Jurisdiction Updates March 2018 Edition

In focus pg.30 Shaking the status quo

Macau MGM unveils Cotai gem pg.6

KOREA Fourth IR bets on Incheon pg.12

SINGAPORE No wind in top line sales pg.14

VIETNAM Hoiana woos Macau VIPs pg.34

ASEAN 2018 SUPPLIER SPECIALS pg.42

MESSAGE 3 Engaging the industry at ASEAN GB is proud to be hosting the second edition of casino industry. Leaked proposals have so far suggested a the ASEAN Gaming Summit in Manila, where high-tax environment, with restrictions on space, which 300 guests from both the land-based and some warn will lead to lower investment levels. online gaming fields will gather to engage with While Japan delays, South Korea steams ahead, with Incheon Amore than 80 leading speakers lined up to discuss the attracting its fourth IR. A Chinese property developer has state of the industry. announced plans for $4.5 billion resort on Yeongjong Island, Rosalind While the 2017 show focused on the convergence of online which authorities are touting as a major step towards creating Wade and land-based gaming, the 2018 event takes a look at an entertainment hub in the Incheon Free Economic Zone. disruptive technologies, as well as innovative operational In Singapore, operators continue to squeeze out profits and management strategies. from flat revenue. LVS argues that while a success story, The Focus section of this edition is dedicated to lifting the the city state is a very large EBITDA producer without top- veil on some of the discussions you can expect in Manila. line growth prospects in the near future. While the summit was designed to throw the spotlight on Back to South East Asia, we look at how tax reforms the some of the issues and products that are likely to shake up Philippines may have a sting in the tail. The recently Luis the future of the gaming industry in Asia, we take a deeper approved first steps in a long-awaited tax-reform program Pereira look at some of the emerging trends, both for the online are designed to raise funds to improve infrastructure. and the land-based industries. Analysts say they will dampen consumer spending, but are In the land-based sector, we discuss how new technologies unlikely to hurt the booming gambling industry. However, can be used to help operators maximize their table yields. a second round of measures may contain more sting and While in the online sphere we look at how First Cagayan operators are watching closely. plans a comeback. The master licensor is promising not Keeping with the Philippines, and the ASEAN Gaming only to significantly upgrade its infrastructure, but also to Summit, the 2018 event also features an upgraded focus on fintech and bitcoins, aiming to become an Asian meeting space at the conference, allowing companies to hub for these high-growth industries. showcase their latest products and technologies in a casual In these pages you’ll find our regular Jurisdiction Updates environment. This edition’s Special Supplier report brings from across the region. Starting with Macau we bring you you the voices of event exhibitors and supporters. They talk the story behind the new property on the market. MGM about the trends they are seeing in Asia and comment on Cotai’s delayed opening happened without some of the what products and services they’re prepared to deploy to fanfare seen for other debuts, but management has said take advantage of developments. casino floor traffic has been above expectations and close See you in Manila! to matching its sister resort on the Peninsula in terms of mass win per unit per day. Connect with us: Heading into IndoChina, analysts say central Vietnam’s Hoiana IR-in-development, to be operated by Suncity, has @agbrief Asia Gaming Brief the potential to generate about $15 billion a quarter in VIP Asia Gaming Brief rolling volumes and syphon off a chunk of Macau’s high- roller market. On behalf of Asia Gaming Brief Further afield, operators and the community are still waiting Rosalind Wade & Luis Pereira for the details of how Japan plans to regulate and tax its Publishers

www.agbrief.com

PUBLISHED BY PUBLISHERS & MDS DISCLAMER AGBRIEF PARTNER EVENTS MARCH 2018 EDITION Blue Sky Venture Ltd. Rosalind Wade, Luis Pereira All rights reserved. No part Series II • Issue XIX 16/F China Law Building, 409 of this publication may be › ICE Totally Gaming MANAGING EDITOR Av. da Praia Grande reproduced or transmitted › iGaming Asia Congress Sharon Singleton Macau SAR | P.O. Box 1139 in any shape or form, or › Japan Gaming Congress t. +853 2871 7267 ASIA EDITOR by any means, or stored in › G2E Asia f. +853 2871 7264 Felix Ng any retrieval system of any › Russian Gaming Week e. [email protected] nature, without prior express › iGaming Super Show DESIGN permission. The publishers People Press Publishing ADVERTISING ENQUIRIES accept no responsibility › World Gaming Executive Summit [email protected] PHOTOGRAPHY for loss or damage to any › Australasian Gaming Expo Agencies materials submitted for › Gaming, Racing & Wagering Australia SUBSCRIPTION ENQUIRIES publication. The views › G2E Las Vegas [email protected] PRINTING expressed within are not › European iGaming Congress Hop Sze, Hong Kong necessarily subscribed by the EDITORIAL ENQUIRIES › IAGR Annual Conference publishers. [email protected] For more info, please visit our › MGS Entertainment Show website www.agbrief.com. › Malta iGaming Seminar › SiGMA CONTENTS 4

GREATER CHINA NORTH ASIA SOUTH EAST ASIA

MACAU 06 JAPAN 10 SINGAPORE 14

SOUTH KOREA 12 MALAYSIA 16

PHILIPPINES 18

INDOCHINA AUSTRALASIA

VIETNAM 34 AUSTRALIA 38

CAMBODIA 36 NEW ZEALAND 40

special focus 22 SUPPLIER SPECIAL REPORT 42 LAST WORD 66

Asia Gaming Briefings | March 2018

6 6 MACAU

GREATER CHINA GREATER MGM opens its Cotai jewel

MGM Resorts opened its Cotai property on Feb. 13, with analysts cautiously optimistic about the prospects for the multi-coloured resort, whose design is meant to evoke a jewellry-box.

Asia Gaming Briefings | March 2018 GREATER CHINA 7 he delayed opening happened without some of the fanfare seen for other debuts over the past few years, though management has said casino floor talking to non-MGM industry insiders Ttraffic has been above expectations. On a recent on“ the ground in Macau the feedback we conference call with analysts, executives said received was quite positive as it relates to the property was already close to matching its sister resort on the Peninsula in terms of the property, its positioning, the gaming mass win per unit per day. floor, the non-gaming elements, etc. All MGM Cotai will have just under 1,400 hotel rooms, meeting space, high-end spa expect it to be very competitive, especially and retail outlets, as well as the usual array of at the higher end of the market. bars and restaurants. It sees its unique selling point as being its high-tech auditorium. Its ” MGM Theater houses a 900-square-metre 4K LED screen, which is the world’s largest MGM Cotai expands the number of the property, its positioning, the gaming floor, permanent indoor LED screen. It is the first group’s gaming tables in Macau by 29 percent the non-gaming elements, etc. All expect dynamic theater in Asia with over 10 different and will eventually take up its room count by it to be very competitive, especially at the configurations and 2,000 seats. 238 percent. However, the table allocation higher end of the market.” “We did see non-gaming offerings at was lower than had been expected and it Govertsen said he expects MGM China’s MGM Cotai that are differentiated from its launched with no junkets. It is expected to market share to rise to 9.5 percent from 7.1 peers,” Morningstar analyst Chelsea Tam add about five junkets by June. percent in 2017 as the resort gets up to speed, said in a note. MGM China received an initial table a gain of 34 percent. By way of comparison, A giant glass atrium, known as The grant of 125 gaming tables, with 100 of Wynn Macau’s market share as Wynn Palace Spectacle connects the main lobby through those available at the open and a further 25 ramped went from 10.1 percent to 16.5 percent. to restaurants and shops, with 25 LED walls to be deployed in 2019. It was lower than the Bernstein Research was less upbeat, displaying a variety of pictures. 150-table allocation that analysts had expected predicting that any strong ramp up on Cotai “The collection of royal carpets from and below the 150 granted to Wynn Resorts’ may be at the expense of the company’s the Qing dynasty hanging on the wall in the Wynn Palace and Las Vegas Sands Parisian. Peninsula property. high-end area does give a prestigious look The company is expected to transfer some “We remain concerned about the and feel,” Tam said. tables over from MGM Macau later this year. company’s ability to fully defend its position The property is opening at a time gross In terms of ramp up, Tam said that MGM on the Peninsula after the Cotai opening and gambling revenue in Macau is firmly back on Cotai’s ramp up speed should be “decent” as we are skeptical of a strong Cotai ramp up. an upward track, recording growth of 19.1 the adjacent opening of Wynn Palace in 2016 The addition of 1,400 rooms and increased percent in 2017. According to projections ramped up strongly. gaming capacity will inevitably give the from Fitch Ratings that growth will continue Grant Govertsen, managing director company potentially outsized growth in this year, notching up a gain of about 13 and head of Asia gaming research at Union the near term, but at the cost of US$3.4bn percent. The mass and premium mass market Gaming, said the ramp trajectory was currently in bringing Cotai online,” analyst Vitaly is expected to takeover from the VIP sector under appreciated by the market. Umansky said in a note. as the main market driver, with a key catalyst “Talking to non-MGM industry insiders “MGM’s lack of experience in Cotai for growth being the expected opening of the on the ground in Macau the feedback we operation that will lead to similar slow ramp bridge linking Hong Kong Macau and Zhuhai. received was quite positive as it relates to the encountered by peers,” he said. GREATER CHINA 8 was up 23 percent, as the hold fell to 3.1 Sands China percent from 3.7 percent the year before. The HK$27 billion MGM Cotai opened Sands China (1928:HK) has five properties in its doors on Feb. 13. The company said the Macau. The new $3 billion The Parisian opened initial demand and customer feedback to in September 2016 and is now a key driver of the resort has been positive. Like its main group results. It features a scale replica of the competitors MGM is also actively seeking a Eiffel Tower, nearly 13,000 hotel rooms, two license to operate in Japan. million square feet of retail-mall offerings and two million square feet of MICE capacity. Sands China’s Q4 results beat analysts’ expectations, SJM Holdings driven by strong premium mass revenue in SJM Holdings (880:HK) has 20 casinos Macau, which gained 52 percent year-on- on the Macau Peninsula. The company has year, compared with a 7 percent gain in base been losing market share while it completes mass, according to Union Gaming analysis. construction of its Cotai IR, which most Total net revenues increased 12.9 percent to analysts now expect to open in 2019. US$2.10 billion compared to US$1.86 billion Recently, the company’s Grand Lisboa in the fourth quarter of 2016 and above The Hotel was the title sponsor of a Dota 2 Street estimate for $1.94 billion. Net income eSports tournament in December. It was the increased 49.1 percent to US$519 million, first international eSports competition held while hold-normalized EBITDA came in in Macau, with nine teams of contestants at $758 million, representing growth of 30 coming from around the world. For Q4, SJM percent over the prior year. Bernstein Research reported a 4 percent gain in GGR to HK10.9 noted the company is optimistic about further billion, in line with estimates. VIP GGR fell 1 growth in the premium sector, which is being percent year-on-year, while mass revenue rose driven by more younger players coming from 9 percent. SJM lost market share in mass, but provinces outside Guangdong and higher gained in VIP, according to Bernstein analysis. performed strongly, gaining 36 percent and average spend per customer. 20 percent respectively. Despite the positive results, the group’s share price has been hit MGM china Wynn macau hard after founder and CEO Steve Wynn was forced to step down following allegations of MGM China (2282:HK) is operating a Wynn Macau (1128:HK) operates two sexual misconduct. Representatives from single casino on the peninsula. MGM China’s resorts, with its $4 billion Wynn Palace the Gaming Inspection and Coordination Q4 revenue gained 10 percent, pulled up by opening in 2016. The company’s original Bureau reportedly met with top executives the mass market, which benefited from a gain property is on the Macau Peninsula. The to discuss the situation. in both volume and hold percentage. Net Wynn Palace has 1,700 hotel rooms and 90 revenues were $549 million. Revenue from percent of the resort will be non-gaming. The main floor table games was up 21 percent, company’s Q4 2017 results beat expectations, Galaxy Entertainment Group helped by a 10 percent increase in volume with adjusted property EBITDA gaining and a gain in the hold to 21 percent from 19 64 percent to $376 million year on year. Galaxy Entertainment Group (27.HK) has percent in the same period a year earlier. VIP Net revenue came in at $1.31 billion, up three main properties and runs three City Club revenue fell 5 percent, even though turnover 43 percent. Both mass revenue and VIP casinos inside hotels. The company’s Galaxy

GROSS GAMING REVENUE Gaming-related crime falls Gaming-related crime cases dropped slightly GGR 2018E in 2017, despite the gaming sector recording significant growth in the year. A total of 1,847 criminal proceedings related to gaming Fitch +13% were initiated in 2017, a slight (0.2 percent) Morgan decrease from 1,851 in 2016. Gaming-related Stanley +16% crimes include loan-sharking and debt-related kidnappings. “Most of the cases related to Bernstein +10% the mentioned two types of criminal activities happened inside casino premises, with no Deutsche indications that the criminal activities have +11.3% Bank extended outside the properties and impacted on the security of Macau,” Secretary for Security Wong Sio Chak was cited as saying.

Asia Gaming Briefings | March 2018 GREATER CHINA 9

Macau Phase 2 and Broadway at Galaxy Macau Kevin Benning, who was formerly VP of gaming opened on May 27, 2015, almost doubling the Melco resorts operations in Manila, has been promoted to capacity of the resort. The property is viewed & entertainment senior VP and chief operating officer of the by analysts as one of the best placed in Macau, Philippine property. having made considerable efforts in recent Melco Resorts & Entertainment (6883.HK) The company is now exploring possible years to boost its mass market appeal. Galaxy has three casinos and the Mocha Clubs. The Phase 2 expansion for Studio City and has been was recently chosen for inclusion in the Nikkei company operates the City of Dreams and Studio granted an extension of the development period Asia300 Investable Index – a newly created City in Macau and the City of Dreams Manila. under the Studio City land concession contract. index of Asia’s biggest and fastest-growing In January, the company announced a It is expected that the additional development companies, which is designed to be used as major management reshuffle, with David will include a hotel and related amenities. For an underlying index for financial products Sisk named as property president for City of Q4, MLCO reported net revenue of $1.33 billion, such as investment funds. Dreams Macau, replacing Gabe Hunterton, a gain of 12 percent, which was in line with For Q4, Galaxy once again topped analysts’ who will leave the company. expectations. Adjusted property-level EBITDA expectations posting a 25 percent gain in revenue Geoff Andres, who is currently president was $340 million, also up 12 percent. Analysts to $18 billion. VIP GGR was up 31 percent of City of Dreams Manila, will replace Sisk as say City of Dreams is underperforming the and mass market revenue gained 19 percent. property president at Studio City in Macau. company’s other Macau properties.

Sands gives dads a break Sands China Ltd. is implementing a paid paternity leave policy for eligible team members as of Feb. 16, 2018. Dr. Wilfred Wong, president of Sands China Ltd., said: “The family is the cornerstone of our society. Sands China values team members’ well-being and work-life balance, and is committed to the implementation of ‘people-oriented’ policies and guidelines. We strive to address the needs of our team members, so we’re very pleased to announce this new paid paternity leave policy, acknowledging the important role of fathers in the family. With this new policy, fathers of newborns will have time to be with their families to enjoy this important milestone of life and to support them, helping maintain a harmonious family life.” 10 JAPAN NORTH ASIA Taxes, restrictions to dampen investment levels Operators are still waiting for the details of how Japan plans to regulate and tax its casino industry, however leaked proposals have so far suggested a high tax environment, with restrictions on floor space, which some warn will lead to lower investment levels. NORTH ASIA 11 GB reached out to a number of IR LOCATION CANDIDATES Limited openings international IR operators to hit Konami revenue seek their reactions to the leaked government proposals. Since these Slot machine supplier Konami Holdings Corp. reported a 4.9 operators are competing for what is likely to A percent decline in revenue be only a handful of licenses, anonymity was from its Gaming & Systems offered to encourage them to give their frank division for the first nine months assessments of the proposed regulations. of FY18. Revenue for the One international operator responded as first nine-months of the fiscal follows: “The government is considering a rate year fell to JPY20.7 billion of 30 percent applied to gross gaming revenues, ($193.7 million), while segment which may be reasonable in jurisdictions where profit fell 8.6 percent to JPY investment levels are low. However, a tax rate this 2.7 billion. Konami said the high, combined with a possible restriction on decrease in revenue was due to a reduction in the number of casino size, will not permit the levels of investment new slot machine installations that the government itself has suggested. Under - caused by limited new casino this scenario, an investment of up to [US$9 openings and postponement billion] would simply not be possible.” of casino management system A second IR operator also provided a installations in the quarter. negative assessment, highlighting the proposal for an escalating tax rate: “Casino tax is not personal income tax. To realistically generate higher revenue, more investment needs to be injected. Instituting an escalating tax rate disincentivizes an operator from investing further because of the declining margins from the higher tax rates.” A third operator did not highlight specific issues, but provided an overall statement of concern: “We can only hope that the legislative framework allows developers like ourselves the pathway to achieve a sufficient return on the capital we want to invest in Japan.” Public can be swayed on IRs, survey finds While such negative and worried views A survey conducted by the Nippon Research Center and presented by Las Vegas Sands of the proposals appear to be predominant found the Japanese public could potentially be persuaded to back IRs. It found 55.8 percent among the international IR operators, they of the public are in favor of “the development of an Integrated Resort similar to Singapore’s are not universal. One operator observed that, Marina Bay Sands in Japan,” and only 44.2 percent opposed, if the question was framed in a certain way. Before answering whether they would support an IR in Japan, the respondents “the tax rates, though higher than expected, were made to read three information cards highlighting Marina Bay Sands’ economic are a reasonable way to keep some of the contributions to Singapore and its measures to combat problem gambling. Then a video economic benefits of IRs in the country and was shown highlighting Sands’ rich entertainment offerings. Only then were the respondents are not excessive.” asked if they would like to see something like that in Japan as well. If the tax rate proposals came in significantly higher than most observers expected, the proposed individual casino entry fees for Japan Meanwhile, casino opponents such as the Japan James Murren, chairman and CEO of MGM residents (but not foreign tourists) to casinos Communist Party denounced the lower-than- Resorts International said his company already were considerably lower. expected fee as a mere pittance. envisions building a relatively small casino that Reports last year suggested that entry fees Significantly, the US$19 casino entry fee would be less than 2 percent of his proposed would be set quite high, perhaps in the range plan faced considerable criticism from within IR’s total floor area. of US$40 to US$70. However, it appears that the Komeito party IR project team, which Music, sports, and other entertainment government bureaucrats absorbed the point felt it was too low. One member was quoted facilities would dominate an MGM IR in that there is no scientific evidence suggesting as remarking, “Should it really be less than Yumeshima. that high casino entry fees are useful in fighting the fee collected in Singapore?” Komeito is “Osaka has two airports,” Murren added, problem gambling. Hence, the new proposal is a ruling coalition party. “and it has a wonderful railway network as well. for a US$19 or perhaps a US$27 casino entry fee. The government proposals for casino Visitors can travel to Kyoto, Nara, and the Seto This proposal seems to have satisfied floor size restrictions were in line with what Inland Sea. Considering Osaka’s economic scale, nobody in the Japanese political world. Strong had been suggested last year: a maximum of we could build a very large IR here.” advocates of IRs are demanding lower entry 3 percent of the total IR area and a ceiling of The rules were scheduled to be submitted fees or, better yet, to scrap them altogether. 15,000 square meters. in the current Diet session. NORTH ASIA 12

SOUTH KOREA Incheon attracts fourth IR

A Chinese property developer has announced plans for $4.5 billion IR on Yeongjong Island, which authorities are touting as a major step towards creating an entertainment hub in the Incheon Free Economic Zone.

ongRunn International, a Chinese opened last April. real estate and resorts developer, has The resort opened with 158 tables, 291 agreed to buy a parcel of land for $80 slot machines and four electronic table games million for the resort, which will be with a total of 62 seats. The hotel has 711 Lcalled Diamond City, Global Construction rooms, with restaurant facilities, pools and a Review reports. convention center. In the first half of this year, According to the company’s website, the venture expects to introduce a spa, family Diamond City is a new mixed development play area, retail space and a boutique hotel. to be built on a 165,769 sq. m site comprising According to Sega Sammy, the resort 740,925 sq.m of residences, a 7-star hotel, attracted 117,000 visitors in fiscal Q3, generating casino, office tower, retail mall, schools, sales attributable to Sega of KRW129 billion. medical and aesthetics centre, interactive world Paradise swung to a loss of KRW11.3 cultural avenue, K Pop hub and theme parks. billion (US$10.4 million) for the 12 months LongRunn said it will develop Diamond to December 31, compared to the KRW55.1- City in partnership with China state-owned billion profit recorded in the prior year. Its enterprises and a prominent listed HK real- revenue for the year fell 3.9 percent to KRW668 estate developer. billion. It didn’t give a detailed breakdown of The head of the Incheon Free Economic the performance of the Incheon IR. Zone, Kim Jin-yong, said the contract would For January alone however, casino revenue help Yeongjong Island create an entertainment improved, gaining 23.4 percent. hub to compete with Las Vegas and Macau. In January 2014, Caesars Entertainment got However, the plans are ambitious. Work on preliminary approval to build a resort in the other major projects in the area is proceeding Midan area of Incheon in collaboration with at a snail’s pace, while South Korea’s casino the Lippo Group. However, Lippo pulled out sector has been hit hard by geopolitical in 2016 leaving Caesars looking for a partner. tensions with China. A tour ban imposed A unit of Hong Kong-listed Guangzhou R&F by Beijing last year in retaliation for Seoul’s Properties stepped into the breach taking on decision to deploy a U.S. anti-missile system 50 percent of the venture. hurt sales and overall tourist numbers to the The plans called for over 170,000 sq.m. of country are down. development, with a 720-room hotel, as well South Koreans are only allowed to gamble as the casino and other facilities, however, it’s in one remote resort, run by Kangwon Land. unclear how much progress the resort has made. The other casinos are entirely reliant on foreign U.S. tribal operator, Mohegan Sun, was visitors. Operators in Incheon are counting also targeting a 2020 open for its $5 billion on attracting tourists arriving through the IR, named project Inspire. It was expected to country’s main airport, one of the biggest in include a three-tower luxury hotel complex the world. They are also hoping to generate with more than 1,300 five-star and six-star strong non-gaming revenues, by drawing on guest rooms; more than 20,000 square meters the huge population of the greater Seoul area. of luxury retail; a 4,500 square-meter Korean The airport had a total of 62.08 users last cosmetics and beauty hub: a cultural area; an year and Terminal 2, which can accommodate 18 amusement part and an ECOAdventure Park. million passengers opened in January this year. However, the project has faced delays. In The only IR currently operating in Incheon November, CEO Mario Kontomerkos told a is Paradise City, a joint venture between conference call that the company planned to Paradise Co. and Japan’s Sega Sammy, which finally break ground by the end of last year.

Asia Gaming Briefings | March 2018 NORTH ASIA 13

GROSS GAMING REVENUE

Casino Casino Only Kangwon Land for Foreigners Bullfighting 7.41% 5.80% 0.14% KRW 16,277m KRW 12,757m KRW 299m

Sports Toto 20.21% KRW 44,414m

Horse Racing 35.24% KRW 77,459m

Lottery 17.68% KRW 38,855m

Motorboat Racing Bicycle Racing 3.14% 10.38% KRW 6,898m KRW 22,818m

(Source: National Gambling Control Commission)

GKL Q4 profit Kangwon Land more than halves sees Olympic boost Grand Korea Leisure, which operates Kangwon Land said it expected to be a major three foreigner-only casinos, saw beneficiary of the PyeongChang Winter Q4 profit drop by 58.4 percent to Olympics, with its Kangwon Land Casino and KRW14.2 billion. Its total sales fell High1 Ski Resort expected to draw both foreign 14.1 percent to KRW127.6 billion. and Korean visitors. Kangwon Land Casino is For the year, the company saw the only one in South Korea where locals are net income fall 29.6 percent, while allowed to gamble. It has 200 game tables and sales fell 8.6 percent. GKL’s casinos 1,360 slot machines and video games, making operate under the Seven Luck brand. it the largest casino in Korea. 14 SOUTH EAST ASIA SINGAPORE large producer of “Singapore isawonderful success story, butatthispointit’sjustavery In thewords ofLasVegas Sands ChiefOperating OfficerRob Goldstein, from flatrevenue Squeezing outprofit E BIT D A withoutgrowth pr ospects inthenearfuture.” SOUTH EAST ASIA 15 oldstein was speaking to analysts there was no news to report as to whether it increasingly choosing Singapore over Hong after a record year for the company’s would spin off its Singapore mall. Kong as a destination to park their money. Marina Bay Sands property that Analysts at Maybank are expecting the These individuals control an estimated saw adjusted property EBITDA higher visitor numbers in Singapore to $5.8 trillion the report said, citing consulting Gup 24.6 percent to $456 million in Q4. The translate into more spending at least in the firm Capgemini SE. Part of the preference for margin was a robust 52.5 percent, compared VIP sector this year, as does ratings agency Singapore is because it’s at a safer distance with just 34.6 percent for the company’s Fitch. While, according to a recent Bloomberg from scrutiny from authorities in Beijing Macau properties. report, China’s high-net-worth individuals are than in Hong Kong. Although management did a sterling job in controlling costs and squeezing the maximum profit out of the iconic resort, it showed little, to no, top line growth. 2017 TOURISM TRENDS Non rolling win was flat, edging up just International Visitors Arrivals (mil) % year-on-year change 1.1 percent. Slots revenue showed strong gains, up 9 percent, but rolling chip volume 2.00 was down 4 percent to $9.93 billion. VIP accounted for 17 percent of profit, compared 1.50 with 8 percent the prior year. The lack of growth on the revenue side comes despite a strong recovery across Asia’s 1.00 major markets last year, led by the VIP sector. Singapore itself saw record arrivals in 2017, with visitor numbers up 6.2 percent to 17.4 0.50 million, fuelled by an increasing number of Dec. Jan. Feb. Mar. Abr. Mai. Jun. Jul. Aug. Sep. Oct. Nov. Dec. tourists from the key China market. Tourism receipts rose 3.9 percent to 2016 2017 S$26.8 billion ($20.20 billion) in 2017, also (Source: Singapore Tourism Board) a record high. However, that spending is not finding No immediate plans its way onto the casino floors, leaving for bitcoin ban executives struggling to answer perplexed Singapore says it sees no reason analysts’ questions. why it should ban trading in bitcoin. Goldstein told analysts that in part, the “The number and different forms lacklustre performance was due to the relatively of cryptocurrencies is growing small size of the VIP sector in Singapore internationally”, Deputy Prime compared with Macau. He also conceded the Minister of Singapore Tharman Shanmugaratnam told deputies. mass market had been relatively disappointing. “Cryptocurrencies are an experiment. “I don’t know why, I would say otherwise It is too early to say if they will until the future, I don’t see why there would be succeed”, he said answering any catalyst in the near future to drive that.” questions from lawmakers about the Chief Financial Officer Patrick Dumont possibility to ban the trading of bitcoin agreed that the relatively small size of the and its alternatives. The Monetary VIP sector had been a factor, but also spoke Authority of Singapore has been about increasing competition from other closely studying developments and Asian markets, such as the Philippines and potential risks. “As of now, there is the continuing draw of Macau for visitors no strong case to ban cryptocurrency trading here”, he said. from Korea and Japan. Although much of the focus has been on the VIP market, he said he was concerned about the flat trajectory of the mass market. Chief Justice sets sentence guidelines for casino fraud “We’re going to keep at it, we’ve got a Judges in Singapore will now have sentencing guidelines for dealing with casino fraud very good team on the ground there, we’ll after a new framework was set out by Chief Justice Sundaresh Menon. Menon noted keep looking at cost but obviously we’ll love an absence of guidelines during a case involving a member of a Russian syndicate that to see some top flying growth and that’s the used sophisticated technology to predict the outcomes of slot machines. In his sentencing best indications, or best thoughts I can give guidelines, the CJ set out a matrix of nine sentencing ranges, based on the level of harm you on the growth prospects for Singapore.” caused by the offense (slight, moderate and severe) and whether the offender’s culpability The company’s retail operations continue was low, medium or high. This led to a range from a fine for slight harm and low culpability, to perform strongly, although executives said up to seven years for severe harm and high culpability. SOUTH EAST ASIA 16 MALAYSIA

Genting’s New York IR debuts, eyes Asian tourists

The $1.2 billion Resorts World Catskills opened its doors in February, expanding the Genting brand in the U.S., even though the Malaysian company missed out on a license for its own property in New York State.

he IR, which is the biggest of four new was ultimately unsuccessful. In May last year, machines, a poker room and private gaming properties in the upstate area, will Empire entered into a license agreement with salons. Guest amenities will include 332 all-suite be the first large-scale development Genting, to rebrand the Catskills property luxury rooms, which include 12 penthouse suites, in the U.S. to carry the Genting under the Resorts World name. 8 garden suites and 7 two-story villas, two indoor Tname. The company has been pushing hard “The ability to tap into Resorts World pools, a spa and fitness center. to penetrate the North American market, New York database is a big deal,” said Alex There is a 2,000-seat event center and late though with mixed results. Bumazhny, senior director of Fitch Ratings. this year, an entertainment village will open to In 2015, Nasdaq-listed Empire Resorts “Being able to cross-promote will benefit both provide additional non-gaming amenities. In was awarded the license to operate the properties. Queens customers will be drawn spring 2019, a Rees Jones-redesigned 18-hole Montreign Resort Casino, one of four given to Catskills to redeem their loyalty points in golf course is scheduled to open. out by regulators in a bid to boost tourism and a more amenity rich environment and will be However, to make the project pay, the employment in the economically depressed more incentivized to consolidate their play in company is relying on the pull of the Genting upstate region. The company’s majority Queens to accumulate points. In a competitive brand to bring in new tourists, in particular shareholder is Kien Huat Realty, which is environment building a database from scratch Asia’s high rollers. owned by Genting Chairman Lim Kok Thay. is a very difficult and expensive proposition and “This recognized worldwide gaming and The Genting Group, which operates a having a relationship with the Queens property hospitality brand will provide us greater power “racino” in Queens, New York, had put in its gives Resorts World Catskills a head start.” to market our resort casino, which is designed own proposal for a $1.5 billion property in The integrated resort will be by far the biggest to meet 5-star and 5-diamond standards, and Sterling Forest, Orange County. However, it of the new casino complexes in New York state, provide regional, national and international faced stiff opposition from local residents and with 130 table games, 2,150 state-of-the-art slot exposure for the Catskills region,” Empire

Asia Gaming Briefings | March 2018 SOUTH EAST ASIA 17

GENTING MALAYSIA 2017 RGB sees “belt and road” opportunities 2017 revenue +4% Electronic gaming machine supplier RGB MYR9.32b International Bhd says it is expecting its Adjusted EBITDA -9% turnover to increase by RM50 million this MYR2.20b year as a result of a number of concessions and leasing deals secured over the last Q4 visitation +34% 6.7m two years. Group managing director Datuk Chuah Kim Seah told local media the Illegal gambling concessions included Donaco’s Star Vegas crackdown continues in Cambodia, Pagcor in the Philippines, Golden Sands Dili in Timor Leste, SKKS Malaysian authorities are continuing their Slot Club in Laos, and Casino Royale in campaign to stamp out illegal gambling, arres- Kathmandu. Looking ahead, RGB says it ting 160 people after a week-long operation intends to expand its presence to countries in Sarawak state in February. Police made benefiting from the One Belt, One Road 97 separate raids, local media reports. The initiative. “We expect these countries, most charges involved selling of illegal 4D games; of which are locations where we already cyber gambling; gambling dens and gambling have a presence, to boom with investments in a public place. The 160 individuals arrested that they will attract in the near future. This were aged between 16 and 61 and included is why we are now recruiting new staff to eight foreigners. Police also seized RM30,000 handle the expansion of our business in the ($7,600), as well as gambling paraphernalia. One Belt, One Road region,” he said.

Executive Chairman Emanuel Pearlman said “In the US the success of an integrated resort million in revenue in the first year, but says last year when announcing the rebrand. “By depends on the amenities that surround the it is only on track to hit about $150 million. branding the company’s resort casino, the only casino,” says Warwick Bartlett, CEO of Global Lago owns and operates del Lago Resort integrated resort casino in New York State, a Betting and Gaming Consultancy. “You cannot Casino, a $440 million resort and casino Resorts World property, the company aims expect people to drive 80 or so miles to a resort development located in Tyre, NY, between the to reach a market of existing Resorts World and find the restaurants are not as good as the cities of Rochester and Syracuse. customers worldwide.” place where they just left!” Elsewhere in the U.S., Genting’s ambitious The resort is located about 90 miles away “Genting in the Catskills has a lot of amenities expansion plans are enjoying mixed fortunes. from New York City and has created more apart from gambling, but the opening and trade Construction has now begun on the long-delayed than 1,300 local jobs. According to the state’s this winter for the other casinos has probably $4 billion Resorts World Las Vegas, which is Lieutenant Governor Kathy Hochul it is expected been poor due to the weather. They have had scheduled to open in 2020, four years later to bring in 4 million visitors to the Catskills a lot of snow and sub zero temperatures, not than originally planned. The company decided each year, “providing millions in revenue.” very enticing to leave NYC at this time of year! to overhaul the design to incorporate a more Other local officials were equally as optimistic However most Americans will be the recipient modern Chinese feel. about the prospects for the property and the of the Trump tax rebate this month so I expect In Massachusetts, plans to operate a property impact on the regional economy. revenue to ramp up.” on behalf of the Mashpee Wampanoag tribe “Today marks a major milestone, not only In January this year, Moody’s downgraded have been held up due to court action over for Resorts World Catskills, but for all of Sullivan the Lago Resort Casino’s debt rating due to a the land rights. The company also operates a County,” Luis Alvarez, Chairman of the Sullivan slow ramp up. The credit rating agency had “racino” in New York and has been pushing to County Legislature said in a release marking the expected the resort to generate about $250 build an IR in South Florida. opening. “We are confident that this casino resort will serve as a beacon of hope, opportunity and excitement for the region by generating new jobs, driving tourism, and contributing millions of We are confident that this casino dollars to our state and local economies.” resort will serve as a beacon of hope, However, some industry experts have warned “ that the market is overcrowded and the other opportunity and excitement for the region new properties that have already opened have by generating new jobs, driving tourism, been underperforming their revenue targets. New York City is a major draw for Asian and contributing millions of dollars to our tourists, but there are few other attractions state and local economies. around the Catskills once they have made the trip out into the country. ” SOUTH EAST ASIA 18

PHILIPPINES Tax reforms may have sting in the tail

Philippine President Rodrigo Duterte late last year signed into law the first steps in a long-awaited tax reform program to raise funds to improve infrastructure, which analysts say will dampen consumer spending, but are unlikely to hurt the booming gambling industry.

owever, a second round of from the lower 99 percent of the community are Filipinos making an annual taxable income measures may contain more of a to the wealthiest 1 percent. of P250,000 (around $5000) and below as they sting and operators are watching This is being rolled out in a series of will no longer need to pay income tax from the bill closely. packages across the year. The first package 2018 onwards. Meanwhile, those earning HAny policies that could affect spending sees a reduction in personal income tax rates above P8 million ($156,000) annually will be power in the Philippines are significant, benefiting taxpayers earning above minimum slapped with 35 percent personal income tax, as the country has a strong mass market, wage and an increase in excise levies on items higher than the current 30 percent. dominated by local visitors. such as petroleum and automobiles, tobacco Small businesses are likewise expected to Known as the Tax Reform for Acceleration and sugar-sweetened beverages among others. benefit from the TRAIN law, which offers an and Inclusion (TRAIN) law, the program re- These will be staggered and adjusted gradually optional flat 8 percent tax based on gross sales invents the country’s 20-year tax regime. The in a bid to generate P130 billion ($2.53 billion) or receipts in lieu of business and income taxes. government claims it will be a simpler and in additional revenues. But not everyone is happy. According fairer system, designed to shift the tax burden With the new income tax rates, the winners to Rosario Bella Guzman, research head

Asia Gaming Briefings | March 2018 SOUTH EAST ASIA 19 and executive editor of IBON a non-profit I think it’s still better as consumers will have development organization, the richest 10 the choice on where to spend the higher take- Tiger Resort Leisure percent will benefit from TRAIN, while there is home pay. They can choose not to purchase and Entertainment a computed negative outcome for the lower 60 items whose excise tax has been increased percent of income earners. Most of the country’s thus resulting in a net positive impact on their Okada Manila, owned by Japan’s Universal 22.7 million families do not pay income tax disposable income. People who have suddenly Entertainment, is the newcomer to Entertainment because they are engaged in informal work with a higher take-home will not spend more on City, holding a soft opening for the resort in low and erratic incomes so do not receive the food or necessities but will likely spend on late 2016. At 44 hectares, the property is by far benefit of lower income tax, but are hit with discretionary items or even leisure activities the biggest in the complex and the rollout of the burden of excise tax. like gaming and entertainment,” says Laneda. hotels and other facilities is continuing. At its With the significant rise in prices of “In that regard, we do not think there completion of Phase One, Okada will have 994 commodities, consumers can also expect a will be a slowdown in the mass market hotel rooms and operate 500 tables and about rise in the inflation rate, but according to the segment of casinos.” 3,000 slots. Its centrepiece is the world’s largest Department of Finance this will only be a short Operators are also not concerned. Steve coloured fountain, as well as a giant inner city term hiccup. Inflation is estimated to go up by Wolstenholme, managing director of Okada beach complex, known as “Cove Manila”. 1 percent next year and 0.5 percent in 2019. Manila says “The TRAIN law will effectively The casino floor will have about 500 table But while this could dampen overall reduce the income tax payments of most salary- games and 3,000 electronic gaming machines, consumer spending, it won’t affect spending earners. That will free up some disposable a 90,000 square-feet nightclub and beach habits among the middle class for luxury income, which can be spent for leisure activities club entertainment complex. It will also have items such as shopping, or leisure activities including gaming. The new law can therefore have an 8,409 square-meter retail promenade, a such as gambling. a positive impact on our mass gaming market.” world-class spa and 40 restaurants ranging In fact a higher disposable income means But what will affect the casino industry from casual, buffet, and international dining. higher demand for gaming and entertainment, directly is the second tax package, which is “With these kinds of amenities and this benefiting the gaming industry says Richard currently under review. The proposal will be type of spend, it’s not just going to put Okada Laneda of COL Financial. submitted to congress to be discussed before Manila on the map, but also Entertainment City “While some goods will be more expensive, the end of February and is expected to come and Manila in general as a global entertainment out mid to late 2018. destination as well as a business destination,” This package will cover corporate taxation Managing Director Steve Wolstenholme says. and the modernization of fiscal incentives and look at taxes on tobacco, alcohol, mining, Bloomberry Resorts coal and casinos. In a statement, Finance Undersecretary Bloomberry Resorts Solaire is a 16-hectare Karl Kendrick Chua said package two will gaming and integrated resort complex along include the removal of the value-added tax Asean Avenue in Parañaque City. The Bay exemptions for coal and casino operations. Tower of Solaire consists of a casino with an The Department of Finance wants to lower aggregate gaming floor area of approximately the corporate-income tax to 25 percent, from 18,500 square meters (including approximately the current 30 percent, and rationalize the 6,000 square meters of exclusive VIP gaming fiscal incentives for businesses. areas), with approximately 1,400 slot machines, While the exact details of the second 295 gaming tables and 88 electronic table package are not yet known, there is concern. games. Bay Tower has 488 hotel rooms and “If the Department Of Finance means to 15 specialty restaurants. Contiguous to the remove the tax exemption of casinos in TRAIN existing Solaire Resort and Casino, the Sky tower Phase Two, it is a proposal that needs serious consists of a 312 all-suite hotel, additional ten consideration. It will have a significant impact VIP gaming salons with 66 gaming tables and not only on the existing operations but more 223 slot machines. It also includes a certified importantly on the competitiveness of the 1,760-seat lyric theatre. Philippines as an investment destination for The company recently put in a bid to gaming and related leisure,” said Atty Arnold buy the land the casino is built on and an Salvosa, assistant vice president for corporate adjacent plot through its Sureste Properties and legal services of the Philippine Amusement unit. The two plots of land total 160,359 sqm, and Gaming. Corporation (PAGCOR). with minimum floor price for the land set at “If the existing tax exemption of gaming P37.2 billion (US$738 million). Bloomberry income from Value Added Tax (12 percent) and is also planning a second property in Quezon Corporate Income Tax (30 percent of taxable City, which is due to break ground towards income) will be removed, the Philippines will the end of this year. likely become the most expensive jurisdiction “The locals market will continue growing to do gaming business,” Atty Salvosa added. in line with the growth presently characterizing SOUTH EAST ASIA 20 the Philippines economy, but international international nightclubs and a multi-level car Resorts World Manila. The hotel room count visitation will continue to outpace domestic park. It includes an approximately 260 room for the group’s three hotels (Maxims Hotel, growth as the Philippines and Solaire become Crown Towers hotel, Hyatt City of Dreams Remington Hotel, and Marriott Hotel Manila) better known and “mainstream” to Integrated Manila, a 365 room hotel managed by Hyatt remains at 1,226. The property is currently Resort guests and players globally,” President International Corporation and Asia’s first in the third phase of its expansion, which will and Chief Operating Officer Thomas Arasi says. Nobu Hotel with 321 rooms. consist of a further three hotels, more gaming The group recently reshuffled its and other amenities and is scheduled to be City of Dreams management team in Asia, with City of completed by 2018. Further down the road, Dreams Manila President Geoff Andres it will open the fourth and final IR planned The $1.3 billion City of Dreams Manila moving to manage sister property Studio for Entertainment City, which is scheduled to is owned by Belle Corp and Melco Crown City in Macau. Kevin Benning, who was open in 2020. As the first IR in Manila, the Entertainment’s local unit. City of Dreams formerly VP of gaming operations in Manila, company has built up a loyal base of customers, Manila has six hotel towers with approximately has been promoted to senior VP and chief especially in the local mass market. 950 rooms in aggregate, including VIP operating officer of the Philippine property. “The Philippine market is getting used to and five-star luxury rooms and high-end luxury goods, but sometimes things are too boutique hotel rooms, a wide selection of Resorts World Manila big and too quick. For some of the domestic restaurants and food & beverage outlets, a market, they feel intimidated. You have to 4,612.44 square meters family entertainment Travellers International Hotel Group, a tap into that market and understand what center in collaboration with Dreamworks joint venture between Genting Hong Kong and they want,” says Chief Operating Officer Animation, a live performance stage, two Alliance Global, is the owner and operator of Stephen Reilly.

GROSS GAMING REVENUE

Installed capacity (As of June 30. 2017)

Tables Electronic Gaming Machines PAGCOR - Casino Filipino 526 10,461

City of Dreams Manila 267 1,754

Resorts World Manila 316 2,015

Solaire Resort and Casino 394 1,883

Okada Manila 87 911

Thunderbird Binangonan 25 243

Thunderbird - Poro Point 28 321 GGR Royce Casino 28 168 2016 P149b

Widus Hotel and Casino 39 168 2017 P170b

Midori Casino 52 306 (Source: Pagcor)

Freeze placed on new casinos Pagcor eyes doubling The Philippines’ gaming regulator said there will be in POGO revenue no more new licenses granted in the Philippines Philippine Amusement and Gaming Corpo- after January 11 this year, due to President Rodrigo ration (PAGCOR) chair Andrea Domingo Duterte’s concern about the proliferation of casinos said she expects income earned from online across the country. “The President told me last casinos under the POGO scheme to reach P6 January 11 to freeze the entry of new casinos because billion in 2018 ($115 million), double the P3.1 there are already many of them, and there are more billion earned last year. “Not all the licensees wanting to apply,” Philippine Amusement and Gaming were fully operational last year,” said Domingo, Corp Chair Andrea Domingo said. There are three new referring to the 45 firms granted licenses last casino licensees in Cebu, including Emerald casino year. “But this year, everyone will be operatio- from Dennis Uy, Millenium casino by the Hong Kong- nal, so we expect revenue to increase.” Under based Asian Gaming Group and the Universal casino the POGO scheme, each licensee is required by the Gokongwei Group. There are another eight to pay $10,000 in licensing fees per month for operations in Clark, Pampanga, and another Pagcor a minimum of 15 gaming tables, or a total of approved licensee on Boracay Island. $150,000 per month per POGO licensee.

Asia Gaming Briefings | March 2018 21 PJM™ is the world’s fastest RFID chip technology.

Accept no imitations. Accept no limitations.

Only one technology commands an industry-leading read rate of 1,200 chips per second – twice that of other RFID chips – PJM™

PJM™ RFID chips set the global standard in automated gaming table technology with unmatched performance, reliability and security.

www.wdtablesystems.com

©2018 Walker Digital Table Systems, LLC. All rights reserved FOCUS 22 Focusing on the future

The second ASEAN Gaming Summit was designed to throw the spotlight on some of the issues and products that are likely to shake up the future of the gaming industry in Asia.

he focus section of this March edition In our first article of the series, we talk to of Asia Gaming Briefings mirrors that executives from First Cagayan, which was shaken theme, taking a deeper look at some of the from its pedestal as Asia’s premier online gambling emerging trends, both for the online and jurisdiction last year after legislative changes from Tthe land-based industries. Philippine President Rodrigo Duterte, which included

Asia Gaming Briefings | March 2018 FOCUS 23 granting licensing power for online companies operators chart their way, it won’t be enough are also keenly aware of the fact that their to land-based regulator Pagcor. to succeed in the fast-paced Asian market. patrons don’t always freely embrace the ideas After losing almost half of its licensees, In the land-based sector, we discuss how dreamt up by whizzkids in suppliers’ R&D First Cagayan is fighting back, promising not new technologies can be used to help operators departments. We discuss how to achieve only to significantly upgrade its infrastructure, maximise their table yields, providing vital the right balance between staying at the but also to focus on fintech and bitcoins, information that previously could only be forefront of technology, without turning off aiming to become an Asian hub for these supplied by experienced pit managers. The the existing audience base. We also argue high-growth industries. addition of high-tech equipment can help there needs to be space to take a level of risk. Staying in the online sector, we look at trim costs and provide an invaluable aid Our last article in the focus series explores how European models can provide a guide to floor managers when it comes to table the issue of security, which has become a as the industry grows in Asia. As the market allocation and pricing. major topic for discussion globally after two matures, the focus is starting to switch from We also look at some of the new major attacks on casinos last year. Properties player acquisition to player retention forcing technologies being incorporated into products. around Asia have been stepping up measures a strategic shift. This is leading to greater While operators are aware of the need to to protect clients. We speak to experts about competition on product and although stay relevant with the younger generation the most effective ways to keep casino floors what has gone before in Europe may help and to expand their audience base, they safe without reducing enjoyment levels. FOCUS 24

CEZA seeks to regain online dominance, eyes Fintech

After an annus horribilis in 2017, First Cagayan Leisure and Resort World Corporation is fighting back, pledging major upgrades in infrastructure and technology to help the Cagayan Special Economic Zone and Freeport (CEZA) regain its status as the hub for online gambling in the Philippines.

nce the premier licensor for online firms gambling operator could directly, or indirectly, in the country, First Cagayan lost more allow persons who are physically located outside the than half of its licensees last year after territorial jurisdiction of the licensing authority to Philippine President Rodrigo Duterte place bets, online or otherwise. Ocracked down on online gambling. The order left First Cagayan, which had been the Although most of First Cagayan’s licensed primary licensor for the Asian-facing Philippine online operators held a license in the CEZA, an isolated, gambling industry, in a precarious position. To make largely undeveloped region on the country’s northern matters worse, the state-owned Philippine Amusement shore, in practice they were operating out of more and Gaming Corporation (PAGCOR) stepped into the developed areas, such as Makati in the capital. mix, saying it would issue its own online gambling Duterte put a stop to that arrangement, issuing licenses. The Philippine Offshore Gaming Operator an Executive Order specifying that no licensed online license, known as POGOs, are more expensive, but

Asia Gaming Briefings | March 2018 FOCUS 25 in an interview with AGB. and the main infrastructure needs to be The move could also potentially pave done. “We’re still hoping the data center can the way for First Cagayan to snap up any be up and running in two years. It will be operators denied a PAGCOR offshore license modular and built in phases so it addresses Meanwhile, to tow the line with only the current demand,” he said. Duterte’s online gaming crackdown, CEZA CEO, Raul Lambino said the free zone has Fintech ambitions implemented several reforms to eradicate illegal online gaming operations. He said he He also said CEZA is having discussions canceled the enterprise registration of 164 with unnamed parties regarding a project business process outsourcing (BPO) firms “to supply stable electricity to the Freeport.” that provided support services to offshore CEZA recently inked a Memorandum of gaming operators. In a move that fortified Understanding (MOU) with Japan’s Traders the agency’s role as regulator, he also asked Holdings Inc and technology company the two master licensors First Cagayan Iwave, Inc. aimed at developing the first Leisure and Resort Corp. (FCLRC) and the Asian Special Economic Zone to regulate, North Cagayan Gaming and Amusements license and propagate fintech companies Corp. (NGGAC) to cancel their operations from around the world. in Metro Manila and return to CEZA “The MOU on a larger scale will bridge giving the free zone exclusive control of the technology industries of Japan and the “regulatory functions and powers over all Philippines,” Lambino said. gaming operators, land-based and offshore.” As part of the plan and its vision of being an economic zone that would blend business Junket jets and leisure, it’s also been developing its tourism facilities. According to Lambino, a Taiwanese One of the main drawbacks of CEZA is firm and two major investors in CEZA have its remoteness. Currently the closest airport expressed interest in creating a cluster of is in Tugeguarao and from there it’s another tourist attractions, including a casino gaming 2.5 to 3 hours drive to get to the free zone. complex, hotel and villas, a water theme park, The new Cagayan North International golf courses, a horse-riding area and a premium Airport will cut that travel time to one hour duty-free outlet shopping mall. once it opens later this year. “Cagayan already has a natural beauty that is allow greater flexibility in location. The airport will be able to accommodate hard to resist. What we need is to show that the According to Francis Hernando, chief the jets of junket operators bringing in VIPs Freeport can be an investment jewel in Southeast operating officer of Leisure and Resorts to gamble in CEZA’s brick-and-mortar and East Asia,” said Lambino in a statement. World Corp, of which First Cagayan is a casinos and in the near future welcome subsidiary, the number of online licensees international flights. “Shifty” rules dropped from 138 to less than 80 as a result. According to Hernando, they’ve In an attempt to hang on to its remaining completed about 90 percent of the airport Hernando says the Philippine gaming licensees, First Cagayan has committed to an in terms of construction and they’re now industry has been going through a big adjustment overhaul of its data and telecommunications looking for an operator. He’s hoping the period, first with the Duterte crackdown on facilities and a major upgrade of the notoriously airport will see its first domestic flights by licensees and now with an upcoming tax law that insufficient infrastructure in CEZA. It has summer and will function as the country’s will include casinos, which has been affecting pledged to spend $4 million on upgrading its most northern airport. potential investors in the country. existing data centre in Cagayan Cyberpark, with CEZA has also been pushing for incentives “The gaming regulatory environment a further $3 million to be spent on upgrading such as visa on arrival when it opens up to is the one that needs to be clear. We should the region’s external data infrastructure to international flights. admit even from the government side, it bring the authority’s hosting and connectivity In addition to infrastructure, First became a bit shifty and that needs to be capacity in line with established international Cagayan’s new direction focuses on building settled down and communicated to the gaming jurisdictions. up its telecommunications facilities to create licensees or would be licensees.” “At this point we understand and an Asian fintech hub, including a blockchain With Duterte’s intentions hard to realize we have to build a good part of the centre; cryptocurrency mining farm; fintech forecast the industry is still in limbo and infrastructure first before we are able to start-up incubators and cryptocurrency exchange. CEZA operators know they could come convince operators to come. Now that’s not Its new 10-hectare Cyberpark is being under much sharper scrutiny at any moment. going to happen overnight. You cannot match pitched as a “fully functional, self-contained “Realistically for this year we will be happy the infrastructure and availability of man community with purpose-built buildings to if we can renew at least a dozen licenses. The power that’s in Manila and that’s why they house studios and call centers.” next step would be to create office spaces for chose to relocate to Manila,” said Hernando The plans are out, the roads are finished those dozen or so companies,” said Hernando. FOCUS 26 Europe paves the way for Asia’s maturing online market

Faced with increased competition and more demanding customers, Asia’s online operators are looking towards Europe for ways to drive revenue growth in a market that is beginning to mature.

reviously, operational demands in Europe and on customisation, personalisation and differentiation. Asia have differed significantly. The challenges “The days when it was enough to roll out a operators faced in highly regulated, intensely standard, European-style, English-language website competitive jurisdictions such as the UK or Italy into Asian markets and expect it to succeed have gone,” Pwere a world away from those active in Asia’s grey markets. Joe McCallum, director of sportsbook at Sportsbet.io However, AGB understands that tightening margins told AGB. “Customers in Asian markets are now far at many of Asia’s biggest online operators are forcing more discerning.” strategies to be re-evaluated. Online sportsbook is perhaps the vertical which Many of these strategic shifts mirror those undergone highlights the progression of the Asian online market in Europe over the past five years: greater focus placed towards maturity better than any other. For many years, upon retention than acquisition; operators competing on customers were serviced by simple online sportsbooks product rather than marketing; and a greater emphasis offering a narrow range of betting markets, with

Asia Gaming Briefings | March 2018 FOCUS 27 volume dominated by handicaps. mobile gaming, but warned that “it is not “The blueprint doesn’t work, and the more This has now changed, and the most as simple as Asian markets mirroring the rigid it is, the less it’s going to work. I have seen successful sportsbooks are now doing significant dominant trends in Europe.” very large gaming companies in casino, lottery volumes across hundreds of markets and “In Europe, most markets transitioned gradually and sports miserably fail to enter Asia due to extensive in-play options, in much the same from desktop gaming to mobile gaming. It has a business model that wasn’t fit for Asia. You way as their European equivalents. been a process that has taken several years, and need to adjust, be flexible and, most importantly, “It is a lazy assumption to say that only recently has mobile become the dominant choose the right people to work with in Asia,” customers in Asian markets are only interested channel for most operators,” said Rochman. Omri Goren, who has worked in Asian gaming in the handicap. While it does remain an for 10 years and consults for many of the sector’s important part of the mix, we’ve witnessed Mobile designs biggest companies, told AGB. the tastes of average customers diversify Goren warned that Asia’s online operators significantly in recent years,” McCallum said “As Asian gaming was not as firmly have so far remained slow to catch up with of Sportsbet.io. “These customers are now established years ago, many new players in European counterparts. It may be the case demanding a range of markets equivalent Asia are accessing sites and games for the that the basics still need to be resolved to what European users are accustomed.” first time on mobile and tablet devices, rather before tackling the challenges traditionally It has been a similar story for the casino than desktops. In fact, a great deal of the associated with a mature market. vertical. growth in Asia will come from customers “While new players in the region definitely “Asia’s online markets are evolving extremely who have never played online casino on a look sharper, cleaner and more versatile, we are quickly; and operators and suppliers are desktop. As a result, the way we design games still seeing the older (and very large) companies certainly in a position to take the best Europe needs to take this into account,” he added. stuck 15 years in the past,” said Goren. can offer and adapt it for new markets,” said While Europe may provide inspiration According to Warwick Bartlett, CEO Matthew Rochman, head of technology at for operators facing new market realities in and founder at Global Betting & Gaming online games developer OneTouch. Asia, others caution that it will not necessarily Consultancy, it can be tricky to define exactly Rochman picked out the example of provide one-size-fits-all solutions. what stage the Asian online market has reached. “In terms of volume Asia is already quite mature relative to the volume coming out of Europe. Profit margins are low but this is compensated by volume leading to high net profit before tax,” he told AGB. With Asian markets remaining a long way from adopting UK-style regulatory frameworks, it is unlikely that 2018 will see a significant acceleration of many of the trends typically associated with mature markets, such as consolidation via M&A activity. But operations will likely adapt to better match the efficiencies operators in Europe must deliver to remain competitive. Asia-focused platform provider SA Gaming, for instance, said it believed the future of igaming “is tied to personalization, effective data and marketing tools and successful customer relationship management (CRM)” - areas that have traditionally been neglected by Asian operators more focused on acquiring new players than retaining and maximising the value of existing ones. On product too, McCallum at Sportsbet. io said the operator is witnessing growth in personalized, custom betting from Asia, where players select the nature of the bet and have full control on how they place the wager. “In Asia, as in Europe, product innovation is now a key battleground,” he said. It is clear that even if Asia’s online market does not yet match the maturity of Europe’s, only those operators willing to adapt to these new challenges will succeed in the long run. FOCUS 28

Can technology reinvent the casino floor? The question of technology’s role on the casino floor has always been a divisive one.

raditionalists will argue that core products, like there is great scope to innovate around these titles and Blackjack, have been popular for hundreds of offer new products that engage different audiences.” years, and will remain so long into the future. It is often a case of using new technology to create Others will point to how the land-based variations on classic titles. R. Franco Group, for Tsector has struggled to engage younger audiences as instance, has released several video bingo products evidence that technology needs to be better deployed that allow players to decide whether they want to play on the casino floor. a physical or digital game within the casino, without Tastes on the casino floor clearly do evolve, and the need to change machines. recent years have witnessed the rapid growth of side bet Other suppliers have launched products that look variations of classic table games, particularly in Macau. to bridge the gap between the online and land-based However, it remains relatively rare that an entirely space as part of a broader omnichannel strategy. One new game emerges and grabs a significant share of notable example is Playtech’s Age of the Gods Live casino revenues, with War and its variations being Roulette, which launched last September. the last example of note. “The Live product shares casino liquidity for the “Technology is always redefining product, but first time while also offering players the ultimate this is a complex process,” Rubén Loeches, Chief desktop and mobile gaming experience,” the company Marketing Officer at omnichannel casino supplier said at the time. R. Franco Group, told AGB. “Of course, Blackjack Loeches said that while much of the focus on and Roulette are not going to vanish overnight, but omnichannel has been bringing land-based players

Asia Gaming Briefings | March 2018 FOCUS 29

onto the digital channel, the casino floor Alcorn from T J Gaming Consultants told AGB. acceptance of it, remains uncertain,” Warwick will continue to become far more digital, “Most casino players still want to experience Bartlett, CEO and founder at Global Betting with closer links to online products. the thrill of the old-fashioned casino and the & Gaming Consultancy, told AGB. interaction of customer staff and the perceived “We know that in Asia there is reticence The cutting edge Hollywood/Vegas glamour of casinos.” to play automated casino games, but wide Alcorn said that casino operators should acceptance of participation games played However, the application of the very latest introduce new technological changes “discreetly on the likes of Xbox and PlayStation. The new technology onto the casino floor is no simple and gently” at a pace customers can handle, future will probably be to engage millennials process, and offers no guarantee of success. not the pace demanded by suppliers. through game participation and traditional The biggest challenge is often identifying “Many casino head offices forget to speak to casino table games.” which technology has lasting appeal, and which the operations staff who deal with customers daily has genuine application in a casino environment. when they decide to introduce new products. It Keeping pace For instance, Macau received its first is easy for the manufacturers to convince head bitcoin ATM as early as 2014, but four years on office that they have a new product that will Bartlett added that new technology for regulatory and technical hurdles have meant reduce cost by cutting back on manpower and casinos that will dramatically change the that the SAR’s casinos are not yet exchanging increase revenue,” Alcorn added. casino floor is still “probably five to ten years chips for cryptocurrencies. However, Alcorn said these manufacturers away”, by which time many of the millennials Similarly, much of the excitement around should be happy for casino operators to trial that these innovations are aimed at will be the possibilities of virtual and augmented new technology in beta areas. “If the product moving into the next generation. reality on the casino floor has subsided, and manufacturer truly believes that his product Ultimately, casino’s biggest challenge is to the technology still looks to be several years will make such an impact on your revenue leverage technology in such a way to keep pace from mainstream adoption. and excite your customer that much, he will with the ever changing tastes of customers, Both crypto and VR have made more roll the beta area out with you and know you without alienating them by transforming the progress as central components of viable gaming will eventually buy it.” experience too rapidly. products online, but they are yet to have a The question of ensuring the customer is “Gambling companies are, at heart, significant impact on Asia’s land-based sector. on board with new technology is, of course, technology companies,” Loeches at R. Franco “We would caution the industry to be very an important one. Group said. “If casino does not evolve with careful at introducing too much too quickly, “The adaptation of new technology, the latest technology, it cannot hope to remain especially on the main gaming floor,” Joan such as artificial intelligence, and customers’ appealing to new players.” FOCUS 30

Delivering high yields

AGB examines how casinos are getting smarter and more sophisticated when it comes to maximizing earnings from their table games.

anaging and optimizing the yield on the prioritize the availability of seats to the most valuable casino floor is essentially the science of segments, which not only enhances the guest experience maximizing revenue from players by for the most profitable segments, but also improves the offering them the right product at the casino’s bottom line in the process.” Mright time, whilst keeping operating costs to a minimum. Nayak uses booking a hotel room as an analogy. This conundrum is more or less ‘solved’ with electronic “We intuitively understand that there is higher demand gaming machines (EGMs) as there is just one player at on the weekend, so we expect to pay more for the same a time with his or her transactions and play constantly room on weekends versus weekdays. In the same way, being logged. The gathered data then helps with pricing, when we are running short of tables or dealers because game popularity and other insights in order to maximize of higher demand in our casino, players should expect yield per machine. Yet optimizing yield for table games to pay more to buy a seat at the table – literally as well as is much more of a complex problem, particularly when figuratively.” Nayak highlights how data volumes today you have the costs associated with employing a dealer are exploding, with more data created in the past two and multiple players placing various wagers, including years than the entire history of the human race. By 2020, side bets, and varying their stakes. Casinos will often have about 1.7MB of new information will be created every a lack of accurate and timely data on dealer speed, the second for every human being on the planet, he says. time it takes to play each game, the gap between games, The natural response of most organizations has been number of active players and types of bets being placed. to generate more reports. “In our experience,” he says, “what most operators crave is not reports but rather the Deciding demand knowledge of what the data means for their business and, more importantly, what they should do differently now.” Despite these challenges, the aim shouldn’t be to The traditional systems for gathering data on the maximize yield from players, but instead to segregate casino floor can be broadly categorized into a handful demand based on willingness to play table games at a of different options. Automated data gathering is where price so that the casino can make appropriate trade- RFID chips replace regular chips and tables are fitted with offs when needed, says Varun Nayak, SVP of gaming RFID readers. While this is an accurate solution that also strategy at Tangam Gaming. “For instance, when assists with security, it isn’t suitable for all types of table there is a capacity or labor constraint for a given level games. Surveillance cameras installed at the table are of demand, yielding table limits will allow casinos to also used for automated data collection but, like RFID

Asia Gaming Briefings | March 2018 FOCUS 31 systems, can be a somewhat expensive solution to deploy. The cheapest option is traditional manual data gathering whereby pit supervisors periodically (usually every hour) input data for each table. Yet this is “non-real time, error-prone and not smart,” warns Subhash Challa, CEO of SenSen Networks. Instead, SenSen has developed algorithms with deep-learning AI technology to use low- cost cameras inside Android smartphones and tablets to deliver real-time data on play on the casino floor. “Our deep learning technology learns and understands layouts and betting activity as if there is a human standing there and taking notes continuously,” Challa explains. “Since Android phones and tables are so cheap, yet of very high quality, the cost to get this data is minimal compared to other systems. And since the data is collected for every table and every game for every player and dealer, we can support data-driven approaches to manage the floor and optimise yield as opposed to model- driven approaches to yield management.” In Macau, it is particularly important to maximize the yield from each gaming table as Macau controls the number of tables that a concessionaire can have on the casino floor, says Alidad Tash, SVP of gaming and strategy at 2NT8 Ltd. “The most profitable players are premium mass players who – at around 40 percent profit margin – are four times more profitable than junket players. This disparity is because of the additional 42 percent junket commission, which is on top of the 39 percent in gaming taxes applied to all gaming segments. So, improved yield leads to a much healthier bottom line since it brings more of the profitable mass players.” Whilst employed by City of Dreams in Macau, Tash increased the mass table games hold percentage from an industry average of 21 percent to an industry-leading 36 percent. “Increasing the hold takes involves improving a combination of three factors: operational efficiencies, improved customer service, and better casino marketing, which respectively increase hands per hour, total time played, and average bet. “I was fortunate to be part of the team that devised strategies that helped maximize all three factors, which led to the very high hold percentage – 36 percent over my last 13 quartets – and which correlates with the premium mass success enjoyed by City of Dreams through 2016.” In fact, Tash describes Macau as the “ultimate table games laboratory” since it isn’t a monopoly and there are hundreds of tables in the larger casinos. “This makes it ideal for technologies that improve and track gaming efficiencies to thrive,” he concludes. FOCUS 32 Threat assessment capability seen as key to casino security

The deadly attack on Resorts World Manila (RWM) last year was a wake-up call for casino resorts in the Philippines and across the wider region, leading to demands to improve security and properly assess the risks facing each jurisdiction.

t was an incident that made headline news around and deficiencies” which caused not only the loss of lives the world. In the early hours of June 2 last year, a and damaged properties, but also placed the country’s lone gunman entered Resorts World Manila (RWM) gaming, tourism and hospitality sectors in “a bad light.” in the Philippine capital and left 38 dead (including However, the gaming regulator lifted the ban at the Ihimself) and 54 wounded after he fired shots and set end of June after TIHGI had, among other measures, fire to gaming tables. Most of the victims succumbed to added more X-ray machines and metal detectors, and smoke inhalation. Islamic State claimed responsibility doubled the number of guards equipped with firearms. but the police later confirmed that it was a botched As well as enlisting the services of crisis management robbery perpetrated by heavily indebted gambler, Jessie and security specialists Blackpanda, the operator says Carlos. In the aftermath of the arson last June, PAGCOR it recruited directly from the Philippine National suspended the provisional license belonging to Travellers Police and invited generals to join the team. “We have International Hotel Group Inc. (TIHGI) which operates some of the biggest heads at the table from a security casinos and other gaming facilities under the RWM name. and safety standpoint,” RWM chief operating officer PAGCOR said RWM had to rectify “serious security lapses Stephen Reilly said. “We engaged Blackpanda, which

Asia Gaming Briefings | March 2018 FOCUS 33 is one of the best security firms worldwide. a 42-year-old Philippine national, slipped past and very strong surveillance systems,” says They are still with us and engaged for another security carrying an assault rifle, a handgun Craig Sheridan, managing director of Sheridan year.” There is also an on-going review and and ammunition vest was obviously a huge Consulting Group and the security director improvement of safety and security protocols concern. Nearby casino resort City of Dreams for Star Entertainment Group. in case of emergencies, as well as additional later informed the media that it had stepped “Also, most casinos maintain very close safety and security seminars for staff. up security, while other casinos were said to be relationships with law enforcement and Meanwhile, part of the renovation work to on heightened alert after the attack. Although intelligence agencies. Obviously, with large the fire-damaged and bullet-riddled property it wasn’t terror-related, the incident was a stark amounts of cash, 24/7 operations and housing involves the construction of security bunkers reminder for the government and casino resorts large crowds of people, vulnerability certainly in the event of future attacks. “We have had that nowhere is completely safe and secure. Steve does exist.” Indeed, some of the larger operators to redefine the industry standards as you can’t Vickers, CEO of Steve Vickers and Associates, a across the Asia-Pacific region see thousands of settle for just a regular door and dog sniffing specialist political and corporate risk consultancy, patrons entering and exiting their properties the back of cars,” Reilly says. “We have to make says there isn’t a one-size-fits-all solution for every day. And in many casinos, visitors can it as pleasant as possible for the guest, but you protection of casino resorts. “The threat level freely stroll into the lobby without passing also need to consider that the world is changing differs from region to region and country to through any form of security checks. Sheridan fast, therefore we try to do things with the end country,” he explains. emphasizes the need for a culture where in mind. We now have security bunkers and a workplace awareness is normal in the daily double layer of security around the property. It’s Easy access routine. “Staff and management need to be very expensive, but it’s something we must do. alert, report what they see and challenge the PAGCOR reviewed our plans and I believe what “Some third-world countries that have norm. Management need to lead by example, you see at the other integrated resorts today is a well-understood insurgent, or armed militant displaying safety conscious behavior at all result of what Travellers presented to PAGCOR.” problems, are clearly more exposed. The times. They need to engage with employees, PAGCOR said that when the resort’s Philippines has such problems in some parts wear identification and create a relationship license was suspended the government was of the country but the more likely threat comes of trust which encourages staff to feel safe, losing an average of P14 million a day, or P434 from the relative ease with which firearms valued, protected and a sense of being part million a month. Indeed, PAGCOR required – including automatic weapons – can be of a team.” all licensed IR’s to submit security and safety acquired. The angry man, disaffected gambler Steve Vickers Associates’ annual Asia Risk protocols for inspection. The fact that Carlos, or exposed junket operator, therefore, present Assessment, which was published just recently, an ongoing threat in that country. Conversely, suggested large casinos in Macau remain this is absolutely not the case in, for example, vulnerable to terrorist attack despite the former Singapore where access to firearms is severely Portuguese colony’s close ties to China, recent controlled.” Vickers suggests the best defense efforts to improve readiness, and the general for casinos is a deep and realistic understanding difficulty of obtaining firearms and explosives. of any given local situation, implementing Furthermore, Triad Societies’ close links to the contingency measures and acting on real, gaming sector and the security threats posed prevailing threats. However, often the focus by this cannot be ignored. Vickers tells AGB: is on foiling thefts and preventing cheating “In Asia, the hidden threats associated with on the casino floor. “Some casinos and local Triad Societies and their involvement in junkets governments tend to be very good at protecting and gaming, which can lead to unexpected the money but not so focused on external events in casinos, such as thefts and robberies, threats,” he says. also needs to also be considered.” The RWM attack bore similarities to the mass shooting in Las Vegas last year in which Outstanding issues a gunman killed 58 and left 851 injured at an outdoor music concert by opening fire As for the Philippines, it highlighted how from the window of his 32nd-floor suite at the political and security situations in the the Mandalay Bay hotel. There have also country “pose significant risks to investors.” been mass-shooting terror attacks at popular Yet what is perhaps most concerning for resorts and upmarket hotels over the years, those tasked with ramping up security and including Sousse, Tunisia, in 2015 and the protecting casino resorts in the country is Indian city of Mumbai in 2008 which left 38 the ease with which the RWM gunman was and 160 dead respectively. Yet with all the able to get his hands on powerful weapons. surveillance systems, security personnel, metal “The Manila attack highlighted the dangers detectors and, in some cases X-ray machines of those locations with easy access to firearms and canine support, a casino isn’t what you – especially automatic or semiautomatic would automatically class as a soft target for weapons,” says Vickers. This is an issue that terrorists. “Casinos are not necessarily soft the government needs to urgently address to targets as they have a layered security approach reduce the chances of similar-style attacks. 34 34 VIETNAM

INDOCHINA Hoiana seen syphoning off Macau VIPs

The Hoiana IR, being developed in central Vietnam, has the potential to generate about $15 billion a quarter in VIP rolling volumes and syphon off a chunk of Macau’s high roller market, according to analysis from Union Gaming.

Asia Gaming Briefings | March 2018 INDOCHINA 35

unket operator Suncity has taken a 34 “Of course not all of this play would be The property is seen as well positioned percent stake in the IR, which is being diverted from Macau (e.g. some would be about an hour’s drive from Danang airport on developed by VinaCapital and another from SE Asian customers), but regardless, well-paved roads. However, a new highway, investor. It is scheduled to open in it could have a several hundred basis point scheduled to open about the same time as J 2019. As well as the equity stake, Suncity impact on Macau VIP beginning later in 2019.” the resort, will cut that journey time in half. will have a related management contract and The resort is scheduled to be developed The beach resort is already a popular a separate management contract for an IR in seven stages, with investment for the first tourist draw with foreign visitation growing being developed in the north, which will be stage set at $650 million. Phase 1 covers 270 at an annual average rate of 33 percent since one of two participating in a pilot scheme to hectares of land, rising to 986 hectares once 2013 (primarily driven by Chinese and South allow local residents to gamble. fully built out. Koreans), the report said. The 33 percent “The reality is that Suncity will be in The casino is to include 140 gaming average annual growth in foreign visitation position to redirect a real amount of VIP tables and 1,000 slots/ETG seats is notably faster than foreign visitation to volume to Vietnam beginning next year,” On the non-gaming side, Union Gaming the country as a whole, which only grew at the firm said in a note, adding that the $15 said there will be a 313-room mass market hote, a 14 percent CAGR over the same period. billion estimate for quarterly volume makes an all-suite hotel with 136 keys, a condo hotel The next resort scheduled to open in up about 7 percent of Macau’s estimated both for sale and on a timeshare basis, as well Vietnam is on Phu Quoc island, which will be VIP volume for 2019. as a golf course and other resort amenities. the first project to be allowed to permit locals.

Tourism arrivals

Accrued for 12 months of 2017 12 months 2017 vs 12 months 2016 (%)

China 4,008,253 48.6%

2,415,245 South Korea 56.4%

798,119 Japan 7.8% Government tightens tax oversight 616,232 Taiwan Vietnam’s casinos will soon be required to adopt 21.5% new measures that ensure all transactions and

614,117 winnings are properly recorded and stored for USA security and tax collection purposes, local media 11.1% reports. The Ministry of Finance Decree No. 3 is (Source: Vietnam Ministry of Culture, Sports and Tourism) set to take effect on February 12, 2018, with the aim of ensuring that casinos are run properly and winnings are recorded for tax collection purposes. Tourism industry faces skills gap The decree also puts forth regulations related to Vietnam faces a huge skills shortage in its tourism industry, which has seen the management of money, conventional currency rapid growth in recent years, according to reports. According to a forecast by and organization. the Vietnam National Administration of Tourism (VNAT), by 2020, the tourism It also states that businesses are only allowed industry will need more than two million people directly providing tourism to exchange and return conventional currency at services, not including the labourers supplied to cruise tourism. At present, there the cashier for players before they start playing. are more than 1.3 million workers in the tourism industry nationwide, accounting All transactions related to domestic, foreign and for 2.5 percent of the nation’s total labour force. However, only 42 percent of conventional currency must also be monitored by those were actually trained to work in the hospitality industry, the report said. computer software, with the data collected put into Last year, Vietnam welcomed more than 13 million overseas visitors. revenue summaries. INDOCHINA 36

Nagacorp 2017 revenue Gross Gaming Revenue $925.9m

Mass Market: $149.7m Public Floor Tables

Mass Market: $150.9m EGM

VIP Market $625.3m

(Source: Nagacorp) Rail link to improve Bavet access Vietnam and Cambodia are considering building a railway connecting Ho Chi Minh CAMBODIA City with Bavet City, linking Vietnamese outbound travellers to the Cambodian casino hub. The plan was reportedly revealed during a meeting between Naga 2 stokes VIP demand Cambodian Transport Minister Sun Chanthol and Vietnam’s Deputy Minister NagaCorp’s newly opened Naga2 has already attracted the attention of Asia’s VIPs of Transport Nguyen Nhat. The project is and is likely to further fuel growth in the sector in 2018, after a 142 percent jump in the early stages of conceptualization, with the governments now working on a in VIP rollings last year. feasibility study. It is also understood that the two countries are also studying the he operator, which has a monopoly holds true. We are modeling 97 percent VIP construction of an expressway linking within a 200 km radius of the capital volume growth in 2018 to $41.6 billion, and Ho Chi Minh City and Phnom Penh. The Phnom Penh, reported a 39 percent 10 percent growth in 2019 to $45.7 billion.” railway line to the west, which links Phnom Penh to Poipet on the Thai border, is set to increase in net profit for the full- Leading Macau junket Suncity Group was be finished by 2018. Tyear 2017, reaching $255.2 million. Gross scheduled to open at the beginning of March, gaming revenue increased by 85 percent to promising to bring its high roller clientele to $926 million, while EBITDA increased by 25 the Cambodian capital. percent to $319.7 million. Naga2 more than doubles capacity in terms Nagacorp said it continued to achieve solid of hotel rooms and gaming facilities. It also growth in the mass market segment, with mass adds a state of the art 2,200 seat theatre and market table buy-ins up 28 percent to $787.8 additional entertainment, food and beverage million and electronic gaming machines bills- options alongside the NagaCity Walk duty-free in up by 21 percent to $1.8 billion. shopping mall which opened in August 2016. However, it was the growth in VIPs that The company said the opening has removed China influx blamed hit the headlines. Total rollings for the year many of the constraints previously faced by for Sihanoukville crime hit $21.1 billion, translating into a 177 percent the group in the development of new markets China’s increasing involvement and increase in revenue to $625.3 million. For Q4, and deeper penetration of its existing markets. investment in the Sihanoukville Province the group reported VIP volume of $10.1 billion. As a whole, Cambodia has seen strong has pushed up the crime rate and brought Nagacorp said the opening of Naga2 in visitation, helped by a buoyant economy, instability, Governor Yun Min said in a letter November 2017 has significantly increased which has attracted a growing number of to the government. The three-page letter, the quality and range of VIP, mass gaming business travellers. which was sent to the interior minister said and non-gaming offerings. The extension In 2017, visitation to Cambodia continued that the influx of Chinese investors had has provided the group “with a product to grow with international arrivals increasing “created opportunities for Chinese mafia comparable in quality to integrated resorts in by 12 percent to 5.6 million visitors and arrivals to come in and commit various crimes more established gaming destinations,” it said. at Phnom Penh International Airport gaining and kidnap Chinese investors, causing insecurity in the province,” the governor “We have consistently heard from Macau by 21 percent over the same period last year. was reported as saying in Free Malaysia junkets that the quality of Naga2 well-exceeded Visitation from China grew by 46 percent to Today. Sihanoukville, a sleepy coastal town their expectations and that they would have 1,210,782 visitors and is the leading source in Cambodia, has seen a surge in China- no issues in bringing more of their players of visitation to Cambodia. driven interest in the hotel and casino to Naga,” said Union Gaming analyst Grant The International Monetary Fund expects industry. Governor Min also admitted that Govertsen. “Even in Cambodia, the adage the economy to grow by 6.8 percent in 2018 Chinese investment has created jobs for that quality gaming supply drives demand after expanding by about 6.9 percent last year. the city and pushed up real estate prices.

Asia Gaming Briefings | March 2018 INDOCHINA 37

Highest accuracy with no changes to 40 layout, chips, dealer or player behaviour

130

130 lift your game

SenSen Networks SenGAME 3.0 delivers the highest accuracy of mixed stack height valuation including back betting. It is a plug and play solution which retrofits to existing tables that does not require changes to layouts, chips, dealer or player behaviour. It is inconspicuous and cost effective which is easy to install, calibrate and maintain.

Learn more at sensennetworks.com 38 38 AUSTRALIA

AUSTRALASIA Political donations under fire in latest anti-industry salvo

Australia’s gambling industry is facing mounting political pressure across many areas of the country, with campaigners targeting political donations in an attempt to reduce the lobbying power of the sector.

Asia Gaming Briefings | March 2018 AUSTRALASIA 39 he Alliance for Gambling Reform spin at $1, remove EFTPOS access near has called for a complete ban on machines and ban political donations from GROSS GAMING REVENUE political donations from the gaming the gambling industry. Total gambling +3.9% industry, after recent disclosures “Our policies will be a key negotiating expenditure 2017 Tfound that more than A$1.5 million ($1.18 plank to keep the next government of [South $23.65b million) was donated to major political Australia] accountable on such an important Casinos +0.4% parties in 2016/17, local media reports. issue, should we have the seats in parliament $5.19b According to analysis by the AGR, in to influence that change,” Xenophon was Gaming machines +4.2% 2016/17, there were 20 seperate gambling cited as saying by local media. $12.07b industry donations to the federal Labor The increasingly hostile environment Sports betting Party, totalling $330,650, while the Coalition and mounting regulatory pressure is +13% $920.6m received almost $1 million in donations. taking its toll on the industry, with British Crown Resorts, Tabcorp, Clubs NSW, Clubs bookmaking giant William Hill becoming Racing +4.1% Australia and the Australian Hotels Association the latest to exist, selling its Australian $2.94b were revealed as major gambling donors. business to CrownBet. Tim Costello, director of the Alliance, “Given the credit betting ban in Australia Donaco warns legal said that gambling harm will continue in and the likely introduction of a point of spat to hit profit Australia until the “political funding tap is consumption tax in a number of states, it Donaco International said on Tuesday completely turned off.” is clear that profitability will increasingly that it does not expect to post a statutory Costello added that there is a good chance come under pressure,” the company said. net profit for the 2018 fiscal year, due that the reported numbers are understated, Amendments to the Interactive Gambling to an anticipated impairment charge with current rules stating that only donations Act, passed last year, create a hostile environment of about A$144 million (US$113.3 over $13,200 need to be disclosed. Costello for online operators, effectively banning all million). The Australia-listed company also said that a large amount of the donations online gambling apart from sports betting and said the impairment is the direct result were focused in NSW, calling the state the lotteries. It further prohibits in-play betting of the breaches of agreement by a most “pokies-captured jurisdiction.” and from February this year banned online former Thai vendor, who had been The issue of donations hit the headlines bookmakers from offering credit betting. operating competing gaming activities next to its resort in Cambodia without recently in Tasmania’s elections. The opposition Last year, ads during live sports tournaments consent. While a preliminary injunction Labor Party ran on a platform promising were banned, while operators licensed in was granted against the defendants, to ban all pokies from bars and clubs. The the Northern Territory were recently told the overall litigation continues - with incumbent Liberal Party accused Labor of to stop accepting and paying out bets in Donaco now claiming damages of taking political donations from the industry cryptocurrencies. US$120 million. Donaco said that the “under the table,” despite its reported stand According to the Australian Financial impairment won’t have an impact on the against the machines. Review, the Northern Territory Racing company’s cash flows, but will impact on Meanwhile, in South Australia gambling Commission sent an email to all corporate the company’s statutory net profit for the also featured front and center in recent bookmakers registered in the territory year. The impact will also stretch into the election campaigns. However, anti-gambling recently, asking all to stop accepting bets company’s capital management plans for the 2018 financial year, which takes into crusader Nick Xenophon appears to have in bitcoin and other cryptocurrency. account forecasted net profit. moderated his stance, backing off a pledge “The chairman of the Racing Commission to completely ban pokies. ... is intending to issue a formal communique He said he now wanted to reduce poker to all sports bookmakers and betting exchange machine numbers by half in hotels which operators licensed in the NT if currently Tabcorp profit plunges currently have 10 or more over the next five years. transacting in cryptocurrency (for example by half His target would be to cut the numbers Bitcoin, Ethereum and the like) for their Tabcorp Holdings’ statutory net profit fell in hotels and clubs from about 12,100 to wagering operations to immediately cease more than 50 percent in the first half of the 8,000. His party also plans to cap each and desist,” the email said. 2018 financial year. Tabcorp said NPAT and EPS were adversely impacted by significant items after tax of A$57.4 million (US$44.9 million), which comprised of Tatts Group acquisition related costs; Sun Our policies will be a key negotiating Bets onerous contract provision; Sun Bets “plank to keep the next government of [South impairment; Luxbet closure costs and loss on the Odyssey divestment, all of which Australia] accountable on such an important was partially offset by the net gain on the Tatts cash-settled equity swap. Revenues issue, should we have the seats in parliament reached $1.4 billion in the interim period, to influence that change. up 18.7 percent year-on-year. The company completed its landmark merger ” with lottery giant Tatts Group late last year. AUSTRALASIA 40

NEW ZEALAND Asia VIPs creep back to NZ

SkyCity Entertainment says its international business is recovering and it expects modest growth in group EBITDA this year, also helped by expansion in New Zealand and an improved performance in its Australian properties.

he company, which like other accreditation. ‘China Ready’ accreditation is operators in Australasia had been a global accreditation system acknowledging targeting wealthy Asians, saw a drop commitment to providing the best service for in business last year after employees Chinese travellers. Tfrom Australia’s Crown Resorts were arrested in “We continue to believe in the long-term China on gambling-related charges. For the full prospects for our International Business and year it’s targeting $10 billion in turnover in its our management team, now led by Stewart international business, with operating margins Neish, has been making a positive impact on broadly in line with the first half of the year. the business,” CEO Graeme Stephens said in SkyCity said it is also evaluating strategies to the interim report. maximize revenue from its existing properties, The company, which generates the bulk including a potential sale of its underperforming of its revenue from its Auckland property, Darwin casino, as well as focusing on new also has a new management team in place. technologies. Rob Campbell began For H1, New Zea- as chairman on Jan. 1 land’s only listed casino following the retirement operator reported an This is one of Chris Moller, while 11.6 percent rise in net Michael Ahearne took profit to NZ$93.5 mil- “of the fastest over as chief operating lion (US$67.6 million), growing forms officer in December. while reported revenue of entertainment SkyCity has been amounted to NZ$554.7 focusing on improving million, an increase of 4 globally with its IT infrastructure to percent. EBITDA reached strong appeal for engage through both Academics call for pub NZ$180.8 million, a digital and social media ban for pokies positive movement of both millennial and and recently launched 4 percent year-on-year. Asian audiences. a direct-to-television Academics in New Zealand have called for The international esports studio in its electronic gaming machines to be banned in pubs and clubs, saying the availability business achieved growth ” Sky Tower, the result of pokies is a key factor in problem during the period due of a partnership with gambling. Professor Max Abbott Dean to an increased focus on key customers, with esports company LetsPlayLive. of Health and Environmental Sciences particularly strong activity over the Golden LPL Studios is a state-of-the-art broadcast at Auckland University of Technology, Week period in October. Operating margins studio designed exclusively with esports in told a recent gambling conference that significantly improved to 21.6 percent vs.12.6 mind. The development will enable LPL to there has been unprecedented growth in percent, due to the benefits of an operational film esports events at most major Australian commercial gambling in recent decades, review and modest bad debt provisions vs. the and New Zealand venues whilst producing a despite research showing the magnitude previous calendar period. world-class broadcast product in 4K or HD to of gambling-related harm is similar to that Overall turnover in the international business any linear TV or online partner in the world. of depression and alcohol misuse and dependence. Fellow speaker, Dr Lance was up 9.4 percent to $4.8 billion. SkyCity The setup includes dedicated PC and O’Sullivan said there is a direct link between said about 50 percent of turnover had come console booths, commentary and analysis addiction to pokies and sick kids. “It’s bad from junkets during the period ending Dec. desks, and an ultra-modern control room. enough that we have diseases of poverty 31, compared with 40 percent the prior year. “This is one of the fastest growing forms in a first world country like New Zealand, SkyCity has been pushing hard to gain a of entertainment globally with strong appeal but to see them exacerbated by pokies is share of the Chinese outbound tourism market for both millennial and Asian audiences,” extremely frustrating. This is the definition of and was recently awarded ‘China Ready’ Ahearne said. a preventable epidemic,” he told delegates.

Asia Gaming Briefings | March 2018 AUSTRALASIA 41

GROSS GAMING REVENUE Lottery Commission under fire for CNY app

Gaming Machines Casinos A Maori health group has criticized (outside Casinos) the Lotteries Commission for a new gambling app with a Chinese theme, launched to coincide with Chinese $870 $856 $854 $843 New Year. Hapai Te Hauora general $827 $818 $806 manager Anthony Hawke said Lotto’s decision to launch a gaming app with a Chinese theme around the festival $586 $572 $527 was inappropriate. “This isn’t a Maori $483 $490 $486 $448 or Chinese issue, the issue is of the derogatory association of gambling with a festival that is very important to a culture,” Hawke was cited as saying by local media. He said there was also a concern that Lotto would launch products targeted toward other cultures at culturally significant times of the year. “It’s a slippery slope 2010/11 2011/12 2012/13 2013/14 2014/15 2015/16 2016/17 from here if they target other cultures without completely understanding the (Source: NZ Dept. of Internal Affairs) cultural implications.” SUPPLIER SPECIAL REPORT 42

ASEAN 2018 Shaping the industry of the future

Organized by Asia Gaming Brief, the second edition of the ASEAN Gaming Summit returns to the Philippines on March 20-22, 2018 at Conrad Manila.

ver 300 delegates gave praise to the the three-day event is also an unmissable opportunity conference last year, noting the event’s to meet new contacts. This year, the ASEAN Gaming well-curated content, high-profile speakers, Summit introduces a new pre-conference “Golf Fun and meticulous organization. Day” held on 19 March - the day before the conference, OWhile the 2017 show focused on the convergence as well as networking cocktail receptions, poker of online and land-based gaming, the 2018 event tournaments, and conference wrap parties. takes a look at disruptive new technologies as well The 2018 event will also feature an upgraded as innovative operational and management strategies meeting space at the conference. With a Kiosk Meeting for the land-based and online gaming industry. Area and Networking Bar, allowing companies to New features of the conference this year include showcase their latest products and technologies in multi-tracked sessions over the two official conference a casual environment. days (March 20-21), as well as an optional third-day Over the next few pages, we hear from some of masterclass, where attendees can pick from workshops the leading suppliers of the Asia gaming industry, related to regulation, online security and digital marketing. who give their insights into the future of the ASEAN As those who have attended in the past can attest, gaming market.

Asia Gaming Briefings | March 2018 SUPPLIER SPECIAL REPORT 44 Alderney eGambling Susan O’Leary, CEO of Alderney eGambling

of the region, and there is a huge appetite In addition, the Alderney Gambling Control for the activity among the population. At Commission has just launched its Category present, however, there isn’t much in the 1 Associate Certificate B2C, which allows way of frameworks and rules for online Asian operators to obtain a licence from operators and suppliers. That is starting to any country in the world. change, and we have been working closely with regulatory bodies and watchdogs What have been the biggest developments across the region as they look to implement in Asia for you in the past year? their own rules and requirements. Over the The growing number of operators and coming years, it should provide clarity for suppliers embracing regulation. Asia is a online operators and suppliers looking to patchwork of white and grey, with different establish themselves in Asia. rules in different markets. As such, operators and suppliers are embracing self-regulation How is your company responding to these and obtaining licences with internationally trends? recognised regulators such as the Alderney We have been active in Asia for several Gambling Control Commission. There years now, forming strong relationships with are many reasons for this, from wanting regulators, lawmakers and local operators to partner with well-known brands that and suppliers. We have also been assisting will only deal with regulated businesses, hat kind of trends do you foresee Alderney licensees that have seized the to gaining access to superior banking and Win South East Asia over the next first mover advantage by launching in payment processing solutions via preparing few years? Asian markets where it is appropriate for for an IPO or M&A activity. In short, they Regulation and licensing are going to be them to do so. We have also developed a want to raise standards and ensure they are the key trend in South East Asia, particularly unique Asian Betting Model that allows operating to the same level as businesses when it comes to online play. Legal land- operators and suppliers working to the in highly regulated, mature markets such based gambling is widespread across much “agency” structure to be properly licensed. as Europe.

APE Tony Chan, Asia Pioneer Entertainment

How is your company responding to these trends? APE is continuously looking to expand outside of Macau alongside growth of casino capacity in SEA.

What products are you currently offering in the Philippines / Asia? APE has supplied Spintec machines in City of Dreams Manila.

hat kind of trends do you foresee in competition as the gaming destination of choice. What have been the biggest developments WSouth East Asia over the next few years? SEA mass market players will likely focus in Asia for you in the past year? South East Asian casinos will capture a more on slot games for entertainment value APE supplied a large installation of Spintec greater market share of both the China and rather than their Macau counterparts - who stadium games to Genting Highlands in their Asia VIP market. Macau will face increasing are still more interested in table baccarat. phase 3 project in 2017.

Asia Gaming Briefings | March 2018 SUPPLIER SPECIAL REPORT 46 Aristocrat hat kind of trends do you foresee in games for our customers that will be entertaining cabinets adding to player enjoyment and our Wthe South East Asia over the next few for players, some of whom may be visiting customers’ gaming offer. years? How is your company responding to the casino for the first time. Performing very these trends? strongly across Asia is the Behemoth cabinet What have been the biggest developments in We see growth in the “Hold & Spin” which stands greater than 10 feet tall with Asia for you in the past year? feature segment. To this end, we have enjoyed its single, Ultra High Definition 84” screen. We mentioned the Helix+ cabinet. With subtle a great deal of success with our Lightning Link We look forward to pleasing players through upgrades to our award-winning Helix cabinet, progressive throughout Australia, the Americas, the continued growth of 5 Dragons Empire we’ve significantly improved player experience. Europe and Asia. We expect sustained demand in the Arc cabinet and 5 Dragons Grand in Dual 27” High Definition monitors project the in Linked Progressives across South East Asia the Arc Double. powerful graphics and thrilling animations for and continue to bring further innovation into Lastly, we are also creating games for which Aristocrat games are famous. Bank them this segment – both in terms of product and those who enjoy table games, with the together and slap on the optional, enhanced LCD game play. We’ve just launched our latest Hold added fun of a slot environment. For this topper to really make your games pop. & Spin product in Long Teng Hu Xiao – Mighty segment, we have created our Games of We also mentioned Long Teng Hu Xiao Cash; it’s off to a very strong start. Fortune; Multiline Baccarat, Baccarat 88 – Mighty Cash. This game coupled with the Next, we see a healthy VIP segment. For and Baccarat Streak which are played on Helix+ cabinet is a winning combination. The this reason, we will continue to extend our our exciting Arc cabinet. latest game in the Hold & Spin segment, Long line of standalone games for players who Teng Hu Xiao was engineered from the ground enjoy a higher volatility gaming experience. What products are you currently offering up with Asia in mind. From its Reel Power base “Standalone, high volatility” is a key segment in the Philippines / Asia? game mechanic to its Dragon and Tiger themes, for operators right across the region – and is Due to its compelling mechanics and since the link was purpose-built for this region. particularly important in markets such as The its Asian debut in The Philippines, Lightning We recently launched our first Korean-themed Philippines, Vietnam and Cambodia. 5 Dragons Link has been a sensation. In addition, we are title: 5 Kings. It has been very well received by Rapid, Fortune King Rapid and 5 Kings are very excited to bring Lightning Link, the 5 casino operators – especially in The Philippines great examples of new Aristocrat games in this Dragons Series and Good Fortune to market and Vietnam – due to the volume of Korean space. We will respond to our customers’ needs in our latest Helix+ cabinet which builds on players who frequent these markets. The game by building on our core brands and evolving the success of Helix to which both operators looks great running in our Behemoth Cabinet; an already strong portfolio. and players have responded very positively. it’s a standout on the casino floor. Next, the growth of mass market gaming is Fulfilling our commitment to emerging These are only a few of Aristocrat’s biggest an interesting trend that we, and our customers, segments, we are also offering our line of developments for Asia over the past year. We are keenly aware of. Players enjoy new gaming Baccarat inspired Games of Fortune as well maintain a deep commitment to this market experiences, gameplay and visual destinations as 5 Dragons Empire Link. and will nurture our core while introducing that are big, loud and bright. We strive to create We look forward to these games and innovative, new concepts as we grow with you.

Asia Gaming Briefings | March 2018 SUPPLIER SPECIAL REPORT 48 Betconstruct Yue Dong, Regional Director - China, BetConstruct hat kind of trends do you foresee Win South East Asia over the next few years? From the perspective of channels, the playtime spent on mobile devices will surely increase which leads to a higher popularity of mobile-designed games and high-frequency games. What will catch the eye of the player, thus setting an aim for a developer to work on, is the game quality. Improved graphics, UI/UX design and sound effects will significantly contribute to players engagement.

How is your company responding to these trends? What products are you currently offering over their business. We want to give our partners freedom in the Philippines / Asia? and an opportunity to enter the gaming BetConstruct has a global reputation What have been the biggest developments market with innovative products to attract of a complete gaming and betting software in Asia for you in the past year? new players. For that purpose we have provider. For the Asian region we offer During the year 2017 BetConstruct has developed SpringBuilder with its set of Sportsbook, Data Feed and Marketing been strengthening its position in the region. tools to create gaming websites. Also we Solutions, Live and RNG Casinos, Skill Our solutions for the Asian market have are coming up with new games in different Games and many more. The whole range been improved with functions specifically product categories and closely following the of BetConstruct products can be found developed to suit its requirements, starting tendencies of the local market for a further in Spring BME, an all-inclusive platform from the languages and up to backoffice improvement of our offerings. developed to give operators full control and marketing tools.

How is your company responding to these investment in its core development teams and eBet trends? opening additional offices throughout Asia to Founded on a mobile first strategy, which provide enhanced partner support. hat kind of trends do you foresee in led to numerous industry awards and market WSouth East Asia over the next few years? leadership, eBET is uniquely positioned to support What products are you currently offering in Over the last 6 years, eBET has noticed an live mobile casino throughout Southeast Asia. the Philippines / Asia? unquenchable thirst for live Baccarat in Southeast Through innovation within our live casino eBET continues to operate on the principle Asia. This trend shows no signs of slowing product, we resolve the most critical market of providing high-quality games that transcend down in the years to come. We will continue challenges faced by partners throughout Asia. modern terminology. Each game is designed to support its popularity by launching new One feature that is highly coveted by partners is by eBET, certified by GLI, and regulated by the variations of our award winning live Baccarat. eBET’s industry leading compression technology, gaming authority in the Republic of Philippines Additionally, the inevitable casino player which provides secure HD quality video at a to ensure fairness and reliability. eBET’s fully migration from PC to mobile will continue to fraction of traditional live casino bandwidth licensed modern casino studio of 30 tables and gain momentum. We expect the demand for costs. This has enabled eBET to offer reliable, 250+ Asian dealers offer Baccarat, Roulette, live mobile casino to intensify in three key SEA scalable, and inexpensive live casino services Sic-bo and Dragon Tiger on HTML5, iOS, markets: Indonesia, Thailand and Vietnam. This to partners in developing markets. Android and PC trend is largely correlated with smartphone In order to continue to provide cutting- adoption rates throughout the region. edge technology, eBET will be doubling the What have been the biggest developments in Asia for you in the past year? eBET is dedicated to bringing the best personal iGaming experience to players throughout Asia with our award winning live casino, superior customer support and cutting-edge mobile technology. The eBET brand has continued to strengthen in 2018 and has recently partnered with GPK, Dafabet and many more leading Asian platforms.

Asia Gaming Briefings | March 2018 SUPPLIER SPECIAL REPORT 49 Betgenius Thomas Klingebiel, Commercial Director – Asia, Betgenius

Our industry renowned in-play data feeds and fully outsourced trading services are used by many of the biggest regulated operators in the world to support trading operations and to automate bet acceptance and resulting. Powered by data collected by over 6,000 accredited sports reporters around the world and unique mathematical algorithms with customisable trading tools, Betgenius is a truly full service trading solution for sportsbooks in the Asian market. We have also been an integral marketing partner to sportsbooks across the world for over a decade. We combine our deep knowledge of the industry and a unique ability to leverage the wider betting ecosystem to provide a wide range of marketing services including programmatic trading, ad serving and creative services to our clients. With a reputation built on being able to efficiently deliver and retain players at scale, Betgenius hat kind of trends do you foresee we continuously achieve on behalf of our has established itself as the industry leader Win South East Asia over the next trading clients is a testament to the strength and only betting-specific digital marketing few years? of our products and highlights why we are specialist of its kind. We’re currently observing two key considered market the leaders in this space. trends in South East Asia. The first, is Last year we launched BetBuilder, a What have been the biggest developments the continued rise of so-called “long-tail” unique product which revolutionises pre- in Asia for you in the past year? or tier two sports and their importance match betting by enabling customers to The successful launch of our odds feeds to operators both in terms of revenue instantly build accumulators made up of and outsourced trading products with two generated, and as a marketing and retention dozens of different player, team and event major Asian operators was the highlight for asset. With that being said it is clear that markets within the same game. BetBuilder us over the last 12 months. It has given us football will continue to rule supreme, but delivers a slick user experience which gives great confidence that our products are not we are seeing that betting on smaller and control to the customer and delivers the only sophisticated enough but also powerful more exotic competitions is increasing at odds they want instantly. Appealing to the enough to be readily deployed in possibly a faster rate when compared to betting on fun factor of sports betting, BetBuilder has the most competitive sports betting market the top European leagues. already been proven to increase pre-match on the planet with great success. The second is the gamification of sports turnover for operators without cannibalising betting. Operators are looking for new and in-play betting. innovative ways to engage the next generation We’re soon to be launching Microbets, of sports betting customers who seek more a new innovation in keeping with modern control over their bets, instant gratification customer’s desires for instant gratification and bets that have more of a fun factor. It’s a and reward. By allowing the operator to trend that we are very much at the forefront offer multiple binary outcome markets of with our innovative products BetBuilder within a defined time-frame, Microbets and Microbets. creates yet another new way of increasing in-play turnover and betting frequency whilst How is your company responding to these providing the customer with the excitement trends? of a near immediate win or loss. Our data and trading products for sports like basketball, tennis, volleyball and What products are you currently offering badminton are second to none in the market. in the Philippines / Asia? Betgenius prides itself on the breadth and Betgenius offers a range of trading and depth of coverage in not only these sports, marketing services to regulated online sports but all sports. The revenue and margins that betting operators across the Asian market. SUPPLIER SPECIAL REPORT 50 Gamevault - Leander Games Harmen Brenninkmeijer, Managing Partner, Dynamic Partners International hat kind of trends do you foresee in The result will be an impact on this segment What products are you WSouth East Asia over the next few years? of the industry similar to what happened with currently offering in From a macro point of view, the gaming lotteries in China from 2014-2016. the Philippines / Asia? environment of SE Asia needs to be separated From a micro point of view, we believe the We are developing into 1) gaming that is organized for “locals”; operators will react with more technological Asian style games and and 2) gaming that is targeted to jurisdictions advancements to get around the “Chinese aggregate games to the outside the local market. wall”, making it more difficult to find where various operators to offer When looking at the Philippines we can see the operators are located. them a full assortment of there are several new measures enabling local We believe more and better content will be proven content. The focus is players to gamble in various types of locations created, more in-depth marketing activities will to be as unique as possible ranging from IRs to Egame locations. Bets are take place and the focus will shift from getting whilst delivering games placed via a desktop functioning as a slot machine, any player to making sure the players are being players want to engage or dedicated Bingo machines, horserace betting retained. More advanced customer management with on a regular basis. shops and lottery kiosks. In this case technology features will be introduced on the platform and As we have seen, many Asian games become is creating the opportunity to expand the offering in the games and more loyalty will be created leaders in their own right in jurisdictions across within the established regulatory framework. with “series” of games. the world, we expect to be a key player in the For all other countries the legal environment is delivery of content. much less clear, and changes are being made to How is your company responding to these deal with it from Cambodia, Laos to Vietnam. trends? What have been the biggest developments in However, the individual approaches taken by We believe that we need to look at the micro Asia for you in the past year? regulators are likely to be incomplete, failing trends and advocate the right measures at a macro From a macro point of view, we are to address all pertinent issues. level whenever we get a chance. We need to focus excited about the initiatives taken in Vietnam For those jurisdictions targeting international on the potential threats as they surely will arise re Sportsbetting, the Japanese approvals re clientele such as South Korea, Japan and China, and we need to retain a level of flexibility so we the casinos (albeit the results are to be seen) the outlook is very different. In my mind, the can react based on anticipated events. We like to and the opening in the Philippines of new Chinese authorities will start to question the make sure that everyone understands that we’re gaming products. suppliers and operators they consider to be in the entertainment business (truly) and not For us it’s been the fact that we established infringing on the rules. An example will be that just participate for the revenues it can create. D-tech, our game studio designing games for during 2018 and 2019 the Chinese government It’s a business where it’s a privilege to operate in local players. We look at opportunities where we will address social gambling which will result in this industry and not a right. It therefore comes can add value and where we believe we can help restructuring of the type of games on offer today. with a level of responsibility. companies get established in our core markets.

Frosmo a never-ending challenge and for that process FROSMO is the best solution at the market. Mikael Gummerus, CEO and founder, FROSMO We are hiring people from the potential new hat kind of trends do you foresee in markets to ensure that we can communicate WSouth East Asia over the next few years? with them effectively and be able to provide a We see continued strong growth within the superior service. online gaming sector in Asia. The regulatory environment will probably change during What products are you currently offering in the next few years and open up for a few new the Philippines / Asia? alternative markets to be offering licenses FROSMO’s data driven continuous to operators. There should also be some development platform allows our customers consolidation happening here, where there to gain competitive advantage and grow their will be fewer but bigger operators. business in a very competitive market. This is used by several of the biggest operators here in What have been the biggest developments in How is your company responding to these Asia and globally. Our solution is completely Asia for you in the past year? trends? system agnostic so we can work on top of any Stronger local presence with key clients Our business is global and as we help gaming platform, content management system that help us to understand the market and our customers adapt to changing external and marketing cloud complementing and by- requirements better. In addition it’s been environments, so we are in a good position passing their weaknesses. We also offer full crucial to advance our technical service to help our customers. As the competition Professional Services with unique experiences capabilities and I’m happy to tell that we can heats up companies need to find their own about continuous data driven development ensure scalable, secure, low latency content unique angle to the customer experience. It’s with full implementation capabilities. delivery anywhere in the region.

Asia Gaming Briefings | March 2018 SUPPLIER SPECIAL REPORT 51 GLI Salim Adatia, Vice President, GLI

hat kind of trends do you foresee in ® WSoutheast Asia over the next few years? Beyond the unsurpassed growth of the Asia Ltd. gaming industry in Southeast Asia, we foresee there will be increased demand for products and services that are positively proven to be globe to ensure best practices are adhered to for services, but is so much more. Services include fair, secure and auditable. The Southeast Asian the Southeast Asian regulators, manufacturers testing; professional services; inspection; market has a large pool of sophisticated bettors. and operators that we are so privileged to have consulting: forensics and R&D. With the increased availability of places to as clients. We apply the same superior level of make wagers, either online or in bricks-and- knowledge and rigor to testing regardless of What have been the biggest developments in mortar venues, they will want to know that whether we are asked to test physical in-venue Asia for you in the past year? they have an equal and random chance of gaming machines (i.e.,: Slot / EGM) or for One of our main goals during the next winning good fortunes. Moreover, the increased regulated online gaming. year is to satisfy the increasing demand for our demand mentioned above is giving rise to new We have been extremely pleased to see cybersecurity auditing and consulting services to and innovative gaming products and ideas. our list of valued clients continue to expand. the expanding Asian market. Our security and We are seeing a myriad of different types of Through consistent world-class customer service professional services division has undergone games, some hybrid in nature, integrating and the highest quality evaluation services, exponential growth to meet the unique needs entertainment along with an ability to place with rapid turnaround-time for testing, our of the gaming industry. We intend to grow a wager. We are also seeing an increase in live portfolio of satisfied stakeholders in Asia has this service in Asia as well, especially given dealer gaming activity especially in regulated steadily increased. This has enabled our company the heightened awareness amongst CEO’s and markets such as in the Philippines. We are also to directly respond to trends by expanding CIO’s to protect intellectual property, player fielding increased inquiries of interest from our APAC operations, both in Macau and data, licenses and brands. India regarding potential forms of wagering Australia. Having an increased pool of subject In addition, as regulated markets continue and traditional localized games, which is a matter experts in all areas of gaming has also to expand in Southeast Asia, our goal is to market we continue to monitor and strive to enabled GLI to help our clients succeed, which continue to be a trusted source of advice and help in any way we can. is something we feel is vital to developing and knowledge for best practices; both within and sustaining long-term business relationships. outside of Asia, to support positive growth. This How is your company responding to these is a responsibility we take seriously, given our trends? What products are you currently offering in view of the importance of maintaining integrity GLI is leveraging its nearly 30 years of the Philippines / Asia? and responsibility in gaming and entertainment experience in all areas of gaming from around the GLI is the leader in testing and certification products and services all over the world.

IGT Charles Seo – Head of Products, Asia

Asia together with our Australia Studios to performers and resonate well with players. become part of the APAC family, sharing We are looking to bringing those proven the vast amount of knowledge and skills that math models back into the regions as part each of the studios have on a day to day basis. of our “Perennial” Strategy. To better understand what is happening on the gaming floors across Asia we have also What products are you most excited about increased our interactions and discussions coming from IGT into Asia in the next 9-12 hat’s our strategy for Philippines with key operators, something which needed months and why? Wand rest of Asia? improvement. I’m very excited about the vast amount of IGT’s product and content strategy for As part of IGT’s content strategy we games currently in production and waiting Asia is to treat each region uniquely, we are focusing on bringing “first to market” to be approved across Asia. know that a single game strategy in which innovation products into Asia (both hardware As part of IGT’s Turnaround Strategy, the one product will work in all regions is not and game content). We are actively reviewing last 12 months have been heavily focused on the best method moving forward. our product portfolio and utilising IGT’s our Link innovation and development so I In the last 12 months we have implemented global R&D roadmap to select innovative am looking forward to launching our recently changes within our Game Development game mechanics which will allow IGT to be Asia approved HyperHits & PrizeDisk family, Studios to meet the changing trends in Asia. first to market into the region. as a link product – initially launched with One of the key changes we have implemented We are also aware that there are classic Elephant King and Wolf Ridge – which will is incorporating our development teams in IGT titles on the gaming floors that are strong resonate well throughout Asia. SUPPLIER SPECIAL REPORT 52 Jade Entertainment Joe Pisano, CEO, Jade Entertainment

hat kind of trends do you foresee with the entry of PaddyPower and FSB, and international football matches. The new Win South East Asia over the next among others, that will cater to the market decrees are expected to pave the way for few years? potential of sports/online betting. increased domestic and foreign investments We believe that Chinese tourism in Vietnam’s gambling industry. expenditure will continue to be a key driver What products are you currently offering • Issuance of POGO licenses in Philippines of gaming performance in Southeast Asia. in the Philippines / Asia? • Continued growth/expansion of RWG At the same time, mass-market gaming Jade offers a wide range of products and with the opening of Sky Casino. tourism will continue to grow in the region, services to the Pan Asian gaming market, • Macau gambling industry posted growth including Macau. these products include the complete range of: after revenue dropped to five-year lows Looking at specific regions, we believe • Novomatic products including slot during a central government campaign that visitor arrivals at Resorts World Genting machines; electronic table games; absolute from 2014 against shows of wealth among will likely grow in 2018 with more attractions vision products public officials and likewise during the opening this year. Integrated Resorts (IR) • Apex slot machines and ETG’s time when China’s economic growth in Japan could drive capex after 2019 if the • Walker Digital table solutions in the was also slowing down. IR implementation bill is passed in 2018, Philippines and service in Malaysia and the growth of the casino and gambling • NRT redemption kiosks industry in Philippines will be supported by • Miwa locks the recent trends, such as the integration of • FSBtech sportbook platform casinos, hotels and resorts for cross business • Sportsbetting powered by Paddy Power growth and improvements in airports (Clark • JCM Service centre for Philippines and and Subic) and infrastructure (skyway Malaysia access roads). • Equipment leasing Rising demand in online betting and an • Graphic controls TITO paper increasing number of non-junket services • Optium Ebingo machines will also contribute to the growth of the industry in Philippines. This is despite the What have been the biggest developments recent pronouncements made by PAGCOR in Asia for you in the past year? on imposing a moratorium on new casinos. Vietnam opened its doors to gambling Vietnam will also see gambling growth, when its Government recently issued Decree with the recent enactment of laws that legalize No. 03/2017/ND-CP in 2017. The decree, casino operations in Vietnam, allowing which took effect on 15 March 2017, allows locals to gamble. This paves the way for the casino operations in Vietnam, including establishment of IRs in Vietnam. the operation of gambling machines and gaming tables subject to compliance with How is your company responding to these certain business conditions. trends? Decree 03 sets out specific conditions in Jade recently established an office/entity obtaining a casino license. It also provided a in Malaysia that will cater to the needs/ pilot scheme where Vietnamese citizens may requirements of Resorts World Genting. gamble in some casinos that are located in We also are looking to establish another tourism complexes and entertainment facilities. base in Vietnam in 2018 to cater to Vietnam Another decree was also enacted in casinos’ growth/expansion. Finally, we’re Vietnam in 2017. Decree 06, which permits also expanding our strategic partners base betting in horse racing, greyhound racing

Asia Gaming Briefings | March 2018 SUPPLIER SPECIAL REPORT 54 Limelight Jaheer Abbas, Sales Regional Director, SE Asia & ANZ, Limelight

hat kind of trends do you foresee and Origin Storage for the gambling sector. Win South East Asia over the next • Low Latency Live Streaming services few years? ensure the successful delivery of low- The biggest trend we foresee is the shift latency streams to web and mobile devices of device preference. While users in Asia • Web Acceleration with DDoS Protection traditionally preferred PCs and laptops as enables faster response times for media- their device of choice, we now see a seismic rich and personalised websites while shift to the use of mobile, particularly in the providing a powerful solution to the field of online gaming and gambling. We threat of cyber-attacks anticipate continued growth in this area, • WAF provides powerful defences against and users to invest more time and money HTTP application layer threats. into their gambling experiences. • Our Bot management services help determine if incoming requests are How is your company responding to these generated by bot/script or human user trends? • Origin Storage Services help enhance In online gambling where users are in download performance and manage different locations wagering on the same file sharing game, low and consistent latency is required. Ultimately, we look to enable companies To address the issue of latency, we have to deliver game experiences to users reliably introduced Video Acceleration, a specific and consistently while ensuring optimum set of configuration options in the Content performance of downloads, video streaming, Delivery Service designed to accelerate the and websites. delivery of dynamic manifest files and very We do so by implementing a dynamic, small video chunks. This is especially important integrated cloud-based workflow and for mobile users who are on-the-go. harnessing our expertise in global delivery, Video Acceleration is targeted at scalability and offerings to help our customers companies delivering HLS and DASH live stay ahead of the curve. We will continue to streams from their own infrastructure as an invest in innovation so we can deliver the origin for the CDN to cache fill from, and best user experiences in the market. will typically be deploying a video platform version of its EdgePrism OS software that to produce the Master Manifest, individual What have been the biggest developments is designed to optimise user experience for bitrate manifests, and the video chunks. in Asia for you in the past year? the fewest video rebuffers, lowest latency, We also offer DDoS security, Web In the past year, we have increased the highest throughput, and superior security. Application Firewall (WAF) and Bot number of Points of Presence (PoPs) and As a result, users can stream videos at higher Management service to address security expanded our network, resulting in higher quality while experiencing fewer rebuffers. threats that may arise. quality video. We have also developed We have also extended our low latency live a strong suite of products – such as our streaming to iOS and Android devices. What products are you currently offering DDoS Attack Interceptor, WAF and Bot In December last year, we also expanded in the Philippines / Asia? Management products – to enhance our our CDN global egress capacity to 28 Tbps, In Asia, we offer services such as Low security offering. an increase of 39 per cent, allowing us to Latency Live Streaming, Website Acceleration Most recently, we have completed provide effective high-capacity network with DDoS Protection, WAF, Bot Management the global rollout of a new and enhanced support to our customers across the globe.

Asia Gaming Briefings | March 2018 SUPPLIER SPECIAL REPORT 55 nCHain While legacy Bitcoin Core has attracted much Jimmy Nguyen, CEO, nChain Group attention in late 2017, Bitcoin Cash has been quietly gaining traction. Bitcoin Cash is now hat kind of trends do you foresee in set to take off further in the next 12 months Wcrypto and blockchain technologies as awareness of the benefits of a truly scalable over the next few years? (and decentralised, immutable) cryptocurrency Blockchain technologies will certainly become clearer in the eyes of business leaders. continue to dominate the disruptive tech landscape in 2018. In particular, we see 2018 as How to you foresee the gaming industry a big year for the growth of Bitcoin Cash – the response to these trends? cryptocurrency that most accurately mirrors Online gaming is one of the first industries the original vision of Satoshi Nakamoto as that adopted Bitcoin for payments. As Bitcoin outlined in the 2008 Bitcoin White Paper. Cash rises in recognition and usage, I expect Bitcoin Cash emerged in August 2017, to see online gaming companies move from forking off from the legacy Bitcoin Core chain, Bitcoin Core to Bitcoin Cash. with a commitment to bigger blocks, faster Bitcoin Cash transactions can be sent transaction network will not work for online speed, and lower transaction fees – which are for very low fees – as little as 1 or 2 cents gaming, or any other industry. the keys to create a peer-to-peer electronic cash (in U.S. currency), and can be confirmed As Bitcoin Cash rises, I also expect online system that can rival the VISA and Mastercard quickly. In comparison, the legacy Bitcoin gaming operators to begin integrating with global payment systems. Core chain is slower and its fees have become Bitcoin Cash wallets and experiment with Those elements are necessary to create prohibitive – costing upwards of $20 to send in-game micropayment features that use enterprise-level payment and technology systems. a transaction. Such high fees and a slow Bitcoin Cash.

Novomatic Lawrence Levy, VP Global Sales NOVOMATIC

gaming machines, as well as linked progressive Malaysia with around 650 machines and jackpots, WAP jackpots and scalable casino dedicated technicians on site 24/7. There are management systems. Another trend is in the also just under 100 machines in Singapore advancement of Electronic Table Gaming, that are performing very well, and we are with custom and stadium-style setups that building the offering throughout the region feature large signage and offer digital versions by designing standout ETG areas with signage of player-favourite table games. from NOVOMATIC Media Technology. In the Philippines, the Otium bingo division has How is your company responding to those been delivering a range of video bingo games trends? to the market for several years and following In direct response to the growth of linked recent GLI-11 v3.0 certification, can now offer progressive jackpots is the Enchanted Fortunes a wide range of titles on the leading OT100 and Linked Jackpot available on new cabinets OT300 cabinets, in addition to multi-level and such as the PANTHERA Curve, as well as a community jackpots. growing library of linked progressive games. The NOVOMATIC library of stand-alone titles What have been the biggest developments in is also expanding and will fuel the company’s Asia for you in the past year? hat kind of trends do you foresee in growth in the region, with games such as Asian In terms of slots, NOVOMATIC is still WSouth East Asia over the next few years? Fortunes and Viking & Dragon just two of relatively new to the region and the past year The prevalence of linked progressive many leading the offering. Well-established has been one of consolidation and strengthening jackpots continues in South East Asia and this in Europe and now growing in Asia and the areas of R&D to develop products relevant to will likely develop over the next few years. This US is the NOVO LINE Novo Unity II ETG the various Asian markets. Leading cabinets is a positive trend for slot gaming overall, and product, which offers popular electronic table such as the V.I.P. Lounge and GAMINATOR as more titles become available in the region, games such as Baccarat, Roulette and Sic Bo Scorpion started to spread during the past year, players have access to new types of games with on leading terminals like the EXECUTIVE SL. with new installations such as in the Philippines different levels of volatility and math models. at Solaire, Resorts World Manila and the new NOVOMATIC has already started to drive What products are you currently offering in Okada Manila property. We see the development development in the region with products the Philippines / Asia? of new integrated resorts in South East Asia as specific to the market, providing a variety We have one of the largest ETG setups a major opportunity for the upward growth of of slot content on internationally-proven in the world at Resorts World Genting in all our product lines in the region. SUPPLIER SPECIAL REPORT 56 Qtech effortlessly distils this range with its cutting- unswerving drive edge recommendation software, which runs to become the Jonas Alm, CEO, Qtech off similar machine-learning algorithms to largest provider hat kind of trends do you foresee in digital-content giants Amazon, Netflix and of digital enter- WSouth East Asia over the next few years? Spotify. Players are accordingly suggested games tainment in Asia I think you can’t look much further than commensurate with their personal favourites, by 2021. the escalating smartphone-adoption rates for a which readily enhances their overall experience. definitive trend on the way the gaming industry These recommendations are based on familiarity What have been is leaning in South East Asia. Mobile growth in of profile, content and playability, and perfectly the biggest de- Asian gaming is surpassing even our best-case capture individual user taste. In short, QT Play’s velopments in projections. So, as Asia’s fastest-growing games unique auto-curation algorithms match the right Asia for you in distributor, our challenge is to respond to this game to the right audience. It’s another industry the past year? surge in demand for mobile RNG games by first from QTech, and is game-changing both After a suc- providers and operators, and corral the best games literally and figuratively! cessful 2017 of triple-digit growth, improving in the market under the QTech Games banner. the speed and performance of all games on its As for the players themselves, the gender divide What products are you currently offering platform, the aforementioned launch of QT Play between men and women gamers continues to in the Philippines / Asia? has seen us hit the ground running in 2018 with narrow, especially among the key 21-35-year-old QTech Games’ products are available all another tool that ensures our partners are able bracket, so a product portfolio which speaks to across Asia, bar the Philippines. Our unique to outstrip their rivals. We’re currently seeing gender equality in terms of thematic content will distribution platform offers those Asian operators the biggest growth in India’s rapidly emerging become essential, if it isn’t already. the finest online (RNG) games in the world, market, where slots continue to prove popular. while mobile gaming naturally represents our However, the main source of revenue is cascad- How is your company responding to these central focus. This is premised on a fully flexible, ing from table games. Therefore, as with every trends? tailored technical model that affords games pro- Asian territory, it’s crucial to supply the correct We’ve just launched QT Play, a new game- viders and operators the most straightforward gaming portfolio for varying cultural taste and recommendation app designed to meet this integration available on the market. Leading regulation. The subcontinent is no different in ramping mobile demand. In the bustling performance and customer service (our team this domain. Indeed, QT Play’s ability to filter igaming marketplace, with a blizzard of new is fluent in English, Chinese and Korean) is at this Pan-Asian mix and parcellate it according game releases, it’s easy for players and providers the heart of everything we do, as we expand to player preference and respective market to feel inundated, even overwhelmed by the our geographical footprint throughout the requirements allows our partners to target any scale of choice and competition. QT Play most populous continent. It’s part of QTech’s region with precision and confidence.

Sensen We specialise in the Video-IoT data analytics. Our software combines enterprise video and Subhash Challa, CEO, SenSen Networks sensor data acquisition, data fusion and Big hat kind of trends do you foresee in Data analytics, deep machine learning and WSouth East Asia over the next few years? artificial intelligence into a highly scalable and We see increased use of data driven configurable platform to improve the speed and approaches to decision making to optimize all accuracy of the decisions our customers make gaming operations over the next five years. We and automate their business processes. expect advances in Machine Learning and AI to become mainstream and the organizations What products are you currently offering adopting these new generation technologies in the Philippines / Asia? will have an edge over others in understanding We have recently introduced a ground their customers better, serving them better and breaking new product call SenGAME 3.0 which helping them to become more competitive and uses low-cost android devices to provide data profitable. On the other hand, companies not driven insights for table game operations in real investing into these technologies will be left time that we are offering in the Philippines/Asia. retrofit solution that can be easily added to the behind. We also see the adoption of blockchain The solution delivers complete information of existing tables. technologies by various organizations within the table game betting activity including Game gaming ecosystem introduce new challenges for begin and end times, number of players at the What have been the biggest developments gaming operators in the next five years. gaming table, the number, type and value of in Asia for you in the past year? each bet placed and determine other metrics We are actively promoting the solution to How is your company responding to these about live table game operations within Casinos. all the players within the gaming ecosystem and trends? This is the only solution in the market that can exploring partnerships with technology vendors We are a leading provider of data driven provide these metrics with no changes to chips and system integrators to acquire customers insights for business process enhancements. or table layouts or dealer actions. It’s a complete within the region.

Asia Gaming Briefings | March 2018 SUPPLIER SPECIAL REPORT 57 Spectrum Gaming Fredric E. Gushin, Managing Director, Spectrum Gaming Group

hat kind of trends do you foresee in South East Asia Wover the next few years? Asia will continue to be the center of the gaming world. Most of the major operators will be firmly focused on Japan, which is likely to legalize IRs later this year. However, the market in Southeast Asia is vibrant and growing. We think that Southeast Asian countries will continue to develop and implement gaming regulation that is in line with international standards. It will be interesting to see if Cambodia finally passes its proposed gaming law, how Laos deals with its casino industry, whether Myanmar decides to implement its draft gaming legislation and whether Thailand considers the legalization of casinos sometime in the coming years. Now that the initial wave of economic growth over the last decade has taken place, we see Asian gaming regulators and casino operators stepping up their AML compliance efforts. We see this trend gaining traction in Macau and elsewhere.

How is your company responding to these trends? Spectrum Gaming and our affiliated Asian company, Spectrum Asia, have been working with clients in Asia since 1991. In addition to working on the normal feasibility and economic impact study projects, we have been working with clients across Asia in an effort to help them understand that they need to consider all the long-term implications of expansion into new markets. For example, we have been assisting a number of clients who wish to strengthen their internal compliance and AML procedures, not simply because they want to comply with all local regulations, but to ensure they can demonstrate to gaming and securities regulators their commitment to these important regulations.

What products are you currently offering in the Philippines / Asia? We offer a full range of gaming regulatory services to governments including setting up regulatory agencies, conducting What have been the biggest developments in Asia for you in the casino licensing investigations, AML compliance services and past year? strategic planning services. For developers and commercial casinos The expansion of casino gaming in the Philippines and the likely we offer strategic planning services, the conduct of independent privatization of PAGCOR casinos has created new opportunities and feasibility and economic impact studies, casino development and demands for our services. Likewise we have been working in Japan compliance related services including due diligence. for a number of clients. SUPPLIER SPECIAL REPORT 58 Sportradar Michael Maerz, Managing Director Betting – Betradar

hat kind of trends do you foresee in terms of sports data and technology with offices media tools plus hosted content solutions. But WSouth East Asia over the next few years? located across the globe. But one of the keys to we are also in the process of developing a few In the next few years we foresee esports our success is our commitment to quality over additional products that will be of particular becoming one of the most watched sports quantity. This means we’re not just responding interest and popularity in the Asian market. worldwide. This is being driven by younger to trends but remaining at the forefront. One generations, especially in Asia. Obviously, the of the ways we do this is by listening to our What have been the biggest developments in demand for more sports content, such as live customers. By doing so we also try to pre-empt Asia for you in the past year? video streaming and betting entertainment their demands so instead of following trends, we We have acquired several new clients tools to engage fans is always increasing. Use are anticipating them. As a technology leader, across the last 12 months and have continued of mobiles in Asia is also popular, which is we are also trying to create our own trends in to maintain productive relationships with our conducive to the consumption of esports and terms of niche sports and new products. existing ones, which have included expanding live sports betting and streaming. So, in general our offering to many. We are now proud to terms, with the increased demand beyond the What products are you currently offering say that Betradar has become a household traditional sports like horse racing, basketball in Asia? name throughout the region. We have also and football, operators should look to advancing Given that we are based worldwide we are formed partnerships with third parties to their technology and content solutions and offering all of our existing products and services deliver some exciting new products into the becoming more mobile friendly if they want in Asia, which includes our 360-degree offering market as well as acquiring new and extending to keep up with the trends. for betting operators, with everything from existing sports data rights deals. In June last fixtures creation, monitoring and settlement, year Betradar entered a major collaboration How is your company responding to these pre-match odds, live odds, live data, our Managed with leading Chinese sports data provider, trends? Trading Services, Virtual Sports products, live Beitai Digital, which has also helped us bring We are one of the world’s leading suppliers in video streaming, betting entertainment and new data solutions to the Chinese market.

Zustro gaming operators. This allows our company to maximize our resources, human and floor space, by partnering with online gaming companies. Once the new gaming regulations are finalized, Cambodia is set to rival the Philippines as SE Asia’s No.1 destination for online operators and Ha Tien Vegas and Zusto intend to be at the forefront.

What products are you currently offering in the Philippines / Asia? hat kind of trends do you foresee in making it a viable option for operating iGaming Currently Ha Tien Vegas operates a land- WSouth East Asia over the next few years? businesses in Cambodia based hotel and casino with 161 hotel rooms, The expansion of land-based gaming and 28 gaming tables and 105 electronic gaming legalizing gambling is becoming the hot topic How is your company responding to these machines. Additionally Ha Tien Vegas provides in many jurisdictions. Vietnam is opening its trends? operational floor space for Zustro to operate doors to the local population and it is only a Given the pending improvement in 12 live dealer online tables. In a collaboration matter of time before Thailand announces the regulations in Cambodia and the potential from both sides, Zustro has now launched legalization of casinos in their own country. For for increased competition from Vietnamese ZustroPlay which features 4 of the most popular Cambodia’s future, the opening up of casinos casinos, Ha Tien Vegas Entertainment Resort table games in Asia – Baccarat, Roulette, Dragon in the two neighbouring countries is a definite has made a strategic partnership with Zustro an Tiger and Sic Bo. For more than seven years threat to gaming revenues and jobs. iGaming company with a wealth of experience Zustro has been operating www.clubvegas999. However this has not slowed down investment in providing quality live online dealer products. com and now using that experience they have into Cambodian casinos with the amount of Operating under the Ha Tien Vegas gaming developed their own proprietary software they licensed casinos doubling in the last 2 years. A license Zustro is able to provide high-quality can provide as a turnkey solution to other more positive move by the government has been live dealer products from a specially designed casinos and also the ability integrate into other the drafting of new regulations for the control of studio and also streaming from the casino main online operations. Ha Tien Vegas can also casinos and online gaming operations. Making gaming floor. A combination of land-based provide a similar partnership to other iGaming a more transparent and regulated environment and online experience combining to provide companies looking for their own dedicated can only benefit Cambodian gaming operators, competitive and high-quality products for other tables or operating space.

Asia Gaming Briefings | March 2018 SUPPLIER SPECIAL REPORT 60 Tangam Varun Nayak, Senior Vice President, Gaming Strategy, Tangam Systems

opening and more tables being added to What products are you currently offering the market. However, from a customer in the Philippines / Asia? perspective it does not look like the growth Clients across Asia are using TYM. We rate is going to keep pace with the increase have also launched Floor Layout Analytics in supply. In fact, the focus to acquire and (FLA) - which delivers an easy way to retain customers is heating up since everyone visualize over 40 KPIs on a casino’s own is targeting the same Chinese premium mass geocoded floor map in real-time with just customer. Naturally if operators are to protect a few clicks. By allowing for seamlessly their margins in this increasingly competitive combining financial and operational KPIs environment they are going to have to focus FLA allows operators to make informed on improving operational efficiencies. We judgements about their floors as well as believe that will increase the importance of collaborate better with other parts of the use of data in decision making. organization such as marketing and finance. In short, we expect that more operators in the future will find the need to leverage What have been the biggest developments data driven technologies to make their in Asia for you in the past year? operations more efficient as the environment Table games yielding is complex - far gets increasingly competitive. more complex than say Hotel room yielding. Not only are a lot more variables involved How is your company responding to these but patrons react to changes to price / mix trends? in real time which increases the complexity Our platform TYM - short for Table Yield exponentially. To succeed at yielding Management - is focused on using data to requires the right mindset, proper tools, improve operational decision making for and an alignment of marketing strategy table games. with operations. When all of these pieces We live a world where we are drowning are in place, execution is seamless, and in data. The challenge has morphed into results follow. knowing what data to focus on and how We’ve seen this blueprint of execution will that improve the business. The more with our clients in Asia Pacific and that has intelligent use of data an organization resulted in having market leading financial makes, the more benefits they are likely metrics such as hold% and Win per unit per to see. That is what our platform delivers. day. Galaxy Entertainment Group has been Through machine learning and cutting- leading on that front and their results speak hat kind of trends do you foresee edge optimization algorithms we are able for themselves. As an aside, I’d like to point Win South East Asia over the next to recommend specific changes to price, out that yielding should improve customer few years? capacity and labor allocation to the gaming experience since the high value patrons get In Asia we see a continued increase in floor to not only improve player experience the level of service they deserve and that supply / capacity because of new properties but also increase profits in the process. increases their propensity for repeat visits.

Asia Gaming Briefings | March 2018 ad_2.pdf 1 29 Jan 2018 10:10:17 PM

SUPPLIER SPECIAL REPORT 61

w

C

M

Y

CM

MY

CY

CMY

K 62 Become a member

SUBSCRIPTION FORM, PLEASE TICK AS APPROPRIATE, USE CAPITAL LETTERS

STANDARD MEMBERSHIP BENEFITS TOP NEWS HEADLINES E-BRIEF CONTAINING IN-DEPTH FEATURE ARTICLES SINGLE MEMBERSHIP $615 SEARCHABLE ARCHIVE OF GAMING NEWS US$ 128.00/ MONTH, 6 MONTHS - US$ 768.00 $1,035 DISCOUNTED ACCESS TO EVENTS AND OTHER AGB PRODUCTS US$ 108.00/ MONTH, 12 MONTHS - US$ 1,296.00

CORPORATE STANDARD MEMBERSHIPS

THREE (3) MEMBERSHIPS: 10% DISCOUNT FIVE (5) MEMBERSHIPS: 20% DISCOUNT TEN (10) MEMBERSHIPS: 35% DISCOUNT $552 $492 $399 6 MONTHS: US$ 690 EACH each 6 MONTHS: US$ 615 EACH each 6 MONTHS: US$ 499 EACH each Total: US$ 2,070 (Save: US$ 234) Total: US$ 3,075 (Save: US$ 765) Total: US$ 4,990 (Save: US$ 2,690) 12 MONTHS: US$ 1,165 EACH $932 12 MONTHS: US$ 1,035 EACH $828 12 MONTHS: US$ 840 EACH $672 Total: US$ 3,495 (Save: US$ 393)each Total: US$ 5,175 (Save: US$ 1,305)each Total: US$ 8,400 (Save: US$ 4,560) each

* Sign up and pay in full for 12 months and get the 13th month free! * The above discounts cannot be used in conjunction with any other discount

CONTACT INFORMATION

FIRST NAME : LAST NAME :

EMAIL : SKYPE NAME :

COMPANY : ROLE :

ADDRESS :

STATE : PROVINCE :

CITY : POSTAL CODE : COUNTRY :

USER NAME : MOBILE : + PHONE : +

PAYMENT DETAILS: HSBC HONG KONG | “BLUE SKY VENTURE LTD” | #658-046347-838 | SWIFT: HSBCHKHHHKH I WOULD LIKE TO SETTLE VIA CREDIT CARD. PLEASE SEND ME A DEDICATED PAYMENT LINK TO THE EMAIL ABOVE

WHAT IT IS WHAT YOU GET AGB serves as a platform for multiple levels of information about the Asian AGB consists of a weekly eBrief reporting on recent regional news and develop- gambling industry in the form of feature articles, latest news headlines, network- ments in the Asian gambling industry. Articles are written by experts living and ing events, directories of key authorities and players, bespoke research, introduc- working in Asia and cover a range of legal, operational and market issues, offering tion services, and access to experts who can answer your questions. in-depth analysis of the opportunities these developments provide for operators and those who work with them.

WHAT’S DIFFERENT WHY YOU NEED IT Our extensive network of regional advisors ensures that the intelligence you receive Gain access to the vast knowledge and experience of those who actually work in is real, topical, and based on fact. No other service gives you such comprehensive and with the Asian gaming industry and get the inside scoop on the next great insights into the political, legislative and competitive developments affecting the opportunities, as well as answers to your everyday operational challenges. By markets in this region, and what they mean for you. Get your information from the becoming a member, you also connect with other like-minded people who want horse's mouth, not from third parties more than just surface-level information.

AGBAGB - Asia Gaming Brief || Trading as as BlueBlue SkySky Venture -- Reg#43675Reg#43675 SOSO | [email protected] Asia Gaming Briefings | March 2018 16/F China Law Building, 409 Av. da Praia Grande, Macau SAR | P.O. Box 1139 63 CALENDAR OF EVENTS 64

G2E Asia 2018 MARCH AUGUST 15-17 May 2018 The Venetian, Macau ASEAN Gaming Summit 2018 https://www.g2easia.com/ Australia Gaming Expo 21-23 March 2018 14-16 August 2018 Conrad Manila, Philippines Asia Lottery Expo ICC Darling Harbour, Sydney http://agbrief.com/event/asean-gaming-summit-2018 15 May 2018 https://10times.com/australasian-gaming-expo The Venetian, Macau https://www.asialotteryexpo.com/zh-cn.html APRIL SEPTEMBER

Affiliate Grand Slam Blockchain Expo Global 17-19 May 2018 International Masters of Gaming Law (IMGL) 18 April 2018 Hong Kong Autumn Conference Olympia, London http://affiliategrandslam.com/ 5-7 September 2018 https://blockchain-expo.com/global/ Prague, Czech Republic https://www.imgl.org/conferences/autumn/ JULY overview/2018 MAY

World Gaming Executive Summit http://www.globalgamingexpo.com/ October Japan Gaming Congress 3-5 July 2018 10-11 May 2018 W Hotel, Barcelona Conrad, Tokyo http://www.terrapinn.com/conference/world-gaming- Global Gaming Expo http://www.japangamingcongress.com/ executive-summit/agenda.stm 9-11 October 2018 Las Vegas Sands Expo & Convention Center, Las Vegas IAGA Annual Conference iGaming Super Show http://www.globalgamingexpo.com/ 14-16 May 2018 17-20 July 2018 Four Seasons, Macau Amsterdam http://www.theiaga.org/2018-summit-overview http://www.igamingsupershow.com/

Become a member Exclusive access to AGB Intelligence

BE the first to receive our daily briefs

priority registration for our events

REGISTER NOW AT AGBRIEF.COM

Asia Gaming Briefings | March 2018 LAST WORD 66

Disrupting the regulators

Technology has been disrupting conventional business models for years now, from the way Sharon Singleton we bank to the way we book our holidays and travel around town. However, in the land-based gaming sector there have been few truly revolutionary products to shake up the status quo. Managing Editor, AGB

asinos in Asia are still heavily table focused, From the casino’s point of view it’s understandable not with baccarat by far the firm favourite on the to rush headlong into the next best and as yet unproven floors in Macau and indeed most properties thing. Floor space is precious and experimentation is a around the region.. gamble in and of itself. Even if something quickly fires CThere has been plenty of talk of how to attract the the imagination of clients, it needs to have a shelf life millennial audience and hook them into the casino to merit the sizeable investment. experience, often through the potential introduction Some casinos in Asia are willing to push the envelope, of digital technologies, creating convergence between particularly in the Philippines where clients are often the land-based and online sectors. keen to try something new. Also in Cambodia, where However, despite the best efforts of the suppliers there is a distinct blurring of lines between land-based and their R&D departments, change is slow. At the and online offerings. recent ICE Totally Gaming Show in London, several However, behind all of this are the slow turning companies were showcasing interesting new concepts wheels of regulation. Macau in particular is known to that could have a major impact on the floor. be risk averse with new products facing a true uphill Takara Gaming Group is battle to gain approval. While one example. It has a GLI-11 it is worthy for regulators to certified operating system, ensure the quality and security which enables a video game’s IP Even if of the products being offered to to run on any regulated gaming punters, there perhaps needs to floor. This effectively turns “something quickly be a way of speeding the process the slot machine into a giant fires the imagination to ensure casinos in Asia are customizable i-Pad, providing able to offer the most cutting casinos with the flexibility of clients, it needs edge products available to their to provide the latest content to have a shelf life clients should they so desire. without the huge additional Then there’s bitcoin, the infrastructure investment to merit the sizeable disruptor in chief. From an early traditionally associated with investment. embrace of crypto-currencies, introducing new gaming regulators around Asia are having machines. ” second thoughts, spooked by the At ICE it showcased the frenzy of speculation. Chinese Shooting game “Fish Hunter” in a chance- China has banned bitcoin trading outright, while based casino-graded gaming machine. Fish Hunter Australian gambling regulator, the Northern Territory is a real-time fish shooting simulation game that has Racing Commission, has imposed a ban on online captured the video skill game market in China since cryptocurrency wagering. South Korea seems to have its debut in 2009. dialled back from a threat to also impose a ban, but TGG’s has introduced its products on the floors in is thought to be looking at introducing a licensing Cambodia, the Philippines, Singapore and South Korea, system, while noises by India also suggesting it might though is still waiting on the green light from Macau. crackdown hit prices hard. Play n’ Go was another one, showcasing its new Banning cryptocurrencies and foot dragging on other omni-channel platform OMNY. The product is designed cutting edge technologies will ultimately prove to be like to allow players to transfer their game progress across holding back the tide. Regulators rather than enforcing any land-based or digital device through a standard a knee-jerk ban need to be as equally disruptive in their user profile, blurring the lines between the casino floor thinking to ensure they offer consumer protections without and online worlds. cutting off access to potentially game-changing products.

Asia Gaming Briefings | March 2018