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.

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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. The phenomenal success stories that are Macau and Singapore have set a pace for revenue growth in the larger Asia-Pacific region that PricewaterhouseCoopers believes will surpass the United States this year as the world’s largest. By 2015, the firm expects regional gaming revenues will hit US$79.3 billion, accounting for 43% of the global market. What this foretells is a “geographic shift in revenue origination,” PwC says. “This trend reflects the fact that demand in Asian countries currently far outstrips supply and that, for the next few years at least, operators and countries that offer further high-quality capacity in the region can be fairly certain that they will soon see it absorbed.” Which, of course, speaks more or less directly to the profound influence of China on the region’s leisure and tourism landscape. Rapid urbanization, rising disposable incomes and the relaxation of government restrictions on travel have transformed the Chinese population into the largest source of tourism revenue on Earth, a record $102 billion last year. International trips by Chinese citizens in 2012 exceeded 82 million. By 2015 they are expected to reach 100 million. “This happened all in one generation,” as Wolfgang Arlt, director of the China Outbound Tourism Research Institute, has noted. “Many have parents who didn’t have shoes. Now they’re showing the world and themselves: ‘I’m strong. I can go spend US$5,000 for nothing, just my pleasure.’” Yet, gambling is anything but exclusive to the Chinese, and PwC is not alone in recognizing that in Asia it remains vastly underserved. “Definitely, the success of Macau has set off a chain reaction in what is happening in the region,” says Francis Lui, vice chairman of Galaxy Entertainment Group. “You see more countries now assessing the pros and cons of having gaming as a driving engine for bigger economic growth.” The drivers, as you’d expect, are as varied as the region itself. At Entertainment City, the Philippines is taking the master-planned route. Taiwan is experimenting with something similar although on a much more limited scale. South Korea is dressing up the area around Incheon International Airport with tax breaks and other incentives. Even tiny Sri Lanka has entered the fray. And in Japan, a historically conservative political culture is shaking things up in Asia’s second-largest economy with the possibility that legalization will happen much sooner than anyone imagined. Mr Lui has put it succinctly: “The region is going to have more casinos.”

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CAMBODIA The ASEAN Model

2012 and looking forward to the opening of Naga2, which broke ground in November. Naga2 will add 1,033 hotel rooms, 200-300 ambodia’s growing appeal as a regional table games, 50 VIP gaming rooms, 500 Cdestination should continue to pay EGMs, entertainment and MICE facilities, sweet dividends for the NagaWorld casino and an underground shopping mall—the monopoly in Phnom Penh. stuff of “a truly integrated gaming and Visitation to the Southeast Asian nation entertainment destination,” as company increased 24% last year to 3.5 million, Chairman Timothy McNally puts it. driven primarily by travelers from Vietnam, The property is already substantial by South Korea and China. Tourism receipts regional standards—660 hotel rooms, 1,700 totaled US$2.21 billion in 2012 as average electronic gaming machines and 170 live Las Vegas Sun Hotel & Casino, Bavet spend per capita, which has been on the table games, 15 food & beverage outlets, rise for the better part of two decades, hit a nightclub, a spa, 25,000 square meters of $663. The Ministry of Tourism is expecting meeting space—and there are no statutory 4 million visitors this year on the strength limits on gaming capacity. Revenues in of forecasts calling for robust GDP growth 2012 were up 24.6% YoY to US$278.8. Pre- across Indochina—7% annually through tax earnings were up 23% to $137.8 million 2017, according to the International for a sparkling 49% operating margin. Monetary Fund—coupled with domestic Vietnamese players are the mainstay, infrastructure improvements, highlighted accounting for an estimated 35-40% of by a planned expansion of the international main floor revenues. But VIP play, most of airport in Phnom Penh, and a broader it Malaysian, is an increasingly important reach into markets outside Southeast Asia, part of the mix, generating $95 million in including more direct flight connections revenue last year on a 17% increase in rolling with mainland China. Actually, China is the chip volume. Five or so junkets are driving Holiday Palace Resort & Casino, Poipet country’s fastest-growing source of visitation most of the volume, although the property (+35% YoY in 2012), and its contribution is has relationships with some 30 different revenue increased 36%, food and beverage expected to reach 500,000 by 2015 and 1 operatives. Last year saw the opening of the sales, 54%, entertainment and other million by 2020. company’s first sales offices in Ho Chi Minh revenues, 37%, a tribute to management’s NagaWorld, the principal asset of Hong City and Bangkok. success at up-selling the total offering to Kong-listed NagaCorp, enjoys an exclusive Gambling generates more than 90% of visitors with a bit more wallet. license within a 200-kilometer radius of the revenues, but performance from the non- The role of the Vietnamese in driving capital. The property is coming off a banner gaming side continues to improve. Room these higher-margin segments has been significant enough to merit its own 200- room hotel wing and a dedicated gaming area for bigger cash players. Saigon Palace, it’s called. It opened earlier this year with Vietnamese-speaking dealers and Vietnamese food and music. Cambodia’s cheaper thrills are provided by 30 or so small casinos and slot parlors concentrated around the towns of Poipet and Pailin along the border with Thailand, where gambling is illegal, and in Bavet, bordering Vietnam, where casinos are off limits to locals. CIMB, an ASEAN-facing investment bank headquartered in Kuala Lumpur, estimates this frontier trade at 20- 30% of the total market, although no one knows for sure since it operates with little or NagaWorld, the principal asset of Hong Kong-listed NagaCorp, enjoys an exclusive license within a no regulation. 200-kilometer radius of Phnom Penh. Entertainment Gaming Asia, a

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distributor and lessor of EGMs in Cambodia (670 of them in NagaWorld) and the Philippines opened its first Dreamworld- branded casino in Pailin last May with 26 tables, two VIP rooms and 50 EGMs. Built for US$2.5 million it was immediately hailed by equity analysts Union Gaming Research Macau as the “category killer” of the borderlands. The company is slated this month to open a more elaborate slots-only casino in Poipet for $7.5 million. Dreamworld Pailin EGA also has eyes for the province of Kampot on the southeast coast where the situated across the Mekong Delta from the south of Phnom Penh, Thansur Bokor pickings have been less than lush. A fairly picturesque beaches of the Vietnamese Resort and Casino, where EGA also leases big casino there abruptly closed its doors province of the same name. Not far away, machines, is reported to be struggling in in January: Hà Tiên Vegas, it was called, in the Bokor Highlands about two hours its first year.

JAPAN No Time Like the Future

viability of casinos in the world’s third- largest economy has never been in doubt, and global names of the likes of Las Vegas he word out of Japan is that Prime Sands and Genting have expressed interest TMinister Shinzo Abe’s government in investing a lot of money. The country may include casino development in a new has long hosted thriving racing and lottery national economic growth plan to be drawn industries, and a machine gaming sector up next month. centered on the pinball-like game pachinko English-language daily The Japan Times, is estimated to generate some US$200 citing unnamed but “informed” individuals, billion in revenue a year. Investment reports that Mr Abe may propose special brokers CLSA Asia-Pacific Markets estimate zones for investment in privately operated that one resort-scale casino in Tokyo and resort complexes featuring hotels, casinos one in Osaka or another major city could and other attractions. He told the Budget Shinzo Abe be worth at least $10 billion a year, easily Committee of the National Diet’s House surpassing the $5.9 billion Singapore’s two of Representatives in March that lifting is building toward introduction of an resort casinos generated in 2012 and the the country’s longstanding prohibition on authorizing bill, but not before elections in $6.2 billion booked on the Las Vegas Strip casinos is an idea with “merit”. July to the House of Councillors, the Diet’s last year. Tokyo Governor Naoki Inose has Advocates have been pushing gaming’s upper chamber, which is still controlled by hinted at his support, and it is reported potential economic benefits for the better the opposition Democratic Party of Japan that Osaka’s popular pro-casino Mayor Toru part of a decade with little by way of and where a coalition led by the LDP hopes Hashimoto, a founder of the rightist Japan political traction to show for their efforts. to seize a majority. The non-partisan caucus Restoration Party, also wants to sponsor a However, this go-round they appear to have says it wants to submit a bill by the fall with casino bill. the requisite support at the top and have a view to securing legalization within two That said, a multiplicity of divergent secured an influential former chief cabinet years, according to a recent Reuters report. political interests together with a history of secretary as their leader, Hiroyuki Hosoda, “You need both sides of the equation governmental instability have been major a veteran of the ruling Liberal Democratic before things really get moving. We want to obstacles, especially when combined with Party said to be a confidante of Mr Abe’s. make that happen this year,” said the caucus’s the country’s inherent social conservatism. The news that Trade Minister Toshimitsu deputy leader, Takeshi Iwaya, another Advocates hope to finally overcome Motegi and Education Minister Hakubun prominent LDP lawmaker who served in Mr these with the backing of Mr Abe, who Shimomura have been appointed to advise Abe’s first government in 2006. was returned to power in December and the pro-casino caucus in the House would Given Japan’s sizable urban population has been winning popular points with also indicate that legislative momentum and high propensity to gamble, the his aggressive approach to tackling the

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country’s chronic economic malaise. If there is anything to the wisdom of stock markets, maybe this really is the time. Pachinko manufacturing giant Sega Sammy Holdings has seen its share price rise more than 50% this year despite a big drop in profit for the 12 months ended 31st March and a subsequent lowering of its earnings forecast. Mizuho Securities, for one, told Reuters it likes Sega Sammy’s prospects along with those of Fuji Media Holdings, a broadcaster located in a section of Tokyo considered prime territory for casino development. Sega Sammy, which is developing a casino in South Korea in partnership with that country’s Paradise Group, stated a desire as far back as 2007 to invest in Pachiko parlor in Tokyo’s Akihabara district casinos in Japan should the opportunity arise and last February purchased a resort Given Japan’s sizable urban population in Miyazaki Prefecture. Two months after and high propensity to gamble, that acquisition was announced, company President Hajime Satomi reasserted the the viability of casinos in the world’s third-largest company’s intentions, saying, “Of course, [a economy has never been in doubt. casino] is what we have in mind.”

LAOS Rewards and Their Risks

security became an issue. When word got out that the owner was looking to sell to another Chinese investor, the government ourism is Laos’ fastest-growing industry, was compelled to act. The casino was shut Tand its importance prompted the down last year and a report in the English- government to authorize casino gaming language daily Vientiane Times said the SEZs as part of a massive special economic zone Kings Roman Casino would no longer be permitted gambling that was leased to Chinese developers in the facilities “after finding such operations province of Bokeo in the “Golden Triangle” a situation the authorities were apparently created serious problems for Laos.” frontier area bordered by Laos, Myanmar prepared to accept for the sake of the The ruling did not affect the Kings Roman and Thailand. investment the small, landlocked nation complex, which was adding buildings at that The development company of 6.5 million sorely needs. It was also a point, but it does speak to the risks Laos still Dokngiewkham quickly opened a casino, decision they came to regret when a second poses for foreign capital more than 30 years the Kings Roman, and unveiled plans casino sprung up in Boten to the northwest after Pathet Lao guerrillas deposed the king for the 10,000-square-hectare zone that across from China’s Yunnan province. The and established socialist rule. include an airport, luxury hotels, an Royal Jinlun, as it was called, grew into a A Macau-based real estate consortium industrial complex, a bridge across the serious operation with 150 tables and 300 known as Sanum Investment Limited has Mekong River and housing for 200,000 machine games and a clutch of supporting learned this to its dismay after a court in workers and their families, mostly Chinese. hotels where only Chinese was spoken, only Vientiane at the end of last year ordered the In the process Laos found that it had yuan was accepted as payment and where seizure of its Thanaleng Slot Club in Vientiane largely relinquished sovereignty over the even the prostitutes advertised on business over a tax dispute. The venue is located on area, which evolved into a self-governing cards printed in Mandarin. Crime became the main bridge from Thailand and books a Chinese colony for all intents and purposes, a serious issue, getting so bad that border hefty US$3 million in profits a month, and

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Sanum says the seizure was engineered by also in the crosshairs. Sanum has a 50-year said. “The treatment we have received shows its minority partner, a politically connected monopoly in Savannakhét and two other they simply cannot be trusted.” Laotian company, to gain control of the club. provinces which it believes the government Authoritarian and famously corrupt Sanum also operates a second slot hall on would now like to bid out. Perhaps with that as it may be, the Lao People’s Democratic the Thai border and one on the Vietnam side, in mind the company filed a suit with the Republic is not unaware of the benefits and the company fears that its Savan Vegas World Bank last fall to try to save Thanaleng. of commerce properly regulated. After Hotel & Entertainment Complex downriver This was probably a bad idea because Savan years of being closed to the outside world, in Savannakhét, representing the bulk of its Vegas is a prize worth taking: a 182-room the country is now visa-free to all ASEAN $400 million investment in the country, is hotel in Laos’ second largest city, featuring nationals and to Koreans, Filipinos, Japanese, a pool and spa, several restaurants and a Russians and Swiss. Tourism is responsible 5,000-square-meter casino with 500 slots for one in 10 jobs. Foreign visitation was up and ETGs, 78 table games and a sports book. 22% last year to 3.3 million and up 14% the Savan is hoping the bank’s International year before, when it generated an estimated Center for the Settlement of Investment US$679 million in revenue. Disputes can persuade the government that The country’s second-largest casino is taking the club in the manner it did could flourishing in the 215-room Dansavanh Nam violate international financial compacts to Ngum Resort about 70 kilometers outside which Laos is a signatory. Vientiane. The 14,800-hectare property is on “They want to be a member of the a lake surrounded by a nature reserve, and World Trade Organisation. They want to boating and golf figure prominently in its be a member in good standing of the offering. The casino contains 150 machine international legal community. It will not games and 85 live tables, including poker, happen until they can enforce the rule of and features a VIP club and five private The Royal Jinlun, as it was law at home,” Sanum President Jody Jordahl rooms for big players. called, grew into a serious operation with 150 tables and 300 machine games and a clutch of supporting hotels where only Chinese was spoken, only yuan was accepted as payment and where even the prostitutes advertised on business cards printed in Mandarin. Savan Vegas Hotel & Entertainment Complex

MALAYSIA Hall of the Mountain King

29 million, was only the second since the political alliance known as Barisan Nasional took power 56 years ago, and the ultimate he victory of Malaysia’s pro-business outcome was a little uncertain as of this Truling coalition in bitterly contested writing as the opposition Pakatan Rakyat, led parliamentary elections earlier this month by former Finance Minister Anwar Ibrahim, was good news for Genting Group and its refused to concede defeat, accusing the sprawling mountaintop resort city north of government and its hand-picked Election Kuala Lumpur. Commission of widespread fraud. The balloting, which drew a record Mr Ibrahim is said to be popular among 80% of registered voters in this country of ethnic Chinese and Indians frustrated Resorts World Genting

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with Barisan’s pandering to the Malaysian of 8,000 rooms and suites in five hotels, majority, and it appears he’s gained support theme parks and other family-oriented as well among increasing numbers of Malays attractions, more than 100 food outlets, who’ve grown tired of a regime perceived as shops, an 18-hole golf course and MICE irredeemably corrupt from too many years space—generated RM2.04 billion in EBITDA in power. last year (US$688.2 million) on RM5.48 billion Prime Minister Najib Razak’s supporters, ($1.85 billion) in revenue. on the other hand, are alarmed by Pakatan It recorded more than 20 million visitors Rakyat’s dependence on Islamic religious in 2011, primarily Malaysians, followed by parties. They contend that Barisan has Singaporeans and Indonesians and lesser delivered political stability, robust economic numbers of Thais, Vietnamese, Chinese growth and social reforms. and Indians. More than 70% of visitors are Whether or not a win by Mr Ibrahim Anwar Ibrahim day-trippers, an indication that Casino de would have extended the reach of Sharia Genting, the resort’s collection of themed law beyond domestic and religious matters Despite “regional competitive pressures” and gambling venues containing 3,000 slot involving Muslims, as Barisan warned, a “cautious” outlook on gaming’s prospects machines and electronic table games and financial markets certainly were relieved generally, “Growth in regional tourism and 500 live tables across 200,000 square feet, is that he didn’t. The ringgit jumped almost domestic private consumption augurs well,” a big draw, if not the biggest. 2% with Mr Razak’s victory, one of its best the company has stated. It helps, too, to have the national performances ever, and the Bursa Malaysia’s Its Resorts World Genting flagship in gambling monopoly, a happy circumstance KLCI Index hit record highs. Genting Highlands about an hour from the that is allowing the company to beef up Genting Group’s resort arm, Genting capital city, together with a pair of resort efforts to market itself as more than the low- Malaysia, which trades on the Bursa’s Main hotels in Langkawi on the Andaman Sea rollers paradise it is perceived to be and to Market, kept its own counsel on the results, in the northwest and in Kijal on the South spend more aggressively to attract high- but it has made no secret of its bullishness China Sea coast, account for more than 60% limit players from the wider region. In 2011, on Malaysia’s prospects and its US$4 billion- of the company’s global revenues and 90% the company purchased two aircraft for this plus worth of hotel and gaming assets there. of EBITDA. Genting Highlands—a complex purpose.

THE PHILIPPINES What Can Go Right

This isn’t about bragging rights but about economic development and jobs for a nation that needs them badly. Tourism t about US$2 billion in annual revenues accounts for about 10% of employment in a Acurrently, the Philippines is well on the country where 55% of the economy relies on way to securing its position as Asia’s third- services and the jobless rate is the highest in largest casino market, and the next five Southeast Asia. The goal is 10 million tourist years or so could see it vying with Singapore arrivals by 2016, or about double last year’s for second place as resort development at figure. It could mean more than 3.5 million the government-owned Entertainment City jobs, according to official projections. complex in Manila reaches critical mass. The vision began to take shape in March with the opening of Entertainment City’s first megaresort, Solaire. Its US$750 million first phase has created 4,500 jobs at a gorgeous facility that includes 1,200 electronic gaming machines and 295 table Solaire Resort & Casino, Manila

Tourism accounts for about 10% of employment in a country where 55% of the economy relies on services and the jobless rate is the highest in Southeast Asia.

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games, 488 rooms and suites and an array of fine dining and casual restaurants. But Solaire wasn’t open more than a month before an obstacle arose in the form of a ruling by the Bureau of Internal Revenue that casino licensees, including the government-owned operator, PAGCOR, and their supporting junkets must pay the country’s 30% corporate income tax. The ruling has everyone seriously rethinking their profit projections. Predictably, share Plans for Kazuo Okada’s $2 billion Manila Bay Resort call for an oceanarium, a sports arena and a Ferris prices have tumbled. wheel. The big question, of course, is whether it will hinder the progress at Entertainment As the property ramped up to its current CLSA Asia-Pacific Markets believes the City, where Solaire is in the throes of a $400 1,800 slots and 300 tables, as its supporting market has an outside shot at $6 billion. million expansion slated for completion in hotels opened and its retail, cinemas and “We believe the market is well-placed the second half of 2014—with 300 suites, other amenities came on line, gaming to exceed the current size of the Singapore a theater, a spa and pool, retail and an revenue in what had been a static market market within the next six years,” says expansive outdoor promenade—and Belle soared by more than 40%. It showed there Credit Suisse. Grande Manila Bay, managed by Macau was significant domestic demand eager Driving this, of course, will be the new casino giant Melco Crown Entetainment, is to trade up to a better experience, and in supply coming on line at Entertainment scheduled to open next summer with 1,000 the view of some analysts, the scale of that City. So a lot is riding on a happy hotel rooms and suites and 1,900 EGMs demand sets the Philippines apart. resolution of the tax issue. Government, and 350 table games together with what “The Philippine population of 97 million PAGCOR and the various licensees are promises to be a vibrant assortment of non- is almost three times that of Singapore, discussing possibly waiving the “franchise gaming attractions. Malaysia and Macau combined, presenting tax” embedded in the existing gaming Two more integrated resorts have sizeable onshore potential for the higher- taxes, which would reduce them both by been licensed for Entertainment City with margin mass segment,” investment bank 5%. Another way might be to address the openings slated for further down the Credit Suisse notes. ruling at its source. This would involve road. Resorts World Bayshore is backed by Morgan Stanley has forecast 35% annual restoring PAGCOR’s tax-exempt status as Travellers International Hotel Group, the revenue growth through 2015 to $3 billion, a government-controlled corporation, joint venture between Genting Hong Kong which would have been unthinkable even which was revoked back in 2005. and the Philippines’ Alliance Global Group five years ago when the market consisted of “Overall, the situation remains fluid,” as that has already tasted success in the market 13 or so smallish casnos and a couple dozen one Philippines-based analyst told Gambling as the developers of Resorts World Manila slot clubs operated by PAGCOR (Philippines Compliance, an industry news site. just a few miles away at Ninoy Aquino Amusement and Gaming Corporation) with Alliance Global struck a positive tone in a International Airport. Bayshore is looking contributions from two private licensees, statement saying, “We are optimistic that the to open in 2016 with more than 2,000 EGMs Panama-based Thurnderbird Resorts and government and the industry will come out and 360 table games and 1,440 rooms Macau’s Jimei Group, which operate three with a common understanding supportive and suites. Lastly there’s the tentatively casinos between them. of the growth and success of the business.” titled Manila Bay Resort, a joint venture led by Japanese machine gaming tycoon Kazuo Okada and Robinsons Land, a major The phased opening of Resorts World Manila in 2009 Philippine developer of hotels and shopping and 2010 had a decisive effect malls. At a projected cost of $2 billion, its on perceptions about the Philippines. plans call for an oceanarium, a sports arena and a giant Ferris wheel. The casino is to open in 2016 or shortly thereafter with 3,000 EGMs and 500 table games and a collection of hotels featuring 2,000 rooms and suites. All this has been predicated on friendly gaming revenue tax rates of 17% on VIP and an effective 27% on mass play, higher than Singapore’s blended 16% but substantially lower than Macau’s 40%. The phased opening of Resorts World Manila in 2009 and 2010 had a decisive effect on perceptions about the Philippines.

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SINGAPORE The Challenges to Growth

The CRA to date has licensed only three “international marketing agents,” as they’re known locally, all employed by Resorts esorts World Sentosa ended 2012 on a World Sentosa, where their percentage Rrelative high note, given the challenging contribution to VIP volume is in the low year that it was. Casino revenue was up single digits. 19% sequentially in the fourth quarter on The irony is that about half the rolling a substantial pickup in VIP play (+56%), chip volume at both properties consists of compared with Q1 2011. The top line, play out of China, which explains Las Vegas however, was down 3% and down 12% for Sands’ characterization of Singapore as the all of 2012, hobbled in no small part by poor “most challenging credit market”. luck against those same VIPs. The US$150.5 million the company set The US$150.5 million Rolling chip volume continued strong aside in 2011 for doubtful accounts was Las Vegas Sands set aside into the first three months of 2013, up 38%, “primarily due,” it said, to its Marina Bay in 2011 for doubtful but revenue growth again was plagued by Sands subsidiary, whose provision alone low hold (2.1% as opposed to the average at totaled $65.6 million. Last year, the provision accounts was “primarily baccarat of 3% or thereabouts.) for MBS was raised by more than $57 due,” it said, to its Marina Marina Bay Sands likewise had a terrific million, three times the increase allotted the Bay Sands subsidiary. first quarter in terms of VIP volume, its best company’s five Macau casinos. three months ever, in fact, but relatively At Resorts World Sentosa last year weak hold of 2.51% (compared with 3.58% the impairment charge taken on “trade for the pool of “high value” Malaysians and in Q1 2012) drove EBITDA down 16% on an receivables” (the line item covering unpaid Indonesians, “likewise quite well-penetrated,” 8.7% decline in revenue. markers among other obligations) was up he says. A recent J.P. Morgan report echoes The impact on Sentosa was similarly 18% to S$143 million. Another $1.1 million this assessment, citing “looming concerns” profound. Union Gaming Research Macau was written off as net bad debt, a 10% over “rising costs, falling margins and estimates the property’s bad luck cost it increase over the year before. In the first stagnant industry mass market”. S$150 million in EBITDA, which was down quarter, the charge taken on receivables was Fortunately, both are well-endowed with 32% from the fourth quarter and 34% year up 24% to $45.2 million. It was the second- high-margin non-gaming attractions that on year. biggest expense after administrative costs. generate about 20% of their total revenue. This is hardly coincidence, of course, VIP Managing risk is not an issue on the The hotel at Marina Bay Sands, the largest play being inherently risky, and Singapore’s high-margin mass-market side, but both in Singapore, stood at 98.5% occupancy in risk factor being magnified in the absence resorts are having to work harder three years the first quarter at an average daily rate of of a junket industry like Macau’s to bring into their existence to grow this lucrative S$465. Resorts World Sentosa’s 1,500 rooms in the players and handle credit and segment, specifically to expand the visitor were 92% occupied at an ADR of $404. collection. And the fewer the players the base to include more higher-limit cash In a review of operations at Resorts greater the risks. Yet the city-state’s gaming players, the region’s prized “premium mass”. World Sentosa published earlier this year, watchdog, the Casino Regulatory Authority, The local population is “essentially maxed Mr Govertsen warned of “persistently low is famously wary of junkets and their out,” in the view of Union Gaming analyst mass-market growth” in 2013, submitting a reputed links to Chinese organized crime. Grant Govertsen, and the same largely goes forecast in the 4% range for tables and slots, reflecting where both properties stood at the end of the first quarter. (Mass table drop at MBS was up 2.4% year on year, slot handle was largely flat at +1.6%.) Growing the pool of VIPs in a bid to smooth out volatility will likely see both market deeper into China, and Union Gaming, taking the VIP rebound in Macau as a bellwether, expects rolling chip play “to grow nicely” through the balance of 2013 but at a considerably lower volume than was seen in the first quarter, reflecting, among other things, a less aggressive approach to Resorts World Sentosa extending credit.

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COVER STORY

SOUTH KOREA The Incheon Salient

the country about 50 kilometers from Seoul. What the company and its partner, Japanese pachinko giant Sega-Sammy, have in mind for the first new casino to be ore than 900,000 Chinese patronized licensed in South Korea in years will be five MSouth Korea’s foreigners-only times bigger than Paradise’s flagship at the casinos last year, a market comprised of 16 Sheraton Grande Walkerhill in Seoul. Plans properties and worth in excess of KRW1.25 call for a phased opening beginning in 2016 trillion in revenues (US$1.13 billion). with 450 table games at full build-out— South Korea is capturing about 5% twice as many as Paradise operates now in of China’s overseas tourism currently and all five of its casinos—and with non-gaming expects that to grow to 10% by 2020, which attractions that include two five-star hotels, would be around 10 million consumers. a convention center, retail and an indoor Gaming is cranking along nicely at annual theme park. growth rates in the low double digits on the The Incheon FEZ is one of six the Sheraton Grande Walkerhill in Seoul government has launched to encourage domestic and foreign investors to think about strength of visitation from the PRC that has Korea in a big way with substantial tax breaks, grown an average of 24% a year since 2009, subsidies and other incentives. The gaming very much in line with government’s vision industry sees Incheon’s as the most promising of the country’s potential as a hub of the because it’s home to the country’s principal Asian travel and leisure boom. airport and it’s the closest to China, about two Paradise Group, which together with hours by air from Beijing and an hour and a government-owned Grand Korea Leisure half or so from Shanghai. The largest operator controls about 90% of the foreigners-only in the United States, Las Vegas-based Caesars market, expects 4 million Chinese to be Entertainment, has its sights on Yeongjong visiting Korean casinos by 2020 and is excited and is seeking permission to develop a resort that it’s been chosen by the government to casino there in partnership with the Lippo develop a US$600 million foreigners-only Group, a conglomerate headquartered in Grand Korea Leisure’s Seven Luck Casino at venue on Yeongjong Island in the Incheon Indonesia and listed in Hong Kong with Millennium Seoul Hilton Free Economic Zone in the northwest of holdings in retail, media, real estate, banking, natural resources, IT and health care. Tokyo- based Universal Entertainment, another major pachinko name and parent company of slot-maker Aruze, is reported to be in talks with Korea’s Shinsegae department store empire about a possible tie-up on Yeongjong. Much has been written also about a longer- range development targeted for the Incheon FEZ called EIGHTCITY. Backers reportedly include Korea Airlines, Daewoo and luxury hotel group Kempinski and plans call for a EuroVegas-size cluster of hotels and other attractions. At least one casino figures in the plan, but there has been no word on whether a request has been filed with the government. Actually, it isn’t known whether the government intends to license gaming at any of these projects aside from the Paradise joint venture. Last September, in the heat of the national elections, the administration of Berjaya Group’s vision for a massive mixed-use residential, resort and health care complex on Jeju. soon-to-be defeated President Lee Myung-

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COVER STORY

bak lowered the up-front investment bus) and limits on visitation (15 days per required of foreign entities interested in month) and daily wagers ($275), the casino FEZ casinos from $300 million to $50 million is pulling in 10,000 customers a day, far more and eased certain requirements on leverage than it has actual room for, and the annual and profitability. It was, in all, a modest revenues from its 960 slots and 130 or so reformation. But then, Korea has always tables have tended to exceed those of all the been cautious in its approach to gaming tourist casinos combined. expansion, and the new administration of Down at the other end of the country on President Park Geun-hye, which took office the self-governing island of Jeju in the Korea in February, isn’t sure it’s comfortable with Strait, Malaysia’s Berjaya Group would love to even these alterations, and they’re said to be include a casino for Koreans as part of its plans under review. for a massive mixed-use residential, resort and health care complex. Berjaya, one of Asia’s largest companies whose holdings include Jeju has appeared on a land-based and online betting and lottery survey by China’s Global operations, is prepared to inject more money Times as one of the into Korean tourism than any foreign developer ever, about US$2.5 billion, and things could be country’s three favorite in play on Jeju given the island’s status as the resort islands along with country’s only “special autonomous province,” Hawaii and the Maldives. which affords it a great deal of independence from the central government in areas like has grown from about 90,000 a decade ago foreign direct investment. to more than 1 million. Jeju has appeared on Jeju used to be a popular destination for a survey by China’s Global Times as one of the President Park Geun-hye Japanese tourists, and it was an important country’s three favorite resort islands along stop for the Taiwanese before it became with Hawaii and the Maldives. Last year, China’s Likewise, the government is anxious to possible to fly direct from the ROC into Travel Weekly named it its top honeymoon quell speculation that the domestic market mainland China. Japan’s gamblers have destination. In 2012, Jeju was selected for will be allowed to expand beyond Kangwon since migrated to the Philippines and to the first overseas investment by Greenland Land, the publicly owned casino that was Grand Korea Leisure’s market-leading Seven Group, Shanghai’s largest property developer. summoned into existence a decade ago Luck casinos in Seoul and Busan, and Jeju’s Last month, Landing Investment Group, a real in the remote northeastern highlands to eight smallish venues, which include two estate giant based in China’s Anhui province, provide a lift for a down-at-the-heels former Paradise casinos, have been left with not signed an agreement to develop resort coal mining region. Though operated as a much of a growth story to tell. facilities on Jeju to support an expansive non-profit, Kangwon Land has proven so In light of which, it’s a wonder how the “Myths and History” theme park which the successful that it’s become something of island found its way onto the radar screen local government is hot for. Another Malaysian a political headache. Despite its distance of the likes of Berjaya. The answer to that is entity, EMG Group, also is planning a large from Seoul (three to four hours by express China. The number of visitors from the PRC resort investment.

SRI LANKA A New Player

economy. The casino market today island. By 2010, tourism receipts tripled consists of nine or so small venues serving to more than US$1 billion, according to the tourist trade in and around the capital, a World Bank report, and the Sinhalese- ames Packer has acquired land in the Sri but the government is making tax breaks Buddhist-dominated political leadership JLankan capital of Colombo for what is available and other benefits to attract has wasted no time in directing attention reported to be a US$350 million casino, and investment on a resort scale, investment to what is clearly a growth industry. In the island suddenly is on the industry’s radar. like Packer’s, and some of gaming’s other 2010, legislation was passed granting It’s an interesting time for Sri Lanka, big names have been taking a look. formal recognition to Colombo’s casinos, which is actively seeking developers Much has changed since the defeat in which up to that time had been referred to take its tourism industry to the next 2009 of a protracted armed uprising by the to rather euphemistically as “recreation level and in the process grow the larger Hindu Tamil minority in the north of the clubs” and were restricted (as they still are)

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COVER STORY

to foreign passport holders. In 2011, India’s the Middle East, Russia, South Korea and Delta Corp., Goa’s largest casino operator Japan with a $6 million marketing blitz and owner of two Colombo venues, bought showcasing the island’s considerable natural land in the capital for which it has been and historical attractions and the fact looking for partners to develop a resort- that these are accessible from just about scale casino and supporting hotel. anywhere in Asia, thanks to an international Delta has in the past been in talks with airport and an international airline, Sri MGM Resorts International and Caesars Lankan, that flies to 68 destinations in 33 Entertainment about possible tie-ups in countries. India, only the Indian government doesn’t The government has its sights on 2.5 allow foreign direct investment in gaming, million tourist arrivals by 2016 and US$2 an obstacle that finds Sri Lanka in a position billion in related receipts. This should get of increasing importance as a gateway to a boost from a recent agreement reached the subcontinent’s increasingly affluent and with India to start running ferries again leisure-hungry millions. across the Gulf of Mannar. The service This year, the Sri Lanka Tourism had been halted for years by the Tamil Promotion Board is targeting India, China, insurgency.

TAIWAN Between China and China

a preliminary regulatory framework for gaming on Matsu for consideration by the Legislative Yuan, the national parliament. peaking at a press conference in Taipei The legislation would impose an effective Slast July, two days after the residents of 14% tax on gaming revenue which includes Taiwan’s Matsu islands voted narrowly to a 7% “franchise fee” for the first 15 years of approve casino gambling, Weidner Resorts operation, increasing to 8% through year 25 boss William Weidner recognized the need and 9% thereafter, and a local government to respond to concerns about whether the tax capped at 7%. The minimum age for tiny, undeveloped archipelago hugging entering a casino would be set at 20, and China’s Fujian coast can support a 21st a number of Singapore-style safeguards century destination resort. William Weidner are proposed, such as banning recipients “I don’t see any problems that cannot be of government allowances and individuals solved by modern technology,” he said. Strait, apparently with some success, to who have been declared bankrupt or have Earlier this year, Weidner unveiled a sell officials in Fujian with its 37 million bad credit records. The bill would also allow dramatically expanded vision for the island inhabitants on the wisdom of joining family members, close relatives or partners chain: a veritable resort city to open in forces. In December, Weidner Resorts to request exclusion orders on relatives. phases, consisting of clusters of high-rise signed a preliminary agreement with Hong At a press conference following the hotels and providing 70,000 direct jobs. Kong ferry operator Chu Kong Passenger release of the legislation last month, Mr He says it will attract 5 million to 7 million Transport for service between Fujian’s Yeh said he doesn’t envision a resort casino visitors a year for starters, and he says he capital of Fuzhou and Matsu. Weidner also on the scale Weidner proposes to open on has commitments from a consortium of has proposed development of a supporting Matsu before 2019. banking giants for around US$2.5 billion, a tourist hotel near Fuzhou, whose 4.4 million Significantly, he said also that the substantial portion of which is earmarked urban residents (together with the 5 million government is not considering allowing for bringing Matsu’s primitive infrastructure of the port city of Xiamen farther south) are casinos on Taiwan proper. up to snuff. This will include expanding considered key to the success of whatever These are still very choppy political waters. the small airport on the island of Beigan, ultimately gets built on Matsu. Relations between the PRC and the Republic constructing a ferry harbor and a bridge Fuzhou officials like the hotel idea, of China have thawed considerably over the linking Beigan with Nangan, the other major according to Weidner, as does Taiwan’s last decade, but China still considers Taiwan island, and developing electrical generation pro-business Minister of Transportation a renegade province, and Fujian’s Lianjiang and water treatment facilities. and Communications Yeh Kuang Shih, County actually claims the archipelago of He has also reached across the Taiwan whose department has recently drafted Matsu as its territory. On Taipei’s side, the idea

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of entrusting a budding tourism economy to Half a century ago, Kinmen and Xiamen were lobbing the effective control of travel policies dictated artillery shells at one another. Today, a huge sign in Beijing is an issue the government will continue to consider very carefully. in gold letters against a red background stands above Reports in the meantime are that Caesars Xiamen’s western shore facing Kinmen: “Peaceful Entertainment has sent an executive to Reunification. One Country, Two Systems,” it says. Kinmen, a Taiwanese island group in the Taiwan Strait but farther down the coast. Kinmen also has hosted Liu Yung Hsiang, president of Taiwan construction giant Howarm, who visited recently in the company of junketeer and casino operator Jack Lam, whose Macau-based Jimei Group does business throughout East and Southeast Asia. Half a century ago, Kinmen and Xiamen were lobbing artillery shells at one another. Today, a huge sign in gold letters against a red background stands above Xiamen’s western shore facing Kinmen: “Peaceful Reunification. One Country, Two Systems,” it says.

VIETNAM Getting to Ho Tram

and are quite luxurious. Then there is the Internet, which is illegally The border with China has proven another devouring tens of millions of dollars, according lucrative bet. There is a fairly new casino in to official estimates, a vast black market the Mong Cái in Quang Ninh province in the government says it wants to shut down amid he Ho Tram Strip may be Vietnam’s biggest northeast, and one of the largest slot floors proposals that get floated from time to time Tbet yet on destination gambling as an in the country is in a casino controlled by for legalizing sports betting. economic development tool, but it is far from relatives of Genting Group Chairman Lim Kok The casinos and clubs are restricted the only one. Thay in the Lao Cai International Hotel in the to foreign passport holders. The Socialist The country is home to five legal casinos northwestern mountains adjoining China’s Republic of Vietnam, like the governments containing in total around 500 electronic Yunnan province, about 300 kilometers above of Cambodia, Laos and Singapore, takes a gaming machines and upwards of 75 table Hanoi. Seventy percent of the people of Lao Cai stern view of gambling by its own people, games. They’re all located in tourist hotels, live in poverty, most of them ethnic minorities, with the result that the country is exporting some of which, like the Crowne International but the province draws more than a quarter- tons of revenue while reimporting the very at Da Nang Beach and the Do Son and the million day-tripping Chinese a year, and that social problems it wants to prevent. Along the Royal Hotel and Villas on picturesque Halong has enabled some of the more enterprising western border it’s all the local police can do to Bay, are marketed to an international clientele citizens of the provincial capital of Lao Cai and try to stem an exodus of some 25,000 people the nearby resort town of Sa Pa to grow rich a week crossing into Cambodia to patronize a off the cross-border traffic in goods, gambling notorious bunch of frontier gambling houses and exotic Hmong and Dao women. and cockfighting dens, and it’s Vietnamese There are another 740 or so EGMs in more who supply about 40% of the hundreds of than 20 clubs nationwide and a popular public millions of dollars pouring into Phnom Penh’s lottery whose sales account for about 2.5% of NagaWorld casino every year. gross domestic product. Pari-mutuel betting Resort casinos capable of delivering has been around for decades at a horse track tourists and their hard currency are a different in Ho Chi Minh City and more recently at a matter. greyhound track about 120 kilometers to the The economic liberalization of the last 25 east in the coastal province of Ba Ria-Vung Tau, years, the Doi Moi, as it’s known, has been a Do Son Casino where Ho Tram is waiting for the OK to open. “development success story,” in the words of

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million visitors, 4.2 million of them leisure country’s fragmented and famously corrupt travelers, 1.4 million from mainland China, bureaucracy. followed by South Korea, Japan, the United Ho Tram, which envisions US$4 billion States and Taiwan, with Malaysia, Thailand worth of luxury hotels and leisure attractions and Cambodia contributing another 850,000. at full build-out, has virtue in the fact that The government is forecasting 10 million at least some of it actually exists. But the international arrivals and 45 million domestic opening of its first phase—541 rooms and travelers by 2020, when tourism is expected suites, a casino that will be country’s largest to contribute US$18 billion-$19 billion to the by far, with 90 table games and 500 EGMs, economy, equivalent to around 7% of GDP. plus restaurants, shopping, a spa, swimming Las Vegas Sands thinks either Ho Chi pools and other attractions situated along 2 Minh City or Hanoi would be an immensely gorgeous kilometers of white sand beach— profitable setting for something of destination ran into money problems at some point last scale if the ban on domestic gambling could year and now appears stalled somewhere in be finessed. Genting is reported to have that labyrinthine bureaucracy. Asian Coast provincial approval for an investment of Development (Canada) Ltd, the consortium several billions up in Quang Ninh, close to behind it (US casino operator Pinnacle China and the thriving resorts of Halong Bay. Entertainment is a substantial investor), At one time, the Malaysian resort giant had missed a performance deadline outlined in the its eye on a multibillion-dollar casino hotel original investment certificate granted by the on the South China Sea coast in the central government. This triggered a suspension by a province of Quàng Nam near the popular syndicate of Vietnamese banks of the undrawn beaches of Da Nang. It’s reported also that the portion of the project’s credit facility. There has northern highlands province of Hà Giang on also been some murkiness surrounding the the Chinese border has endorsed a casino on funding of the working capital requirement. the site of a massive tourism complex of 2.7 Earlier this year, MGM Resorts International square kilometers proposed for a UNESCO- pulled out of an agreement to manage it. An designated geological park that drew nearly amended investment certificate has since 400,000 visitors last year. Vietnam’s recent been granted, and ACDL has begun work on history is also littered with about $10 billion a second hotel and a golf course. As of this worth of abortive gaming projects. Some writing, no operator and no opening date had The economic liberalization were mere talk. Others were ground up in the been announced. of the last 25 years, the Doi Moi, as it’s known, has been a “development success story,” in the words of the World Bank. Per capita income has grown tenfold in the space of a generation. the World Bank. Per capita income has grown tenfold in the space of a generation. Since the start of the new century, gross domestic product has been expanding annually at an average of 6.3% a year on the strength of farming and oil exports, manufacturing, a growing technology sector and a service economy that now accounts for more than one-third of GDP. Not surprisingly, the country is a magnet for foreign direct investment, and a lot of it is finding its way into the leisure Ho Tram, which envisions US$4 billion worth of luxury sector. Tourism generates about 4.5% of GDP and is growing by 11-12% a year. International hotels and leisure attractions at full build-out, has virtue arrivals were up 14% in 2012, exceeding 6.8 in the fact that at least some of it actually exists.

May 2013 | INSIDE ASIAN GAMING 29 TECH TALK

The Local Perspective The big international slot manufacturers are gradually getting more Asia-focused with their game development. Macau-based Laxino Technology always was, and now they’re busy creating mobile versions of their successful online slot and table games, and taking their game development further with the consumer insights gleaned from living and breathing Macau, interacting with big players and tapping into their extensive online data base

he current buzzword among gaming jurisdictions. Still, that puts all of Casino de Genting (which by law is off international slot machine manufacturers Macau’s installed EGM capacity below the limits to Muslims, effectively barring the Ttargeting Asian markets is “localization.” 10% annual replacement rate on Australia’s country’s ethnic Malay majority), as well This is in part an acknowledgement that 197,892 machines. The US had 849,859. as the casinos at Singapore’s sprawling until recently as a group they had not always So for slot makers, Asia is a long-term integrated resorts. Asia’s other emerging done enough to create products specifically investment but a fairly safe one given casino destinations are also banking on designed for the region’s players. That, casino expansion across the continent Chinese to drive their businesses, from however, is understandable considering and the insatiable demand from mainland the mid-level-VIP-targeted NagaWorld in the big slot suppliers’ sales in Asia outside Chinese players. Phnom Pehn to the swanky new Solaire in of Australia are still a tiny fraction of total For the most part, “localization,” as Manila Bay. worldwide sales. far as Asian gaming is concerned, means Slots only started taking hold in Macau Macau had 16,585 electronic gaming catering to Chinese preferences. Macau from 2003, and as the players mature, their machines at the end of last year, year, giving was designed with Chinese players preferences are evolving rapidly. They are it a comfortable lead among Asia’s legal in mind. So was Malaysia’s venerable also forming strong brand loyalties to the

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companies who were quickest to adapt and to release a few more over the course of the company’s product manager for mobile create Chinese-themed games. The major year. The company will then also devote its table games. “We have a 24/7 help desk, slot manufacturers now regularly fly their resources to releasing its online table games and the app support team monitors the developers into Macau to familiarize them on mobile platforms. network traffic in order to provide a stable with the market and how it’s changing. The rationale for developing mobile apps, environment for their players. We monitor They also have set up design studios and and particularly casino games, is obvious. traffic 24/7. If sometimes traffic drops we development centers in Australia, India, Mobile broadband subscriptions in Asia and immediately find out what’s the problem. China and elsewhere. abroad are exploding, and by letting gamblers If traffic drops, there could be some place bets during downtime anywhere they network problems in certain areas. You Developing in Macau are, rather than tethering them to desktops, need to react really fast to switch the line Macau-based IT solutions company online gaming operators are likely to derive to another area.” Laxino Technology Ltd was founded by considerable incremental revenue. Providing Mr Tam has also worked on developing Lam Iao in 2008, born of his desire to free-to-play apps of popular slot games also math models for games at Laxino since the create opportunities for aspiring local IT appears to serve a substantial marketing and company started, and in this endeavor he professionals in his hometown. promotion function. is helped greatly by having access to the The fast-growing company now has 80 “We’re currently working on the play- rich, real-time customer data bases of the employees and is involved in a wide range of for-fun version of Paramount,” says Terry online operators they work with. “So we can IT services, but given its roots in the world’s Lee, the company’s product manager for analyze the math and try different things. most dynamic gaming market, it started out mobile slot games. “One of our clients wants A lot of data analysis is available to us in with very much a gaming focus, providing to put out a free promotional game for the developing games.” a full range of support and services to both iTunes store. So we’re doing Paramount for With employers around Macau online and land-based gaming operators. iOS [Apple’s mobile operating system]. We bemoaning the difficulty of finding and The company also has an active game- already released it on Android, so we need retaining quality staff in the city, especially development division, which has released to do some modification for iOS.” when deep-pocketed casinos can swoop several online slot titles, as well as Internet “All Laxino’s software is developed in- in with higher-paying offers for valuable IT versions of popular casino and peer-to-peer house in Macau, in line with Lam’s goal staff, Laxino appears to have done a good card games. that when people think about IT in Macau, job in holding on to its talent. “Which is why Laxino has already reconfigured three he wants them to think of Laxino,” stresses we also focus on the work environment, job of its popular online slot games—Three Mr Lee. satisfaction, having a family feel. You can’t Brothers, The Legend of Feng Shen and Technical support is also carried compete on the basis of salary alone with Paramount—for mobile platforms, and plans out from Macau, adds Martin Tam, the the casinos,” adds Mr Lee.

Providing free-to-play apps of popular slot games serves a substantial marketing and promotion function.

May 2013 | INSIDE ASIAN GAMING 31 FEATURES

Keeping It Reel Aristocrat confronts the challenge of market leadership by uncovering new strengths in today’s classic games while laying the groundwork for tomorrow’s

ristocrat is celebrating its 60th birthday this year with its gaze fixed firmly on the next 60, and that means there will be no Aresting on success. The slot-maker that exerts so dominant a presence across many of Asia’s casino floors, whose market-leading share in Macau is built on games—5 Dragons™, Fortune King™ and FA FA FA™ spring immediately to mind—that have come to define the slot experience for most Chinese players, is continually finding new ways to engage an ever-changing marketplace. This means staying engaged yourself, with your customers and with the competition, tirelessly exploring the opportunities this presents to innovate, to push out the boundaries of what’s new and to think about established products, technologies and processes in different ways. Aristocrat is exhibiting at G2E Asia 2013 under the banner “Creating Asia’s Legendary Games,” a claim that speaks succinctly to the company’s ability to keep its hand hot with a portfolio uniquely tailored to the preferences of the region— like with its Legends™ series for extending the popularity of proven brands with new features and enhanced play mechanics and graphics. The formula was first tested in Asia two years ago with a Legends version of the Reel Power™ classic 5 Dragons. It offered higher win multiples and a spicy free games feature that lets players choose either a set number of spins with up to a 40-times multiplier or a “Mystery Choice” that randomly selects the number of games and the multiplier. The reception was enthusiastic, and Phoenix Riches on the Viridian 5 Koi Legends™ joined the series Widescreen cabinet in 2012. This month, visitors Defining the slot experience for Chinese players—Fortune King

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to G2E will get their first look at Legends versions of 50 Dragons™ and Fortune King. New graphics and sound have been added to create 50 Dragons Deluxe™, which features a “choose your volatility” option that guarantees longer stacked wilds to create an even more compelling gamble, leveraging, as 5 Dragons Legends™ does to great effect, that vaunted approach to game math for which Aristocrat is famous. Fortune King Deluxe™ will offer two new features plus bonus free games and a similarly enhanced visual package.

King’s Dynasty feature screen

and Call of Duty. He is, needless to say, a key hire. Player preferences are rapidly maturing, in Macau specifically, and Aristocrat knows it must respond with a more nuanced approach—more worldly might be another way to put it—to game design and development. As Mr Punter says, “You’re starting to see a player that will come to Macau for the first and second time and see slots and see electronic tables and, of course, see live table situations, so you’re getting players that have got a lot more variety to choose from. We’re seeing changes in denominations come into play, more animation and graphics, lower volatility games and higher volatility games. Where it used to be just stand-alone “We have to be changing,” says Asia and link, now there’s licensed product in the marketplace, there’s features in Pacific General Manager David Punter. the top box, and you’re starting to see “We have to mold ourselves to what’s happening in the region.” “We have to be adapting to the changing environment,” says Asia Pacific General Manager David Punter. “We have to mold ourselves to what’s happening in the region and be ready to respond with the best games for Asian customers and players.” The Asia Pacific division grew “significantly” last year, parent Aristocrat Leisure said in its most recent revenue report, which covers the nine months through 30th September. The division was instrumental in driving year-on-year revenue growth (+ 8.5%) and profit growth (+ 23%) for the company’s business segments outside Australia, the Americas and Japan. Aristocrat’s revenues outside Australia and the Americas were up 61% for the period. Profit generated by the Asia Pacific division was up almost 28% on a 19.5% increase in revenue. The region’s importance to Aristocrat prompted the company to create a new director-level head of Asia Pacific sales and business development, Mark Aubrey, reporting to Mr Punter. Mr Aubrey, doesn’t come from traditional casino gaming at all. He’s held senior sales and marketing roles with LucasArts and Activision and most recently served with Warner Bros. as group marketing director for home entertainment, video games, television and digital. He’s managed franchises of the stature of Star Wars, Batman, Harry Potter Dragons on the Lake

May 2013 | INSIDE ASIAN GAMING 33 FEATURES

“To deliver the world’s greatest gaming content, we need the world’s greatest game development talent.”

— CEO Jamie Odell, Aristocrat Leisure

more stand-alone jackpot-style games.” Aristocrat is hitting upon a number of creative responses. More Power™, for one, brings a new level of interaction to Reel Power’s stand-alone progressive format with expanding reels that shift from 243 ways to win in the 3x5 reels of the free games feature to 1,024 ways in 4x5 reels and up to 3,125 possible combinations in 5x5s. Finding new ways to glean power from its stalwart Hyperlink™ multi-progressive platform is something the company also finds intriguing. The pairing of Hyperlink 2.0™ with a game designed specifically for the Asia-Pacific market, Dragons on the Lake™, brings together elements of 5 Dragons and FA FA FA in the form of a symbol- triggered jackpot and selectable volatility that lets players target the prize they want to play for. “That’s completely unique,” notes Mr Punter. “It’s quite exciting from a player’s perspective.” Dragons on the Lake will be shown at G2E Asia on top of 5 Dragons Deluxe™, Fortune King, Choy Sun Doa™ and possibly some others, depending on approvals. The region also will be getting its first look at an exciting reprise of Hyperlink’s legendary Cash Express™—the “Train Game,” as it’s known among Macau players—the game that proved that the city’s nascent machine gaming market of a decade ago was more than willing to be seduced by the lure of the big win. The new version, Cash Express Gold Class™, sports an eye-catching interactive top box in the shape of a locomotive smokestack and a randomly triggered “Multiplier Wheel Feature” that boosts base game wins up to 100 times. A “Gold Class Feature,” also randomly triggered, moves the player into a special three-reel screen for 20 free games. Jackpots are generated via a “Stop Reels” button that halts each of the five reels on a point total, the cumulative points corresponding to a progressive, and there’s also an additional prize level that resets to a higher amount than the traditional four. Interactive button decks are one of the more important recent innovations in slot design. As Mr Punter notes, “You can change play dynamically and interact with the customers a lot more.” New York-based High 5 Games was a pioneer in rethinking slot buttons, and Daniel Marks, who was a lead designer for the company, will be Cash Express Gold Class features a randomly triggered “Multiplier Wheel one of the people taking Aristocrat’s R&D into the future. He’s chief Feature” that boosts base game wins up to 100 times. operating officer of Chicago-based Spooky Cool Labs, the company

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“To deliver the world’s greatest gaming content, we need the world’s greatest game development talent,” Jamie Odell, chief executive of Aristocrat Leisure, says. “Joe knows how to combine maths, art and brands to make great games that delight players and drive revenues for our customers.” On Demand™, a downloadable solution for changing out game content with the touch of button (its first dual-language titles will be exhibited at the show) is a platform that should prove ideally suited to his talents. Then there’s Wonder 4™, a “game changer,” as Aristocrat likes to pun, an entirely unique take on the multi-game concept that allows players to select one or more of four base games in any combination or all four at once. They can play a 5 Dragons and three 50 Lions™ or two 50 Lions and two Wicked Winnings™ or four 50 Dragons and so on. It’s a multi-game within a multi-game, actually, featuring an innovative drag-and-drop technology by which the player moves the titles from the menu onto any of the reel sets. Choices include two Reel Power scatter-pay games and an Xtra Reel Power™ game in addition to the standard pay-line game. A bonus-packed “Super Feature,” triggered when the symbols line up on reels 1, 2 and 3, gets four games going at once at heady max bets in the range of 1,600 credits. “These are the things that are very key for me and for the business,” says Mr Punter, “to keep pushing what concepts, what games, what licenses we can look at. But in saying that, we’ve got to be on our game. Our competitors are designing more specific games for this region. That keeps us pushing.” Mr Punter says to look for the impact of the triumvirate of Messrs Kaminkow, Marks and Olive to be felt increasingly over the next 12- 18 months across a range of new and existing platforms. Its ripples will spread beyond that, too, enriching what is already a prodigious store of human capital. “I think we’ve had at least three of our design studios recently come out to the region, which has never happened before,” he says, “our top games designers, whom we consider some of the top games designers in the world, out for three or four days to Singapore and Macau. The idea was to get a better understanding of what the players are doing, watching them, seeing what new games are Wonder 4 allows players to select one or more of four base games in any coming, what the trends have been in the last 12 months or so.” combination or all four at once. For Aristocrat, market dominance is never the end game, it’s the point of departure. behind the “Wizard of Oz” game on Facebook, and is working with “These are the things that are very key for me and for the business,” Aristocrat as an exclusive third party. Spooky Cool’s chief executive, Mr Punter says, “to keep pushing what concepts, what games, what Joe Kaminkow, who built a reputation at IGT as one of the most licenses and what operators want Aristocrat to focus on to entertain influential designers of slot machines in history (think Wheel of their players . But in saying that, we’ve got to be on our game. Our Fortune, Ghostbusters and Sex and the City), joined Aristocrat earlier competitors are designing more specific games for this region. That this year as senior vice president of Game Development. Scott keeps us pushing. It’s definitely keeping us busy.” Olive, one of the founders of Hyperlink, is also on board under an arrangement similar to Mr Marks’. Visit Aristocrat at Stand #417

May 2013 | INSIDE ASIAN GAMING 35 In FOCUS

The Pacific Play 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

hile Saipan is a remote island in the Pacific Ocean, far from Southeast WAsia and China and accessible mainly by indirect connections and charters, and while it may not seem at first to be an obvious place for the development of People will gaming, the potential for a certain type of likely never casino may very well exist. It will never be another Macau, or even another Cambodia plan a trip or Jeju, but it may have a limited role to to Saipan play in the Asian gaming market. The just for main challenges for the territory—the US Commonwealth of the Northern Mariana gaming. Islands (CNMI)—have less to do with For players geography and connections and more to do inclined to with strategy and ultimately politics. People will likely never plan a trip to the travel for CNMI just for gaming. For players inclined gambling, to travel for gambling, Asia has too many Asia has too better options closer to home for most. The distances and logistics are indeed daunting. many better Only two major airlines make direct options scheduled flights to Saipan, Delta Air Lines closer to from Tokyo and Osaka and Asiana Airlines home for from Incheon, Busan, Osaka, Hiroshima and Tokyo, and the journeys are about 3.5 most. to 4 hours. Delta, Japan Airlines and United Airlines fly to Guam from Japan. United also flies from Manila, Honolulu and Hong Kong to Guam, the last a five-hour flight. From

36 INSIDE ASIAN GAMING |

In FOCUS

Guam, it is 45 minutes on a prop plane to Saipan. Direct charter flights are also being organized from major Chinese cities. The initial and main draw of Saipan is the sand and sun. CNMI, like many Pacific islands, is blessed with pure waters and pollution- free skies. There has been very little industry in the group, and a population that’s never been above 100,000 has put relatively little stress on the environment. What’s available on Saipan is hard to find in Asia, even in places like Thailand—and in many cases, the azure waters in the region require local air or boat connections to access. On Saipan, the main beach is 10 minutes from the airport. For Chinese travelers especially, CNMI is attractive. The numbers indicate increasing interest. In March 2013, Chinese visitors The commonwealth is desperately in need of tourist totaled 9,021, up 33% on year. Charter flights and gaming dollars. Over the past few were being organized from Guangzhou, decades, its economy has been hit on all fronts. Shanghai and Beijing as of early this year. CNMI is part of the US, but under a special program visitors from China and Russia are immigration policy. While part of the US, federal government took over immigration allowed to visit the islands visa-free for 45 the government of CNMI was able to issue policy and required the minimum wage days (they must have a confirmed round- its own visas. It was also free to set its own to converge with the federal rate over a trip ticket). A separate Guam-Saipan visa minimum wage (US$3.05 an hour until number of years (the minimum wage is now waiver program adds a few more countries 2007). This led to companies establishing $5.05 an hour in CNMI). and territories to the list, including Hong clothing factories in Saipan, bringing in The closure of the sweatshops caused Kong and Taiwan. A chance to visit the cheap labor from poor Asian countries the economy to collapse. In 2008, GDP fell US without going through the expensive, and manufacturing products labeled 12.1%. The following year, it dropped 19.8%, complicated and sometimes unsuccessful “Made in the USA.” That abruptly ended according to the Bureau of Economic Analysis. process of applying for a US visa can be a after a series of articles and documentaries The population dropped as well. It fell 22.2% strong draw. Years ago, a similar loophole exposed sweatshop conditions in CNMI. The between 2000 and 2010, though the drop attracted Japanese tourists who wanted to get quick and easy exposure to a US destination and a chance to buy products, Many people go to the island because especially alcohol, duty-free. of its unspoiled beauty and gaming could negatively The commonwealth is desperately in affect the image of the place. need of tourist and gaming dollars. Over the past few decades, its economy has been hit on all fronts. Japanese tourists stopped coming in great numbers about a decade ago. As they became wealthier and gained rights to travel visa-free to more exotic destinations, and as prices came down in Japan, they were less inclined to visit Saipan. Japan Airlines stopped direct service in 2005. The Asian economic crisis, the terrorist attacks of September 11, 2001, and the Great Recession of 2008 kept tourists from coming from other destinations and replacing the Japanese. The overall decline has been dramatic. Since hitting a peak of 726,690 in 1997, total tourist arrivals fell to a low of 369,012 in 2011. Saipan was also hit hard by the collapse of its textile industry. Up until 2009, the local government had autonomy over

38 INSIDE ASIAN GAMING | In FOCUS

Others have posed similar questions during public hearings in the past (the current bill is the third regarding casinos in recent years). Historically, the public has failed to support the introduction of gaming. A casino law was passed in 1979 but defeated by referendum. The 2007 Saipan Casino Act was also voted down by the people, while a petition last year to have the issue of legalized gambling placed on the ballot failed to get enough signatures. Many people point to the casino on Tinian, a CNMI island near Saipan, when making the case against gaming on the main island. The Tinian Dynasty Hotel & Casino has failed to make a profit since it was opened in 1998, recently fell behind in paying its employees, has not been able to pay all its local taxes and was raided by the IRS in April this year for possible reporting violations. Two arrest warrants were issued. While there are many extenuating circumstances that help explain why that The Tinian Dynasty Hotel & Casino has failed to make a operation has failed to gain traction, such profit since it was opened in 1998, as limited and expensive transportation to the island, it is seen by some as a test case recently fell behind in paying its employees, has not been for gaming on Saipan. Meanwhile, a casino able to pay all its local taxes and was raided by the IRS on Rota, another island in the group, closed in April this year for possible reporting violations. last year. Mr Lee says that gaming is still possible on Saipan. He believes it just needs to be from the peak to the trough was probably under similar payment terms. A full 80% of priced correctly and targeted at the right as much as one-third. The government’s the government proceeds from gaming market. Casinos catering to people who fiscal position has deteriorated along with would go straight to the pension fund. have had their time on the beach and want the overall contraction. Its budget peaked But operators might not be interested. The something else to do, or to those waiting for at US$237 million and fell to $102 million island is probably asking for too much up their flights home, might work and could in 2012. The biggest problem, and the one front to make it worth anyone’s while. generate some revenue for the government. most relevant to gaming, is the fact that “There has always been good potential Most of all, the upfront costs need to be the Northern Mariana Retirement Fund is for gaming in Saipan,” says Ben Lee, reasonable. Other jurisdictions, such as near insolvent—it is expected to run out of managing partner, gaming developments Cambodia, have realized that this is the way money in 2014—and desperately needs a and marketing, IGamiX Management & to earn the most over the long term. If the series of hefty cash infusions. While tourism Consulting Ltd. “The problem is the pension operators are attracted, money can be made has started to recover, revenues are not issue plays a big role.” through salaries and taxes paid. If the cover going to grow fast enough to make up for The idea of casinos on Saipan is also charge is too high, operators may simply the shortfall. Gaming is seen as one way to generating a measure of skepticism and choose not to come at all. bridge the gap. resistance from stakeholders and the But the plan as currently envisioned public. Travel agencies in Japan have may not be successful. While many believe said that casinos probably wouldn’t draw that gaming would bolt on nicely to the tourists and could even deter some from CNMI economy, the way the industry is set visiting the commonwealth. Many people to be structured may not make business go to the island because of its unspoiled sense. Under a recent bill sent to the CNMI beauty and gaming could negatively affect House of Representatives, operators will the image of the place. Anthony Pellegrino, be required to pay a sizable upfront fee. a leading businessman on the island, has A 40-year monopoly would cost US$80 asked on the pages of the Saipan Tribune million, the first $40 million payable in year whether gaming is right for the CNMI 1 and the rest after 20 years. Three licenses and whether it will deliver strong and would go for $30 million apiece and be sold sustainable growth for the commonwealth. Gaming floor at the Tinian Dynasty Hotel & Casino

May 2013 | INSIDE ASIAN GAMING 39 INSIGHTS

Filtering Out the Noise Macau gaming stocks have performed strongly over the past few months, and international investor interest in the sector continues to grow. While the stocks now benefit from much greater liquidity, their prices are still regularly moved by headline news which often has little correlation to their fundamentals. J.P. Morgan Leisure and Gaming analyst Kenneth Fong discusses the key factors to consider in forecasting where the sector is headed and the challenges in valuing the stocks

lthough Macau’s official gaming figures are only released on a monthly Abasis, unofficial leaks of weekly revenue and market share data are widely disseminated and commented upon. The trouble with this is that while casino games favor the house in the long run, there can be a great deal of volatility in the short run, and so the ability of Macau gaming data to reliably indicate trends diminishes greatly as the measurement period narrows. Given the increasing interest in Macau gaming stocks, demand for analyst commentary on the data is also on the rise. This can sometimes lead to misinformed knee-jerk pronouncements from afar. On more than one occasion we’ve heard prominent gaming analysts express concern While casino games favor the house in the long run, that Macau casino revenue during Chinese there can be a great deal of volatility New Year wasn’t performing as expected. in the short run, and so the ability of Macau gaming While Chinese New Year often sees floods of data to reliably indicate trends diminishes greatly as the high-rolling Chinese players descend on US casinos, Macau VIPs—who generate close measurement period narrows. to 70% of the market’s total revenue—tend to avoid the crowds of mass-market visitors was likely related to players putting off normal at around 2.7%-2.75%”. The market- who come to the city during the period. their Macau trips until the weeklong wide VIP win rate for the first quarter of 2013 More recently, the alarm was raised mainland Chinese holiday to mark Labor had stood at 3.28% when the tentative recovery in the growth Day on 1st May. Hong Kong-based Kenneth Mr Fong is a member of J.P. Morgan’s of Macau’s VIP revenue since the beginning Fong, meanwhile, talked to Macau’s junket Asia Conglomerate, Gaming & Lodging of 2013 appeared to falter in the third week operators and revealed in a note that the real Team with a special focus on Macau Gaming of April. Reaching for an explanation, one cause of the dip appeared to be volatility in and Lodging names, and his insights benefit US-based analyst concluded the slowdown luck, with VIP win rate for the week “below from proximity to and regular contact with

40 INSIDE ASIAN GAMING | May 2013 | INSIDE ASIAN GAMING 41 INSIGHTS

There are a couple of other macro indicators. We also look at the Guangdong export data because, after all, a big part of the business comes from Guangdong province.

Although Macau gaming revenue is highly correlated to liquidity and export and manufacturing output in China, is that mostly relevant to the VIP sector, while the mass market is less dependent on these macro factors? The difference between VIP and mass is the relative rates of penetration. VIP is more penetrated. If you have supply and demand balance, and macroeconomic conditions adversely impact VIP players, you will see the sector immediately slow down, because the supply and demand match. But for mass it’s different. Mass is underpenetrated. Many more mass players want to come than those who already came to Macau. Even though the same customers’ spending will slow down, the increase in penetration will offset the slowdown. So today I may have 10 customers coming in here. They spend, let’s say, $100 each. Tomorrow they may spend less, it’s down to $95, but you have an additional three to five more players come in because of improved “If VIP players are tight on credit and their money infrastructure which allows increased is tied up in their businesses, penetration. The increase in new players will they don’t have surplus money to gamble. be more than enough to offset the decline in So if it’s easy to get money either existing players’ spending. That’s why even though we saw an from bank loans or Social Financing, their liquidity economic slowdown in China last year, still is eased, then they have more money they can the mass market registered 30% growth. spend in Macau.” It’s in part because of the increase in penetration.

Not only is the mass market growing, but we seem to be moving up in the Macau casino operators and junkets as well aggregate financing apart from yuan bank mass market, with minimum bets on as familiarity with the habits and preferences loans. It contains six other categories: tables having risen considerably in of local players. foreign-currency loans, entrusted loans, trust recent months. Inside Asian Gaming spoke to Mr Fong loans, bankers’ acceptance bills, corporate It’s a function of two things. One is we about the major factors driving the sector bonds and non-financial stock sales]. have more players coming in, it translates and what investors need to look out for. These are some of the macro liquidity into more demand. And there’s a limited indicators we normally look at because amount of gaming tables, so casinos can IAG: What are the key economic they directly affect how much money VIP increase the pricing. indicators in mainland China you look players can get from their businesses. If The other thing is a lot of investors think at in gauging demand for Macau they are tight on credit, and their money mass-market growth is purely a function of casino operators? is tied up in their businesses, they don’t higher table limits, but they are only seeing Mr Fong: On the VIP side we normally have surplus money to gamble. So if it’s part of the picture. It is actually also the look at the loan growth, the monetary easy to get money either from bank loans result of the customer-segmentation efforts growth, as well as the amount of Social or Social Financing, their liquidity is eased, of the casino operators. Financing [Total Social Financing is a term then they have more money they can Most of the major casinos today have coined by China’s central bank to monitor spend in Macau. been around since 2007. Like Venetian,

42 INSIDE ASIAN GAMING | MGM, Grand Lisboa and Altira. When they “A lot of investors think first opened, they did not have such a clear mass market growth is idea of who their customers were or what they wanted. Back then the mass gaming purely a function floors in Macau were pretty unstructured, of higher table limits, with a big mass floor, maybe a little bit of but they are only seeing high-limit area, and that’s it. And back then the VIP was so strong that everyone was part of the picture. focused on VIP. They were relatively easier It is actually to serve. Give them credit and commission, also the result of the the players will come. Not until 2011 and 2012, when the customer-segmentation VIP sector started slowing down, did efforts of the casino operators start paying more attention operators.” to their mass-market business, which was still growing strongly. They started looking at how they could improve yields. Over the past couple of years they have accumulated a customer data base and gained knowledge of what the customers want and their preferences. The operators saw there was still room to get more yield from their mass-market customers. One of the ways to do that was to segment them. Like airlines, in the past they only had economy, now they have economy, premium economy, business class and first class. It’s the same thing for the casino floor, where you have the pure electronic tables, the stadium ETGs with a live dealer, the regular tables, the high-limit and the premium mass. So by segmenting the customer you actually improve the yield on a per customer basis. You’ll notice nobody really talked about premium mass two years ago—not analysts and not even the casino operators. It was only last year that everybody started talking about premium mass as a result of slowing VIP, the table cap and the shortage of dealers. So casinos needed to think of clever ways to get higher yields on a per customer basis and started to look for good ways to segment customers.

Are the margins on premium mass higher than on the regular mass? How do the costs break down in the mass segment? It depends on how much the casinos spend in reinvesting back to the customer. If a customer loses $100, if it is grind mass, $40 goes to the government as tax, and approximately $15 to salary and overhead expenses, $5 is the reinvestment such as lucky draw promotions, different offers, hotel points, etc., and the remaining J.P. Morgan Leisure and $35-$40 will be the margin. Gaming analyst Kenneth Fong

May 2013 | INSIDE ASIAN GAMING 43 INSIGHTS

back. I think, in part, because of the more stabilized political environment in China, the VIP players have become more confident about the economic and political outlook and have resumed their normal activities.

What about the claim that Macau casinos are widely used to launder money and transfer funds out of mainland China? How can you measure that? From talking to junket operators, I think there are much easier and more cost- effective ways to get money out of China rather than through the gaming tables. Because on the gaming tables you have a chance to lose, and the transaction costs can be pretty high.

How about capacity in Macau, especially in light of the table cap allowing 3% growth in annual supply of live tables until the end of the decade? Is capacity going to be increasingly a Galaxy Macau high-limit area limiting factor for Macau casinos? Near term, I don’t think capacity will be “You’ll notice nobody really talked about premium a constraint, especially at Sands China for example, which has so much capacity. There’s mass two years ago—not analysts and not even the casino still capacity that needs to be absorbed. operators. It was only last year that everybody started talking about premium mass as a result of slowing VIP, the It’s not like the situation in 2004 or 2005 when Macau was pretty much at full table cap and the shortage of dealers” capacity?

The labor cost as a proportion of revenue must go down in the premium mass compared to grind mass? Yes, but reinvestment also goes up. So, effectively, in premium mass, operators use what they get from the efficiency enhancement from the players gambling more, and they invest a little bit back to them, and also keep a little bit more. At the low end of the mass, 3%-5% of revenue goes to player reinvestment, and at the high end about 15%. The operators give most of their premium-mass players hotel, buffet vouchers and ferry tickets, etc.

The big news since the beginning of 2013 has been the pickup in the VIP sector. Is VIP back in solid growth mode? It is too early to say how sustainable it “The hard-core gamblers still prefer the peninsula is, because inherently this segment is pretty relatively. The atmosphere there is better for them, volatile, and it all depends on how the macro economy trends. The junket operators say and the casinos are more densely located—it is the customers seem to be gradually coming convenient to travel across casinos.”

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No. And the other thing is to look at the number of visitors per day per table. Back in 2002 there were more than 90 visitors per day per table. Now it is only 20-something. So they are not really that crowded. Which means that capacity can continue to be utilized.

So the capacity should be able to carry Macau until the next wave of Cotai properties start coming online from mid-2015? I think so. How will Cotai shape up as the new properties start openings there? Will Upcoming addition to the Cotai landscape—rendering of MGM China Holdings’ planned Cotai resort there be an increasing dichotomy between players on Cotai and on the peninsula? is nice. When these gamblers are losing to attract customers. I would say Cotai players would at one casino they want to move over to Right now, people are still focused on be relatively more tourist-like, more another one. On Cotai, the casinos lack the inside of the casinos there and not the family-oriented. And on the peninsula connectivity, whereas on the peninsula outside. You only have Venetian, Sands there could be some high-end as well they are closely connected, so that’s why Cotai Central and City of Dreams and to as more hard-core gamblers. The hard- I think hard-core gamblers still like to play a certain extent Galaxy on the other side. core gamblers still prefer the peninsula on the peninsula. But if you go to Vegas, the beauty is also on relatively. The atmosphere there is better the outside. You walk along the Strip taking for them, and the casinos are more densely When will Cotai achieve critical pictures, you see all these different buildings located—it is convenient to travel across mass? and designs. You need this factor as well to casinos. For a hard-core gambler, the Probably 2017, after all the other attract customers. You will need a few more most important thing is whether they win operators have gradually opened there. properties over there which carry different or not as opposed to whether the casino Then you’ll have more iconic products there designs to complete the landscape.

“Back in 2002 there were more than 90 visitors per day per table. Now it is only 20-something. So they are not really that crowded. Which means that capacity can continue to be utilized.”

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government—building up critical mass in a short period of time. That critical mass creates a natural barrier to entry.

What are the challenges in valuing Macau gaming stocks? One is from the driver point of view. The VIP market is inherently very volatile, so it’s not easy to forecast an exact number. As an investor I pay for the cash flow stream of a business over the next 10, 20 years. If the revenue is inherently volatile, how can I have an assurance of what kind of cash flow I can get and what kind of multiple I should get on this income? The other consideration is that in the medium term, in 2020-2022, the licenses of Critical mass under construction—the Cotai Strip Macau’s casino operators will be expiring. We are likely to get more clarity on how A lot of the visitors to the Cotai What are your thoughts on the other the licenses will be renewed closer to the properties are tourists and leisure markets in the region? How about expiry date. As we move closer to the license visitors who aren’t as interested in Solaire in Manila, which opened in renewals, investors will focus more on gambling as the hard-core players on March? It seems to have got off to a whether there’s a risk factor there. the peninsula. Are these leisure visitors slow start. actually valuable to the casinos? It is gradually ramping up. It will take Even though it’s highly unlikely any They are good and bad. If tourists some time normally for a new casino to of the operators will fail to have their come in, even though they are mainly ramp up, especially when the product is licenses renewed? there to take pictures, they could also relatively high-end, it also needs some But still there is uncertainty. So you need gamble a little bit, but will not sign up for time to gain customer recognition. And the to put a discount for the license renewal risk. the casino’s loyalty card. They just come Manila Bay area is relatively undeveloped. in, throw chips on the table, lose and go. Again, critical mass is important, and when The casino has no reinvestment cost and all the other casinos gradually open up, doesn’t need to provide hotel service you’ll get it there. or food vouchers for them. By contrast, the hard-core gamblers sign up with the How about Singapore? loyalty programs, accumulate points, In Singapore the mass segment will not redeem hotel rooms, etc. enjoy the similar growth story as Macau. I think for Singapore it will be more like How will the peninsula casinos hold single-digit growth in the mass market. And up beyond the next wave of Cotai in terms of VIP, the problem in Singapore is development? they don’t have junkets, so the casinos need They will grow slower than the overall to extend credit to the players. The players market because if you are a hard-core come from different regions, you have gambler you are already coming to Macau. different jurisdictions, and that may be a The new customers to Macau over the problem for debt collection. coming years are likely to be more leisure So there is some credit risk involved entertainment or new players, and they will in the Singapore VIP market which makes be more attracted to Cotai. So the growth it hard for it to grow as big as Macau’s of the peninsula relative to Cotai will be VIP sector, because in Macau you have all slower, but I believe the peninsula casinos the agents doing the debt extension and will still grow. collection. Macau will continue to dominate And some people definitely seem to the Asia market. In part because it’s right prefer the more raucous, down-and- next to China, and because it’s already dirty atmosphere at the older casinos. built critical mass with 35 casinos densely It’s their comfort zone. They feel this is located in a very small place. It’s hard for the way to gamble—yelling and pounding the others to replicate that quickly, so this the tables. They are more relaxed. is a clever strategy on the part of the Macau Ramping up—Solaire

48 INSIDE ASIAN GAMING | The casino floorINSIGHTS at Marina Bay Sands, Singapore

“There is some credit risk involved in the Singapore VIP market which makes it hard for it to grow as big as Macau’s VIP sector, because in Macau you have all the agents doing the debt extension and collection.”

Do you think Macau gaming stocks are crackdowns on junkets, officials being like you said, it’s the inherent nature of undervalued in relation to comparable detained in China. These things will scare the business, how it’s operated, it’s always sectors, such as consumer goods? investors. natural for people to associate the two I would say so. The consumer names in things together. So when investors see this China are trading at 20-something times But it seems like all the bad news over negative news-flow, even though they know price to earnings while Macau stocks are the last two years has had very little that it may not be true, they don’t want to trading at mid-teens PE while giving you impact on actual revenue. take the risk. Sell first and find out later. a 4%-5% dividend yield. I think that’s in It’s more noise than actual impact, part because of the uncertainty over the yes. But it will create uncertainty. Because, Is one of the problems that the VIP segment, so investors put a valuation investment community perhaps discount on Macau names compared to the views the sector more simply than consumer names. “When investors see they should? They’re too focused this negative news-flow, on the headline revenue or growth Is it also related to perceptions of how numbers and not enough on EBITDA the sector is operated? even though they know that and margins and the mass story that’s Yes, that is also true. It is not as simple it may not be true, been going on in the past year? compared to consumer stocks, and you have they don’t want to take Yes. But there are so many sectors now in a bigger component of policy risk involved Hong Kong and so many things going on that I as well. And there’s a lot more noise about the risk. Sell first think it would be natural for investors to focus anti-corruption drives, illicit money transfers. and find out later.” more on the top line and headline growth. It’s So I think inherently it will make investors easier to understand. If growth goes up, then feel less comfortable to put a high multiple they can assume sector fundamentals are on the stocks. strong. If it slows down, there will be some concerns. You won’t know EBITDA until the But as time goes on and the sector companies announce their quarterly results, gets bigger and investors become so each year you only have four times to more comfortable with it, would the find out the profit trend. But every month or multiples then perhaps converge with even every week you know how the headline those of the consumer names? revenue is growing. In the short-term the I would say so. The multiple should sector will react to the headline. In the gradually converge closer to the consumer medium-term it’s all related to the cash flow names. The sector-average PE is gradually and earnings of the companies. expanding as well. So in a way all the short-term What are the major downside risks to noise could offer a lot of potential the sector? opportunities for a savvy investor? The volatility of the VIP sector. There’s Yes, opportunities for the investor who always a lot of headline news about really knows how the sector operates.

May 2013 | INSIDE ASIAN GAMING 49 FEATURES

Protecting All Interests ‘Prevention is better than cure,’ explains Ian Hughes, senior director, Global Engineering and Client Services at Gaming Laboratories International

dispute arising from a malfunctioning machine in a Vietnam slot club Athat erroneously displayed a US$55 million jackpot in 2009 is still being contested. The latest court ruling, in January, upheld the player’s claim to the sum, though the judgment—which clearly would set a dangerous precedent for the country’s gaming industry—has been appealed to a higher court. One of the knock-on effects of the protracted drama has been an increase in demand around the region for the services of gaming testing labs. “We’re noticing that in Asia— whether it’s a regulated or non- regulated jurisdiction—the reliance on lab results and the credibility of the machine have become ever more important,” explains Ian Hughes, senior director, Global Engineering and Client Services at Gaming Laboratories International, the world’s leading gaming testing laboratory and technical consultancy. “An operator in a regulated market is relying on the protection afforded to them by that regulator. So if you’re an operator or concession-holder in Macau, the regulator takes the responsibility for making sure the product coming into Macau meets the requirements. “But when there’s a lack of regulation standards is recognized IAG: Are there any then you need to have some other globally as an international significant regulatory changes mechanism in place to protect both your set of standards of very high reputation. that have taken place in Asia recently? own interests and your players’ interests. Regulators refer to it, operators refer to it, Mr Hughes: From a regulatory Because an operator, particularly an manufacturers refer to it. The GLI Standard standpoint we’ve had a few minor operator with international interests or Series is seen as the international standard changes in Singapore. We worked with the of high reputation, wants to ensure the that can be easily adopted in these Singapore [Casino Regulatory Authority] products coming into their markets do jurisdictions. The goal of the Standard Series on the changes for some of their technical what they’re supposed to do. is to help regulators, suppliers and operators standards. “So we’re really seeing more of that in avoid any potential issues before they We participated in a technology forum Asia—they’re relying on a GLI certification happen.” they held [at the end of January] with or an approval or something presented Inside Asian Gaming caught up with Mr manufacturers and operators. The Singapore by someone of independence saying the Hughes recently and spoke to him further CRA holds these forums to keep the industry product does what it’s supposed to do.” about the current state of gaming testing involved with changes that they want to put Mr Hughes adds: “GLI’s series of and standards in Asia. forward that would affect manufacturers. It’s

50 INSIDE ASIAN GAMING | FEATURES

standards up to date with technology. markets, where they’re coming from. Online Standards maintenance is very important, suppliers are going to the whole world. and that’s one of the things we’ve been It’s a huge investment for a manufacturer doing with our standards, keeping them up to put the multi-language on, and it has to to date and releasing them to the industry as be correct. So we do a lot of multi-language technology changes, particularly as we see a support for manufacturers to make sure that lot of systems convergence. it is correct. Not only if you’re doing a literal The Macau standards that came out translation, but that it actually makes sense. were very specific in some areas, dual Regulators want us to make sure that language being the primary one, which the player is correctly informed of the rules meant some major changes for some of the play, and so if the game is adequately manufacturers to support dual language, described in English, then if somebody is especially if that wasn’t native to their reading it in Chinese, it has to adequately operating system. And some manufactures described in Chinese, without referring back found it easier than others. But that was a to the English version. The English version move all manufacturers were looking to might be the final legal language, but at the make anyway as their platforms become end of the day the player has to be correctly more international. So multi-language informed in the language that they’re being support is certainly something that we’re presented to. seeing more of in platforms. Even platforms going into English-speaking countries will Were you testing for Chinese before? Ian Hughes have support for multi-language, just to be Yes. So if it’s in there, we’ve always tested appealing to the player. it. But now there’s a requirement for it to be That’s a change we previously saw in the game and accurate. “We’re noticing that happening online. When players go to an in Asia—whether it’s a online site, they always have the option for Is there anything else coming out of regulated or non-regulated multi-language. And we’re seeing that same the new Macau standards that you’ve functionality for terrestrial gaming as well. had to adapt to? jurisdiction—the reliance The most languages I’ve seen on a We always work to what the regulator on lab results and the gaming machine are maybe three: Chinese, lays out. So prior to that new standard credibility of the machine Spanish and English. Online we’ve seen 11 to coming out, manufacturers had the choice 15 languages. When suppliers are developing to use GLI 11, Australia and New Zealand have become ever more a terrestrial platform, they know their target standards or Nevada standards. So there important.” an opportunity for the CRA to present those proposed changes to the manufacturers and find out if there are any concerns. The CRA have made some slight changes to their requirements for the layout of player information displays. There are also some changes relating to card-readers, electronic card shoes and shufflers. Really technical, mechanical-type matters, but nothing that would cause concern. Not like a year ago, when personal information displays were introduced. It’s just maintenance of existing requirements. There were also some changes to the licensing process for suppliers. We’re still going through the documents and updating test scripts that they relate to. But, again, nothing too challenging for the majority of suppliers.

What else has kept you busy? At the ready—GLI has added night shifts at two of its global offices in order to respond more quickly to Obviously, it’s important to keep urgent requests.

May 2013 | INSIDE ASIAN GAMING 51 FEATURES

GLI at G2E Asia 2013 or nearly 25 years, Gaming Laboratories of products on their floor, with a simple FInternational has been the world leader solution that taps into our global data base in providing independent testing, inspection so that the information is always up to date, and certification services to the gaming, accurate and in real-time,” GLI President and wagering and lottery industry. It brings its CEO James Maida said in a news release. lottery, land-based and iGaming testing and GLiCloud delivers on that promise, and certification experience as it returns to G2E because it links to our new GLI Mobile, Asia. GLI Asia representatives will be at the regulators now have the power of a global stand to discuss the importance of accurate, data base in the palm of their hand.” secure and independent testing and the GLiCloud is designed to link to GLI benefits of testing to regulators, suppliers, Mobile, the downloadable app that GLI operators and consumers. introduced to the market at G2E Asia last In addition to its testing services, GLI has year. GLI Mobile allows regulators and a wide range of exclusive, award-winning suppliers alike to check GLI’s global data tools for suppliers and regulators. Among base from their mobile phones or tablets. It them is GLI Link, an Internet-based tool that facilitates 24/7 access to the lab in a secure, Lottery expert—Larry Xiao allows remote testing of devices against password-protected environment. are responding to the latest advancements. systems, saving suppliers considerable Based in Macau, GLI Asia was the first As a top expert in lottery issues as well as time and money. Point.Click.Submit and full gaming testing laboratory in the market, casino gaming, Mr Xiao is a familiar figure as Point.Click.Transfer have been field-proven and was the first lab in Asia to be certified for a speaker throughout Asia. to speed supplier time-to-market and ISO/ISE 170025:2005. GLI provides independent testing and reduce costs. Point.Click.Submit eases the In addition to the company’s presence on auditing services that have benefitted submissions process, allowing suppliers to the show floor, two GLI executives will play land-based and online regulators and make submissions with just a few clicks of key roles in G2E Asia’s conference. GLI Senior suppliers in 455 jurisdictions around the the mouse, while Point.Click.Transfer allows Director of Engineering & Client Services world. Additionally, GLI has extensive the transfer of previously certified devices to Ian Hughes will speak at the conference. lottery experience including high-profile international markets. Mr Hughes is responsible for directing and lottery projects in Beijing, South Korea and New for G2E Asia is GLiCloud, a cloud- controlling engineering activities across Taiwan. based program that empowers operators all GLI laboratories in the United States, GLI also offers independent network and regulators to better manage inventories. Australia and Europe as well as for providing and information security assessments to its It empowers regulators to track the entire technical advice and certification services to regulatory, lottery and supplier clients. With gaming floor’s software and hardware along regulators globally. He’s an active member of 20 laboratory locations located across Africa, with the regulatory status of all components. many regulatory committees, including the Asia, Australia, the Caribbean, Europe, North It’s an automated process designed to National Standards Committee in Australia. America and South America, GLI is the only eliminate human error. GLiCloud links casino GLI Asia Managing Director Larry Xiao global organization of its kind to hold US and floor inventory to real-time regulatory will lend his expertise to the conference, international accreditations for compliance compliance status and provides oversight moderating the panel “Gaming Technology with ISO/IEC 17025, 17020 and Guide 65 and reporting of activities and tasks Innovations: Traditional Tables & Electronic standards for technical competence in the “Regulators around the world came Games.” The panel will discuss differences in gaming, wagering and lottery industries. to us asking if we could develop a way to table game regulation between the region’s help them track the enormous number markets, innovations and how regulators Visit GLI at Stand #429

were always standards in place, just not one hire staff and engineers at different skill levels only gives us an hour overlap. The night shifts specified standard. So now it’s very clear that are required. We’ve added night shifts to give us a full working day overlap. So our what you need to do in Macau. And there are two of our global offices so they work through Australian offices and our US offices can work some specific requirements put in there that to the early hours of the morning to provide throughout the working day with that night they felt were important. a longer day. The industry wanted us to have shift in place now. better availability, and with the increase in What significant changes have been staff and shifts, we’re able to do that. And Are the requests you get so time- happening at GLI recently? particularly with our Las Vegas office the sensitive that you need night shifts? GLI continues to make sure that we’ve night shift that we introduced there supports If something happens and we need to got adequate resources to meet industry our Asian and Australian offices because of respond we don’t want to wait until the next requirements. We’ve hired over 120 staff in the time difference. We hit 4 p.m. in Las Vegas, day. We want to be able to put people onto the last six months and we’re continuing to and that’s the start of the day in Asia, so that it straight away.

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Kangwon Land

Proving Ground SPIELO International™ recently carried out one of its largest casino systems installations in Asia at Kangwon Land in South Korea. Kangwon Land offers the perfect venue to demonstrate the robustness and flexibility of the company’s offering

angwon Land is the largest of South Korea’s 17 casinos. It is also the only Kone where locals are allowed to play, and owing to that exclusive position, there’s hardly ever an empty seat in the house. On weekends, there are line-ups for seats at the tables. The slots, meanwhile, operate at around 95% occupancy. That high occupancy made the migration of Kangwon Land’s slots over to a new management system a challenge. “Of the 960 machines, 940 of them are always online, and the reason 10 or 20 are vacant is because players go for smoking or toilet breaks,” explains Chiang Lai Fatt, General Manager-Asia Pacific Casino Systems for The Kangwon Land IT team, from left to right: Seonuk Choi, Assistant Manager; Haejung Ju, Senior Manager; SPIELO International. Do Hwan Kim, Manager; Namgyun Kim, Assistant Manager “Initially we only had four hours a day to migrate, and each day we could only work migration was so smooth that it hardly modular solutions that operators can “just on migrating one bank so it didn’t affect affected our daily business. We would like to plug and play,” as Mr Chiang points out. income,” adds Mr Chiang. ”Despite those thank SPIELO International for their efforts on “We also allow our customers to choose challenges, SPIELO International was able to this project,” commented Ju Haejung, Senior the modules they need, which most of ramp up its resources to complete the entire Manager, System Management Department the major systems providers do not allow.” migration between August and November at Kangwon Land. SPIELO International also customized certain last year, accomplishing a smooth transition Kangwon Land issued the request for elements of GALAXIS for Kangwon Land; on time and on budget. The SPIELO system proposals to replace its existing casino for example, providing Korean language continues to run securely and robustly since systems in 2012, and SPIELO International support for the system. its start in August 2012. was the selected supplier because of its Kangwon Land offers the ideal proving “We are extremely happy and satisfied flexibility in pricing and its ability to respond ground for a casino system’s robustness. with SPIELO International, their Casino to the customer’s specific requirements. “This project highlights our system’s Systems products, and also all of their A key strength of the GALAXIS™ casino reliability to handle high levels of player staff that we had to deal with. The whole system is that it offers robust, market-tested, traffic. To give you some examples, every

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TECH TALK

second at Kangwon Land there are dozens and stable jackpot engine which is currently Among the SPIELO International Casino of ticketing transactions, and every hour running all our jackpots on the floor, from Systems products installed at Kangwon there are over 150,000 system transactions, progressives to mystery jackpots. The Land are: from cash in/out to jackpots, etc.,” according system has been running smoothly since • GALAXIS JACKPOTS—there are 153 to Mr Chiang. Day 1,” says Kim Dohwan, Project Manager, jackpots running in the Kangwon Land CMS Project. casino, of which 80 are standalone, and there are 18 different types of jackpot Testing Times Ahead managed centrally by the GALAXIS Kangwon Land is majority owned by JACKPOTS engine, including progressive, the South Korean government and located mystery and gift prize mystery jackpots in Gangwon Province, an economically (e.g. car giveaways). GALAXIS JACKPOTS depressed former coal mining region. It was also provides wide area progressive envisioned as a means to help resuscitate the management local economy. The resort opened in 2003 • GALAXIS SLOTS for accounting. GALAXIS and features 199 hotel rooms, 10 restaurants, SLOTS is SPIELO International’s advanced a spa, theater, golf course and ski resort, in and powerful slot management system addition to 960 slots and 100 gaming tables. for fast and efficient slot accounting, The casino is slated for further expansion, reporting, monitoring and maintenance and the successful relationship with SPIELO of the slot floor. International is likely to continue. • GALAXIS CASHLESS portfolio offering Kangwon Land could see competitive qpon cash™ a ticket-in/ticket-out pressure escalate in coming years. The solution to issue and redeem tickets. At property’s exclusive right to serve domestic Kangwon Land, 25,000 qpon cash tickets gamblers expires in 2025, and authorities are issued to players each day. say that licensing for at least one new venue • GALAXIS MARKETING is used by “This project highlights catering to locals could take place in 2025 Kangwon Land for its Player Services our system’s reliability to or soon after. Furthermore, official plans call functions. GALAXIS MARKETING also handle high levels of player for the licensing of up to five resort-scale includes solutions for loyalty club traffic. To give you some casinos over the next decade or so. management, player management, The competitive edge conferred by marketing campaigns and a wide range examples, every second SPIELO International’s casino system is of applications for enhancing the player at Kangwon Land there set to become increasingly important for experience. are dozens of ticketing Kangwon Land as these developments • GALAXIS CONNECT presents the unfold. GALAXIS will also help the property CRYSTAL.net platform with its touch transactions, and every deal with an expected huge influx of screen player interface. CRYSTAL.net hour there are over 150,000 visitors to Gangwon Province in 2018 for connects any number and type of slot system transactions.” the Winter Olympics—the event will be machines on the casino floor. The in- held at Pyeongchang, up the road from machine player screen is used for direct Kangwon Land. messaging, marketing and presenting – Chiang Lai Fatt, General a wealth of additional applications Manager-Asia Pacific Casino to the player, right at the slot. Such Systems for SPIELO International player applications include: myBar, myInfo, myPromo, Live Messages, EGM GALAXIS enhances the ability of Reservation and language selection operators to attract, analyze and reward support and work in conjunction with players based on their activity. It is the GALAXIS MARKETING loyalty club particularly adept at handling jackpots. The competitive edge conferred by SPIELO card as well as GALAXIS CASHLESS “Our jackpot solution is able to manage all International’s casino system will help it face payment systems. the jackpots —progressive and mystery— future competitive pressure in South Korea’s casino • GALAXIS MULTIMEDIA presented in without the need for an external controller. market. GALAXIS MARKETING, powers 14 different In many cases customers use a management Marc Attal, Managing Director of Casino Jackpot displays at Kangwon Land. system, but still need an external controller Systems at SPIELO International, reiterates All the Jackpot displays are managed to run the jackpot. Our system can manage the company’s commitment to Kangwon centrally, allowing greater flexibility all jackpot activity, which in the end Land: “We will continue to work closely with to change the media throughout the simplifies the IT requirement and saves the Kangwon Land in supporting its ambitious casino for special events. customer money,” stresses Mr Chiang. development,” he said. “We are ramping up Kangwon Land management agrees. our operations in Asia with the recruitment Visit SPIELO International at “SPIELO International has a very powerful of additional technical support resources.” Stand #213 56 INSIDE ASIAN GAMING |

G2E ASIA 2013

Flashing the Cash Giesecke & Devrient has brought its expertise in high-volume banknote processing to Solaire and with typically impressive results

iesecke & Devrient, known around concept for fully integrated banknote the world as a leader in large-scale processing, based on careful analysis of the Gcash-processing technologies, has location itself.” raised its profile in the gaming industry in There is quite a lot involved in counting a big way with the customized end-to-end multiple currencies, inspecting their solution it is providing for Asia’s newest authenticity, value and fitness and sorting megaresort. them according to denomination, series, Ensuring that cash moves smoothly, orientation and condition and at high efficiently and securely in the demanding speed. Solaire’s system is built around three environment of a 21st century casino is products, all of which will be exhibited at a specialty for G&D, which is accustomed G2E Asia this month, each with an integral to designing the high-volume systems part to play in fulfilling these core functions. required by central and commercial banks First, there’s the BPS C4, the hub of and cash-transit enterprises. the count room, a modular workhorse that can be set to recognize up to 100 different currencies and process up to BPS C4 five of them simultaneously. The C4 was designed especially for the highest-volume of banknote qualities and substrates at a environments and is capable of a through- best-in-class 1,200 notes per minute with put of up to 40,000 notes an hour. That’s 12 authentication provided by the patented notes per second. It comes with up to 20 CashRay 180 sensor. Color touchscreens delivery compartments for allowing a variety simplify input. And integrated printer- of processing types in a single pass and to-document accounting and statistical header cards to ensure that small deposits reports are a snap. The BPS C1, the “all- are efficiently processed and securely rounder,” as G&D likes to call it, is a dual balanced. It’s modular, too, and therefore stacker that delivers rapid sorting, superior adaptable to a wide range of processing authentication and verification and multiple requirements. Only one operator is required processing for up to 10 currencies. Its robust BPS C1 for the different sorting procedures, but capabilities and small footprint make it ideal it can be variably configured to allow for a for cage and cash center use. For Solaire Resort & Casino, which maximum number of jobs to be run at the Solaire also plans to employ G&D’s opened in March at Manila’s fledgling same time. And it easily integrates into innovative Bank Express System to Entertainment City leisure complex, G&D existing management systems via a LAN automate the bank-out function in the put together a tailored portfolio of hardware interface. Options and accessories include: employee cage bank as well as track and software components to integrate single currency adaptation for almost 100 inventories and cash balances. Working in the resort’s business segments—the all- currencies and adaptations for processing tandem with G&D’s Compass Casino, Bank important operations of the cage, of course, up to five currencies on a single unit; a Express is designed to provide controlled together with the restaurants, shops and the pneumatic module designed for handling and secure access to 150 pre-assembled hotel—into a single, flexible system for fast, poor-quality banknotes; configurablesatellite employee banks, each containing reliable, fully automated, high-security cash- reporting languages; an external printer, up to 1,000 banknotes and up to six rolls processing. mouse and keyboard; external components of coins. Delivering average dispense times “Solaire is one of the largest and most for invalidating and/or destroying banknote of seven seconds, it allows cashiers to modern casinos in the world. This makes bundles; and closed circuit television for complete transactions efficiently, ensuring absolute precision and high productivity displaying count data. they spend less time in the back office and indispensable,” says Jim Goodwin, director of The similarly versatile Numeron and more time serving guests on the floor. Market Segment Casinos for Munich-based the compact BPS C1 complement their big G&D. “We worked closely with the customer brother with an array of powerful desk- Visit Giesecke & Devrient at to develop and implement a suitable top tools. The Numeron handles all kinds Stand #629 60 INSIDE ASIAN GAMING | May 2013 G2E ASIA 2013

Going Live G2E Asia to roll out exclusive TV channel for in-show broadcasts

he American Gaming Association and Reed Exhibitions has announced that, for the first time, Global Gaming TExpo (G2E) Asia 2013 will be broadcast onsite over G2E TV, a self-contained television channel. Sponsored by Aristocrat Technologies, these broadcasts will provide attendees real-time show updates, interviews with decision makers from key gaming industry companies, expert market analysis on Asia’s gaming landscape, conference bulletins, show updates, and a full review of each show day. Billed as “the premier gaming exhibition and conference event dedicated to the Asian gaming markets,” G2E Asia 2013 will take place 21st-24th May at the Venetian Macao. “We are excited to launch G2E TV at G2E Asia 2013; it was a matter of meeting a prevailing need with perfect timing,” said Lay Eng See, assistant vice president of lifestyle events at Reed Exhibitions. “In today’s highly digital world, having dynamic content that you can carry in your pocket, access on-demand, pause, rewind and replay, makes it practically impossible to miss a single highlight. We couldn’t pass up the chance to put key show and industry information at every participant’s fingertips.” G2E TV will stream live on the G2E Asia website, www.g2easia. com, and via the new G2E Asia Mobile app. The app is available for Android and iPhone platforms and provides participants with portable, one-click access to the latest G2E Asia 2013 news to ensure they will never miss a show highlight. The app also will allow participants to search conference sessions, access their My G2E Asia Show Planner agendas, search for exhibitors, and view the full schedule of events. “We’re thrilled with this opportunity to partner with the G2E Asia team for the sponsorship of G2E TV,” said David Punter, general manager of Asia Pacific at Aristocrat, which is celebrating its 60th anniversary this year. “Launching a new channel is a groundbreaking innovation for an event like this, and bold leaps forward are exactly how Aristocrat has continually reaffirmed its position as the first name in gaming supplies since 1953. We look forward to remaining part of this great industry and to delivering outstanding value for our customers for the next 60 years and beyond.” G2E ASIA 2013

Hit Machine Armed with a cutting-edge new cabinet and Asian-themed jackpot, DLV is returning to G2E Asia intent on enlarging its footprint across the continent’s slot floors

ith its versatile and cost-effective multi-game products, Latvia-based slot manufacturer DLV has slowly but surely Wbeen building its presence in Asia. The company’s latest cabinet, dubbed Hybrid, will make its regional debut at this month’s G2E Asia. Hybrid features two new 4-level mystery progressive jackpots: the Dragon jackpot, designed specifically for Asian markets, and the baseball-themed Vollinstars. DLV was founded in 1994 and initially focused on its home turf in the Baltic region, but gradually expanded its presence into international markets including the European Union, non-EU countries in Eastern Europe, Central America and South America. In early 2010, the company made its maiden foray into Asia with the first of several installations in Cambodia. In Cambodia and worldwide, DLV has enjoyed considerable success with Jewel Jackpot, a progressive jackpot system featuring ten games and various themes. The company continued the popular series first with Jewel Jackpot 2, and more recently with Jewel Jackpot 3, which has been expanded to include 15 games and will also be highlighted at G2E Asia. DLV Chairman Mihail Volokotkin believes the Asian market, long dominated by the major international slot suppliers, is now hungry for greater choice, creating opportunities for new brands, including his own. DLV has good insight into the needs of slot operators— particularly the needs for operational and cost flexibility. As well as manufacturing slot equipment, the company runs slot halls in its home market and in South America. It also assists with the running of operations in Asia

The new Hybrid cabinet has two 24-inch screens and a touch-screen interface.

DLV prides itself on the competitive pricing and technical robustness of its products, as well as its speed and flexibility in responding to clients’ needs. Mr Volokotkin also stresses the importance the company places on conducting thorough market research and keeping up with evolving circumstances. “In each of our innovations we try to offer the latest technology while catering to the characteristics and trends of each market and incorporating the valuable feedback from our product focus groups.” Jewel Jackpot 3, the latest instalment in the popular Jewel Jackpot series, has been expanded to include 15 games. Visit DLV at Stand # 529

62 INSIDE ASIAN GAMING | G2E ASIA 2013

Platform Diving Many in the industry talk about convergence … High 5 Games is actually achieving it

here is extra sparkle this year to the “Wild Multipliers” lets players choose wave High 5 Games is riding into from five bonus options, each offering T G2E Asia. a different number of spins and three Shadow Diamond, which has been different multiplier values that can winning over players as the first Bally appear on wild symbols, and the Technologies game on High 5’s highly multipliers are accretive to create more rated High 5 Casino on Facebook, makes chances at a winning combination. ranked by total spins, spins per session and, its debut this month as the first land-based • Golden Three Kingdom, inspired by the of course, monetization. Apps are evaluated release to come out of a partnership struck 14th century classic that has been called for effectiveness. User geography and last year between Bally and the innovative China’s most widely read historical language are analyzed. Player surveys are New York-based game developer. A 4x5 reel novel. Highlights include Super Stacks deliberately designed to be wide-ranging. game, Shadow Diamond features specially and “The Collection Bonus” where Themes and features are queried. So are animated top glass and High 5’s popular players retrigger additional free spins graphics and even music. “Super Stacks,” which create the potential by collecting all the hidden symbols, “We know that the future of casino for big wins by increasing the frequency at a clever complement to the theme’s gaming must include social, mobile and which a full stack of the same symbol will mystique. If all the symbols are collected online consideration,” says COO Med land in a reel. four times in a bonus round, winnings Nadooshan. High 5’s dynamic approach to reel are multiplied by 10. The site clearly serves the company well configurations continues to influence the • West Journey Treasure Hunt, the 3x5 as a branding and cross-marketing tool also. way manufacturers think about slots as offering that stars the beloved Monkey “It just made sense,” as Chief Executive games as well as gambles, and it features King and his colorful companions and Anthony Singer attests. “Online players are prominently a new title just released for IGT: features “Super Stack Multipliers” with searching for the same high-quality slot Lucky Horse, a 4x6, 466-pay-line offering its random multiplier that kicks in when games that they can find in real casinos.” that comes packed with exciting reel action three or more reels are covered with High 5’s success at honing these in the form of “Stacked Wilds, Connected the same symbol. “Pick-A-Super-Stack” conversational skills was recognized at last Lines” and “Horizontal Expanding Wilds”. adds another layer of interactivity with a year’s Global Gaming Expo in Las Vegas with High 5 has played a significant role player choice in the free games bonus. the American Gaming Association’s Voice in helping IGT deliver on its increasingly Award for “Best Communications Campaign”. successful new-look Asia strategy with Two new titles were recently launched The company’s winning entry consisted of games crafted specifically for the region online, and look for one or both to make a new Web site and a package of YouTube, both in their play features and maths and a surprise appearance on the G2E Asia Facebook and forum posts that addressed in the way they make visual and narrative show floor. These are Brazilia—a 3x5 game player feedback, digital direct mail and use of East Asian folklore and other cultural that fans of Shadow of the Panther will promotions targeted at casino operators. touchstones. like, with its “Super Stacks-Split Symbols” “The Slot Report,” a monthly e-blast Three titles in particular have struck a combination—and Gypsy, a 4x6 Split for operators, ended up a finalist for “Best chord with Macau players: Symbols game offering 243 ways to win. Digital Direct Mail”. • Big Dragon Lounge, which takes the They join a family of 30 games on High Joining the hardware collection earlier frisson of Roaring Twenties Shanghai 5 Casino, which surpassed 1 million active this year was “Best Manufacturer of the Year” as its starting point. Unique features monthly users earlier this year—350,000 picked up at the Totally Gaming Awards include a 3-4-4-4-3 reel configuration active daily users—and continues to be at the International Casino Exposition in which unfolds in 576 ways to win. The refined as a strategic data collection point London. “Winners Choice Bonus” feature with for what will work terrestrially. Titles are “We’re pleased,” Mr Nadooshan said at the time, but he was quick to add, “The best has yet to come for High 5 Games.”

Check out High 5 Games’ West Journey Treasure Hunt at IGT Stand #835, and its Asian-themed linked progressive Zhi Nu at Bally Technologies Stand #235

May 2013 | INSIDE ASIAN GAMING 63 G2E ASIA 2013

Wide Appeal SHFL Entertainment will have strong representation from all categories—including utility, specialty games, e-Tables and slots—at G2E Asia, with the next generation TableMaster making its regional debut

ormerly known as Shuffle Master, SHFL Entertainment has a presence Fin the gaming industry that reaches far beyond the automatic shufflers that gave the company its original name. At G2E Asia, SHFL will be turning the spotlight on electronic table games, progressive games on felt tables, slot machines, and, of course shufflers. “Asia has been an extremely important market for us, and certainly the fastest growing,” reveals Julia Boguslawski, Vice President Investor Relations and Corporate Communications. “We have an expanding footprint in all the key markets and have been establishing a presence in some of the newer emerging ones. This is a market with strong representation from nearly all of our product lines and substantial room to grow.” TableMaster’s lifelike virtual dealers are stunning. There will be more than 25 products at the SHFL stand, and according to blackjack game Royal Match 21 along with award-winning Asian-themed slot link Duo Ms Boguslawski, that includes strong Dragon Bonus Baccarat and Fortune Pai- Fu Duo Cai, will be the centerpiece of the representation for all product categories, Gow Poker. company’s slot display. The link delivers a including utility, specialty games, e-Tables “Our newest e-Table innovation is a unique “All Up” Chinese-themed game style and slots. significant upgrade to our long-standing, where all lines are always in play, even at a Among eTables, the next generation successful TableMaster product,” says minimum bet of one credit. As players buy TableMaster, dubbed TableMaster FUSION, Ms Boguslawski. “We’re very excited to more gold symbols, they access a higher- will make its debut at G2E Asia. TableMaster unveil a new interface which features a paying scorecard and more opportunities to brings table games to an electronic format, high-definition display, widescreen player win progressive jackpot prizes. One of Duo with multiple players seated at a console terminals with touch-screen betting, Fu Duo Cai’s most popular titles, 88 Fortunes, with a virtual dealer. Games include SHFL enhanced illumination, multiple concurrent is a four-level link progressive that is loaded specialty games with side bets, such as the side bets, a modern and attractive design, with features such as stacked symbols, the and support for multiple game offerings. The ability to offer players 10 free games, and a lifelike virtual dealers are stunning—that has linked jackpot feature. always been a hallmark of TableMaster— “It’s in nearly all the marquis properties and the modular design offers flexibility in Macau, with installs in the Philippines and and convenience. This is a significant launch Singapore as well,” adds Ms Boguslawski of for us and we can’t wait to gauge customer Duo Fu Duo Cai. “Our recent acquisition of reaction at the show.” a content studio in Qingdao, China, shows The Rapid e-Table, now called SHFL our long-term commitment to the Asian FUSION Hybrid, also will be on display, and market as we strive to continue delivering that’s been a big success for SHFL. compelling localized content with high- “There are over 400 seats of our Rapid quality graphical assets.” e-Table in Singapore,” says Ms Boguslawski, In the utility category, SHFL has a well- “and the massive stadium-style seating is established presence in Asia. just an incredible thing to witness.” “We have card shufflers in markets SHFL FUSION Hybrid SHFL’s top-performing title in Macau, the like Singapore, Macau, Malaysia and the

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Philippines, with lots of ramp for growth as progressive hardware. operators look for ways to enhance security “Combining an intuitive dealer interface measures on their floors,” observes Ms with electronic chip sensors embedded Boguslawski. in the table, players are able to place At G2E Asia 2013, the DeckMate2 an optional jackpot wager in order to poker room card shuffler will get an official potentially win fixed prizes or a continuously introduction to the Asian marketplace. incrementing progressive jackpot,” says Ms “We unveiled this at G2E in Las Vegas Boguslawski. “This next-gen hardware works and received very positive feedback from in conjunction with our new Game Manager customers; we’re hoping for the same 2 progressive management software, a reaction at G2E Asia,” states Ms Boguslawski. network-based system that allows for multi- “With a shuffle time of 22 seconds, level jackpots and fully configurable multiple the DeckMate 2 is twice as fast as its reserve pools.” predecessor, the DeckMate. In addition SHFL is excited about the prospects for to optical card recognition, the DeckMate continued growth in Asian markets. 2 features an innovative new shuffling “We think gaming in Asia is progressing method to reduce wear on playing cards rapidly due to economic growth and that and reduces maintenance needs. The real these countries present some of the most value proposition is the enhanced security exciting, fertile markets in the industry,” says that the DeckMate 2 brings to the table, Ms Boguslawski. “Established markets like which is particularly relevant for the Asian Macau and Singapore have traditionally gaming market.” been the main focus, but lately emerging In the progressive games category, SHFL markets such as Cambodia, Vietnam and will be showing progressive versions of Korea have been on the radar and offer established games including Crazy 4 Poker promising growth stories.” Duo Fu Duo Cai delivers a unique “All Up” Chinese- and Mississippi Stud. Newer titles, including themed game style where all lines are always in Big Raise Stud Poker, will be running on Visit SHFL Entertainment at play, even at a minimum bet of one credit. SHFL’s next generation Nexus Command Stand #801

May 2013 | INSIDE ASIAN GAMING 65 FEATURES

Revenue Boosters TCSJOHNHUXLEY is advancing in key markets with its comprehensive range of products designed to enhance performance across the casino floor

ith a wide range of products including gaming tables, roulette wheels, chip sorting machines and e-FX and Omni Wwinning number displays, TCSJOHNHUXLEY is enjoying a time of growth across the continent. The collection will be on display at G2E Asia. “We’re delighted at our progress in the Asia region, with 2012 being a record year for our business,” said marketing manager Tracy Cohen. “The Solaire opening [in Manila] was a highlight, with us providing 295 custom-designed tables for the main gaming floor which were predominantly baccarat tables and a further 50 tables for dealer training. In addition, we supplied all the table layouts, Omni Baccarat electronic displays, electronics for Sic Bo, Philippine- themed money wheel, plus all metal and acrylic table accessories. We also expanded our presence in Vietnam supplying the soon-to-be- opened Ho Tram casino. Our Macau business continues to steadily grow and our strategy remains to supply products, solutions and Gaming Floor Live automatically support that helps to drive and grow our customers’ business. We aim to continue to attract the best talent we can in sales, service and captures game data which provides support to meet the market requirements.” information to maximize turnover, For G2E Asia, the spotlight will be on products including maintain the house advantage, reduce Gaming Floor Live, the real-time game optimisation tool designed operating costs and understand to maximise key performance areas and profitability, now available across baccarat, sic bo and roulette games. Introduced as a roulette opportunity costs.

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some new regionally inspired games. Sicbo Blaze is the first of these featuring the company’s latest gaming surface technology. Game animations are projected through a traditional gaming layout, which brings added excitement to the game and attracts new players by making tables stand out on the gaming floor. For added game security, all winning bets and game sequences are highlighted and standard gaming layouts cover the complete table surface instead of the traditional Perspex playing surface. Blaze gaming surface technology will be rolled out in the coming year to cover a variety of table games. TCSJOHNHUXLEY is optimistic about the future of Asian gaming. “Growth will continue in the region as we’ve seen in Q1 with the opening of new markets further solidifying that growth,” said Cath Burns, TCSJOHNHUXLEY Group CEO. “Over the past 12 months we have focused heavily on investing in our products and our people. To meet the growing market demands we have strengthened our team by hiring the right people to drive our business forward as well as making a continued commitment to develop key products for the region. Asia is an extremely important market to us. We continue to grow our market share in Macau, Singapore and Malaysia and with new markets in the Philippines and Vietnam opening up we are excited about the future.”

Visit TCSJOHNHUXLEY at Stand #549

Cath Burns solution, Gaming Floor Live automatically captures game data which provides information to maximize turnover, maintain the house advantage, reduce operating costs and understand opportunity costs. The system enables casino managers to measure performance, benchmark optimum results and compare real-time performance against the selected benchmark, providing live feedback to dealers, floor and casino management. TCSJOHNHUXLEY said other highlights include the Supernova Table Bonus System, which delivers floor-wide progressive and game bonusing to all live table games, and Xia Tablet, the server-based roulette solution that allows players to play live roulette tables on a touch screen tablet device throughout a gaming venue. Through Supernova, operators can offer multiple jackpot and bonus levels, mystery bonus prizes at the tables, and have mystery win animations to drive table excitement. With the Xia tablet, players visit the cash desk and deposit a stake, which is then loaded onto the device by staff. The customer then can use the tablet anywhere in the casino to play roulette. All results are delivered in real time via a wired game server, then a visual representation is sent to the tablet via a wi-fi connection. In addition to those key products TCSJOHNHUXLEY is launching Xia Tablet and Kiosk

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Speed Counts By automating the buy-in process on high-volume gaming tables such as those found in Macau, the i-depsys intelligent drop box could result in dozens more hands and thousands in extra revenue a day on each table

acau’s casinos generated over US$150 million per day in table Mgaming revenue during the weeklong holiday in China to mark Labour Day on 1st May. That works out to around $27,000 per day or $1,125 per hour on each of the city’s 5,800-odd gaming tables. A technology that can increase the number of hands per hour by 40% or more clearly offers tremendous potential value in a high-volume market like Macau. Intelligent Deposit Systems, formed in 2006 by a group of industry professionals, has created just such a technology in the form of the world’s first table-integrated intelligent drop box, dubbed i-depsys. The i-depsys units allow cash to be presented at the table and counted mechanically with a full range of forgery The i-depsys intelligent drop box detection options. The system also gives an accurate, real time position on cash at the pouch within the machine’s own drop safe. Star City GM Dave Scott commented: “We table by means of a software interface that A successful live trial of i-depsys units are extremely pleased with the performance records all transactions. It works with casinos’ was recently concluded at the UK’s Star of the i-depsys units and the efficiencies they CCTV systems to give an independent, City Casino, leading to operator Genting have created for the business. We have made reliable record of all table cash transactions. UK placing an order with IDS for systems changes in procedure to accommodate the And using IDS’s patented technology, the across an initial four properties with a view new system and have reaped significant cash is stored in a security tamper-evident to adding further sites in the near future. operational benefits as a result. By using i-depsys I can now put my count staff back on the casino floor to make money not count money by opening additional tables.” Inside Asian Gaming spoke to IDS CEO Andrew Beddoe about the evolution of the i-depsys and his company’s value proposition to casinos.

IAG: Where did the idea for the i-depsys come from, and what did the development entail? Mr Beddoe: I have worked in the industry for many years and had many different roles with casino supply companies. I kept hearing the same story from casino management about how frustrating, time consuming and laborious the end of day count was for them. I thought there must be an easier Cash is stored in a security tamper-evident pouch. way or solution. So I went to the banking

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industry to see what was available stacker boxes. Here we substitute our pouch and looked at various products. Some, for their existing stacker box and deposit the like bill validators/note acceptors were notes directly into their stacker boxes. This discounted immediately owing to their means that the operators get all the speed. I quickly identified a fast count front-end benefits with no need to and validation apparatus which suited our change cash handling protocols purpose and set about building that into a or procedures or any associated product that the casinos could use. infrastructures such as drop box trollies, I engaged casino operators from day etc. This is a significant cost and time one to get their input as to how the product saving for operators and sets the i-depsys should look, feel and function. So i-depsys apart from any potential competitor. The has been shaped by casino operators from i-depsys handles, validates and deposits all its inception. The development has been major currencies. The i-depsys unit has the challenging as whilst cash is one of the ability to accept 30 notes a second but we easiest mediums to transact it is one of the set it at 16 notes per second for optimum most difficult to count, validate, secure and performance. transport as no two notes are the same. Thankfully, IDS has a great technical team who have worked through all the issues we The i-depsys has been designed to be as compact faced to deliver the tried and tested robust and unobtrusive as possible. product we have today.

Can you offer an estimate of how supermarket without a till? much it speeds up table games, in For the first time operators know the terms of hands per hour? precise cash position of their business in real The increase in speed varies from time which has meant they now have the territory to territory and indeed in the UK ability to make efficiencies through informed from city to city. The increase is wholly operational decisions. It also means they can dependent on the volume of cash going make decisions in real time based on the across the table. In some UK casinos there information they are receiving. They can are a lot of single-note buy-ins, and the refine banking and cash stock positions, i-depsys unit is no quicker at processing a make savings on cash/bank deposits and single note than human hand. Typically in earn improved interest on deposited the UK we see a 5-10% increase. Where you cash because the bank know its audited see big upsides and increases is in high- cash. As a management tool i-depsys has volume cash environments such as Asia and given transparency to the operators and the US. We estimate that we would see at eliminated any and all variance between least a 40% increase in most environments estimated and actual cash drop. and significantly more in certain casinos. We will know more in the very near future How easily does it integrate into as our trials in Australasia commence. In no existing tables? How obtrusive is it? instance is the i-depsys slower than human We have been as size-conscious as hand and the processes used today. possible. We are well aware how crowded and busy pits are with product and people, What are the benefits operators have and so we have developed and styled said they get from having a real-time i-depsys to be as compact and unobtrusive position on cash at the table? as possible. Nevertheless, we are often Operators are primarily seeing various asked if we can make it smaller and until efficiencies through improved control and issuing banks make notes infinitely smaller real-time reporting. Knowing an accurate it is as small as we can make it. The table position of your business at any time is integration is very easy and not dissimilar to fundamental in any business operation. a chip-sorting machine, albeit a lot smaller. Today’s cash handling procedures in casinos are very antiquated and a legacy of the How have you modified your product IDS CEO Andrew Beddoe technology available at their inception. for Asian drop boxes? These processes have stagnated over many For Asia we have developed a unique years and unlike the retail industry have not product and formed a strategic partnership The i-depsys can be seen at the moved forward. Could you imagine today a with the manufacturer of the casinos’ existing TCSJOHNHUXLEY Stand #549

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Best Acceptance MEI returns to G2E Asia with its comprehensive suite of cash management solutions, focused on the efficiency-boosting combination of SC Advance and EASITRAX Soft Count

he CASHFLOW SC was voted “Best friendliness had to be Electronic Gaming Peripheral—Bill taken into account, TAcceptor” by a region-wide panel of assessed on the basis judges for Inside Asian Gaming’s Supplier of the overall robustness EASITRAX Soft Count Awards 2013, announced last month. The and intuitiveness of the technology expands the reach judging criteria were determined by the and the consistent strength and integrity of MEI’s note acceptors. growing sophistication of the technology of that all-important interface with the itself. Operator floor feedback figured end-user, the player. hardware system designed to streamline the prominently in the results. It took into The CASHFLOW SC celebrated its 10th cash management process, says MEI. account software stability, the quality of birthday last year and it’s still going strong, EASITRAX Soft Count works by gathering the hardware components and the ease though MEI has released a strong follow-up data from multiple note acceptors and of servicing and upgrade. Interoperability in the form of the SC Advance. IAG got a look funneling that information into a secure and integration were also weighted at the SC Advance in action at G2E in Vegas. remote database that can be accessed to heavily based on factors like plug-and-play The demo consisted of feeding wet, crinkled track revenues and analyze slot performance. capability and compatibility with back- and torn notes into the SC Advance, which RFID technology connects slot machine of-house operations. Finally, consumer was able to process them without skipping asset numbers to a specific cashbox to help a beat, underscoring the importance on the eliminate “hot boxes” and increase operational casino floor of bill acceptors that can quickly efficiencies. MEI claims operators typically and consistently process the most badly used receive a return on their investment in bills, and how critical that is both in terms of EASITRAX Soft Count in under a year through keeping players happy and eliminating down newfound efficiencies in labor, maintenance time at the gaming machine. and accounting practices. MEI claims the SC Advance delivers the MEI will also be exhibiting two new industry’s best first-time acceptance rate products at G2E Asia—Web EASITRAX and for valid street-grade notes and is packed PPM Advance. Web EASITRAX is a portal with valuable features that include faster that allows operators to create customized bill-to-bill speed, comprehensive bar-code reports and track performance remotely, recognition, expanded memory to allow giving operators the flexibility and assurance more currencies and denominations to be that they can manage their slot floor from recognized and a USB 2.0 upgrade to speed anywhere in the world. up communications with the host machine The PPM advance, meanwhile, builds on and allow for the addition of even more the success of the traditional unit, adding functionalities. new features including a visual display, Expanding the reach of its note acceptors Bluetooth functionality and enhanced from the slot floor into the soft count room memory help. The PPM Advance can is MEI’s EASITRAX Soft Count, which, since also sense the host unit—whether it is its introduction in 2008, has been installed CASHFLOW SC or SC advance—and ensures on 100,000 games worldwide. The addition the correct software is downloaded. The SC Advance reliably deals with wet, crinkled and of EASITRAX to SC Advance or CASHFLOW torn notes. SC creates a comprehensive software/ Visit MEI at Stand #824

70 INSIDE ASIAN GAMING | G2E ASIAInfinity 2013Baccarat

Serving the Masses Weike Gaming Technology’s new electronic baccarat product has potential to draw in an under-represented segment of Macau’s main-floor players

key component of the breakneck growth in Macau’s mass-market Agaming revenues since last year has been “the customer-segmentation efforts of the casino operators” as gaming analyst Kenneth Fong points out on Page 42 of this issue. All the mass segments are fed by an apparently insatiable demand for baccarat. At the upper end are the premium-mass players, served by live tables in well- appointed high-limit rooms. The mid-range- mass players flock to regular tables on the crowded main floors, while the lower end has been gravitating to the rapidly proliferating electronic terminals set in stadium configurations around live dealers. One other segment with apparent room to develop further is pure electronic terminals. Though there is a smattering of such games around town, they have achieved nowhere near the penetration of the terminals around live dealers. This could be partly down to players’ aversion to the purely electronic format, but seems also a function of a lack of compelling product in the market. Singapore-based Weike Gaming Technology observed the underpenetration “Infinity Baccarat is modular, scalable and caters to of pure electronic baccarat games in markets like Macau, where labor cost and supply is a Macau and set about developing its Infinity Baccarat, which takes center stage at its G2E limiting factor,” says Weike COO Ray Poh.

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A selection of Weike’s new game concepts on display at G2E Asia.

Asia stand this year. reveals Mr Poh. “There are already a lot of international appeal by supplementing its Infinity Baccarat features video of a 50-line games out there. But there are some “unique and distinctively Asian-themed beaming Chinese dealer around which up markets, such as Indochina, which prefer game library,” as Andrew Masen, Weike’s to 128 terminals can be configured—Weike fewer lines. For example, in Cambodian vice president, Slot Gaming, in charge of recommends operators install a minimum of casinos, where the denomination is either game development, puts it. Mr Masen was eight to create the requisite atmosphere of USD or Thai baht, 50-line games become brought on board in 2008 as a prelude camaraderie seen at the live tables. quite expensive.” to Weike launching its campaign to Weike opted to film a real person rather And even in markets such as Singapore, penetrate new markets. It had until then than going the animated route because “we where Weike has “the 50-line segment been operating for a decade building a want players to feel more connected,” says well covered,” believes Mr Poh, “it’s time to solid business supplying slots, electronic Ray Poh, recently appointed the company’s expand to cater to other segments with 30- table games and progressive jackpot link COO. He adds, “Infinity Baccarat is modular, and 40-line games.” Over the company’s 15- and gaming management systems to scalable and caters to markets like Macau, year history, “we started off with nine lines, smaller-scale gaming venues in Singapore, where labor cost and supply is a limiting then added 18, then moved to 20 and 25, Malaysia, Cambodia, Vietnam, Laos and factor.” and now we’re supplying predominantly 50- the Philippines. Infinity Baccarat comes standard in line games in Singapore.” Weike has its sights on building its either Mandarin or English, and one of its Weike also will showcase several new footprint in Asia’s major casinos, and key differentiating features is “we allow game concepts at the show. “There is especially in the continent’s newly players to squeeze the cards” (using Weike’s Shanghai Casino and Oriental Legend, both established slots mecca, Macau. The local patented card-squeezing technology), of which are casino-themed. There’s Dancing slot market is a particularly tough nut to explains Mr Poh. “This makes it more of Snake, which was released this year to mark crack for new entrants because of players’ a premium product, and allows you to the “Year of the Snake.” The Illusionist, about fierce loyalty to established games, but maintain the feel of a live table. We still run a magician, The Great Genghis, themed after Weike has gradually been making inroads more hands than a live table, but obviously the Mongol warrior legend, and the kung fu- with machines that have been performing with the squeezing part of it we don’t run as themed The Grand Master.” well against the entrenched competition. many hands as other electronic products.” Although all these titles are highly Its machines have also been standout Asian-themed, Mr Poh points out that performers at Singapore’s integrated Weike has also been releasing “several resorts, building on Weike’s previously Expanding Stable non-Asian themes as well, but the reason established strong presence in the city- The other highlights at G2E Asia for we are focusing on these particular ones state’s slot clubs. Weike will be a new line-up of slot titles. “This at G2E Asia is because they are the newest In addition to the new games, Weike year, besides our stable of 50-line games, we concepts.” will be showcasing its market-proven are going to introduce more 30- and 40- Weike has been working steadily systems at G2E Asia. “Our WeSystems line games in order to widen our offerings,” over the past five years to broaden its cater to club markets and mid-sized

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Mr Sitharthan has been in the casino gaming industry for 10 years serving in operational roles throughout the region. He has gained extensive experience from various operational gaming roles, including serving as director of gaming machine operations at City of Dreams in Macau. His supplier-side knowledge accrues from his previous position as director of systems (Asia Pacific) at Bally Macau. “We are very excited to welcome Mr. Sitharthan to be a key member of Weike Gaming. With his familiarity in gaming operations, systems business and his valuable network in Asia Pacific, we are confident that Mr Sitharthan will continue the effort to take our business to the next level,” said Chow Chee Keong, vice president, operations of Weike Gaming Technology.

Visit Weike at Stand #411

casinos around the region,” says Mr Poh. “Importantly, we cater to multi-site venues as well.” That’s because Weike is currently one of the largest systems suppliers in Asia with fully operational wide-area gaming management, cashless and jackpot systems. WeSystems is approved to GLI 12 and GLI 13 standards and is in operation in Macau, the Philippines, Vietnam, Cambodia, Malaysia and Singapore. Weike’s wide-area networks have been connecting multiple venues run by some of the biggest club groups in Malaysia and Singapore, operating stably and giving the clubs a much-needed competitive boost against the local casinos and integrated resorts.

Talent Boost Weike’s regional-expansion efforts will be helped by its appointment in March of Jothy Sitharthan Markhamuthu as its new vice president, Business Development, overseeing the Sales and Marketing department. Mr Sitharthan is tasked with spearheading the strategy and development of the department to serve existing and potential clients. “With my appointment, I hope I can bring forth my experience and contacts to expand both business opportunities and gaming markets for Weike Gaming,” commented Mr Sitharthan. Infinity Roulette

May 2013 | INSIDE ASIAN GAMING 73 G2E ASIA 2013

Safety First Angel Playing Cards has become the biggest supplier of playing cards to the global casino industry thanks to its leading reputation for protecting baccarat games

he vast majority of casino revenue in Asia derives from baccarat. And with the proliferation of high-rolling Chinese Tplayers over the past few years, major casinos in the US and elsewhere are also becoming increasingly reliant on the game. Baccarat is big money, and in order to safeguard the integrity of the games, most of the world’s baccarat tables employ state-of-the- art electronic baccarat shoes rather than regular ones. The biggest supplier of these is Japan’s Angel Playing Cards Co., Ltd, which has shipped around 8,000 of its ANGEL EYE shoes, giving it a roughly 90% share of the global electronic baccarat shoe market. The ANGEL EYE was developed specifically in response to customer requests for a product to prevent “card switching”—a cheating method where a player covertly swaps a live card on the table with a concealed one. Angel began development of the ANGEL EYE in 2002, and the following year released the ANGEL EYE I, capable of not only thwarting card switching, but also reducing dealer mistakes and detecting counterfeit cards. According to Yasushi Shigeta, Angel’s President and CEO, the first generation ANGEL EYE “was designed to be attached onto a normal baccarat external monitor.” Angel thus paved the way for the development of shoe. The rank and suit of the detailed baccarat results displays, which help feed the appetite for dealt cards and the game baccarat among Chinese players who look for patterns in the results result was confirmed, to predict future outcomes. and could be Angel took the feedback and experience from the first generation shown on an shoe to create ANGEL EYE II, released in 2005. “The shoe integrated the card dealing compartment with the central processing unit, and enabled the results to be calculated and displayed through built- in LED lights and an LCD monitor on the same device,” explains Mr Shigeta. “The integration allowed the shoe to become more secure, with no risk of hacking during data transmission, and forgery of game results becoming difficult. “The market response to the ANGEL EYE II was overwhelmingly positive, with much feedback from casinos informing us that instances of card switching decreased dramatically; and miscalculation and mis-payouts by dealers due to wrong interpretation of results decreased dramatically. “The subsequent generations of ANGEL EYE, such as ANGEL EYE II-EX , ANGEL EYE III, etc., added a new security feature called the “Casino Reference Code” function which enables the detection and flagging of any cards with Game protection— incorrect codes. Currently, most Macau casinos utilize the the ANGEL EYE shoe ANGEL EYE with this function.”

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the frequency of errors drops to one in every 10,000 cards, there would still be an error once every three days on each electronic shoe. That kind of frequency would negate the merits of implementing an electronic shoe, and so that level of accuracy [one error out of 10,000] is not sufficient.” Underlying the smooth operation of the ANGEL EYE is Angel’s playing cards. “In order for the ANGEL EYE to perform stably and accurately, it is important the cards used in the shoe are produced to Angel’s usual exacting standards,” points out Mr Shigeta. “The precision of card cutting and code printing is critical. Angel conducts 100% inspection for both the cut and the code print. Striving for our goal of 100% accuracy, all manufacturing processes of ANGEL EYE, from assembly to final configuration as well as inspection before shipment, are conducted in our factory in Japan. Operation checks and inspection before shipment are repeated many times. Inspection and compatibility testing is done using cards with the actual specification as the cards to be used in the casinos.” The value of Angel’s thorough inspection checks were highlighted last year when another manufacturer failed to shuffle a batch of what were supposed to be pre-shuffled cards delivered to the Golden Nugget in Atlantic City, leading to the casino losing US$1.5 million to savvy players over 41 hands of cards dealt in sequence. Striving for 100% accuracy—Angel Playing Cards Co., Ltd President and CEO Angel also stands ready to provide support for its products Yasushi Shigeta around the world. “ANGEL EYE shoes delivered to casinos are serviced by our professional technicians, who monitor the shoes to maintain reliability through regular service and maintenance work,” says Mr Numbers Game Shigeta. “Furthermore, in order to ensure security, even the casinos’ Given the huge volumes of play on Asian baccarat tables, the staff are prohibited from disassembling the components of ANGEL accuracy of shoes and cards is critical, and Angel strives to achieve EYE shoes. All repairs or upgrades, including software, are managed a 100% error-free record. As Mr Shigeta observes, “If an electronic and conducted by Angel staff only.” shoe commits an error once every 1,000 cards, it works out to three to four errors every day on each electronic baccarat shoe. Even if Visit Angel Playing Cards at Stand #603

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May 2013 | INSIDE ASIAN GAMING 75 G2E ASIA 2013

Seduction Tools In addition to releasing a string of localized slot content for Asian markets, IGT has also developed systems solutions with specific relevance to the region’s table-dominated casinos

nternational Game Technology has its to create surprise jackpot roots in single-player electronic games, promotions specifically for Ihaving been founded on video poker and table games players. Lucky grown into a worldwide slot machine giant. Chip enables operators to But table systems and management tools create and set criteria for have become an important part of the mix, bonus events to reward table and IGT is inviting attendees to “Experience players, and can display the Difference” at G2E Asia. winner announcements on IGT says it has been investing heavily video monitors throughout in Asia with new people, a new approach the casino to attract attention and games and systems that are tailored to the tables. specifically for operator and player demands. Casinolink, meanwhile, And the company claims the changes have supports the full gaming been received very positively across the operation by linking the market. management of slot machines, Cutting-edge casino management table games, account-based tools IGT Advantage, Casinolink and sbX wagering, marketing and the aim to turn possibilities into performance. cage into one comprehensive Given the strength of the Asian table games system. market, IGT is investing in the localization Management solutions of its systems solutions with richer table for the slot floor are a major functionality. part of the sbX system, with Key developments include a Rebates “sb” standing for “server- and Commissions module designed based.” The sbX Floor to effectively incentivize, manage and Manager application allows develop the junket promoters who are slot managers to optimize critical extensions of casino marketing game mix and placement programs. Also key is Table Manager, the with visualization tools. first fully automated system that maximizes Game theme, denomination comping accuracy, increases productivity and pay table data come and delivers compelling promotions to into play, with pre-defined table players. When combined with RFID reports available via a web chip tracking and image-based card browser. And the Service recognition, information including average Window enables two-way bet, theoretical win and actual win are communication with players automatically entered into the system. It at the machines, delivering enables quick, accurate comp decisions on players, is wireless capable and compatible with all types of games. Silk Seduction is designed Lucky Chip will be launching soon specifically for Asian playing styles.

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CSI video slots, CSI: NY targeted messages on game MegaJackpots themes such as CSI video screens. Through the IGT slots, which deliver crime-stopping action Advantage system, the Service featuring characters and clips from “CSI,” Window can be opened at “CSI: Miami” and “CSI: NY.” The CSI slots are networked games from other interactive, keeping players intrigued as manufacturers, as well as IGT they get to be the crime scene investigator games. in a bonus event. If they collect enough Along with the systems evidence, they add a free-spins bonus that emphasis, there are always leads to even more engagement. lots of slots at the IGT stand, Among IGT Core slots making a debut and this year the showcase at G2E Asia will be the sweetly themed includes an extensive line- Takes the Cakes, a spin-off of the hugely up of titles showing the popular Candy Bars game. And IGT Video company’s growth in the Reel Edge slot titles such as Tully’s Treasure region. From game changers Hunt offer traditional slot play with skill- such as the Great Zodiac based bonuses that boost interactivity Race to new games designed to the max. Tully is a sea turtle, and in specifically for Asian playing the bonus event players use a joystick to styles such as Money Idol, guide him near the ocean floor, avoiding Fire Pearl and Silk Seduction, obstacles while collecting gems and coins there are slots to suit any to build the bonus award. market in the region. IGT also has its eye on the future IGT will also showcase with IGT Interactive. While Interactive some of its famous opportunities are currently limited in Asia, IGT Interactive will show how it can bring seamless gaming experiences to players across all devices, from online to mobile, featuring best of breed content and strongly-recognized brands.

Money Idol Visit IGT at Stand #835

May 2013 | INSIDE ASIAN GAMING 77 G2E ASIA 2013

Bringing the Experience to Life WMS offers a feast for the senses with flavors specially crafted to satisfy a range of Asian tastes

ontinuing its commitment to the Asian market, WMS is bringing to G2E CAsia a lineup of more than 30 games featuring an array of unique and dynamic entertainment experiences. “Engaging Players. Delivering Results,” the motto of the US-based slot giant, translates into a diversity of game content on a range of stylishly functional cabinet configurations bolstered by a significant number of new math models that address player demand for varied gaming experiences—and all of it is supported by the power of the advanced CPU-NXT2 and NXT3 operating systems. Boldly styled and immediately eye- catching, the new Blade cabinet is already making an impact in North America, thanks to the player insights and operator feedback that played an integral role in its design, and it will be shown in Asia this month for the first time along with a library of exclusive game content developed specifically to satisfy the diverse preferences of the region. “With appealing aesthetics forged to support the robust capabilities of the CPU-NXT3 operating system on highly competitive and geographically diverse slot floors, Blade themes are delivering extraordinary performance,” says Kristi Krasovetz, senior manager of International Marketing Communications. The variety of products WMS will be showing reflects the importance to the company of the Asia-Pacific market, she says. On display will be an array of games for the CPU-NXT2 platform. Several are being shown in Asia for the first time, among them selections from the Game Chest Multi-Game series, WMS’ first multi-game series designed for customers outside the United States, Spider-Man’s exciting bonus rounds include along with Double Money Burst and several video and audio clips from titles from the popular Colossal Reels and G+ the popular Hollywood Deluxe series. franchise. This year’s show lineup also will feature

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two premium licensed games—Willy Wonka & the Chocolate Factory and Spider-Man. Spider-Man is a Sensory Immersion 2.0 game that leverages the interactive excitement of D-BOX Technologies’ synchronized motion chair and the theater- quality sound and graphics of the CPU- NXT3 to deliver an unforgettable game experience. Spider-Man is a “dual-array game” that provides reel-spinning video action across two full 5x3 reel layouts along with six random “Spider-Sense” features and exciting bonus rounds that include video and audio clips from the popular Hollywood franchise. With Willy Wonka & the Chocolate Factory, another Sensory Immersion 2.0 offering, players get to explore the “Scrumdidilyumptious” joy of pursuing a jackpot by finding a “Golden Ticket” hidden in a “Wonka Bar” while the odds of finding it increase each time the jackpot is not won. And a ride on the “Chocolate River Boat” comes to life thanks to the trademark graphics, superior play mechanics and advanced touchscreen functionalities, all synchronized with the excitement of the D-BOX motion chair. Even the game’s “Wonkavator” feature, the free-spin trigger used to determine which bonus round will be awarded, is motion-enabled. Several standouts in the Colossal Reels series also will be on display. Player insights and operator feedback played an Colossal Reels has quickly become a integral role in the new Blade cabinet’s design. top performer for WMS by virtue of the widescreen capabilities of the Bluebird2e The series has been expanded this year, and Bluebird xD cabinets and the power of and two of its new game themes and math the CPU-NXT2 platform. The series features models will be featured at G2E Asia. two reel sets—traditional and oversized— that transfer wild symbols between reels. Visit WMS at Stand #202 Willy Wonka & the Chocolate Factory

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

May 2013 | INSIDE ASIAN GAMING 79 G2E ASIA 2013

Dominating Presence Novomatic offers operators an updated range of products to turn players’ heads, including an attention-grabbing new cabinet

Making its Asian debut—the Dominator cabinet

ong an important supplier of slot demonstrate the company’s commitment Interactive games. One highlight is sure machines and multiplayer automated to Asian gaming markets by presenting to be Reach the Hill, with its Amazeland Ltable games systems to Asian markets, specifically designed game compendiums community jackpot. In Amazeland, players Austria’s Novomatic returns to G2E Asia in our latest Super-V+ Gaminator and NOVO join forces as their character ants team up promising its latest products and market- LINE Interactive multi-game mixes. In total to navigate a maze and carry a gold coin to specific innovations. Well-known for its a product display that will surely excite our the end. multi-game offerings on the extra-wide- customers in the region.” A second bank of Dominator cabinets screen Super-V+ Gaminator cabinet, this The Dominator is an attention-grabber will be connected to the card-animated time Novomatic and Jade Gaming, its local with its game-synchronized LED effects. four-level mystery progressive Magic Joker partner for Macau and the Philippines, will It incorporates three 24-inch TFT screens Jackpot, signaled when a joker hits the be giving its new Dominator cabinet its for enhanced graphics that work with top screen and launches a deck of shuffling Asian debut. sound to create an in-depth experience cards. If the player then is dealt anything but “Asia’s operators can expect to see a for the player. There’s an extra opportunity a joker, the game returns to normal play. If great range of already highly successful for operators in an optional 18-inch multi- the card is a joker, four more cards are dealt international product developments purpose TFT topper. The topper can be used to complete a hand that determines the on the Novomatic booth at G2E Asia for information about the games or about prize. For the show, both Amazeland and 2013,” said Austrian Gaming Industries the casino, or for jackpot displays. Magic Joker will use the 18.5-inch topper for Managing Director Jens Halle. “Together Novomatic will turn the spotlight on the jackpot animation and the machines’ third with our partner Jade Gaming we will also Dominator with a range of new Novo Line screens to display jackpot levels.

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The innovative new Pinball Roulette sophisticated one-stop-shop hardware and takes video representations of the classic software solution: Admiral Absolute Vision. table game to a new level. Pinball Roulette It allows operators to display video content is a single-player terminal that combines from diverse sources on all types of screens the attraction of traditional roulette in different flexible configurations. with the amusement factor of a pinball It’s a wide-ranging collection of games, launching mechanism and Octavian’s casino options and technology, in line with what management system ACP, or Accounting Asian operators have come to expect from Control Progressives. All Super Gaminator Novomatic. V+ III terminals at Novomatic’s booth will link to ACP to demonstrate the modular Visit Novomatic at Stand #1147 functionalities of the ACP system. Among the features in the Super-V+ Gaminator III section of the booth will be two market-specific Asian game mixes: the Super-V+ Gaminator A2 multi-game mix based on Coolfire II and the Novo Line Interactive Macao-Mix based on the Novo Line Interactive server-based-ready platform. Multiplayer gaming has long been an important part of the Novomatic mix, and that’s true again at G2E Asia. On display will. be a Novo Line Novo Unity II multiplayer Pinball Roulette installation with six player terminals and one automated roulette wheel. Each terminal Double Action Roulette, Baccarat, Black Jack, will be linked to eight electronic live games Poker, Bingo and Sic Bo. as well as video slots: Players can choose And for the first time in Asia, Novomatic among Novo Multi-Roulette as well as the will show its new, flexible and comprehensive fully animated Flying range of Roulette, video content delivery system, packed into a

The market-specific Asian Super-V+ Gaminator A2 Novo Line Novo Unity II multiplayer terminals with automated roulette wheel. multi-game mix

May 2013 | INSIDE ASIAN GAMING 81 G2E ASIA 2013

Expanded Palette Matsui has been busy enhancing the security features and aesthetics of its gaming chips, which have been gaining a growing presence in the region

New colors—Matsui’s Antique Stone Series

he Matsui group, headquartered in IAG: What innovations have you which we made is “MG EYE 2”. This is a new Tokyo, specializes in the manufacture made in the past year to make your security feature for Matsui chips. While Tand sale of gaming chips and layouts chips more secure? MG EYE is incorporated in the decal part (both wool and synthetic). Its subsidiary Mr Machida: Recently we have released of chips, the MG EYE 2 is put in the plastic serving Asian markets outside Japan and a few significant developments of security part. The security material which is specially Korea, Macau-based Matsui Asia Ltd, is part features for Matsui chips. developed for our chips will be incorporated of a global network also spanning Europe The first relates to the “MG EYE” in the plastic part of the chips when injected, and the Americas. Its chips and layouts [pronounced “em-gee eye”] chip security and it reacts to the tester which is only are used by more than 700 casinos in over feature, one of our very unique security available from our company. Both MG EYE 100 countries, and in addition to Macau, features. We have already sold millions of and MG EYE 2 are not visible to the naked the group has sales offices in Manchester, chips with this feature. It can be incorporated eye and can only be verified by a reader England, Moscow, Las Vegas and Seoul. in the decal—the center printed part of which is supplied exclusively by Matsui. All of Matsui’s manufacturing takes the chip. While this security feature is very place at facilities it has 100% ownership of, reliable and offered at a very reasonable ensuring its supply chain is fully secured. cost, we received feedback that the speed Have you carried out any interesting The company prides itself on its competitive of verification was an issue because it took customization jobs for customers pricing and speedy response to customers’ about one second to check each chip with recently? needs. Matsui’s high-quality chips feature the previous tester device. In response to We have just launched a new gaming a host of optional security features and are the feedback, we have developed a new chip product, “Premier Decal Chip”. The licensed in several gaming jurisdictions, device which we call “MG EYE Scanner”. original idea for this product came from notably having gained approval from With this device, chips incorporating MG one of our customers who wanted their Singapore’s famously fastidious Casino EYE security can be verified even more high value chips in our standard decal chip Regulatory Authority, with a visit by the CRA quickly. It has an LCD monitor which can format rather than traditional plaque style. to Matsui’s production facility in Korea part show the result and can work just like a We have various chip diameters from 39mm of the rigorous screening process.. traditional UV light on gaming tables. This to 50mm but the customer wanted it bigger Inside Asian Gaming spoke to Shigeki will be a great enhancement of technology and in a unique style. So we developed this Machida, MD of Matsui Asia Ltd, about the for existing users and new users of MG EYE rectangle-shaped decal chip which looks company’s latest product developments security chips. like a plaque but with a standard decal. This and plans for regional expansion. Another very important development Premier Decal Chip is a very unique chip

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special colors which we call Antique is planning a new version of this machine Stone Series. Those new colors which will be even more powerful and heavy have recently been added duty to meet customers’ demands. to our standard colors. Like those cases, we are What are the major orders you have always open to customers’ received for your products in Asia suggestions and requests. The over the past year? Matsui chips product range has We had several very big orders from actually been expanded by our the Philippines and Macau which kept our users’ cooperation and input. factory very busy last year. We also received many chip and layout orders from areas like Cambodia and India where our market share In addition to chips and layouts, is significantly high. you also supply table accessories including playing cards, a unique card-shredding machine, roulette What do you see as the big wheels and winning results displays. opportunities for your business in Asia that is a hybrid of a traditional European- How has this part of your business over the next few years? style plaque and an American-style chip. developed over the past year? Asia is going to offer big opportunities It accommodates all the security features Yes, gaming chips and layouts are our for us, definitely. We started our factory available for our decal chips. One of the core business but these other items are for gaming chips and layouts in 2001 major advantages of this product compared another important part of our business that and opened our Macau office in 2006. to European-style plaques is that the we have handled for a long time. We supply The volume of business in Asia has been price is much more reasonable, while the various brands of playing cards including growing every year and we have had appearance is gorgeous and high-end. our own OEM brand to many casinos. The to expand our manufacturing facility Another interesting customization job Card Shredder has been one of our best several times as a result. Now Matsui chips arose when one of our long-time clients selling items in Asia for many years. It shreds and layouts are recognized as a major asked us to develop new colors for our paper cards and plastic cards very fast, at a and reliable brand in the industry and chips. We have 43 standard colors but they rate of about 30 decks per minute. It is best customers appreciate the quality of our had used most of those colors already and for medium to small operations but big products and the level of our service. they wished to have some unique colors operators in Singapore, Malaysia and the for their new set. Our R&D team took Philippines also use this machine to destroy Visit Matsui Asia Ltd at some time coming up with several very their playing cards after use. Our R&D team Stand #1229

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Hopper Upgrade Taking center stage at FutureLogic’s stand this year is the new Ticket2Go solution, which enables slot operators to replace coin payout technology with a simple ticket-based solution

utureLogic, with its printing and couponing solutions, has been a mainstay in the Asian gaming market since opening its office Fin Macau in 2006. Its latest innovation, Ticket2Go, will be the focal point as the company returns to G2E Asia. Ticket2Go is new to Asian gaming markets. The solution offers a networkless ticket-out payment solution for machines that have a serial or parallel coin hopper, making it the only ticket-out payment small-to-medium-sized operations is the ability to turn machines solution that works with both state-of-the-art as well as legacy with coin payouts to ticket pays. That enables operators to get rid machines. of coin inventory and reduce coin-handling time. With redemption Multilingual and multi-currency, the Ticket2Go solution can behind the bar for small operations, it eases collections for route be installed across multiple sites enabling operators to replace operators and saves time, freeing operators to interact with coin payout technology with a simple ticket-based solution. With customers. the addition of the Ticket2Go Cash Redemption Module which While Ticket2Go is new and FutureLogic is eager to show it off, can be integrated with any third-party cash redemption terminal, the company’s full line of ticketing solutions will be on display at FutureLogic offers a secure and automated solution for small to G2E Asia. That includes the Gen2 Universal Printer that earlier this medium-sized operations or venues. year won the Inside Asian Gaming Supplier Award for “Best Electronic The product originally was launched at London’s ICE show in Gaming Peripheral – Printer”. It’s interoperable with gaming devices 2012, then spread to European markets. John Edmunds, FutureLogic’s from all manufacturers, allowing operators to use a single printer vice president of global product management and international throughout their slot floor. The Gen2 Intelligent Bezel System uses markets, said market-specific adjustments were performed to make blocked bezel detection to reduce paper jams, and tickets are fully the Ticket2Go ready for Asia. printed and burst before being made available to the player. “We’ve now been able to develop the product so it’s applicable FutureLogic will also present the PromoNet toward the Asia market and we’re very excited about showing it off promotional couponing solution. at G2E Asia for the first time,” said Mr Edmunds. “In Europe they have Installed in 12 locations worldwide, a lot of what they call amusement with prizes games. These are much it’s a template-based solution that lower-cost products, much more about entertainment than helps casinos design and manage just gambling. They’re really kind of a cross between an a wide range of promotional amusement game and a slot machine. campaigns from the convenience of “That market’s quite distinct, and there are a workstation PC, and turns ordinary more than a million of those games in Europe. It slot tickets into eye-catching coupons. It doesn’t exist in Asia. Asia really is a slot market, also enables operators to tailor rewards to all and it just depends on whether they’re large players, regardless of whether they have or are casinos or small clubs. So there’s a difference using a loyalty card. in product and there’s a difference in Promotional triggers work in real time, and market segmentation. So we’ve had to PromoNet can link game-play metrics and slot make different developments in the promotions directly to player behavior. FutureLogic product to make it applicable suggests that can boost players club sign-up, extend the toward that market.” The key benefit to The Gen3 Evolution Printer, which FutureLogic claims is the fastest printer in gaming

84 INSIDE ASIAN GAMING | PromoNet enables operators to tailor rewards to all players, regardless of whether they have or are using a loyalty card. time players spend on the games and increase slot revenues. Promotional coupons can be issued from the slots automatically, based on game-play behavior that meets preset conditions, or manually via the casino’s host issuing on-demand coupons through mobile computing solutions. At G2E Asia 2013, FutureLogic also will showcase PromoNet’s newest module, PromoNet Online. It links land-based game play with online promotions and rewards. And along with the reliable Gen2 Universal Printer, FutureLogic will showcase the Gen3 Evolution Printer. Introduced in 2010, the Gen3 more than doubles the ticket capacity in what FutureLogic says is the fastest printer in gaming. With precision grayscale printing, advanced multiport architecture and direct system connection over TCP/IP, the Gen3 also offers an optional onboard promotional network adaptor. For uses away from the gaming machines, there’s the CouponXpress Printer that takes all of the Gen2 functions and flexibility to the cashier’s cage, hotel front desk, kiosks or other transaction points. It’s a product line with a proven record of success in Asia. “We’ve been in this market for seven years,” Mr Edmunds said. “We’ve been very lucky, we’ve got a great team and great products, and we’ve been very successful.”

Visit FutureLogic at Stand #829

The CouponXpress Printer that takes all of the Gen2 functions and flexibility to the cashier’s cage, hotel front desk, kiosks or other transaction points. Craft and Commitment Abbiati Casino Equipment is expanding its presence in Asia with a portfolio of table game technologies designed for regional appeal

his spring, Abbiati Casino Equipment style chips, both available in an array of colors, This is thanks in large part to the office completed a delivery of chips and diameters, styles, finishes and unique security Abbiati opened in Singapore last year, which Tplaques for the opening of Solaire, features. Plaques like the ones you’ll see in finds the company positioned better than it’s Manila’s new US$1.2 billion integrated Solaire’s new VIP rooms are richly crafted in ever been to service and support a growing resort. It was one of Abbiati’s largest orders traditional mother of pearl and fitted with demand for its products across Asia, and the ever and one that clearly signifies how UV-sensitive links for extra security and big show at The Venetian Macao this month entrenched this family-run firm out of Turin, serialization. The chips on the main floor are finds it armed with innovations developed Italy, has become as a major supplier to designed with the same attention to detail, specifically for a region which in Mr Abbiati’s Asia of quality table game equipment and manufactured under a computer-controlled words has come to play “a very significant technologies. CNC injection-molding process that ensures role in our company’s business”. The goal, he But then Abbiati’s reputation was already state-of-the-art consistency and durability, says, is a more collaborative relationship with well-established in the Philippines, as it is in each one carefully ground on its face to just the customer, for which a more regionally Macau, Singapore and Vietnam, where its the right thickness for smooth handling and focused R&D strategy is seen as key. So one of distinctive currencies can also be found. Still, uniformity, and along its edges to guarantee the highlights of Abbiati’s stand at G2E Asia CEO Georgio Abbiati professed himself duly that size and diameter never vary. this year is an RFID-enabled baccarat table “pleased” with the high-profile placement, Solaire’s Senior Vice President of Gaming designed and manufactured exclusively for noting with justifiable pride that “More and Dennis Andreaci will tell you that Abbiati Walker Digital Table Systems’ Perfect Pay more Asian casinos are putting their faith in was selected both for its “leadership position Table Network. our products.” in quality chip supplies” and for its ability to The selling point of Perfect Pay, as Premium chips and plaques of the kind supply currencies with the best and latest the name implies, is the ability of radio- prized by leading names such as SJM, The design and security features. The top- frequency identification to flawlessly track Venetian and Solaire are leading the way for flight service the company provided was bets, game results and wins and losses. For Abbiati’s expansion in table games markets important as well—“crucial,” in fact, as Mr Abbiati, sophisticated RFID has assumed across the region. These include jetons in the Andreaci recalls, “in ensuring the chips were increasing prominence as a strategic European style and a wide range of American- delivered in time for our opening.” investment, the foundation of its Chip

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Inventory System, which is built around a 13.56 MHz PJM-enabled microchip, or “tag”. Embedded in the game piece the tag works like a DNA marker, making it possible for a system like Perfect Pay’s not only to confirm the identity and location of all the chips played at one of its tables but to monitor their movements from vault to table to cashier. On Abbiati’s Perfect Pay tables each tag is transmitting its unique data in real time to special high-frequency antennae concealed beneath the layout— antennae capable of reading chips at an amazing 800 pieces per second— which combined with special monitoring software provide a completely integrated Premium chips and plaques of the kind prized solution for tracking, accounting and by leading names such as SJM, The Venetian and Solaire game management. are leading the way for Abbiati’s expansion in table games The show also will see the debut of the company’s New Generation Baccarat markets across the region. Table, also designed specifically with the Asian operator in mind and incorporating with layouts woven from the best wools But the fact that its products are found the best of Abbiati’s quarter-century of and micro-fine cloths and incorporating in more than 120 casinos on four continents experience as an artisan of casino furniture. a package of advanced ergonomics and is the best testimony to the trust operators This is a table designed to complement security features. place in them. It speaks to a commitment the VIP room experience with a choice of “Table games is a core business, very to quality that is synonymous with the solid woods—mahogany, oak or cherry high end,” says veteran industry marketer Abbiati name. wood—with leather, alcantara, skai and Christophe Leparoux, whose Golden Cathay carbon fiber trim features known for their Consulting has helped open some big doors Visit Abbiati Casino Equipment at aesthetics and resistance to wear, finished for the company in Asia. Stand #428

RFID-enabled baccarat table G2E ASIA 2013

For the Fun of It Konami’s recipe for expansion in Asia? Dragons, a Goliath of a slot cabinet and some dazzling 3D, for starters

onami Gaming is focused on cabinet will be one of its highlights. growing its markets in the region Konami is giving special attention to the Kand has chosen for this year’s G2E graphically dynamic KP3, one of its newest Asia a new progressive, a new cabinet video platforms, with an eye-popping, and a new system to help it realize that real-time 3D interface that adds a fresh ambition. and uniquely personal dimension to the Although Konami has always slot experience. had a presence on the continent (it Director of Game Product was founded in Japan in 1973 as a Management Steve Walther explains that manufacturer of video game equipment), the realism is thanks to the more powerful it has over the past two decades been processor featured in the KP3, which also ramping up its efforts to serve the casino enables greater creative flexibility in game industry worldwide. The first expansion design, while the Podium cabinet brings it occurred in 1996 with the formation all together with dual displays that work Dragon’s Victory is a four-level linked progressive of Konami Australia Pty Ltd. Last year, in harmony for seamless play and lighting that features a colorful take on the fire-breathing the company announced that it was that synchronizes with the action during beast that appears when the progressive is establishing a branch office in Singapore “celebration” modes. randomly triggered. to help concentrate its efforts to sell and Dragons hold a special place in Asian dual 32-inch high-definition LCDs, an support its games and products in East lore, especially in China, so Konami is enhanced sound system, an ergonomic Asia, especially in the booming market of confident it has a winner in Dragon’s button panel to provide greater comfort Macau. Victory, a four-level linked progressive for longer play and 360-degree “attract” “Konami has experienced that features a colorful take lighting. It also is designed to support K2V success in Asian gaming on the fire-breathing beast and KP3 games, including stand-alone markets with products such that appears when the progressives. But initially it’s the sheer size as Podium and Advantage progressive is randomly of the Goliath that demands attention, and 5, and we will continue to triggered. During the in the United States this is being exploited unveil innovative products to progressive game, 12 “Pearls” in high-traffic areas for maximum effect. support our presence in the are displayed which the Synkros, another of Konami’s G2E Asia market,” says John Gomes, dragon randomly selects to 2013 unveilings, represents the latest Singapore branch manager. uncover a colored medallion. evolution of the Konami Casino Management The company is Once three medallions of the System, one that “Synkronizes” all aspects particularly excited about G2E same color are uncovered, of a gaming operation, as Mr Walther Asia 2013 where it will show the corresponding jackpot puts it. It offers advanced capabilities for for the first time in Macau level is awarded. real-time analysis and an extensive kit of its KP3 video game series; a Dragon’s Victory is innovative marketing tools designed to new progressive, Dragon’s compatible with both the increase time on device, visitation rates Victory; a new cabinet, the KP3 and K2V game series and player card signups. These include True Podium Goliath; and the and will be released with Time Tournaments—a unique approach to Synkros casino management Konami’s most popular system-delivered community gaming that system. titles. allows players to participate in tournaments The theme at the stand The new Podium Goliath at their convenience via “on-demand” and this year is “Born From Fun,” is a larger version of the “group-start” formats—and SuperSeries, and KP3 on the Podium company’s very popular a multi-level, multi-themed floor-wide Podium video platform, and, bonusing tool. indeed, at a whopping 93 The new Podium Goliath is a inches tall more than lives Visit Konami Gaming at whopping 93 inches tall. up to its name. It features Stand #1119 88 INSIDE ASIAN GAMING | G2E ASIA 2013

Running the Tables LT Game is on the move, chasing down new products, new markets and new ways to stay on top in Macau

lectronic table games are transforming built for smart, fast, secure cash- and ticket- LT holds in the territory through Mr Chun mass-market casino floors across Asia, handling. Fitted with a range of options and on live dealer technology. In Macau the live Eand nowhere is this more evident fully customizable, it is capable of turning a dealer games are the most popular by far, than in Macau, where LT Game continues to bulk insert of 2,000 bills into a paper voucher highly visible on the floors at The Venetian, shore up its dominance with a host of new in less than 30 seconds. Then there is the Sands Cotai Central, City of Dreams, the products for the pit and some significant new CTS-5000, a multifunctional tableside Lisboa, Wynn Macau and Sands Macao in enhancements to its market-leading Live companion that dealers, especially in “stadium”-style installations consisting Table Multi-Gaming System. Macau’s intensely high-volume, high-limit of large numbers of terminals, almost all G2E Asia 2013 will see the debut of LT environment, are going to love. Sleekly baccarat, arranged together in multiple rows Game’s LT E-Baccarat, a live “chipless” table designed, compact and unobtrusive, the around one or more croupiers. that blends the look and feel of the traditional CTS-5000 counts, sorts and validates buy- There are more than 1,400 of these game with the speed and efficiency of ins, accepts, validates and prints tickets and terminals in action, and they’re all LTs. There touchscreen betting. Players can buy in reads smart cards. Results are displayed on a will be a lot more of them in the future, by inserting cash or a ticket into built-in full-color seven-inch screen. too, for a lot of reasons: they’re convenient, acceptors. Betting is conducted at each seat LT is also looking to make its mark they’re player-friendly and they’re extremely on friendly seven-inch LCD monitors. But it’s a on community games with an electronic cost-effective. They’re also the best tool the real dealer dealing real cards, so the personal version of Texas Hold ’Em and e-table six casino concessionaires have to keep pace and tactile elements of the game that are so versions of mahjong and a popular Chinese with demand in the face of the government’s important to Chinese gamblers are preserved. card game called Dou Di Zhu (“Beat the yearly cap of 3% on new table games. In a They also get to track past results on full 27- Landlord”), a team game for three players supply-constrained environment that is inch “road map” monitors and the slot-like with rules roughly similar to bridge. driving bet minimums in the largest table convenience of a ticket printer at every seat. The company’s flagship Live Table Multi- games market in the world through the roof, What’s eliminated is the possibility of dealer Gaming System, available in single- and they’ve emerged as the ideal high-margin error and disputed results (or worse, cheating dual-screen models, has been redesigned low-roller solution. or fraud) since every hand is electronically with a wider 26-inch player interface and Beyond Macau, LT scored its first Live recorded. Which also makes player-tracking a larger arm rest to provide more space Table sale in Australia earlier this year with a possible, bringing science to the art of ratings and comfort for tracking results and 40-seat installation the company expects to and rewards. performing the various analyses that are grow to 100 seats in the months ahead. Talks “We’re thinking of the future, and in the part and parcel of the baccarat experience. are under way with New Zealand’s SkyCity future the casino will be more efficient,” says This new “Landscape” version offers more for an installation. In the United States, 30 LT founder and Chairman Jay Chun. “Even interactivity, too, courtesy of a new software units have been sold to Barona Resort & the dealer will not have to be trained too package that lets players pre-set bet levels Casino near San Diego. Royal Caribbean much because they don’t have to learn all and alerts them to take advantage of certain has purchased a 40-seat installation. LT is the payouts. It’s much easier.” streaks. Also, for the first time, players can looking for big things in Nevada as well, It will be hard to keep up with the bet multiple games from a single wallet. where it holds an associate equipment restlessly innovative Mr Chun at this year’s Live Table Multi-Gaming System has a supplier’s license. The company opened an show, where LT is also unveiling two state- lock on more than 50% of Macau’s booming office in Las Vegas in October. of-the-art cash-handling solutions. LT Cash ETG market, currently numbering more than Access is a self-service currency exchange 4,700 seats, by virtue of the exclusive patent Visit LT Game at Stand #502

May 2013 | INSIDE ASIAN GAMING 89 G2E ASIA 2013

Smarter, Faster, Too ‘Intelligent Validation’ defines JCM Global’s commitment to providing the solutions that keep the games running smoothly and profitably

The iV8 is a table-side validator that verifies banknotes at a rate of eight per second.

or JCM Global it’s all about helping casino operators do business better, smarter and faster, and at G2E FAsia the company will be showcasing the award- winning “Intelligent Validation” solutions that make good on that commitment. The star attraction will be the iV8, the powerful table-side validator that verifies banknotes at an amazing rate of eight per second, speeding up game play, dramatically increasing the number of potential hands per hour and protecting against counterfeiting, dealer error and fraud. Developed specifically for high-volume markets like Macau, the iV8 processes a “brick” of 40 notes in seconds— from presentation to storage—in stackable cash boxes. Buy- ins are inserted directly into an adjoining tray where every bill is validated and counted and the total value displayed for all to see. The main tray holds up to 200 validated bills and automatically rejects suspect notes by moving them during tabulation into a separate tray capable of holding up to 50 bills. Also in the spotlight this year will be an improved version of JCM’s award-winning iVIZION bill validator, which captures the entire image

The iVIZION’s currency fluency makes it an especially compelling fit for the region’s diverse markets.

90 INSIDE ASIAN GAMING | of a banknote or ticket and provides an acceptance rate of better than 99% and an unrivaled level of security. The iVIZION’s currency fluency makes it an especially compelling fit for the region’s diverse markets. It’s available in models that process Hong Kong, Singapore, Taiwan and Australian dollars, and patacas, yuan, ringgit, rupees, pesos and won and can accept multiple currencies depending on the needs of the local market. Building on this foundation of “Intelligent Validation” is DNA, Dynamic Network Applications, which empowers operators with real-time reports and alerts and can even enable regulators to instantly verify peripheral devices, software versions, view reports and more. A bundled enhancement tool, DNA puts control and information in the operators’ hands while eliminating time-wasting procedures so that faster and smarter decisions can be made. It provides extensive reports in real time and delivers firmware updates instantly, with no downtime, across an entire casino floor. It’s impressively flexible, too, functioning as both a wireless and hard-wired system, invisibly monitoring a machine’s SAS line for critical housekeeping data while securing two-way communication with all peripheral components. JCM also will be showing its iPRO and iPRO-RC bill validators and its floor-proven Universal Bill Acceptor, Vega-RC bill validators and Intelligent Cash Box. The Sentry 2 smart bezel also will be on display, featuring multi- color LED indicators listing up to six denominations and providing a range of alerts, including error indicators, a general fault indicator and a cashbox-full indicator, and a last-bill denomination indicator for settling disputes. Rounding out the exhibit will be the award-winning PayCheck 4 thermal printer, which creates a TITO voucher in only 0.6 seconds. The PayCheck 4 packs 8MB of standard memory so it’s capable of storing more fonts, images, logos and bar codes, which translates into almost limitless opportunities for casinos to personalize their players’ gaming experience. And it’s durable, with a usable lifespan of approximately 640,000 slot-type tickets and a diagnostic USB port for enabling quick troubleshooting in the field. It’s also upgradeable, with parts that can be hot-swapped for minimal downtime.

Visit JCM Global at Stand #1300

PayCheck 4 thermal printer

May 2013 | INSIDE ASIAN GAMING 91 G2E ASIA 2013

East Meets West Meets Excitement Whether it’s the heart-throbbing romance of Chinese mythology or the rubber-burning action of a NASCAR auto race, Bally Technologies has a thrill for every culture

o show its solid commitment to delivering products designed specifically for the Asian market, Bally Technologies will debut T a broad selection of Asian-themed game titles at G2E Asia. These are highlighted by stunning graphics and engaging mechanics and are packed with features players enjoy, such as free games and stacked wilds. And, importantly for the Macau market, they are bilingual, selectable either for Chinese or English. “We have high expectations for G2E Asia as we do every year,” says Srini Raghavan, senior vice president of Asia-Pacific/Africa and managing director of Bally India, where the US-based slot giant is concentrating an increasing amount of its considerable R&D talent. “We have a game-development studio in the region focused solely on delivering content that will appeal to players in the Asia- Pacific market, and much of that new content will be on display at G2E Asia 2013,” Mr Raghavan adds. “This year, we are extremely proud of the depth of our portfolio and the library of new Chinese- language video content.” A standout of which is Zhi Nu, one of four new games steeped in the romance of Chinese mythology and linked to a progressive multi-jackpot, this one starring the heavenly maiden Zhi Nu and her mortal true love, Niu Lang. Available on Bally’s Pro Series V32 platform, it’s a five-reel 50-line game sparked by three enchanting free game triggers scattered anywhere on the middle three reels. Also on display will be Chinese Zodiac on the Pro Series V22/22 Upright and V22/26 Slant cabinets where players get to choose the “zodiac” symbol and lock the wilds as colorful astrological animals bring them luck and fortune. In fact, an array of themed titles in Chinese—China River, Fantastic 8, Red Phoenix, Perfect 8, Shadow Diamond, White Lion, Heavenly Empress and Pharaoh’s Dream—will be offered for both cabinet styles. Visitors to this year’s show will also get a look at several new titles—Star Signs, Zodiac Fortune, Joy of Samba and Koi Treasure— on the award-winning Pro Curve cabinet, with its innovative LCD display that gives the illusion of spinning reels. Of course, the wider region is also an area of intense focus. As Mr Zhi Nu is one of four new Bally games steeped in the romance of Chinese Raghavan points out, “Due to Singapore’s success, other countries are mythology and linked to a progressive multi-jackpot.

92 INSIDE ASIAN GAMING | G2E ASIA 2013

reviewing their gaming laws and considering expansion, which will likely provide new opportunities for Bally and our casino operator partners in the coming years.” The company finds the Philippines to be “particularly exciting,” he says. “We also know that the overall economies in most Asia-Pacific countries tend to be strong and stable and the consumer base finds great entertainment in gaming—both of which bode well for Bally.” This also plays to one of Bally’s great strengths, which is its ability to transcend cultures with games that have proven successful at capturing the internationalism of pop iconography in the 21st century. In line with this, one of the uniquely American offerings rolling onto this year’s show floor is NASCAR, a video slot featuring an all-star lineup of stock car heroes and plenty of high-octane thrills. Featured on the powerful ALPHA 2 Pro Series V22/32, NASCAR invites players to choose their favorite driver (at which point the game screen changes to reflect those team colors and branding) and put pedal to the metal through three exciting bonus rounds—“Pit Stop, Burnout Free Games” and “U-Race”—for a chance at progressive wins.

“We have a game-development studio in the region focused solely on delivering content that will appeal to players in the Asia-Pacific market.”

— Srini Raghavan, Bally Technologies’ senior vice president of Asia-Pacific/Africa and managing director of Bally India

Elite Bonusing Suite, which can be used to add excitement across the iVIEW network with a series of new real-time interactive promotions: Virtual Racing, U-Spin Bonusing, DM Tournaments and Virtual Racing NASCAR. These can also be targeted to individual players with personalized rewards and second chances to win and invitations to tournaments. NASCAR offers high-octane thrills. The Bally Mobile team also will be on hand to provide live demonstrations of custom cloud-based “mobile concierge” apps and The Asian industry will also get their first look at Cash Wizard Tiki Web sites for both players and casino employees. Magic, the follow-up to the successful Cash Wizard. Tiki Magic offers “Our business strategy for the Macau and Asia-Pacific markets a 1,080-pixel high-definition player interface and stars an all-new has not wavered,” Mr Raghavan explains. “We will continue to build character, Ms Magic, the tour guide on a journey through a forest and maintain strong partnerships with casino operators in the region filled with three enchanting bonus features, two Bonus Bet features, and focus on delivering market-specific game content that provides an exciting new “touch/drag/fling” feature and a chance at three casino operators with a strong return on investment.” progressive jackpots. Bally will also be offering live demonstrations of its innovative Visit Bally Technologies at Stand #235

May 2013 | INSIDE ASIAN GAMING 93 G2E ASIA 2013

More Than This In addition to supplying Asia’s casino currency of choice, GPI is developing a growing array of efficiency-enhancing RFID products

B&G American- style chips

aming Partners International returns the need for periodic manual rack counts, time, the spotlight is on GPI’s new plaque to G2E Asia ready to meet growing TIM helps improve table game productivity design capabilities that take plaque Gneeds for currency products, RFID and provides casino management with customization to a new level. GPI also table game solutions, furniture, and table ongoing, accurate information about each will be introducing several new standard games accessories including playing cards chip tray’s balance and activity during dealer JAV chip designs for its American-style and dice. shifts while reducing human error and game B&G chips and will demonstrate further GPI has been in the Asian market since down-time,” the company said. customization possibilities. B&G premium 1967, and is the market leader in supplying Also new is the RFID Plaque Box that chips were introduced in 2011, and are fully chips, plaques and jetons both in Macau and can be incorporated easily into a gaming customizable, allowing casinos to create Singapore. The company sees a growing table’s overall design. With its ability to store unique designs with up to six color shots to demand for RFID applications and solutions, and track up to 60 RFID plaques, the plaque incorporate logos or other original designs. and is continuing to expand its RFID product box can be installed either next to a regular portfolio to help operators maximize the chip tray or with GPI’s RFID dual chip tray productivity at tables. for maximum table currency accounting. One new RFID table game solution This innovative new product enables is GPI’s RFID Tray Inventory Module (TIM) secure protection of a casino’s highest value which can be used with any of the company’s currency items while delivering real-time RFID single- or dual-chip trays. TIM is an counting and movement details. optional application that works with GPI’s With poker’s popularity maintaining Table essentials—GPI supplies casino currency, RFID Chip Inventory System to provide operators its foothold around the world and gaining table game solutions, furniture, and table games with real-time chip tray currency inventory traction in Asia, GPI is displaying its RFID accessories including playing cards and dice. monitoring directly at the table. Poker solution. It combines an RFID chip “With time-saving functions such as tray, a touch-screen display and an RFID Beyond RFID and currency solutions. automated table openings and closings and antenna that quickly reads and validates all GPI will showcase table games products ongoing inventory accounting that eliminate chips being played. This fast pot-scanning including its Paulson plastic cards which reduces game down time caused by manual offer the same high quality as Paulson and pot calculations, making it possible to Paulson PSV paper stock cards with the generate additional rounds per hour. It added benefit of being able to withstand also eliminates dealer errors by instantly long, repeated play. They offer the classic calculating rakes and more, giving snap and feel of traditional paper stock cards dealers more time to focus on the and are tear, smudge, and scuff resistant. game and the players. Furthermore, GPI also will display its custom furniture the company’s RFID poker manufacturing capabilities. Visitors can solution can enhance poker table expect a full demonstration of the complete management processes by providing line of table game products, as each table the information necessary to identify the will be stocked with the essential products most profitable hours of play and maximize required for a live game, including playing a poker room’s efficiency. cards, dice, roulette wheels, table game GPI’s B&G line of chips, plaques and accessories and more. GPI’s RFID solutions offer operators greater jetons continues to be the currency of efficiency at the table and cage. choice for the Asian gaming market. This Visit GPI at Stand #1105

94 INSIDE ASIAN GAMING |

G2E ASIA 2013

From Strength to Strength Ainsworth Game Technology will show off its latest innovations at G2E Asia under the banner “Play the Future”

ew South Wales-based Ainsworth an eye-catching signage package. Game Technology was founded Snake Mystery, created to commemorate Nby the legendary Len Ainsworth, the Year of the Snake in 2013, is one of the long acknowledged as one of the newest additions to Ainsworth’s mystery fathers of slots in Australia and the man jackpot packages. Snake Mystery who established industry heavyweight incorporates the proven Double Hit Aristocrat. concept with a 2-level mystery link. Mr Ainsworth gave up control of Another highlight item at the Aristocrat in the mid-1990s. By then he was Ainsworth stand will be Fortune Ox, in his 70s, but his appetite for business- the company’s latest high-denom link building was undimmed. He set up progressive from the Double Hit line. Ainsworth Game Technology in 1995 Available in the unique triple-screen and the company listed on Australia’s Super A560 cabinet, Fortune Ox provides ASX in December 2001. It now employs increased start-up value options plus more than 300 people and its reins rapid-hitting bonus prizes with even have passed into the capable hands of more generous frequent free game industry veteran Danny Gladstone, who features. The Fortune Ox series is was appointed CEO in February 2007. targeted at high denom play in a 5,10 or Over the past few years, Ainsworth 20 pay line format with a 3-level link or has greatly increased its share of 2-level SAP + 1 level link option. the Australian market and grown Then there’s Ainsworth’s 3-level international sales. Last month, it standalone progressive, Thunder announced it had joined forces with Dragon, which, according to the Bally in a content-sharing agreement company, is another market-first designed to help power both concept wherein scatter combinations companies’ expansion into online not only trigger the free games feature, and remote gaming. The deal will see powerful Quadtronic processor, compact but also simultaneously reveal any 1 of 3 Ainsworth provide a variety of games for storage and premium sound system. On the potential big-time standalone progressive Bally Technologies’ iGaming Platform and front end, there is an intuitive player interface levels. Further adding to the excitement, Remote Gaming Server for distribution in supporting a 15-button play deck with a bonus prizes are up for grabs and during the regulated markets in the United States and programmable button option. To top it off, free games the appearance of scatters ramp elsewhere. the A560st offers high-resolution graphics up as they continue triggering more free Underlying Ainsworth’s recent success and imaginative themes that are synonymous games and even more progressives. has been the strong performance of the with the entire A560 GamePlus range. Ainsworth’s popular 4-level standalone A560 family of cabinets. The all new A560st, Also under the spotlight is Ainsworth’s progressive series, Quad Shot, will feature on display at G2E Asia, is an “eye catcher that latest high-end link progressive, Treasure new Asian-themed titles, Dragon Charm, perfectly embodies the attributes of a classic Storm, packed with three link progressives, Jade Emperor and Wings of Fortune. entertainer,” proclaims Ainsworth. Available two standalone progressives and an There will also be updates to Ainsworth’s in two different modular versions—single exhilarating free games feature. With three GamePlus range with the link progressive 23” LCD and Dual 23”/27” LCD—it caters for game titles to choose from—888 Blue “pick your feature” Double Shot Oriental a range of modern gaming applications. Dragon, 888 Red Dragon and 888 Yellow game package. According to the company, the A560st Dragon—Treasure Storm is a 40-/50-line offers state-of-the-art technology with its game for the 1 cent market, available with Visit Ainsworth at Stand #201

96 INSIDE ASIAN GAMING |

REGIONAL BRIEFS

Strong First Quarter for SJM Hong Kong-listed Get Nice Holdings, according to statements issued by both companies. Grand Waldo consists of 320 rooms and around 40 table games and 145 slot machines that are operated as one of four “satellite” casinos under Galaxy’s gaming concession. The property also contains 325,000 square feet of entertainment and other non- gaming space and 650,000 square feet of MICE space. Although Grand Waldo has only a minute share of the market and operated at a HK$131 million loss last year, the acquisition is a significant one for GEG on several levels. Given the Macau government is unlikely to allocate new land to build casinos, it offers longer-term strategic value by boosting Galaxy’s land bank Furthermore, given the lack of new supply coming into the market over the next two years, the purchase offers Galaxy additional capacity for growth in the nearer term. Analyst Grant Govertsen of Union Gaming Research Macau said, Grand Lisboa “The best way to think about the acquisition is in terms of what its gaming assets could generate if they performed at least in line with Macau’s largest casino operator posted an 11% increase in pre- Galaxy Entertainment’s existing wholly owned table games (which tax earnings in the first quarter on a 10% rise in gambling revenue to could require redeployment elsewhere if necessary). ... Table games HK$21.7 billion (US$2.78 billion). are a finite and scarce resource (and therefore extremely valuable) Hong Kong-listed SJM Holdings (HK: 880) recorded EBITDA in the context of the Macau government’s market-wide cap on the of HK$2.1 billion at its 20 casinos for the three months ended 31st number of table games.” March. The VIP segment turned in a particularly strong showing, up Hong Kong-listed Galaxy is planning a phased expansion 13% to $15.1 billion in revenue, and growth was steady in the mass of Galaxy Macau that will triple the size of the resort when it is market, with revenues up 4.7% to $6.22 billion. completed over the next several years. The first addition, pegged at Estimating growth market-wide at 7% on a same-store basis a cost of HK$19.6 billion, is slated to open in mid-2015. Construction (i.e. adjusted for the impact of new supply), SJM is “outpacing the on two subsequent phases totaling a projected capital investment market,” wrote equities analyst Grant Govertsen of Union Gaming of HK$50 billion-$60 billion could begin the end of this year, the Research Macau. company has said. Under current plans, phases 3 and 4, as these are Net income rose to HK$1.92 billion (US$247 million) from $1.71 called, will add 5,500 hotel rooms and up to 1,000 table games and billion in the first quarter of 2012. 3,000 slot machines to the resort complex. Union Gaming noted that VIP got a boost from the reclassification The cash-rich company’s reserves hold it in good stead to finance of some 28 high-limit public tables at the company’s flagship Grand its expansion plans. Galaxy entered the new year with HK$15.6 billion Lisboa as “VIP” based on maximum bets that exceeded the regulatory of cash on hand after net income more than doubled to $7.4 billion threshold of HK$300,000. The impact of this is not entirely clear, the in 2012 on a 38% increase in revenues to $56.7 billion. The bulk of firm said, in part because the rest of the market does not appear to be that, $33 billion, was generated by Galaxy Macau. following the same reporting protocol. Future reclassifications could Galaxy was approved by the Macau government to add 50 table result in VIP revenues appearing to grow faster at SJM as more so- games this year between Galaxy Macau and the company’s StarWorld called “premium mass” tables are counted as VIP. Conversely, growth casino hotel on the Macau peninsula. Deputy Chairman Francis Lui could appear to lessen on the mass side. has said one-third of the tables will be allocated to VIP rooms and For the quarter, gaming revenue at Grand Lisboa was up 24% two-thirds to the public floors. to HK$8.3 billion, resulting in a 12% increase in property EBITDA to $1.22 billion. The company’s other self-promoted operations, Casino Lisboa and Casino Jai Alai, posted $386 million in EBITDA on a 17% increase in combined gaming revenue to $3.3 billion. Pre-tax earnings at the 17 third-party-promoted “satellite” casinos were up 3% to $420 million on a slight decline in gaming revenue (minus-1%) to $10 billion.

Galaxy Buying Grand Waldo Macau casino giant Galaxy Entertainment Group is taking full possession of the Grand Waldo casino and hotel in an all-cash Rendering transaction valued at HK$3.25 billion (US$419 million). of Galaxy Galaxy is buying the Cotai site and its physical plant, which are Macau located next to the company’s Galaxy Macau flagship resort, from phase 2

98 INSIDE ASIAN GAMING | May 2013 REGIONAL BRIEFS

Stellar First Quarter for Sands China by luck, with by an increase in the VIP win percentage to 3.14% in Q1 2013, compared to 2.59% in the previous year’s quarter. “Its revenue growth is less than that of the market in Macau, likely due to new competition on Cotai,” commented Tim Craighead, a Hong Kong-based Bloomberg Industries analyst. In February, the company started construction of a Cotai resort which it plans to open in the first half of 2016. The total budget for the project will be $3.5 billion to $4 billion. Meanwhile, Union Gaming Research Macau’s Grant Govertsen points out: “Although Wynn Macau remains largely capacity constrained until it can open its Cotai project in early 2016, the existing asset remains, in our view, the most aspirational in town.”

Mass Market Drives Melco Crown’s Q1 Results Dual-listed Melco Crown Entertainment Ltd (Nasdaq: MPEL, HK: 6883) announced an 11.5% year- Sands Cotai Central on-year increase in first-quarter net revenue to US$1.15 billion, driving Macau casino giant Sands China posted a 63% increase in profit a 12.8% rise in earnings before for the first quarter. interest, tax, depreciation and Net income for the Hong Kong-listed subsidiary of Las Vegas amortization to US$274 million. Sands Corp. (HK: 1928) rose to US$452.9 million from $277.4 million Union Gaming Research in the same period in 2012 on revenue that was up 39% to $2.02 Macau’s Grant Govertsen is billion. Adjusted earnings before interest, taxes, depreciation and particularly excited about Melco City of Dreams amortization—the key industry measure of the ability to turn sales Crown’s prospects, writing: “MPEL continues to set the bar higher, into cash flow—climbed 39% to $626.4 million. and we believe its quarterly EBITDA run-rate is likely to approach For the three months ended 31st March, the company counted a US$300 million during the back half of the year. Trends across Macau record 14 million visits. remain very strong, with VIP continuing to inflect positively (MPEL Sands China has been expanding aggressively at the territory’s VIP volume +18% portfolio-wide during 1Q13), and mass market popular Cotai resort district, a stretch of reclaimed land joining the remaining very robust (MPEL mass table GGR +32%). With the right Macau-administered islands of Taipa and Coloane that has begun to physical plant in the form of City of Dreams, we look for MPEL to surpass the Macau peninsula proper as the must-see place in the city continue to outperform the market.” for the Chinese mass market. Mr Govertsen stresses the company’s mass-market segment Last year, Sands added a three-hotel, two-casino complex called “continues to be the most exciting driver of earnings at MPEL.” Melco Sands Cotai Central to its portfolio, which includes The Venetian Crown’s first-quarter mas-market revenue was up 32% year on year, Macao and the Plaza on Cotai and Sands Macao on the peninsula. while combined VIP revenue at its two properties, Altira and City of and announced in January that it had received government approval Dreams, grew 12%, with VIP win rate a little on the low side at 2.77% to add 200 additional table games. Sands plans to invest another $2.8 billion to build a fifth resort, a themed extravaganza called Parisian complete with a replica of the MGM China Posts Record High in First Quarter Eiffel Tower on a portion of its Cotai land holding MGM China Holdings Ltd reported a 6% year-on-year increase in net revenue at Wynn Macau Profit Surges in Q1 MGM Macau to US$747 million, Wynn Macau Ltd (HK: 1128) reported a with adjusted earnings before 19% year-on-year increase in first-quarter interest, taxes, depreciation and net income to US$249 million on the back amortization up 10% to $192 of a 4.4% growth in revenue to $992.1 million before deducting the million. Property earnings before interest, liicence fee it pays parent company MGM Macau taxes, depreciation and amortization rose MGM Resorts International. 14% to $330.7 million. Grant Bowie, chief executive officer and executive director of Winnings at Wynn Macau’s mass- MGM China, stressed that the company’s “growth especially in the market tables grew 14% to US$243.1 mass market is very encouraging and confirms that the Macau million. Although VIP turnover (measured market is diversifying as a destination market as customers look for by rolling chip sales) declined 15% to $28.4 tourism and leisure activities to enhance and extend their visit to billion, overall VIP revenue was supported Encore at Wynn Macau Macau.”

| INSIDE ASIAN GAMING 99 INTERNATIONAL BRIEFS

Online Poker Dealt in US—Legally of the national market, but that ran into trouble with the Office of Fair The first legal real-money Trading, which referred it to the Competition Commission on fears poker Web site in the United that it would “substantially reduce competition in the casino sector”. States is open for business. The commissioners gave their OK on the condition that Gala’s UltimatePoker.com, run by Aberdeen, Stockton-On-Tees, Bristol and Cardiff casinos were Ultimate Gaming, a majority- excluded and that Rank shed an inactive license in Edinburgh owned subsidiary of Las Vegas in exchange for a Gala venue in the Scottish city. Rank sold the locals-market giant Station Edinburgh license to an entity called Global Gaming Ventures. Casinos, began accepting In addition to its extensive online and mobile gambling products, wagers on 30th April, the the acquisition will have Rank ultimately owning 54 operating first of several US Internet casinos and 12 non-operating licenses. gambling operations on the way in the months ahead as the states of New Jersey and Delaware rush to join Nevada and get their online games up and running. Betfair Eyed for Takeover Licensed in Nevada and limited by state law to residents and in-state visitors, UltimatePoker offers both single-table games and multi-table tournaments with buy-ins ranging from US$0.01 to $100. Players must be at least 21 years of age. About 20 other companies—including social gaming pioneer Zynga—are preparing to set up virtual shop in the Silver State, while on the other side of the continent Delaware expects to be online by September with full-scale casino gambling under the auspices of the state’s lottery and Atlantic City’s casinos are working with regulators to get their games online by the end of November. Like Nevada, however, both will be restricted initially to gamblers within their respective borders, although it is believed that states with legal markets will be able to compact with each other to increase the shared player pool. Several attempts to overcome the interstate divide by persuading the US Congress to sign off on national regulation have never gotten past discussion in committee Online betting exchange giant Betfair is being targeted for and aren’t likely to in the future. Two years ago, a Justice Department takeover by private equity firm CVC Capital Partners. crackdown on offshore operators practically drove the online game News reports say CVC has held preliminary discussions with in the US into extinction. investors Richard Koch, Antony Ball and other partners about Betfair, A fully realized US online poker market could generate US$4.3 which could include an offer for the company by funds advised by billion in revenue its first year and $9.6 billion by year five, according CVC together with the two men and partners. to London-based research firm H2 Gambling Capital. But a state Betfair’s market value is estimated currently at £800 million like Nevada, which has a total population of only 2.8 million, will (US$1.2 billion). be hard-pressed on its own to generate the liquidity necessary to Mr Koch, a co-founder of international strategy consultancy LEK make poker profitable. Las Vegas, however, welcomes more than 45 Consulting, holds a 6.5% stake in Betfair. Mr Ball is a non-executive million visitors a year, and its all-powerful casino industry is hoping director at Luxembourg-listed investment group Brait and is the co- a revival of poker in cyberspace will help their bricks-and-mortar founder of its private equity business. operations capture a younger market. UltimatePoker players, for Since its acclaimed London listing three years ago, Betfair has example, can cash in winnings at any of Station’s 16 casinos, and lost ground to competitors at home and is pulling out of markets tourists can create an account online before they arrive. Station where gambling regulations are unclear, although these provide also plans to offer guests rewards for playing Ultimate Poker, much almost a quarter of its revenues. The company recently said it would like player points they receive in casinos. The points can be traded pull out of Germany and Greece because of problems over licenses for free rooms or food. and punitive tax rates. The company’s shares have since fallen to well below the £13 the company listed at, and Chief Executive Breon Corcoran, who was hired last year from Irish bookmaker Paddy Gala Deal Elevates Rank to No. 1 in UK Power, has acknowledged the company had “lost its way somewhat.” Rank Group’s clearance to buy UK rival Gala Coral will make it the CVC has been involved in gambling at various times in the past. country’s largest land-based operator. The firm bought William Hill in 1999 and sold it three years later and After months of investigation, the UK Competition Commission once owned a stake in UK casino and bingo operator Gala Coral. has finally given its approval to the US$274.2 million deal, which will enlarge Rank’s casino portfolio by 19 operating properties and three currently inactive licenses. Toronto Casino Limps Toward Uncertain Fate The original agreement, concluded last May, would have seen With four of his hand-picked executive committee members Rank take over 23 Gala venues for total holdings equivalent to 44% voting against him, Toronto Mayor Rob Ford has vowed to take

100 INSIDE ASIAN GAMING | May 2013 INTERNATIONAL BRIEFS

what appears to be a losing Tiny Cyprus Gambling on Casinos battle for a downtown casino Embattled Cyprus, poster child of the EU’s sovereign debt crisis, to the city’s voters. is planning to license casinos in a bid to lure big-spending tourists With nine of the members and keep Cypriots from pursuing their gambling fix in the Turkish- having voted in favor of the occupied northern half of the island. proposal, albeit with some President Nicos Anastasiades says casinos are part of a larger 50 conditions, and a yes plan to rejuvenate an economy that is expected to shrink by 13% vote from a skeptical City over the next couple of years and with unemployment projected Council increasingly unlikely, to soar despite a pending €10 billion bailout (US$13 billion) by the casino’s most vocal international lenders. advocate says he will force The tiny Mediterrenean country of less than 1 million people will a referendum, which itself shoulder €13 billion of overall bailout costs mainly by seizing up to would be problematic given Toronto Mayor Rob Ford 80% of bank deposits of more than €100,000 and by breaking up the time line—it wouldn’t go the moribund Laiki Bank and folding its performing assets into the to the polls until next year—and the potential political fallout. Bank of Cyprus. Plans are also in the works to distribute state- and The timing is perhaps the biggest issue. The Ontario Lottery and church-owned land for cultivation and to allow individuals to stay Gaming Corporation, which is pushing a casino in Canada’s largest on as renters whose homes or businesses are at risk of being seized city as the centerpiece of its strategy to privatize gaming in the because they’re unable to service their mortgages. province, says it wants an answer one way or the other this spring Mr Anastasiades, who was elected in February in part on a and has already prepared a list of alternate host communities in the pledge to legalize gambling, says the island will contribute €21 metropolitan area. The OLG believes privatization, which includes million to help subsidize salaries for 6,000 jobless that will be dismantling Ontario’s racinos and replacing them with upwards of hired in the tourism sector. 29 commercial casinos, will add C$1 billion to a depleted provincial treasury. Any lengthy delay in Toronto would impair the agency’s ability to implement it. The OLG tried at one point to sway the issue with a promise of a hosting fee for the city that was far greater than its established revenue-sharing formula for the rest of the province, but that sparked a storm of protest from other cities and was shot down by Premier Kathleen Wynne. Mounting opposition to a downtown casino—from councilors, health experts, community organizations, small businesses, academics, religious leaders and an array of current and former political figures—has been frustrating for Mr Ford, who showed up at a union-organized pro-casino rally the morning of the executive committee vote and promptly crashed head-on into a television camera. “It’s either no or yes,” he said afterward. “If it’s a yes, thank you very much, appreciate your support for creating 10,000 good-paying jobs. And if it’s a no, then I guess that becomes an election issue.” A Toronto Star survey shows 25 of the 44 councilors saying they intend to vote against the casino plan when the issue comes Casino Busted at Moscow University before them on the 21st of this month— two more than the Police in Moscow have shut down an illegal casino operating on majority required to kill it. the premises of a public university. The executive committee’s conditions, which also would require The gambling den, located at Moscow State University of approval by City Council, were first outlined in a report by City Instrument Engineering and Infomatics, was taking in 3 million Manager Joe Pennachatti. They include a 50-50 revenue split with the to 5 million rubles a day (US$97,000-$161,000), according to an OLG with a minimum of $100 million for Toronto, which has already announcement by the Interior Ministry reported by RIA Novosti. been nixed by Ms Wynne; a cap on gaming space of 135,000 square Police confiscated four card tables, three roulette tables, 70 slot feet; more convention facilities; and a “social contract” requiring the machines counterfeited from a well-known global manufacturer and selected casino operator to implement plans to mitigate problem other gambling paraphernalia. gambling and other potential negative impacts. A law passed by the State Duma in July 2009 at the urging of Would-be operators include two leading Las Vegas-based casino President Vladimir Putin effectively dismantled the country’s thriving corporations: MGM Resorts International, which has partnered casino industry by banning it from major cities and exiling it to four with local property developers Cadillac Fairview, and Caesars outlying “zones”: one on the lower Don River near the Sea of Azov, Entertainment and its Ohio casino partner, businessman Dan Gilbert. one in Kaliningrad, one in Central Asia and one on the Pacific coast Canadian real estate conglomerate Oxford Properties Group has also around Vladivostok. outlined a proposal. Casino giants Las Vegas Sands and Wynn Resorts The effect has been to drive much of the business underground have expressed interest as well. where it is subject to periodic police crackdowns.

| INSIDE ASIAN GAMING 101 Events Calendar

20 May 2013 9 – 11 July, 2013 eGaming Review North America World Gaming Executive Summit (GES) 2013 One Atlantic, Atlantic City, USA W Hotel, Barcelona, Spain eGR North America are excited to be hosting the inaugural The 7th annual World Gaming Executive Summit is the gaming “New Jersey: Open for business” briefing. conference for CEOs and the senior management teams from With the recent signing of the New Jersey online gaming bill, elite online and offline operators and their partners. The event the opportunities for land-based operators in The Garden brings lottery and gaming executives together as it is co- State are now substantial. located with the Global Lotteries Executive Summit. How do operators in New Jersey and other states now best Website: http://www.terrapinn.com/2013/wges/ capitalize on these opportunities? How do you successfully launch an online gaming business and reap the potentially massive rewards? 12 – 14 August, 2013 This essential briefing will provide a comprehensive overview of all the key operational issues you need to consider to Gaming, Racing & Wagering Australia develop and implement an effective online strategy. Sydney Convention and Exhibition Centre, Sydney, Website: http://www.egrmagazine.com/new_jersey_open_for_ Australia business Gaming, Racing & Wagering Australia returns in 2013 as the official conference of the Australasian Gaming Expo, the Australia’s largest trade show for the gaming and hospitality 21 – 23 May, 2013 industry. Global Gaming Expo (G2E) Asia 2013 Website: http://www.GamingDownUnder.com The Venetian Macao, Macau Global Gaming Expo Asia (G2E Asia) is the premier Asian gaming event and the largest regional sourcing platform 13 – 15 August, 2013 for casino executives to discover new products, meet global suppliers, establish new contacts and conduct business. Held Australasian Gaming Expo (AGE) in Macau—the heart of Asian gaming and one of the fastest Sydney Convention and Exhibition Centre, growing casino markets in the world—it’s the most important Sydney, Australia business opportunity for buyers and suppliers in this market. Featuring more than 180 exhibitors across 15,000 square Website: http://www.g2easia.com/ meters of exhibition space, the Australasian Gaming Expo is easily the biggest event of its type in Australia. Visitors have long acknowledged that the world’s best and latest gaming 5 – 6 June, 2013 and hospitality equipment is on show at the Expo for gaming Russian Gaming Week 2013 and hospitality executives from around the Asia-Pacific region. Websitge: http://www.austgamingexpo.com Moscow Exhibition and Convention Center, Moscow, Russia Russian Gaming Week is the region’s largest gaming and 24 – 26 September, 2013 entertainment expo (formerly known as EELEX) targeted at owners, managers and gaming industry professionals Global Gaming Expo (G2E) 2013 specializing in the entertainment industry in Russia, Sands Expo Convention Center, Las Vegas, USA Ukraine and the CIS countries. Russian Gaming Week covers G2E is the world’s largest gaming event where gaming entertainment industry legal developments and the most executives, buyers, and industry professionals meet each important problems and issues facing the gaming and fall in Las Vegas to conduct serious business. It’s the gaming amusement industry in the region. industry’s most in-depth source of new products, networking, Website: http://www.rgweek.ru/en/news ideas and information. G2E showcases over 600 exhibitors, 100 conference sessions and exciting special events. Website: http://www.globalgamingexpo.com/ 19 – 20 June, 2013 Social Casino Gaming Summit Bellagio, Las Vegas, USA The biggest land based casino operators and games developers meet in the heart of the gambling industry to build partnerships to power the new era of social casino gaming. This is the ideal place to develop your social gambling strategy, build new revenue streams, prepare for the legalization of gambling and meet the leading names in social casino gaming. Website: http://www.bulletbusiness.com/social

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