supposedly rival Macau companies

72 INSIDE ASIAN GAMING | June 2011 Pansy Ho

to assist with that. Equally, Ms Ho should benefit from her closeness to the global leisure brand when she’s scouting for new business opportunities in the People’s Republic. But the non-compete agreement offers potential traps in MGM Resorts’ home markets. Those traps are not so much in its core market of Las Vegas—the company owns too much of the gaming real estate on the Las Vegas Strip ever to be put under any serious regulatory pressure by the Nevada authorities. But it could face awkward regulatory questions in its smaller US markets such as Michigan. MGM Resorts’ predecessor company MGM MIRAGE was forced to announce a pull out from its joint venture with Boyd Gaming in Atlantic City because the New Jersey Division of Gaming Enforcement was unhappy about it even being connected with Pansy Ho. MGM Resorts’ non-compete agreement with Ms Ho presupposes she will be a person of influence at STDM, even if technically she’s only a minority shareholder there. That means she will be expected to wield that influence either passively—by leaving the room or abstaining when a piece of STDM business relevant to MGM China’s interests is discussed—or to wield the influence actively, by seeking to steer STDM, SJM or Shun Tak away from a course of action that might hurt MGM China’s interests. The latter is explicitly mentioned in the agreement. So Ms Ho has either to wield influence at STDM to make MGM Stuck in the middle with you—Pansy Ho situation not of MGM Resorts’ making Resorts happy—in which case she risks upsetting the rest of the Macau market operators and possibly also her fellow directors at evil than having a chaotic succession at STDM/SJM. The latter STDM—or she will have to choose between MGM China or STDM. companies are, after all, essentially proxies for maintaining Chinese Some think it would be better for the proper functioning of the control over a burgeoning gaming market with major foreign market if she were forced to choose between the two now. participants in it. It took two months of bitter in-fighting among Dr Ho’s surviving Let them eat cake consorts and children to arrive at a compromise deal whereby Ms But where’s the incentive if she can have her cake and eat it? Ho becomes a director of STDM and Dr Ho’s fourth consort Angela Ms Ho is certainly dining handsomely on the MGM Macau part of Leong gets to run SJM for at least the next six years. No one in power the cake. Her sale of 21% of MGM China Holdings in a Hong Kong in Macau seems to want to throw all that away on a nicety such as flotation in late May (she previously held 50% of the joint venture) worrying about anti-competitive behaviour issues involving STDM/ was expected to net her US$1.21 billion to US$1.5 billion cash, giving SJM and MGM China. her a net worth of about US$5.1 billion and overnight making her Ms Ho said recently at a Hong Kong press conference— Hong Kong’s richest woman. supposedly to discuss the initial public offering for MGM China Is an attack on her non-compete deal with MGM Resorts merely Holdings, her joint gaming venture in Macau with MGM Resorts— envy at her success? Does it matter if she’s a shareholder and that she wanted to be an ‘MVP’ (most valuable player). She didn’t director of two Macau gaming operators if she only holds a minority say she wanted to play every position on the field, which is how stake in each? They’re all good questions, and find echoes in anti- the twin track approach of directing MGM China and STDM looks competitive practices that have been enthusiastically pursued for to some observers. years in Hong Kong, where specifically, price-fixing for many goods In theory, anti-competitive practices are illegal in Macau. and services abound. Article 21, paragraph 3, of Macau Law 16/2001 states: “Any form Inside Asian Gaming makes no suggestion that price-fixing of arrangement amongst concession companies or associated is the aim of the MGM Resorts non-compete agreement. But companies of a concession company which may obstruct, restrict, here’s why a non-compete agreement might cause problems for impair or destroy fair competition shall be prohibited”. Macau. Macau depends for its international credibility as a gaming The clause was inserted in that particular law—a statute setting investment market on the notion that over time its regulatory out the framework for the Macau gaming industry after market and legal standards are converging with international standards, liberalisation—because Macau did not have (and still does not have) not diverging from them. North America and the European Union a law dealing with restrictive trade practices. Whether Article 21, have outlawed most forms of anti-competitive agreement—as paragraph 3 will ever be enforced is another matter. well as their ugly big sister, price-fixing cartels. It could therefore MGM Resorts is to some extent stuck in the middle of the STDM make overseas gaming regulators distinctly uncomfortable—and succession drama—an issue not of its making. MGM Resorts would possibly harm Macau investors’ interests directly or indirectly—were much rather have Ms Ho on board at MGM China for the time the Macau government to encourage, or simply allow by default, an being. It has plans to expand its non-gaming hospitality offer into anti-competitive climate and anti-competitive practices to develop mainland China and it needs Ms Ho’s political clout on the mainland in relation to the local casino market.

June 2011 | INSIDE ASIAN GAMING 73 WMS

Mind Power set to Unleash Imagination™ at G2E Asia

MS Gaming Inc. will showcase helping customers maximise their current 35 innovative games designed slot performance, today, and reflecting our Wfor local markets at G2E Asia commitment to create new revenue streams in Macau—backed for the first time in in the years ahead,” states Mr Salat. Asia by the power of the company’ Portal “The WMS G2E Asia showcase will further Applications. Put simply, for WMS a game demonstrate our emphasis on transcendent isn’t just an interface between a player and innovation and how it continues to deliver a piece of gaming hardware. A WMS game is new products that aim to drive higher value the front door to a technological world that for gaming operators.” adds value for players and casino operators Premium new games featured include alike. That’s why WMS will headline its G2E THE WIZARD OF OZ™ THE GREAT AND Asia stand with its trademarked slogan POWERFUL OZ™; Alice™ and Attack from ‘Unleash Imagination’. Mars™/Revenge from Mars™. Here are “For the first time in Asia, WMS is some of the highlights of what visitors will introducing our innovative Networked experience: Gaming Portal family, the Ultra Hit G+™ Deluxe Series—The G+ Deluxe Progressive™ Portal Application family, series takes standard G+ game play to a and other components of our WAGE-NET™ whole new level of engaging experience networked gaming solution to the Asian via unique video, plus synchronised lighting market,” says Sebastian Salat, President, WMS and audio effects. It offers 30% larger, highly International. THE WIZARD OF OZ™ THE GREAT AND POWERFUL detailed reel symbols; exciting game play Many of the product innovations being OZ™ videos; optional game statistics showing showcased, including the initial family wins and losses, amped-up win celebrations of portal applications, allow casino operators potentially to drive with ‘big win’, ‘super big win’ and ‘mega big win’ animations higher coin-in, improve operational efficiencies and create slot floor Alice™ Theme—The Alice theme takes the successful WMS differentiation. Bonus Bank formula to a whole new level. Available in 30-line video A key point for industry customers, says Mr Salat, is that not and mechanical versions, the Alice theme comes packed with five only do these WMS technologies help casino operators differentiate unique, randomly triggered features available in both the Alice and themselves in the market, but they are also easy to adopt and are the Mad Tea Party™ and Alice and the Enchanted Mirror™ themes. extremely cost-effective. Additionally, each theme features a unique bonus round. “Our product displays will strike a strong balance between Attack From Mars™ / Revenge From Mars™—These are the newest games utilising the WMS Sensory Immersion gaming platform. They expand player engagement and allow players to ‘defend’ the Earth as humans or ‘destroy’ it as Martians, by playing two exciting Wild features and four comical bonus levels. THE WIZARD OF OZ™ THE GREAT AND POWERFUL OZ™—The biggest THE WIZARD OF OZ™ gaming experience yet, THE GREAT AND POWERFUL OZ combines WMS Transmissive Reels™ technology, the Community Gaming™ experience and Sensory Immersion capabilities in one exciting game experience. Players become their favourite character as they journey to the Emerald City for a chance to encounter the Wizard of Oz. The WMS G2E Asia 2011 product demonstrations will mark the debut of the company’s networked gaming Portal Game Enablement technology in the Asian market. It gives operators the ability—thanks to the flexibility of networked gaming—to extend the life cycle of base game themes. It does this by adding new entertainment experiences on slot machines connected to the network. WMS will demonstrate a number of video and mechanical reel games enabled Sebastian Salat by the following Portal Application families at G2E Asia 2011:

74 INSIDE ASIAN GAMING | June 2011 Ultra Hit Progressive® Portal—The first commercially available WMS Portal Application family, available on both video and mechanical reel games, Ultra Hit Progressive adds a secondary mystery progressive bonus experience on top of most current WMS base game themes. The Jackpot Explosion™ bonus experience features a bubbling volcano that displays imminent jackpots on the base game screen, the gaming cabinet’s top screen, as well as on strategically located signage. As coin-in increases and the progressive triggers are approached, robust visuals of a volcano filling with lava are displayed and ambient sounds are amplified to celebrate the big win. Ultra Hit Progressive provides casino operators with the flexibility to implement either a bank-level execution or a full Networked Gaming solution. MetaScreen™—Providing the first true competitive slot experience, this Portal Application family will debut with the Pirate Battle™ game, a 2-vs-2 Community Gaming™ competition theme available exclusively on banks of four Bluebird xD™ cabinets with special 32-inch overhead monitors. These monitors join to form a massive single screen on which a bonus cannon battle randomly occurs, as red and blue teams compete for credit and progressive awards. “Ultra Hit Progressive® is another example of the continuous, creative evolution of the WMS design and development process and our commitment to delivering a premium value proposition to our customers,” states Sebastian Salat.

WMS Gaming’s Unleash Imagination can be experienced at Booth #239 at G2E Asia 2011, from 8th to 9th June at The Venetian Macao

“The WMS G2E Asia showcase will further demonstrate our emphasis on transcendent innovation and how it continues to deliver new products that aim to drive higher value for gaming operators”

Jackpot Explosion™ GLI

Enhanced Testing Gaming Laboratories International will showcase a host of exclusive value-adding tools for regulators and suppliers at G2E Asia

aming Laboratories International’s GLI Asia laboratory was the first full Ggaming testing lab in Macau and since its opening, the test lab has become the first and only gaming test lab in the region to achieve accreditation for ISO/ISE 17025:2005. GLI Asia provides the region with independent testing and certification for all electronic gaming devices, and is a part of GLI’s global network of 16 laboratories. At G2E Asia, GLI will be discussing its exclusive tools, including GLIAccess®, the password-protected backend of GLI’s website where regulators and suppliers can quickly and easily track submissions; GLI Verify®, a hand-held tool that empowers regulators to take the lab with them to the casino floor; GLI Link®, a powerful tool that allows online testing of devices and systems; and Point.Click.TransferSM, which enables suppliers to quickly transfer previously certified submissions into Ian Hughes jurisdictions around the world. GLI Asia tests an incredible range of For more than 20 years, Gaming electronic devices and systems including Laboratories International, LLC has been lottery, keno, and bingo; tote and pari- the world leader in providing independent mutuel systems; cashless wagering systems; testing, inspection and certification services on-line computer systems and systems to the gaming industry. With 16 laboratory modifications; sports betting and wagering locations extending across Africa, Asia, systems; and casino style gaming devices Australia, Europe, North America and South & VLTs. GLI also tests interoperability America, GLI is the only global organization and communication; player tracking of its kind to hold U.S. and international systems; TITO systems; RNG; and conducts accreditations for compliance with ISO/ associated/peripheral equipment testing IEC 17025, 17020 and Guide 65 standards and certification. for technical competence in the Gaming In addition to its stand, Ian Hughes, industry. GLI offers independent third party GLI’s Senior Director of Engineering & Client evaluation and certification of Gaming For more information, visit www. Services, will speak on the panel, “Protecting technology, devices and systems in addition gaminglabs.com. the Investment: Risk Management and to providing network and information Find out more about GLI Asia at G2E Asia Security in the Gaming Industry.” security assessments. Booth #1232.

76 INSIDE ASIAN GAMING | June 2011 TransAct

Toast of the Town TransAct Technologies Inc has expanded its footprint on Macau’s burgeoning Cotai Strip following last month’s opening of the Galaxy Macau™ integrated resort

ransAct’s Epic 950® printer—named exclusive printer the ability to print in Chinese characters, Best Electronic Gaming Peripheral for all the 1,100 slot and an easy upgrade path to promotional T—Printer in Inside Asian Gaming’s machines featured on the n e w coupon printing through our patented Supplier Awards 2011—was selected as the Galaxy Macau casino floor, which opened ServerPort technology and the Epicentral 15th May. The last major resort to open on Print System™. We are excited to have the Cotai was City of Dreams, in June 2009, and Epic 950® chosen by Galaxy Entertainment all the slots at that venue also exclusively use Group for the Galaxy Macau and look the Epic 950®. forward to working with them to capitalize “We are very pleased with this exclusive on all the features the Epic 950 offers.” win, which provides further confirmation “Galaxy Macau is pleased to have that the Epic 950® printer is the most in- TransAct Technologies as its exclusive demand Ticket-In, Ticket-Out (TITO) printer provider of TITO printers for its slot available on a global scale,” said Andrew machines,” said Peter Johns, Vice President, Hanley, Vice President International Sales Electronic Games for Galaxy Macau. of TransAct Technologies. “The Epic 950® “TransAct has established itself as a leading contains the best technological features supplier in the Macau marketplace in and provides operations with maximum terms of product performance, excellent flexibility for their slot floors. It is a highly local service and support, and we are reliable and robust printer which offers happy to be working with them as we numerous advanced features including open the brand-new Galaxy Macau and Ground support—TransAct’s Macau-based team includes Andrew Hanley (left) and Technical Sales quick disconnect, reliable ticket burst show the world what “World Class, Asian Manager Sonny Su (right) and present, paper low ticket sensing, Heart is all about.”

The new EPICENTRAL™ Print System—connected directly to TransAct’s ServerPort™ device inside the slot machine—is an easy-to-use software system that enables casinos to internally develop marketing programs and promotional coupons to be distributed to customers on a real-time basis at a slot machine. Additionally, the system works with all existing slot systems and games as it is separate and distinct from the slot system itself. With this, a casino is able to use the EPICENTRAL Print System to connect to any existing slot machine, regardless of the game’s manufacturer or the current slot system, as long as the slot machine is equipped with an Epic 950® printer.

Check out TransAct’s market-leading products, including the Epic 950 and Epicentral™ coupon and promotion system, at G2E Asia Booth #1127 at The Venetian Macao from 8th to 9th June.

June 2011 | INSIDE ASIAN GAMING 77 MEI

Noted Success MEI’s rapid growth in Asia’s competitive casino bill validator market is no accident

s long as cash remains king for MEI’s sales success in Asia is strongly people wagering on casino games, linked to the fact it grasped a fundamental Athen high quality bill validators and dynamic of purchasing behaviour existing soft count technology will play a vital role throughout the casino industry. This is in boosting the efficiency and profitability that casino executives tend to be naturally of casino operators says global technology cautious about switching from one company MEI. technology supplier to another unless the MEI, based in in West Chester, benefits can be proven up front. Pennsylvania, in the United States, claims the world’s largest installed base of Market proven unattended payment systems, handling To satisfy this need, MEI introduced over two billion transactions per week in the concept of Value Added Trials—also more than 100 countries. It has added to known as ‘VAT’. that installed base by rapidly building its “Our ‘VAT’ system allows customers to market share of cash handling equipment trial our products in parallel with those of our for the casino sector. In the Asian casino competitors for a couple of months before industry it has done this in only a few years they purchase them,” explains JeanMarie almost from a standing start. Decker, Marketing Manager. “We were a newcomer in Asian casino “We invite operators to run a trial of markets, starting four years ago,” says MEI’s note validator product in a bank of Edmond Tang, MEI’s Sales Manager— six to 12 slot machines alongside a bank of Gaming/Retail, Asia Pacific Region. slot machines using the casino’s existing bill validator system.” The results quickly tell in terms of Expansion Head turner—the one millionth unit of CASHFLOW “At that time we had a market share of SC with model Holly Madison building MEI’s sales in Asia, says Edmond maybe less than 5%. We gradually introduced Tang. our products into the Macau casinos and success illustrates MEI’s leadership in “Two years ago we introduced the we’re pleased to say that because of the those areas and its importance to the EASITRAX system at Genting’s Resorts strength of the products they have been industry. EASITRAX Soft Count extends the World Manila. At the beginning we had widely accepted by professionals in the application of our knowledge—enabling very little market share—about 15%. But industry and we have built up our market casinos to make their cash management after they started to use our product, we share—over four to five years—to 50% plus process more efficient.” increased our market share so that now in Macau. That’s a huge achievement. Our customers in Macau include The Venetian and MGM Macau.” The cornerstone of that achievement is the reputation for accuracy and reliability won by MEI’s CASHFLOW® SC bill validator and by the company’s EASITRAX® Soft Count. EASITRAX allows casino floor staff to check quickly and reliably what’s in the drop boxes and crucially helps casino managements stay in compliance with the stringent financial reporting rules imposed on the modern industry by regulators. “Our core business is security and acceptance,” says Tom Nugent, MEI’s President - Gaming. “The CASHFLOW SC bill validator’s Edmond Tang Tom Nugent

78 INSIDE ASIAN GAMING | June 2011 MEI

way through banknotes in multiple wavelengths to check for unwanted bills; • faster bill-to-bill speed, meaning faster transactions and fewer delays for players at the gaming machine; • expanded memory, allowing more firmware updates and, therefore, more CASHFLOW SC SC Advance functionality; • processing of barcode coupons in all four 90% of the [slots] floor uses CASHFLOW teamed together they produce even directions and improved acceptance SC— because of the experience with greater benefits than when employed where bills of one currency come in the EASITRAX system. Genting’s Manila separately. The EASITRAX Soft Count different sizes; project was a very good grounding for system, for example, has been designed to • an upgrade to USB 2.0, which speeds up us in entering the Singapore market with be easily retrofitted to the CASHFLOW SC communications with the host machine Genting’s Resorts World Sentosa (RWS). At bill validator. and potentially expands functionality. RWS they have 100% adoption of our bill “In order to take full advantage of the validator product—and they all come with efficiencies that EASITRAX gives you, you “When someone wants to integrate SC EASITRAX.” must have your whole floor as CASHFLOW Advance into their casino, they don’t have to That sums up MEI’s modular approach SC. That makes it harder for competitors buy all new products because SC Advance to marketing its casino products. EASITRAX to pick MEI off product by product,” says can work side by side with CASHFLOW SC. can drive the sale of CASHFLOW SC units JeanMarie Decker. All you have to do is replace the head. It can and vice versa. be interchanged throughout your units,” “EASITRAX Soft Count allows the Track your cash explains JeanMarie Decker. CASHFLOW SC to redefine what a bill Radio Frequency Identification (RFID) “Because of the high quality of our validator can offer casino operations and, technology aboard CASHFLOW SC and products, customers can expect them to in so doing, enhances the value that MEI EASITRAX is used to connect slot machine have a lifespan of at least seven years,” adds can offer our industry partners,” states Tom asset numbers and bill validator operational Edmond Tang. Nugent. information to a specific cashbox and ”In Asia it will probably take another integrate all that into the count system. The two years for the replacement cycle to kick CASHFLOW SC highlights cashbox can be taken out of the gaming in with many of our current CASHFLOW SC The basic selling point of CASHFLOW machine and ‘identified’ by the EASITRAX customers. But the launch of SC Advance is SC—as with any quality bill validator—is reader base. Up to four EASITRAX reader about positioning us for that transition, as to increase gaming machine ‘uptime’—the bases can then be linked simultaneously well as capturing new customers. amount of time a machine is operationally into a soft count room system that includes “In the Philippines, for example, PAGCOR active and earning money— and to reduce a USB hub and a computer. EASITRAX [the Philippine Amusement and Gaming operational costs. Soft Count’s proven technology has been Corporation] is talking about retrofitting bill installed in over 64,000 slot machines in the validators to the units in the casinos they CASHFLOW SC does this by: United States and Asia since product launch manage. That’s a great sales opportunity for • controlling acceptance rates (i.e. in 2008. the market—around 8,000 units—and one governing what actually goes into the MEI has built on the rapid market that we will pursue,” adds Mr Tang. cashbox); acceptance of CASHFLOW SC and EASITRAX “Our offer is very strong and I think • generating currency report documents by developing its next generation bill that’s why we’ve been able to expand on how many bills are in each cashbox validator, the SC Advance™. The new product so quickly in Asia. When we first entered and the percentage of collected was displayed at the International Casino Macau, 90% of the market was held by a denominations over a period of time; Exhibition in London in January and is likely rival manufacturer. Speedy service is part • managing drop status (the daily to be launched in Asian markets in the third of that strong offer. We have our dedicated collection of the money and cashboxes); quarter of this year. support team for gaming products in Hong • generating jam reports if jams occur, Kong and we serve Macau directly. We can identifying potential problems; Advanced technology fly to Manila in about an hour and a half. • defining the reason for any bill rejection “SC Advance is even faster, so the Our customers in the region appreciate all based on one of seven categories; acceptance rates [for bills] are better, it’s these things. We’re very positive about the • issuing a version report to ensure each more secure and it has a bigger memory as future in the region.” bill validator has up-to-date software. well,” says JeanMarie Decker. For a demonstration of SC Advance, The crucial differentiator with MEI’s Details of the enhancements available CASHFLOW SC, and EASITRAX Soft Count, visit casino peripherals is they work in a modular via SC Advance include: MEI at Booth #1423 during G2E Asia 2011 at way. When individual MEI products are • transmissive sensors to see all the The Venetian Macao from 8th to 9th June.

June 2011 | INSIDE ASIAN GAMING 79 TCSJOHNHUXLEY

Long Live the Revolution TCSJOHNHUXLEY gives an Asian debut to two innovative roulette products—and much more—at G2E Asia 2011

CSJOHNHUXLEY is to display its revolutionary (in every sense) TMultiPLAYTM HD Auto roulette incorporating the Gemini wheel for the first time in the region at G2E Asia. MultiPLAY HD Auto merges a traditional roulette table and automated roulette wheel with a full sized electronic multi-player betting surface to deliver the ultimate in fully automated roulette game play. All chip handling, calculation of winnings and payouts are fully automated by the system. This delivers total game security, reduces costs and substantially increases the number of games played per hour—with no need for a dealer. Also at the show will be TCSJOHNHUXLEY’s Double ActionTM Roulette featuring EL TCSJOHNHUXLEY’s MultiPLAYTM HD Auto technology layout, a unique variation to the traditional game of roulette, delivering two Action Track are available for placing bets on winning numbers from a single spin. the possibility of double numbers occurring. Double Action Roulette—based on This can lead to pay outs as high as 1,200 to TCSJOHNHUXLEY’s world famous Mark VII 1, subject to local regulatory conditions. Roulette Wheel—has two sets of numbers The company also expects a lot of industry (inner and outer rings) situated in opposing interest in its newly launched technology order on a single wheel, with one spin products such as Gaming Floor LiveTM. It’s a marking two numbers. The Double Action™ tool for table game optimisation in real time, table layout consists of two identical betting designed to maximise key performance areas. Each area accommodates bets for one areas and profitability. of the two sets of numbers on the wheel. In In addition, there’s Supernova Table addition, new areas including the Double Bonus—a powerful progressive and TCSJOHNHUXLEY’s Gaming Floor LiveTM game bonus system that drives increased revenues by adding higher levels of player excitement and loyalty to table games. Complementing these innovative products is TCSJOHNHUXLEY’s normal commitment to excellence in its traditional table products and displays. “TCSJOHNHUXLEY is extremely pleased to be exhibiting once again at G2E Asia and as always, will be showcasing a range of innovative products alongside our traditional ones,” says Tristan Sjöberg, Managing Director Asia.

Rebecca Kingswell, TCSJOHNHUXLEY’s Executive Tristan Sjöberg, TCSJOHNHUXLEY’s Managing Experience TCSJOHNHUXLEY at G2E Asia, Director of Operations (Singapore) Director Asia Booth # 1200.

80 INSIDE ASIAN GAMING | June 2011 Atronic

Breath of Fresh Air ATRONIC’s OXYGEN cabinet and games are supported by versatile systems and some smart apps

TRONIC’S general manager in Asia, player interface on each machine. Lai Fatt Chang, will be joined by The company says the philosophy of Akey colleagues from Europe as ATRONIC Systems is connectivity—to link the company demonstrates its strong any type or make of EGM on the floor using catalogue of games, products and systems the CRYSTAL.net platform, as long as they at G2E Asia. communicate using a standard protocol. key performance information in real time. They include ATRONIC’s new OXYGEN™ ATRONIC supports the G2S® protocol, Players will also be able to rate cabinet, as well as its comprehensive regardless of the vendor. their experience of the games using library of standalone line games, roulette, ATRONIC also recognises the growing their phones through another ATRONIC and keno games. importance of electronic media applications application. Casino marketing departments The OXYGEN cabinet contains ATRONIC’s in marketing casino games. ATRONIC will will benefit from innovative player new sensys EP™ platform, described as use G2E Asia to launch its FloorMaster™ and promotions delivered via SMS that can ‘powerful and robust, yet easy to service’. myGuest™ applications for smartphones be redeemed directly on the EGM in the Its hardware is Game to System® (G2S®)- and touch screen devices. myGuest is a casino. Casino floor managers can also use compatible; network-gaming ready, and smartphone application allowing players their smartphone as a fast and easy way to supports all major casino systems and player to see information about them and fellow switch games and denominations on multi- tracking modules. players, and enabling casino managers to game EGMs directly on the floor. ATRONIC’s HOT&WiLD™ multi-level reward players on the floor in real time. “ATRONIC’s continued presence in Asia progressive offers four jackpots, exciting FloorMaster allows users of PC touch screens over more than a decade has shown that we game features, and lots of bonus action. and tablet PCs to access a complete map of are committed to being a steady player in The OXYGEN cabinet’s top wide screen a venue’s slot floor, showing EGM status and this market, and that we are willing shows a jackpot meter. Players can to support operators across the follow an animated graphic of the continent, from Korea all the way rising mercury during HOT&WiLD down to Malaysia. This market bonus games. HOT&WiLD is is not just about Macau,” said offered in single-game or Marcel Heutmekers, ATRONIC multi-game setup. Senior Director for Asia and diversity™, ATRONIC´s Latin America. extremely successful multi-game “At this year’s show, we are product, features brand-new as presenting a part of our vast OXYGEN well as top-ranking ATRONIC library. This new cabinet is becoming games. diversity allows players a significant tool for us in to select their preferred game many territories. It is already types with different volatility enjoying success in Asia, and levels. ATRONIC says it is we hope that customers will see the only multi-game on the this momentum and expand market featuring proven, their OXYGEN installation base top-performing standalone in Asia.” progressive games. Visitors to ATRONIC is 100% owned the show can see the selection by Lottomatica Group, a with each of the Pure Purple™ market leader in the Italian and Royal Red™ game suites. gaming industry and one of The ATRONIC Systems the largest lottery operators Division is presenting in the world based on total CRYSTAL.net™, described as wagers. the industry’s most powerful EGM (Electronic Gaming ATRONIC is at Booth #223, Machine) floor network hosted by its Asian distributor, system—with a touch-screen RGB Sdn Bhd.

June 2011 | INSIDE ASIAN GAMING 81 Novomatic

Game On and On Austrian Gaming Industries’ NOVOLINE™ Novo Unity™ II brings boundless variety and flexibility to electronic table gaming

ustrian Gaming Industries comes NOVOSTAR® SL3. LED lights on the product automated Novo Multi-Roulette™ wheel. to G2E Asia with a new distribution provide that essential ‘look at me’ factor for There’s also a great variety of other electronic Apartner for Macau and the Philippines the casino floor. live games: Novo Flying Baccarat™, Novo and a famously comprehensive catalogue of The ergonomic design of the Flying Sic Bo™, Novo Flying Black Jack™ plus Novomatic slot games and electronic tables. NOVOSTAR® SL cabinet series is Novo Texas Hold’em Poker™ and Novo Flying Novomatic’s new local distributor, Jade complemented by an innovative Flip Screen 3-Card Poker™ and a range of video slot Gaming, is run by Asian market veteran Feature (on the SL2 and SL3). It allows the games. Those games are available on each Joe Pisano. Mr Pisano has many years of guest to flip his main screen from the bottom of the player terminals. operational and purchasing experience in to the top monitor. There’s also extra start major East Asian markets. button built into the foot rest. Austrian Gaming Industries/Novomatic is Novomatic’s product display at this The multi-player installation has at Booth # 1019 year’s show includes a comprehensive six NOVOSTAR® SL1 terminals plus one electronic multiplayer installation based Novo-Bar™ that are connected to the fully on NOVOLINE™ Novo Unity™ II. Its unique feature is the ability to offer a variety of interconnecting electronic live games and slot games on a virtually unlimited number of individual player stations. It allows the operator to link via one installation any chosen number of terminals to different games such as roulette, baccarat, poker, blackjack, sic bo and bingo as well as slots. Novomatic’s latest Super-V+ Gaminator® slot multi-game mixes will be presented in two groups of Super-V+ Gaminator® cabinets that are linked within the Octavian casino management system ACP (Accounting Control Progressives System). T h e y are also connected to the latest mystery progressive jackpot theme WILD NIGHTS™. Further Super-V+ Gaminator® multi- game mixes will be displayed in a range of NOVOSTAR® SL2 (slant top) cabinets. The cabinet is available in three different modular versions and caters to the entire range of modern gaming applications: NOVOSTAR® SL1 with one monitor for multiplayer installations and NOVOSTAR® SL2 with two monitors as well as

Multiple choice—NOVOLINE Novo Unity II

82 INSIDE ASIAN GAMING | June 2011 Ainsworth

Experience Counts Ainsworth displays its latest innovations at G2E Asia

he future is A560™’, proclaims Ainsworth Game Technology, and Tiger™; targeted for the 2¢ and 5¢ market. The industry leading which will showcase its newest innovations at this year’s G2E Double Hit™ concept features two level progressives and bonus ‘TAsia in Macau. Trade show attendees will have the chance to prizes with unique free game features. see the all-new A560™ cabinet, innovative 50/100 line stand alone Watch out for Ainsworth’s new concept games with the latest progressives, the proven performer, Double Hit™ and exciting Super Super Game™ Range: Red Hot Dragons™, The King™, The Queen™ Game™ & exclusive Dollar range. and Soaring Eagle™. Super Game™ provides for a unique feature Ainsworth’s Play 50Lines™ / Play 100Lines™ range—the extension attached to standard game feature awarding players even ultimate in stacks and wilds—will be expanded with titles Beyond more prizes. the Moon™, Glitter Gems™, Winning Wolf™, Thunderbucks™ and Ainsworth will expand its innovative dollar game range with Rhino Run™! Play 50Lines™ / Play 100Lines™ provides for double Mustang Money™, Dollar King™, Thunderbucks™ and Panda King™. the lines and double the excitement. Featuring a highly successful In addition, the special release of the all new Hot Reel™ concept will & unique formula of extra long stacked wild arrays during the base be launched with the first instalment, China Tiger®, incorporating 25 and feature games, Play 50Lines™ / Play 100Lines™ is set to create lines + 5 credit ante-bet option. a new realm of excitement for all players. In addition, all Play 50Lines™ / Play 100Lines™ are available with a 2 level $Mystery To experience the latest Ainsworth has to offer, drop by Booth SAP option. #1225 at G2E Asia. For more information, contact Jonathan Siah Ainsworth’s proven performer, Double Hit™, strikes again with on +60 1223 40866 or email [email protected]. Alternatively, new titles: Double Dragons™, Dragon Fish™, Peking Panda™, Rabbit™ jump online and visit www.ainsworth.com.au.

June 2011 | INSIDE ASIAN GAMING 83 Interblock

Treasure Island Interblock’s Organic Island will be a sure draw at G2E Asia

nterblock will show off its award-winning Organic Island Michael Hu, Sales Director Asia at Interblock Asia Pacific product at this year’s G2E Asia in Macau. commented: “From the very beginning of Organic Island’s I The market-leading provider of electronic multi-player, product development, the aim was to produce industry-leading multi-game casino equipment recently completed a 34-station equipment. We wanted to please our respected customers, Organic Island installation at the new Galaxy Macau casino. distributors and business partners. We’re happy to say that the It is specially customised for the Macau market, offering an feedback is we’ve achieved those goals. electronic, touch screen version of the popular local game ‘fish, “With the Organic generation of gaming products, Interblock shrimp crab’ as well as real sic bo and real roulette with touch has upgraded the concept of multi-player gaming machines screen betting. into multi-player gaming solutions. This product family is the At G2E Asia, the Interblock brand will demonstrate Organic most advanced multi-player platform on the market, offering Island with multiple player stations and double-sided live display. unparalleled flexibility with multi-language support, multi-game The three generators used on the product at the show will be: capability, time-of-day denomination scheduling, and player • baccarat selectable denominations,” adds Mr Hu. • roulette (single zero) • sic bo Interblock’s Organic Island can be experienced at Booth #1215

Interblock’s Organic Island in wood and gold design

84 INSIDE ASIAN GAMING | June 2011 Gaming Concepts Group

Know Your Customer Newly-formed Gaming Concepts Group plans to use its Asia-Pacific gaming operations experience to supply best-fit casino products and services across the region

ilver Heritage Limited (SHL), a leading and Cambodia. Gaming Concepts Group will handling machines to surveillance, security regional gaming company with benefit from this support structure and an systems and software, all of which we have Soperations in ten casinos across Asia- extensive team of sales and administrative had experience in historically. We also Pacific, announced the formation of its new staff from these regional offices. offer casino consulting and management division, Gaming Concepts Group Limited. Gaming Concepts Group will be officially services—another thing the people within Gaming Concepts Group will supply table launched at G2E Asia 2011 at The Venetian our group have tremendous experience gaming products and casino management Macao from 8th to 9th June. Inside Asian with. To be truly diversified we top out the services, in addition to distributing electronic Gaming spoke to Mr Wagner about what the range by offering project furniture with gaming machine products for SHL, which company will offer. some extremely talented partners. This will remain focused on its core business of division offers all the high-end furniture a casino investment and participation revenue casino would ever need from gaming and share operations. restaurant fit-outs to nightclub and hotel SHL has appointed Mr Julian Wagner, furniture. Truly the complete package. currently Vice President Regional Operations at SHL, to the role of Vice What will you be highlighting at G2E President Business Development and Sales Asia? for Gaming Concepts Group. The main highlight for us will of course Mr Wagner, a veteran in the Asian casino IAG: What products will Gaming be the launch of the company. Within the sector, will be working a dual role and Concepts Group supply? business we will be introducing the Concept continues to be supported in both by the SHL Julian Wagner: We have decided to offer Studio. The Concept Studio will be the head office in Hong Kong, and the regional the entire range of casino products covering vehicle for our in-house products. We’ve offices in Macau, Laos, Thailand, Philippines every department’s needs from cash packaged up quite a range for our launch.

June 2011 | INSIDE ASIAN GAMING 85 Gaming Concepts Group

These products come under our Ideal range developed and bought to fruition. inclusive of Ideal layouts, Ideal Playing Cards, Ideal Progressives, Ideal Displays and the What sets you apart from other Ideal Sic Bo. companies supplying casino products Let me touch on two of my favourites and services? What is your niche? within the Concept Studio range. Firstly, Relationships and partnership. We the Ideal Sic-Bo table. Well it’s actually not want to develop a relationship with our just a sic bo table. It can be converted into customers and be their partner in not a Yu Ha Hi or money wheel table at any only supplying and supporting their time. Traditionally, sic bo tables have been products and services needs, but as with designed with the older light box design the Concept Studio, try and make their and come with either the Asian or Australian ideas a reality. We also want to bring some odds pay table. As recently shown in Macau, operational expertise into the casino changing those would require the operator product and services side of the industry. to purchase a new screen print and the light By doing so the casino operator will see box. But, with today’s technology, the light a sizeable decrease in lead times as we box has been replaced with a new 60-inch understand exactly what they need, and, high definition LCD screen. By using the more importantly, why they need it. We functions of the tables’ management Touch- can make the process very clean, simple Screen, you can change and quickly convert and uncomplicated. the game type at no cost. Change out the Julian Wagner Part of our sales strategy will be to dice shaker and you’re ready to go. This great offer great packaged deals with yearly product offers a fantastic player experience We keep hearing comments from regional rebates. Also, all-inclusive casino set-ups and some nice benefits to the operator, casino operators that they rarely see their whereby we’ll bundle up the entire casinos’ which will add to the bottom line. suppliers. We aim to change that perception. equipment needs and have them ready for The second product we’re exhibiting The new media such as Facebook and Twitter their opening. You’ll also see a tremendous is our Ideal Progressive. It’s a dual bet might be very valuable, but the age old face- amount of marketing through various progressive system whereby the player can to-face (on a frequent basis) really does give mediums. We’ll not be overly involved but bet on the dealer’s hand as well. From an the casino operator the confidence to buy you’ll feel our full support and presence operators perspective this sees incremental a product or sign that service contract. We throughout the key milestones of an order revenue, an increased player experience have some exciting innovations coming up or project. and greater efficiencies and security and everyone can find out more about these We see our niche not so much as aiming through the introduction of Touch-Screen at G2E and as we move forward. at any one particular target market segment and the Contactless TAG technology. From or any single product line, but more of having our research, we believe customers will feel Can you work with casinos to produce a great understanding of our customers comfortable with the way the Progressive custom products for them? through actual operational experience. All is played as we’ve used the tried and tested Yes we can, and I’m glad you asked this our staff in sales will have an average of 15 sensor method of placing progressive question. We spoke about the Concept years Southeast Asian operational and sales wagers. We are convinced that we’ll see a Studio briefly as a home to our in-house experience. We’re sure casino operators great reaction from customers at the show products, but the Concept Studio also has that are perhaps new to the business will and we’ll be displaying this product in our another exciting and innovative arm to appreciate this. We can lead them through new Macau showroom soon along with it. This is the product development side the entire process and make the overall the complete range of the Concept Studio whereby we are going to be working with experience painless; even fun. Ideal products. casino operators as partners whenever they are in need of a new product or service. Let Will you be expanding the Gaming What is your main value proposition to me give you an example. Recently whilst Concepts Group team? casinos operators? visiting a customer and discussing their Our strategy is to add to our sales team Gaming Concepts is a start up company table layout requirements, the customer several senior managers with similar levels of yet benefits from the strategic alliance with mentioned that they would welcome the regional casino operations experience and, SHL and all of its regional strengths. SHL opportunity to sit with a graphic designer, similarly to myself, lots of Asian experience. has more than 100 staff in eight separate express their layout ideas to them and We will have some exciting announcements countries in Southeast Asia. All of the top format a layout design there on the spot. that we’ll be making during G2E Asia managers and executives have been fully Through the Concept Studio we are able regarding these appointments. trained up in the Gaming Concepts business to send our graphic designer to the casino strategy and range of products and services. site and make that idea a reality. We are very Gaming Concepts Group will be exhibiting We are just a phone call away and we can have open to casino operators’ ideas and we’ll give at G2E Asia Booth #1333, and looks forward to people at the location within a moment’s more details soon about a website portal presenting its extensive products and services notice. Service levels are a key component. whereby these ideas can be incubated, to existing and potential clients.

86 INSIDE ASIAN GAMING | June 2011 NRT

Quick March NRT shows how years of experience in cash handling technology are paying off in casino industry applications

NRT Technology Corp (NRT)—a leading supplier of self-service cash-handling equipment in the retail and financial industries—will display and demonstrate its ‘Quick’-themed series of casino products at G2E Asia 2011. A notable Asian success for NRT is the orders the company won to supply a fast and efficient system for processing entry fees at Marina Bay Sands (MBS) casino in Singapore. Singapore citizens and residents must pay a daily or yearly levy for entry to MBS or its market rival Resorts World Sentosa. MBS, which opened in April 2010, features 28 NRT QuickTouch™ kiosks at its entrances to facilitate faster entry into the casino. The self-service kiosks validate the identity of Singaporeans, display payment options, process payment (cash, debit card or credit card) and confirm transaction status to a host system. “Our success came in that case by demonstrating that we understood the environment. Some of the trust was gained by proving to the client that we really cared, that we really wanted to understand their unique requirements,” explains Art Ayow, NRT’s Vice President of Sales - International Gaming, Lotteries & Banking. “The Quick products are all industry leading, value-added technologies that help our clients meet their business objectives for cost reduction and productivity improvement,” he adds.

NRT’s ‘Quick’ products range comprises: • the QuickJack 2™ Smart Card product enables the purchase, redemption, loading and cash-out of smart cards as well as an entire suite of self service applications; • the QuickTouch™ platform is a small footprint kiosk where users can (among other functions) purchase tickets/cards, sign up as club members or redeem points for gift coupons; • the QuickTable™ developed in partnership with JCM Global, allows allow casino players to cash out TITO tickets or make cash withdrawals without the inconvenience of waiting at the cage. At G2E Asia NRT will demonstrate a new component that addresses Asian clients’ needs for speed, greater bet processing capacity and escrow.

QuickJack has evolved from a jackpot dispensing kiosk to a multi-functional product with best-in-class features and turnkey applications. There are 4,300+ QuickJack™ devices deployed globally, processing over 800 million transactions annually. Significant QuickJack™ installations are located in Canada, the USA, Macau, Singapore, the Caribbean and Europe. All NRT kiosk solutions are managed by the renowned Cash Handling System (CHS), which provides real- time, web-based services for system management, security and management reporting. NRT’s network of 15,000-plus automatic teller machines (ATMs) process more than 50 million transactions per year. Its products are used world-wide by gaming establishments, lotteries and retailers as well as banks.

See NRT’s cash handling products in action at Booth # 1027 during G2E Asia

NRT’s QuickTouch casino kiosk

June 2011 | INSIDE ASIAN GAMING 87 Inspired Gaming Inspired Offering The UK’s Inspired Gaming Group launches new touch screen and virtual gaming products

nspired Gaming Group, a major supplier of server-based casino technology in new and emerging markets, is to launch several new products into the Asian market at G2E Asia. I Inspired will show its next-generation electronic roulette product Multi-Win Roulette 4.0 on the new Sabre slant top cabinet. A key feature of this GLI-compliant product is the ability to connect the terminals to live or auto roulette wheels. It is unique in allowing players to bet on up to four wheels simultaneously. Inspired says it’s also the only electronic roulette product to have both a primary 26-inch high definition (HD) widescreen touch screen and a secondary touch screen. The main one, with Real Touch technology, recreates the physical sensation of playing with real chips. The second Player Portal touch screen provides game analysis and venue marketing messages. Inspired will also be offering an exclusive preview of new Live E-Baccarat content for the Sabre terminal. As with Multi-Win Roulette, Live E-Baccarat can be connected to live tables within the casino or tables in remote locations. The Panoramic Play layout of the HD widescreen terminal is designed to improve player entertainment. “We’re confident that now is the right time to launch a new electronic table gaming productto operators in the region who should be looking for cutting edge products to maintain and grow their incomes,” says Lee Gregory, Inspired Gaming Group’s Managing Director for Casino. “I’m personally very excited about the show, and the region as a whole, and I think Sabre is a highly complementary product for many of the exciting venues in Macau and beyond.” Another product—newly approved and soon to launch in China—is Inspired’s Virtual Sports available in both HD and 3-D. It offers betting on computer-generated sports events, including football, horse racing, cycling and tennis. Virtual Sports is a multi-platform technology with in-venue, online, mobile telecoms, television and terminal applications and commentary in 16 different languages. Virtual Sports, will be broadcast throughout the show at the Inspired booth via the Virtual Betting Inspired Gaming Group’s Multi-Win Roulette 4.0 Channel, a new partnership between Inspired and SIS. Inspired is the leading gaming machine operator in the United Kingdom for the gaming and leisure markets, and also provides its unique Open SBG™ software systems, terminals and Virtual Sports products in 19 other countries. It is one of the three leading video lottery terminal suppliers to Italian casinos and betting shops.

Inspired Gaming Group, Booth # 1333, G2E Asia

USPC Strong Suit USPC brings its top sales game to G2E Asia 2011

he United States Playing Card Company (USPC) is working its strongest possible hand at G2E Asia. The maker of the famous playing card Tbrands BEE®, BICYCLE®, KEM®, AVIATOR® and HOYLE®—still proudly manufactured in the US in its state-of-the-art factory in Kentucky—is sending its entire casino sales team to Macau. The team—led by USPC President Marc Hill—will include Mike Slaughter, who joined the business in April as Vice President Global Sales. Also at the show will be Austin Ao, Technical Services Representative, along with Scott Madding, International Casino Sales Director and Dwight Watson, USPC’s Casino Sales Manager – Asia. Members of the USPC sales team at New York New York in Las Vegas USPC is at Booth #743A

88 INSIDE ASIAN GAMING | June 2011 JCM

Bigger, Faster, Smarter JCM Global brings its newest bill validator and printing products to G2E Asia

CM Global shows off the company’s all- • an intelligent cashbox protected by new products— iVIZION® bill validator; radio frequency identification tag JPayCheck 4™ thermal printer and technology with encrypted and web- Vantage™ table game bill validator at this enabled data; year’s G2E Asia. • a 64 megabit flash memory; The company describes iVIZION bill • a self-calibrating sensor package; validator as “the better, faster, smarter • modular component design; solution” for the gaming industry, changing • the ability to read barcodes horizontally the way the industry sees banknote and vertically; iVIZION bill validator from JCM Global validation by creating what the company • two high-speed processors; calls “intelligent validation”. • a sealed 85 millimeter banknote path; the PayCheck 4 is so fast, there’s no need “iVIZION sees better, thinks smarter and • patented and proven removable stacker to rely on a ‘burst’ action like some other runs faster than any comparable product mechanism; printers. The PayCheck 4 also claims the in the industry,” says Kunal Mishra, General • ‘blind mate connector’ capability (where most memory of any printer in gaming, Manager New Business Development for the technology connects or ‘mates’ with allowing it to store more fonts, images, JCM Global, based in Tokyo. other technology by push action rather logos and barcodes so casino operators than the need for threading); can personalise their players’ gaming iVIZION bill validator comes with: • ‘hot swap’ capability (where a technician experience. The PayCheck 4 is compliant • Contact Image Sensor (CIS) technology; can pull out a component from a system with the European Union’s Restriction of • a 99%-plus acceptance rate on genuine and plug in a new one while the main Hazardous Substances directive—which bills; power is still on); limits the use of lead, mercury, cadmium • diligent counterfeit protection; • complete compatibility with all gaming and several other materials in electronic protocols. equipment imported to or produced in the Also new at G2E Asia is the PayCheck 4 EU. JCM Global adds that PayCheck 4 also thermal printer. Only the PayCheck 4 from has the longest-lasting head of any printer JCM Global can print a ticket in just 0.6 in the industry. seconds, says the company. JCM adds that JCM Global will in addition show an advanced prototype of its new Vantage™ table bill validator. The Vantage was specifically created for the Macau market, where players typically buy-in to table games with a brick of notes. With the Vantage, instead of the dealer taking several minutes to count, notes can be counted at a blazing fast eight notes per second, dramatically increasing table game speed and the number of games played per hour. Its wide bill opening can accept a range of currencies, including Hong Kong dollars, Euros, Singapore PayCheck dollars and US dollars. 4 printer from JCM Global JCM Global is at Booth # 829

June 2011 | INSIDE ASIAN GAMING 89 DLV

Poised For Success With its versatile and cost-effective multi-game products, Latvia-based slot manufacturer DLV look set to grow its presnce in an Asian market hungry for new choice

he enthusiastic player response The DIAMOND Wide Screen was What are the new products in the to the new slot games on offer at unveiled in January at the International DIAMOND GAMES Premium series? TGalaxy Macau since its 15th May Casino Exhibition (ICE) 2011 in London. The DIAMOND GAMES Premium series opening confirm the belief of DLV Chairman The new cabinet has undergone significant continues with DIAMOND GAMES Premium Michail Volokotkin that the long-standing testing since then, and we have been more IV, V and VI, each of which offers a choice of dominance of the major international slot than satisfied with the results. The DIAMOND fifteen game titles. suppliers in Asia could be starting to wane, Wide Screen blends robust hardware with The predecessor to these products, making way for new brands and products. attractive design. It is currently awaiting DIAMOND GAMES Premium III, has earned a Latvia-based DLV was founded in 1994 product certification, which we expect to solid reputation in the international gaming and initially focused on its home turf in obtain by autumn this year. market and won the attention and trust of the Baltic region, but gradually expanded operators and players alike. its presence into international markets DIAMOND GAMES Premium III and IV are including the European Union, non-EU now available in a wide range of jurisdictions, countries in Eastern Europe, Central America while DIAMOND GAMES Premium V and VI and South America. In February last year, are currently undergoing testing. the company made its maiden foray into Asia with the first of several installations in What are the factors behind the Cambodia. success of Jewel Jackpot in Asia? DLV will be exhibiting its latest Jewel Jackpot stands out because of innovations at G2E Asia 2011, from 8th to 9th its exceptional price-quality balance and June at The Venetian Macao. On display will versatility. It has a mystery progressive be its new DIAMOND Wide Screen cabinet, jackpot, and can be offered either as a the follow up to its successful Jewel Jackpot standalone product or linked to a network mystery progressive product and additions of as many as 254 machines. to its DIAMOND GAMES Premium series. Jewel Jackpot has a prominent top Inside Asian Gaming spoke to Mr screen that enables operators to clearly Volokotkin about the unique characteristics display the available jackpot, so although of DLV’s products. large casinos can opt to show the jackpot on large overhead plasma screens, smaller IAG: What are the main features of the venues with limited space can simply use new DIAMOND Wide Screen cabinet? the top screen. Michail Volokotkin: The new DIAMOND Wide Screen cabinet incorporates the latest How is the new Jewel Jackpot 2 technological advances to offer several different from the original? improvements on our previous upright The original Jewel Jackpot includes ten machine, the DIAMOND DTFT. games and various themes. The new Jewel The DIAMOND Wide Screen features Jackpot 2 offers two additional games that a16:9 resolution display, TITO (ticket in are different from the original games, and ticket out) support and two hoppers. We’ve which we believe are particularly well-suited also enhanced the sound quality and made for the Asian market. other hardware improvements to keep pace with the demands of the dynamic gaming Apart from manufacturing gaming market. machines, your company also runs The DIAMOND Wide Screen offers 38 gaming venues in Latvia, where improved ergonomics and player comfort DLV machines operate alongside and usability. We’ve also made the products from the major international new cabinet better suited to the Asian slot manufacturers. How do DLV environment by making it more resistant to machines perform at those venues, moisture and dust Jewel Jackpot 2 compared to the games from the

90 INSIDE ASIAN GAMING | June 2011 bigger manufacturers? Asia and our technicians can provide service As the gaming market developed in and assistance in installing, operating and Latvia, we had to adapt our products to updating the products. evolving market conditions in order to We are also able to offer back-up and remain competitive. maintenance for our products through our Thus, in addition to the proven game partnerships with hardware manufacturers mathematics, rich sound and attractive in Taiwan, who we’ve been working with for graphics of our products, we have developed the past ten years. a culture of innovation and market responsiveness that allows us to hold our DLV’s latest hardware and games, own against the big manufacturers. including the new DIAMOND Wide Screen cabinet, Jewel Jackpot 2 and DIAMOND Can you describe your technical GAMES Premium series, as well as the support in Asia? DIAMOND KIT universal gaming platform, DIAMOND GAMES We have strong technical support in will be on display at G2E Asia Booth #543. Premium IV

IGT Blue Chip Investment The IGT bluechip Neo™ gaming machine makes its regional debut at G2E Asia

nternational Game Technology IGT) will show its dedication to the Asia gaming market with the latest in fun, excitement and innovation in games, systems and mobile and online offerings at G2E Asia 2011 in Macau. I One of the highlights will be the launch of the IGT bluechip Neo™, a new gaming machine for the Asian markets, which will feature dedicated Asian game themes. It’s already a leading gaming machine in the Australian and New Zealand markets, and features an ergonomic design for enhanced player comfort. The IGT bluechip Neo will showcase a new theme bank as well as six high-performance progressive jackpot games, including Dragon Master（圣龙天下）; Extra Chance Jetsetter Beijing（旅游达人 — 北京行）; and Fortune Koi（金玉滿堂）. “IGT is dedicated to bringing the industry’s best games and systems products to our customers around the world, and our offerings on display at G2E Asia are proof of this commitment,” said Craig Churchill, IGT’s senior vice president of International. “We’re excited to launch a new gaming machine at G2E Asia featuring dedicated Asian games. These new games join our award-winning line-up of global games and one of the widest game libraries in the Asian market. We are thrilled to show attendees how our products can help take the gaming experience to new levels of excitement.” The company continues to be an industry leader in providing floor-scalable casino management systems offering competitive edge. Whether they’re products such as Intelligent Bonusing, Rebates and Commissions or Table Manager, IGT Systems demonstrates the ability to meet the demands of growing global markets. IGT is also a leading supplier of online and mobile gaming solutions for regulated markets through its Interactive division. The Interactive division will be showcasing its entire portfolio of online and mobile games at G2E Asia. IGT’s most recent online titles include well-known consumer brands such as Star Trek™ and in-house brands such as Wild Wolf ®. Visitors will also see new mobile games such as 20+ Blackjack and Jacks or Better video poker. Both games are web apps for the iPad®, iPhone®, iPod® Touch and Android™ smartphone devices.

See the full range of IGT products and services at Booth # 700. IGT bluechip Neo™ cabinet

June 2011 | INSIDE ASIAN GAMING 91 Briefs

used to fund potential future expansion—analysts have speculated the company could try to put the funds toward potential interest in Regional Briefs Macao Studio City. Lawrence Ho said MPEL was still contemplating what to do with the remaining 1.5 million square feet of land it has next to CoD, but Galaxy Macau opening bounce pushes operator into joint suggested it probably wouldn’t build an apartment-hotel there. third place “It’s probably unlikely that the government will approve apartment The opening of Galaxy Macau on 15th May pushed Galaxy hotels. They’ve been looking at it the past five years,” he said. Las Vegas Entertainment Group into joint third place for market share based on Sands Corp (LVS) began the marketing drive to sell its Four Seasons revenue data for the seven days to 22nd May. apartments even before The Venetian Macao opened in August 2007. Market share for the six operators in the week to 22nd May was as LVS Chairman Sheldon Adelson has previously stated ‘monetising’ follows: SJM 33.6%; Sands China 15.4%; Galaxy Entertainment Group the apartments could raise US$1.4 billion. So far, however, the 13.6%; Melco Crown Entertainment 13.6%; Wynn Macau 12.7%; and government hasn’t given permission for casino operators to use their MGM China 11.1%. land for residential projects. Macau gaming revenue for May was expected to hit MOP24 billion (US$3 billion) at the time Inside Asian Gaming went to press. MGM China hopeful of Cotai That represents a 41% increase year on year. land decision ‘within year’— Pansy Ho Melco Crown Entertainment swings to US$7.2million net Pansy Ho, Managing Director profit in 1Q 2011 of MGM China Holdings, says she Macau casino operator is “very hopeful” that the company Melco Crown Entertainment could have land gazetted for a Cotai Ltd (MPEL) moved to a net project “within the year”. profit of US$7.2 million in She added that all operators the first quarter of 2011 with pending applications would versus a year-earlier loss probably hear from the Macau of US$12.5 million. It was government at the same time. driven by improvements in The comments came during a Hopeful on MGM’s Cotai land— both its gambling and non- press conference ahead of the initial Pansy Ho gambling operations, said public offering that MGM China management. City of Dreams—welcoming competition launched on the Hong Kong Stock Exchange last month. Net revenue in the quarter ended 31st March rose 42% to The ‘all at once’ comment re: government decisions on pending US$806.6 million, versus the 43% overall gambling revenue growth Cotai land applications was a reiteration of what Dr Ambrose So, Chief in Macau over the same period. Gross gaming revenue in the territory Executive of SJM Holdings, the casino operating company chaired is on track during 2011 to generate at least five times that of the Las until recently by Dr Stanley Ho, said to the media late last year. Vegas Strip. “It’s [MGM China’s Cotai land application] right now in a very MPEL Co-Chairman Lawrence Ho downplayed concerns of advanced stage and very promising,” Ms Ho told reporters in some analysts that the company’s US$2.1 billion Cotai resort City of Hong Kong. Dreams (CoD) would be negatively affected by the opening of the “We have received news that in fact most of the relevant neighbouring US$2.1 billion Galaxy Macau resort on 15th May. government bodies that have to look at the planning from a macro “We believe that the Galaxy opening is great for Macau and it’s perspective have basically received our plans. I think it would be even better for Cotai,” said Mr Ho, echoing comments from Cotai appropriate to say that we have been assured by the government neighbour Sands China Ltd. that as and when all the relevant [government] units have passed “When you look at City of Dreams it’s much more contemporary their comments and have also reverted back to us—we will go into and probably more on the sophisticated side,” he added. a process of answering back each other over a period of time until “The Galaxy property looks great but it certainly looks like a we get to a point where we have a clear picture—but in terms of property that was built to compete with the Grand Lisboa [the Macau the timing of things this whole process has already kick started. I peninsula flagship of the casino company SJM Holdings formerly run would presume that the respective enterprises that have put in their by his father Dr Stanley Ho],” explained Mr Ho. applications would probably all learn about the possibility of getting Mr Ho said the company was still talking to stakeholders in the [land] gazetted at the same time. stalled Macao Studio City project, for which Melco Crown has the “We have been very hopeful that this could happen within the rights to operate the casino business on a revenue sharing basis. year.” That US$2.4 billion project was scheduled to begin operations in 2009, but construction has remained at the initial stages for years because of a bitter dispute between the partners that has escalated Singapore regulator fines Resorts World Sentosa S$0.5 to Hong Kong courts. Following MPEL’s recent Rmb2.3 billion million for rule breaches (US$354.7 million) bond issuance—which it said would be partially Singapore’s Casino Regulatory Authority (CRA) has fined the

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in Singapore and Las Vegas, said Union Gaming Research. In 1Q11, LVS reported total net revenues of US$2.11 billion), EBITDAR (after corporate expenses) of US$699.9 billion and adjusted earnings per share of US$0.37. “We estimate low hold in Singapore and Las Vegas impacted 1Q11 EBITDAR by US$36 million during the quarter, thus using a normalised hold, EBITDAR (post corporate) would have been approximately US$735.8 milllion,” said Union Gaming Research in a note to investors.

SJM 1Q11 revenue boost in line with general market SJM Holdings’ 1Q 2011 interim Penalty paid—Resorts World Sentosa results showed gaming revenue increased 43% year on year to Genting Singapore gaming property Resorts World Sentosa (RWS) a HK$18.141 billion—in line with total of S$530,000 for four breaches of its rules. Macau market-wide growth of RWS was fined for in some cases reimbursing the entry levy 42.9% during the first quarter. payable by Singapore citizens and permanent residents, as well as Adjusted EBITDA was HK$1.678 for failing to ensure that casino surveillance footage from several billion (up 53% year on year). cameras was retained for the specific period required by CRA, the “We believe the primary regulator said in a statement. driver of the upside to our EBITDA “The disciplinary action taken serves to remind casino expectations came from better- operators to act responsibly to uphold the integrity of social than-expected margins on the safeguards put in place by the authorities,” said T Raja Kumar, chief strength (and resulting flow- executive of the CRA. through) of the company’s mass Holding firm—Grand Lisboa helped Las Vegas Sands’ Marina Bay Sands is the only other casino resort market business,” said Union SJM to grow with the market to be allowed in the city-state after Singapore legalised casino Gaming Research. gaming in 2005 as part of a plan to boost tourism. SJM’s EBITDA margin improved to 9.2% in 1Q11 versus 8.6% in the Genting’s US$4.8 billion Resorts World Sentosa opened its prior year quarter and 8.5% in the immediately preceding quarter. doors in February last year, making it the world’s third most Adjusted in line with US accounting standards, and including results expensive casino complex after MGM’s CityCenter in Las Vegas from SJM casinos managed by outside parties, SJM’s EBITDA margin and Marina Bay Sands. would have been 30.6%, said Union Gaming.

LVS 1Q net revenue hits record US$2.11 billion thanks to Macau visitor numbers up 11% year on year Asian operations Macau visitor arrivals increased 10.7% in April compared to the Net revenue for Las same month in 2010, amounting to 2.3 million inward journeys. Vegas Sands globally in the April 2011 enjoyed the benefit of one additional weekend day as first quarter of 2011 was compared to 2010 (10 versus nine). April 2011 also benefited from an a record US$2.11 billion, early start to the typical May 1 Labour Day holiday, which began this an increase of 58.2% year on 30th April. compared to US$1.33 In April, visitors from Mainland China accounted for 1.27 million billion in the first quarter people—54.3% of Macau’s total for the period—up 4.5% year on of 2010. Consolidated year. Nearly 40% of the mainland arrivals (495,000) came in under adjusted property EBITDA the Individual Visit Scheme (IVS) visa programme. And roughly half LVS—record EBITDA in 1Q 2011 (earnings before interest, of mainland Chinese visitors came from neighbouring Guangdong taxation, depreciation and amortisation) in the first quarter of 2011 province. increased 101.0% to US$745.7 million compared to US$371.0 million in the equivalent quarter a year earlier.. The EBITDA performance could have soared even higher—to US$785.7 million—but for a particularly unlucky quarter for the house in the live table games segment said LVS in a filing to the US Securities and Exchange Commission. Consolidated adjusted property EBITDA margin increased 750 basis points to 35.3% in the first quarter of 2011, compared to 27.8% in the first quarter of 2010. Las Vegas Sands’ strong performance in building gross revenues Full steam ahead—Macau visitor numbers up in April in the first quarter of 2011 was to some extent blunted by its low hold

June 2011 | INSIDE ASIAN GAMING 93 Briefs

MGM China IPO on target to raise US$1.5 billion Brokers said the offer was well received by the market. Philip MGM China Holdings Securities reported that HK$500 million worth of margin investment will fetch a maximum was made through the brokerage firm. Applications exceeded the HK$11.66 billion (US$1.5 shares on offer by 19 times. billion) in its Hong Kong “This reflects the market’s reaction to the stellar earnings reports listing amid robust growth by Macau’s casinos and the strong growth momentum in gaming in Macau gaming revenue. revenues,” Philip Mok, a research analyst at Philips Securities told the It is the fourth largest South China Morning Post. initial public offering of Fat Cat—MGM China listing at upper end of But Mr Mok cautioned investors to watch price corrections in a gambling concern on valuation the near term, since the offer price had already absorbed these record, and the fourth biggest new listing on the Hong Kong stock upside factors. exchange this year, according to data from Dealogic. Ng Huei-suen, a gaming sector research analyst at CLSA, said The shares were priced at HK$15.34 per share, the top end of the gaming revenue in Macau grew 58% year-on-year last year, though initial price range of HK$12.36 to HK$15.34 per share. that was expected to slow to about 35% this year.

brother Vice Chairman Lorenzo Fertitta are leading the restructured company with an expected debt of $2 billion. International Briefs According to Bloomberg News, at least US$1.7 billion of the company’s debt was the result of a leveraged buyout in November 2007 by Fertitta Colony Partners, which took the casino operator private. Station Casinos, founded in 1976, employs 13,000 people. Mouse to mouse inquiries lead to gambling bust A bar in the United States has been reported by police for allowing gambling on mouse races. US racetrack casino revenues up nearly 6% Scott Beach, aged 49, ran the rodent derbies at the Bucktail Lodge Total revenue for US in Danville, Iowa—a town of about 900 people—over the course of racetrack casinos rose 5.9% two years before being cited by the Des Moines County sheriff. in 2010, compared with The sheriff’s office confirmed that Mr Beach and his wifeJan 2009. That’s a growth rate were reported for knowingly permitting criminal activity on licensed more than six times higher premises. Mr Beach said police told him ignorance of the law was no than the general casino excuse. market in the US. The latter Bar patrons pick a mouse for a dollar. The animals run on an managed a lacklustre 0.9% eight-foot long (2.4 meter) flat track, with each mouse racing in its year on year growth in own lane. Whoever picks the winning mouse gets the pay-out. revenues in 2010, according Asked if he needed to put cheese at the end of the run to tempt to figures compiled by the American Gaming Association (AGA). the mice forward, Mr Beach said, “No, they’re in their cages all day. The 2010 racetrack casino revenue figure, US$6.74 billion, was They’re ready to run.” up from $6.38 billion in 2009. The number represents the amount of He added he plays racing music for the mice, including ‘Wipe money that casinos retained from gambling on slot machines or table Out,’ ‘Rawhide,’ and George Jones’ ‘The Race is On’. games. The report, released annually by the AGA, said that the figure was compiled from 45 racetrack casinos operating in 12 states. The figure was bolstered by the opening of new racetrack casinos Station narrows first quarter loss in 2010 in Florida, where gambling revenue rose 51.9% compared Station Casinos has reported a with 2009. Growth was also robust in Pennsylvania, where table smaller first-quarter loss than a year games were legalised in 2010, with total revenue at racetrack casinos earlier as revenues generated at the in the state growing by 26.4%. company’s 18 local casinos remained Racetrack casinos provide hundreds of millions of dollars in stable. Net revenues for the quarter subsidies annually to purses and racetrack operators. Recent reports ended 31st March were US$247.7 conducted by the racing industry have indicated that approximately million, down 0.6% from $249.3 million one-third of all purses distributed in the US are provided by gambling for the same period last year. In the subsidies. first quarter, the gaming company lost $11.8 million compared with Overall, total gambling revenues at casinos in the US, including $53.5 million last year. riverboat casinos and Native American casinos, increased 0.9% in Station Casinos, which filed for bankruptcy protection in July 2009 2010 compared with 2009, rising from US$34.28 billion to US$34.60 owing almost US$6 billion, won court approval of its restructuring billion, according to the AGA report. The increase was the first in three plan in August. The company expects to emerge from bankruptcy years for the casino gambling industry. Total casino gambling revenue in the second quarter of 2011. Chairman Frank Fertitta III and his peaked in 2007 at US$37.52 billion, just prior to the recession.

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In contrast, total handle at US racetracks in 2010 dropped 7.3%, according to the Jockey Club—the fourth straight year of declines.

Luck of the Irish William Hill Sportsbook & Racebook, one of the world’s leading sports betting and gaming providers, has launched a new website for the Irish market. The firm spent over a year developing their Irish site, with the aim of competing with their rivals for a slice of the estimated €1 billion Irish online betting and gaming market. William Hill Online will offer Irish punters over 500,000 betting opportunities every week on a range of events including Gaelic Athletic Association sports (such as gaelic football and hurling), soccer, horse racing, rugby, golf, motor sports, US sports and a wide range of Irish novelty markets. The site will also supply Irish players with bingo, poker, casino games, live casino games, Las Vegas and slot games. William Hill Nevada’s Capitol Building in Carson City Online will also offer Irish customers a new financial site called ‘Day poker if the United States’ Congress passes an Internet gambling bill Trader’. or if the US Department of Justice says online gaming is allowed The company—which runs 52 conventional betting shops in under federal law. the Republic of Ireland—additionally has four different cell phone Offering Internet poker for money is legal in many jurisdictions ‘apps’—Mobile sportsbook, Racing App (Racing Post/WilliamHill), outside the United States and is “generating billions of dollars Shake-A-Bet and Match predictor. worldwide,” said Mr Horne, adding that federal law does not bar a state from legalising online poker within its own borders. In 2006, a federal law prohibited banks and other financial 888 gains first online gaming certification from Italian companies from processing gambling transactions across state lines. regulator The Unlawful Internet Gambling Enforcement Act also established 888, one of the world’s the framework for legalising intrastate gambling by declaring that most popular online gaming online intrastate wagering does not constitute “unlawful Internet providers, has announced gambling” if expressly permitted by state law. that it has passed its first The committee accepted an amendment proposed by Peter certification process with the Amministrazione Autonoma dei Ernaut of the Nevada Resort Association to prevent both the Monopoli di Stato (AAMS), the Italian regulatory authority. This state and federal government from taxing the industry. Ernaut certificate will enable 888 and its independent business-to-business said the amendment means that if the federal government division, Dragonfish, to offer services in the booming Italian market levies a tax, the state would be prohibited from imposing its in the coming months. 6.75% gross gaming tax. Dragonfish’s Total Gaming Services offers partners a ‘turnkey’ gaming operation, as well as the CasinoFlex product. CasinoFlex enables Dragonfish partners to enjoy its casino gaming suite, District attorney in Baltimore seizes ten more gambling together with complimentary marketing tools, whilst using their domains own back office and wallet. Dragonfish has already engaged with Another 10 Internet domains related to online gambling have leading Italian partners such as Microgame, Gioco Digitale / bwin. been seized by a US District Attorney in Baltimore, along with 11 it and King.com, for the deployment of its CasinoFlex, with several bank accounts. more deals imminent. The move brings back memories of ‘Black Friday’ in April when the US Justice Department seized the Internet domains of PokerStars, Full Tilt Poker and Absolute Poker. The latest action, however, involves Nevada passes Internet poker bill non-poker sites. A bill to establish provisions governing the licensing and operation The latest indictments—of a Costa Rican and two Canadians— of Internet poker in Nevada has been unanimously approved by the stem from a Homeland Security Investigations sting. The agency state’s Senate Judiciary Committee. created a payment-processing firm and used it to make personal “The genie is out of the bottle in terms of online gambling. contact with top managers of online gaming companies. There is a great need for regulation,” Assemblyman William Horne, The indictments in Maryland name ThrillX Systems Ltd D-Las Vegas, and sponsor of Assembly Bill 258, told the committee and BMX Entertainment, and individuals Darren Wright, David during a hearing in Carson City. “Nobody is going to do it better than Parchomchuk and Ann Marie Puig. The seized sites included Nevada.” DoylesRoom.com, Bookmaker.com, 2Betsdi.com, FunTimeBingo. The bill authorises the Nevada Gaming Commission to adopt com, GoldenArchCasino.com, TruePoker.com, BetMaker.com, regulations and to grant licences to casinos to be ready to offer online BetGrandeSports.com, Betehorse.com and Beted.com.

June 2011 | INSIDE ASIAN GAMING 95 Events Calendar Events Calendar 7 - 9 June, 2011 21 – 23 August, 2011 Global Gaming Expo Asia (G2E Asia) 2011 Australasian Gaming Expo The Venetian Macao, Macau Sydney Convention and Exhibition Centre, Darling Don’t miss Asia’s leading gaming event. It’s the ideal place for Harbour, Australia you to see the latest technologies and products, learn the trends Billed as the region’s largest gaming equipment exhibition and during world-class conference sessions, and network with peers trade show, the Australasian Gaming Expo features more than from Macau, Asia and beyond. 150 exhibitors showcasing the latest in gaming and related Website: http://www.g2easia.com equipment and systems. Website: http://www.austgamingexpo.com/ 22 - 23 June, 2011 SAGSE Gaming Panama 2011 22 - 24 August, 2011 ATLAPA Convention Center, Panama City, Panama Gaming, Racing & Wagering Australia Billed as the most international gaming trade event in Central Sydney convention & Exhibition Centre America and the Caribbean, SAGSE Gaming Panama has been Scheduled alongside the Australasian Gaming Expo, this running for over seven years. conference will focus on the regulatory and market drivers that Website: http://www.sagsepanama.com are shaping the future of the gaming and entertainment industry in Australasia. Website: http://www.beaconevents.com/2011/grwa2011/en/ 5 - 7 July, 2011 Home/index.jsp World Gaming Executive Summit 2011 Meliá Avenida América, Madrid, Spain The 5th edition of World Gaming Executive Summit is a senior level 25-27 Aug, 2011 strategic gaming conference for the online gaming community GTI Asia China Expo 2011 and land-based casinos. Poly World Trade Expo Centre, Guangzhou Website: http://www.terrapinn.com/2011/wges/index.stm GTI Asia China saw its successful debut in 2009 and definitely proved itself as an excellent platform for the industry to know 18 - 20 July, 2011 more and better about the Chinese market. Integrated Resorts Website: http://www.gtiexpo.com.tw/cnen/ Resorts World Sentosa, Singapore The second edition of the Integrated Resorts conference features stimulating conversations on how to finance, develop and market 3 - 6 October, 2011 integrated resorts and provides networking opportunities for Global Gaming Expo (G2E) professionals in this field. Las Vegas Sands Expo & Convention Center Website: http://www.integratedresorts-lse.com/ Celebrating its 10th anniversary this year, the G2E 2011—one of the largest trade show in the gaming world—has a new date and a new venue. It will expected to be attended by tens of thousands 18 - 20 July, 2011 of gaming executives from around the globe seeking to learn and Casino Marketing Conference discover what’s new, what’s next and everything exciting in the Planet Hollywood Resort & Casino, Las Vegas gaming industry. Website: http://www.globalgamingexpo.com/ This promises to be a hard-hitting, straight-talking, no-holds- barred senior-level conference that addresses marketing challenges across all facets of the gaming industry, including commercial casinos, tribal casinos and racetrack casinos. The 2010 event was well attended by over 100 gaming operators and companies. Website: http://www.casinomarketingconf.com/

denotes events where Inside Asian Gaming will be available. To list your event here and on our website, email [email protected].

96 INSIDE ASIAN GAMING | June 2011