Inside Asian Gaming

September 2009 • MOP 30 • ISSN 2070-7681

The second annual who’s who of Asia’s gaming industry

Something Different: Casino Design

Server-Based Gaming: Brave New World

Handful of Aces: Singapore Market Outlook

Bally: Targeted Growth

Raising the Game: Silver Heritage

Sponsored by:

C O N T E N T SSeptember 2009

The AsianGaming 50 – 2009

7 The Asian Gaming 50 – 2009

38 Handful of Aces

42 Targeted Growth

45 Bright Ideas

46 Something Different

48 Peace Breaks Out

50 Brave New World

52 Raising the Game

56 Regional Briefs

58 International Briefs

60 Events Calendar

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38

48

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INSIDE ASIAN GAMING | September 20094

Editorial

PublisherKareem Jalal

DirectorJoão Costeira Varela

EditorMichael Grimes

Operations ManagerJosé Abecasis

ContributorsDesmond Lam, Steve Karoul

I. Nelson Rose, Richard Marcus Shenée Tuck, James J. Hodl

Andrew MacDonald William R. Eadington

Graphic DesignerBrenda Chao

PhotographyIke

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Asian Gaming 50 – 2009 The Mark of Success

“Many of life’s failures are people who did not realise how close they were to success when they gave up,” is a saying attributed to Thomas Edison, the man who developed and patented the first commercially successful electric light bulb.

The words have some relevance for Asian gaming. On a practical level, it’s difficult to imagine a gaming industry anywhere in the world without the excitements of electric signs and electric power. On a philosophical level, given the amounts of capital invested in the land-based and online industries in the region, it requires a steady nerve and a good deal of faith in the future to keep on investing during a global financial crisis.

A lot has happened in the 12 months since our first Asian Gaming 50 list. The rich have seen their fortunes chopped—in some cases by as much as one-third. A few people with great visions for gaming projects but not much ready cash have seen those schemes evaporate because they couldn’t get other people to fund them. Everyone has felt the pinch of more expensive money at consumer and corporate level and its trickle down effects on everything from customer confidence to staff budgets to marketing effort.

That brings us to the issue of faith. Henry Ford, another American pioneer of mass production in the early 20th century, once made the following observation: “If you’re not succeeding at the level you’d like to succeed, my best advice to you is to double your rate of failure.”

A distinguishing feature of many people on this year’s Asian Gaming 50 – 2009 list—including in particular those survivors from last year’s list—is that they have kept going… and going… and going, often over many decades, and even when other people advised them to stop or give up. It helps, of course, if you’re in a business with a unique competitive advantage that generates enough cash for you to diversify or follow your vision without borrowing other people’s money. Japan’s pachinko industry with its somewhat hazy post-war history and interesting regulatory status is probably a good example of that.

For those that do need a helping hand from other people’s money, survival in a downturn and the push to future prosperity for the entrepreneurs and their investors then becomes an issue of salesmanship. Business plans and financial modelling are pivotal to modern industry. But if you can’t sell your vision to the flesh and blood human investors sitting in front of you, then you can’t survive. It’s really that simple.

Hats off to this year’s Asian Gaming 50 – 2009. Some had easier starts in life than others. A few are gaming ‘royalty’ born into families already powerful in the industry. Most are self-made or corporate employees especially hungry for success. What they all share is this: they have kept going despite the setbacks, sometimes even seemingly against all rational odds. Their energy and their vision have helped to make the gaming industry in general, and the Asian gaming industry in particular, the exciting and vibrant market it is and remains despite the downturn.

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September 2009 | INSIDE ASIAN GAMING 7

The AsianGaming 50 – 2009 The second annual ranking of the industry’s most influential people

When following daily and weekly news events in the Asian gaming industry, it’s not always easy to see the big picture. The global credit crisis and subsequent global economic recession, for example, have tended in the last year to grab the bulk of the headlines.

If one pauses for a moment and tries to take a longer view, it becomes clear that it’s not the industry’s talent pool that has somehow drained away. It’s just the general level of confidence and the financial framework that has changed.

Things are still moving forward, however, in multiple Asian markets. The Philippines opened its biggest casino yet only a few weeks ago. Taiwan appears to be closer to legalising casinos than at any time in the past 20 years. Two new integrated gaming resorts complete with tournament-standard golf courses are expected to begin construction in Cambodia and Vietnam, respectively, within the next 12 months. Singapore is even closer to launching its two integrated resorts. It is people—talented and driven people—that make those things happen. All the money in the world won’t help without the human will to succeed.

In the biggest Asian gaming market, Macau, Melco Crown Entertainment has opened its City of Dreams resort, and L’Arc, licensed by Dr Stanley Ho’s casino company, SJM, is due to open this month. In the online sector, Internet use in Mainland China continues to grow rapidly, especially among the young, giving unparalleled opportunities, particularly for providers of so-called ‘soft’ gaming services such as role playing games. That online growth is reflected in some of the names on the Asian Gaming 50 – 2009.

Against this background, the recession looks more like a blip than an insurmountable hurdle. The trend is upward and onward, and the people listed here in the Asian Gaming 50 – 2009 are among the best of the best. Their goal may be to make the most money possible for themselves and their companies. But in doing so, they are helping to create and maintain a culture of excellence in terms of products and services that has the ability to make the Asian gaming industry not only the highest grossing in the world, but the very best.

We invite you to be part of the Asian Gaming 50 – 2009 debate by emailing your comments to the editor at [email protected].

Asian Gaming 50 – 2009

Sponsored by:

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KaiRo International is currently involved in projects in Vietnam and is investigating possible opportunities in neighboring countries.

John A. Robbins, Chairman of KaiRo International said: “We are very happy to be the sponsor of IAG’s Asian Gaming 50 – 2009 list. The list has become a valuable at-a-glance

guide to some of the key figures in the Asian part of the industry. It contains not only historical information about how the industry leaders rose to prominence, but also some insight into where they, their companies and the regional industry may be heading next.”

About the sponsor



Lim Kok Thay may seem to some a surprise choice for top position in this year’s Asian Gaming 50 – 2009, especially because he knocks ‘Mr Macau’, Dr Stanley Ho, off pole position.

On closer inspection, Mr Lim’s rise isn’t so surprising. In a world where casino operators are cutting budgets and in some cases struggling to make debt payments, Mr Lim’s company, Genting Berhad, is not only holding its own but is growing.

The Genting group operates Malaysia’s only casino, Casino de Genting at the Genting Highlands Resort, the world’s largest single resort, which includes over 10,000 hotel rooms within a complete entertainment city. It also controls Star Cruises, Asia’s leading and the world’s third biggest cruise line.

Last month, on 28th August, Genting unit Star Cruises, in partnership with Philippine billionaire Andrew Tan, unveiled the US$700 million Resorts World Manila at Newport City near Manila’s international airport. It is stocked with an initial 100 gaming tables, set to increase to 300 tables and more than 1,000 slot machines by the end of the year. Even with its opening complement of 100 tables, Resorts World Manila already ranks as the Philippines’ largest casino.

The real centrepiece of Genting’s international gaming operations, however, will be a S$6 billion (US$4 billion) integrated resort located on Singapore’s resort island of Sentosa, scheduled for an early 2010 opening. Industry whispers suggest the property could even be ready before Christmas 2009. Investment bank CLSA forecasts Resorts World at Sentosa will garner a 46% share of an estimated US$3.2 billion national market in casino revenue in Singapore in 2010.

That’s not the only bright spot on the horizon. Genting, in common with many other Asia-based gaming and non-gaming companies, has managed to keep its financial gearing modest, arguably putting it in a better position to take advantage of the economic recovery when it comes. In late July this year, the Group announced two share buybacks. They were for relatively

1 (4) Lim Kok Thay Chairman and CEO, Genting Berhad

modest amounts (just under US$5 million), but at a time when some rival foreign casino operators are issuing new shares like there’s no tomorrow, it provides some positive news for Genting’s existing equity investors.

Genting recently took a 3.2% stake in the Macau and Las Vegas operator MGM MIRAGE for US$100 million. Genting was at pains to point out the purchase related to a valuation opportunity presented by MGM MIRAGE’s under-pressure shares. Speculation had suggested Genting harboured a strategic aim to become partners with an existing operator in Macau. This speculation was stoked by the fact that Star Cruises had previously expressed interest in a partnership with Dr Stanley Ho in a casino project in Macau, although that idea faded after reports it might cause difficulties for the parent Genting in its relationship with the Singapore regulators.

‘Coherence’ is a word that has been used by some analysts to describe Genting Group’s activities. The achievement of a coherent strategy would be no mean feat, given that the conglomerate has activities ranging from gaming to power generation, plantation farming, property and oil and gas. What analysts suggest is that rather than operating its diverse activities discretely, Genting has managed to create synergies whereby those activities and their revenue streams support each other and the business as a whole.

Genting was named ‘No. 1 in Overall Most Convincing & Coherent Strategy In Malaysia’ in Euromoney’s ‘Asia’s Best Managed Companies 2009’ awards. The

company was also voted ‘No.2 in Top Ten Most Valuable Malaysian Brands’ in Brand Finance Plc’s ‘Malaysia’s Top 50 Brands 2008’ awards.

An example of Genting’s strategic approach is the way the company has positioned Genting Highlands Resort in its home market of Malaysia in anticipation of its new resort in Singapore. Mr Lim ordered a major refurbishment of Genting Highlands Resort, commencing in 2007. This wasn’t rocket science, given that the existing resort was starting to look a bit dated in the light of developments in Macau and elsewhere. Nonetheless, Genting’s understanding of the need for a modern marketing strategy and cross-promotion enabled the company to redefine its Genting Highlands facility as a hilltop resort with some gaming, rather than a hilltop casino with some entertainment. This approach has helped to familiarise Genting’s casino customers with the integrated resort concept well in advance of RWS’s opening. It brought immediate results, with the annual number of visitors to Genting Highlands peaking at almost 20 million.

RWS in Singapore will feature not only a casino but a Universal Studios theme park and animation studio, six hotels, the world’s largest marine park, meeting facilities, shops, and a 1,600-seat theatre.

Elsewhere, Genting has been careful not to over-extend its gaming ambitions. Plans formulated last year for a casino resort and Universal Studios theme park at Manila Bay in The Philippines faded in 2009. Privately, Genting executives denied that a formal deal had ever been on the table.

As we reported last year, Under Mr Lim’s watch, Genting has expanded its overseas interests. Since his appointment as Genting’s president and chief executive in November 2002, and later as chairman in December 2003, Mr Lim has overseen Genting’s acquisition of Britain’s Maxims Casino Club, an exclusive high-end casino, and raised its stake in London Clubs International, which operates casinos in London, Egypt, South Africa and Lebanon. Through its Genting Stanley (formerly Stanley Leisure) subsidiary, Genting is now effectively the largest casino operator in the UK, according to the company. Mr Lim also drove casino developments for Genting in Australia (Burswood and Adelaide casinos) and brokered a partnership to operate Subic Bay Resort and Casino in the Philippines.



2 (2) Sheldon Adelson Chairman and CEO, Las Vegas Sands Corp.

What a difference a year makes. Like Icarus, the boy in Greek mythology that flew a little too close to the sun, Mr Adelson saw the wings of his business, Las Vegas Sands Corp., lose an alarming number of feathers in a short space of time. Unlike Icarus, Mr Adelson has been able to keep himself airborne.

Not only has Mr Adelson stayed aloft, he has also presided over what amounts to a clearout of executives at the very top level of his organisation—including the high profile departure of Bill Weidner as President and Chief Operating Officer. Now, according to analysts, LVS, along with Las Vegas rival Wynn Resorts, could be poised to raise extra cash on the Hong Kong stock market with an initial public offering of shares in a local unit spun off from the parent—taking advantage of an upward bounce in Asian equity prices.

It’s certainly a turnaround from the final quarter of 2008. Then, in the aftermath of the global credit squeeze, the capitalisation of Mr Adelson’s casino operating business

second place on our list indicates the question posed by auditors has been answered—at least for the time being. Despite his company’s significant debt burden, his casino operations continue to generate greater annual EBITDA than almost any other gaming company in the world.

LVS did experience a slight setback in July when it had to concede that Marina Bay Sands, its integrated resort in Singapore, would not open before the end of 2009 as it had hoped. The company is confident, though, that once open early next year, MBS will supply 40% of LVS’s global annual EBITDA by 2011—which the company has estimated will amount to US$700 million in cash terms.

plummeted earthward before recovering and recommencing its upward trajectory. Nevertheless, the fallout from the global panic proved costly. By August this year, LVS stock held only 11% of the value it registered at the beginning of 2008. At the same time, LVS’s debt burden—run up as part of an aggressive expansion programme—was only partly offset by the mothballing of some building work on Cotai. Mr Adelson was not alone in his discomfort. He had plenty of company both inside the Asian gaming sector and beyond. Where Mr Adelson was under more specific pressure was in the warning from his auditors, filed in November with the US Securities & Exchange Commission, that there was some question mark about LVS’s viability as a going concern. That related to whether LVS could meet its debt covenants under the new, tougher trading conditions.

While the SEC filing generated a lot of negative publicity for LVS, it shouldn’t be forgotten that in a post-Enron world, US standards on financial disclosure remain some of the toughest in the world. This means US auditors are required to cry wolf earlier and more often than in almost any other jurisdiction in the world.

The fact that Mr Adelson remains in

3 (1) Stanley Ho Hung-sun Chairman and Managing Director,

Sociedade de Jogos de Macau (SJM)

Dr Stanley Ho is the founder not simply of the modern gaming industry in Macau, but also of Macau as a world-ranked tourism destination. In recognition of his achievements, he was presented with a G2E Asia Visionary Award on the first day of G2E Asia 2009, held in June at the CotaiExpo™ convention centre.

Dr Ho made his first fortune—outside gaming—before Steve Wynn, number 4 on this year’s list, was even born. Dr Ho also has nearly half a century of experience in serving Macau’s predominantly Chinese gamblers. While that may give him an edge in terms of anticipating the needs and direction of the market, Dr Ho’s advanced age is likely to be an increasingly important factor when it comes to the future of his company.

Macau’s most famous entrepreneur will celebrate his 88th birthday in November. He must naturally have given some thought to how his businesses—in particular his casino operating company, Sociedade de Jogos de Macau (SJM) and his general Macau investment vehicle, Sociedade de Turismo e Diversões de Macau (STDM)—will be run

after he leaves the stage. The market is likely to focus increasingly

on succession issues, given that Dr Ho recently underwent surgery at Hong Kong Adventist Hospital and spent time in intensive care there after reportedly tripping and hurting his head at home. The news sent shares in SJM Holdings, the Hong Kong-listed arm of Dr Ho’s casino empire, falling by as much as 5.5% on the day.

Nonetheless, any company led by Dr Ho arguably retains a significant competitive edge against the foreign competition. This is in terms of depth of local contacts, the standing he personally has in government circles and his ability to understand their way of thinking, as well as his ability to think and negotiate strategically so that his business interests extract maximum advantage from the regulatory and political framework of Macau.

His insight about the local market paid off in spades in the months before and after the recent global credit crisis. His decision to limit capital expenditure on new infrastructure, to control business overheads aggressively and to focus on effective cross marketing of his properties in an aggressively bullish market at a time when some of his rivals were leveraging themselves to the hilt, proved to be a far sighted and highly resilient business formula. It allowed him to spread his bets

and extend his brand coverage across the Macau peninsula—the traditional heartland of the Macau casino industry—at modest, incremental cost with projects such as L’Arc (due to open in September 2009) and Oceanus. Thus far, the strategy has meant that Dr Ho’s casinos managed not only to hold on to last year’s market share based on gross gaming revenues, but also actually to build on it.

The alternative market strategy—putting nearly all one’s investment eggs in one capital-intensive integrated resort



4 (3) Steve Wynn Chairman and CEO, Wynn Resorts

appears to the least financially-stressed of all the foreign outfits in that market and at home during the current downturn.

Not only has he managed to fund Encore Macau—the VIP-focused extension to his sole Asian property, Wynn Macau—at a modest capex, but he has also managed to position the company for an initial public offering (IPO) that could raise as much as US$2 billion once conditions are deemed favourable.

In July, Wynn Resorts announced one of its subsidiaries had filed an application with the Hong Kong Stock Exchange Ltd in connection with a possible listing on the exchange. It added at that time that no decision had yet been taken regarding the timing or terms of any IPO, though sources familiar with listing procedures in Hong Kong said it normally takes three months to process an application.

Steve Wynn’s influence on Macau extends well beyond the walls of Wynn Macau, right up to the front door of his industry rival Sheldon Adelson’s Venetian Macao property. Mr Adelson may dispute the idea that Mr Wynn was an influence. But it’s a matter of record that it was Mr Wynn, back in the 1980s, who first had the bright idea of creating a casino resort on the Las Vegas Strip that placed as much importance on dining and entertainment as on gaming. The result was the Mirage. It was this pioneering of the integrated resort concept that is also credited with having secured Mr Wynn a Macau casino concession. It’s fair to say that Mr Adelson, with his background in trade exhibitions,

enhanced and refined Mr Wynn’s concept in Las Vegas by developing conference facilities at gaming resorts to ensure hotel rooms remained full all year round. Mr Adelson then exported this concept to Macau, and The Venetian Macao was born.

Mr Wynn showed considerable acumen in the Macau market by converting a sub licence granted to him into a cool and virtually cost-free US$900 million profit. Why he had the sub licence in the first place is almost worth an Asian Gaming 50 – 2009 entry of its own. The concise version: only three concessions were awarded, but following Las Vegas Sands Corp’s split with its original bidding partner, Galaxy, each concession holder was awarded a sub-concession in order to allow LVS and Galaxy to go their separate ways without re-opening the bidding process. Stanley Ho sold his sub-concession to the joint venture involving his daughter Pansy and MGM MIRAGE for US$200 million. Mr Wynn, meanwhile, sold his sub-concession to the Melco Crown joint venture in April 2006 at a price that covered three quarters of the initial US$1.2 billion cost of Wynn Macau, which had its first phase opening in September 2006.

Mr Wynn is known for his ferocious energy. He needed it recently when he made a 28-hour round trip to Wynn Macau just to attend a wedding reception for Jonathan Zeman, son of Wynn shareholder and director Allan Zeman. He didn’t even have time to stay the night, but as a showman like Mr Wynn understands, courtesy and appearances count.

contribute to escalating junket commission rates). Each, however, quickly realised that junkets are crucial to operating a high-roller business in Macau, and adopted the familiar arrangements created by Dr Ho.

For the time being, Dr Ho’s grasp of strategic issues in the Macau market remains unparalleled. It was Dr Ho who was one of the driving forces in the creation this year of a trade association for Macau operators. His aim was to reduce financial pressure on the operators during a global recession by eliminating irrational or excessive competition among them. The arrangement was formally recognised in July with a signing ceremony at Dr Ho’s flagship Grand Lisboa property.

of ‘non-negotiable’ or ‘dead’ chips by the players they brought in. The commission serves not only as a reward to junkets for bringing their clients to a particular casino, but also for extending credit to those clients, since the bulk of VIP gamblers in Macau come from mainland China and are unable to bring large sums of money with them owing to China’s currency controls. In addition, gambling debts are not legally enforceable in China, so the junkets are also charged with the sometimes onerous task of collection.

Each successive foreign operator arriving in Macau proclaimed it would court high-rollers directly and do away with the junket middle men (and therefore not

basket—as occurred with Las Vegas Sands Corp, led by the person ranked number two on this list, has proven to be a little more challenging in the current straitened credit markets.

Dr Ho also deserves a nod as the pioneer of Macau’s unique VIP market structure—involving operators of private VIP rooms and the rolling chip commission programme—that continues to generate the bulk of casino revenue in Macau and virtually all of Asia.

Starting in the mid-1980s, the VIP rooms located within Dr Ho’s casinos took on some of the administrative burden of the gaming operations in exchange for a share of revenue. Meanwhile, junkets received a commission on the purchase

Steve Wynn was the least bullish in terms of spending commitments of all the foreign-owned casino companies in Macau. A consequence is that his company

9


5 (6) Lawrence Ho Yau-lung Co-Chairman and CEO, Melco Crown Entertainment

6 (5) Francis Lui Deputy Chairman, Galaxy Entertainment Group

Lawrence Ho’s apprenticeship in the Asian gaming industry has been fully served and Dr Stanley Ho’s son is now ready for the next phase—executive maturity. That certainly seems to be on the agenda following the opening of City of Dreams by Mr Ho junior’s joint venture with James Packer’s Australia-based casino company Crown Ltd, known as Melco Crown Entertainment Ltd (MPEL) and listed on Nasdaq in New York.

City of Dreams, located opposite Venetian Macao on Cotai, has the potential to take Mr Ho and his partner into Macau’s big league. Prior to its launch on 1st June, MPEL’s mass market coverage was limited to Mocha Clubs, the slot machine clubs away from the territory’s casino hot spots and drawing mainly local players. Most of MPEL’s revenues were coming from the VIP-focused Altira Macau (formerly known as Crown Macau) on Taipa, and that property’s success was founded on the market-leading 1.35% commission rate on rolling chip volume offered to betting agents in order to get them to bring their high roller

high performing product. The local slot players at Mocha clubs are a distinctively different clientele from the slot players coming from Hong Kong and Mainland China that populate the casinos’ main floors. Mocha showed that careful selection of slot product, attractive surroundings, effective marketing and enthusiastic leadership gave the lie to the notion that ethnic Chinese players either didn’t like slots or didn’t trust them.

A question for the future is whether Lawrence Ho will play any kind of role in running STDM and SJM when his father leaves the stage, or whether the assets of his father’s company could be divested and absorbed into the gaming operations of Lawrence Ho and his sister Pansy.

customers in the doors, up in the lifts and out to the VIP gaming suites. Now that the industry (with some prodding from the government) has agreed in principle to a 1.25% cap on the VIP commission rate, Altira’s competitive advantage has effectively been cancelled out.

Mr Ho’s first executive role in the gaming industry was as managing director of Hong Kong-listed Melco under the chairmanship of his father. Prior to joining Melco, Mr Ho worked at the merchant bank Jardine Fleming from September 1999 to October 2000 and iAsia Technology Ltd (the predecessor of Value Convergence Holdings Ltd).

Melco was a long-established company with a relatively low profile before Mr Ho took over. He used it as a vehicle to transform Macau’s local slot club market. Mocha, a Ho-family business unit operating slot machine clubs aimed mainly at local players, was rapidly developed into the more contemporary and marketing-focused organisation branded as Mocha Clubs. The relaunch involved an extensive refurbishment programme of the company’s existing properties and the addition of some new ones, and the creation of Macau’s first VIP slot lounges and main floors stocked with

Francis Lui took a momentous decision earlier this year when he decided to put Galaxy’s nearly-finished integrated resort on Cotai into what amounts to suspended animation. He cited the need for caution until market conditions were shown to be right. That, in part, accounts for him slipping one place from fifth to sixth in this year’s Asian Gaming 50 – 2009 list. Mr Lui could reasonably argue he doesn’t care where he sits in any list, provided he offers consistent and improving value for shareholders and uses his investors’ money wisely.

The company faced a dilemma familiar to rapidly expanding industries. This was whether to conserve cash to service existing debt on venues already opened, or whether to press on with launching new venues. The latter judgement required faith that there was enough liquidity ain the Macau casino industry to service the start up costs of the new venue. Mr Lui and his executives were not convinced that Macau—despite its significant revenue growth even in the second half of 2008—currently has the necessary ‘legs’ to support a strategy of aggressive expansion of supply. In reaching their decision, Mr Lui and his executive team took into account the global credit crisis and the knock on effect it appears to have had on China’s exporting industries and the credit

rating of Chinese VIP gamblers.In the end, Mr Lui and his team opted for

what might be seen as a classically Chinese piece of pragmatism. This was to continue building the company’s Cotai resort but to stop short of fitting it out, while at the same time reducing overall corporate debt by making cash-hungry bond holders an offer they found hard to refuse.

Delaying the interior fit out of the property until the eve of its launch certainly makes sense. That’s in terms of the potential for cost savings by beating down suppliers on price in a distressed market. It also makes sense because of Macau’s notoriously humid sub tropical climate, which can render any unoccupied, non air-conditioned property mould-ridden within weeks.

Time will tell if the decision to delay opening Galaxy’s Cotai resort was prudent and far sighted, or a missed opportunity.

Galaxy is an interesting animal compared to the other five concessionaires and sub-concessionaires in Macau. The Lui family-run core company, K. Wah Construction Materials, had no direct involvement in the gaming industry prior to liberalisation of the Macau market in 2002. This is not necessarily a disadvantage. Not only did Galaxy hire experienced gaming industry people to help guide it, but family members,


7 (9) Kazuo Okada Chairman, Aruze Corp Vice-Chairman, Wynn Resorts

As a result of the credit crisis and slumping sales of Aruze’s pachinko and pachislot machines in its home market of Japan, Kazuo Okada’s net worth declined to US$900 million at the start of 2009, according to the Forbes.com’s ‘Japan’s Richest’ list. So though he is no longer technically a self-made billionaire, he could soon regain that mantle following recent aggressive moves to establish Aruze as a leading international slot machine manufacturer, the bounce-back in value of Aruze’s 21.8% stake in Wynn Resorts and realisation of Mr Okada’s casino operating ambitions.

Mr Okada built his fortune on Aruze’s success in the Japanese pachinko and pachislot machine manufacturing markets. The gaming machines using steel balls are one of Japan’s most popular forms of entertainment and Aruze is the second largest manufacturer of them. Over the years, Aruze (formerly Universal Distributing) has expanded into the production of other electronic gaming machines, amusement machines and video games.

Early this year, Aruze Gaming acquired US gaming-machine content supplier True Blue Gaming, which is now tasked with developing content for all Aruze Gaming offices around the world. As part of the agreement, Aruze Gaming acquired the talents of Kent Young, formerly Global General Manager of Aristocrat Technologies, and game developer Scott Olive, who was responsible for creating some of Aristocrat’s most popular and innovative games.

licence with the Nevada Gaming Commission (thanks in no small part to his friend Steve Wynn’s vocal support) and sells its machines in Macau, the US and Australia. In the company’s 39-year history, the Okada family has managed to retain ownership of a controlling share in Aruze, assuring Mr Okada also has the final say on his company’s future.

Aruze’s 24-player baccarat machines sit on the gaming floor at Wynn Macau, and Steve Wynn honoured Mr Okada and his family by naming Wynn Resorts’ Japanese restaurants Okada. Their friendship will truly have borne fruit if Wynn Resorts and Aruze successfully gain a licence to operate a property in Japan.

Aristocrat, of course, is the undisputed Asian slot market leader, though it could well lose some of its position to Aruze now that Messrs Young and Olive have joined the latter’s ranks.

The value of powerful friends in the gaming industry cannot be understated, and Kazuo Okada has discovered that a friend in need is a friend indeed. His friendship with Wynn Resorts’ Steve Wynn has opened many doors for Mr Okada’s Tokyo-listed gaming machine supplier Azure, but it has the potential to open a much bigger door for Mr Wynn when casinos are eventually legalised in Japan.

The pair’s business relationship began in 2000 when Steve Wynn was looking for new financial backers to open Wynn Las Vegas. Mr Okada answered his call with a substantial investment that netted Aruze the single largest stake in Wynn Resorts—although Steve and Elaine Wynn effectively own a larger overall share of Wynn Resorts through their stake in Aruze USA, it remains to be seen whether Aruze or Steve Wynn ends up with the largest stake once the Wynns’ divorce proceedings, begun in March this year, are finalised.

The business ‘marriage’ between Mr Okada and Mr Wynn may not have been made in heaven proper, but it certainly offered—and continues to offer—a harmonious resolution to both men’s needs. Mr Wynn and Mr Okada’s mutual interest in expanding their gaming assets and sales globally has seen them collaborate on a number of projects, including Wynn Macau. Since October 2002, Mr Okada has served as vice chairman on the Wynn Resorts board, affording him an even greater say on the company’s future direction.

Today, Aruze holds a manufacturer

including Mr Lui, showed themselves willing to question received wisdom within the industry, with a focus always on fiscal caution. Evidence of this was when Galaxy decided to follow a bond issuing route to debt finance in 2005-06, at a time when banks were lining up to throw loan money at the Asian gaming sector.

Galaxy’s position appeared to be vindicated earlier this year when the company was able to ‘retire’ US$170 million of bond debt by offering cash to liquidity-seeking bond holders, at a cost to Galaxy

of only US$86 million—in effect a 50% discount. This happened at a time when some of Galaxy’s market rivals were stuck with covenants on bank loan debt, providing in some cases punitive penalty clauses for early payback. That, in effect, is an inevitable by-product of a system where banks borrow short at high rates and lend long.

Mr Lui showed himself to be a pragmatist and also an opportunist (in the best sense), when the newly constituted Galaxy Entertainment Group made a quick entry into the Macau market by—beginning in

2004—opening a handful of casinos within hotels owned by other companies. These properties, branded City Clubs, are still operating within the Waldo, Rio, President and the Grand Waldo venues. But it was Galaxy’s flagship property, StarWorld Hotel and Casino, that really enabled the company to place its stamp on Macau’s gaming landscape. The award-winning property continues to punch above its weight, both in business performance terms and general consumer appeal, relative to the capital invested in it.



8 (8) James Packer Chairman, Crown Ltd Co-Chairman, Melco Crown Entertainment

The last 12 months have produced mixed fortunes for James Packer, the chairman of the Australia-based casino operator Crown Ltd and co-chairman of the Macau casino developer and operator Melco Crown International Ltd (Nasdaq: MPEL).

Starting with the good news, MPEL’s first integrated resort in Macau, City of Dreams, opened at the beginning of June this year. It puts Crown Ltd firmly on the map as a player in the East Asia gaming market.

On the not-so-good news front, some of Mr Packer’s North American casino investments—bought at the top of the market—performed poorly. For example, he experienced a US$290 million write down on Las Vegas-focused gaming company stocks, including a stake in Harrah’s. One bet Mr Packer was considering last year but is probably very glad in hindsight he didn’t make, was to build a Crown casino in Las Vegas. The US$5 billion scheme would have consisted of a 5,000-room hotel and a 324-

40 Richest’ list, also published by Forbes.On the public relations front, Mr Packer

is a less prominent figure in Macau than his joint venture partner Lawrence Ho of Melco International Development. The latter tends to front the organisation when it comes to media announcements and interviews. This is not to say Mr Packer takes no interest or leadership role in the business, but he does not appear to relish the razzamataz that goes with being a casino entrepreneur in the way that Sheldon Adelson or Steve Wynn does.

metre tower, which would have made it the highest building in the city.

Mr Packer, the son of the late Australian media entrepreneur Kerry Packer, inherited US$5 billion in business interests after Mr Packer senior’s death in 2005. He then restructured the business, spinning off the media assets and placing his bets mainly on the gaming sector.

This time last year, Forbes estimated Mr Packer’s net worth at US$5.7 billion. This year, after a combination of a crash in global equity prices and write downs at Crown and Consolidated Media, Forbes put his net fortune at US$2.5 billion—a fall of 56%.

Following these setbacks, Mr Packer displayed elements of the ‘ordinary bloke’ community solidarity that characterises even Australia’s super rich. He put one of the toys traditionally associated with a billionaire lifestyle—namely his US$50 million yacht—up for sale. He also postponed delivery of a US$60 million private jet and left a swimming pool complex at his family property half-built.

The bigger they come, the harder they fall. Relative to the super rich around him, Mr Packer is holding his own. In May this year, he reclaimed the top spot on the ‘Australia’s

9 (-) Kwon Oh-nam President and Chief Executive, Grand Korea Leisure

a year ago, he has succeeded in boosting the performance of the organisation’s three casinos, operated under the Seven Luck brand. In doing so he has bucked the global recessionary trend.

GKL, a subsidiary of the Korean Tourism Organization (KTO), was established in 2005. It is the only state-owned casino operator in South Korea, and is likely to be part privatised with a flotation on the country’s stock exchange in the second half of 2009. GKL plans to sell off a 49% share in the business between now and 2010 as part of the Korean government’s plan to raise cash from public assets and reduce public spending.

As the top boss at GKL, Mr Kwon has control of three of South Korea’s 17 licensed casinos. Two of GKL’s establishments are located in Seoul and one in Busan—all under the Seven Luck brand.

Since the venues opened in 2006, GKL has become the biggest single casino operator in South Korea by revenue, with an annual gross of US$284 million last year.

The most obvious hurdle to overcome for all Korean casino operators in building the national market is that only one of Korea’s 17 legal casino venues—Kangwon Land Resort & Casino in Jeongseon-gun—is open to locals. All the others are by law restricted to foreigners.

The 64-year-old Mr Kwon is well placed to act as a public relations face for the

industry in the battle to relax that regulation. He has impeccable contacts within South Korea’s sometimes labyrinthine bureaucracy from his days at the Korea Trade Investment Promotion Agency (KOTRA). He held a variety of positions there, including heading the agency’s North American office.

“An important goal of mine is to help improve the perception of casinos among policymakers, politicians and the general public, making them aware that we are running a good and clean business that’s earning foreign money for the country at a difficult time,” Mr Kwon was quoted saying recently.

If South Korea is to compete with Singapore (which is due to open its first casino resort early in 2010) and possibly with Taiwan and Japan, which have both looked at legalisation of casinos, then the Korean industry must be allowed to have bigger venues with more services, such as holiday resort facilities or medical services, Mr Kwon has stated.

Since taking up his post in July 2008, Mr Kwon has travelled to several US locations including Hawaii, New York and Washington D.C.—communities with significant populations of ethnic Koreans and Japanese—to pitch a concept he calls the “business casino”. This is essentially a version of the Las Vegas integrated resort model, but scaled down and adapted for an East Asian

Mr Kwon plays an important role not only in running an important part of South Korea’s legal casino sector, but also in promoting a positive image of the industry to sometimes sceptical lawmakers.

Since his appointment as President and Chief Executive of Grand Korea Leisure (GKL)


10 (25) Jack Lam Yin Lok Chairman, Jimei Group

operations in Macau, the Philippines and further afield.

Jimei Group has expanded high roller operations quickly in Macau since 2008. It has opened the LeRoy VIP Club at SJM’s Grand Lisboa and the International Club at Wynn Macau, as well as VIP rooms at MGM Grand Macau, Sands Macao and The Venetian Macao.

Jimei Club at Melco Crown Entertainment Ltd’s City of Dreams opened in June 2009. The latest addition to the Jimei stable is the Jimei VIP Club at the Four Seasons Macau, which began operating in July 2009. Jimei’s market coverage makes it probably the biggest single supplier of VIP players in the Macau market. Jimei Group has also opened VIP service centres and travel offices in Taiwan and has similar plans for Singapore.

The company runs the casino cruise ship M.V. Jimei sailing out of Hong Kong. In addition, Jimei has interests in South Korea and the Philippines. Dr Lam became a junket operator in the Philippines in 1994. In 2000, he acquired Fort Ilocondia Resort & Casino and, in 2004, Fontana Leisure Parks & Casino. Both properties have enjoyed substantial growth in business under his leadership, offering a wide range of facilities including villas, water parks and hotels, as well as gaming.

Dr Lam was born in Mouming in Guangdong province, Mainland China, and moved to Hong Kong in 1979 at the age of 18. According to his official company biography, he started out as a bookkeeper at his uncle’s factory, earning only HK$1,000 (US$128) a month and sending most of his salary back home to help his family. He

got his introduction to gaming through his uncle, who played regularly in Macau. After accompanying his uncle on several trips to Macau, Dr Lam built up a network of contacts and started working as a junket sub-agent—a ‘ground floor’ role that gave him insights into building and maintaining customer relationships.

In 1981, Dr Lam started work as a representative for a small junket in Macau. Thanks to what he describes as his attention to detail and a solid understanding of the market and of his clientele, he gradually emerged as a leading junket operator.

Expect to hear more about Jimei Group in Macau and beyond in the next 12 months, especially if the regional economy improves and China relaxes its restrictions on travel to Macau under the individual visit scheme.

Prominent Asian gaming junket operator Dr Jack Lam moves up this year’s list thanks to the rapid growth of Jimei Group’s Macau operations since 2008. VIP play remains the lifeblood of Macau’s gaming turnover, with VIP revenue of 33.1 billion patacas (US$4.1 billion) in the first half of 2009 accounting for 64.4% of total casino revenue in the period.

Junket operators are essentially facilitators. They connect casino operators with high net worth players. Most importantly, they coordinate gambling credit for high rollers from Mainland China and other markets where restrictions apply on cross-border currency movements. They also ensure that those credit facilities are honoured by the players using them. As facilitators, junket operators must be strong negotiators with all the parties and have enough flexibility in their outlook to be able to adjust their business model to shifting market conditions. Dr Lam ticks all those boxes in terms of his approach to business.

In late 2008, Dr Lam also became a Macau casino operator in his own right, with the acquisition of a casino—at the former Mandarin Oriental Hotel (now the Grand Lapa Hotel) in downtown Macau.

The refurbished casino, relaunched under Jimei branding and operated under a sub-licence from Dr Stanley Ho’s casino operating company SJM Holdings, opened its doors to high rollers in January. The venue complements Jimei’s existing junket


clientele. As such, it includes the integration of gaming with business meetings, medical services and shopping.

GKL says visitors to the Seven Luck casino near COEX in southern Seoul will soon have the option of a health check-up at the private medical clinic located in the nearby Intercontinental Hotel, while the Busan Lotte Hotel outlet will soon have a health check-up centre.

Under Mr Kwon’s leadership, the performance of the Seven Luck venues in the first half of 2009 has bucked the recessionary trend seen in the wider Asia Pacific and global economies. After setting new highs in revenue with more than 43

billion Korean won (about US$31.8 million) in January, the venues broke previous attendance records for February, recording 105,000-plus visitors.

The 34.7 billion won revenue in March represented nearly 34% growth year-on-year, while the 100,000-plus visitors that month was up approximately 52% year on year.

The company said most of the growth in the first quarter of 2009 was due to a sharp rise in the number of Japanese visitors attracted by the weakness of the local currency, the won, against the Japanese yen. The three Seven Luck outlets combined to draw 56,977 Japanese visitors in March 2009,

about 70% more than a year earlier.GKL says that on current projections,

it expects around one million visitors to its casinos this year, bringing in 400 billion won in revenue.

Mr Kwon has gone on record saying Seven Luck’s biggest strength is in providing resort-style services to cover the tastes of a whole family rather than lone gamblers.

GKL was also talking earlier this year of ramping up its slots offer in a market that, like Macau, has until now been dominated by table play. Recession permitting, it could provide some exciting opportunities for equipment suppliers during challenging times.



11 (14) Pansy Ho Chui-king Managing Director, MGM Grand

Paradise Managing Director, Shun Tak

Holdings

12 (-) Linda Chen ChiefOperatingOfficer Wynn Resorts (Macau), S.A.

The first half of 2009 has certainly been interesting for Pansy Ho in the gaming and property development fields. The effects of the global credit crunch caused financial challenges in the gaming sector, where her 50:50 partner in Macau, MGM MIRAGE, was for a while left dangerously exposed and looking over-borrowed on its US$8 billion CityCenter project in Las Vegas. A relatively lacklustre performance in VIP revenue from their joint venture Macau property, MGM Grand Macau, despite the bull market that lasted up to the end of the first half of 2008, did little to dispel the gloom.

Ms Ho was also under some pressure in her other role as managing director of Shun Tak Holdings, the Macau-focused shipping and property conglomerate chaired by her father Dr Stanley Ho. Shun Tak’s ambitious residential project, One Central, next door

required extended hospital treatment due to a reported fall at home. Regardless of the SJM succession issue, Ms Ho’s public profile is likely to grow in the coming years if, as expected, she clears the regulatory hurdle related to her partnership with MGM MIRAGE.

to MGM Grand Macau suffered from the international crisis. In one case, an Icelandic insurance company that had an option on a whole tower at One Central was forced to pull out of the deal because of its own liquidity crisis.

If Ms Ho thought she was having an exciting year, it got even more exciting in May. State attorneys in New Jersey indicated they would advise the New Jersey Gaming Commission that Ms Ho was ‘unsuitable’ to be a partner for MGM MIRAGE. The claim of unsuitability is thought to relate to unproven allegations made by US Federal Authorities about triad criminal involvement in VIP rooms at casinos operated by her father, Dr Stanley Ho. This stance matters to MGM MIRAGE because it jointly operates with Boyd Gaming a successful casino property in Atlantic City New Jersey. In theory at least, the state authorities have the right to suspend or withdraw MGM MIRAGE’s gaming licence.

Ms Ho’s role as a potential heir to her father’s business empire was thrown into sharper focus during August, after Dr Ho

background as a native of Shanghai plus a rigorous academic education at Cornell and then Stanford—two of the best universities in the United States—helped to forge one of the most precious of commodities in global business. That is, a highly intelligent and motivated executive who can think and communicate ideas to customers and employees in both a ‘Chinese’ and ‘Western’ way.

The result has been that despite Wynn Macau’s modest footprint in the market and a rapid growth of property supply, Wynn has managed to maintain a Macau share in the mid to high teens of percent of gross gaming revenue.

Ms Chen has been credited with two major successes. The first was efficient and cost-effective leadership in building Wynn Macau phases one and two and the successful implementation of Encore, the extension to VIP capacity currently under construction. The second was her understanding of the need to have in place an effective network of high roller agents well in advance of Wynn Macau’s phase one opening in September 2006. This understanding allowed Wynn Macau to grab market share from the opening day, rather than having to play the catch up game facing those Western operators who

learned the hard way that direct players are hard to come by and that the mass market won’t yet fill the revenue gap.

MGM MIRAGE, which has a 50% interest in MGM GRAND Macau next door to Wynn Macau, is probably kicking itself that it didn’t hold on to Ms Chen’s talents. If it had, then MGM GRAND Macau’s performance might have been much better.

Ms Chen was Executive Vice President of International Marketing for MGM MIRAGE from June 2000 through May 2002, based in the United States. In that capacity, she was responsible for international marketing operations for MGM Gran Las Vegas, Bellagio and Mirage.

MGM MIRAGE’s loss has clearly been Wynn Resorts’ gain. In 2007, in recognition of her achievements, Ms Chen was appointed to the Wynn Resorts board. There she works alongside Allan Zeman, the Hong Kong-based entertainment industry entrepreneur, and Kazuo Okada, the pachinko manufacturer-turned-slot king who also gets an entry on this year’s Asian Gaming 50 – 2009 list.

Prior to MGM MIRAGE, Ms Chen served in various senior positions with the Mirage, MGM Grand and Bellagio Hotels and opened each of the three properties in 1989, 1993, and 1998, respectively.

Linda Chen is distinctive not only for being one of the world’s highest paid female business executives, but also for her ability to maintain a high level of credibility with gaming industry peers in the East and West.

Steve Wynn’s decision to appoint Ms Chen as Chief Operating Officer of Wynn Resorts (Macau), S.A., in 2002 was all about pragmatism, not tokenism. Her


14 (7) Winfried Engelbrecht-Bresges

CEO, Hong Kong Jockey Club

13 (-) Steve Jacobs President, Macao, Las Vegas Sands Corp

The CEO of the Hong Kong Jockey Club (HKJC) drops seven places to number 14 on this year’s list after presiding over a 30% year-on-year fall in club profits for 2008 to HK$700 million on a turnover only 1.5% down from 2007.

The deterioration in the results for the club—the horse racing, lottery and sports betting monopoly in Hong Kong—cannot be laid entirely or even mainly at the CEO’s door. The Jockey Club, which donates all its operating surplus to charity, is often asked by the Hong Kong government to subsidise public spending. An example is when, in 2007, the government asked the HKJC to bear the full HK$1.3 billion cost of a suggested new MTR (Mass Transit Railway) station next to the club’s Happy Valley race course on the eastern side of Hong Kong Island. At the time, Mr Engelbrecht-Bresges, a diplomatic-minded and highly-able administrator who is also one of the world’ leading authorities on commercial horse racing, signalled (in a very mild way) his frustration with the government’s position on his personal blog.

The fact that the MTR station didn’t

Steve Jacobs had one of the toughest jobs in Asian gaming when he took up his new post in May 2009. That was to reduce costs in Las Vegas Sands Corp’s Macau operation by cutting jobs, while at the same time maintaining the morale of the remaining staff and positioning the business to take advantage of better trading conditions when they arrived.

Mr Jacobs was arguably well suited to the task. His previous job was as President and CEO of VGI, a management services group specialising in turning around and building companies in the travel, transportation and hospitality sectors.

Revenue generation was never the problem for Las Vegas Sands Corp (LVS) in Macau. The problem was keeping down operational costs on the huge Venetian Macao and generating profitability in order to help pay off project debt on that property as quickly as possible.

Given the billions of dollars of capital expenditure committed to Macau by LVS, Mr Jacobs’ operational cuts were, relatively

more aggressive marketing tactics over the coming years, rather than merely being provided with an Internet fire wall against overseas online betting sites. Standing still could risk erosion of the player base with the core horse racing product as older race goers die off and the sport is increasingly forced to compete for consumers’ dollars with electronic and casino entertainment in Macau and beyond. That’s especially the case if Macau Jockey Club’s product offer continues to improve and if Macau casinos are allowed to run sports betting books from their premises, as was mooted last year, or if Macau ever gets round to licensing online betting.

happen might be connected to the fact the HKJC was also asked by the city authorities —and agreed—to spend HK$1.2 billion plus on facilities for the equestrian events at the Beijing Olympics last year. These included: air-conditioned stables for 200 horses; a world-class equine veterinary clinic; farrier services; 13 training arenas (including a large air-conditioned indoor arena); various galloping tracks on the infield of the Sha Tin racecourse and a 5km Olympic cross-country course and temporary stabling facilities at the Hong Kong Golf Club and the Jockey Club’s Beas River Country Club. The cost of those facilities amortised over several years may well account for some or all of the 30% fall in operating profit recorded by the Club in 2008.

When the Olympic funding deal was first struck back in 2005, the HKJC was told the government would review the tax position of the Club. The fact that Jockey Club chairman John Chan went public this July complaining about the Club’s tax burden suggests those talks have not yet been concluded to the mutual satisfaction of both sides. The government currently imposes a 72.5% levy on net stake receipts for horse racing, and a 50% levy on net stake receipts for soccer betting.

The HKJC may need to be given more autonomy to pursue new product lines and

speaking, a drop in the ocean. Politically, however, in terms of helping to maintain investor confidence, they were vital. LVS had to send out the message to investors that it was aggressively managing its costs in order to turn LVS Macau very quickly from a cash-eating machine to a profit-generating one.

Some of Mr Jacobs’ decisions were made for him after the Macau government indicated it expected casinos to cut non-residents’ jobs before those of the locals.

After his appointment, Mr Jacobs met the local media and explained that despite a likely cut of 4,000 posts, it was a temporary measure and that the company expected to hire again as soon as practically possible.

He said the government was mandating some of cuts by withdrawing 1,500 foreign worker permits. Another 600 or so hires were moved over to Singapore.

In August 2009, Mr Jacobs assumed the role of President and CEO for Sands China Limited, a wholly owned subsidiary of LVS. In this role, he is responsible for overseeing and integrating all aspects of the company’s strategy, financing, operations and development efforts for LVS interests in Macau. They include the Sands Macao Hotel, The Venetian Macao-Resort-Hotel, and the Four Seasons Hotel Macao, Cotai Strip® and

The Plaza Casino.LVS Chairman Sheldon Adelson indicated

recently that he expected construction work on suspended Cotai plots five and six to begin by Christmas. A number of analysts, meanwhile, have indicated that Venetian Macao Ltd, the unit that manages The Venetian Macao complex, could generate US$1 billion in EBITDA (earnings before interest, taxation, depreciation and amortisation) over the next 12 months.

If that happens, expect to see Mr Jacobs smiling more often during company press conferences.


15 (26) Vincent Tan Chee Yioun Chairman and CEO, Berjaya Group

Vincent Tan makes his second appearance on the Asian Gaming 50 – 2009 list thanks to his gaming and lottery management interests in Malaysia.

Mr Tan bears the dubious distinction of being the only Malaysian US dollar billionaire to have dropped out of this unofficial ‘club’ of the super rich in the last year. He has been hit by the triple whammy of the global financial crisis, the accompanying 10% depreciation of the Malaysian ringgit against the US dollar, plus a decline in share prices of his companies.

Those setbacks notwithstanding, Mr Tan, a father of 11, is still worth an impressive US$750 million according to Forbes.com’s

activities in Malaysia.Berjaya Sports Toto Berhad is also involved

in the leasing of online lottery equipment. Other activities include manufacturing and distributing computerised lottery systems.

Mr Tan got his start as a McDonald’s franchisee, before acquiring a controlling stake in the share capital of Berjaya Kawat Berhad from Australia’s Broken Hill Proprietary (BHP) Ltd and Singapore’s National Iron & Steel Mills.

‘Malaysia’s Richest’ list. His conglomerate, Berjaya Group, reported a RM1.15 billion (US$330 million) profit in 2008.

Mr Tan has run Berjaya, which means ‘success’ in Malay, since 1984. The group has diverse interests covering hotels, real estate, finance and retailing (including Malaysia’s first Krispy Kreme doughnut store, which opened in April), and last but not least, lotteries.

Berjaya Sports Toto Berhad is Malaysia’s sole national lotto operator with more than 680 outlets throughout the country. It offers a variety of games including digit-type games (namely, 4D, 5D and 6D) and lotto-type games (namely, Toto 6/42 Jackpot, Super Toto 6/49, Mega Toto 6/52) for the domestic market.

Since 1969, the company has donated substantial amounts to the promotion and development of sports, youth and cultural

16 (13) Philip Chun Chairman and CEO, Paradise Group

widely regarded by industry analysts as likely to set back plans to introduce legal casinos in Japan. That should also give some comfort to the South Korean casino sector, which is dependent on foreign visitors as only one of the country’s 17 casinos is open to locals.

The result of the softening won for Korean casino operator Paradise Group was a 14.3% increase in sales in 2008, despite a raft of new venues being opened in the rival casino market of Macau in the second half of 2007, including The Venetian Macao.

The operating income for Paradise’s casino operation unit grew 11.9% in 2008, recording 19.2 billion won (US$15.4 million), says the company.

The best known and biggest earner among South Korea’s 16 foreigner-only casinos is Paradise Group’s Paradise Walker Hill Casino, which opened in 1968 at the Seoul Sheraton Hotel on Walker Hill.

Paradise estimates the foreigner-only casinos in Seoul account for 72% of gross casino gaming revenues in the country. The company says the Korean market overall has grown 57% in three years to record annual gross revenues of 755.5 billion won (US$608.6 million) in 2008.

The potential for the market would be

much greater if the government were to open the whole market to local players. There is no sign currently that this is on the political agenda. Currently, only Kangwon Land Resort & Casino in Jeongseongun, operated by the property development company of the same name, is open to locals.

Paradise Group has long dominated the country’s casino industry, which began in 1968 with the opening of a casino in Incheon, where the international airport serving Seoul is located. The Incheon property was taken over by Paradise in 2001 and renamed the Paradise Golden Gate Casino. The company also owns and operates Paradise Casino Busan and two casinos—Paradise Grand Casino and Lotte Casino—on the resort island of Jeju.

Paradise also notably operates the largest casino in Kenya, Africa—the Paradise Safari Park & Casino, which houses 40 tables and 600 machines.

In addition to casinos, the Paradise Group runs hotels and restaurants and is involved in manufacturing, duty free retailing, construction, consulting and non-profit activities. Philip Chun effectively took over the reins of the company from his late father, Chun Rak-won, in 2004.


The South Korean tourism industry benefited from a weakening of the local currency, the won, following the global financial crisis that escalated in the third quarter of 2008. This attracted more customers from core markets including Japan in late 2008 into 2009.

The recent defeat of the ruling Liberal Democrats in Japan’s general election is



17 (-) Jim Murren Chairman and Chief Executive

Officer,MGMMIRAGE

Jim Murren had a torrid time in the first half of 2009 with a constant juggling act to meet lenders’ covenants on the company’s US$13.5 billion global debt burden.

Given that MGM MIRAGE is only a 50% partner in MGM GRAND Macau (alongside Pansy Ho), the property was never going to command quite as much of Mr Murren’s attention during the funding crisis as CityCenter in Las Vegas, which accounts for around US$8.6 billion of the money the company owes.

Those existential pressures eased slightly in May after the company announced a refinancing package. That allowed Mr Murren some breathing space to think tactically about the company’s business, rather than just strategically.

Once Mr Murren had some time and space to reflect more on the Macau operation, he came out fighting. In July, in comments reported by Bloomberg, he described MGM GRAND Macau’s performance from the time of its opening in December 2007 as “underwhelming”.

“Our Macau market share is half what it

cooperation, especially at a time when the horse racing industry has to compete for customers against an East Asian casino and lottery market that is growing in capacity year by year. These benefits include the ability to cross-promote events and to offer greater market coverage to advertisers and television companies.

In May this year, the JRA announced a joint initiative with the Hong Kong Jockey Club (HKJC) known as Hong Kong-Japan Tourism Exchange Year 2009. As part of the scheme, the promotion of tourism between the two markets is being tied in with major horse racing events, namely: Japan’s Yasuda Kinen (which was held in June) and the Cathay Pacific Hong Kong International Races in December. Horses from Japan regularly race in Hong Kong, and vice versa.

The Yasuda Kinen, a Group 1 race over 1,600 metres, took place at Tokyo Racecourse on Sunday 7th June. On the same race card that day, the JRA designated race nine as ‘The Hong Kong Jockey Club Trophy – Hong Kong Japan Tourism Exchange Year 2009’.

In turn, the HKJC will host ‘The Japan Racing Association Trophy – Hong Kong Japan Tourism Exchange Year 2009’ as part of the Cathay Pacific Hong Kong International Races meeting at Sha Tin in Hong Kong on 13th December this year. This is the flagship

18 (12) Kenji Tsuchikawa President and CEO, Japan Racing

Association

event in the Hong Kong racing calendar sponsored by Hong Kong’s main air carrier, Cathay Pacific.

Top international race meetings such as the Audemars Piguet Queen Elizabeth II Cup and the Champions Mile also in Hong Kong, and the Japan Cup, Yasuda Kinen and Sprinters Stakes in Japan, attract thousands of overseas visitors every year.

Dr Tsuchikawa of the JRA said at the time he was excited by the cooperation agreement with HKJC. “On the commemorative race day in Hong Kong in December, there will be special promotion of Japan’s tourism attractions. I hope many Hong Kong people will see this and that it will be an incentive to visit Japan,” he said.

Mr Tsuchikawa is a career horse racing official—the first to have risen through the ranks to become president. He joined the JRA in 1968 as a veterinary surgeon. In September 2007, he was named president and CEO of the association. The JRA was founded in 1954 and centrally manages horseracing in the country, as well as racecourses, betting operations and horse-training facilities.

Mr Tsuchikawa has expanded the JRA’s efforts to promote the sport in Japan and

elsewhere in Asia by leading the association into a greater cooperative role with the Asian Racing Federation.

should be,” he added, adding rather ruefully, “the other US-based and other newer casinos have been more aggressive in marketing, more aggressive in recruiting and junket relationships.”

This was some admission, which must reflect as strongly on the company’s joint venture partner Ms Ho as it does on MGM MIRAGE and its management. Ms Ho, after all, had the advantage (in theory) of local knowledge and an inside track on the elements required for the successful launch of a casino in that market thanks to her father’s unique and pre-eminent role in Macau.

Whether it was by good luck or good management, in the same month Mr Murren’s comments were reported, MGM GRAND Macau saw its monthly share of Macau gross gaming revenues leap from 8% to 12%. Some industry insiders linked the improvement with several high rollers being lured away from rival properties, instead of a major improvement in the fundamentals, such as the mass-market appeal of the property. The July returns weren’t, however, just a flash in the pan, with MGM GRAND Macau recording an 11% share of GGR in August.

Mr Murren’s headaches regarding the Macau operation aren’t over just yet. The

company is still waiting to hear what action, if any, the gaming regulators in the US will take regarding the company’s partnership with Pansy Ho. It follows reports in May that state attorneys in New Jersey, which licenses the Borgata Hotel Casino & Spa in Atlantic City—run by MGM MIRAGE and Boyd Gaming—had found Ms Ho to be an “unsuitable” partner for MGM in Macau. Expect 2010 to be just as busy for Mr Murren as was 2009.

Under Kenji Tsuchikawa’s leadership, the Japan Racing Association (JRA) has extended its marketing and cooperation programme with other horse racing jurisdictions in the Asia Pacific region.

The arrangements do not yet constitute a horse racing international ‘tour’ of the sort promoted to spectators in sports such as Formula 1 motor racing or the Professional Golfers’ Association PGA TOUR for golf. There are, however, significant strategic benefits available to the JRA from international


19 (15) Tan Soo Nan Chief Executive, Singapore Tote Board

20 (20) Kunio Busujima Founder, Director and Senior

Advisor, Sankyo Co

As Chief Executive of Singapore’s Tote Board, Tan Soo Nan is responsible for overseeing one of Asia’s oldest and most successful government gaming monopolies, which has roots going back to 1968.

In 2007, Singapore’s Ministry of Community Development, Youth and Sports said 53% of Singapore’s then 4.5 million population regularly participated in the Tote Board’s 4D lottery. This four-digit lottery draw held at weekends provides the bulk of the annual revenue generated by the Board—around S$4.2 billion (US$2.91 billion) in 2007.

In 2008, betting tax from all the Tote Board’s activities—including lotteries, soccer betting, horse racing and trackside pari-mutuel betting—contributed S$1.81 billion (US$1.26 billion) to Singapore’s national budget, according to the country’s Ministry of Finance. The estimated contribution of betting tax to the 2009 budget is S$1.86

however, and the modest entry price of the Tote’s lottery products (S$100 per day for the casinos versus S$1 for ordinary entry to the 4D draw), it seems the casinos are aimed at distinctly different markets in terms of consumer income.

Mr Tan has extensive business experience as a managing director of DBS bank and as a senior executive with a subsidiary of Temasek Holdings, the Singapore government’s investment vehicle. He will need the benefit of that commercial knowledge to ensure the Tote maintains its strong position in Singapore’s expanding gaming market.

billion; a year-on-year rise of 2.8%, according to the ministry.

The Tote Board also donates surplus funds generated after tax from the operations of Singapore Turf Club and Singapore Pools to social projects in Singapore.

To illustrate just what a hold the 4D lottery in particular has over the locals’ imagination, whole websites exist devoted to the reported ‘science’ of identifying and picking lucky 4D numbers. Local media reports say devotees even stop at the site of car accidents to jot down registration numbers for possible use in the draw. Why bad luck for a motorist translates into good luck for a lottery player isn’t fully explained in the reports.

Whether Singapore’s casino resorts will cannibalise any of the revenues from Tote Board betting products when the casinos open next year remains to be seen. Slot machines would normally be considered the natural competitor to lotteries, given the generally better odds of achieving a win on slots and the modest stake money involved. Given the relatively high cost of casino entry for Singapore residents,

out into other areas of entertainment and gaming, Mr Busujima’s business, Sankyo Co, has stayed largely focused on its core business.

At the age of 83, Mr Busujima has now stepped down as Chairman of Sankyo Co, the company he founded in 1966, in favour of his son Hideyuki.

Mr Busujima senior remains, however, one of the wealthiest people in Japan, occupying the number two spot (up from number three last year) on Forbes.com’s ‘Japan’s Richest’ list for 2009. This is despite his net worth falling by the odd US$200 million to US$5.2 billion since 2008.

Sankyo has been busy updating its image to keep in line with the tastes of a younger generation of players seeking Western-style glamour. In 2008, Sankyo hired Hollywood star Nicholas Cage to appear in a series of television commercials in Japan, playing the role of a pachinko aficionado.

Other innovations to modernise the industry’s offer to customers include pachinko parlours with bars and cafés and some with women-only sections. Last year, an analyst’s report suggested the pachinko industry across Japan employs around 300,000 people—more people than even Japan’s steel industry.

Mr Busujima senior originally worked for rival pachinko manufacturer Heiwa, the company that helped launch pachinko in Japan after World War II. He witnessed the growth of pachinko manufacturing from a “cottage industry” into an innovative modern one.

In the 1970s, Mr Busujima contributed to the revolution of pachinko manufacturing

by inventing the immensely popular “Sankyo Fever” machine. His creation prompted a new wave of advances in pachinko design that used high-tech, state-of-the-art manufacturing equipment and techniques.


Kunio Busujima is another of the ‘pachinko billionaires’ on this year’s list. They are men who first got rich from the Japanese craze for this pinball-like machine. While some of the pachinko ‘kings’ have used their riches to branch


recently it has diversified into bowling alleys, golf driving ranges, amusement facilities, cinemas and other leisure-related business. Maruhan invested in the Macau casino resort Ponte 16, the joint venture between Success Universe Group (formerly Macau Success) and Dr Stanley Ho’s SJM. Ponte 16 opened in February 2008. Maruhan also opened a commercial bank in Cambodia last year.

Maruhan’s founder, Korean-born Han Chang-Woo, was placed at number 20 on ‘Japan’s Richest’ list 2009 with an estimated personal net worth of US$1 billion. That was up one place on his 2008 ranking, but his wealth was down US$600 million compared to 12 months ago thanks to the credit crisis.

When father of six Mr Han, now aged 78, held a party to celebrate the 50th anniversary of Maruhan (which is still privately owned), he did so in style. He invited 2,000 guests and hired the Tokyo Philharmonic Orchestra to perform for them.

on their hands arrive early at the casino to occupy seats at the crowded tables, and then charge eager gamblers arriving later up to US$700 for those seats on the weekend. One of the management’s innovations has been to make the whole complex a non-smoking area, which must also make it more pleasant for the chair-minding old folk.

For the young or the young at heart, the operating company has diversified and now also owns High 1 Ski Resort, a premium slope on 925,000 square metres of land next door to the hotel and casino.

Cho Ki-Song, the company President, has been the mastermind behind these and other innovations, transforming Kangwon Land from a state-run monopoly to a successful private company. He is the first president of

21 (21) Putera Sampoerna Founder,MANSION(Gibraltar)Ltd

22 (22) Han Chang-Woo Chairman and CEO, Maruhan Corp

23 (38) Cho Ki-Song President, Kangwon Land

audience for much of the sponsorship.Mr Sampoerna has funded his betting

venture from the family fortune which was built on some of Indonesia’s more traditional industries including palm oil and rubber production. Later, it expanded into tobacco, automobile and telecom interests. Mr Sampoerna sold the family’s clove kretek cigarette business to Altria (formerly Philip Morris) for more than US$5 billion in 2005—a move that gained him a position on Forbes magazine’s Indonesian Rich List.

Since his father’s death in 1994, Mr Sampoerna has been professionalising his empire by bringing in executives from Singapore, Taiwan, the US and Korea. He has also shown interest in luxury casinos with his purchase (and later sale) of London-based Les Ambassadeurs casino.

Mr Putera’s son, Michael, who runs a family investment vehicle, Sampoerna Strategic, is a professional poker player. His daughter Michelle manages the family’s philanthropy, including the Sampoerna Foundation, which was established to assist with a range of social projects including the improvement of public education in Indonesia, the training of teachers and support of ‘model’ schools.

J a p a n e s e pachinko parlour operator Maruhan Corp. appears to be weathering the recession affecting Japan and the wider world. It recorded sales of 2.5 trillion yen (US$25 billion) for

the fiscal year ending March 2009. It made a profit of 49.6 billion yen (US$540 million) during the same period.

Maruhan has 244 gaming parlours across the country and employs more than 12,500 people. The company was set up in 1953 and incorporated in 1957. More

Kangwon Land’s main hotel casino, which opened in April 2003, is the only one of South Korea’s 17 casinos open to Korean nationals.

Despite being a gruelling four-hour drive to the east of the national capital Seoul and containing just 132 gaming tables and 960 slot machines, it is one of the highest grossing casinos in the world in real terms, bringing in the equivalent of around US$1 billion in revenue annually.

Locals inform Inside Asian Gaming that Kangwon Land is so popular among South Koreans that hard-up pensioners with time

Netherlands-born Indonesian tycoon Putera Sampoerna is the owner of MANSION, which runs an online casino, video poker, sports book and betting exchange from Gibraltar.

MANSION has become a truly global online gaming brand in the last few years, with a customer base stretching from Europe to East Asia. A sign of that global reach is the company’s shirt sponsorship for Tottenham Hotspur, an English Premier League soccer team. On the club’s second and third strip this season, the MANSION logo is accompanied by Chinese characters, making explicit the target

As Japan prospered during the 1950s, pachinko also thrived and Mr Han did well enough in the 1960s to move into the bowling industry. At one time he owned the nation’s largest alley. In the 1970s, Mr Han returned his focus to pachinko and rode the wave of the 1980s economic boom, which left him well positioned to take advantage of the long slide in Japanese asset prices in the 1990s and allowed him to continue building his company and increasing his share of pachinko parlours. Even as Japan struggled to regain its feet after the decade-long economic slowdown, Maruhan Corp prospered.

Mr Han expanded his parlours into central locations as space became available; he built multi-floor emporiums that lure customers with innovations including non-smoking sections, free parking and improved odds of winning. The cash flow from these large, successful outlets helped diversify Maruhan into the conglomerate it is today.

the resort hired from the private sector—all his predecessors were former government officials. In his previous roles, Mr Cho created and led LG Electronics and LG Philips Display into globally recognised brands.

Mr Cho has his heart in the project. He was actually raised in Kangwon province, where the resort is located, and is dedicated to helping improve economic development in the area.



24 (28) Justin Leong Ming Loong HeadofStrategicInvestmentsand Corporate Affairs, Genting Group

Many large publicly traded companies in Asia are still family-run, and Genting Group is no exception. Justin Leong is a grandson of the group’s founder Lim Goh Tong. His boss is his uncle Lim Kok Thay, the brother of Mr Leong’s mother Siew Lian.

It would be misleading, however, to assume nepotism is the guiding principle within Genting. No major company could survive in a competitive industry such as gaming and during the current challenging trading conditions without having talent at the top.

Oxford University-educated Mr Leong plays a key role as a ‘big picture’ man, looking out for new investment opportunities and also talking to existing investors and to the media.

Genting has probably been the most proactive of all the major Asian gaming companies in understanding the value of good public relations in an age of globalised

language and on their own terms, having started his career at Goldman Sachs in London where he was an analyst in the M&A division and an associate in global technology equity sales.

business and 24-hour news.Even those companies with a good

in-house PR department tend to appoint outsiders to this role. The fact that Mr Leong is one of the family and has direct access to the top man in the organisation indicates the business value that Genting attaches to positive publicity and a good corporate image. Genting’s core markets for its gaming operations are Malaysia and soon Singapore, two jurisdictions where support for its gaming business cannot be taken for granted because of domestic political considerations. It’s not surprising, therefore, that the company places great store in protecting its image and its reputation as a company of probity.

On the strategic front, Mr Leong reportedly played a key role in the Group’s

decision to take a stake in the cash-pressured MGM MIRAGE recently, as well as the decision to make the group in effect the United Kingdom’s biggest casino operator by purchasing a controlling stake in Stanley Leisure in 2006.

Mr Leong is also in a position to speak to the banking community in their own

25 (11) Efraim Genuino Chairman and CEO, PAGCOR

Dr Genuino’s influence on Philippines gaming and on the wider political and social scene has been significant. He slips into the second half of the Asian Gaming 50 – 2009 list this year only because his term of office is due to expire soon to coincide with presidential elections scheduled for 2010.

It was Dr Genuino who led the planning of the ambitious Manila Bay project for the creation of one of Asia’s biggest leisure zones featuring gaming, entertainment, shopping and residential developments. He has also presided over the expansion of PAGCOR’s online gaming licensing regime domiciled in the Cagayan Economic Zone Authority (CEZA), as well as the licensing of a number of other gaming projects around this nation of islands. PAGCOR reported total revenues of P14.6 billion (US$302 million) for the first half of 2009.

As the leader of PAGCOR, Dr Genuino has been lobbyist for the Philippines gaming

industry, gatekeeper of its standards and diplomatic link between investors in the sector and sometimes hostile politicians and churchmen. As the head man at PAGCOR, Dr Genuino is responsible for disbursing large amounts of tax money both as remittances to the central government and as grants for support of sports and social programmes. By the conventions of the Philippines political system, Dr Genuino and his senior management team at PAGCOR will be expected to step down at or before the next Presidential elections in 2010. The reason is that the presidential incumbent, Gloria Macapagal-Arroyo, will not be seeking re-election, and the incoming president has the prerogative to appoint his or her own senior executive team at PAGCOR.

Dr Genuino has been tipped as a possible future presidential hopeful in his own right, although some commentators think that honour is more likely to fall to his son.


27 (33) Theodore “Teddy” Cheng Chee Tock

Chairman, C Y Foundation

C Y Foundation has been at the forefront of serving the demand for non-casino online games in the Mainland China market.

Internet use is exploding in China. There were 338 million users as of June this year (up 13.4% in six months), according to the government-funded China Internet Network Information Center (CNNIC). It’s safe to assume that figure is already out of date. By June, the number of mobile Internet users had reached 155 million, accounting at that time for 46% of all Internet users and representing a 32.1% increase within six months. More than two-thirds of China’s Internet users are under 30, according to CNNIC.

Teddy Cheng and his management team spotted early on that role playing and casual games played on a subscription basis offered not only huge potential in the China market, but were also less likely to attract

the sort of hostile regulatory action typically associated with online casino games, where search engines and Internet censors often block sites and providers.

The number of Chinese Internet users shopping online rose to 87.88 million in the six months to June 2009, an increase of nearly 14 million from December 2008, while the use of online payment increased by 4.8%. The CNNIC survey suggested only 30% of Internet users believe online transactions are safe from fraud.

C Y Foundation’s business model is to a large extent protected from the online fraud issue because much of its business is conducted face-to-face with customers via Internet cafés, rather than via card payment online. C Y Foundation says it is the only company dedicated to organising and running player-to-player (P2P) tournaments for prizes in Internet cafés throughout the Mainland.

In August, C Y Foundation announced that it was taking an effective 20% stake in Paradise Entertainment, a casino gaming supplier and operator of live dealer electronic table gaming terminals and progressive

jackpots in the Asia Pacific region. The share deal involves C Y Foundation injecting HK$40 million (US$5.1 million) in working capital into Paradise Entertainment.

Mr Cheng is a renowned entrepreneur in Mainland China. He has acted as chief

representative or principal consultant in Mainland China to foreign firms including

AT&T, Unisys, Honeywell, Hewlett Packard and IBM. Both Mr Cheng and his wife are scions of prominent families that have active links to the very top of China’s political hierarchy. Mr Cheng has also acted in an advisory capacity to several provincial and municipal governments in China.

24

26 (34) Angela Leong On-kei Director, Sociedade de Jogos de Macau

Ms Leong is best known as the fourth official consort of Macau’s former gaming monopolist Stanley Ho, and is mother of his five youngest children. Whether she would have become a director of STDM—parent company of SJM, which operates Dr Ho’s casino interests in Macau—without her strong domestic CV is a moot point.

Ms Leong’s profile in Asian gaming is likely to be consolidated over the years as the children she has borne Dr Stanley Ho mature and stake their own claim to a position in the family business. Ms Leong is reputed to be a savvy businesswoman and fierce dealmaker and is often at the forefront of campaigning for the gaming industry in general, and the interests of her company in particular.

Ms Leong is also a Macau legislator and leader of the Macau Development Alliance party. She was elected to the Legislative Assembly in 2005 as one of those candidates selected by direct ballot rather than the complex hybrid scheme of nomination also used to select lawmakers in the territory. Also on the party ticket was Dr Ho’s long-time lieutenant Dr Ambrose So, though he failed to retain his seat.

Ms Leong is seeking re-election to the Legislative Assembly on 20th September and is likely to maintain a significant profile in Macau public life.

28 (29) Subhash Chandra Non-Executive Chairman, Essel Group

Subhash Chandra, a former rice trader turned mass media entrepreneur, returns to the Asian Gaming 50 – 2009 as the founder of Playwin, India’s first online lottery business.

Although only a fraction of India’s 1.1 billion-plus people have access to the Internet, low-income adults can play electronic lottery games by visiting terminals located in shops.

The lottery is promoted in cyberspace as myplaywin.com. It has a reputation among players as fair in a country where paper lotteries are widely regarded with suspicion as corrupt.

Playwin and traditional paper lotteries are licensed on a state by state rather than a national basis. Playwin was floated on

the Indian stock market in November 2001, initially winning online lottery franchises for the governments of Sikkim, Karnataka and Maharashtra.

Market research about online gaming in India is limited. But a report by the Internet & Mobile Association of India in 2008 estimated that the sector, including casual and role-playing games as well as lotteries, would be worth US$200 million by 2010.

Playwin products certainly appear to have captured the public imagination. In a country where according to the World Bank half the population earn less than one US dollar per day, Playwin’s record lottery prize (the product of a rollover from previous draws without any top prize winner) amounted to a staggering US$3.5 million won by a resident

http://myplaywin.com/



the necessary background to understand consumer demands and respond to them.

He came to Aristocrat from Foster’s Group, the Australian drinks conglomerate, where he was managing director of its Australia, Asia & Pacific division. Mr Odell also has experience in consumer retailing in a wide range of international markets.

In August, Mr Odell announced what the company called a ‘transformation programme’, to focus particularly on building the company’s business in Japan, Australia and North America.

He said the aim was to reduce earnings volatility across the company’s operations and deliver sustainable growth. That

included doubling Aristocrat’s share of the North American market for revenue share agreements between slot manufacturers and casinos over the next five years. To achieve that aim, Aristocrat planned to base more of its management team in North America, said Mr Odell.

In an interview with Inside Asian Gaming published in July, Mr Odell also hinted at Aristocrat moving into the stepper market in Asia and other markets, where companies such as WMS and Bally Technologies currently have a strong presence. He also suggested Aristocrat may move to expand its video slot offer by releasing new products with strong all-round entertainment themes.

30 (-) Jamie Odell ChiefExecutiveOfficerandManaging

Director, Aristocrat Leisure Ltd

of Kolkata in May 2006.Playwin’s potential for profitability

is hugely boosted by the fact that its products and services can be supported and cross-marketed by other parts of the Essel Group empire without (so far) any troublesome regulation imposed by national politicians.

An example is that Playwin lottery products have now expanded into the offline entertainment market using pre-paid scratch cards produced by ItzCash, another Essel

business. The services offered by myplaywin.com cards can also be accessed by mobile phones through SMS. The lottery results are in turn promoted on Play TV, an Essel Group operation and India’s first interactive gaming television channel.

Mr Chandra’s Essel Group also owns Hindi TV broadcaster Zee Entertainment, with an estimated 500 million viewers in 167 countries. His son Punit was named Zee’s chief executive in August last year. The Essel business is still family run, with Mr Chandra’s

brothers heading Zee News and Dish TV respectively. Other businesses include amusement parks.

Subhash Chandra came 28th in FORBES’ ‘India’s 40 Richest’ list in December last year. As a result of the global credit crisis, however, he was relegated from FORBES’ global list of billionaires as his net worth was estimated at US$970 million. In 2007, Mr Chandra was ranked at 407 on the ‘World’s Billionaires’ list’ with a net worth of US$2.3 billion.


Jamie Odell was hired by Aristocrat Leisure Ltd to maintain and build the company’s strong technical team while at the same time reinvigorating its

focus on the ultimate VIPs—its consumers.The CEO, who recently completed a

strategic review of company operations, has

29 (-) Greg Hawkins ChiefExecutiveOfficer, City of Dreams

integrated resort in Macau.His challenge now is to turn CoD into the

kind of VIP hotspot that Crown Macau used to be. That task got a little more challenging recently when the Macau operators’ newly formed trade body agreed to cap commissions to agents at 1.25% of rolling chip turnover.

Mr Hawkins remains upbeat, however, that the quality and range of CoD’s VIP offer will earn the loyalty of newly arrived customers on both the agent and player sides, and bring in new business.

The early indications are that it’s working. MPEL doubled its market share of Macau gross gaming revenue in July, the month after CoD opened, recording an 18% share, compared to 9% in June.

Prior to joining MPEL, Mr Hawkins was general manager for gaming at SKYCITY Entertainment Group, a gaming and entertainment enterprise listed in Australia and New Zealand. At Skycity, he managed the gaming operations and strategies across multiple casino businesses in New Zealand. He also served as a director of

Greg Hawkins earns a place in Asian gaming history as one of the executives who presided over Macau’s record-breaking 1.35% commission offer made to VIP betting agents to revive the fortunes of Crown Macau (now Altira).

It certainly worked for a while. After the commission deal was struck with junket consolidator Amax in December 2007, Crown Macau went from single digits in terms of market share of Macau VIP gross to grab around one fifth of the entire high roller segment in a matter of months. The hangover from the party came later when the other operators responded with a price war, a global recession started and the effects of baccarat’s inherent volatility kicked in.

In May 2008, Mr Hawkins moved from Crown Macau after just over two years as Chief Executive to take up the equivalent post at City of Dreams (CoD), Melco Crown Entertainment Ltd’s (Nasdaq: MPEL) first

Skycity Australia during the period between 2001 and 2004, overseeing the operations of Skycity’s casino in Adelaide, Australia, as well as the gaming machine and food and beverage businesses of Skycity in Auckland, New Zealand from 1998 to 2001. Before joining Skycity, he was with Crown Melbourne Limited beginning in 1994 as an initial member of the executive team that launched the Crown Casino Melbourne.

Mr Hawkins also has experience in both the mass market and high roller segments, serving as a senior manager with the Victoria TAB gaming division in Australia between 1990 and 1994.


In the spring, RGB entered the Macau slot equipment market for the first time, judging that the timing was right given that slots now account for more than 5% of gross gaming revenue in Macau.

“The timing for us to go into Macau now was right, because if you look at Macau in 2005 the slot machine revenue was only a little over 2% of the casino gross. Since then, it’s increased tremendously,” Mr Lim told Inside Asian Gaming earlier this year.

Mr Lim, who started his career with Dreamgate in 1988, is a graduate of Brock University, Canada. He has more than 20 years of experience in the gaming and amusement machine industry, including as an adviser to the Philippine Amusement and Gaming Corporation (PAGCOR)—that country’s regulator-cum-operator. Mr Lim is also a keen soccer player and soccer supporter and sits on the management committees of a number of social and membership clubs in Malaysia.

31 (36) Steven Lim Tow Boon Group Executive Director, RGB Ltd

32 (-) John Gomes ManagingDirector,IGTAsia

IGT’s acquisition of the assets of Progressive Gaming International (PGI) in January marked a milestone in IGT’s business development in the expanding Asian gaming market.

PGI’s radio frequency identification chip systems and automated table equipment are complementary to, rather than directly competitive with, the IGT Advantage® suite of products. The combination of the two product lines has allowed IGT to cover even more market segments. This is important in an Asian region that is culturally very diverse in terms of player preferences and casino

He has more than two decades of experience in gaming. He started his career with leading leisure group Sun International. When gaming was legalised in South Africa, Mr Gomes joined Tsogo Sun Gaming before relocating to Russia.

management culture.John Gomes, the Managing Director of

IGT Asia, has been leading the company’s expansion in the region. He was also responsible for the launch in Asia recently of IGT’s well received REELdepth™ games, which use Multi-Layer Display® technology to create 3-D virtual reels. The launch was at Resorts World at Manila, the largest casino in Philippines, which opened at the end of August.

Mr Gomes joined IGT in 2004 as General Manager for Russia with the responsibility of setting up and running the company’s business and offices in that emerging gaming market. Prior to his job with IGT in Russia, Mr Gomes worked for the biggest local gaming operator in that country.

RGB Ltd describes itself as a ‘one-stop hub’ for supplying, manufacturing, refurbishing and servicing casino equipment, as well as amusement and electronic gaming machines.

The company, based in Penang, Malaysia, is a wholly owned subsidiary of Dreamgate Corporation Berhad. RGB makes original gaming equipment under RGBGames branding; produces other famous gaming

machine brands under licence; and markets equipment on behalf of RGB and its licensing partners. An example is that RGB is an agent for Chicago-based equipment supplier WMS in the new Singapore casino market. RGB’s parent Dreamgate also has experience as a gaming operator. It is an equity investor in boutique casinos, hotels and clubs with gaming licences across the Asia Pacific region.

RGB is leveraging on its extensive contracts in the regional industry following its decision to become directly involved in the operation of the slot machines at L’Arc, an SJM-licensed Macau casino, scheduled to open in the fourth quarter.

Steven Lim, RGB’s Group Executive Director, has had an exceptionally busy 2009. He has helped to oversee not only the preparatory work for L’Arc, but also the launch of new RGB Games products across the region. That includes the award-winning video slot game Shanghai Night.

33 (32) Paul Steelman President and CEO, Paul

Steelman Design Group

“There’s no casino in the world that’s like it,” he explains. “The single casino with a diversified hotel use spread around—there’s none like it. CityCenter [MGM MIRAGE’s US$8 billion mixed-use casino development in Las Vegas] will be similar to it, but doesn’t have the same planning characteristics that this one has.”

Using lessons from behavioural psychology, Mr Steelman has formulated a set of “rules of casino design” intended to lure people into casinos and keep them there. These rules include ensuring exits—actual exits, not just exit signs—are clearly visible (which apparently keeps players at the tables for an average of five minutes longer) and using curved rather than straight corridors (which makes visitors feel there is more to the property than they have seen,

World-leading casino architect Paul Steelman draws his insights from a career spanning over two decades, during which he has designed several market-revolutionising casino properties, from the original ‘integrated resort’, The Mirage in Las Vegas, to the unique stadium-style gaming venue that is Sands Macao.

Mr Steelman’s latest Asian creation is the Hard Rock Casino, which opened on 1st June at Macau’s City of Dreams resort on Cotai. Even with the modest-sized Hard Rock Casino, Mr Steelman continues pushing the envelope in terms of gaming-venue design.

encouraging them to return).Following the tremendous market

response to Sands Macao in the wake of its May 2004 opening, Mr Steelman’s services have been much in demand throughout Asia, though that demand has been tempered recently owing to the credit crisis-induced slowdown in new casino resort


35 (-) Yasushi Shigeta President & CEO, Angel Group

In terms of casino inventory, playing cards are the ‘softest’ bit of the ‘hardware’, requiring a very high replacement rate. The replacement rate is highest in Asia, where baccarat players bend the cards as they slowly peek at them, requiring the cards to be discarded after each hand.

To give an idea of the higher intensity of playing card usage in a baccarat-dominated market such as Macau, Wynn Resorts’ Macau property, with 400 gaming tables, goes through about half a million decks each month, and although its Vegas property only has 140 tables, it takes a year for it to go through that many decks (i.e. the Macau property uses about four times as many decks per table).

Any supplier that claims to control the majority of the playing card supply segment in the world’s high betting volume baccarat market—namely Macau—stands to

generate a very high turnover of business.Japan’s Angel Playing Cards, which with

its US subsidiary trades under the name Angel Group, claims an 80% share of the Macau casino supply market and a 70% share in Asia Pacific as a whole.

Apart from supplying playing cards, Angel also pioneered the electronic baccarat card shoe. The Angel Eye shoe is used on over 4,000 tables around the world, enabling big improvements in security and efficiency for casino operators.

Since its foundation in 1956, Angel has been dedicated to manufacturing all types of playing cards and gaming cards for domestic and international markets. The company started supplying major casinos in 1998.

Since then it has established a reputation for quality and service amongst customers. The company says this has allowed it to build market share in the land-based gaming and cruise ship segments of the Asia Pacific market in particular.

Angel, based in Higashiomi, Japan,

has 135 staff dedicated to producing high specification products, including packs tailor-made for individual operators and venues.

Since 2005 the Angel success story has been led by Yasushi Shigeta, the company’s President & CEO.

Mr Shigeta began his career by working as a management consultant after graduating from Kyoto University in 1990.

In 1993 he joined Angel Group where he worked his way up from middle management to become a director of the business in 1995, finally being appointed to the top job in 2005.

28

34 (-) Cath Burns Managing Director and Vice President

AsiaPacific,BallyTechnologies

Macau include: Bally’s SDS® slot-accounting and player-tracking system; 420 Bally iVIEW™ player-interface displays; the company’s CMP Casino Management System with a new junket module fully adapted and configurable to Asia’s requirements; and the award-winning TableView™ Real-Time Table Rating and Player-Tracking system.

Ms Burns is also leading Bally’s relaunch in Australia. Bally, along with other slots and systems manufacturers, has identified new sales opportunities in this mature market as operators look to boost margins and profits by re-equipping with the latest and most revenue-efficient casino management technology.

Ms Burns joined Bally Technologies in March 2005 and immediately set about establishing the company’s head office in Macau for both its gaming and systems business operations. This included hiring staff, implementing policies and procedures and directing daily operations.

One of her major accomplishments was managing the near flawless installation of Bally’s slot and player-tracking systems at

the Venetian Macao Resort and Casino—Asia’s largest casino with more than 3,500 slot machines and 1,200 table games. She and her team were also responsible for acquiring a 23.9% share of the machines on the gaming floor at the new City of Dreams casino resort complex on the Cotai Strip in Macau. This represents the largest property-opening order Bally has obtained in the Asia-Pacific market to date.

Immediately prior to joining Bally, Ms Burns was President of Sandals, Sandals, Sandals, a shoe retail business. In that role she increased sales by 20% and created a cost-saving inventory management system. Previously, Ms Burns was an account manager for IBM Australia, providing consulting expertise to customers on information technology trends and equipment options for the gaming industry. During her tenure with IBM, Ms Burns received the Asia Pacific Marketing Excellence Award and the Asia Pacific Region Marketing Award, and was a member of IBM’s “100% Club.” She also managed the Australia office of Video Lottery Consultants for six years.

development. Only when liquidity returns can several other ambitious Paul Steelman designs—including the US$2 billion Macao Studio City adjacent to Venetian Macao and the US$4.2 billion beachfront Ho Tram Strip destination resort—be realised.

According to Mr Steelman, themed casinos are faux pas and today’s trends are tomorrow’s design disasters. One sinking copycat theme we were spared from was a

Titanic casino. In 1998, immediately after the movie’s tremendous box office success, Mr Steelman recalls “a guy called me up, and brought in a drawing made by a sign guy. Here was the Titanic casino with melting ice in Las Vegas. That year I saw four people come in with the Titanic Casino idea.

“People tend to copy success, but here’s the difference between people who copy success, and people who learn from it.

People who learn from success advance it. They learn and then they advance.

“People have an idea, and they think the idea is worth some money. But believe me; Steve Wynn and Sheldon Adelson have a million ideas. So they’re not going to buy any idea from anyone else. Steve Wynn, over a period of time, advanced. He advanced The Mirage to the Bellagio. He advanced Bellagio to the Wynn. He always advances.”

Cath Burns is widely considered to be one of the rising stars of Asian gaming for her leadership and performance in building Bally’s market share in Macau from what amounted to a standing start.

That track record was confirmed in August when the company announced that L’Arc Macau and RGB Macau, slot manager of the new L’Arc Macau casino resort, had purchased a range of Bally Systems products for the venue’s autumn 2009 opening.

Bally Systems products ordered by L’Arc



37 (40) Sonny Yeung Hoi Sing Chairman, Success Universe Group Ltd

and the United States.Mr Yeung’s formative gaming industry

experience was as a VIP room operator at Dr Stanley Ho’s Casino Lisboa. The relationship forged during that time paid dividends when he was able to broker the investment deal with Dr Ho for Ponte 16, where the gaming rooms also operate under an SJM licence.

Ponte 16 is the only gaming resort currently operating next door to Macau’s old town, which is a UNESCO-listed World Heritage site. A ferry terminal at Macau’s Inner Harbour next to Ponte 16 provides visitors from Zhuhai on the Chinese Mainland easy access to the resort via a five-minute ferry ride.

Ponte 16 is a predominantly mass-market facility. As at 31st December 2008, the casino had 97 gaming tables, only eight of which were high-roller tables, plus 278 slot

On the mass side, NagaWorld’s slot machines increased aggregate handle by more than 1,000%. The huge improvement in slot performance coincides with the revenue share agreement made between NagaCorp and Elixir Gaming Technologies (EGT) in January. This allows the latter to manage NagaWorld’s slots on a revenue share basis with win per unit per day split 80:20 in favour of NagaCorp, according to a filing with the US Securities and Exchange Commission made by EGT.

In the VIP table sector, however, NagaWorld’s revenues in the six months to the end of June fell 66.8% to US$34.1 million from US$102.8 million in the equivalent period last year, said the Hong Kong-listed parent company. This was despite the fact that the number of VIP players remained more or less stable.

In the first half of 2008, high roller play accounted for 94.2% of gross gaming revenue at NagaWorld. That was stimulated by the resort’s positioning as a mid-market facility with modest check-in limits of around US$25,000 to US$30,000 per

customer, in a region with a shortage of quality high roller casinos.

First-half after-tax profits at NagaCorp fell to US$11.5 million in the six months to the end of June, down from US$25.5 million last year. The results suggest that secondary Asian gaming markets are even more vulnerable to contraction during general recession than are core ones. This may be the case despite the fact NagaCorp has strong political support from Hun Sen and a 70-year monopoly licence within a 200-kilometre radius of Phnom Penh lasting until 2065.

In terms of yield on total capital invested, however, NagaCorp’s business model for NagaWorld has remained resilient, given the relatively modest cost of redeveloping the site. At most recent estimates that was little more than US$100 million, paid for out of cash generated by the business rather than via costly commercial loans or bonds. Indeed, in the first half of 2009, NagaCorp announced a share buy back equivalent to 10% of the company’s aggregate nominal capital.

38 (43) Chen Lip Keong Founder and CEO, NagaCorp

Chen Lip Keong’s three decades-plus of experience in business management will be invaluable in navigating Hong Kong-listed NagaCorp, the operator of the Cambodian casino resort NagaWorld, through the generally choppy waters faced by all gaming companies in Asia and beyond.

Dr Chen is an official advisor to Hun Sen, the prime minister of Cambodia, and is credited with helping to revitalise the country’s tourism industry following two decades of civil war.

NagaCorp’s first-half performance in 2009 has been a tale of two markets.

Success Universe Group Ltd (formerly Macau Success) is a joint venture investor with Dr Stanley Ho’s SJM Holdings in Ponte 16, a gaming resort that opened in February 2008 at Macau’s historic Inner Harbour. The company also runs a casino cruise ship, the M.V. Macau Success, out of Tsim Sha Tsui in Hong Kong.

In June, Macau Success announced it had changed its name to Success Universe Group Ltd. The Hong Kong-listed business said this was to reflect the international expansion of its business into North America, where it operates Jade Travel Group, an air ticket consolidator serving customers in Canada

machines. In 2008, the then Macau Success recorded an operating loss of HK$170.3 million (US$21.9 million) on its share of the Ponte 16 venture.

36 (23) Albert Yeung Founder and Chairman, Emperor Group

Albert Yeung is well known in Macau and beyond as the businessman who built the ‘casino paved with gold’. The lobby of the Grand Emperor Hotel & Casino in downtown Macau features a ‘Golden Pathway,’ with 78 gold bars, each weighing one kilogram, recessed in the floor under glass panels.

The gesture aptly sums up Mr Yeung’s personality as a showman and show business entrepreneur. He counts Hong Kong and Hollywood actor Jackie Chan among his friends, with Mr Chan named as a minority shareholder in the Grand Emperor Hotel & Casino when it opened in January 2006.

Mr Yeung was also one of the minority

financial backers of the controversial Oliver Stone film ‘W’ about the life of former President George W. Bush, released last year.

Mr Yeung’s official biography recounts that he started in business as a jewellery retailer with one shop selling jewellery and watches. From that foundation, he expanded into property development and investment, financial services, entertainment and movies, hotels, publishing, catering and general retailing. The Emperor Group, based in Hong Kong, has become a regional player in entertainment and leisure, with ventures in Macau, China, Taiwan, Thailand and Indonesia, employing some 7,000 staff.


of considerable insight into how table games from other manufacturers can utilise and integrate with GPI’s radio frequency identification technology, both at the cage end of the casino floor and at tableside.

From 2002 to 2006, Mr Gronau served as Vice President of Operations for Shuffle Master Inc., a major supplier of automatic card shufflers and proprietary table games. At Shuffle Master, he oversaw software and hardware research for two product lines and directed manufacturing operations for all products.

From 2006 to 2008, Mr Gronau was President and Chief Executive Officer of Cadillac Jack, a supplier of innovative games and systems to the gaming industry. The latter company recently announced plans to expand into the Asian market.

Between 1996 and 2002, Mr Gronau served as Director of Operations and Business Planning for WMS Industries Inc., a major maker of lottery terminals and slot machines, then as Vice President of Distribution Services for that company.

39 (-) Gregory S. Gronau ChiefExecutiveOfficer GamingPartnersInternational

Corporation


Gregory S. Gronau is a new entry on this year’s Asian Gaming 50 – 2009. He earns his place as the newly appointed Chief Executive Officer of Gaming Partners International Corporation (GPI), an industry-leading supplier of gaming chips and plaques.

GPI is not only one of the longest-serving equipment providers to the Macau market, with a 42-year track record, but it is also one of the most dominant, currently claiming a market share of around 90%.

Mr Gronau joined GPI in October 2008 as Chief Operating Officer. He has the benefit

Advertise with Inside Asian GamingFor advertising enquiries, please email: [email protected] or call Matt at: +852 95797383

40 (39) Arthur M. Wang ChiefExecutiveOfficerand

Director, GigaMedia Ltd

Arthur Wang, the CEO, also said his company had responded to the challenging trading conditions by reducing costs and increasing efficiency.

In the first half of 2009, the company’s performance was hit by the euro weakening against the US dollar. GigaMedia said at that time it was in talks with an undisclosed party regarding a possible strategic partnership on its poker and casino software business.

After the Q1 ’09 results were released in June, Mr Wang struck an optimistic note, particularly in relation to the growth of China’s non-casino games market. “We believe we have hit bottom in this cyclical downturn and that the second half will see renewed strength in Europe. And in Asia, we are looking at our best year ever, with strong top and bottom-line growth,” he stated.

In its Q1 ’09 results announcement, the company said it achieved poker and casino software revenues of US$31.7 million, in line with expectations. It said active depositing poker players held steady quarter-over-quarter, while the number of new depositing players grew slightly during the period. In Asia, GigaMedia’s online games revenues amounted to US$12.7 million for Q1, up 33% quarter-over-quarter on strong

organic growth. GigaMedia’s casual games portal, FunTown, and its online sports and casual game unit in China, T2CN Holding Limited, saw revenues surge 27% and 43%, respectively.

In June, the company reported global Q1 ’09 revenues of US$44.4 million and net income of US$4.8 million.

As well as being CEO of GigaMedia, Mr Wang is also a member of the board of Linmark Group, a Hong Kong Stockmarket-listed global sourcing firm, where he serves as chair of the compensation committee.

Previously, Mr Wang was a managing partner of 698 Capital Limited, an Asian investment firm, as well as an executive director of KGI Asia Limited, where he served as head of corporate finance. He also served as an investment advisor and board member of UFJ Asia Finance Technology Fund of the UFJ Group (formerly the Sanwa Bank Group of Japan), and as a board member and director of Softbank Investment International (Strategic) Limited, the Hong Kong-listed arm of Softbank Corporation. Mr Wang is also a trained lawyer. Earlier in his career he practised corporate and securities law in the New York and Hong Kong offices of Skadden, Arps, Slate, Meagher & Flom LLP.

GigaMedia, a Taiwan-based online entertainment business, has not been immune from the global financial crisis. A significant portion of its revenues come from Europe, where it operates the market leading Everest poker software and runs complementary live poker tournaments. Increasingly, however, GigaMedia has been focusing on provision of non-casino online content in the Greater China market, including role-playing and casual games.


tel:+852 95797383


41 (-) David Kinsman ChiefExecutiveOfficer,Weike Gaming Technology

42 (30) Albee Benitez President, Leisure and Resorts

World Corp President, First Cagayan Leisure

and Resorts Corp

43 (-) Clarence Chung Chairman and Chief Executive

Officer,ElixirGaming

companies offering online offshore gaming content and services.

First Cagayan Leisure and Resorts Corp is in turn majority owned by a Philippines public company—namely Leisure and Resorts World Corp— led by entrepreneur Albee Benitez.

Through the latter company, Mr Benitez heads the Philippines’s largest chain of

bingo halls with 36 sites—all licensed and regulated in turn by the national regulator-cum-operator, the Philippine Amusement and Gaming Corporation (PAGCOR). The bingo halls are in the country’s major

politically following the accidental death of Phnom Penh’s police chief in November 2008, by early January Clarence Chung and his management team at Elixir had signed a deal with NagaCorp to operate slot machines on a revenue share basis in the latter’s NagaWorld Casino in Phnom Penh.

Hong Kong-listed NagaCorp is insulated from the political and regulatory turmoil recently surrounding Cambodia’s gambling industry, as it has an exclusive and currently unlimited 70-year casino licence within 200 kilometers of the capital.

The deal meant that by the time the final clampdown on Phnom Penh’s 70 slot clubs came in February, EGT was able to relocate equipment from its three slot clubs in the capital and mitigate potential losses.

EGT’s primary business is the placement of gaming machines on a revenue share

model in three, four and five star resorts, hotels, and other venues across emerging gaming markets in the Asia Pacific region. In its results for the financial year ended 31st December 2008, EGT said it expected growth in the Philippines market in 2009 as well as expansion of capacity at NagaWorld would help to offset the closure of its own Phnom Penh slot clubs.

Mr Chung has extensive financial and gaming management experience. Concurrent with his roles at Elixir Gaming, Mr Chung is an executive director and the Chief Operating Officer of Melco International Development Ltd and is also a director of Melco Crown Entertainment Limited. Previously, he served as the Chief Financial Officer at Melco and over the last 20 years has held senior financial positions at a number of multinational companies.

The Philippines’ First Cagayan Leisure and Resorts Corp acts both as regulator and operator of gaming businesses in the Cagayan Special Economic Zone Authority (CEZA). CEZA, a freeport set up in the north of the country by the Philippines government in 1995, is Asia’s first and so far only issuer of internationally recognised licences for

David Kinsman, the company’s current CEO, was recruited in 2008 as part of the drive to turn the company into a truly global player.

“Our aim is to build Weike into Asia’s number one gaming machine company,” says Mr Kinsman. “We do not aspire to be the biggest, but definitely to be the best,” he adds.

Mr Kinsman is a passionate advocate of Weike’s products, but also of the benefits of electronic gaming to the whole industry. He points out, for example, that the ability of electronic games to give pinpoint-accurate player odds creates value and levels of player engagement that ultimately benefit the operators. He says that once initial capital costs are covered, an electronic baccarat table in the Macau market can typically be 90% cheaper a year to run than a live table.

The company has also been building its gaming systems business in Asia, including slot management, customer relationship management and monitoring systems.

Mr Kinsman started his gaming career with Olympic Video Gaming in Australia, which became Australasia’s No. 2 manufacturer under his leadership. The

company was eventually sold to IGT Group in 1997 for A$178 million (US$152.8 million at today’s prices). Mr Kinsman also served as General Manager of Vidco, launching multi-terminal gaming products. Vidco was then sold to another group and renamed as Star Games in 1991.

His next role was as CEO of Online Gaming Systems in Australia, where he set up the regional office in Sydney to service the Australian, Asia-Pacific and South African markets. Later, the company took over the worldwide assets of its then parent.

Between 1994 and 1998, he served twice as Director of AGMMA, the Australian Gaming Machine Manufacturers’ Association (now known as the Gaming Technologies Association).

In 2004, Mr Kinsman was headhunted by the online gaming provider Mansion Group as COO, creating ‘The Poker Dome’, a television series featuring poker games between the world’s top players betting their own money. It became one of the top-rated shows on the Fox Network in the United States and beyond, generating a large pool of clients for Mansion.

Weike passed an important milestone last December when the Singapore-based manufacturer achieved the first of a series of GLI-11 certifications for its equipment. This included approvals for its Infinity platform and gaming machine range, and its multi player electronic table game equipment.

The certificates enabled the company to move to the next phase in its drive to build sales in key Asian target markets, including Macau.

The company was founded in 1998.

Elixir Gaming Technologies appears to have been the most fleet-footed of the slot operators in the Cambodia market, which contracted sharply earlier this year when the government barred locals from visiting slot clubs in Phnom Penh.

Seeing the way things were going

shopping malls and offer a range of games including traditional bingo, electronic bingo, instant bingo pull-tabs and Rapid

Bingo—a keno-type game.


44 (46) Nick Niglio COO and Executive Director,

Neptune Group Ltd

Entertainment Group’s StarWorld Hotel & Casino.

Since the beginning of 2007, Neptune Group has been buying up smaller junket operators or taking equity stakes in entities that have profit agreements with Macau junkets. The company is now considered— along with A-Max Holdings, Dore Holdings and Golden Resorts Group (companies that are also Hong Kong listed)—one of the key junket aggregators in the Macau market.

Neptune Group has been, for the past year, consolidating its interest in Macau to further enhance its value to investors. As part of this consolidation, Mr Niglio has eliminated unprofitable sub junkets and sought to expand Neptune’s presence in all areas of the casino floor. Expect Neptune to attempt to diversify its business throughout 2010 with new capital projects as it pursues new revenue streams.

Mr Niglio brings extensive experience from the US gaming sector to Macau, including a stint as Executive Vice President

for Caesars World Marketing and Executive Vice President of Trump Taj Mahal Casino Resort in Atlantic City, New Jersey. In Macau and Hong Kong, Mr Niglio served as a gaming consultant for several large international concerns seeking to position themselves in Asian markets.As Chief Operating Officer and executive

director of Neptune Group Ltd since 2007, Nick Niglio has been helping to ramp up the high growth gaming activities of the Hong Kong-listed conglomerate.

Neptune Group, known until July 2007 as Massive Resources International Corp, has interests in securities’ investments and electrical engineering as well as gaming. The company is probably best known to the general public as operator of the casino cruise ship Neptune, which it acquired in June 2005 for HK$68 million (US$8.7 million) and which sails out of Hong Kong to international waters. Within the gaming industry, the company has a growing profile in the operation of VIP junkets to Macau, including dedicated VIP rooms at Galaxy


45 (-) Mike Aymong Executive Chairman, Asian Coast

Development (Canada) Ltd

Mr Aymong makes this year’s list as the leader and public face of the company planning to develop a stretch of Vietnam coastline as the Ho Tram Strip—the first truly integrated gaming resort in the history of that country.

The site in Ba Ria-Vung Tau Province will have MGM MIRAGE as its branding partner and will be known as the MGM Grand Ho Tram.

A groundbreaking ceremony for the site was held in July, according to the English-language edition of Saigon GP Daily, an official newspaper of the ruling Communist Party of Vietnam.

Some in the industry were sceptical about whether ACDL and its partners would be able to raise the reported US$4.2 billion cost of the project in the current credit crisis. David Friedman, a senior executive of the Macao Studio City project on the Cotai Strip in Macau, has fallen off this year’s Asian Gaming 50 list precisely because of the failure of that project to get all the finance in place.

Industry sources suggest banks in

Vietnam have agreed to underwrite a significant portion of the finance for MGM Grand Ho Tram on condition of support from the overseas banking sector.

Site designs for Ho Tram were approved by MGM MIRAGE early in 2009. Land clearance began soon afterwards, followed by some preparatory landscaping and tree planting. According to the company’s current schedule, the resort is due to open in early 2012.

The resort facilities feature two hotel towers with luxury suites plus convention, entertainment and recreation areas including a championship golf course designed by Greg Norman.

Prior to taking up his role at ACDL, Mr Aymong was Executive Chairman of World Gaming plc, a London-based publicly traded global leader in the back office gaming software industry. He also spent several years in executive roles for three telecommunications companies: MetroNet Communications (later purchased by AT&T Canada); TELUS Advanced Communications and GT Group Telecom.


46 (-) Tristan Sjöberg Managing Director Asia,

TCSJOHNHUXLEY

TCSJOHNHUXLEY, a supplier of gaming equipment worldwide, has reported strong sales in Asia in 2009. The company recently won significant orders for Singapore’s new integrated resorts—Las Vegas Sands Corp’s Marina Bay Sands and Genting’s Resorts World at Sentosa. Other large projects for TCSJOHNHUXLEY in the region include: Savan Vegas Hotel & Casino in Laos; NagaWorld in Cambodia; Kangwon Land Resort & Casino in South Korea and Genting Highlands Resort in Malaysia. The company has enjoyed a particularly strong business relationship with Genting over many years.

Much of the credit for TCSJOHNHUXLEY’s success in the region must be attributed to the work of Tristan Sjöberg, Managing Director Asia for the company, and his team. Mr Sjöberg has a PhD in oceanography, so a career in gaming was not the most obvious choice of direction. The fact, however, that oceanography deals with analysis of highly complex systems probably set Mr Sjöberg in good stead when he moved into the electronic gaming equipment market.

Mr Sjöberg relocated to Singapore from London at the beginning of 2009. The move coincided with the group’s expansion programme in the region, enabling the long-term development in manufacturing, sales, service and support in this rapidly expanding and increasingly important market. The creation of the Singapore bureau means the company now has offices in 11 of the world’s main gaming jurisdictions.

Under Mr Sjöberg’s regional leadership, the company has pursued a policy of investing, if possible, in the communities where it has clients. For example, where locally manufactured products meet the company’s brand standards in terms of quality, innovation and ready availability, TCSJOHNHUXLEY will try and use that local product. This policy has been put into practice in a number of orders for Macau casino venues in the past few years including at Sands Macao, Galaxy StarWorld Hotel & Casino, MGM GRAND Macau and, most recently, Melco Crown Entertainment’s City of Dreams Macau resort on Cotai.

47 (44) Alfonso R. Reyno Jr Chairman and CEO, Manila Jockey Club

In particular, the Club got into the real estate business. In 2003 Mr Reyno adopted the sort of business model used by many European soccer clubs for their stadia. He moved the race stadium and track from a piece of prime land in the centre of Manila to a bigger, cheaper site in the suburbs at Cavite. The old 16-hectare site was then redeveloped as a mixed-use project with 3,400 high-end condominiums and townhouses in partnership with Ayala Land Inc.

At the new racetrack site, MJCI and its partner Century Properties also developed a 77-hectare estate with an up-market residential village known as Canyon Ranch, overlooking the sporting complex.

MJCI also operates more than 200 off-track betting stations (OTBs) in Metro Manila and in the neighbouring provinces, with the number of OTBs still growing. The Club also has its tele-betting facilities, which it reports have been adopted enthusiastically by race fans.


Gross sales from horse racing betting in the Philippines have fallen nationally 10.6% year-on-year in 2009, according to the Philippine Racing Commission. It’s too early to call this a downward trend, as takings from horse racing have shown some volatility nationally over the last five years.

Despite the 2009 slowdown, the industry as a whole still managed to book 4.9 billion pesos (US$100 million) in sales in the eight months to the end of August.

Manila Jockey Club Inc, (MJCI) founded in 1867 and the oldest such organisation in southeast Asia, has to a degree been protected from the economic effects of the national sales downturn thanks to product diversification under its Chairman and CEO Alfonso R. Reyno, Jr, who took up the post in 1997.


48 (-) Hyung Joo Kim FounderandCEO,IntercityGroup

machines; hotels offering a total of 1,500 rooms; a world-class 18-hole golf course; a water park; shopping malls, plus a culture and entertainment centre. The groundwork and road construction for the site began in March this year and building construction is expected to start in December.

Intercity says that while revenue from the gaming operation is central to the business plan for the project, it also spotted a gap in the market for a high quality all-round holiday resort. It says that although the local service centre town Siem Reap has a range of international quality hotels, it lacks entertainment and nightlife venues. The company thinks that even accounting for the existing upward trend in the number of visitors to Angkor Wat, its resort will bring in even more new visitors. It estimates three million visitors will be coming to the area annually by the end of 2011.

Mr Kim is a developer with a clear practical vision for how Bellus Angkor Resort & City will look and function. He studied architecture at the prestigious Seoul National University and later furthered his studies in the US at the University of Michigan, where he received a Masters in Architecture. He has worked in Korea and internationally as an architect.

In order to pursue a career as a developer, he then went on to obtain an MBA from the Wharton School of Business at the University of Pennsylvania. Early on in his career, he recognised the potential of Southeast Asia. He spent several years involved in the Vietnam real estate market—an experience that he believes played a vital role in helping him obtain this opportunity in Cambodia.

Hyung Joo Kim is the founder and CEO of Intercity Group (ICG), a South Korean real estate development company. Mr Kim enters this year’s list thanks to Intercity winning a sole concession from the Cambodian government in October 2008 to build a gaming resort near Cambodia’s tourism hot spot Angkor Wat.

Bellus Angkor Resort & City (BARC) will cost US$470 million and the first phase is due to open in 2011. The developers had initially hoped to get the project ready for 2010, but the global recession necessitated a change of plans. The scheme will be on a 265-hectare site 20 kilometres north of the temple complex at Angkor Archaeological Park and about the same distance from Siem Reap International Airport, which lies to the west of the temples. Around two million tourists visit the area annually via the airport—representing around two thirds of all the foreign visitors to the country each year.

Facilities at the resort will include: a casino with 200 tables and 1,000 slot


49 (45) Leonard H. Ainsworth Executive Chairman, Ainsworth Game Technology

told the Sydney Morning Herald in an interview earlier this year.

Even post credit crisis, Mr Ainsworth has been estimated to be worth A$835 million (US$710.2 million) and was recently named Australia’s 34th richest person. Mr Ainsworth’s money comes from the family’s (now non-voting) share in Aristocrat and money made in the recent past from Ainsworth Game Technology, the rival slot maker he set up in the mid-1990s.

Mr Ainsworth has plenty to think about when it comes to disbursing his fortune and deciding what to do with his business. He’s already had experience of the difficulties this can cause. In an earlier brush with mortality in 1994, Mr Ainsworth was diagnosed with prostate cancer. As a result he portioned off his shares in Aristocrat to his family. But after he was given the all clear from cancer shortly afterwards, he decided against retirement.

In 1995 he founded Ainsworth Game Technology as a rival to Aristocrat. So far the venture hasn’t hit the same heights

as Aristocrat, but to be fair the Australian and international slot markets are far more crowded with rival suppliers now than when Mr Ainsworth started out in 1954.

As part of his succession planning, this year Mr Ainsworth extended the maturity on a A$40 million loan to Ainsworth Game Technology, to a date four years from the day he dies. He has also changed the redemption date on the company’s A$25.6 million in bonds due to mature this December by two years, with the option to extend for another three.

As a sweetener, the 8% coupon will rise to 10% on 1st January 2010. Mr Ainsworth reportedly owns about 60% of the notes and is the company’s principal source of funding.

Extending the maturity on the loan and the redemption on the bonds prevents any of his family from taking legal action to divert the money from the company, though family members indicated recently they would respect Mr Ainsworth’s wishes without the need for litigation.

SJM isn’t the only company thinking about the issue of succession planning in 2009. Len Ainsworth, aged 86, a founder of a company that was the precursor to Aristocrat Leisure, has been dealing with the issue in typically earthy Australian fashion.

“Once you’re in a box you don’t know what’s happening, do you?” Mr Ainsworth


50 (35) Dennis Valdes President, PhilWeb Corp.

million) for January to March, 108% higher than the previous year’s P46.2 million, the company said in a filing to the Philippine Stock Exchange.

During a special stockholders’ meeting in August Mr Valdes said he expected annual net income for 2009 to reach P584 million (US$11.94 million). That’s exactly double the P292 million net income booked by the company in 2008.

Mr Valdes is said to have excellent contacts within the Philippines Amusement and Gaming Corporation (PAGCOR), the licensing body for land-based and Internet gaming in the Philippines, and with politicians in the country.

Challenges do however remain for PhilWeb’s business. Internet cafés were especially lucrative in the Philippines in the early Noughties when domestic broadband was not widely available.

Online gambling content providers are also increasingly competing for consumer cash with providers of casual or role-playing games.

To counter the squeeze on the Internet café sector, PhilWeb has been aggressive in expanding its range of mobile gaming products delivered direct to users’ cellular telephones.

The Philippines is a difficult market to call when it comes to predicting how politics will affect a gaming company’s prospects.

PhilWeb Corp., the online gaming operator led by Dennis Valdes, seems to have cast off the gloom experienced by the sector early in 2009. At that time, several politicians were lobbying for a ban on domestic online gambling in the country. The local media said the initiative was aimed at Internet cafés—a core part of PhilWeb’s business.

That regulatory threat appeared to have receded by the end of the first quarter. In April, the company said it had more than doubled earnings for the first quarter this year, as it opened 10 new e-gaming cafes.

Profits reached P96 million (US$1.96

By their very nature, lists such as Inside Asian Gaming’s ranking of the 50 most influential people in Asian gaming are bound to incorporate elements of subjectivity, though we have applied a rigorous analytical methodology to arrive at the results. We enlisted a panel of eight independent gaming industry executives and analysts from around the region to compile the rankings, which will likely result in lively debate and even controversy.

Even measuring the objective criteria posed difficulties, because many of Asia’s biggest gaming companies remain in private hands, making it difficult—if not impossible—to obtain accurate financial records. Therefore, market share and other business KPIs were estimated after extensive discussions with peers, competitors, suppliers and customers.

Another consideration is that Asia’s gaming sector can often be particularly country-specific, so we endeavoured to select panellists from not only high profile casino jurisdictions such as Macau, but also emerging gaming markets around the region. We sought feedback from various gaming sectors including parimutuels and Japan’s massive pachinko industry—omitting pachinko just because the Japanese government does not technically consider it gambling would, in our view, be a misrepresentation. We also included online operators, who are making an ever greater impact in the region, regardless of the official status of their businesses.

Even though government agencies ultimately control and influence all regulated gaming in Asia, after much discussion we decided to exclude individuals such as Macau’s Chief Executive, gaming regulators in the various jurisdictions (including Macau’s Direcção de Inspecção e Coordenação de Jogos and Singapore’s Casino Regulatory Authority), and senior officers of the Culture, Welfare, Sports and Finance Ministries in China, who set out the framework that gaming takes place in. One exception to the exclusion of government officials was made for the Chairman of PAGCOR.

The eight panellists were instructed to nominate individuals for the Asian Gaming 50 – 2009. The initial list of 78 individuals was put through a scoring process to arrive at the final rankings. The panellists gave each of the nominated

individuals a score of between 1 and 10 on the following criteria: 1. How well known is the individual within the gaming sector in

Asia?2. How successful has the individual been historically in the

gaming sector?3. How fast has their business grown over the last 5 years?4. What is their potential for future growth in their current

gaming sub-sector and other gaming sub-sectors in Asia?5. How successful are they financially (individually and/or

company, or individual together with company, where relevant)?

6. How influential are they with the government and regulators within their jurisdictions of operations?

7. How influential are they internationally within the gaming industry (individually and/or company, or individual together with company, where relevant)?

8. How much of an innovator are they within the gaming industry?

9. How well are their products and/or services marketed and promoted?

10. How much do they own of their principal business and/or how much control do they have over their company?

11. How well positioned are they to cope with competition within their existing jurisdictions of operation and from overseas competition?

12. How do you perceive their dominance in their current major markets of operation? Feedback from the panellists led to each question being given

a specific weighting—between 90% and 115%. Further weightings were applied relating to the company the nominated individual either works for or controls. These include the company’s status (public or private), financial performance and size (in terms of both operations and market capitalisation/value), as well as the size/importance of the markets it operates in. Finally, panellists applied a further weighting for each nominated individual with respect to his or her perceived personal integrity, effectiveness in management, overall track record and foresight.


Core Ranking Methodology



We identify six reasons to be bullish on the Singapore gaming sector and six features that the market

has yet to price in. These factors will drive gaming revenue of US$3 billion next year (about 23% that of Macau), growing at 12% per annum thereafter. Lower gaming taxes add to the appeal of Singapore as a VIP gaming market. The local population’s appetite for gambling will complement the tourist segment (60% of total casino visitors), with Indonesia, Malaysia and Thailand supplying the bulk of overseas customers.

Resorts World is for everyoneWe estimate a 46% market share for

Genting Singapore’s Resorts World, which

targets families. Gaming Ebitda [earnings before interest, taxes, depreciation and amortisation] margin should be around 40% in 2010 (versus 22% in Macau, which is subject to higher gaming taxes). Our model conservatively assumes a 1.3% junket-commission rate for the VIP market, which will contribute to 40% of total revenue.

A top-five theme park in AsiaAdding to Resorts World’s winning

hand are a Universal Studios theme park, hotels and retail space, making it an entertainment venue for a wide audience. These non-gaming components will add a further S$160 million to 11CL Ebitda. Based on our estimates of four million visitors

in 2010 and 4.5 million in 2011, Universal Studios will become the fifth most popular theme park in Asia, and among the top 15 globally, in two years.

Resort Ebitda drives targetWe expect Resorts World’s Ebitda to

grow 12% per annum in the medium term, with potential upside to our Ebitda-margin estimate as it should achieve scale efficiencies over time. Our 2011 earnings estimate is 75% above consensus given our more bullish view on the Singapore gaming sector. We forecast a 2011 EV/Ebitda [Enterprise Value/Ebitda] of 12 times for the resort, based on peer multiples. This is the key contributor to our S$1.10 sum-of-parts target price for the stock.

Handful of AcesSingapore is ready to take a bite of the fast-growing Asian gaming pie,

with an expected US$3 billion in revenue in 2010 that is set to double by 2015, predicts investment bank CLSA. In a recently published research

report, CLSA’s Aaron Fischer, Jon Oh and Huei Suen Ng highlight their reasons for being optimistic about the city-state’s nascent casino industry


Market Outlook

A rosy futureSix reasons to be bullish on

Singapore gaming

Asians have a high propensity to gamble

The average bet in Macau is US$100 versus US$20 in Las Vegas. Singapore is well located to tap into the huge Southeast Asian market—there are an estimated 164 million people within a one hour’s flight. Singaporeans also have an avid interest in gambling (54% of locals gambled during 2008; of whom 71% gambled at least once per week), so there is actually a bigger pure-locals market than in Macau. Pent-up demand in this region is huge and we do not believe it is a market-share game in competition with Macau or other Asian-Pacific markets.

Money to burnSoutheast Asia, and indeed Asia, is

home to some of the world’s fastest growing economies. The region is expected to maintain GDP growth of 5%-plus over the long-term. Along with GDP growth comes rising incomes. MasterCard estimates that the number of Asians earning more than US$5,000 will reach 639 million by

2014 from almost 400 million now, or 5% Cagr [compound annual growth rate]. Singaporeans, who are expected to make up one-third of casino visitors to the Singapore resorts, have the third-highest GDP per capita in Asia of US$30,000.

Tourist heavenThe Singapore casino-resorts will offer

more gaming activities than are available in Macau or elsewhere in Asia-Pacific. Marina Bay Sands is building expansive convention facilities; 1 million sq. ft of mid- to high-end retail; numerous restaurants; 2,600 hotel rooms and the SkyPark, which we believe will be one of the leading tourist attractions in Singapore. Resorts World Sentosa includes Universal Studios, which will be one the largest theme parks in the world. All these attractions will support more than 17 million tourist arrivals by 2015 (+70% from 2008). We expect average length of stay will increase to four days (from 3.2 days currently), which compares with Macau’s 1.3 days.

Government supportGaming taxes are between 12-22%

versus 39% in Macau and 25% in Malaysia. The success of the integrated resorts is in the interests of the government as this initiative represents a tool to attract tourists, create jobs and add to the increasingly dynamic cultural landscape of Singapore. Ebitda margins will be high at around 40%, although ROIC [return on invested capital] will be in the mid-teens given the high capital expenditure.

Efficient infrastructureSingapore is a well-established travel

hub, with an efficient air, land and sea transport network, making it an attractive location for a casino-resort. Both casinos are located just 20 minutes’ drive from the airport. Currently, 4,500 flights arrive weekly into Singapore from 185 countries. There are strong connections to Australia, Europe and the US, which unlikely many other Asian cities. Singapore enjoys a more stable political, economic and social environment than Macau, which should result in more predictable revenue streams.

Less reliance on VIP play and junket operators

We believe VIP play will contribute around 40% of revenue, compared with Macau’s 70%. This is positive as VIP revenues

can be more volatile (closer correlation to macroeconomic conditions and loan growth) and significantly lower margin due to the high commissions paid to junket operators. For these reasons, we believe investors will be prepared to assign higher valuation multiples to stocks with more dependence on wider margin, more predictable mass-market business.

Warning signsIt can’t be all good news

Teething problemsThe challenge for Marina Bay is erecting

the SkyPark, which will connect the three 55-storey hotels. Rides at Universal Studios will have to satisfy strict testing requirements by Universal’s parent company, General Electric. As at the City of Dreams recently, casinos tend to suffer from a low hold rate when they first open. Service levels will also probably disappoint on day one as staff are trained up over time. There will be around 20,000 new employees for both resorts.

Bad pressWe can almost guarantee there will be

bad press around the opening. We expect numerous articles discussing how the casinos are destroying the social fabric of society. We saw it before in Melbourne and to some extent the press will be right. But there is growing recognition that the positive benefits of legalised casinos (essentially increased economic activity and job creation) outweigh the side effects, which the Singapore government will work hard to manage. Their track record speaks for itself.

Low ROICAlthough well flagged, it is true that the

ROIC for the Singapore casinos will be in the mid-teens in the first two years. The reason is the high capital expenditure required for the non-gaming components. Mid-teens ROIC is significantly lower than in Macau, which is typically in the range of 20-30%.

Early casinos such as Sands Macau were in excess of 100%. However, we believe mid-teens is reasonable for Singapore, which is a lower-risk market due to a clearly defined supply outlook (only two casinos), clear government support and significant growth potential.


Asian VIP marketThere are a lot of discussions about how much market share

Singapore can take from Macau. Not much, we believe

We estimate the Asian VIP market at US$12 billion—mostly from Macau, whose VIP market comprises mainly visitors from the mainland China, Hong Kong and Southeast Asia. The latter represents a huge potential market for Singapore.

There is huge amount of pent-up VIP demand in Asia—from Singapore, Indonesia and other Southeast Asian countries. And, again, there are many reasons to visit Singapore (business, family, etc) even before the introduction of casinos. Macau does not appeal to many of these nationalities. Meanwhile, Melbourne has a well-established casino but is 10 hours away from most Asian cities. Las Vegas is also too far. Genting is not high-end enough to attract many non-Malaysians.

So, which markets will lose share? Macau’s VIP revenue is captive to the city itself, given currency-related controls and issues relating to VIP players’ creditworthiness. For example, most Chinese VIPs are unable to move substantial capital outside China and hence are dependent on junket operators to provide capital. While it is difficult to quantify, we understand that about 75% of VIPs in Macau originate from China.

Macau has a high gaming tax rate of 39% versus only 12% in Singapore. This is huge and suggests that casinos in the island-state could afford to pay a much higher commission to junkets to bring players from China. However, we expect the higher rate to be available to limited parties—only those that would consider travelling the extra distance to Singapore in the first place.

We believe a large chunk of Chinese players will prefer to play in Macau for cultural reasons, comfort and the close location. The two Singapore integrated resorts have invested huge amount of capital, giving rise to substantial debt. They will be eager to generate adequate returns, lowering the chance of higher commissions. We believe the two operators may agree on a set of junket commissions. This is already happening in the more challenging Macau, where are they are six concession holders and 32 casinos.

Market OutlookSingapore versusMacau

While Macau remains reliant on Chinese tourists,

we expect Singapore to capture other Asian

markets. The island-state also has a larger local market versus the PRC

special administrative zone

Average length of stayAs highlighted above, the number of

tourist arrivals in Macau is much higher than in Singapore (at 22.9 million versus 10.1 million). But the average length of stay in Macau is around 1.4 days versus 3.5 days in Singapore. Therefore, the total tourist days in Macau is 32 million days versus Singapore at 35 million days.

Macau has been unsuccessful at extending the average length of stay as it lacked entertainment options. Yet, this has improved slightly since the opening of casino-resorts such as The Venetian, MGM and City of Dreams. Still, Singapore has its advantage as there are many other reasons to visit the island-state as a tourist, apart from the upcoming casinos. The huge number of business visitors also creates another potential captive market for the integrated resorts.

The Singapore Tourist Board aims to boost tourists’ average length of stay per person from three days to 4.5 days. Based on our tourist-arrivals forecast, this implies 32.4-76.5 million days between 2008 and 2015. However, while tourists from further afield such as India, Europe and the US are likely to spend a longer time in Singapore, tourists from nearby countries such as Indonesia will still visit Singapore for a shorter period of time. We, therefore, believe the average length of stay will increase by a lesser amount than government forecasts of around four days.

Don’t forget the localsMore so than in most other gaming

markets, local people will form an important regular traffic driver at casinos in the island-state. We expect population growth of about 3% over the next six years, driven by an 1.6% increase in local Singaporeans and 8% in foreign residents. Both of these estimates are in line with recent historical averages.

Gaming-markets comparisonOur estimate of US$3.2 billion normalised gaming revenue in 2010 puts Singapore at

around 23% of Macau’s 2008 revenue (US$14 billion), 53% of that of Las Vegas Strip (US$6 billion), three times the Malaysian gaming market (US$1 billion), and about 3 times that of Melbourne (US$1.2 billion) and 5 times that of Sydney (US$0.6 billion). We do not include Japan in the chart below as its gaming market comprises mainly pachinko/pachislot venues rather than casinos. Still, the sector generates around US$25 billion in net win per year—this further highlights the Asian appetite for gaming.

Asian VIP revenue (US&m)Las Vegas Strip 1,260Macau 9,500Australia 432Korea 493Malaysia 300Total 11,985

Casino gaming revenue, 2008

MacauLas Vegas Strip

Atlantic CitySingapore

KoreaMelbourne

MalaysiaSydney

0 2 4 6 8 10 12 14 16

Note:Singaporerevenuenumbersare2010estimates.Source:CLSAAsia-PacificMarkets,DICJ,NevadaGamingAssociation

Source:CLSAAsia-PacificMarkets

35


Targeted Growth

Bally Technologies tailors its Asian slots offer property by property

Bally Technologies’ global profits rose in the fourth quarter of the financial year ended 30th June 2009 despite a slowdown in group revenue. Although Bally’s revenue from slot equipment

and systems fell 17% year-on-year during he quarter, its operating margin actually rose 2%, from 23% to 25%.

It appears to be a vindication of the company’s approach to sales in Asia Pacific and beyond. Cath Burns, Managing Director, Vice President Asia Pacific explains to Inside Asian Gaming (with additional insights from Kurt Gissane, Associate Director, Business Development and Operations, Asia Pacific) why Bally continues to improve its performance in Asia Pacific despite a global downturn.

IAG: What progress has Bally Technologies made in the Asia Pacific markets in the last 12 months?

Cath Burns: We continue to grow in a measured, steady way. Even with the slowdown we’ve seen in Macau, with the suspension of [Las Vegas Sands Corp.’s] parcels five and six on Cotai and [Galaxy] MegaWorld etc, we’ve still been able to grow our basic product. We’ve still been able to go into new markets in the course of this last fiscal year. We’re also enjoying [equipment] replacement in Macau properties. We’re getting some replacements there where we haven’t been previously. We’ve also got new markets that we’ve entered in the last year. In addition we’ve seen continued growth in markets like the Philippines. And we’re focusing on new emerging markets like

Singapore. We see that growth continuing into next year.

How do you go about building sales and revenue?CB: When outside suppliers first came to Macau

they didn’t always have the right product for the market. It took them a while to catch up and

it took them a while to earn the customers’ trust. We at Bally have achieved that and now we’re seeing the rewards in terms of our equipment’s performance.

When Wynn opened, we weren’t part of the opening. We’ve steadily over the last two years gone in there bank by bank. For a property with a relatively small footprint by Macau standards, we have grown quite nicely. We have a good mixture of Bally product there that’s performing well.

In The Venetian [Macao] we went in initially with a modest order, as we were on the cusp of changing our product mix. I think the initial order was 150 machines. We’ve been able quarter-on-quarter to grow and grow [the number of machines supplied] at the Venetian.

Now when you walk in you’ll see a very nice spread of Bally product and it’s doing very well there. Where performance of other manufacturers has been not so good, we’ve been able to capitalise and put our product in [Macau casinos].

We’ve had the same experience in Malaysia with Genting. When we went into that well-established property [Genting Highlands]

our first order was for about 20 machines. By last year we were shipping about 20% of their


ship share. That’s what we were aiming for, and that’s what we were getting, so we’re pleased with that.

How do you make sure you give customers the right product, given that Asia has many different markets and the players in them have different tastes?

CB: We currently have a portfolio of 170 games for the region, but we don’t have 170 games actually out in the market. We have 60.

What that enables us to do is work with our customers to look at what we think would be successful in their market. We then put that product out and manage it with them to make sure it’s performing. If it’s not performing we have a plan to take it out and swap it for other product to ensure constant high performance. You will see us continue to do that. I don’t see any reason to change that strategy.

It will be on a customer-by-customer basis. Because even in Macau some games work say at the Grand Lisboa but don’t work say at Wynn, or some that work at The Venetian [Macao] don’t work at Sands [Macao]. It just depends on the demographics.

Each customer in each market, we view specifically. Somewhere like the Philippines, for example, they like upright cabinets, so we don’t put too much of the CineVision™ [wide screen cabinets] in. Macau on the other hand, is completely mixed.Some markets have contracted this year. I’m thinking of the slot club market in Cambodia. What about other markets in Indochina?

CB: We have a distributor that looks after that region for us. They sold a few machines into Savan Vegas [casino] in Laos. That’s a smaller, slower market, but we’re starting to build there.

The slowdown in Cambodia affected us in the slot clubs like it affected everybody. But we continue through our distributor to supply to NagaWorld [casino in Phnom Penh].

The main places where we’re seeing growth in this fiscal year is Singapore, the Philippines, the two casinos opening in Macau—L’Arc and later Oceanus. We’re fortunate enough to have nice orders there. Then there will be some replacement [orders] in Macau.

What other projects are you working on?CB: We’re working on our re-entry into the Australia market. That’s

probably the single most important new plan for us to execute over the next 12 to 18 months. Australia, being the largest [slot] gaming market in Asia Pacific, is an entry that we will get right. It’s not a question of going in and putting a toe in the water. We’ll be diving in and entering the market and making a good job of it.

We also of course want to continue the success we’ve had in Macau. We’ve got a structure in place there.

Kurt Gissane: Australia is a very heavily regulated market as I’m sure you and your readers are aware. The three major states each have different protocols. There’s considerable development work that needs to be done to get into those markets.

In [East] Asia we’ve been fortunate enough to be able to bring over SAS-standard global protocol [equipment] and filter out into other [Asian] markets. We know we’ll get economies of scale by going that route. In Australia you really have to tailor the product on a state-by-state basis.

CB: When we look at Australia, we look at the market as if we were an Australian company trying to get into the Nevada market. You wouldn’t for example say: ‘Okay, next week we’re going in to Nevada.’ You’d be foolish. Every company that’s done an approach

Bally


like that has failed miserably.Australia is a mature gaming market with 200,000 machines.

[One gaming machine for every 105 people, based on the latest population estimate of 21.1 million people.] When you go into Australia with a product, you are setting up a full-scale operation to meet the market needs: you’re designing product, you’re implementing specific protocols. It’s something you want to get right the first time.

We want to go in. We want to get it right. We believe from a company point of view we’re well positioned now. The experience we’ve had in the region serves us well to go into a market like Australia and we’re looking forward to it.

We’ve done a lot of hard work to build here [in Macau] and we want to make sure that translates into another big, mature, market.

How, if at all, would the experience in Macau and the rest of East Asia help you in Australia?

CB: The product that we’re playing in the region is product that will work in Australia. Not all of it will, but some of it certainly will.

I think there are some parallels between the player in Asia and the player in Australia. Understanding that [Asian] player I think helps us and positions us for Australia. It gives us some insight.Are there a lot of ethnic Asian players in the slot markets in Australia?

CB: Absolutely. If you look at some of Aristocrat’s core strengths when they came into this market [Macau], they brought games that had been designed for Chinatown in Melbourne and in Sydney. They’re great games, they’re global games. The fact that they were made for an [ethnic] Chinese market and that the Chinese love them, has meant that globally they translate [work] everywhere. They are knockout games.

They took that experience from Australia and brought it to Macau. Bally will do the same thing from here to Australia. We’ll do that not only with our Asia Pacific experience, but also with our knowledge of Europe, South America, North America—we’ll draw on all of it, and we’ll come up with the right product mix for the Australian market.

Are equipment replacement cycles getting lengthened in Australia as a result of the global recession?

CB: I don’t know. In Australia you can certainly see some quite old product on the [slot hall] floor, but there could be other explanations for that. One of the reasons it’s still on the floor is probably the loyalty of the customers to that product. So why would you [the operator] take it off?

The same thing happens in Nevada. There are products where sometimes the operator says: ‘I don’t want them [the product] removed. I don’t care if there’s a latest and greatest’. It’s because the player loves it because there’s such a familiarity to the product.

Is there a common denominator for achieving success in all these different markets?

CB: The key for us from the point of view of product on the floor in Asia is we started small and built. So what you’re seeing from us throughout Asia Pacific is a targeted approach to each customer of building a bank [of machines on the floor] at a time.

We’ve gone through an evolution of products. We started with the CineVision™ [wide screen] video display, then we moved into a reel. We started with Hot Shot, then Blazing 7 and then we added

another three games to that portfolio. We had Quick Hit and then we added to that; video, stepper and built on the success of those games. Then what you see is a mixture of product. So whether it goes into an upright cabinet or whether it’s stepper or whether it’s video, we’ve built on that.

If you take our CineReels™ product, there’s no other product like this in the world. Macau is the first market where we released it and now it’s throughout that market. It’s also going into Singapore.

Building on the Quick Hit theme, after the stepper, which we launched with [in Macau], we then went into a new cabinet, the Quick Hit Platinum cabinet, offering an even better playing experience and a different style of game.

For us it’s very much a question of: ‘What’s worked?’, then going and building on it and expanding it so we come up with something that’s a little bit different.

When you look at the casino floor and the Bally product—from the player’s perspective, they don’t really care who makes the product. They just want to know it’s something different and a good experience. That’s what we’re aiming for.

This market continues to need choice. We’re seeing new players [from different countries] coming into the market so you’ve got to be able to offer them choice.

We’re starting to see now in Macau a move from that ‘Build it and they will come’ scenario to the competitive landscape we expected. So now it’s about ‘What do I offer the player? How to I create incentives for the player? How do I make them stay in my property?’

We’ve just signed contracts with L’Arc [the new SJM casino in Macau] for both our slots systems and our table systems. They’ll be using our promotional products, so you’ll start to see that built. How you take care of your player is becoming a very important part of the Macau market.

Bally

Bally slots at last June’s G2E Asia in Macau


I believe casinos are losing one of their traditional roles in the entertainment industry—serving as a refuge from the troubles of the outside world.

A recent newspaper article stated that movie theater ticket sales are doing well. It noted that industry insiders say movies have long been a refuge for the masses during

economic downturns. Then it had an interesting quote from Patrick Corcoran of the National Association of Theatre Owners in Washington, D.C.: “If times are tough, people still need to get out and get away.”

Yes, people do need to get away and they used to flock to casinos to do that. We all know that isn’t happening right now. So what can you do to make your casino a refuge again? I am convinced that the answer is as simple as getting back to the

basics of good service. Quality service then leads to the ultimate goal—creating an outstanding gaming experience.

Heck, if movie theaters can get people to spend their money on what may or may not be a good movie, then casinos can get people to try gaming. There’s a 50-50 chance a moviegoer’s experience will be lousy. Either the movie was good or it wasn’t. But great service can give casino guests a good

experience each and every time even though they lose some money. Give people that experience and they likely will come back to play again.

Casino employees need to start thinking about some rather vague words and phrases that relate to having a good experience and then find ways put them into action.

Take the word “great”, for example. Guests should have a great time at your casino. You want every person who walks out of your property to leave feeling

great. If you do the right thing, if you help them in every way you can and treat them like a guest, chances are they will have a bounce in their step as they leave.

Odds are they will already be upbeat the next time they come to play because they will anticipate a great experience.

The phrase “good time” is another example. Many people patronize casinos simply to have a good time and nothing more. Guests know in the back of their mind that the chances of winning are fairly slim. But they’re OK with that because they come to your

property to have fun and escape for awhile.“Unbelievable”—that’s the kind of experience your guests must have. They must be in awe of how

much fun they had and how nice everyone was. When guests visit your property, they must have an unbelievable experience they can take home. That’s what they have to show for the time and money they

spent at your casino.What about the word “warmth”? Guests don’t want to walk into a place that feels sterile and cold.

They want your casino to project warmth and personality and employees play a major role in making that happen. Their smiles and eye contact help guests feel warm and welcome.

This may sound a little corny, but if your guests had such a wonderful time at your property that they had to make up a word to describe their feelings, “yowza” would be ideal. If you can find a way to get people to actually exclaim “yowza!” because they had so much fun, well, you’ve done your job.

There are plenty of other words that describe the kind of gaming experience casinos need to deliver—exceptional, stupendous, marvelous. Sure, they’re vague, but all it takes is the right word to get casino employees thinking about ways they can make that word happen. I firmly believe casinos can reclaim their rightful place as a refuge for people in tough times. These days, people want and need to get out and get away. Give them a reason to come to your place.

By Martin R. Baird.Reprinted with permission from urbino.net.

Bright IdeasCreate a refuge with great guest service

Feature

http://urbino.net/


Casino Design

Paul Steelman has become the go-to guy for Asian casino operators seeking to create crowd-pulling properties.

His first big gaming splash in the region was the Sands Macao, which opened in May 2004 at an initial cost of US$265 million, and though followed by a string of billion-dollar-plus properties in the city, still packs in the crowds throughout the weeks.

Inside Asian Gaming agrees with Mr Steelman’s claim that Sands Macao “still has the most energy of any casino here,” despite being built in a hurry to ensure it was the first post-monopoly casino to open in Macau, and on an odd-shaped plot of land.

Sands Macao was widely-touted as Macau’s first Vegas-style property, but according to Mr Steelman: “When we created the Sands, we were instructed and decided this, that we did not want to create an American casino. In designing that facility, our goals were to design something new and non-American. “

“Somehow that message has got a little lost, and many of the [Macau] casino operators have tried to interject American type of gaming into this community. Consequently, some of the other casinos just don’t have the kind of energy that the Sands has.”

Mr Steelman claims the only thing Vegas-style about Sands Macao is its “people-watching excitement.” The inspiration to create a dynamic people-watching space, however, came not from the US, but from Macau, during Mr Steelman’s visit to Macau’s monopoly-era flagship casino, the Lisboa, about nine years ago.

“When I sat down there and gambled one day, I was gambling and these people were watching me. And I said gambling here is more of a spectator sport. That’s why I said we should do the stadium casino. Be that as it may, I didn’t take too much of a chance here. I have high ceilings, and I have middle ceilings, and I have low ceilings.

“I have all the ceiling heights. So if it failed miserably, I still would have been covering my bets. But in order for us to do that we had to invent certain things, like those ‘G-wings’ [which stand above the individual tables and contain lights and surveillance cameras], because it would have been too bright without them. We have a patent on those, by the way.”

Sincerest form of flatteryInside Asian Gaming has witnessed

many elements of Paul Steelman’s designs, particularly those at Sands Macao, imitated around Asia. In Macau, people wandering into former monopoly operator Stanley Ho’s new flagship Macau property, the Grand Lisboa, often observe that its stadium-style main gaming floor resembles the Sands, “with heaps of feng shui elements thrown in.” Even the G-wings above the tables have somehow made their way to the Grand Lisboa main floor.

Meanwhile, casino operators who didn’t

manage to enlist Mr Steelman’s services to create the original version of their properties still have the option of calling on him for a revamp. Galaxy Entertainment Group’s main Macau property, StarWorld Hotel & Casino, has been a consistent VIP earner since its opening in October 2006, but its mass revenues have lagged.

The VIP spaces had always been more central to StarWorld’s business model, and given the property’s small plot size, the main gaming floor was constrained. However, keen competition and declining margins in the VIP sector, prompted Macau’s casino operators to redouble their efforts to court mass players. StarWorld’s solution was to commission Mr Steelman to revamp its main gaming floor.

Galaxy proclaimed in an August press release to announce the completion of the revamp: “Every detail has been attended to, from the eye-catching crystal chandeliers to the clean air. To ensure the latter, StarWorld has installed a comprehensive air purifying

ThenewlookStarWorldmaingamingfloor

Something DifferentOften imitated but never duplicated, world-renowned casino architect Paul Steelman—

who makes a return appearance to the Asian Gaming 50 – 2009—continues questioning the received wisdom on casino design


Casino Design

system, the first of its kind in Macau. Above the gambling tables air is drawn into the system to be filtered, drastically reducing smoke for a clean and clear experience.”

Rocking with jazzThe latest Macau property to be designed

from scratch by Mr Steelman’s company, Paul Steelman Design Group (PSDG), is the Hard Rock Casino at Melco Crown Entertainment’s City of Dreams mega resort, which opened 1st June. Mr Steelman comments: “I think it’s kind of unique, in that it’s the first casino in Macau that says it’s going to attract a more youthful audience. It has a lot of jazz. It has a lot of the things that will attract casino customers, and of course, I’m very interested to see how it will work on the basis of these diverse hotels built around it.”

Unfortunately, owing to the slowdown and suspension of construction of several casino projects around Asia, we will have a longer wait to see whether Mr Steelman’s latest designs will revolutionise gaming in the region, in the way Sands Macao managed to do.

One innovation Inside Asian Gaming is keen to witness is the transformation of the VIP baccarat rooms, where the bulk of Macau and the rest of Asia’s gaming action still takes place. Mr Steelman wants to move away from the staid “wood-panelled, windowless

Louis XIV rooms” to VIP facilities that are more space-based than decor-based.

“How excited can you get over the wood-panelled room?”, asks Mr Steelman, suggesting “I think high-rollers like it a little simpler, to be honest.” Although the opening schedule for the US$2 billion Macao Studio City, designed by PSDG, has been put off indefinitely in the wake of the credit crisis, it will feature a dramatic move away from the current form of VIP rooms. Says Mr Steelman: “We were going to put them all in huts out on the pool. We were putting natural light into them, placing them next to the Playboy club, putting them in quadrants with big casinos going into little casinos, etc. We do have lots of ideas on how to make them more desirable.

“Architecture is energy and motion, and what we need to do in these rooms is to create a situation that has an energy-base to it. We can’t create a room that looks like a

library and has some wood-panelling.”Mr Steelman believes the current form

of VIP rooms is a product of ‘if it ain’t broke, don’t fix it’ thinking. After all, most casino architects simply respond to what their casino-operating customers ask for. “And the customers tend to like the last thing they’ve been in. So our customers actually don’t give us good read. What’s a good read is when a high roller travels from casino to casino, there’s a certain amount of architecture and decor that holds them in place. So what we’re trying to do with these rooms is we’re

not trying to disguise it into something it’s not. We’re trying to say this is Macau, this is beautiful pool decks, this has great, luscious fabrics that makes you feel softer, this has lighting that makes you feel more tanned, this has music that allows you to talk over and concentrate on the cards.”

Another PSDG creation that is now a little farther off on the horizon is the US$4.2 billion beachfront Ho Tram Strip destination resort, phase one of which was originally scheduled to open late this year. Though there is no way that target will be met, Mr Steelman expects the foundations to be completed in October, and the resort open before 2012.

Positive side of the crunchAlthough the credit crisis has deprived

casino developers of funds to continue their work, the prognosis is not all bad for new casino projects, points out Mr Steelman. In the wake of the last downturn in 1987, several cash-strapped state and national governments moved to legalise or expand gaming within their borders because “officials wanted the painless taxation associated with it. We thought that that might also happen with this particular depression we’re in.

“You might have just seen that mayor Daley in Chicago passed legislation for a casino to be built in that city. Kansas has a new gaming law. And you have the Vietnam law [enabling the Ho Tram Strip], which will be extended to other cities.

“We also see some liberalisation of European gaming laws, particular in Germany, which will allow casinos to be built more Las Vegas-style than they currently are.

“And we see some of the Indians [Native American tribes] coming to an agreement with the states easier than they did in the years before. For example, the Seminoles got a compact accepted by the government. There’s an undercurrent of this. “

Above and below: Sands Macao

Hard Rock Casino

Macao Studio City

Ho Tram Strip


Feature

Peacebreaks outIt’s a doctrine of free market capitalism that appealing to self-interest is often the best regulator of market behaviour

That appears to be the case on Cotai in Macau. Las Vegas Sands Corp and Melco Crown Entertainment Ltd were ahead of

the pack in announcing a bilateral agreement on VIP commission caps of 1.25% several weeks before the cap was agreed on a market-wide basis with the Macau government.

This was to avoid a costly and (from their perspective) unnecessary trade war between The Venetian and its newly opened neighbour, City of Dreams.

As Stephen Weaver, Asian regional president of LVS told Inside Asian Gaming

after the inauguration of the casino operators’ trade chamber at the Grand Lisboa Casino recently:

“We’re neighbours, we’re on friendly terms, so it didn’t make sense to enter into [commission] agreements that might have to be amended later at the behest of the government.”

In case anyone is worried that a new Woodstock-style era of peace and love is in danger of breaking out between the operators in Macau, don’t worry. It isn’t all sweetness and light.

There’s still the small matter of whether to build an air-conditioned bridge linking The Venetian and City of Dreams. The current line of thinking in both camps seems to be to push for first mover advantage and damn the bridge. In other words, grab as many customers at the ferry terminals and border land crossings as you can, then hang on to them for dear life until they’ve spent up and so have nothing left for your rival across the road. Some market research published recently in Australia seems to support this theory.

Media reports on the 1.25% VIP commission cap agreed recently

between Macau casino operators have naturally focused on how it will benefit those operators’ bottom lines.

Another interesting question receiving less attention is what impact price fixing agreements will have on other service and equipment suppliers in Macau.

Slots and slots systems suppliers have already spoken privately of a trend toward

discounting and revenue share agreements with operators on new equipment rather than capital expenditure up front.

The recently formed Chamber of Macau Casino Gaming Concessionaires and Sub-concessionaires could be an extra factor in increasing the downward pressure on equipment supplier revenues.

The chamber is far more than a talking shop. It’s a forum allowing the operators to share information, compare notes and,

if deemed necessary in the interests of the Macau industry, fix prices. Were this principle to be applied by the operators to the slot supply sector, it could have a dramatic impact on the business model for those suppliers in the Macau and East Asia market.

Any cap on the prices operators are willing to pay for original slot equipment and systems support in Macau could reduce the incentive for the suppliers to develop

Macau cartel to squeeze slots sector?


Feature

market-specific products. Why put all that time and effort into market-specific product designed to appeal to Chinese players if the market is not willing to pay a premium for the privilege?

Under those circumstances we could see a return to the situation that existed back in 2004-05. At that time many Western manufacturers were focused mainly on tweaking existing cabinets and games originally developed for core markets in North America, Europe and Australasia.

Under those circumstances the competitive advantage available to large suppliers through their ability to create market-specific product via large R&D departments could become a costs albatross, leaving the Macau market in the hands of smaller, more nimble suppliers with lower cost bases.

Commission caps and the bottom line

Signing ceremony of the Chamber of Macau Casino Gaming Concessionaires and Sub-Concessionaires

Bill Lerner, formerly of Deutsche Bank and now of the specialist consultancy

Union Gaming, has put some useful metrics on exactly how much Macau casino operators’ bottom lines could benefit from the recently-agreed 1.25% VIP commission cap.

“We’ve applied the new commission cap to our models and we estimate the following incremental 2010F EBITDA by operator,” says Mr Lerner.

“Galaxy HKD189 million, or +21% at corporate level; SJM Holdings HK$515m, also +21% at the corporate level; MPEL US$33m, or 13% at corporate level; LVS US$56m, or 4% at corporate level; MGM (not meaningful); WYNN US$0m (never raised commission rates).”

Anyone with the time and patience can probably work out from that model (based on gross rolling chip turnover per operator as declared in financial statements) what commissions the operators have been paying pre-cap.

The government says the new capping rules will come into effect from 9th

September. The authorities say the system will not be a paper tiger. Sanctions available to the government include: fines for failure

to issue reports on commissions paid; fines for failing to follow

agreed reporting rules, and fines for any breach of the commission cap. The latter offence can also result in up to six months’ suspension of a junket’s licence, or even cancellation of said licence.

But as reported recently, in the complex network of contracts and sub contracts that make up the world of Macau junkets, there are other ways of creating incentives for sub agents or agents, without it showing up in headline rolling chip commissions. The issue is whether that incentive

or solicitation can be tracked back to the doorstep of the main junkets or individual operators.

Don’t be surprised if the Gaming Inspection and Co-

ordination Bureau (DICJ), Macau’s gaming regulator, starts advertising for forensic accountants quite soon.


COD

Brave New WorldCityCenter is about to take the next big step into the future of server-based gaming

When the $8 billion CityCenter opens on the Las Vegas Strip later this year, the world-class architecture

and ultra-chic shops will capture the lion’s share of attention. But for many casino operators, manufacturers and technology watchers the real show will be on the slot floor, where MGM Mirage and IGT will roll out the first-ever casino-wide installation of a server-based gaming network.

The unveiling at CityCenter’s ARIA Resort & Casino will mark the culmination of close to 20 months of planning between MGM Mirage and the Reno, Nev.-based slot giant, which is installing the SBG network and its related systems.

For financial analyst Bill Lerner of Union Gaming Group it marks “an extremely important first data point for full-blown server-based gaming.”

“The casino industry,” he says, “is going to be watching the early results out of CityCenter very closely.”

For Javier Saenz, IGT’s vice president of network systems product management and marketing, an SBG installation across 2,000 gaming machines represents a paradigm shift for the industry. “It’s brand-new technology across the entire floor. This is where people can go to see what

that looks like.”Michael Volkert, vice president of slot

marketing and operations at ARIA, says MGM Mirage started formulating the strategies and concepts about two years ago. Their work led them to IGT, which had a system, was committed to the open protocols of the Gaming Standards Association and was working on further development.

Conceptually, with SBG, casinos will be able to manage their slot floors with much more flexibility than ever before. They can change and reconfigure games instantly, with no machine down time, increasing flexibility and decreasing costs. What’s more, they can deliver tailored bonusing, marketing and multimedia content directly to their players, expanding the opportunities for meaningful interaction and generating loyalty.

The nexus of all this from IGT’s standpoint is its Service Window technology, through which players will be able to access their point balances, comp balances, account information, restaurant information, show information and more, right at the game.

“The physical machines will look the same,” explains Saenz. “The big difference will be how the individual player interacts with the individual machine.”

It also will allow digital signage through

IGT’s sbX Media Manager to be tied in across the property, so what you see on the huge sign on the street conceivably could be on the plasma screen above a bank of slot games and on the Service Window itself. Applications could involve expanding the capabilities of IGT’s Tournament Manager, now used for standalone tournaments. New applications will explore areas for creating even a greater sense of community among players.

“We’re definitely looking at how you enable that communication between players,” says Saenz.

MGM Mirage and IGT are carefully preparing for this opening, running tests at Treasure Island (now no longer part of MGM Mirage’s portfolio) and a regulatory field trial at the Monte Carlo and taking full advantage of the resources at IGT’s new Interoperability Center in Reno.

“There will be no surprises in terms of functionality at ARIA,” Saenz says.

As the field trial progresses at Monte Carlo, “gradually we’ll start to introduce third-party EGMs to the system,” he says. “At the moment, all vendors are invited to participate, and all the majors are certainly working on it.”

If there has been a challenge, it has been


Server-Based Gaming

getting the different gaming manufacturers to get along, says Volkert.

“To take a lot of different companies—who all have great ideas and different ways of doing business—and try to get them all to agree to one path has been challenging. It took us some time, and you know we decided to make it a collaborative process. We brought all the vendors together and did conference calls every week, and we just walked through every issue together, and we talked about it. It’s the only way to do it.”

The conference calls are still going on. “I think we’ve finally gotten to some middle ground to where we can get some things done,” Volkert says.

MGM Mirage supports GSA open standards and made them a requirement for doing business at ARIA.

“I think it’s important to provide a level-playing field for the whole industry,” he adds. “I’m not looking to create a competitive advantage for any one company. I think that if server-based gaming is going to come to reality we have to be very cognizant that it has to be an open-source system and that we allow other people to be able to compete in that space.”

This means telling suppliers they have to be GSA-compatible and that the Service Window is the method the casino will use to communicate to players.

“The guest needs to have one interface, one source of contact, one way of doing something,” Volkert explains. “You’ll just confuse them if there are

multiple touch points.”This also means that IGT has to ensure

its competitors’ machines can work with IGT’s system.

“They have a unique obligation to make sure they interface with other manufacturers and make sure their games are interoperable,” Volkert says, “so they’re under more pressure than ever to make sure their systems are open and to make sure they play well with others.”

Regulators nationwide will be paying close attention.

“Some of the other jurisdictions are watching to see what kind of trouble or lack of trouble they’re going to have,” says Marc McDermott, GSA’s technical director and a former chief of the Electronic Services Division of the Nevada Gaming Control Board. “Having the largest jurisdiction in the country, Nevada, decide that this is OK, and having it working with no problems in Nevada for some time, is certainly a help. There are quite a few places where this is moving, not to the extent of CityCenter, but it’s definitely moving in.”

GSA President Peter DeRaedt says he has no illusions that the technology will spread overnight. “I don’t think it’s going to accelerate that fast. I don’t see any big bang.”

Still, he adds, “having the ability to innovate more rapidly is definitely going to be there.”

And it will be interesting, he says, to see what kind of metrics come out of ARIA to

show cost savings, revenues and indications of how players perceive some of the new functionalities.

Which may not be quite as sexy as cool new apps, but as he puts it, “immediate cost savings increase the ability to innovate long-term.”

In the shorter term, though, as Lerner sees it, the economic realities will find other casinos proceeding slowly. “A number of them are trialing [server-based gaming] as you would expect them to do. Nobody has the budget to do anything meaningful. They have the luxury of waiting.”

But he acknowledges the magnitude of the potential. “I think that disruptive technology historically has resulted in accelerated replacement cycles for slot machines. I think ultimately that if you incentivize people on an individual basis at the point of sale, right at the machine, they’ll spend money incrementally on other parts of the property.”

Saenz has no doubt that what is happening at ARIA is a turning point for the industry.

“Once we start to see the revenue potential on the upside, operators are going to be very compelled to justify the expenditure.”

By Marian Green. Reprinted with permission from Casino Journal.Rendering of the soon-to-open CityCenter

RenderingofCityCenter’sARIAResort&Casino


Silver Heritage

Some of the best business partnerships actually begin after work over a pint of beer and a televised sports

game. So it was with Silver Heritage’s chief executive officer, Mike Bolsover, and chief operations officer, Tim Shepherd. Watching the 2003 Rugby World Cup at a Marriott hotel bar in Malaysia, the pair discovered they were both independently establishing sports bars in Southeast Asian casinos to capitalise on the growing popularity of televised European football and the advent of Internet sports betting.

Mr Bolsover had been a proprietary trader and business development director with the sports betting group Victor Chandler International for four years from 1999. Mr Shepherd had moved to Hong Kong in the mid 1990s and had worked as a consultant to the UK-founded bookmaker Ladbrokes and to Macauslot, Macau’s only licensed sports betting operation in which Macau’s former gaming monopolist Dr Stanley Ho has a stake.

With their common interests and complementary expertise, Messrs Bolsover and Shepherd joined forces just as Silver Heritage’s first sports lounge went online at Laos’ original licensed casino—now known as Dansavanh Nam Ngum Resort—in 2003.

Silver Heritage—originally a middleman between Asian casino operators and overseas licensed bookmakers like Stan James—was at that time leading the development of

Las Vegas style sports betting in Asia. The company gained a foothold for suppliers in the region through a well-connected local network and attracted new customers to licensed casinos on the Thailand-Laos and Thailand-Cambodia borders.

Nowadays Silver Heritage’s original sports betting lounges have been transformed into fully automated, directly managed, electronic gaming areas, with sports betting just one component of the business mix. The

floors in the lounges are usually split equally between server-based games, slots and automated table games. Around 95% of the sites’ revenues are from these products, with the balance from sports betting and poker.

Direct management of slot facilities in a venue licensed to another operator—usually on a revenue sharing basis—is not a brand new concept in Asia. The key to success in this field is in execution of that management. That’s in terms of signing

Raising the GameSilver Heritage is ramping up its directly managed slot business in Asia

Club 19 at the Dansavanh Golf Resort Clubhouse in Laos


Silver Heritage

up good quality venues, getting market-appropriate equipment and in effective marketing and promotion of the sites.

Silver Heritage now directly operates gaming lounges in nine venues in four Asian countries. The sites are mostly in licensed casinos but one is on a cruise ship that sails in Asian waters. The venues are in: Laos (four, including the company’s own “Club 19” Dansavanh at the Dansavanh Nam Ngum Resort); Cambodia (three, including at NagaWorld, Phnom Penh’s only licensed casino, operated by Hong Kong Stock Exchange-listed NagaCorp); Singapore (the cruise ship) and The Philippines (one venue in Manila).

Sports to slotsThe transition from sports betting into

operation of electronic gaming machines (EGMs) was driven by casinos’ demands for new ideas to feed their growing operations, recalls Mr Shepherd. That shift of operator focus was in many cases a consequence of sports betting becoming regulated and being designated as a non-casino monopoly in many parts of Asia.

In 1999, the Macau government awarded Macauslot the sole licence to operate sports betting in that Special Administrative Region of China. Although the business generated just US$38 million in 2008, the monopoly was recently extended for another year—to the disappointment of many executives in the city’s integrated gaming resorts.

In 2002 the Hong Kong government issued an ordinance that amended the Hong Kong Jockey Club’s gaming licence, allowing it to organise and promote online and retail betting on local and foreign

soccer matches. HKJC began offering such services commercially in 2003. The move was in response to the perceived growth of unregulated and unlicensed soccer betting in the territory. HKJC’s previous remit was confined to the promotion of horse racing, horse race betting, lottery promotion and lottery betting. By the time of the 2007/08 soccer season, sports betting was generating an impressive US$4 billion annually for the Jockey Club.

Taking a lead from Hong Kong, Singapore also decided to regulate its sports betting market. The sole licence in Singapore was granted to Singapore Pools, recalls Mr Shepherd.

“The market for casino-based sports betting still exists in Asia, but it has become more of a niche product,” he adds.

“Casinos still continue to request sports betting and SHL remains one of the niche providers of this product to licensed casinos in Asia. At the same time, the small casinos we worked with were growing up and wanted new ideas—one of the product categories we introduced was slot machines.”

Raising US$150,000 as start-up capital for the new product line, Silver Heritage purchased 30 reconditioned machines in mid 2004 from New South Wales, Australia, and operated them in Dansavanh. The initial investment was recouped in six months and a new business was born for Silver Heritage.

Mr Bolsover said: “While slots are far more capital intensive than sports betting—which might have cost us US$10,000 per installation to set up with a couple of plasmas, a PC screen and a bit of time—they are, potentially, a much bigger business.”

Silver Heritage’s best performing gaming

machines (server based roulette) gross as much as US$450 per machine per day in the best performing venue, says Mr Bolsover.

Server based optionAs of 30th June this year the company

has 730 machines installed in nine venues in four Asian countries. They generate gross revenues of more than US$2 million per month across all 730 machines, says the company; and a further 120-plus are currently being redeployed in existing locations to optimise returns. It adds that despite the current challenging economic conditions it sees immediate expansion opportunities in all four existing markets. Silver Heritage says it will be operating in 14 venues by the end of the year and sees expansion potential in Vietnam and India.

Around 30% of its installed machines are controlled by computer servers, states the company. Silver Heritage says it leads in supplying this server-based distribution technology in Asia thanks to a partnership with Inspired Gaming, an AIM-listed UK company. Silver Heritage says its ability to offer server-based gaming has been a major deciding factor for operators in a number of slot operation deals. Server based gaming is not only a delivery system but also a separate product category in its own right, with its own compliance requirements, points out Silver Heritage.

The tie-up with Inspired Gaming happened because Silver Heritage was proactive in seeking market opportunities and new business partners for the region—another thing that sets it apart from its competitors, says Mr Bolsover.

“We went to Inspired and said ‘You

Multi-player roulette (left) and slots (right) inside the Club 19


Silver Heritage

needto be in Asia’,” he explains. Inspired Gaming’s core product is a

multi-wheel roulette game, which enables participants to play up to four different wheels from one single terminal—a design unheard of until very recently, according to Mr Bolsover.

“It’s a fantastic product for Asia, where people love to watch a whole bunch of tables and follow rolls of luck.”

Silver Heritage also represents Slovenia-based company Royce & Bach, an automated roulette game supplier, and Cadillac Jack, an American slot machine

manufacturer new to Asia.“Their slots do well in certain American

markets that are similar to some of the Asian markets we operate in,” states Mr Shepherd.

Surroundings matterSilver Heritage says it is actively

managing assets in all its venues to ensure a good return on investments. As well as slot product innovations, the company focuses on the design and decor of its electronic gaming areas. In January 2008 it launched the Millionaire’s Club at Dansavanh and spent US$120,000 redecorating the premises. Future investments in the range of US$500,000 to US$2 million will further enhance the company’s offer.

“Our aim when renovating our gaming areas is to make them the best available in the local market. That creates excitement among the customers and drives more people to the casino,” says Mr Shepherd.

The company assists local operators in running their electronic gaming areas, conducts promotions for all of the games within the space, and cross-promotes sports betting, slots and poker, he explains. He cites excellence in marketing and venue management as reasons that border casinos prefer to form partnerships with Silver Heritage rather than its market rivals.

“They trusted us to choose the best mix of games, now they’re trusting us to bring in the players as well, and for that we get a higher percentage of the revenue share,” explains Mr Shepherd.

“We realised we had to do more because casinos largely disregard slots, choosing to spend their marketing money elsewhere—that’s why they have us buying the machines for them in the first place,” he reasons.

Putting on the styleRecently, the company expanded its

themed gaming area concept with the addition of Club 19 at Dansavanh Golf Club in Laos, which opened in January 2009. To golf enthusiasts ‘the 19th hole’ is a euphemism for the clubhouse or bar where players meet after a game to socialise and discuss their round. Club 19 takes that clubhouse idea and adapts it for the gaming market. The boutique scale gaming facility welcomes golfers and club members to bet on sports, play poker, and try their luck on EGMs following their round out on the greens. Silver Heritage’s new association with golfing is helping to move its offer

up market and has boosted the quality of players it attracts, claims Mr Bolsover.

Quality venues have become central to Silver Heritage’s ongoing growth, says the company. It plans to open two to three boutique venues like Club 19 every year from now until further notice. It says it has shifted its focus from growth based on expanding its universe of machines to growth based on maximising the yield of existing and new machines. It says this is achieved by securing the best partners and the best locations. Mr Bolsover hopes the club concept will open new markets for the group in The Philippines in the short term, and Vietnam in the not-too-distant future. SHL has even been approached by a company in New Zealand who like the Club 19 concept.

For its Club 19 strategy, Silver Heritage formed a partnership with Robert Trent Jones (RTJ), one of the world’s foremost golf course design and golf course architecture companies. RTJ is redeveloping Dansavanh Golf Course into a destination for foreign enthusiasts of golf. RTJ has worked on projects all over the world including Dubai, New Zealand and Vanuatu. Mr Shepherd is confident the partnership will eventually open doors to markets beyond Southeast Asia.

Silver Heritage’s business plan is to expand the business threefold or even fivefold in the next three years. Measured on a slot machine basis, that could take the business from 850 machines to between 2,500 to 4,250 machines.

“We won’t just measure success in terms of machine numbers. We want to be known in the industry as a company that manages venues extremely well and where possible actually improves them—that’s the case whether it’s an electronic gaming area in a casino or a gaming area at a general entertainment resort,” says Mr Bolsover. “Managing our gaming assets with increased efficiency will also mean achieving better returns for our shareholders.”

After a few rounds of golf, test your luck at the roulette (top), playing baccarat (center) or sports betting (bottom) in ‘the 19th hole’

48


Briefs

Regional BriefsL’Arc triumphs

Macau’s latest casino, L’Arc, is due to open at the end of this month. It will be the 18th venue run directly by Dr Stanley Ho’s casino operating company, Sociedade de Jogos de Macau (SJM).

The property, on Macau peninsula, will add 142 tables and 400 slot machines to the Macau market.

RGB Macau, a unit of Malaysian gaming equipment manufacturer RGB Ltd, will manage the slot machines at L’Arc.

SJM’s development partner on the hotel portion of the project is Chow Tai Fook Enterprises, a sister business of Hong Kong retail chain Chow Tai Fook Jewellery Company Ltd. Chen Yu Tung, who holds a stake in Dr Ho’s infrastructure investment company, STDM, and is one of Hong Kong’s wealthiest entrepreneurs, runs Chow Tai Fook. The 300 hotels rooms in the property will be branded as the New World Hotel, as a name check to Mr Cheng’s Hong Kong property development and management business, New World Development.

Good show for Bally

Bally Technologies, Inc., a provider of slots, video machines, and casino-management systems for the global gaming industry, says that L’Arc Macau and its slot management partner RGB Macau has bought a range of Bally Systems equipment for the new gaming venue, which is due to open in late September.

They include: Bally’s SDS slot-accounting and player-tracking system; 420 Bally iView player-interface displays; the company’s CMP Casino Management System with a junket module fully adapted and configurable to Asia’s requirements; and the TableView Real-Time Table Rating and Player-Tracking system.

In addition, L’Arc chose Bally Power Promotions, a system that

allows casinos to convert player’s club points and promotional cash into playable credits at the table and gaming machine without having to visit the club booth.

“Bally met all of our needs on both the table games and slots side of our business and gave us the most confidence that they will be a solid long-term partner with solutions as we develop our business in the Macau market,” said Paul Tso, the Chief Executive of L’Arc.

Cath Burns, Bally’s Vice President and Managing Director, Asia-Pacific, described the deal as “exciting and a great honour”.

Junket juggling

A decision on whether to allow junket operators into the Singapore casino market still hangs in the balance only months before Las Vegas Sands Corp’s Marina Bay Sands and Genting Group’s Resorts World at Sentosa, the city state’s first integrated gaming resorts, are due to open, according to industry sources.

The broad requirements for junket promoters intending to operate in Singapore are listed under Section 110 of the country’s Casino Control Act. But only months before the first of the city-state’s two integrated casino resorts is due to open, the detailed regulations for junkets have still not been published.

The reasons for the delay have not been given officially by either the Singapore government or the city’s Casino Regulatory Authority. In the absence of any official word, speculation has focused on two main topics. The first is that a debate about junkets is still going on within the government. The second is that either LVS or Genting Group, or both, have lobbied the government to prevent junkets from being allowed in.

The first scenario sounds plausible if one accepts the assumption that junkets have the potential to create as many problems, in terms of crime and business transparency, as they solve in creating high roller betting volume.

The second scenario—lobbying by the operators for a junket-free market—would only make sense if the operators had confidence they could bring in enough so-called ‘direct’ players (i.e., those with a direct contractual relationship with the casinos for gambling credit) to take up the slack.

A hotel room at L’Arc

The Bally iView

Marina Bay Sands


Briefs

Las Vegas Sands Corp has made no secret in Macau of its desire to change the business model of Asian gaming in terms of diversifying its revenue and customer base. While LVS understands that high rollers are likely to provide the bulk of the revenue in Macau for the foreseeable future, the company would like to make a better margin on that high volume business. The best and fastest way it can think of is to cut out the middleman and recruit more of the ‘direct’ players.

Some analysts have suggested, though, that a Singapore market without VIP agents would be a much smaller market than the US$2 billion annual market estimated last year by the Singapore authorities.

There is a potential conflict of interest between the operators and the government on the issue of the high roller segment. The operators could be happy to trade the low-margin, high volume VIP turnover brought in by agents; for lower volume, higher margin direct VIPs. The government, on the other hand, makes its money by taxing the gross gaming revenue (plus a levy for corporation tax on the operators). This amounts to an effective tax rate of 12% of the VIP gross plus a 15% corporation tax on the operators’ profits. The greater the gaming turnover, therefore, the greater Singapore’s tax income.

A possible hybrid solution would be to allow the market to open without junkets, and to authorise them later once the economic impact and implications of the direct player model had been established.

Resorts World Manila opensResorts World Manila, the

US$700 million casino joint venture between Genting Group unit Star Cruises Ltd and Philippine property developer Andrew Tan, opened on 28th August.

The 100-table facility doubles the number of gaming tables available in the Manila market. The operators are confident

that it will help the total market to grow, rather than cannibalising business from existing casinos licensed by the Philippine Amusement and Gaming Corporation (PAGCOR), the country’s gaming operator-cum-regulator.

Resorts World Manila will draw on Star Cruises’ existing network of more than 2.5 million customers and has the potential over the next three years to generate 11.1 million visitors and raise US$315 million in gambling taxes for the Philippines government, says Kingson Sian. Mr Sian is president of Alliance Global Group Inc., the holding company of Mr Tan, the Philippines’ fourth-richest person.

“Our expectation is this will contribute to earnings within the first year of operations,” added Mr Sian.

The resort’s casino will have 300 tables and more than 1,000 slot machines by the end of the year, when all three floors of the property are opened, he said.

The branding for the property is complementary to Genting’s new Singapore integrated resort, Resorts World at Sentosa, which is due to open early next year. Resorts World Manila, located next door to Manila International Airport, is operated by a JV company that

goes under the name Travellers International Hotel Group Inc.

IGT product debut in ManilaIGT took the opportunity with the

opening of Resorts World Manila to give a world premiere to some of its latest advanced video reel REELdepth™ games powered by its new computer processing unit, known as the Advanced Video Platform®.

Among the IGT games making a world debut were the Virtua Fighter™ multi-level progressives on the widescreen upright G20 cabinet model. The Joker’s Wild™ multi-level progressives, IGT’s first REELdepth game on the G Multi-Layer Display® (MLD®) model, made its first appearance in Asia. REELdepth games use MLD technology to create an industry-leading 3-D effect on video reels.

Lil’ Lady® MultiPLAY and Cleopatra® MultiPLAY video slots were also introduced to the market at Resorts World Manila. The products give players the option of playing up to four games, simultaneously, on the same machine. MultiPLAY games are exclusive to IGT.

Complementing the new releases were existing favourites, including the multi-level progressive games Wheel of Fortune® and Indiana Jones™ on the G23 cabinet model; and Red Hot Jackpots® multi-level progressives on IGT’s classic five-reel S2000 model, and Star Wars™.

IGT is a global company specialising in the design, development, manufacturing, distribution and sales of computerised gaming machines and systems products.

Resorts World Manila


Briefs

International BriefsEnd of sale

The possibility of a ‘fire sale’ of two MGM MIRAGE casino properties in the United States appears to have receded since the company managed to restructure its finances to tackle its US$13 billion plus global debt burden.

Potential buyers had reportedly been circling MGM Grand Detroit and the Beau Rivage in Biloxi, Mississipi, on the hunt for a bargain.

Now that the immediate threat to MGM MIRAGE’s existence seems to have passed, the company appears to be suggesting a sale of the properties was never on the table. One possibility raised by analysts is that the bargain hunter or hunters made what MGM MIRAGE regarded as an unrealistic offer.

MGM Mirage spokesman Alan Feldman told Las Vegas Gaming Wire, however, that if a serious buyer came forward for these or any other properties, then the company would have a duty to its shareholders to explore the offer.

Go fishOnline gaming group 888 says its subsidiary,

Dragonfish, will lead the UK online launch of the World Series of Poker (WSOP) and Caesars Casino brands on behalf of US casino operator Harrah’s Entertainment.

Under the deal, Dragonfish will make its e-payment and customer support services available to the brands to help them build market share, said 888’s chief executive Gigi Levy.

LVS slot bidSands Casino Resort Bethlehem has asked state regulators to

allow it to install more slot machines on the floor.

The operator, Las Vegas Sands Corp, had originally indicated it wished to put an extra 2,000 units in the property. It currently has 3,000.

A spokesman for Sands Bethlehem said the current application with Pennsylvania’s Gaming Control Board was for fewer than 2,000 new machines. He added the company hoped to have permission in time to bring the new equipment online by the third week of November.

Las Vegas shrinkage slowsThe number of people visiting Las Vegas fell for the 14th month

in a row in July. Some comfort is that the rate of year-on-year decline slowed during the month.

More than 3.1 million tourists visited Las Vegas during July, 1.3% fewer than the 3.2 million who came to Southern Nevada a year ago, according to figures released by the Las Vegas Convention and Visitors Authority.

For the first seven months of 2009, visitor volume was down 6% with 21.3 million people coming to Las Vegas through July, compared with 22.7 million for the same period a year earlier.

People are paying less for rooms and spending less on goods and services, the Authority said.

The average daily room rate during July was US$86.23, down 18.6% from US$105.97 in July 2008. Clark County gaming revenues declined 10.9% during the month, says Las Vegas Gaming Wire.

For the first seven months of the year, room rates were down 25.8% compared with 2008 while gaming revenues were down 13.1% in Clark County, an administrative area incorporating the Las Vegas Strip where many Las Vegas casinos and hotels are located.

Citywide hotel and motel occupancy was 84.2% in July, compared with 87.2% a year ago. For the year, room occupancy is at 82.9%, a 6% decrease compared with 2008.

Convention attendance was down 5.5% in July. Convention attendance fell 26% for 2009 with 19.5% fewer conventions and meetings compared to the first seven months of 2008.

Nevada revenues down—againNevada’s gaming fell sharply in July—the 19th monthly

decline in a row according to figures released by Nevada’s Gaming Control Board.

Across the state, casinos reported gaming revenues of US$872.7 million during the period—a 12.5% decline compared with US$997 million reported in July 2008.

Las Vegas Strip casinos reported revenues of US$461.3 million, a decline of 11.1% compared with US$519.2 million a year ago.

The one bright spot was casinos in North Las Vegas. They recorded a 7.4% increase in revenues to US$23.6 million from US$22 million a year ago, helped by the new property ‘bounce’ felt when Aliante Station opened in November last year.

The Beau Rivage

Sands Casino Resort Bethlehem


Briefs

State-wide gaming tax income based on July revenues was US$57.3 million, a decrease of 1.6% compared with US$58.2 million a year ago.

China hand for Atlantic City

China State Construction Engineering Corp has signed a US$1.7 billion agreement with the construction firm Tishman and Revel Entertainment to help the latter build a hotel-casino in Atlantic City, New Jersey.

The project budget is expected to be US$2.5 billion, according to Union Gaming Group principal Bill Lerner.

The resort will include a 100,000 square foot casino, plus nearly 2,000 rooms, restaurants, pools and spas.

Danes hit Internet poker earningsA ruling by Denmark’s Supreme Court could potentially have

implications for online poker players all over the European Union.The court decided a man who earned nearly US$28,000 playing

online poker in a single year violated laws against professional

gambling, reports United Press International.The court said the man used his poker

winnings as his sole source of income. It ordered him to forfeit the money.

The ruling stated online poker games are subject to national Danish law, despite being hosted on servers outside of the country, because the computer used to play the games was located inside Denmark

Bally profits up on smaller incomeIf a company has to experience a dip in revenue, then it helps

considerably if it can make more profit from the services for which it does write invoices.

This was precisely the story for Bally Technologies Inc, for the company’s fourth quarter in the financial year ended 30th June 2009.

Picking up on the theme of the recessionary squeeze facing slot makers worldwide, Bally’s revenue from slot equipment and systems fell 17% during the quarter.

“Improved gross margins and control of expenses allowed us to drive our fourth quarter operating margin to 25% during the quarter from 23% in the same period last year,” the company said in a statement.

Bally, which makes slot machines and casino management systems, said it expects to earn US$2.25 a share to US$2.50 a share in 2010.

The company said new products and an expected improvement in customer spending beginning in calendar 2010 would offset the sluggish North American gaming machine replacement market and an overall weakness in the economy.

For the fiscal fourth quarter, Bally Technologies earned US$33.2 million, or 58 cents a share, compared with US$31.3 million, or 54 cents a share in the equivalent quarter a year ago. That was on falling revenue amounting to US$205.1 million compared to US$247.4 million last year.

Green light for Games4YouGames4You, a provider of games, engineering, and products for

licensed gaming manufacturers, has been awarded its own licence as a manufacturer and distributor of gaming equipment by the state of Nevada.

The company received Nevada Gaming Control Board approval without objection and joins an elite group of fewer than 300 companies worldwide that carry this approval.

“The licence is a large part of Games4You’s commitment to providing our clients with full service game content development and engineering services,” said Michael Gauselmann, owner and chairman of Games4You, in a prepared statement.

“In the past, we could only do those pieces of the game development puzzle that regulations would allow,” stated Dave Tucker, Games4You managing director and joint owner.

“Now we can supply cutting edge games and engineering solutions through the lab and onto the casino floor.”

Games4You was founded in 2006 as a Nevada-registered company and is based in neighbouring Arizona.

The casino at Aliante Station

Atlantic City

Events Calendar

September 2009Asian Casinos Executive Summit Grand Hyatt, SingaporeOrganizer: Terrapinn

15 - 17, September 2009EIG European i-Gaming Congress & ExpoCopenhagen, DenmarkContact: Joya SchneiderTel: + 1 (636) 946-0820Fax: + 1 (636) 946-0566Email: [email protected]: http://www.worldpokercongress.com/2009/Organizer: Clarion Gaming

6 - 8, October 2009Asian Gaming Regulatory and Investment SummitTaipeiEmail: [email protected]: http://www.beaconevents.com/

asianGamblingBriefing/en/home.htmlOrganizer: Clarion Gaming & Beacon Events

4 - 12, November 2009Executive Development ProgramLake Tehoe, Nevada USAContact: Andrea Turman or Sarah PurdyTel: (775) 784-4046, 1-800-233-8928Email: [email protected] or [email protected]

10 - 12, November 2009Asian Casinos SymposiumThe Grand Copthorne Waterfront, SingaporeContact: T.U.N InternationalTel: +65 6271 8891Fax: +65 6271 9029Email: [email protected] Website: http://www.gaming.unr.edu/edp/

17 - 19, November 2009Global Gaming Expo (G2E) Las Vegas Convention CenterContact: Robin Abramson Tel: +1-800-363-3631Email: [email protected]: www.globalgamingexpo.com Organizer: Reed Exhibitions

1 - 3, December 2009Asian Casinos Executive Summit Grand Hyatt, SingaporeContact: Pauline OhTel: (+65) 6322 2762Fax: (+65) 6226 3264Email: [email protected]: www.terrapinn.com/2009/gesa/Organizer: Terrapinn

denotes events whereInsideAsianGamingwill be available. To list your event here and on our website, email [email protected].

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


http://www.worldpokercongress.com/2009/


http://www.beaconevents.com/



tel:+65 6271 8891

tel:+65 6271 9029


http://www.gaming.unr.edu/edp/

tel:+1-800-363-3631


http://www.globalgamingexpo.com/

tel:+65) 6322 2762

tel:+65) 6226 3264


http://www.terrapinn.com/2009/gesa/


http://www.asgam.com/


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Inside Asian Gaming