February 2011 • MOP 30 • ISSN 2070-7681

Many Happy Returns ResortsResorts WorldWorld Sentosa’sSentosa’s birthdaybirthday bouncebounce

In Focus: Cath Burns on Bally’s Value Adding Apps

Stanley and the Women | Macau Revenue: Lies, Bad Cheques and Statistics Market Responsive: Alfastreet | VIP Market Outlook: Crisis Looming?

CONTENTS February 2011

Many Happy Returns

6 Lies, Bad Cheques and Statistics

14 Market Responsive

18 Stanley and the Women

24 Many Happy Returns

30 Value Adding Apps

34 Player Relegation

35 Shining Star

37 Crisis Looming?

38 Boutique Benefits

40 Managing Ills in Macau’s VIP and Mass Gaming Market

44 Regional Briefs 40 46 International Briefs 48 Events Calendar

14 2 3 Editorial

Of Canaries and Coal Mines

Claims in a civil legal case that illegal junket activity has taken place at Marina Bay Sands is not the ideal birthday present for Las Vegas Sands Corp’s Singapore resort as it approaches its one-year anniversary in April. Generalised claims of illegal junkets in the Singapore market have been made before. The issue has been discussed in this magazine. This time, more specific allegations have surfaced in a court case. High roller Lester Ong Boon Lin claims he doesn’t after all owe LVS S$250,000 in gambling losses because he got the money to play via credit issued by an unlicensed junket. LVS’s instinct will probably be to fight the case. One wonders whether Mr Ong would have been quite so keen to cry wolf with claims of unauthorised junkets at MBS if he had stayed on a Publisher winning streak. Kareem Jalal On several occasions, high rollers at the Lion City’s casinos who suddenly decide they didn’t much like losing large amounts of money have taken Singapore’s reputation for having strong and Director executable law and used it as a stick with which to beat the casinos by threatening lawsuits. Loser João Costeira Varela litigation is also an issue in the United States. But in Singapore, once a few test cases have been run and in likelihood thrown out, that trend for loser litigation may die away. Editor Letting the Ong Boon Lin case get to court could, though, be a high risk strategy. It could amount Michael Grimes to washing Singapore’s gaming linen in public. That’s something the Singapore government is unlikely to enjoy. The city-state has until now prided itself on running one of the cleanest and best Contributors regulated casino gaming jurisdictions in the world. Desmond Lam, Steve Karoul Even if MBS settles this case out of court, it could still face an inquiry by the Casino Regulatory I. Nelson Rose, Richard Marcus Authority of Singapore (CRA). That body could be placed under significant political pressure at Shenée Tuck, James J. Hodl home—including from voices in the still powerful anti-gaming lobby—to investigate further Mr Andrew MacDonald Ong’s claims. Any investigation could also put a crimp in the leeway the casino operators currently William R. Eadington have to self-report breaches or potential breaches of the Casino Control Act and its regulations. But without such an investigation and some regulatory clarity on the junket issue, how long before Graphic Designer another Ong Boon Lin emerges to threaten the Singapore operators and claim he’s a victim of Brenda Chao unauthorised credit issuers? Vexatious or not, what impact if any could these claims have on the possibility of junkets being Photography legitimately licensed in Singapore? We should be wary of making assumptions when answering Ike this question. It would be dangerous, for example, to assume that Singapore would rather set its face against junkets entirely than investigate whether unauthorised ones might have been going on under its nose. It would be equally dangerous, however, to assume that Singapore lawmakers Inside Asian Gaming will have the political courage to admit they perhaps underestimated the challenges of running a is published by casino gaming jurisdiction. Must Read Publications Ltd If Singapore can’t beat the junkets, it should at least consider co-opting them. Singapore could 8J Ed. Comercial Si Toi of course press on with its current US-style system of allowing only the casinos themselves to issue 619 Avenida da Praia Grande the credit. But if that’s not working, and as Mr Ong Boon Lin claims, the current law as it applies to Macau credit issuance is being flouted and held in disrepute, then the price of inaction could be very high. Tel: (853) 2832 9980 As New York City appears to have proven with the ‘broken windows’ theory of William J. Bratton, the former head of the NYC Transit Police, if you allow graffiti and fare dodging to go unchecked For subscription enquiries, on your bus and subway system, pretty soon afterwards you have more serious crime as a routine please email occurrence. [email protected] Singapore could alternatively choose to try and force reality to conform to its own vision of how things should be. It could station gaming inspectors on a permanent basis in casinos’ high For advertising enquiries, limit rooms to oversee those operations. But that would be like being an occupying army without please email an exit strategy, not to mention expensive to administer and cumbersome and intrusive for players [email protected] and operators alike. That, in turn, could lose Singapore valuable gaming tax revenue by creating or call: (853) 6680 9419 disincentives for wealthy locals and overseas visitors to come and play. Another possibility would be to get the market to police itself, by licensing some junkets. They www.asgam.com could then act as canaries in the Singapore gaming ‘coal mine’. Any junket that had gone to the trouble and expense of submitting to all the background checks required for an official licence Inside Asian Gaming would chirp like crazy at the first sign of a property being poisoned by illegal junkets. The problem is an official media partner of: with this is that while Resorts World Sentosa appears willing to work with junkets if properly authorised—a number currently have applications pending with the CRA to work at RWS—MBS has shown no signs so far that it wants them. In any case, using market forces to police markets doesn’t always work—as the global financial crisis of 2008 showed—but it would arguably be the least worst option in this case.

Michael Grimes http://www.gamingstandards.com We crave your feedback. Please email your comments to [email protected] 4 INSIDE ASIAN GAMING | February 2011

Market Outlook

Lies, Bad Cheques and Statistics The ‘back story’ to Macau’s VIP gaming numbers

he maxim “There are three types of lies—lies, damned lies, for giving up 15-17% of the gross, SJM is relieved of the headache of and statistics,” has, probably appropriately, been attributed staffing those satellites. That’s no mean concession in a market short Tto at least three famous men of politics and letters: Benjamin of reliable and cheap labour, and could have the effect actually of Disraeli, Alfred Marshall and Mark Twain. boosting SJM’s profit margin in some or all of those properties. The phrase never seemed more appropriate than when applied to Macau gaming numbers. An operator can move up a place or two Minefield in the revenue league table but it may not help very much if the The above illustration is a good indication of the minefield into price is deterioration in higher margin mass-market business, or if which any commentator steps when trying to ‘analyse’ what the the improvement was a result of a short upward blip in his VIP hold Macau revenue numbers mean in advance of company reporting. percentage, which subsequently normalises. While all businesses in all markets are subject to variables (such as As Sheldon Adelson pointed out in his third quarter earnings call last year, SJM’s share of Macau revenue looks unassailable at first glance (32.2% in January this year)—but not so rosy when one digs into the statistics. Most ‘SJM’ properties (16 out of the 20) are satellite casinos operating under the SJM licence but with varying degrees of autonomy in their management. That means SJM gets to keep a smaller proportion of the gross wagered in Macau than its market coverage and table numbers would suggest. Satellites are paying SJM anywhere from 20% of the gross (the traditional 40:40:20 model, whereby 40% goes to the government in tax, 40% to the satellite owner and the residue to SJM), to as little as 3-5% to SJM on a profit share basis. And market-wide, Inside Asian Gaming understands the trend is for a movement away from the 40:40:20 model. Even that bald statistic is somewhat misleading however, given that in return Sheldon Adelson of LVS—a few home truths about market share

6 INSIDE ASIAN GAMING | February 2011

Macau Revenue

adverse weather or bad debt owed by other parties) that can affect businesses in most developed economies. That’s in terms of the year on year comparisons and ultimately profitability, Macau is way they issue credit and the way they collect that revenue after it’s arguably even more resistant to high quality analysis and forecasting actually been recorded by the casinos (not as a receivable, but as on an operator by operator basis. This is because gaining a real insight actual revenue). More on that in a moment. into the dynamics affecting the relationships between junkets and The elephant in the Macau VIP gaming room is that with 60% individual operators is difficult. There’s a lot of chatter in the market of Macau players overall coming from the Chinese mainland, and but little hard evidence ever likely to make its way into a US Securities gambling debts being unenforceable via the courts in the People’s and Exchange Commission filing. But in a market currently 78% Republic, if a player doesn’t honour his credit, someone, somewhere, dependent on VIP gaming (the January figure) for its gross casino may have to be leaned on pretty heavily by foot soldiers indirectly revenue, one can’t blame a fellow for trying. kicking back up to the junket operators. That’s about as opaque as The problem is certainly not in identifying general market it’s possible for a business to get and not be technically labelled as trends. That trend is clearly one of expansion. Casino revenue in racketeering. Macau surged 33% year on year in January to 18.6 billion patacas (US$2.3 billion) from 13.9 billion patacas, according to data from Chinese gamblers could be the biggest Macau’s Gaming Inspection and Coordination Bureau. Union Gaming Research estimated additionally in a recent note a 10% year on year single credit risk currently increase in visitor numbers during this Chinese New Year, though as facing the Las Vegas market Union Gaming points out, that could have been partly attributable to depressed numbers in 2010 when there was unusually cold weather In defence of the junket system, it’s difficult to see an alternative during the equivalent holiday period. way of running high roller operations in Macau given non-execution The problem arguably in Macau is both to understand the on gambling debts incurred by Chinese citizens and the currency and impact of the direct human relationships involved in the junket- banking controls currently limiting overt cross-border movement of casino courtship and also in calibrating market risk as it applies to large amounts of money out of and into China. issuance of VIP credit. The latter is especially important given that nearly 80% of Macau’s gaming revenues currently pass through the Year of the rabid gambler hands of third parties; i.e. those junket operators, before reaching the Indeed, Chinese gamblers could be the biggest single credit risk concessionaire’s books. currently facing the Las Vegas market. Last month, the Las Vegas Sun newspaper reported Vegas casinos are owed at least US$80 Clear as mud million from gamblers in China and Hong Kong alone. That puts Despite some innovations such as the listing of junket entities into perspective the HK$100 million-plus debt recently reportedly in Hong Kong that theoretically at least suggest a trend towards incurred by one gambler in Macau. The internationalisation of the transparency, in practice Macau junket o p e r a t i o n s player market in Las Vegas may be welcomed as a much-needed are still very opaque by the standards of modern boost during domestic economic slowdown. But at least credit issued to domestic US players can be recovered via the courts.

Flight risk—relationships between junkets and operators are sometimes more like love affairs than business

Fireworks—Chinese VIPs could pose the biggest single credit risk to Las Vegas This is not to say that the in-house credit issuance system used by Las Vegas casinos is entirely without risk or indeed entirely without opacity even when dealing with domestic players rated by a centralised credit bureau. The Las Vegas Sun also reported last month that while a Vegas gambler’s first marker triggers an application process and a bank inquiry akin to taking out a personal loan, subsequent markers involve little paperwork other than a

8 INSIDE ASIAN GAMING | February 2011 Macau Revenue

Macau table gaming revenue by operator in January 2011 (excludes slots revenue) Share of VIP Baccarat VIP Baccarat Win VIP Baccarat Main Gaming Floor Total Revenue Revenue From Turnover (HK$ bn) Rate (%) Revenue (HK$ bn) Revenue (HK$ bn) (HK$ bn) VIP Baccarat (%) SJM 135.81 2.86 3.88 1.66 5.54 70 Sands China 43.86 4.50 1.97 1.01 2.98 66 Melco-Crown 62.58 3.33 2.09 0.39 2.48 84 Wynn Macau 55.26 3.44 1.90 0.49 2.40 79 MGM Macau 41.68 3.35 1.40 0.38 1.78 79 Galaxy 59.69 3.06 1.82 0.21 2.03 90 Industry Total/Avg 398.9 3.42 13.06 4.14 17.21 78 check of the person’s gambling history with Central Credit, a credit in Nevada is it also a felony offence that can lead to arrest and a reporting bureau for the casino industry. This can create perverse prison sentence. According to the Las Vegas Sun, the Clark County incentives for a casino host who already has a personal relationship District Attorneys office processes about 100 marker cases each with a player and is paid according to the player’s level of roll. It can week and thousands a year involving big Strip resorts and smaller, encourage a host to in turn encourage his employer to keep the neighbourhood casinos. That volume has increased by 5% to 10% credit lifeline open. in the recession, peaking in 2009. Default can swiftly lead to litigation in the US system, though settlement via the courts may take many years in some cases. One Home visit encouragement for Vegas gamblers to pay up is that although a In the Macau credit scenario, if person-to-person ‘persuasion’ casino debt is a civil matter in common with the rest of the US, doesn’t work, and the debt goes seriously bad, the Macau

Sands China’s better balance between VIP and mass also arguably offers a more stable business model than some of its rivals, providing some cushioning against potential economic shocks.

February 2011 | INSIDE ASIAN GAMING 9 Macau Revenue

concessionaires still have to pay the near 40% tax on the credit- to figures collated by Union Gaming Research. fuelled gross originally wagered (an early bone of contention with While recent reports of a small outbreak of VIP bad debt may Steve Wynn when he entered the market). In Nevada, operators be limited to a tiny number of players and may be only a fraction don’t pay tax on uncollectible player debts. To offset that potential of 1% of total Macau VIP revenue, it does illustrate one potential loss of tax revenue to the public purse, the D.A.’s Bad Check Unit is market risk involved in reliance on the high rollers. That reliance allowed to retain 5% of any monies recovered from successful debt may eventually change largely as a function of the expected recovery to cover departmental and county costs. That compares growth of the Chinese middle class. Those ‘non-comped’ middle- favourably with the 20% fee charged by many commercial debt income mass-market players may be more inclined to divert some recovery companies. Union Gaming Research says that bad debt of their cash to goods and services such as shopping, restaurants expense on the Las Vegas Strip in financial year 2009 (the most and hotels, so that Macau becomes the multi-night tourism recently available data) was about 3.3% of gross gaming revenue destination it aspires to be. (GGR). In 2009, the Strip’s gaming revenues were US$5.5 billion, And that brings us to the January revenue numbers. The sell meaning bad debt amounted to about US$181 million. On those offs seen in Las Vegas Sands Corp’s stock on 7th February after metrics (notwithstanding the fact 2009 was adversely affected on reopening of Asian markets post-Lunar New Year holiday may be the revenue and debt sides by the economic downturn), Chinese as much a function of profit taking (in a region with a lot of retail- gamblers could be responsible for nearly half of the Las Vegas level investors that see the New Year as an auspicious moment Strip’s annual gambling-related bad debt. in the business cycle) as it was global market disappointment in There is some anecdotal evidence that debt default rates may LVS’s fourth quarter 2010 revenue (as suggested in sections of the be historically higher in Macau than on the Las Vegas Strip. Back in financial press). Looking at LVS’s Macau metrics for January, the 2005, Jorge Oliveira, then commissioner for legal affairs in the Macau company has the highest exposure of all the concessionaires to Gaming Commission, suggested a Macau system for write offs the mass market (where market-wide, gross margins can be 35%) capped at the equivalent of 6% of annual GGR. That figure may have and the least reliance on the VIP segment (where volumes are been an estimated one rather than one scientifically researched, but huge but market-wide margins are typically 7% to as little as 3%). it’s interesting to note that over the past 20 years, bad debt on the That above market average contribution from the mass segment Las Vegas Strip has averaged only 3.1% of GGR annually, according can only be good news in terms of return on invested capital in

Galaxy’s overall dependence on high roller play is also likely to reduce significantly when the predominantly mass-market Galaxy Macau resort opens on Macau later this year.

10 INSIDE ASIAN GAMING | February 2011

Macau Revenue

the medium to long term. operators. It is also a market where the junket sector itself has seen Sands China’s better balance between VIP and mass also arguably consolidation, with smaller operations coming under the branding offers a more stable business model than some of its rivals, providing of larger entities acting as junket investors. Those investors have in some cushioning against potential macro shocks. Taking up the ‘lies, turn provided the working capital that has helped to expand high damned lies and statistics’ theme again, gaming revenue figures roller play so effectively. That means that in many cases a junket alone don’t give weighting to the potential hedging factor provided investor/operator/consolidator is working with several casino by the multiple revenue streams offered by an integrated gaming operators simultaneously. That enables the junkets not only to resort such as The Venetian Macao. compare the deals on offer from operators for their VIP business, but also makes the casinos’ management of the operator-junket Steady as she goes relationship a key component in creating VIP volume and ensuring The risk implied in Galaxy Entertainment Group’s current 90% business retention. Whether that relationship is driven principally weighting toward VIP baccarat is probably offset to some extent by price or by more intangible factors such as goodwill is potentially because of its reputation around town for good relationship a multi-billion dollar question. management with junkets. Some operators blow hot and cold with junkets, suddenly hiking up their offer on revenue share or profit share when pressure to grab more VIP market share builds up from investors (a typical short cycle Western investment model). Galaxy seems to prefer a slow and steady approach. The fact the Lui family and ‘connected persons’ still hold a majority stake in GEG is probably a factor in creating that consistency. Galaxy’s overall dependence on high roller play is also likely to reduce significantly when the predominantly mass-market Galaxy Macau resort opens on Cotai later this year. Melco Crown Entertainment, weighted in January at 84% dependence on VIP play, has form when it comes to heavy discounting on its end as a way of attracting high roller volume, as witnessed by the commission wars sparked by the VIP-focused Crown Macau (now Altira) four years ago. But MPEL does at least have two clubs in its golf bag. City of Dreams on Cotai is designed (in theory) for mass market entertainment. As such has the space (if not the clarity of layout) to expand its mass market offer as circumstances and the Macau government allow. At MGM Macau, Wynn Macau and Encore at Wynn Macau on the peninsula, VIP business accounts for an above market average 79% of gross revenue. The two operators have already seen some month to month volatility in market share ranking—a function, according to some sources, of the two properties tussling for access to the same VIP business. Both operators plan Cotai projects. Wynn’s appears further down the track in terms of the planning, though the idea of a 2013 opening seems to have been knocked back by the government’s apparent moratorium on immediate further expansion of gaming capacity on Cotai. According to Steve Wynn’s assessment in June last year, Wynn Cotai would be more a case of Wynn Macau super-sized than ‘Venetian 2.0’. But things can and do change in response to market conditions. Back in 2006, Mr Wynn referred to the possible creation of some mid-market accommodation at Wynn Cotai as “a Taiwan guest house”. Macau is a market that is not only in thrall to the junket Steve Wynn

Advertise with Inside Asian Gaming For advertising enquiries, please email: [email protected] or call +853 2832 9980 12 INSIDE ASIAN GAMING | February 2011

Alfastreet

Market Responsive Alfastreet is making an aggressive push into Asia, backed by intense research and development to gear its products to local markets

alentine’s Day marks the first the semi-automated versions feature anniversary of the world debut of a live dealer spinning the ball, and VAlfastreet’s semi-automated multi- according to Deric Goh, the terminal roulette machines. They went company’s Sales Director live last Chinese New Year at the casino in for Asia, the semi- Singapore’s Resorts World Sentosa (RWS) automated offering was integrated resort (IR). The date seems only specifically developed fitting, as semi-automated multi-terminals to gain Alfastreet a and Singapore casinos appear to be a match foothold in Singapore. “All made in gaming heaven. this while, Alfastreet had only Multi-terminal products are electronic been doing fully automated versions of popular table games, whereby roulette, until we wanted to players place their bets and receive payouts penetrate this market, and we electronically via a computerised touch knew automated would not work screen. Multi-terminals offer casinos several as well,” he explains. “Genting [the benefits over live tables, including increased owner and operator of RWS] have game speed and turnover, reduced labour been operating in Malaysia for the costs, greater security, and even savings on past 40 years. So they have tried dealer mispays (after all, while players will a lot of different products in always raise a fuss when dealers accidentally that market. The automated underpay them, they are often happy to roulette didn’t work—players The remain silent when they are overpaid). didn’t fully trust it, because they updated SLM3 Unlike Alfastreet’s previous fully thought the casino could control the single automated multi-terminal roulette products, wheel, control the ball. But when they terminal

14 INSIDE ASIAN GAMING | February 2011 Alfastreet

converted it to semi-automated with a live facility. “It’s just a matter of upgrading dealer spinning the ball, that really made a the software,” reveals Mr Goh. big change and drew a lot of players.” The new multi-game offering RWS had opened with 66 Alfastreet is currently awaiting approval from R1SL semi-automated terminals, which Singapore’s fastidious Casino Regulatory registered robust performance Authority (CRA). “The CRA are very clear despite being located in the about what their rules are, and expect non-smoking section of the manufacturers to meet their rules,” says casino, which generally contains Mr Hogan. “They want to make sure considerably fewer players than that everything that comes in is fair the smoking section. to the player. That’s good for the The excellent results from the industry, because that will progress R1SL terminals prompted RWS to into players knowing, ‘hey, this is a fair order an additional 115 Alfastreet casino. It’s a fair [gaming] industry in terminals—this time, of the updated Singapore; we have an opportunity to SLM3 cabinet—that went live in the win. We also have an opportunity to smoking section in November. lose, but it’s fair.’ The CRA will ensure the The new terminals occupy a slightly machines perform as claimed.” smaller footprint than their predecessors, which is important in a market where the Southeast Asia push casino area at each IR is capped at 5% of Albert Radman, Alfastreet’s the property’s total floor space. According to Senior Sales and Marketing Director, Mr Goh: “The casinos want to make full use is overseeing the company’s aggressive of the space. That’s why they need product push into the region. Mr Radman believes which has a smaller footprint, so they can Alfastreet’s multi-game player terminals, put more machines into that space to earn scheduled for launch in the second quarter more revenue.” “As the Singapore casino of this year, will place the company firmly The new terminals are also a bit lower. market evolves, players will ahead of the competition. “They are more like a real table,” comments start trusting fully automated “The first step was product development. Mr Goh. Patrick Hogan, Alfastreet’s Asia Sales products, and that trust Manager, adds: “Alfastreet does a great deal appears to be of market research and product development developing quickly.” to make the player more comfortable. So with the heights of the terminals, they want the significant occupancy at that installation. player to ‘feel’ the game. They want it to feel Meanwhile, the semi-automated setup more table-like, more ‘in the game.’ can also be reconfigured around a fully “Before, players on a manual roulette automated wheel. “Conversion simply table had to fight the crowd to get in there involves upgrading of terminal software and and put their bets in place. Meanwhile, the converting the wheel into an automated marketplace at RWS in Singapore is a bit one,” says Mr Hogan. “Alfastreet tries to more upmarket and more modern. So they make products that are maximally flexible don’t mind moving to the automated or for the casino. So if it doesn’t work in this semi-automated equipment. If you look at all configuration, we have a solution for you in of the card tables out here [in Singapore]— our hand, ready to go.” the blackjack and all of that—you’ll find there’s a specific height, because that’s what Greater versatility coming soon the players desire.” Mr Goh reveals “we’re going to roll in new product, which will use the same terminal, Blossoming trust the same cabinet, but is a multi-game. The Of course, as the Singapore casino terminals can connect to roulette, sic-bo and market evolves, players will start trusting baccarat. Three live dealer or automated fully automated products, and that trust tables can be placed in the middle of the appears to be developing quickly. Alfastreet terminals, or at the front in a theatre type recently installed 48 roulette terminals in setup—it will comply with the casino set up Las Vegas Sands Corp’s Marina Bay Sands requirement.” (MBS) around a fully automated wheel, and Furthermore, there is no need to purchase Mr Hogan claims the company has observed new terminals to enable the multi-game Albert Radman

February 2011 | INSIDE ASIAN GAMING 15 Alfastreet

than semi-automated,” he says. company’s efforts. “Alfastreet has invested greatly into Innovation never stops research to ensure their development efforts “Over the past three to four years, are viable and focused on what the casinos Alfastreet has been doing intense research and players want,” claims Mr Hogan. “The and development to gear its products to the machines can compete in any market today. Asian market,” says Mr Hogan. “Alfastreet is And it doesn’t stop there. The research and continuously doing research. If you look at development continues. Keep an eye on the old machines, they looked and felt great, the latest product releases coming from with perfectly finished burly wood rails. Alfastreet very soon.” These classic machines are still in demand, and Alfastreet has upgraded them into their new modern look. Still, they are limited to eight stations, so Alfastreet’s research led them to make the wheel a separate, standalone unit from the terminals. “The set up can be automated or semi-automated, offering maximum Deric Goh flexibility depending on player preference The second step was establishing our and the individual casino’s requirements. position in the Asian market. We’ve done Meanwhile, the player terminals can be well in the whole region, not just Singapore,” located anywhere in a casino. So ideally, says Mr Radman.” Other markets in focus you could be playing an Alfastreet machine include the Philippines, Indochina and, of in any area of the casino [located away course, Macau. from the wheel].” Deric Goh manages the Asian market, “Alfastreet’s market focus and player while Patrick Hogan is in charge of developing research has made its products increasingly business in the Philippines. Mr Hogan is attractive to casino operators and players particularly bullish on opportunities in the alike. Alfastreet is continuing development Philippines, which is a relatively mature and is responsive to market needs. The electronic games market, though roulette flexibility and dynamism of the machines has yet to take a hold there. “We’re looking and meeting the requirements of world at more automated equipment there, rather markets and Asia is the central focus of the Patrick Hogan

The R8 is an update of the original eight station product

16 INSIDE ASIAN GAMING | February 2011 Alfastreet

Pioneering products

The Alfastreet card shoe

lfastreet is a private limited company “That [the card shoe] based in Slovenia. It entered the is our own development, Aworld’s gaming and amusement and very precise, very market in 1997 with its first multi-terminal reliable, and I think it will give roulette machine. After years of rapid growth us an advantage, not only with this in European sales, Alfastreet has expanded game [baccarat], but with the future and is now selling multi-terminal gaming games we are going to roll out,” states Mr equipment all over the world and considers Radman. He adds the company decided The TTM3 table itself one of the pioneers and trendsetters in to develop its own shoe so as not to be top terminal the field. dependent on third-party suppliers. The company displayed its strong line Another promising product is the up of existing and upcoming products at versatile Table top terminal (TTM3), which developed roulette product which has yet to last month’s International Casino Exhibition can fit easily onto bars and tables, and is receive a formal name and is currently known (ICE) in London. Inside Asian Gaming visited equipped with a hydraulic system that simply as Wdky—“which stands for ‘we don’t the company’s booth, and saw several allows the screen to be tilted and fixed in any know yet,’” quips Mr Goh. “This is catered innovative and market-leading products. desired position. more towards markets like Cambodia and Alfastreet’s sic-bo multi-terminal, for One more potential winner is a newly Vietnam.” example, offers a new take on the game by doing away with the traditional dice shaker used by other manufacturers. “We’re doing it in a different way,” says Sales Director for Asia Deric Goh. “We roll the three dice in a roulette wheel; instead of shaking the dice, we spin the dice.” The company also recently upgraded its SL – single terminal and equipped it with an expansive 23” screen, “which is more than enough to satisfy the demanding players in Asia,” comments Albert Radman, Senior Sales and Marketing Director. Mr Radman also has high hopes for Alfastreet’s newly developed live dealer baccarat product, which features an impressive in-house developed card shoe with optical reader. Inside Asian Gaming tried yanking the cards out of the shoe at variable speeds and angles to test the limits of the reader, but was unable to thwart it. Wdky

February 2011 | INSIDE ASIAN GAMING 17 SJM Succession

Stanley and the Women Why the Motherland rather than the Ho family’s extended matriarchy could have the final word in the STDM/SJM succession

Stanley Ho poses for a photo at Government House in Hong Kong after receiving the Grand Bauhinia Medal—Hong Kong’s highest civic award—in November last year. Pictured with him are (from left to right) daughters Florinda (from third wife Ina Chan) and Alice (from fourth wife Angela Leong); Angela Leong; and three children from second wife Lucina Laam—Lawrence Ho, Pansy Ho and Maisy Ho. Dr Ho’s first wife, Clementina Leitao, passed away in 2004.

hat more can be said about the bizarre succession battle parent STDM, it doesn’t say very much for the prospects of those over control of STDM, the parent company to the Macau minority shareholders in SJM. Wcasino operator SJM Holdings, founded by Dr Stanley Ho? SJM is the publicly traded holding company whose operating Well, perhaps something about the plight of the institutional subsidiaries run the largest casino operation in Macau. The SJM and private investors who pumped the equivalent of US$494 gaming operation consists of 20 SJM-licensed casinos (four of them million into SJM in a partial flotation on the Hong Kong market in ‘core’ properties owned and managed directly by SJM) and four slot June 2008. It amounted to approximately 25% of SJM’s equity. If machine lounges aimed mainly at local players. the Ho family are willing to treat each other as badly as reported Sociedade de Turismo e Diversões de Macau (STDM) holds a in the Hong Kong media in their jockeying for control of SJM’s 55.7% stake in SJM (through a 99.99% owned subsidiary, STDM

18 INSIDE ASIAN GAMING | February 2011

SJM Succession

Investments) and therefore controls the casino operating company SJM-licensed L’Arc casino), took his place. In 1986, Henry Fok also had SJM (Sociedade de Jogos de Macau). STDM is, in turn, effectively a disagreement with Dr Ho, reportedly over the company’s business controlled by its largest shareholder, Lanceford. More on that in a strategy and dividend policy, and he attempted to sell out. Dr Ho moment. reportedly resisted this, and instead, Mr Fok made a gift of his stake It’s worth pointing out STDM has a rich tradition of in-fighting to the Henry Fok Ying Tung Foundation in 2002. among major shareholders. And we’re not just talking about the On the last man standing principle, as of February 2011, the litigation against Dr Ho stretching from 2002 to 2008 by his sister STDM shareholders are: Winnie Ho. Most of that related to the spinning off of STDM assets in 1) Lanceford Company Limited: 31.6% (This was held 100% by the run up to the partial flotation of SJM Holdings on the Hong Kong Stanley Ho until January 2011. The ownership of the Lanceford Stock Exchange. rights is currently disputed between a number of Dr Ho’s consorts and children.) Front man 2) Shun Tak Holdings: 11.5% And while everyone 3) Winnie Ho Yuen-ki: 7% is nowadays wonderfully 4) Henry Fok Ying Tung Foundation: 27% exercised by the idea of Dr 5) Cheng Yu-tung 10% Ho as the great man of Macau 6) Others 12.9% gaming, back in 1962 he was perceived essentially as the It’s not surprising there’s been a tussle for control of Lanceford. front man for other investors Assuming for a moment that all the STDM shareholders have equal who were either wealthier than The late Henry Fok—richer, better voting rights, and that the Hong Kong courts affirm the Pansy, him, better connected with connected but not necessarily a better Daisy and Lawrence Ho faction’s right to control (along with Dr Ho’s Beijing, or both. Eventually, ballroom dancer than Stanley Ho third consort) the Lanceford voting rights, then Shun Tak would those other investors either undoubtedly vote with the Lanceford share bloc. Pansy and Daisy fell out with Dr Ho and sold are managing director and deputy managing director, respectively, out, or died off, leaving him of Shun Tak. That would give direct ‘family’ interests 43.1%. Were top dog by virtue of being the Winnie Ho to vote with the other Ho family members, that would last man standing. take the family over the finish line with 50.1% of STDM shares. Given The investor with her history of litigation with Dr Ho, however, her cooperation cannot impeccable credentials among automatically be guaranteed. That could then leave the balance the leadership in Beijing—and of power with the Henry Fok Ying Tung Foundation, New World more ready cash back in Development founder Cheng Yu-tung, and ‘Others’. Although Henry 1962—was Henry Fok. Unlike Teddy Yip passed away at the ripe old Fok’s family and the Chengs are long-standing business associates of Dr Ho, Mr Fok was actually age of 96 in 2003 Dr Ho, there is no guarantee they would owe the same allegiance to born on the mainland. Mr Fok proved his worth as a Chinese patriot the above ‘bloc’ of Ho siblings. during the Korean War from 1950-53, when he reportedly helped China circumvent Western economic sanctions. Another original Stalemate STDM partner was Teddy Yip, a flamboyant Dutchman of Chinese Were Dr Ho’s fourth consort, Angela Leong, to gain control of extraction who became a successful Hong Kong businessman and Lanceford or its successor vehicle, that could potentially lead to who for a while in the late 1970s owned a Formula 1 motor racing stalemate at STDM, with the shareholders possibly breaking into team—not a cheap hobby then or now. He also encouraged the three factions—none of them able to command a majority of votes. commercial development of the Macau Grand Prix. Teddy Yip was, in It may have been this fear that prompted the clinical ‘pre-emptive addition, Dr Ho’s brother-in-law, having married Dr Ho’s sister Susie. strike’ to inject the Lanceford share rights into Ho family-run firms The other member of the original STDM investor quartet, Yip Hon, Action Winner Holdings Ltd and Ranillo Investments Ltd. Action was a Guangdong native who worked as a Macau casino manager Winner Holdings Ltd is 100% owned by Dr Ho’s third consort, Ina prior to the Second World War. He also worked as a businessman in Chan Un-chan, while Ranillo Investments Ltd is owned by Pansy, Shanghai before returning to Macau after the Japanese invasion of Daisy, Maisy, Josie and Lawrence Ho—Dr Ho’s five children by his China in 1937. second consort and second legal wife, Lucina Laam. The speed with which it was done may have related to the delicacy of Dr Ho’s health. Split To have delayed any longer might have been to invite claims that In 1982, Yip Hon and Dr Ho had given his consent to the transfer under duress. The fact Stanley Ho fell out over that he subsequently appeared to revoke that Lanceford transfer business matters and Yip consent, apparently asserting instead the right of his fourth consort Hon disposed of his interest Angela Leong to be consulted in the matter, put the free consent in STDM. Cheng Yu-tung, issue in the spotlight. founder of the Hong Kong At the time of the SJM IPO, many analysts saw that company as conglomerate New World a play mainly for locals with insight into local business and culture. Development (and also more New World order—In 1982, Cheng Yu- That was because of the opaque way that STDM/SJM were and are recently an investor in the tung took over Yip Hon’s interest in STDM still run. Before the recent shareholding and management changes

20 INSIDE ASIAN GAMING | February 2011 SJM Succession

affecting STDM/SJM, Inside Asian STDM/SJM and whom the majority shareholder or shareholders Gaming was told by industry appoint to run STDM and SJM matters to China. That’s not just sources that half of SJM reported because SJM is currently the largest single operator in the Macau to the CEO Ambrose So and the market, generating about one third of gross gaming revenue. Just other half to Dr Ho’s fourth consort, as state companies inside the People’s Republic act as instruments Angela Leong. It’s anybody’s guess of state policy as well as acting as commercial enterprises, so STDM/ as to what the arrangements are SJM, because of their history and roots, can be seen in some ways at present. as commercial proxies for the Macau government and, by extension, There were also significant proxies of Beijing. mutterings in the local market There’s a joke recounted by Paulo Jorge Reis, a former deputy at the time of the SJM IPO that director of information under the Portuguese administration, that sums much of the 25% equity on offer Angela Leong—consort number up how some of the Portuguese felt about the power of STDM, the had been bought up by Dr Ho or four takes on two and three holder of the 40-year gaming monopoly issued to Dr Ho and his business proxies for him or other Ho family members. The sources added that associates in 1962: “Stanley Ho used to sit at the right hand side of the these proxy holdings were in each case below the threshold 5% of governor, and a senior official from China used to sit on the left. When issued equity that under Hong Kong Stock Exchange rules would the governor needed money, he turned to his right. Then the governor require the stockholders to be publicly identified. That could mean would turn to his left to ask permission to spend it.” the minority shareholders are in even more of a minority than they imagined, with little prospect of forming a bloc powerful enough to Not a natural socialist at least embarrass family members feuding over control of the parent And yet Stanley Ho, by upbringing and outlook, was hardly STDM to take their views into account. groomed for a life as a natural ally of communist China. He is a great nephew of Sir Robert Ho-tung, an archetypal Eurasian tai-pan who China’s perspective helped to build the Hong Kong-based colonial trading company Nor has very much been said about what China’s leadership Jardine-Matheson. Sir Robert also helped fund the revolutionary would like to see happen to STDM/SJM. All the runners and riders movement of Dr Sun Yat-sen that led to the creation of the for the STDM/SJM leadership roles so far identified by the Macau and impeccably bourgeois Republic of China following the collapse of Hong Kong media—including Angela Leong, Dr Ho’s children Pansy, the Chinese imperial dynastic system in 1912. It was that bourgeois Daisy Ho and Lawrence Ho, and Timothy Fok, a son of Henry Fok, republic that the communists fought so hard to overthrow in the have at the very least membership of a regional People’s Consultative late 1940s after the Japanese withdrawal from China. Committee in China listed on their CVs. But then that’s virtually Even after he got his feet firmly under the table as ‘Mr Macau’, obligatory for any Chinese who wants to be successful in running Dr Ho occasionally either overreached himself in his relationship a gaming operation in Macau or pretty much any major enterprise with the central government or miscalculated the mood. He got into anywhere in Greater China. frightful trouble with Beijing in the run up to the handover of Hong Seen from China’s viewpoint, the succession question at STDM/ Kong and Macau to China, when he suggested the territories ought SJM is not a purely commercial issue. Who has majority control of to become United Nations-administered zones for a transitional period. And yet it’s a sign of his talent for survival in business and politics and of his current stature that it’s hard to see any of the so far Seen from China’s viewpoint, the named candidates for the succession comfortably filling his 49-year succession question at STDM/SJM is old shoes. not a purely commercial issue. Business culture STDM/SJM without Stanley Ho, but still run by close and trusted associates of the leadership in Beijing is, though, a very much better prospect for China than an STDM/SJM run by an individual with looser ties to the central government. Such an individual might be more intent on taking the companies away from their family roots and down a more Western path as commercial entities Sir Robert Ho-tung—not from majority-owned by public the Mao Zedong wing of Chinese politics shareholders. By that reading, whoever acts as figurehead and/or steward of the largest single holding or largest faction of

February 2011 | INSIDE ASIAN GAMING 21 SJM Succession

shareholders at STDM will need the tacit approval of Beijing, even if they don’t receive a formal coronation from the central leadership. This is not merely nostalgia in Beijing for the early days of the PRC and Macau’s indirect role in sustaining the communist government. As a senior industry insider recently told Inside Asian Gaming: “Everything that happens in relation to the gaming industry in Macau is political—either at the local level or the central government level. China didn’t win back control of Macau after 450 years of foreign occupation simply to hand it back to foreigners via the backdoor of global capitalism.” The awarding of the STDM monopoly in 1962 was attributed at the time to the company’s willingness to invest in tourism infrastructure. The full name of the company—Sociedade de Turismo e Diversões de Macau—echoes that. Under Portuguese rule, gaming has been legalised in Macau since 1847. The first casino monopoly franchise was granted to the Tai Xing Company in 1937, but it was reportedly too conservative to exploit the full potential of the industry and only Chinese games were played in the casinos at that time. Sheriff Stanley The new 1962 monopoly was also sold politically to the Macau community and the outside world as an attempt to re-organise and regulate the existing gambling industry, which had reportedly become infiltrated by triad gangs in the preceding decades. Current officials of the New Jersey Division of Gaming Enforcement might be interested to learn that back in 1962, Stanley Ho was considered one of the ‘good guys’ by the Macau government and hired to clean up the place. It was only in 1984 that STDM started allowing the casino-within-a-casino system (i.e. junket rooms managed independently of the casino licence holder and issuing credit to Stanley Ho—originally players) that today so concerns Western hired to clean up Macau? regulators and governments. To understand how Macau got its post-Second World War reputation for being the ‘Wild East’ and simultaneously China’s ‘Mr Fixit’, we need to go back a little to the 1940s and early 1950s. China’s communist regime had been in power for less than one year when in 1950 it became embroiled in the Korean War, supporting the communist North against the Western- backed South. From that year, the West imposed trade sanctions on China and its ally North Korea. Although the war (unofficially) ended in 1953, those sanctions continued right up to 1957 at the insistence of John Foster Dulles, US Secretary of State at the time. Although China had a socialist economic system aspiring to self-sufficiency in all essentials, it, like present-day North Korea, still needed access to foreign currency and international traders to buy essentials such as medical supplies. From roughly 1950 onwards, Hong Kong- and Macau-based middlemen such as Henry Fok come into the picture. They supplied China with essential materials, accepting non-convertible renminbi as payment. They then used renminbi to pay for Chinese and Korean goods tradable on the world market including ginseng, honey and textiles such as silk. Those goods were Bank squeezed—the administration centre of then exported to the rest of the world in exchange for convertible Banco Delta Asia in Macau

22 INSIDE ASIAN GAMING | February 2011 SJM Succession

tax from the expansion of gaming and tourism was an obvious choice given the long history of gaming in the territory. Under STDM’s monopoly, the annual number of visitors to Macau rose from half a million in 1961 to two million by 1973, then four million in 1983 and more than eight million in 1996. Since 2004, five more casino operators have joined the market alongside STDM’s successor, SJM. Four of them are foreign-owned or part foreign-owned (in the case of Melco Crown Entertainment and the joint venture between Pansy Ho and MGM Resorts International). In 2010, the number of annual tourist arrivals to Macau reached just under 25 million—fifty times the 1961 figure. And yet despite all the new infrastructure brought by outside investors, Macau still functions as a Ho family town and works to enrich that clan, their associates and allies. Most of us arrive on a Shun Tak-operated ferry at an STDM Ferry tale beginning—most visitors to Macau arrive on Ho family-owned ferry terminal. Or we land at an STDM-owned helicopter terminal, transport or fly in to a 33% STDM-owned airport, possibly on a 14% STDM- owned Air Macau jet. Some of us stay at an STDM hotel (with currency and so the cycle continued. In those days before electronic or without casino). A few of us may live in STDM or Shun Tak- banking and electronic surveillance, covering up the money trail developed housing developments. A handful of us may one day have hardly mattered. In any case, the Portuguese administration in our ashes laid to rest in a columbarium Shun Tak plans to build in Macau was hardly likely at that time to be a cheerleader for sanctions the territory. It seems that enforcement. It was weak locally and distracted by internal political even in death, there’s no problems back in Portugal, and thus primarily interested in avoiding escaping the influence of unrest and having peaceful relations with China. the Ho family’s business ties in Macau. A question Despite all the new infrastructure brought is, can the Ho family take by outside investors, Macau still functions as advantage of the political a Ho family town and works to enrich that goodwill on offer from Beijing and build on clan, their associates and allies. Stanley Ho’s legacy, or will they turn inward and The Ho family’s influence in Macau extends Neighbourly cooperation devour each other? even beyond the grave By the late 1950s and early1960s, the needs of the Chinese economy had outgrown that early barter system. It was in this era that many banks were set up in Macau specifically for the purpose of doing business with China. It’s no accident that many of the most prominent families in Macau and those with the best political connections to Beijing are the founders of, owners of, or shareholders in, those local banks. The spat between China and the US administration of George W. Bush back in 2005 over the Macau bank Banco Delta Asia and its dealings with North Korea is just a modern extension of Macau’s decades-long tradition of helping its beleaguered communist neighbours in the face of what has often been perceived historically to be Western economic and political aggression. Those with a more cynical turn of mind suggest the modernisation of the Macau gaming industry in 1962 was due to pressure from China. The argument goes that as the mainland Chinese economy grew, it needed access to an efficient, and more importantly, biddable money laundering service on its doorstep for the purposes of covert external trade. Macau fitted the bill perfectly. Macau’s expanded and modernised casino system—regulated, but not overly so, and able to swallow up and process large amounts of cash via VIP gaming, was the perfect washing machine for Chinese cash according to the cynics’ narrative. IAG has seen no hard evidence to support that claim. Perhaps a more likely explanation is that in the early 1960s a cash-strapped Portugal was urgently looking for fresh Succession race—Macau Grand Prix—one of the many local attractions ways to make its sprawling but creaky empire self-financing. Raising developed under the reign of Stanley Ho

February 2011 | INSIDE ASIAN GAMING 23 Cover Story

Many Happy Returns The casino at Resorts World Sentosa will likely retain the lion’s share of the Singapore casino market in the Year of the Rabbit—though allegations of unlicensed junket activity in the city-state have led to concerns about the industry’s prospects

he Singapore government’s primary In the 12 months since it opened on 20th proclaimed objective in legalising January 2010, RWS has welcomed 15 million Tcasinos was to boost the Lion City’s visitors. Its 1,350 hotel rooms have achieved tourism numbers. The two casinos opened an occupancy rate of 70%. The hotels at last year around sprawling Integrated Resorts RWS include Hotel Michael, Hard Rock (IRs) certainly appear to have delivered on Hotel Singapore, Festive Hotel, and the by- that goal. invitation-only Crockfords Tower. This year, Singapore’s tourist arrivals rose 20% two more hotels—Equarius Hotel and Spa year-on-year in 2010 to a record 11.6 Villas—will add another 500 rooms when million, reversing declines of 4% and 2%, they are launched as part of the resort’s respectively, in 2009 and 2008. The 1.13 second phase, which will include a maritime million tourist arrivals in December set a new museum, the world’s largest oceanarium all-time monthly record. Notably, Singapore’s and a destination spa. tourism figures do not include arrivals via its RWS’s key non-casino draw, Universal land border with Malaysia, which likely grew Studios Singapore, opened on 18th March by much more. 2010, and by the end of the year, the theme The first of the two casinos to open was park’s visitor count passed the two million at Genting Group’s Resorts World Sentosa mark, even though its key attraction, the (RWS), on the first day of Chinese New Year Battlestar Galactica duelling twin rollercoaster last year (which fell on 14th February). The ride, had been taken offline shortly after the casino at RWS actually opened a few days park’s opening until now. Universal Studios after the US$4.7 billion property was officially Singapore has just announced the ride will unveiled on 20th January with four hotels reopen on the 21st of this month, when the and 10 restaurants (with the casino having theme park could well experience a further to wait a few weeks longer to be licensed). spike in visitor numbers.

24 INSIDE ASIAN GAMING | February 2011 Cover Story

Universal Studios is set to open at least two more rides this year, including the much- awaited Transformers attraction, while star chef Joel Robuchon, who holds 26 Michelin stars (the most in the world), plans to open three new restaurants at the resort. Reflecting the quality of the new tourist arrivals drawn by the IRs, the city state’s tourism revenue surged 49% year-onyear (outpacing the 20% growth in tourist numbers) to an estimated S$18.8 billion (US$14.8 billion) in 2010. “We’re on target to reach S$30 billion in revenue and 17 million Resorts World Sentosa visitors by 2015,” says Singapore Tourism Board Chief Executive Aw Kah Peng. Another contribution RWS has made to the local economy is the creation of 12,000 direct jobs, with plans for further hires. The other IR, Las Vegas Sands Corp’s US$5.5 billion Marina Bay Sands, which commenced operations on 27th April last year, employs 8,000 workers. RWS maintains its gaming lead Although we’re still waiting for the year- end earnings results from the two IRs, our sources suggest RWS is still comfortably holding onto the larger share of the local casino market, which Aaron Fischer, head of consumer and gaming research for CLSA Asia Pacific Markets, forecasts will reach US$6.5 billion this year and US$8 billion in 2012. Intimate and low-key—the Resorts World Sentosa casino

The Battlestar Galactica duelling rollercoaster ride at Universal Studios Singapore was shut down after a seat detached and flew off the ride train during routine tests only a week after the attraction’s opening on 18th March, 2010. The issue has now been resolved and the theme park has completed several months of safety tests and received approval from Singapore authorities to reopen the ride on 21st February. The 140-foot tall Battlestar Galactica features two coasters named Human and Cyclon. It is the tallest duelling rollercoaster in the world.

February 2011 | INSIDE ASIAN GAMING 25 Cover Story

Most analysts had originally predicted the swankier MBS would quickly snatch the Machines in the mix market share lead from RWS, despite the latter’s two and a half month head start. It One of the major mistakes Las Vegas Sands Corp (LVS) made when setting up the Marina didn’t take long for the consensus view to Bay Sands (MBS) casino was to replicate the games mix at its Macau properties. Unlike Macau, switch, however, and the smart money is where baccarat is preeminent, in Malaysia and Singapore, roulette reigns supreme, and the now on RWS holding onto the lead for some MBS main floor had initially devoted too much precious floor space to the former game and time to come. too little to the latter. Since the casino areas at the Inegrated Resorts (IRs) are limited to a In a report on Genting Singapore—the maximum 5% of the properties’ total floor space, determining the optimal mix of games on Singapore-listed unit that holds Genting’s the floor is particularly important. interest in RWS—published by Goldman Sachs in June 2011, the investment bank commented: “While we think Marina Bay Sands is undoubtedly a far more spectacular property, we believe the US operator has shown itself to be a relatively underwhelming competitor so far.” Genting gained considerable competitive insights and advantages from operating a monopoly casino property in Malaysia since 1970, including an intimate familiarity with the wants and needs of players from Malaysia and Singapore and an extensive base of customers—many of whom belong to its loyalty card programme—in the region. There is also the matter of the casinos’ interiors, which were also influenced by the respective operators’ familiarly with local players’ preferences. As Goldman put it: “we think Genting may have a more appealing casino product to Asian gamblers.” The cosy RWS casino allows gamblers to feel a much greater sense of anonymity than the MBS main-floor, which takes the popular stadium-style layout of Sands Macao to dizzying new heights. It will “take longer” for gamblers to “embrace the different casino experience” at MBS, according to Goldman Sachs. High visibility—the casino at Marina Bay Sands Junket allegations Upon realising it had not provided sufficient roulette tables, though, LVS swiftly rectified The dark cloud on the horizon for the shortfall by installing expansive additional roulette capacity via automated and semi- Singapore’s gaming industry in the Year of automated multi-terminal installations. the Rabbit is the recent claim of unlicensed The casinos at both MBS and Resorts World Sentosa (RWS) feature a high proportion junket activity at MBS, revealed in court of multi-terminals—namely, electronic versions of popular table games—in their gaming documents filed last month by a high machine mix. These multi-terminals generally offer higher yields than slot machines, driving roller being sued by MBS over a S$250,000 up the average win per machine per day at the two IRs. Whereas gaming machines accounted gambling debt. for less than 5% of total casino revenue in Macau last year, they accounted for almost 20% According to a report in Singapore’s of casino revenue at MBS in the third quarter of 2010 (the first full quarter of the property’s Business Times, Lester Ong Boon Lin alleged operation), and probably a similarly high proportion of total casino revenue at RWS—which in an affidavit that he had owed money does not provide detailed breakdowns of its gaming and non-gaming revenue. to junkets he assumed were operating The Singapore IRs have some of the highest earning gaming machines in the world. legally at MBS at the time he accepted the The 1,798 gaming machines at MBS recorded an average daily win per unit of US$481 in casino’s credit line. Mr Ong claimed the the third quarter of 2010, versus the US$286 earned by the machines at Venetian Macao. way the alleged junkets operated at MBS The machines at RWS are widely acknowledged to outperform those at MBS, despite the was similar to legal junkets he had seen lack of official figures. During IAG’s visit last month to Singapore, we noticed the RWS slot operating in overseas casinos. machines were generally of higher denomination than those at MBS and were enjoying equal To date, no junkets have been officially or greater player occupancy.

26 INSIDE ASIAN GAMING | February 2011 February 2011 | INSIDE ASIAN GAMING 27 Cover Story

gaming industry consultant, has been enlisted by the Singapore government to conduct background checks on all junket Spectrum’s thorough operators applying for licenses to operate background checks in the city-state. A source quoted by Singapore’s command sizeable Business Times revealed: “Spectrum has a fees, which have to be staff of highly experienced executives who shouldered by the junket have relationships with law enforcement in other countries. This comes in handy applicants and are when you’re trying to get background non-refundable, even if their checks done on junket operators from applications are rejected, countries or remote areas where it’s not easy to get answers about their financial which is why many junkets capability, business background, tax are believed history, or whether they have ties with to be waiting for clearer possible crackdown on those junkets by the organised crime. In some instances, it’s guidelines from the Singapore government. quite dangerous to do such checks.” Mr Monaghan did suggest, however, that Spectrum’s thorough background Singapore authorities before the allegation could make the Singapore checks command sizeable fees, which have investing in the process. government postpone the licensing of to be shouldered by the junket applicants junkets. “If the Singapore government and are non-refundable, even if their believes the Singapore casinos have been applications are rejected, which is why licensed in Singapore, which requires strict lax in terms of self-regulation, then it may many junkets are believed to be waiting checks on the personal probity of junket not proceed with licensing junkets,” he said. for clearer guidelines from the Singapore applicants, their staff and clients, including Furthermore, if the Singapore authorities before investing in the process. the source of the junkets’ working capital. government concludes that senior casino There is, though, the possibility of a Nevertheless, as our sister publication, management was aware of or even potential upward revision in Singapore’s Asian Gaming Intelligence, reported in June sanctioned the unlicensed junket activity, gaming revenue forecasts if some junkets last year, according to our sources, Macau and so “the government can’t trust the do manage to pass the probity checks and junket representatives had found their way casinos to self-regulate, then there may be a secure licences to operate in the Lion City around Singapore’s rigorous junket probity monumental change in the way it regulates this year, points out CLSA’s Aaron Fischer. checks by simply checking into the casinos the industry,” added Mr Monaghan. Singapore’s gaming market managed as individual VIPs and then passing on their to thwart all expectations on the upside in chips to ‘friends’—who are essentially their Under the Spectrum microscope the Year of the Tiger. If the past is any guide, junket customers. The media publicity It was recently revealed that Spectrum don’t be surprised by a repeat performance surrounding Mr Ong’s affidavit will probably Gaming Group, a New Jersey-based this year. result in greater official scrutiny of this alleged unlicensed junket activity. In a report released on 27th January, Sean Monaghan, HSBC’s senior regional consumer and gaming analyst, lowered his price target for Genting Singapore stock, stating “any clampdown on Marina Bay Sands could have implications for the greater Singapore casino market and, as such, Resorts World Sentosa (RWS).” Mr Monaghan continued: “If the government cracks down on this illicit segment (if there is one), then it is reasonable to assume that this segment may no longer exist in the 2011 or 2012 period. This means that market forecasts may currently be higher than what they would eventually be.” It is unclear how much the alleged unlicensed junkets have contributed to Singapore’s robust gaming revenues to The nightly Crane Dance at RWS features two 30-metre high animatronic cranes in a choreographed light date and what will be the impact of any and sound show

28 INSIDE ASIAN GAMING | February 2011

Bally Technologies

Value Adding Apps Cath Burns, Managing Director and Vice President of Asia-Pacific for Bally Technologies, discusses the power and potential of the Elite Bonusing Suite™

hat makes the iPhone so much more than an Internet-enabled Wmobile device is the ever-growing array of empowering apps available to its users. One could almost be forgiven for thinking “app” is short for Apple. Although many similar apps can be downloaded to other smart-phone platforms, the iPhone got there first, and its first-mover advantage will keep it well ahead of the pack for the foreseeable future. The apps available on Bally Technologies’ Elite Bonusing Suite™ similarly position the company’s iVIEW Display Manager™ (DM) as the dominant platform for casino operators to deliver content to players through gaming machines. The iVIEW DM is an intelligent controller that enables operators to present system and marketing messages on the main game screen, the top game display, and even the overhead display with picture-in-picture capability. The systems-driven content that can be delivered via iVIEW DM includes player account information, Bally CoolSign® media content, and directed marketing messages. The iVIEW DM can essentially turn almost any slot machine that has a video display using industry-standard protocols into a new delivery system for customised marketing at the point-of-play. Two important features have given the iVIEW DM a clear early lead over its biggest rival in the in-game player-user-interface space; Service Window from International Game Technology (IGT). Firstly, the iVIEW DM can run on any slot Cath Burns machine, regardless of the manufacturer. “As long as it’s got a touch screen, you can put on their games. We viewed it differently. DM relays content through the iVIEW DM on it,” said Bally Technologies’ Managing Our view was that our customers had processor rather than the game processor, Director and Vice President of Asia-Pacific already invested in technology—made their which would require separate regulatory Cath Burns. The iVIEW DM can also be installed investment in games—and they shouldn’t approvals and complex development and on steppers that have touch-enabled top- have to throw out all that investment. We integration efforts. The iVIEW DM thus box monitors. IGT, by contrast, went for a wanted a technology that Is compatible with enables game and systems content on the “very proprietary philosophy” with Service the game; that offers additional opportunity same display without interrupting game Window, explains Ms Burns. “They wanted to generate revenue; improves the player play, whereas Service Window runs through to drive games sales. They said you’ve got to experience, and adds value.” the game processor, which some sources buy new games, because it’s only available The other vital difference is that iVIEW argue could impair game performance.

30 INSIDE ASIAN GAMING | February 2011 Bally Technologies

How does the iVIEW DM work?

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With iVIEW DM having been installed The apps are driven by the Elite Bonusing the interactive applications within the Elite at multiple properties around the world, Suite, which, when used in conjunction Bonusing Suite. Bally’s focus has now shifted to creating with the iVIEW DM (or the small LCD iVIEW killer apps for the platform. As Ms Burns smart-screen retrofitted to machines explains: “Now that DM has been rolled out without touch screens), enables floor-wide into the field—and with all new products, bonusing events at each gaming machine there’s a period of stabilising and making on the casino floor (as opposed to the The Elite Bonusing Suite currently sure it does what it’s supposed to do—now bank-by-bank bonusing events offered by features nine apps, and Ms Burns that we’ve done that, it’s about adding the most competitors). U-Spin™ bonusing, slot demonstrated three of them to Inside applications. That’s what takes it to the tournaments, virtual-racing events, and Asian Gaming—namely, Virtual Racing, DM next level.” dynamic random bonusing are just a few of Tournaments, and U-Spin Bonusing.

February 2011 | INSIDE ASIAN GAMING 31 Bally Technologies

chance to win marketing dollars. All the Elite Bonusing Suite applications are run via a central console using standardised intuitive controls. “From the way you schedule it to the way you assign prizes, you only have to teach the marketing person once. Just like the menus in Microsoft Office. It’s File and Save and all that. It’s all integrated,” Ms Burns said. The applications can also be used in • Virtual Racing: Last July, Barona Resort • DM Tournaments: Using the DM conjunction with CoolSign, which offers an & Casino in southern California launched Tournaments app, casino operators can integrated way of generating and managing a floor-wide “Off to the Races” virtual- take a given selection of slot machines digital messages to customers, also through racing promotion on all 2,000 of the on the floor, and using a central console, a central console. The messages can be slot machines on its floor using iVIEW, convert them from regular play mode to delivered to patrons via many different the Elite Bonusing Suite, and Bally’s tournament mode. media, including overhead electronic signs CoolSign media-management system. on casino floors, in-room television, and During the month-long promotion, outdoor advertising. Crucially, CoolSign also qualified carded slot players received has a direct interface with the iVIEW displays. notification of the bonus event on their As a result, casino management can beam slot machines and were given the option marketing and other messages direct to to touch and choose an animated horse. consumers while they’re playing games. They received a prize from the casino whether they chose the winning horse or the last-place finisher. “This promotion is the first event ever where 2,000 devices and more than Slot tournaments are among the most 50 displays were all synchronised effective casino promotions. Currently, in for a floorwide community gaming order to run them, casinos need to either experience,” said Mike Murphy, Barona’s set aside a section of slot machines, or Vice President of Technology. “Because switch out chips in the machines they Bally is the global leader in slot and our customers had to earn 100 points want to use. With DM Tournaments, casino management systems, and has to be eligible to even participate, it however, “you can run tournaments continued to grow its market share in recent helped generate revenue and increased as often as you want and on whatever years. The addition of these new technology the percentage of carded play. Plus, the games you want,” says Ms Burns. offerings to Bally’s product range “makes us interactivity and ability for players to Whereas virtual races can run on either a fully integrated solution across a casino choose their horse to cheer for definitely the iVIEW DM or iVIEW SmartScreen, DM floor,” says Ms Burns. “Whether it’s our casino added a feeling of excitement and Tournaments can only run on touch- management systems, slot management anticipation on our floor. ‘Off to the Races’ screen machines capable of running systems, TableView™ (our table management has been, by far, our most successful iVIEW DM, since tournaments need a full system), Iview Display Manager, CoolSign, or casino promotion.” game screen. Bally Business Intelligence™; the foundation’s The Virtual Racing app is configurable there. Now it’s just a matter of adding to it according to the operator’s needs, and and helping casinos maximise revenue, stay, variations on the theme could include play—whatever the goal is. virtual car, dog, or even pig racing. Game on Two hot new games currently being rolled out by Bally in Macau are Cash Spin™ and the Chinese version of Fireball™. “In the US, Cash Spin is a premium game • U-Spin Bonusing: This second-chance- title for Bally, which means it is placed and to-win promotion utilises Bally’s U-Spin™ operated on a daily fee or participation gesture-control play mechanic, first basis,” says Ms Burns, and it has become the introduced on the highly successful Cash fastest selling premium game title in Bally’s Spin game, which is now being rolled history. “Given the economic climate in North out in Macau. During U-Spin bonus America, we’ve really been growing our sequences, the player gets to touch the participation business there,” she explains, screen and spin a virtual wheel, with a adding “recurring revenue models are

32 INSIDE ASIAN GAMING | February 2011 Bally Technologies

Burns is taking a step-by-step approach to up a game-development studio, so we’ve Bally’s Australasian foray. “We want to do it hired a lead video producer who’s leading exactly how we did it in Macau. We want to that charge up.” build it one bank at a time. Make sure our “Australia is the number one video product works; do it the right way and build content market in the world, and that fosters it the right way.” the creativeness on video. So as far as the There is clearly a great deal of potential available talent down there, it’s very good for slots in the New South Wales market. for us to have a game studio there. It’s very “Out of a base of 100,000 games, last exciting. We’ll use that [studio] everywhere. year they replaced about 10,000 [Macau’s We’ll use that in Australia, Asia, and North entire installed base is around 14,000 America.” machines]. So if you look at that, even a “Australia is a big, big market and small percentage of that is worthwhile,” commands a lot of respect. I look at it as far explains Ms Burns. “It’s promising for us. as a new entrant going into Vegas. You’ve And it’s a market that we had to have, and got to be really respectful. You’ve got to get it’s a market that we had to make sure we people who really know the market. And entered the right way. We’re also starting you’ve got to give the market what it needs.” As for getting the right people, Bally announced two key appointments in August. Michael McNee was named Managing Director of Bally Australia, while Ron Jeffrey took the role of Sales Manager for Bally Australia. Both are based at Bally’s new regional office in Sydney, New South Wales.

always good.” From the casinos’ point of view, meanwhile, “when they’ve got capital constraints, it’s a great way for them to keep their business growing and get new product to grow their floor.” In Macau, though, casinos have thus far not entered into participation or fee deals with slot manufacturers. “We haven’t really got to that point [in Macau] yet where slots Michael McNee are giving tables a real run for their money. But that’ll happen at some point, because the growth is excellent.” The Chinese version of the popular Fireball game has just been launched. “It’s one of those games that has global appeal,” says Ms Burns, and the local customisation should further boost its popularity in Macau. Aussie charge In addition to leading the growth of Bally’s systems and slots business in Asia, Ms Burns has also been busy working on the company’s re-entry into the complex and carefully regulated Australia and New Zealand markets. Bally commenced its field trial in Sydney in the first week of November, and that appears to be proceeding smoothly. Ms Ron Jeffrey

February 2011 | INSIDE ASIAN GAMING 33 Player Relegation Could some Macau ‘VIPs’ be bumped down to the mass market during 2011?

ome Macau table players currently in Asia. But just as after the global financial qualifying as VIPs could be in for a crisis in 2008 many retail banks changed Srude awakening in 2011, an industry their policies regarding account holder insider suggested to Inside Asian Gaming ‘perks’, so it’s likely the Macau players in Of last month. the new segment would lose some of their course, If the Macau market continues the existing privileges. even in same growth trajectory as 2010 without There are already some signs of this the bullish a significant new supply of live VIP tables, with one Macau operator reportedly market conditions of 2010, not then some of the lower high rollers could cancelling a banquet for mid-level VIPs every VIP table is utilised every hour of every effectively be bumped out of the segment and replacing it with a buffet. According day. But operators point out that rather and back into the mass market. to IAG’s sources, the junket agents acting than running a VIP operation as if it were “Some of these lower level VIPs will as middlemen for the players advised the a budget airline, filling up every available probably get put on the main floor. The operator it was better to cancel the event seat with a paying passenger; what VIPs operators may not have a choice without a than make the players lose face. tend to look for is variety—including the significant increase in VIP capacity coming By ‘significant new supply’ of tables, we choice to move to another table within the into the market and the VIP sector growing mean more than the 400 live tables Galaxy same room if their luck has dried up at their at the rate it is,” said the source. Macau—the only new opening of 2011— current spot. And given that many junket In reality, and in order to save face for will have in its first phase due in the first half operators run rooms in several properties, these unfortunate ‘low highs’, a new segment of this year. We mean more even than the they want to be able to offer players the would probably be created for them, along 400 live tables Sands China may add at Cotai flexibility of trying different venues. That the lines of the junkets found on mass floors 5 and 6 between now and the expiry of the can only happen if the VIP rooms are in some properties and some jurisdictions table cap in 2013. running somewhere below capacity.

34 INSIDE ASIAN GAMING | February 2011 Shuffle Master

Shining Star Shuffle Master adds some innovations to a proven performer as Vegas Star Grand Baccarat goes live at MGM Macau

nyone who still questions the value baccarat—it’s the Grand Tie Side proposition of quality automated Bet. If there’s one thing that players Abaccarat games in Asia should take a everywhere love, it’s more ways look at the time and effort that’s gone into to hedge their base bets via the Shuffle Master’s biggest baccarat installation excitement of another jackpot. in Macau so far—at MGM Macau. The Grand Tie Side Bet is funded separately from the main game and triggered by tied eights or tied nines. What enables Shuffle Master to build this kind of attractive feature into the game is the integrity and stability of the Vegas Star platform, and its staying Vegas Shuffle Master has pulled out all the stops power in the market. It’s now coming up Star Grand to ensure outstanding presence on the floor to its eighth year as a concept. In Australia Baccarat player screen for its multi-terminal Vegas Star offering. alone, the installed base for Vegas Star The Vegas Star Grand Baccarat installation, product stands at 2,500 units. And there’s creates opportunities not only to bring in on the edge of MGM Macau’s main gaming a growing sense in Macau that operators new customers, but also to entertain and floor, provides optimal player excitement, are recognising that automated baccarat delight existing live table players. and improved hold for the casino. MGM It’s been a busy time for Shuffle Master Macau’s management has also played its part in Macau following the opening last month with some very practical help in welcoming of the Imperial Stadium at The Venetian. Vegas Star. The operator removed a partition The 150-seat multi-terminal installation near to the site of the installation so that the by Shuffle Master has two Rapid Roulette public on the floor have an excellent view of games and one Rapid Sic Bo game to draw the giant video screen displaying the dealer. in the players. The second thing you notice as you approach the virtual dealer display is that it’s a video recording of a real human being rather than an animated dealer. Queenie Li, the Hong Kong-based student and part-time model captured on camera as the dealer for the latest generation of Vegas Star, has brains as well as looks. She holds two master’s degrees—including one in international relations. She also speaks fluently the three languages used as dealer announcements and as player screen interfaces on the Vegas Star product—Cantonese (with traditional Chinese script), Mandarin (with simplified Chinese script) and English. Betting options When you sit down at one of the Vegas Star terminals, the third thing you notice is the availability of an attractive extra betting option compared to traditional live table Gaming arena—Imperial Stadium at The Venetian Macao

February 2011 | INSIDE ASIAN GAMING 35

Market Outlook

Crisis Looming? For the time being, VIP credit risk appears to be a micro, not so much macro, issue in Macau

umours last month that a Macau the market busting 1.35% rolling chip liquidity and profit margins are certainly casino operator may be in the hole for commission offered by Crown Macau (now powerful market-driven mechanisms for RHK$100 million because of liquidity Altira) in December 2007 in an attempt to imposing credit discipline. But it only takes issues faced by a junket over player bad debt grab a large share of the VIP market quickly. one or two casinos with a higher appetite is tending to provoke one of two responses Without pointing any fingers, it’s for risk than the average—possibly due to in town: interesting to note that some of the same internal pressures linked to stock price or a) concern personalities that were involved in that balance sheet issues—and an eager and b) surprise that it wasn’t more money competition war have also been linked with ambitious junket operator willing to serve and more than one junket the new one. that higher risk appetite (in order to get Although it is likely a similar scenario potentially above market average profits), for has played out at other casinos around An important question is that market discipline on credit issuance to town, even a few hundred million HK dollars unravel. This vicious circle is made potentially of uncollectibles would only represent a would any disorder more vicious because of the fact that listed fraction of one percent of total VIP revenue, in the Macau VIP credit casino operators don’t immediately have to and it still premature to presage the re- market lead to a fall justify high risk Macau lending policies to emergence of a bad debt crisis their shareholders because usually they’re Still, with Macau VIP gross revenue in the growth rate of the not the ones doing the credit issuance. When growing by 62% year on year in the fourth sector, or discourage high it goes right, management in the individual quarter of 2010 and fierce competition in the rollers from visiting Macau? property claim the success. When it doesn’t, segment by casinos and junkets for players they blame the junkets. via the mechanism of profit share, it’s difficult The answer from the time An important question is would any to see how every dollar of credit issued to of the previous spike in bad disorder in the Macau VIP credit market lead players could be copper bottomed. to a fall in the growth rate of the sector, or Similar dynamics—rapid VIP segment credit in the first half discourage high rollers from visiting Macau? growth and fierce competition on of 2008 is ‘probably not’. The answer from the time of the previous commission rates—were in play the last time spike in bad credit in the first half of 2008 is there were significant bad debt issues in the JPMorgan told Dow Jones Newswires ‘probably not’. Macau high roller market. That followed last month that market concerns about But the last round of credit default the potential negative impact on Macau, did attract the attention of the central and especially its VIP segment, from government in Beijing, and that in turn credit tightening in the general may have contributed to the restrictions on economy of mainland China inward visas for PRC citizens seen in 2008 are overdone. and through into early 2009. That may be right While we’re on the subject of VIP profit in terms of the feeder share, a Macau insider has helpfully pointed system to the Macau out to Inside Asian Gaming that there is a high roller market. significant opportunity cost associated with The lending policies it. The clue is in the name of the business of Chinese retail and model—”profit share”. Junkets (and casinos) merchant banks as pay corporate tax on anything called ‘profit’. dictated by China’s Under the longer-established rolling central bank are chip commission model, junkets don’t pay one thing. But the tax on junket losses (including bad debt). lending policies of Casinos, however, must pay their 39% Macau junkets to people gaming tax on any gross revenue recorded who rock up in the territory regardless of whether it’s funded by debt (claiming they have the liquidity that subsequently goes bad. That’s where already) are quite another. any disorder in the VIP market could really The need for junkets to preserve their hurt the balance sheet.

February 2011 | INSIDE ASIAN GAMING 37 Feature

Boutique Benefits Offering personalised service and value for money is key to running successful small-scale slot venues in the midst of casino giants, says Andy Crisafi, Vice President of Operations at Weike (G) Management Macau Ltd

n December 20th, Weike (G) Management Macau Ltd took over Othe operation of the slot machines and electronic table game (ETG) terminals at a major Macau casino—which had previously used a different third-party slot operator. The new operation adds to the 237 slots run by Weike (G) Management at a recently-expanded venue also located in the vicinity. Working swiftly to create the new setup, Weike (G) had the full complement of 170 slots up and running by Christmas Day, though as Mr Crisafi points out, “this was a staged install in which we already had a few machines running on the 20th, so there was no real downtime for the operation, which was great.” Although it’s early days, there appears to have been a marked improvement in the performance of the slots since Weike (G) Management was handed the reins, and Mr Crisafi credits that to a greater focus on customer service. “We’re committed to providing improved personalised VIP services and are achieving greater results out of our high-limit play. We’re also seeing good results from the mass market, which is our base” Although Weike (G) Management’s new slot operation is located right next door to much larger slot operations at Wynn Macau, MGM Macau and StarWorld, Mr Crisafi is undeterred by the competition. “At the end of the day, it comes down to the players’ experience. Are they having a good time and value for their money? They can play the same products anywhere around town, so what’s going to keep the players happier in a particular casino is their experience. “At the bigger operations, it’s hard for each staff member to know the names of every player who walks in. They’re big casino operations with over a thousand machines. There are a lot of different customers that come in to those big Andy Crisafi operations. With us, we’ve only got 170

38 INSIDE ASIAN GAMING | February 2011 Feature

running at two Macau sites, Weike (G) leisure and lifestyle sector, and which owns Management plans to expand its presence Weike Gaming Technology, a leading Asia- to other local casinos, with a goal to have focused manufacturer of slots, ETGs, and around 1,000 machines in the city by the gaming management and jackpot systems. end of the year. Of the 170 machines at their newest Although slot revenues in traditionally location, 65 are supplied by Weike table-dominated Macau have surged over Gaming Technology, providing a Macau the past few years, the gains have been showcase for the manufacturers’ wares. concentrated at the newer and larger Weike’s products have a strong following casinos, which are better endowed with in Singapore, Malaysia and Indochina, and the resources and know-how to serve Mr Crisafi believes there is clear potential and market to slot players. Weike (G) for Weike to improve its share of the Macau Management offers smaller casinos a one- gaming machine market. “The advantage stop solution to improve their relative slot is it’s an Asian based company, specifically performance. “We’ll handle everything, making games for the Asian market. Weike from the slots to staffing to marketing,” has come out with a great catalogue of comments Mr Crisafi. “This is an important games and is in a position where it can time for casinos to really establish good, customise games for this market—and it strong slot operations, so they can build has been doing so. Weike in conjunction up their loyalty base and benefit from with Paltronics is just about to release a the growth of slots in Macau. We are new linked product, ‘Winner Takes All’, committed to providing high quality, that’s an exciting, innovative, unique reliable and customer-centric services and tournament product that has never been solutions for our Macau operations.” done before in Macau.” As Weike (G) Management widens In addition to the Weike slots, Weike (G) its Macau presence, it also hopes to Management’s latest operation includes a establish sufficient critical mass to enable wide selection of popular games from other it to “offer cross marketing promotions and suppliers. As Mr Crisafi points out: “Variety build loyalty programmes across those is very important to have in any casino. You machines and offer a boutique gaming properties, and possibly introduce wide have to have a good mix of products from all experience. I put a lot of time and effort area links.” the manufacturers. Customers look for that into developing my staff, so they know variety. For us to compete with the other the customers by name, they know what Weike in focus properties around town, we’ve got to at they like to eat and drink. And if they want Weike (G) Management is backed by least offer the same products that they offer a drink, we’ll get them a drink within a Singapore-based Weike Group, a holding in addition to new and exciting innovative minute, which is not so easy to do at the company with several investments in the products.” larger properties. Those are things that give us an advantage.” Of course, sitting next door to bigger and more established slot operations does have the benefit of giving Weike (G) Management access to slot players wishing to casino-hop. The bottom line Mr Crisafi recognises Macau’s increasingly savvy slot players are also acutely aware of value for money, and Weike (G) Management’s slots are set to offer competitive returns to player (RTPs). “So we give the players time on device. We don’t want to rape and pillage our players. We’re out to build up our loyalty. We’re here for the long term. We’re doing different things with our product here as well. It’s not just RTP, but we’re very aggressive with a lot of our mystery links and our marketing strategies.” With just over 400 machines currently

February 2011 | INSIDE ASIAN GAMING 39 Policy Outlook

Managing Ills in Macau’s VIP and Mass Gaming Market The inexorable rise in Macau’s gaming revenue could lead to several undesirable consequences, explains Desmond Lam

here seems to be only one trend in types in Macau’s casinos, with more than explosive (and erratic) growth of Macau’s VIP Macau’s gaming market—that is UP! 4,700 gaming tables and 14,000 slots; a gaming segment spells danger for everyone. TMacau‘s gross casino gaming revenue ratio of 1:3. That ratio pales in comparison It may consequently lead to more rounds reached a whopping US$23.5 billion in to the roughly 1:20 (table/slot) ratio in Las of visa and other regulatory controls in the 2010 and is set to achieve yet another Vegas, suggesting slots (which are closely near future. year of extraordinary growth in 2011. associated with the mass market) have a While casino operators rejoice and take That is provided no other drastic policies long way to grow in Macau. pride in their ever-increasing gaming revenue are imposed to deliberately slow growth. While all these are promising signs (particularly VIP gaming share), my worry is Macau’s VIP baccarat revenue has remained for Macau’s gaming industry, I feel that that we are simply prolonging the pain. The very strong at 72% of gross casino gaming imminent danger lies ahead. Are we going ‘unstoppable’ growth of Macau’s VIP gaming revenue. There are now at least 22 game the wrong way? The failure to control the segment, despite the financial crisis, is a

40 INSIDE ASIAN GAMING | February 2011 February 2011 | INSIDE ASIAN GAMING 41 Policy Outlook

major obstacle hampering the development of a more diverse and sustainable economy. The negative image and numerous issues associated with VIP gaming and operations will inevitably continue to haunt Macau’s international reputation. When Macau liberalised its gaming industry in 2002, most people expected the mass gaming market to expand rapidly and that Macau will become somewhat like Las Vegas. When can we expect mass gaming to overtake VIP gaming? The openness of mass gaming differs significantly from the opaque nature of VIP gaming in Macau. Although around 25 million visitors entered Macau Secrets get locked behind closed doors in 2010, past surveys revealed that approximately 50% and lenient regulatory supervision can potentially lead to serious problems. of all visitors to Macau claimed never to have gambled Not only is problem gambling harder to at one of the city’s casinos. monitor, but gambling-related crimes are also harder to keep an eye on. The heavy issue. It eats heavily into operators’ margins There is currently no official figure on reliance on junkets to promote and draw and is often perceived to be associated with the number of VIP versus mass market players into gaming rooms is another major illegal triad activities. players coming to Macau. But we are Some industry observers now feel probably looking at a few thousand ‘real’ The failure to control the that there is a need to clean up (or even VIP players (with one report suggesting de-market) Macau’s VIP gaming segment over 70% of those are from mainland China) explosive (and erratic) through greater regulatory control by generating 72% of gross gaming revenue growth of Macau’s VIP following the example of Singapore. More (mainly baccarat). The number of mass gaming segment spells specifically, there needs to be a more market players is many, many times greater. cautious selection of its VIP players and the Although around 25 million visitors entered danger for everyone. It may channel members (i.e. junkets) who bring in Macau in 2010, past surveys revealed that consequently lead to more these whales. approximately 50% of all visitors to Macau rounds of visa and other Others believe the Macau government claimed never to have gambled at one of the regulatory controls in the may need to deliberately ‘de-market’ city’s casinos. its VIP segment in order to force the While a large ‘non-transparent’ VIP near future. casino concessionaires to redirect their gaming segment has tarnished the image efforts and resources towards achieving of Macau, the escalated development of its vision and that of the Chinese a bigger mass gaming market can create central government—making many social problems. For example, the rate Macau an international leisure and of increase in problem gambling prevalence entertainment city that all Macanese among the local population since gaming and Chinese can be proud of, with liberalisation is a concern for some local a diversified range of resources politicians. like history, culture, shopping, The 2003 survey revealed that around entertainment (including mass 4.3% of Macau’s population aged between gaming), food and beverage, 15 and 64 years were probable problem MICE, and other sightseeing. In and pathological gamblers. Some research corporate Macau and socialistic suggests that casino dealers display a China, businesses cannot simply greater rate of problem gambling than the care only about themselves general population. Internationally, several and the profits that they studies found that a problem gambler can can make. They have social potentially negatively affect from 3 to 14 responsibilities and must people (including family members and meet the needs and wants of friends. If that finding can be applied to their Chinese stakeholders. Macau, problem gambling could potentially Casino operators in Macau affect at least 20% (and easily more) of are expected to give up Macau’s population today. Adding to that, more in order to ensure a more recent Macau survey found an their own sustainability. increase in the rate of probable problem

42 INSIDE ASIAN GAMING | February 2011 Policy Outlook

and pathological gambling from 4.3% of visa control and hence adds to the overall towards reducing the relative size of the VIP the population in 2003 to 6.1% in 2007. This economic costs of the liberalisation of market with respect to the mass market, and represents a 40% increase after four years of Macau’s gaming industry. will lead to greater regulatory control over rapid development without checks. Anyone who suggests a more drastic both segments. It may also lead to the creation Still, the local population contributes change in government policies to advocate of a stronger middle market (i.e. low VIP or only a small proportion of Macau’s gross mass (leisure) gaming, while reducing the high mass gaming). casino gaming revenue. A 2002/3 survey of share of the VIP market, needs to consider More importantly, any new measures local Macau residents found more than 20% the social impact of such a change. It does, must include a more careful selection of respondents gambled in local casinos. of course, appear to be more in line with of players brought into Macau and the The average money gambled per month per the government’s vision of making Macau a instalment of protection programs for respondent was around US$87, or slightly leisure and entertainment city—a city that players. During this process, Macau will more than US$1,000 per year. That would put attracts all types of visitors, rather than just most likely register a slower growth in gross the estimated gaming expenditure of local hard-core gamblers. Inevitably, to support casino gaming revenue due to a reduced residents at around US$67 million in 2002/3, such an initiative, a strong industry-wide VIP segment as a result of a tightened player which though significant, constitutes only responsible gambling program must be put and trade member selection process. This a small percentage of Macau’s annual gross in place by the Macau government and all will, however, create a stronger and more casino gaming revenue. the casino operators. sustainable gaming industry—one that What is more worrisome is the level One thing is for sure: Moving forward, matches the interests of all stakeholders, of problem gambling among Mainland Macau needs a stricter regulatory control not just the casino operators or junket Chinese visitors to Macau. There is currently system for both VIP and mass gaming promoters/representatives. no study to measure the impact of an segments. The recent cap on the number of expanded gaming market on gamblers gaming tables is just one of the many controls Desmond Lam is an Associate Professor of from overseas. This is important to that can be put in place. By itself, however, it Marketing at the University of Macau. He can Macau’s gaming industry as it affects seems unlikely the table cap will have any be contacted at [email protected]. Visit Macau’s relationship with its neighbours, significant impact on gross gaming revenue www.DesmondL.com. particularly Mainland China, Hong Kong (especially VIP play) in the short term. However, This article was originally published in and Taiwan. It also influences decisions on any future measures will probably be geared Casino Enterprise Management magazine

Anyone who suggests a more drastic change in government policies to advocate mass (leisure) gaming, while reducing the share of the VIP market, needs to consider the social impact of such a change.

February 2011 | INSIDE ASIAN GAMING 43 Briefs

successful opening of the property, which includes a 176-room hotel and 82,00 square feet casino with up to 400 gaming machines and Regional Briefs 25 table games, will undoubtedly attract the attention of big foreign investors including Las Vegas Sands Corp. LVS has already said it would be interested in entering the Indian market. Wynn Macau’s blazing Q4 profit As Indian law currently stands, however, gaming licences are only Wynn Macau Ltd reported issued to Indian nationals or Indian companies. Any foreign investors its Q4 2010 net profit will therefore need a local partner to see a project through. In the surged to US$208.8 million, short to medium-term, neighbouring Sri Lanka could be an attractive compared to US$77.6 million option for a mid-sized, mid-price (say, half a billion US dollars) gaming in the year-ago quarter. resort of the sort already created by Malaysia’s Genting in Manila. Late Operating revenue rose 79% last year, the Sri Lankan government legalised casino gaming and is year-on-year to US$912.2 keen to attract new investment in tourism infrastructure to rebuild million. the country’s tourism industry following the 20-year civil war and the According to The tsunami that devastated large areas of the coast in 2004. Wall Street Journal Online, Sri Lanka is certainly attracting investor interest in the mainstream Kenneth Fong of J.P. Morgan wrote in a report that he believes the hotel sector. As IAG reported last year, Hong Kong-based Shangri-La robust performance in mass-market gambling, often overlooked by Hotels says it would like to build a new hotel property there. The investors, as well as non-gaming revenue played an important role in company’s chairman, Kuok Khoon-Ean, flew to Sri Lanka in August Wynn Macau’s strong result. 2010 for talks with senior government officials. Mr Kuok is the son “This has demonstrated the well-rounded capability of the Wynn of Malaysian entrepreneur Robert Kuok, whose name was recently property across different segments,” he said. linked briefly (and erroneously) with a buy out of the Philippines’ Although Nomura analyst Charlene Liu was bullish on the short- gaming regulator and operator, Pagcor. term outlook for Wynn Macau’s share price, especially following Sri Lanka’s government has stated it aims to generate US$2 billion recent sell-offs, she cautioned: “The share performance in the annually in tourism receipts and 2.5 million tourists by 2016. In 2009, medium term, however, could be bogged down by the market the country earned US$350 million from tourism. sentiment and concern [about] the impact of credit tightening [in China] on VIP gambling.” Speaking during Wynn Macau parent company Wynn Resorts Thomas Arasi resigns from MBS Ltd’s earnings call, Chairman Steve Wynn said the company’s planned Marina Bay Sands president and resort on Macau’s Cotai Strip would cost around US$2.5 billion and chief executive officer Thomas Arasi open by the end of 2014 or early 2015. When he originally revealed has resigned effective 1st February the plan for his Cotai property in April last year, he said it could open after 18 months with the company. as early as the end of 2013. There had been speculation over Parent company Wynn Resorts Ltd reported a profit of US$114.2 the past month about a shake up in million in Q4 2010, reversing from a loss of US$5.2 million in the year- senior management of the Singapore ago quarter. Net revenue rose 53% to US$1.24 billion. integrated resort. In an email to staff on 28th January, 50-year old Mr Arasi said: “I have Thunderbird not quite go decided to pause, take a breather and It seems reports late last year of the imminent launch of spend more time with my daughter Thunderbird resort in Daman were a little premature. and other family.” Inside Asian Gaming understands the resort operators are still Singapore’s Straits Times quoted Taking a breather—Thomas awaiting final licensing approval from the Indian authorities. Anyone an unnamed gaming analyst who Arasi who has ever—in speculated one reason for Mr Arasi’s resignation could be the their student “pressure” he faced running the Singapore property owned by Las backpacking days— Vegas Sands Corps, headed by billionaire Sheldon Adelson. One attempted to use insider told the newspaper: “Mr Adelson is known in the industry to public transport in be a strong character with very strong views. A lot of the business is India will realise that decided by him in the US.” timetables in that country can be very flexible indeed. We Union Gaming Group opens Macau office look forward to the Union Gaming Research Macau Limited, a wholly-owned official launch of this subsidiary of Las Vegas-based Union Gaming Group, announced the Still waiting—India’s aspiring new casino international-quality official opening of its Macau office on 9th February. destination, Daman, like the country’s existing gaming resort on “This is a huge milestone for our company,” noted Grant gaming centre, Goa, was a former Portuguese colony the sub-continent. A Govertsen, one of the firm’s founders and Head of Asia. “There is no

44 INSIDE ASIAN GAMING | February 2011 Briefs

substitute for having feet on the ground in the two largest and most to “a person familiar with the situation”. dynamic gaming markets in the world. Our integration into these The person said the timetable hasn’t been finalised yet, but a communities will allow us to deliver a unique set of resources to our listing hearing could be held at the Hong Kong stock exchange by clients that has never been offered before.” the end of February or early March at the earliest. Union Gaming Research Macau Ltd. is located in the Finance and The company filed an A1 Form, the first formal step in declaring IT (FIT) Building on the Macau peninsula, in the heart of the world’s intent to list in Hong Kong, in September. If a company gains listing largest gaming market. The firm will publish equity research and approval, the next steps typically involve pre-marketing followed by provide corporate access to its global client base. a roadshow and then a listing within six weeks. According to the source, J.P. Morgan Chase & Co., Bank of America- Macau gaming revenue jumps 33.2% in January Merrill Lynch, Morgan Stanley, and BNP Paribas SA are the bankers on Macau’s Gaming Inspection and the deal. Coordination Bureau (DICJ) reported January gaming revenue grew 33.2% year-on-year to 18.6 billion patacas Andrew Macaulay appointed Aspect Gaming MD (US$2.3 billion). Aspect Gaming announced the Union Gaming pointed out that appointment of Andrew Macaulay to the January revenue figure “could have the role of Managing Director. He will been slightly impacted (negatively) by be responsible for the operations of the the early February timing of Chinese business, and will be based out of Macao. New Year, which could have resulted “With this appointment we continue in late month visitation being deferred to strengthen our executive management to the holiday period.” Chinese New team,” said Justin Nguyen, Chairman and Year began on 3rd February this year, CEO of Aspect Gaming. “Mr Macaulay compared to 14th February in 2010. brings with him more than a decade of Macau’s gaming revenue surged commercial experience in global gaming Top dog—SJM’s flagship Grand 58% year-on-year in 2010 to 188.3 Lisboa markets. Prior to joining Aspect Gaming, billion patacas (US$23.5 billion). Mr Macaulay held senior positions as Andrew Macaulay Analyst estimates for full year 2011 revenue growth range from as low Executive Vice President, Asia for Shuffle as 17% to 30%. Union Gaming’s outlook is near the lower end of that Master, General Manager of Business Development for Aristocrat range: “In 2011 we estimate 19% gaming revenue growth in Macau Leisure Limited and Managing Director of GTECH Australasia.” to US$28bn. This contemplates recent months’ run-rate revenues and regional inflation expectations, while also attempting to capture incremental visitation penetration and various junket dynamics. Singapore’s Merlion to open as temporary hotel When layering in relatively modest incremental table supply growth of an estimated 7% in 2011 (Galaxy Cotai) versus 32% on average over the past five-years, and a full-year of junket commission caps (on Rolling Chip scheme) we are particularly bullish on the positive flow- through to margin and profit growth for Macau’s casino operators.” Market share rankings compiled by Macau Daily Times showed Stanley Ho’s SJM maintaining a comfortable lead over the competition. with around 31% of the total. Sands China’s share was almost 18%, Melco Crown Entertainment had around 14.5%, Wynn Macau 13.8%, Galaxy 11%, and MGM Macau dropped back to the bottom spot with 10.5%. Singapore’s mythical symbol—the half-lion, half-sea creature known as The Merlion—is to be converted (temporarily) into a hotel suite. MGM China seeks Hong Kong listing It could be the ideal temporary pad for a celebrity or high roller The Wall Street Journal gambler visiting the city-state. Online reported MGM China The Merlion landmark at Merlion Park will undergo a transformation Holdings Ltd, MGM Resorts starting 7th February to become a temporary hotel suite. International’s joint venture The Merlion Hotel is just one of the many artwork installation with Pansy Ho, hopes to projects presented as part of this year’s Singapore Biennale organised secure regulatory approval by the Singapore Art Museum. in Hong Kong by the end The temporary hotel will be unveiled on 11th March and opened of February at the earliest for public viewing for a two-month period from 13th March. for an initial public offering Key information on The Merlion Hotel, including how visitors may of around US$800 million stay a night at the suite, will be announced shortly by the museum. Roaring towards a roadshow—MGM Macau ahead of a listing, according It will revert to being a tourist landmark on 6th June.

February 2011 | INSIDE ASIAN GAMING 45 Briefs

recognised as an authorised testing laboratory by the Casino Regulatory Authority of Singapore (CRA). Now, GLI Europe has International Briefs achieved the same status of “Singapore Recognised Testing Laboratory (SRTL).” The distinction means GLI Europe is authorised by the CRA to provide testing services for gaming equipment to ensure Nevada ends two years of gaming revenue declines that they comply with CRA standards before deployment. Nevada ended two straight years of declining gaming revenues, “We are honored and grateful to the CRA for granting this but only by the slimmest of recognition to GLI Europe,” said GLI Europe Managing Director Phillip margins, according to a report in Barow. “This recognition is very exciting, both for GLI Europe and for the Las Vegas Review-Journal. our supplier clients. Now suppliers who earn certification through GLI The Nevada Gaming Control Europe can move their products into the rapidly growing Singapore Board announced casinos marketplace. This is yet another reason for suppliers to choose GLI for statewide generated US$10.4 their testing needs.” billion in gaming revenues in 2010, To attain SRTL status, GLI had to prove its accreditation with ISO an increase of 0.1%, or roughly $12 17025, its internal compliance processes and its experience in testing million, compared with the $10.39 gaming equipment for major gaming jurisdictions. billion reported in 2009. Statewide The CRA regulates the casinos in Singapore, and designates gaming revenues had fallen 10.4% qualified testing laboratories with the status of STRL to provide in 2009 and 9.7% in 2008, owing to testing services for gaming equipment deployed at casinos in the the financial crisis that decimated city-state. consumer spending nationwide Properties like Wynn Las Vegas are For more than 20 years, Gaming Laboratories International and drove several major Strip likely benefiting disproportionately has been the world leader in providing independent testing, casino companies to the brink of from Nevada’s buoyant baccarat inspection and certification services to the gaming industry. It has bankruptcy. revenues 15 laboratories spread across Africa, Asia, Australia, Europe, North Industry watchers say it is still too early to conclude Nevada’s America and South America. casino industry is on the mend. Notably, Nevada’s statewide gaming revenues are being buoyed almost solely by baccarat, the staple game of Asian players. Of the Holland Casino may be privatised nearly US$3.8 billion won statewide from tables games in 2010, $1.87 The Dutch cabinet is billion came from baccarat. The game’s revenue figure, which was seriously considering the up 21.4% year-on-year, was the highest amount ever recorded for possibility of selling the baccarat in a 12-month period. A large proportion of that is likely to be Holland Casino group, the contributed by visiting Asian high-rollers, including those cultivated state-owned gambling at the Macau properties of Vegas-based operators such as Wynn monopoly, junior finance Resorts, Las Vegas Sands Corp and MGM Resorts International. minister Frans Weekers Statewide revenues from locals-dominated slot play decreased said on 26th January. 2.7% in 2010, following a decrease of 11.8% in 2009. The slot machine Speaking during revenues of US$6.6 billion recorded in 2010 were 63.8% of the total a debate on possible revenue figure, the lowest percentage since 1997. privatisation of Holland Casino, Mr Weekers told MPs: “We are looking Revenues from table games and other casino areas grew 5.6% in at privatisation. It is not taboo.” 2010, following a 7.6% decline a year ago—though the turnaround Mr Weekers stressed any private owner who failed to implement was clearly driven by baccarat. measures to prevent problem gambling and money laundering According to Mike Lawton, the gaming control board’s senior would have their licence withdrawn. Furthermore, the sale should research analyst, 2010 marked the first time ever in Nevada’s history not lead to the creation of a private monopoly. that the amounts wagered by gamblers on baccarat and the revenues The cabinet is to present its new policy on gambling in March. collected on the game by casinos surpassed blackjack. Holland Casino has 14 venues in the Netherlands and contributed Blackjack provided revenues of $975.7 million in 2010, a decline €164 million (US$222 million) to government coffers in 2009. of 3.3% and the first time since 1998 that revenues from the game fell below $1 billion. Jacob Oberman, director of Gaming Research for CB Richard Ellis, AGEM opens Europe office and appoints Tracy Cohen director said the strong baccarat figures are helping casinos operated by just The Association of Gaming Equipment Manufacturers (AGEM) a few companies and not the Las Vegas Strip as a whole. announced the opening of an AGEM Europe office to serve the “The strong table games revenues are benefiting the luxury organisation’s growing membership base there and the appointment properties disproportionately, and are likely not trickling down to of Tracy Cohen to serve as AGEM Director of Europe. the middle-market properties,” Mr Oberman said. With 16 of AGEM’s 108 member companies based in Europe and another dozen with significant operations there, the AGEM Europe GLI’s European HQ recognised by Singapore’s CRA office in North London will serve as the central contact point for Last summer, Gaming Laboratories International (GLI) was current European-based members and prospective new members

46 INSIDE ASIAN GAMING | February 2011 Briefs

that want to align with an organisation ministry building. that represents the best suppliers in the Police “seized 13 poker tables, four roulette wheels, 17 slot- global gaming industry. machines, 50,000 gambling chips and 2,000 decks of cards,” Ms Tracy Cohen currently serves as Perfilova said. Marketing Manager of TCSJOHNHUXLEY, Illegal casinos have proliferated in Russia since a July 2009 law an AGEM-member company based in banished casinos to four remote regions of the country. the UK with 11 offices worldwide that offers a combination of manufacturing strength with innovation and product LVS turns a profit, fuelled by new Singapore resort development—from quality, hand- Las Vegas Sands Corp (LVS) crafted furniture to cutting edge reported net income of US$271 technical products. With more than million in Q4 2010, which translated 20 years of experience in the gaming to 34 cents a share. In the year-ago Tracy Cohen industry, Ms Cohen will serve in a part- quarter, LVS lost $113.9 million, or 17 time role for AGEM and continue her position for TCSJOHNHUXLEY. cents a share. “The opening of an AGEM Europe location will allow us to better Net revenue surged 56.9% year- serve all global suppliers by having closer contact with a key business on-year in the quarter to US$2.02 region for our members and our European casino customers,” said billion, compared with $1.28 billion a Thomas A. Jingoli, AGEM President and Chief Compliance Officer for year ago. For full year 2010, LVS net Konami Gaming. “Tracy is well respected throughout gaming and revenue reached $6.85 billion, up motivated to serve as our eyes and ears in Europe so that AGEM is 50% from $4.56 billion in 2009. better equipped to address any issues that affect a broad range of The company’s Singapore suppliers there.” property, Marina Bay Sands (which “I’m delighted to have been asked to head up the European opened in April 2010), registered net The turnaround kid—Marina Bay office for AGEM,” Ms Cohen said. “It’s a great honour and I’m looking revenues of US$560.4 million in Q4 Sands forward to working with and supporting the members in the region 2010, which translated into cash flow of $305.8 million. as well as building the AGEM brand and promoting it throughout According to a report in the Las Vegas Review-Journal, LVS Europe and beyond.” Chairman Sheldon Adelson said the results in Singapore were significant because portions of the resort were still under construction in the last part of the year. Moscow police bust illegal casino “Marina Bay Sands is really still in its infancy. We are extremely pleased with the property’s results and its position in the market,” Mr Adelson said. “The Singapore market is still emerging and as we near the completion of our property’s original master plan, the market is all but certain to grow.” The company’s three Macau properties, meanwhile, contributed half its total revenues. Sands Macao, Venetian Macao and Four Seasons Macao generated combined revenues of US$1.09 billion in Q4 2010, a year-on-year increase of 13.1%. Macau also accounted for $213.3 million of the company’s net income in the quarter—almost 78% of the total. Still, only two of the three Macau properties registered revenue gains in the quarter. Net revenues at Venetian Macao grew 15.7% to US$661.5 million and those at Sands Macao rose 12.1% to $319.3 million. However, net revenues at the Four Seasons Macao (and its Plaza Casino) decreased 6.1% year-on-year to $91.8 million. Mr Adelson reminded listeners on the company’s fourth-quarter earnings conference call that total gaming revenues in Macau had surged from US$3.5 billion in 2003 to $23.5 billion in 2010. Across the street—Moscow’s Foreign Ministry “Nobody, and I mean nobody, would have predicted that in a span of seven years it [Macau] would be four times the size of Las Last month, Moscow police raided an illegal gambling den across Vegas,” Mr Adelson said. “Early estimates on the size of the market in the street from the Foreign Ministry, according to a report by the Singapore have clearly been conservative as well.” Russian International News Agency. In Las Vegas, combined net revenues at The Venetian and Palazzo About 80 gamblers and casino operators were taken by grew 16.5% to US$310.6 million in Q4 2010. Net revenues at the surprise when heavily armed, black-clad officers barged in, police company’s casino in Bethlehem, Pennsylvania, jumped 45% in the spokeswoman Yelena Perfilova said. Apparently, the casino was quarter to $83.4 million, thanks in large part to the addition of table hidden behind a second-floor kitchen in a hotel across from the games at the casino.

February 2011 | INSIDE ASIAN GAMING 47 Events Calendar

Events Calendar A more comprehensive events listing is available on our website, www.asgam.com.

21 - 23 February, 2011 13 - 14 April, 2011 6th World Game Protection Conference FADJA 2011 M Resort, Las Vegas Bogotá, Colombia The premier industry event for casino game protection The Andean Gaming Trade Show professionals. Website: http://www.fadja.com Website: http://www.worldgameprotection.com 17 - 19 May, 2011 1 - 3 March, 2011 11th Global iGaming Summit & Expo (GiGSE) iGaming Asia Congress The Fairmont San Francisco Hotel Grand Hyatt, Macau Get the latest on US iGaming legislation from US Congress’ leading The region’s leading event for the interactive gaming community policy-makers, Nevada and New Jersey regulators, key executives will return to Macau for another year of learning, networking in charge of the online strategy for Caesars Entertainment, Boyd and entertainment. iGaming Asia Congress 2011 provides Gaming, California Online Poker Association, Seminole Hard Rock an opportunity to bring together Western technology and International and many others. experience with the in-the-trenches knowledge of those doing Website: http://www.gigse.com/about/s1762/ business in Asia. Website: http://www.beaconevents.com/2011/ igamingasiacongress2011/ 7 - 9 June, 2011 Global Gaming Expo Asia (G2E Asia) 2011 3 - 5 March, 2011 The Venetian Macao, Macau Don’t miss Asia’s leading gaming event. It’s the ideal place for CIAE 2011 you to see the latest technologies and products, learn the trends Pazhou Complex, Guangzhou during world-class conference sessions, and network with peers The 7th China International Game & Amusement Exhibition, from Macau, Asia and beyond. featuring major suppliers from mainland China, as well as Japan, Website: http://www.g2easia.com Korea and Taiwan. Website: http://www.chinaamusement.com 22 - 23 June, 2011 SAGSE Gaming Panama 2011 3 -14 March, 2011 ATLAPA Convention Center, Panama City, Panama Caribbean Gaming Show 2011 Billed as the most international gaming trade event in Central Sans Souci Ports Convention Center, Santo America and the Caribbean, SAGSE Gaming Panama has been Domingo, Dominican Republic running for over seven years. The show’s third instalment will feature exhibitors showcasing Website: http://www.sagsepanama.com their wares to executives representing the more than 60 casinos and major sportsbook operators in the Dominican Republic, casinos and lotteries from surrounding countries, and many more. Website: http://www.caribbeangamingshow.com

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

48 INSIDE ASIAN GAMING | February 2011 May 2010 | INSIDE ASIAN GAMING 49