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April 2011 • MOP 30 • ISSN 2070-7681 A Yen for Change The case for casinos after Japan’s disaster Aristocrat’s Viridian WideScreen: The Bigger Picture on Asia’s Top Performing Games LVS Legal Issues In Focus: Blow Out Averted Full Steam Ahead at The Landmark Macau Hotel | Shuffle Master:Suite Talk Referendum Revisited in Taiwan | Junkets: The Macau Dilemma CONTENTS April 2011 A Yen for Change 6 Blow Out Averted 12 A Yen for Change 25 The Bigger Picture on Asia’s Top Performing Games 28 Full Steam Ahead 30 Suite Talk 32 Referendum Revisited 35 The Macau Dilemma 37 Amnesty for Online Operators? 39 Bringing People Together 44 Regional Briefs 46 International Briefs 25 48 Events Calendar 35 2 3 Editorial Ball Bearings Recent events in Japan are a reminder that investment markets are not the most powerful forces known to humanity. They just seem like they are—until something calamitous happens. The Land of the Rising Sun—until recently such an attractive target for casino investors—is now a nuclear fallout shrouded land of the rising Yen. But a few moments of rational analysis must surely lead to the conclusion that the case for casino legalisation in Japan has actually grown stronger rather than weaker because of the economic damage caused by the earthquake and tsunami. An interesting question is to what extent the appetite of foreign investors to be involved in any casino projects has been diminished or killed off by recent events. An equally interesting question is how far if at all the appetite of Japan’s politicians to tackle the casino issue has been sharpened by the crisis. As we report in our cover story ‘A Yen Publisher for Change’ this month, there are some powerful vested interests in Japan in support of the Kareem Jalal status quo—i.e. doing very little in terms of gaming reform. Director The history of legally regulated casino gaming indicates that three key interest João Costeira Varela groups need to be won over before the industry can colonise new markets—politicians, law enforcement and the public. In Japan, the first two of these three seem ambivalent Editor toward casinos to put it mildly. Some Japanese politicians get funding from pachinko, Michael Grimes while the police actually take a cut of pachinko ball sales according to sources in Japan Business Development Manager spoken to by Inside Asian Gaming. So lobbying for casinos in Japan is a bit like asking the José Ho police in 1920s Chicago to support an end to Prohibition and welcome back legal alcohol sales to that city’s stores. Until the protected status of pachinko is ended, casinos will Contributors Desmond Lam, Steve Karoul never have a level playing field on which to compete. I. Nelson Rose, Richard Marcus James Rutherford James J. Hodl William R. Eadington The Investor’s Friend Graphic Designer Brenda Chao Stan Mortensen was the first and so far only soccer player to score a hat-trick (three goals) in an English FA Cup Final. Yet that match, held way back in 1953, subsequently Photography became known as ‘The Matthews Final’ because of the technical wizardry of Stanley Ike Matthews, a star winger on the same team. There may be times when Sheldon Adelson feels he can identify with Mr Mortensen. Inside Asian Gaming Mr Adelson almost single-handedly opened up the high-margin mass gaming market in is published by Must Read Publications Ltd Macau with Sands Macao and The Venetian Macao. But guess who gets called the “investor’s 8J Ed. Comercial Si Toi friend” by a leading financial publication and listed as one of the world’s greatest CEOs, 619 Avenida da Praia Grande even though his contribution so far in Macau is mainly via the low-margin VIP business? Yes, Macau you’ve guessed it—Steve Wynn. Tel: (853) 2832 9980 The difference between the two men may be smaller than we think. You don’t get to For subscription enquiries, be successful first in Las Vegas gaming and then in Macau gaming by being anybody’s please email fool. Perhaps all that really separates them—aside from the small matter of investment [email protected] strategy—is that Mr Adelson sometimes gives the impression he doesn’t care if he’s liked. Mr Wynn gives the impression that he does—if only because it can be good for business. If For advertising enquiries, please email Mr Adelson ever feels typecast as the ‘hard man’ of casino gaming—like an actor who’s been [email protected] playing the same role in a soap opera season after season—it might be worth him bearing or call: (853) 6680 9419 in mind that it’s never too late to show the market the other facets of his personality. It might even be good for business. www.asgam.com Inside Asian Gaming Michael Grimes is an official media partner of: We crave your feedback. Please email your comments to [email protected] http://www.gamingstandards.com 4 INSIDE ASIAN GAMING | April 2011 In Focus Blow Out Averted But Las Vegas Sands Corp is hardly helped by its current legal issues hen litigation and/or criminal lawsuit in Nevada, alleging that Mr Adelson investigations become bigger had ordered him to commit illegal acts in Wnews than a company’s core Macau and had also failed to grant him stock business activity, a significant amount of options that he was owed. LVS strongly pressure is placed on the people at the top. denies the allegations. Mr Jacobs’ accusations Tony Hayward resigned as chief did, however, catch the attention of the US executive of the oil company BP in the wake Securities and Exchange Commission (SEC), of the Gulf of Mexico crude spill. Between the the financial regulator for New York-listed time of the accident (claiming 11 lives and LVS. The SEC launched an investigation into blighting hundreds of coastal communities the Nevada suit claims, looking at possible on 20th April last year) and 14th June 2010, violations of the Foreign Corrupt Practices the company’s share price almost halved, Act, a US law prohibiting the bribery of wiping £50 billion (US$81 billion) off its foreign officials by a US company. The US market capitalisation. Justice Department and the Nevada Gaming In Japan, Masataka Shimizu, the Control Board also began examining the president of Tokyo Electric Power Co matter and in the third week of March the (Tepco)—the company that brought us the Federal Bureau of Investigation (FBI) said Fukushima nuclear catastrophe—was still it too was investigating. The Hong Kong clinging to his job at the time Inside Asian Stock Exchange’s Securities and Futures Gaming went to press. But between the 9.0 Commission (SFC) rounded off a maddening magnitude earthquake and accompanying March for LVS by announcing on the final tsunami—damaging the coolant supply to day of the month it was launching its own the nuclear reactors—on 11th March and inquiry into Sands China. the end of that month, Tepco’s share price fell According to data in the US business by 80%. That was its lowest level for 47 years newspaper Investor’s Business Daily, from the and shaved US$29 billion off the company’s market capitalisation. Few outside that country are expecting Mr Shimizu to make it to his company retirement presentation and proverbial gold watch. The headache facing Sheldon Adelson, Chairman and CEO of Las Vegas Sands Corp, is arguably small stuff compared to the blinding migraines experienced by Messrs Hayward and Shimizu, even if it looks bad from the outside. Mr Adelson’s issue stems from the sacking of Steve Jacobs as CEO of Sands China—LVS’s Hong Kong-listed Macau unit—in July 2010. The company said Mr Jacobs was fired “for cause”—namely alleged unauthorised deals and violations of corporate policies. Mr Jacobs then filed a Sheldon Adelson—“just cause” Steve Jacobs—claiming wrongful termination 6 INSIDE ASIAN GAMING | April 2011 In Focus time of 28th February—the day before LVS’s oil rig safety prior to the Gulf of Mexico announcement to the market about the SEC disaster. When BP had US$81 billion wiped investigation—and the close of business off its share price, the market was reflecting on 18th March, the company’s market its dissatisfaction with BP management’s capitalisation shrank by 22%. That’s US$7.48 performance, its alarm at the medium term billion in cash terms. The closing stock price implications for BP’s business prospects on 28th February was US$46.64—market in the US market and further afield, and cap of just under US$33.9 billion. The its concern at the cost of the clean-up closing price for LVS stock on 18th March operation and what that could do to was US$36.34—a market cap of just under shareholder profits. As of this month, the US$26.4 billion. total compensation and clean-up bill faced Steve Wynn—really more of an investor’s friend But by the time IAG went to press in early by BP was estimated at US$30 billion. If BP than Sheldon Adelson? April, IBD was reporting that the company’s and the oil rig owner Transocean had done share price was back up to US$44.84—a as recommended by an outside contractor Adelson’s position, it appears unassailable, recovery of 23.4% on the mid-March low. That and replaced a faulty blowout preventer on not least because he and his family own a seems to support Mr Adelson’s contention the Deepwater Horizon platform, it could majority of the LVS stock.

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