G2E Asia 2013 the Maths, the Mastery: Valuing Macau: Aristocrat’S Roadmap J.P
Total Page：16
File Type：pdf, Size：1020Kb
May 2013 • MOP 30 • ISSN 2070-7681 Fortune’s Favored An industry and a continent on the move In Focus: Saipan’s Big Gamble SHOWSTOPPERS: G2E Asia 2013 The Maths, the Mastery: Valuing Macau: Aristocrat’s Roadmap J.P. Morgan’s Kenneth Fong CONTENTS INSIGHTS Filtering Out the Noise 40 J.P. Morgan Leisure and Gaming analyst Kenneth Fong discusses the key factors to consider in forecasting where the Macau gaming sector is headed and the challenges in valuing the stocks. IN FOCUS The Pacific Play 36 Casinos could provide a much- needed boost to Saipan’s ailing economy, but the gaming proposal as it currently stands doesn’t make sense for operators. FEATURES Keeping It Reel 32 Aristocrat confronts the challenge of market leadership by uncovering new strengths in today’s classic games while laying the groundwork for tomorrow’s. Protecting All Interests 50 “Prevention is better than cure,” explains Ian Hughes, senior director, Global Engineering and Client Services at Gaming Laboratories International. TECH TALK The Local Perspective 30 Macau-based Laxino Technology is creating mobile versions of its successful online games and taking game development further by tapping COVER STORY into its extensive online database. Proving Ground 54 SPIELO International recently carried out 8 A Continent one of its largest casino systems installations in Asia at Kangwon Land in South Korea. on the Move Kangwon Land offers the perfect venue to demonstrate the robustness and flexibility Macau’s success has set off a chain reaction of casino of the company’s offering. development across the region. Here’s Inside Asian Gaming’s comprehensive roundup of the plans and prospects, from the fledgling Entertainment City in the Philippines to the possibility of impending legalization in BRIEFS Japan. 98 Regional Briefs 100 International Briefs CONTENTS G2E ASIA 2013 Flashing the Cash 60 G&D brings banknote processing expertise to Solaire. Hit Machine 62 DLV’s new cabinet and Asian-themed jackpot. Platform Diving 63 How High 5 Games is achieving convergence. Revenue Boosters 66 Enhancing casino performance at TCSJOHNHUXLEY. Speed Counts 68 More hands per hour with the i-depsys drop box. Best Acceptance 70 The MEI suite of cash management solutions. Safety First 74 Baccarat protection from Angel Playing Cards. 64 Wide Appeal New additions to all four SHFL Entertainment Seduction Tools product categories—utility, specialty games, 76 IGT’s localized systems and slot content galore. e-Tables and slots. Bringing the Experience to Life 78 WMS flavors specially crafted to Asian tastes. Dominating Presence 80 Novomatic’s attention-grabbing new cabinet. Expanded Palette 82 Matsui chips with enhanced security features and aesthetics. Hopper Upgrade 84 FutureLogic’s Ticket2Go enables ticketing-out on legacy machines. Craft and Commitment 86 Abbiati’s portfolio designed for regional appeal. For the Fun of It 88 Konami’s recipe for expansion in Asia. Running the Tables 89 LT Game chases new products and new markets. Smarter, Faster, Too 90 JCM keeps the games running smoothly and profitably. East Meets West Meets Excitement 92 Bally Technologies has a thrill for every culture. More Than This 94 GPI’s growing array of efficiency-enhancing RFID products. 71 Serving the Masses From Strength to Strength The main-floor appeal of Weike’s 96 Ainsworth’s latest innovations. new Infinity Baccarat. 4 INSIDE ASIAN GAMING | EDITORIAL Mostly Illegal and Very Big Given the phenomenal growth of Asia’s legal gambling markets it’s understandable to find the unregulated ones rather overshadowed, massive as they are, too. How massive no one really knows since most of them exist in cyberspace. Which is interesting in itself because in Internet gambling as in the terrestrial variety the growth in Asia has been epic. In terms of the revenues we know about, the continent has overtaken North America as the world’s second-largest online market after Europe, accounting for 25% of the regulated take, or about US$10 billion, according to H2 Gambling Capital, one of the leading consultants in the field. Of course, this has to be qualified in light of the determination of governments in the US over the last several years to suppress their home markets. Still, if we consider just the impact of China, which, as in most things, is impossible to exaggerate, it’s worth pondering how much of a difference the US ban has really made. If we accept a conservative estimate of $400 billion for the total online market worldwide, this Publisher implies an Asian market, regulated and unregulated, worth $100 billion, conservatively. How much Kareem Jalal of this might be China’s share? Ten percent? Would 20% be unrealistic? Let’s start with the combined sales of the country’s two legal forms of gambling, the Welfare and Sports lotteries, which attained Director a number last year that was larger by about $2 billion than the gaming revenues of all of Macau’s João Costeira Varela casinos. Then factor in more than 500 million broadband users and 400 million mobile Internet Editor users and more than 1 billion mobile phone users and another 14 million computers logged on an James Rutherford average of 11 hours a day across about 140,000 Internet cafes. So when we read as we did in one news story last summer about authorities in Shanghai busting an online gambling ring that had Operations Manager handled more than 70 billion yuan in bets over a six-month period, which is around US$11 billion, Muji Vong it’s entirely believable. “Asia, in general, is booming,” says Dennis Valdes, president of Philweb. Contributors Philweb is the company licensed by PAGCOR, the Philippine government’s regulator/operator, John Grochowski, Tom Hall to run online games in the island nation. Philweb’s varied businesses include scratch cards in James J. Hodl, Richard Meyer Cambodia, Timor Leste and Indonesia and sweepstakes in Guam. The Philippines business includes mobile gambling—there are an estimated 70 million mobile phone users in the country—and Graphic Designer more than 200 PAGCOR-branded Internet cafes offering all kinds of casino games. The cafes are Brenda Chao sold as franchises for PHP1.2 million-1.5 million (around US$300,000) and a cut of the winnings, Photography and one can opt to have one’s in a shipping container complete with computer terminals and cash- Ike, Alice Kok, James Leong, handling so it can be moved around if the traffic in any one location is too slow. Wong Kei Cheong “We are the 7-11 of gaming,” says Mr Valdes. Such permissiveness, while refreshing, is not shared by the rest of the region. It was to the Philippines, in fact, that police in Vietnam traced an online gambling ring they Inside Asian Gaming busted in January that was moving so much money out of the country one of the bank accounts is published by they seized contained the equivalent in Vietnamese dong of US$470 million. The Ministry of Must Read Publications Ltd Public Security describes the country’s cyber-underground as a multilayered conspiracy between 5A FIT Center Avenida Comercial de Macau foreign bookmakers and local operatives and agents. Similarly, the operation busted in Shanghai Macau was routed through servers outside of China and was funneling bets to more than 20 affiliated Tel: (853) 8294 6755 sites operated by Chinese based mainly in Southeast Asia. Conversely, a gang reputedly based in Singapore that law enforcement in Europe considers the most lethal match-fixing syndicate in the For subscription enquiries, world has run most of its online bets through China, according to a former insider. please email Internet gambling is illegal in Japan, yet H2 estimates that revenues in 2012 exceeded the [email protected] equivalent of US$4.5 billion. South Korean police estimate the size of their black market at more than KRW3.5 trillion (US$3 billion) a year. The government of Thailand, which outlaws all forms of For advertising enquiries, gambling except horseracing and a state lottery, says there are so many Web sites taking bets in please email the country they can’t keep up. They’ve identified more than 200 of them, several of them mobile [email protected] sites, offering games in Thai and English and happy to work with either baht or US dollars. or call: (853) 6680 9419 Philweb considers Thailand an expansion opportunity. www.asgam.com “The risks will likely be magnified as the technology supporting online gambling further evolves,” Singapore’s Second Minister for Home Affairs S Iswaran warned recently. The city-state, characteristically, is having none of this misbehavior and is studying ways to Inside Asian Gaming prevent its citizens from participating in it. “In Singapore there are concerns within the community is an official media partner of: over the social risks associated with this highly accessible form of gambling,” said Mr Iswaran. “The government shares these concerns.” It expects to have solutions by the end of this year. Currently, only 9% of Philweb’s revenues are generated outside the Philippines, and Mr Valdes wants to change that. Along with Thailand he sees Myanmar, Sri Lanka, Mongolia, Nepal and Palau as ripe for the picking. He says he can see the day when the majority of the company’s business is in greater Asia. James Rutherford http://www.gamingstandards.com We crave your feedback. Please email your comments to [email protected] 6 INSIDE ASIAN GAMING | A Continent on the Move In a ranking undertaken earlier this year of the 20 largest gaming companies by US dollar revenues, Global Betting & Gaming Consultants discovered that every company in the top 10 has a direct involvement in Asia either as an operator or investor.