Get documents about "Bringing Home the Bacon - Inside Asian Gaming
Shared by: yangxichun
-
Stats
- views:
- 16
- posted:
- 2/22/2012
- language:
- English
- pages:
- 52
Document Sample
August 2010 • MOP 30 • ISSN 2070-7681
Bringing Home
the Bacon
Slots chase table growth in Macau
Direct Play: Singapore VIP Sector In Focus
Macau Policy: School of Hard Knocks | A Tale of Two Cities: Taipa vs. the Peninsula
Lending a Hand: Junket Funding | Carrots and Sticks: Macau Regulation
CONTENTS
August 2010
Bringing Home
the Bacon
6 A Growing Game
12 Direct Play
16 Rejuvenating EGT
20 The Original “G”
22 Referee!
26 School of Hard Knocks
30 Carrots and Sticks
36 A Tale of Two Cities
40 Lending a Hand
44 Regional Briefs
46 International Briefs
48 Event Calendar
20
30
2
3
Editorial
Don’t Forget Joe Wong
The United States has Black Friday—the traditional start of the Christmas shopping
season. Macau has Big Wednesday.
This was the famous moment when, back in 2006, a player at Wynn Macau pumped
the equivalent of several thousand US dollars into a slot machine. It must have seemed a
double blessing to the management given that Wednesdays generally tend to be about
as popular with players (and therefore casino managements) as Friday the 13th is with air
travellers.
How times have changed. Just four years later, a number of Macau slot players (an
admittedly small number) are dropping the equivalent of hundreds of thousands of US dollars
per session as we report in our main story, ‘A Growing Game’. That’s been one of the factors in
a near 30% increase year on year in the slot gross in Macau in the first half of 2010.
Publisher No operator could or should ignore any whale, whether they’re at the tables or the slots.
Kareem Jalal But the rise of the slot VIP does hint at the distorting effect that high volume VIP play can
have on the Macau gaming market. In a bull run, the casinos must chase the VIP growth
Director
because of its sheer volumes, albeit (in the case of table play) small margins.
João Costeira Varela
What that currently means is that the Macau properties that are weaker in the VIP table
Editor segment—namely MGM Macau and City of Dreams—are having a clear out of Western
Michael Grimes marketing people and bringing in Chinese marketing executives to bring in the high end
punters. Many will think it should have been done earlier.
Business Development Manager It’s clear that the number of high net worth people in China is growing rapidly. According
Domingos Abecasis to the World Wealth Report, compiled by financial management company Merrill Lynch
and management consultancy Capgemini, China overtook the United Kingdom in 2009
Contributors for its number of US dollar millionaires. China had 364,000 at the time of the survey, and
Desmond Lam, Steve Karoul
probably has a lot more now.
I. Nelson Rose, Richard Marcus
Shenée Tuck, James J. Hodl A new Chinese millionaire can’t, however, be turned into a Macau high roller overnight.
Andrew MacDonald Sources familiar with the junket trade tell us it can take six months from personal
William R. Eadington introduction of a would-be player to them being granted credit. What that means for the
operators is that high rollers are a precious resource to be courted assiduously.
Graphic Designer Like beauty queens at a village fair, the VIPs know their own worth and are driving
Brenda Chao an increasingly hard bargain with the junkets and with the casinos (when coming in as
direct players).
Photography
Las Vegas Sands Corp Chairman and Chief Executive Sheldon Adelson said as much
Ike
during his company’s second quarter earnings call. Mr Adelson indicated that a side effect
of that was for LVS to rethink its strategy of boosting direct play as a component of its VIP
Inside Asian Gaming
business in Macau. Between the lines, the message was: ‘The Macau direct play margins are
is published by
Must Read Publications Ltd
getting so squeezed, we might as well let the junkets take the strain and let them worry
8J Ed. Comercial Si Toi about collecting on credit’.
619 Avenida da Praia Grande Instead, he wants to ship as many direct players as possible out to Singapore. He may not
Macau get the quantity of VIPs by that route, but he will arguably get the quality. Such is Singapore’s
Tel: (853) 2832 9980 reputation for running a robust legal system that every VIP coming to Marina Bay Sands so
far has paid his tab on time, said Rob Goldstein, Executive Vice President of LVS. The company
For subscription enquiries, can also afford—thanks to Singapore’s lower tax rates—to give more back to the VIP players
please email
than can the junket agents or the casinos to their VIP players in Macau.
subs@asgam.com
So where does this leave Asia’s mass-market players in the minds of casino managements?
For advertising enquiries, By no means neglected. The massive amount spent in Macau and Singapore on equipping
please email main floors with slots and multiplayers as well as live tables is testimony to that.
ads@asgam.com It’s important that operators don’t take their eyes off the mass market. The VIP segment
or call: (853) 6646 0795 is roaring ahead, driving much of the 67.5% year on year growth in the Macau gross. As
such, it’s likely to attract the best and brightest executive talent to manage and build it—
www.asgam.com winning the plaudits that go with that. But the mass market isn’t a casino career backwater.
It has plenty of extra value still to be released. The campaign to build the growth of carded
Inside Asian Gaming slot play in Macau is a case in point. The mass-market managements need the attention
is an official media partner of: and support of their bosses just as much as the VIP marketing team. Let’s hope they get it.
Michael Grimes
We crave your feedback. Please email your comments to michael@asgam.com
http://www.gamingstandards.com
4 INSIDE ASIAN GAMING | August 2010
Cover Story
A Growing
Game
Harvesting value from Macau’s rising slot sector
depends on player sign ups
S
lot machines’ share of Macau gross lay out the red carpet for a slot aficionado some of those senior slot executives give
gaming revenue slipped back in the spending US$5,000 in one go. their take on this developing segment.
first half of 2010 compared to the first Away from the headlines created by A Growing Game: Slot Operators’
half of 2009. But that probably says more Macau’s small number of slot ‘whales’, much Roundtable, was moderated by Marcus
about the explosive growth in table play of the effort of slot managers is going into Prater, Executive Director of the industry’s
this year than it does about slots’ ongoing unlocking the full economic value of more leading trade body, the Association of
appeal. modest players. That focuses initially on Gaming Equipment Manufacturers. The
In the first half of 2010, 4.6% of Macau’s getting as many of them signed up for carded speakers were: Darrin Carlson, Slot Manager–
gaming gross came from slots (3.98 billion slot play as possible so that they can start Operations, at Sands China’s The Plaza
patacas out of 85.9 billion patacas for all earning benefits on their entertainment. Macao; Matt Hurst, Vice President, Gaming
games of fortune) according to figures Increasing carded play should also help Machines, at Melco Crown Entertainment’s
released at the beginning of August by create word of mouth publicity as people see City of Dreams; Peter Johns, Director of Slot
the Gaming Inspection and Coordination what benefits and prizes their friends and Operations, MGM Macau (formerly MGM
Bureau, Macau’s gaming regulator. In the first neighbours have been able to get from their Grand Macau); and Lindsay Stewart, Vice
six months of 2009, slots’ overall contribution visits. Carded play also allows operators to President, Electronic Gaming, Sociedade de
was nearly 6% (3.1 billion patacas out of 51.4 market major events to players such as new Jogos de Macau (SJM).
billion patacas). jackpots. At the end of July, City of Dreams
In cash terms, however, the slot take for launched what it describes as ‘Macau’s Marcus Prater: What’s happening with
the first half of 2010 was up 29.6% on the Biggest Floorwide Jackpot’, with the top carded play in Macau?
equivalent period in 2009. Yet during that prize starting at HK$3 million (US$386,314). Darrin Carlson: Generally speaking, the
period, the number of slot machines went The stereotype of Chinese slot players higher net worth individuals are going more
up by only 8.5% (from 13,509 at the end of as relatively unsophisticated consumers shy towards cards and are extremely card loyal.
the second quarter of 2009 to 14,659 units at of signing up for anything that might mark The lower end mass has not picked that up
the end of the second quarter of 2010). them down as a gambler lags well behind quite as much.
Some of that jump in the gross may be what’s actually happening on many gaming Peter Johns: We’ve seen an amazing pick
accounted for by a small number of VIP slot floors in Macau, say the experts. up on carded play. Most operators are used to
players who now drop the equivalent of a At this year’s G2E Asia organised by 30% to 50% take up. We’re seeing a lot higher
million US dollars or more in a single session. Reed Exhibitions and the American Gaming than that. Our players’ club [membership];
Five years ago, the managements would Association, delegates had a chance to hear our rated play, is extremely high. We see a
6 INSIDE ASIAN GAMING | August 2010
Cover Story
get information on them, so we can segment in terms of being competitive with these
them in the market. We’re able to get some big guys.
great information on our player profiles, Once we have a critical mass of machines,
which helps us in our product selection. we hope to introduce wide area jackpots
The players’ club works really well at and prizes to bring SJM to the forefront
MGM. Being able to segment players is of the industry here. We need to put the
vitally important in this market. I think groundwork in place before we can focus on
more so than other jurisdictions. That’s those specific strategies.
because our player base is so diverse. We’re doing the normal stuff. Embracing
Our customers understand the players’ the members we have, metering the visitors
club concept; they know how to use it. It we get, trying to increase their stays and
may take them a little while to get savvy getting their friends and families in too.
to it when they first come on board, but MP: Tell us a story illustrating how slots
from what I see of the players we get they have grown in prominence.
generally sign up within the first couple of LS: From 0.8% of [Macau] casino GGR
hours of coming onto our property. [gross gaming revenue] in 2003 to 5.4% of
Lindsay Stewart: We’ve had some GGR in 2009 is a significant growth phase
Peter Johns—amazing pick up in carded play
technology issues that have got in the way [for slots] when you consider the [overall]
lot of people use them [cards]. Most people in the last few years. We haven’t been able GGR has grown so exponentially—314%
consider the Asian player an uneducated to take advantage of our size—our critical in fact. The players are out there, and we
slot player. But we see the opposite. They’re mass—as a marketing component. haven’t really seen the biggest proportion of
quite a savvy player. They know they’re Not all our slots are systemised yet. take up yet either, I don’t think.
getting tracked and the reasons. They know Once that happens, we hope within 12 to China is the fastest growing electronically
we give them loyalty cards so that we can 18 months we will have far more firepower literate country in the world, with 48%
August 2010 | INSIDE ASIAN GAMING 7
Cover Story
Most people consider the Asian player an
uneducated slot player.
But we see the opposite. They’re quite a savvy
player. They know they’re growth in Internet access year on year. That’s
going to breed a new generation of players
getting tracked and the reasons. who are exposed to electronic games, like
them, and are going to take that to the next
step and play electronic games in casinos
and slot clubs—the same way their parents
and grandparents grew up playing one on
one table games or mahjong and currently
bring that experience to the casino in order
to challenge the dealer.
It’s very early in the evolutionary
process, but I think that signs are there and
that we will continue to build the market
and make inroads into it. In our property
specifically [Grand Lisboa], we have seen
an increase of probably 50% since we
opened three years ago.
We’re still struggling with rated play,
providing the right incentives to players to
help them understand there’s something in
it for them if they embrace our marketing
plans and strategies, and we’re still looking
for better ways to present that and at how
best to capture loyalty through that.
Matt Hurst: Back in 2004 [at Sands
Macao], we had a couple of players who
would come in and drop HK$40,000 and we
were blown away. Those people were big
players that we bent over backwards to take
care of. Two years later, at Wynn, we had a
guy drop a couple of thousand US [dollars]
into a machine.
Matt Hurst
We called that ‘Big Wednesday’. It
was a massive day. We were truly blown
away. Now we have players in the Macau
market who can drop over a million US
[dollars] in a day. From HK$40,000—i.e.
US$5,000—to a million US in five years is
pretty remarkable growth.
PJ: We constantly get slots at around 20%
Slots at MGM Macau now of the mass floor revenue. It has been as
8 INSIDE ASIAN GAMING | August 2010
August 2010 | INSIDE ASIAN GAMING 9
Cover Story
side of the market?
PJ: At my last count there were 23
vendors selling machines in Macau. Probably
not all of them are fit for this market.
Certainly most people [operators] stick to
the top six [manufacturing] names. But
there are some newcomers that bring some
innovative products. And I think some of
that innovative, different looking product is
what is getting the new players in. Call them
fads, call them gimmicks, whatever you want
to call it—if they [the new products] have a
different look and presence on the floor,
then people will try them because they’re
Treasure Hunt slot lounge at Grand Lisboa
high as 30% in some months, depending on are over 13,000 in the Macau market. And
different factors. their share of revenue continues to grow
Now that operators are starting to offer and grow.
the returns on the high end machines, The [age] 40 to 60 crowd of gamblers
we’re getting the crossover of some grew up on movies like The God of Gamblers.
table players who realise they can get a If you talk to any Chinese person out there,
reasonably good return. They can spend they know that movie. Now we’re talking
HK$6,000 and win HK$6 million. If you about the Wii generation.
want to win HK$6 million at a table, you’ll Slots will progress just like they did in
generally have to put up six million. So Las Vegas. Slots used to be off to the side
we are getting table players who see the for the wives when their husbands came
machines as a good gambling device. in to play blackjack. Now it’s 80% of the
DC: When Sands opened I believe they [gaming] revenue.
started with 450 slot machines. Now there MP: How competitive is the supplier Slots at Hard Rock Casino
Now we have players in the Macau market who can drop over
a million US [dollars] in a day. From HK$40,000 to a million US in five years
is pretty remarkable growth.
Slots at City of Dreams
10 INSIDE ASIAN GAMING | August 2010
Cover Story
different. Even some of the older vendors
have gone down that way and made more
entertainment-type machines. And that is
starting to drive players onto machines.
I still believe that what makes a good
product is: a good game, good math
and good return. It’s what keeps a game
popular. The top five machines in Macau
have been the same for the past four years
and I’m guessing it’s the same for the other
properties. There are some new ones that
spike here and there, but the top ones are
consistent.
There’s a good reason that 60% to 70%
of machines in Macau have some kind of
link on top. That’s because [as operators]
we try to be competitive. The thing that
differentiates us is how we structure those
[prize pool] links on top of the machines.
City of Dreams launched what it describes as ‘Macau’s Biggest Floorwide Jackpot’, with the top
DC: The new vendors when they come prize starting at HK$3 million.
in they offer new products; they bring
new, fresh ideas. Quite often with the more that still holds sway. However, the group us as operators a yield, is the optimum. It’s
established vendors you’re going to get a lot behind is clustering and is significantly what we all look for and what we would
of clones—the same game with a different closer than it has been. And I’m really hope for from the manufacturer—that they
wrapper or same math, different wrapper. pleased to see that it’s happening, because continue to strive to find that balance.
The new and up and coming developers it gives operators more choice, the player At the end of the day we’re in the
they push not only each other, but also more choice and enables everybody to put entertainment business. If a player comes
the established suppliers to go forward. pressure on everybody [else] to build a fair in and gets stripped of their assets, then
Two or three years ago, who would have share of the market and a fair share of the there’s no entertainment value and they’re
thought we would see something like the floor. Players benefit from manufacturers not going to come back. I used to liken it
Lava screens from WMS? Back then they constantly striving to provide better games to going to the movies. You go into the
[WMS] had maybe 5% market share. Now and new concepts and benefits such as movie, you pay your dollars and you come
they’re growing. From my perspective as an bonuses and new game attributes to out two hours later with a memory of the
operator, it [supplier diversity] is a wonderful increase excitement. entertainment. Sometimes our business is
thing because it gives more choice, more Certainly a game with the right the same. If we don’t provide that ‘memory,’
competition, better pricing models. maths model offering time [on machine], then people are not going to go to the
LS: There’s one manufacturer [Aristocrat] excitement and at the end of the day giving movies any more.
Mocha Clubs, established in 2003, was the first operation to seriously promote slots in Macau
August 2010 | INSIDE ASIAN GAMING 11
Direct Play
LVS has clear incentives for shifting its non-junket VIPs to Singapore
A
sian casino gaming is growing both in The sweet spot in terms of the Singapore direct VIP players at Marina Bay Sands (MBS)
terms of jurisdictional coverage and integrated resorts attracting such players in Singapore (1.2%).
gross revenues. In the Macau market may be a matter of 20 to 30 basis points If LVS is going to convert a junket
alone, revenue surged by 67.5% year on year [bps] on a percentage of VIP player roll. That player to a direct one, it would rather do
in the seven months to July to 102.2 billion figure is the difference between the rolling so in Singapore, because, according to
patacas (US$12.8 billion). Most of that was chip commission that most Macau junkets Sheldon Adelson, the company’s Chairman
driven by VIP baccarat. can afford to rebate to their players (0.9% and Chief Executive, the price Macau high
There are, however, strong economic to 1% in commission out of the maximum rollers are demanding from his casinos for
incentives for at least some of those VIPs 1.25% commission paid to them by the their direct business is pushing the direct
currently visiting Macau (not the ones from casinos), versus the rolling chip commission play route into being less profitable than
mainland China) to go solo and try their luck that Las Vegas Sands Corp, in its second many previously assumed. Singapore’s
as direct players in Singapore. quarter earnings call, said it can rebate to its lower taxes will also leave more wiggle
12 INSIDE ASIAN GAMING | August 2010
In Focus
room for offering incentives to players.
More on that later.
Non-negotiable
First, here’s a brief rundown on the
rolling chip commission system in Macau
as it relates to junket play. The VIP room
contractors purchase ‘dead’ chips (non-
negotiable chips that can only be used in
play) from the casino concessionaire to be
resold to VIP player representatives (let’s
call them ‘agents,’ though sometimes their
relationship with the room operator is so
close as to be virtually part of the same
organisation). The room contractors receive
a percentage commission on the volume
of dead chips they purchased. The junket
agents then sell the non-negotiable chips to
players who use them in actual play. Resorts World Sentosa—paying up to 1.5% rebate to VIPs?
When players win a wager with non-
negotiable chips, they are paid off in live VIP players (officially so far) all have a direct 1.2% commission it charges on VIP chips as
(negotiable) chips, which can be redeemed credit relationship with the operators, the an incentive to players. It’s likely, however,
at the casino cage for cash. In reality, they casinos ‘push’ the rolling chip commissions that MBS is also absorbing the cost of player
are usually bought back by junket reps in to players as rebates to incentivise more play. ‘comps’ in its VIP business model so that in
exchange for dead chips. This is the ‘chip That commission ‘push’ can vary depending effect the resort is paying slightly more
rolling’ process often referred to by casino on the size of roll of the player, but LVS says than 1.2% to the player.
executives and industry analysts. Theoretical it typically expects to pay 1.2%. In Macau, the rolling chip commission
casino win is calculated by dividing actual In Macau, junkets ‘pull’ a maximum of that an operator can pay a junket is currently
win by dead chip sales. Most VIP chips are 1.25% commission from casinos on rolling fixed by law at 1.25%. The Macau junkets
rolled on average two-and-a-half to three chips and pay most of it straight back can’t give the whole of that maximum
times per session. to the players either in additional roll or 1.25% to the player because they need to
In Macau, rolling chip commissions occasionally as rebates on player losses, in make some margin. No doubt one or two of
are operating on a ‘pull’ principal. Junkets the end keeping between 20 to 35 bps of the biggest high rollers have at some time
pull them from the operators as reward for the 1.25% commission originally earned in pushed them close to surrendering their
bringing in the VIPs and for mitigating risk order to cover their margins. In Singapore, margin outright. In February, we reported
on credit settlement, and then share them because MBS isn’t dealing with junket some Macau junkets were offering 0.2% of
with their players. In Singapore, because the middlemen, it ‘pushes’ the whole of the a player’s rolling turnover to third parties in
order to convert Macau casino direct players
into junket players. That doesn’t leave much
left for junkets already working on 0.2% to
0.35% net commission.
Over in Singapore, anecdotal reports
suggest Genting at Resorts World Sentosa
(RWS) is rebating as much as 1.4% to 1.5%
to VIP players, including some from Japan.
IAG sources also suggest Genting’s motive
in attracting direct players from Malaysia to
Singapore is the high gaming tax in Malaysia
(25% for VIP and for mass play) and political
uncertainty regarding Genting’s Malaysian
gaming licence, which is currently being
renewed by the Malaysian government on
a rolling basis every three months, whereas
its Singapore licence is guaranteed for at
least ten years.
LVS’s Sheldon Adelson said in his
company’s second quarter earnings call in
Push versus pull—different commission incentives in Singapore and Macau late July that he couldn’t personally pinpoint
August 2010 | INSIDE ASIAN GAMING 13
In Focus
the rationale behind Genting’s positioning
if its reported commission levels on VIP play The Macau VIP split
in Singapore are correct. He did, though,
Theoretical house win 2.75% 2.85% 3.00%
allude to some of the industry speculation
on the motive. Total amount bet by player (roll) $100,000 $100,000 $100,000
“There is a lot of rationale that everybody Gross amount won by casino $2,750 $2,850 $3,000
is throwing around as to why they [RWS] are Macau govt tax @ 40% $1,100 $1,140 $1,200
giving out at least 20 bps higher than we are
giving on any one customer category. So, Commission paid to Macau junket $1,250 $1, 250 $1,250
the biggest spread is on the last $10 million (maximum 1.25% of roll)
and over category,” said Mr Adelson. Macau casino net win (after tax $400 $460 $550
But he added that such commission and commissions)
levels were usually more characteristic of
middlemen being involved. accommodation while in the city. VIPs are by Its where it is going to be.”
“My inclination is to say that if [RWS’s] definition people used to making deals on An assumption behind the debate on
Japan [high rollers are rebated] 1.4 to 1.5, it’s their own behalf. the level of rolling chip commission shared
certainly an indication they may have to be Michael Leven, President and Chief with players in Macau versus Singapore
working with some sort of intermediary.” Operating Officer of LVS, said during the LVS is that high rollers would be sufficiently
Inside Asian Gaming would like to earnings call that the top commission rate motivated by a differential of as high as 60
point out there is no suggestion that RWS MBS was likely to pay its direct high rollers basis points (if reports of RWS’s 1.5% rebates
is breaking Singapore’s rules on junkets was 1.3%. are true) to try their luck in Singapore rather
by working with unauthorised agents. It’s “I think 1.2% is about where it’s going to than Macau.
theoretically possible for VIPs to solicit a be,” stated Mr Leven. A source familiar with the VIP trade
rebate equivalent to 1.4% of rolling chip “I haven’t seen any indication that it’s across the Asia Pacific region says that might
turnover from the casino and then share going to go more than that, unless really big not necessarily be a deciding factor. It may
some of that with a third party that is players that get some extra lift get in there. I be a case of ‘the more venues the merrier’
providing them with travel to Singapore and would say 1.2% to 1.3%, something like that. from the players’ perspective.
Marina Bays Sands—may go as high as 1.3%
14 INSIDE ASIAN GAMING | August 2010
In Focus
junket-driven VIP business was not always
The Singapore VIP split correct in practice. He didn’t mention that it
was his own company that had set up that
Theoretical house win 2.75% 2.85% 3.00%
expectation in the market in the first place.
Total amount bet by player (roll) $100,000 $100,000 $100,000 “The idea of getting [Macau] junket play
Gross amount won by casino $2,750 $2,850 $3,000 with the expectation of lower cost has not
Singapore govt tax @ 12% $330 $342 $360 been completely met amongst the various
(5% VIP tax & 7% GST)* strata of direct premium player. Some of
them are very high, and we may bifurcate
Commission (rebate) paid by $1,200 $1,200 $1,200 part of the [Macau] direct premium play,
casino on player roll @1.2% keep some and not keep others, because
Singapore casino net win $1,220 $1,308 $1,440 the cost of this is very high. Well, in some
(after tax and commissions) cases, it’s high. So we are reconsidering as
Note * (Corporate tax is also levied on casino profits in Singapore at 17%) to whether or not it’s going to be worth it
to keep all strata of direct premium play
The source said: “A lot of high rollers travel promoting direct play in Macau. because I have seen several analyst reports
regularly around the region for business and “We are in active discussion right now that say, well the scuttlebutt [rumour] is that
may have a home in more than one city. For since we terminated Steve Jacobs about the as sales chases direct premium players, a lot
them, it may not be a choice of playing either wisdom of accentuating the effort for direct of the players, a lot of the junket reps are
in Macau or Melbourne, or either Macau or premium play [in Macau],” said Mr Adelson. bringing their business over to Wynn.”
Singapore. It may be a case of the more the “We are certainly not going to eliminate Mr Adelson said he was surprised by the
merrier. The more destinations they have to it. The question is, how aggressive we are source of some of direct players coming to
try their luck, the better.” going to be to try to get it? We certainly MBS in Singapore.
From the operators’ perspective, have a lot of it in, I mean all that we have in “I looked at the top 20 players yesterday
however, it’s clearly potentially more Singapore is direct premium play.” and we have countries that I didn’t believe
profitable to have direct players doing most we would get them from. We even get
of their rolling in a low tax destination such customers from Macau.
as Singapore, than in a high tax destination “We have Hong Kong, China, Indonesia,
such as Macau. Vietnam, Taiwan, Korea, of course, Malaysia
On $100,000 of bets placed (roll) via a and Indonesia, and Thailand.”
junket in Macau, assuming a theoretical
house win of 2.75% and less 40% Lion City factor
government tax on the win and 1.25% of the Rob Goldstein, Executive Vice President
roll going to the junket, the casino would be of LVS, added during the earnings call that
left with $400. LVS said in a note to investors the respect in which Singapore is held
in June 2009 that its direct VIP play in Macau regionally and internationally may also be
was 1.0 to 1.5 times more profitable than a factor in ensuring (in the first few months
junket originated play. That would suggest of operation at least) no default by VIPs on
LVS could retain from $800 to $1,000 in the direct credit.
above scenario were the bets placed under “It [Singapore] is a very important country
direct play. and city state. And the customers have a lot
In Singapore, when a direct VIP player of respect for it. I have been pleased to find
places $100,000 worth of bets, assuming a Sheldon Adelson—reducing direct VIP play in that people pay pretty quickly. We haven’t
Macau?
house theoretical of 2.75%, 12% tax to the had a credit issue yet,” said Mr Goldstein.
government (5% VIP gaming tax plus 7% One good reason for cutting back on Mr Adelson said in some of his closing
Goods and Services Tax) and 1.2% rolling direct VIP business in Macau is credit risk. remarks that industry predictions suggesting
chip commission rebated to the player on As our story ‘Carrots and Sticks’ points out junkets may successfully register for licences
his or her ‘roll’, the casino would be left with elsewhere in this edition, although in theory in Singapore in the second half of the year
$1,220. Singapore also has typically lower Macau law allows gambling debts to be were unlikely.
dealer overheads than Macau. It’s clear, pursued in its courts, in reality if the debt “I am still convinced that the Macau style
therefore, that the economic benefit to a belongs to a resident of mainland China the junket reps will not submit to the probity
Singapore-based casino of direct VIP play courts there may not be willing to assist in checks and provide the information that
is considerably greater than either Macau- the recovery process. the [Singapore] government will need to
based junket VIP play or even Macau-based Mr Adelson has further reasons for falling put them through the investigatory wringer.
direct play. out of love with direct VIP play in Macau. And even if they do, and even if there are
That might be why Mr Adelson said He said during the conference call that the some Macau style junket reps that will do
during the earnings call that his company assumption that direct VIP business could that, I don’t believe its going to be done this
was re-examining its strategy of heavily be acquired in Macau at a lower cost than year at all,” stated Mr Adelson.
August 2010 | INSIDE ASIAN GAMING 15
EGT
Rejuvenating EGT
Things are looking up for Entertainment Gaming Asia, formerly known
as Elixir Gaming Technologies, with strong growth in slot participation revenue
and plans for its own casino resort in Cambodia
E
ntertainment Gaming Asia (EGT) under a December 2009 contract. EGT is our jointly operated slot floor operations.
currently has two major business entitled to 100% of net win generated by the With the addition of these 30 seats plus the
lines. A gaming participation business additional machines it is allowed to place remaining 50 seats under our December
where EGT earns a proportion of revenue until it recoups the agreed commitment fee. 2009 contract, our installed machine base
generated by slot machines it operates at Commenting on the May announcement at NagaWorld is expected to reach 670 seats
partners’ venues, and Dolphin RFID chips to add 30 additional machine seats Mr during July of 2010 covering most of the
and plaques. Chung says: “We are pleased to work with our currently available prime ground floor slot
“The gaming participation business is partner NagaWorld to continue to expand space at NagaWorld.”
now doing quite well. We currently have
about 1,500 machines running, out of which
about 900 are in the Philippines in various
venues, and in Cambodia we have about 600
machines running in NagaWorld,” says CEO
Clarence Chung.
EGT’s Dreamworld at NagaWorld
The EGT-operated Pagcor Universal Club in
the Philippines
The machines at NagaWorld are EGT’s
big earners, achieving an average win
per unit per day of over US$180 in the six
months to May on a growing installed
machine base. NagaWorld, which is located
in the Cambodian capital of Phnom Penh,
holds a monopoly licence to operate in and
around the city until 2065. The machines
in the Philippines earn closer to US$60 per
unit per day. EGT’s share of revenue is 25% in
Cambodia and averages approximately 20%
in the Philippines.
In May, EGT announced an agreement
to increase the total number of machines
it operates at NagaWorld to 670 seats, from
the previously agreed 640. EGT will place an
additional 30 seats in order to complement
and expand its VIP slot area located on
NagaWorld’s casino lobby floor, established
16 INSIDE ASIAN GAMING | August 2010
August 2010 | INSIDE ASIAN GAMING 17
EGT
Sales of Dolphin gaming chips (RFID and non-RFID)
2007 2008 2009
No. of Chips Manufactured 1,005,502 144,400 1,591,000
Sales (US$ ‘000s) 2,267 680 4,516
Gross Profit (US$ ‘000s) 453 116 1,965
Dolphin safe Cambodian government for the
Dolphin Products based project, dubbed Dreamworld
in Melbourne, Australia, Casino and Resort, in Takeo
is a wholly-owned EGT Province, near the Vietnam
subsidiary specialising in border. Dreamworld will Clarence Chung
the manufacture and sale include a casino and hotel
of traditional and radio on over seven acres (30,000 “is primarily geared to mass market players
frequency identification (RFID) square meters) of land. from the southern part of Vietnam and
gaming chips and plaques. While “For the last 18 months we have we will focus our marketing efforts in this
Dolphin has already built a strong been diligent in our efforts to execute region. We expect it to be the first venue of
market presence in Macau and Australia, on our growth plans and successful in our this size and quality in the area—there is one
it is working hard to expand sales in operations in Cambodia and we believe we operating already, which is relatively small,”
international markets. Dolphin’s major have proven ourselves. We have developed points out Mr Chung.
customers include City of Dreams, Altira important local market relationships and the Dreamworld will also cater to players
and Galaxy StarWorld in Macau, and Crown, necessary understanding of the government with dual passports in the greater Phnom
Burswood and StarCity in Australia. and have established a strong brand name in Penh region, as local Cambodians are
Dolphin was originally founded to the market. So, when we made our application prohibited from gambling in their country.
make precision automotive components, for the licence, we got it,” reveals Mr Chung. In addition to being located on National
principally for sale to Australian Highway No. 2 (the high-traffic road that
automakers. Although the Australian connects Phnom Penh and the major
auto industry has declined substantially, cities in southern Vietnam), the property
Dolphin believes it is positioned to gain is positioned near a duty free trading zone
market share in the future. that houses a large shopping facility and
is within 30 minutes of a famous temple
in Vietnam that attracts over one million
visitors annually.
“We’re not going to build it all in one
go. We are currently planning for three
phases of development,” states Mr Chung.
Phase one is expected to include around
Multiplayer roulette at Dreamworld 150 electronic gaming machine seats and
20 table games housed on approximately
“The owner and operator approach 54,000 square feet (5,000 square meters) of
allows us the potential for higher long- casino floor space. “Depending on demand,
term incremental returns on our operations we plan to add more gaming stations and
given the ability to collect 100% of the net hotel rooms in the subsequent phases.”
win compared to approximately 20-25% Capital expenditure for the first
Changing destiny as per our existing participation contracts. phase of Dreamworld, including the land
Until recently, the bulk of EGT’s sales In addition, this extension of our gaming and construction costs, is estimated to
derived from its Dolphin subsidiary, but in operations provides us the ability to leverage be approximately US$8-10 million. EGT
the second half of 2009, gaming participation our established presence and goodwill in anticipates it will be able to fund the project
took over and contributed over 50% of this market and increases our long-term from cash on hand and projected cash flow
revenue. “In addition to consolidating and control of our operations.” from operations.
growing our gaming participating business, The Dreamworld site is approximately Mr Chung summed up by saying,
we will try to control our own destiny by 125 miles (200 kilometers) south of Phnom “We are pleased with our progress and
building, operating and owning our own Penh, and is within three hours drive of are eager to continue to serve the high-
casino,” reveals Mr Chung. several major cities in southern Vietnam potential emerging gaming markets of
EGT announced at the end of May that with a total estimated population of Asia under a new name and expanded
it had been granted a casino licence by the approximately 17 million people. The project gaming business model.”
18 INSIDE ASIAN GAMING | August 2010
August 2010 | INSIDE ASIAN GAMING 19
The SLS AMG
The Original ‘G’
How a Mercedes-Benz supercar inspired Asian casino design
G
ullwing doors (car doors that are floor, also as a solution to a practical problem. too bright and the cameras ineffective, so Mr
hinged at the roof rather than the side) Observing gambling in Macau is “a spectator Steelman came up with the ‘G-wings’ above
were pioneered by Mercedes-Benz in sport,” Mr Steelman conceived of a stadium- the individual tables to house them. G-wings
1952 with the 300 SL race car. The road legal style design for the casino at Sands Macao. are bound to become an enduring feature of
300 SL Coupe followed in 1954 and was the If the lights and surveillance cameras were casino design, and are already prominent on
fastest production car of its day. set in the high ceilings, the lights would be the main floors of Macau’s Grand Lisboa and
The 300 SL’s iconic door design actually
sprang from engineering necessity.
Longtime Mercedes-Benz engineering
meister Rudi Uhlenhaut had designed
the 300 SL’s chassis in racing car fashion,
employing a nest of welded steel tubing
to make it as stiff as possible. This included
the doorsills, which Uhlenhaut extended
so far upward that pivoting the doors in
the conventional manner simply wouldn’t
work. Hence the creation of Gullwings,
which went on to be incorporated by other
supercars, including the DeLorean featured
in the ‘Back to the Future’ movie franchise
and the Bricklin SV-1.
World-leading casino architect Paul
Steelman brought Gullwings to the gaming The 300 SL Coupe
20 INSIDE ASIAN GAMING | August 2010
High Roller Accessories
Singapore’s Marina Bay Sands.
G-wings on the Gaming Floor
‘G’to the Present
The Mercedes-Benz 300 SL’s design lines
have been reinterpreted and updated in
the new SLS AMG, launched in Hong Kong
last month. The new Gullwing supercar’s
exterior communicates power and
dynamism, while the interior was inspired
by the aviation world.
The SLS AMG boasts an unrivalled
technology package, including aluminium
spaceframe body and the AMG 6.3-litre
V8 front-mid-engine developing 420
kW/ 571 hp peak output. The SLS AMG
accelerates from 0 to 100 km/h in 3.8
seconds, before going on to a top speed
of 317 km/h (electronically limited). The
fuel consumption of 13.2 litres per 100 Grand Lisboa Sands Macao
kilometres (combined) puts it at the head
of the supercar pack.
The SLS AMG is the first car to be
independently developed by AMG, the
performance brand within Mercedes-Benz
Cars. AMG was established in 1967 by
Hans Werner Aufrecht and Erhard Melcher,
and is considered a pioneer in the field of
vehicle tuning for motorsports. Following
the cooperation agreement concluded in
1990 with Daimler-Benz AG, the company
was gradually incorporated into what at the
time was DaimlerChrysler AG in 1999. On 1st
January 2005, DaimlerChrysler AG acquired
100% of the shares. Today, Mercedes-
AMG GmbH is a vehicle manufacturer in
its own right, specialising in unique, high-
performance vehicles.
The SLS AMG is now available for
purchase in Hong Kong and Macau.
Hong Kong: HK$3,198,000
Macau: HK$2,537,000
Marina Bay Sands
August 2010 | INSIDE ASIAN GAMING 21
Soccer Betting
Referee!
Taking the commercial shackles off the Hong Kong Jockey Club is the best way of
tackling unlicensed soccer betting in Hong Kong
H
ong Kong’s leading English-language when the custodians of Hong Kong’s horse capitalistic in the tradition of the Shanghai
daily newspaper, South China racing club came up with a novel way to entrepreneurs who fled to Hong Kong after
Morning Post, called in mid-July raise tax in order to house a million Chinese the communist government took power in
for a ‘debate’ on ending the legal betting immigrants fleeing the mainland following China in 1949. The paper may, however, be
monopoly enjoyed in Hong Kong by the the victory of Mao Zedong’s communist missing some of the bigger picture.
Hong Kong Jockey Club (HKJC). party in China’s civil war. HKJC has actually been as proactive as the
The paper says it’s necessary because Focusing the debate on present needs, government will allow it to be in expanding
the current system regulating legal betting the SCMP states: “Other jurisdictions have its gaming offer in the face of dwindling
in the city isn’t working. The SCMP cites got around the dilemma by licensing private interest in horse racing among the younger
as an example the record seizures of cash gaming franchises, bringing them under generation. Its annual report for the year
generated by unauthorised soccer betting regulatory control and into the tax net. Illegal ended 30th June 2009 shows that HKJC’s
syndicates in Hong Kong and across the operators are either crowded out of the turnover from soccer betting has risen more
border in mainland China during this year’s market or have to accept a smaller market than tenfold since it first introduced the
FIFA World Cup in South Africa. share. In a perfect world, the Jockey Club product range in 2003. In the 2003-04 results,
The SCMP suggests this is because the model might well socialise all gambling. In soccer betting generated HK$3.3 billion
HKJC’s soccer betting offer isn’t appealing the real world, the community should have a (US$420 million at current exchange rates)
enough to punters. It says the debate should serious debate about it.” in pre-tax revenue for HKJC. In 2008-09, it
include the possibility of licensing private brought in HK$35.1 billion (US$4.52 billion).
gaming franchises within Hong Kong. Wrong fix? That’s not bad from a single betting product
That would potentially be a revolutionary The SCMP’s instincts in calling for an stream targeted at a purely domestic market
change from the system in place since 1952, end to HKJC’s monopoly are impeccably of around 5.5 million adults. It compares
22 INSIDE ASIAN GAMING | August 2010
Soccer Betting
ago. Yet any widespread gambling interest burden on the legal product was drastically
among the public that is not satisfied by reduced. And issuing new commercial
the club is bound to become a goldmine franchises won’t of itself deal with the
for illegal bookmakers and organised crime competitive threat posed by gambling credit
syndicates,” says the paper. issuance by the unlicensed product. The
The Jockey Club has been offering ‘in chances of Hong Kong allowing credit-based
play’ and so-called ‘Asian handicap’ online soccer betting in the manner of credit-based
betting on soccer games, including the VIP table play in Macau, with credit issuance
major European Leagues and FIFA by the bookmakers and any player losses
tournaments, since 2003. covered by those players liquidating assets if
necessary, is so remote as to be barely worth
Gee up considering.
Their introduction did result in new Short of every Internet and telephone
betting business coming to HKJC. In user in Hong Kong having to give their
financial year 2003-04, the Club’s total identity card number every time they want
revenue from all activities showed the to surf online or make a voice call (with all the
first upward trend since 1997. The Hong civil liberties implications that involves), it’s
Kong government claimed in 2003 that the difficult to see how unauthorised online and
advent of HKJC Football Betting—as the proxy telephone betting can be stopped.
product is marketed—actually resulted in
a decline in Hong Kongers betting illegally. Upward trend
Given that unauthorised betting is by its Records seized by the authorities
pretty favourably with the US$15.4 billion nature underground, one wonders how the detailing illegal online and proxy telephone
generated by games of fortune in Macau in government could be so sure. What we can betting in Hong Kong during the duration of
2009 by 21.7 million visitors. say is tax revenues from the Club’s football the World Cup up to the 7th July recorded
Large amounts of revenue from horse betting in the 2003-04 soccer season rose HK$270 million (US$34.7 million) being
racing have been reinvested into HKJC’s 64.3% from HK$1.65 billion (US$210 million wagered—nearly four times as much as
racing infrastructure and marketing. at today’s exchange rates) to HK$2.71 billion during the previous tournament four years
As a result, in 2008-09, football betting (US$350 million). ago, said the SCMP.
contributed more (HK$370 million) to The problem now seems to be that Perhaps one possible remedy to stem
community causes via the HKJC Charities the unauthorised bookmakers have either the illegal betting tide would be to allow the
Trust than the core horse racing product clawed back ‘market share’ on soccer gaming operators already in Macau—who
(HK$110 million). gambling or simply created new demand. have the longest exposure and greatest
The Jockey Club has argued publicly A likely reason for this is that illegal bookies experience of free market competition in
and privately in the past that the issue is not can offer a bigger percentage in prize money gaming services—to offer sports betting in
whether private gambling franchises should of the cash originally staked than HKJC, Macau casinos and to create a parallel online
be allowed as alternatives to the HKJC, but because they don’t have anything like the sports betting offer that can be accessed
that the Club itself should be allowed to same overheads. In particular, they have no by Hong Kong residents. Every time a Hong
pursue a more aggressive commercial policy. need to share revenue with the authorities Kong resident used the service, the Hong
That’s in terms of reducing the tax levied on either in tax or payment to community Kong government could then be paid a
the bets, making larger the maximum daily causes. Tax is levied at 50% of net stake share of the tax revenue levied on the bet, as
dividends allowed, increasing the betting receipts for HKJC soccer betting and the Club
products offered and in developing the also gives some of its operational surplus on
way products are delivered to customers. all betting operations to community causes.
All these suggested initiatives are designed The unauthorised bookmakers—provided
to fend off the competitive threat from the they have a sufficiently large prize pool—can
unauthorised bookmakers. potentially offer bigger individual dividends
The SCMP acknowledges that aspect of than the HK$10 million (US$1.29 million) per
the problem in its leader. account per betting day allowed by HKJC.
“It [the HKJC] has struggled to compete Illegal bookies also reportedly offer punters
or wring concessions out of the government, credit for gambling; something which, for
such as more race days and more flexible regulatory and ethical reasons, the HKJC
betting on major overseas horse races. simply cannot do.
Officials appear to be more concerned Issuing commercial franchises for
about avoiding antagonising the anti- gambling services within Hong Kong as
gambling lobby of church and education suggested by the SCMP would only help
groups that campaigned unsuccessfully legitimate operators to compete with
against legalising soccer betting seven years illegitimate ones on prize money if the tax HKJC Football Betting—a winning proposition
August 2010 | INSIDE ASIAN GAMING 23
Soccer Betting
able to block payments and settlement
involving mainland residents, unauthorised
bookmakers in China would still be able
to use the prices quoted in the legitimate
online product to make their own book,
and collect bets by phone free of tax, as
allegedly happens now with unlicensed
bookies on the mainland using MacauSLOT
soccer betting prices.
That potential loophole, and the vested
commercial interest of Macau’s current
online horse racing, soccer and basketball
betting monopoly MacauSLOT, majority
owned by Dr Stanley Ho’s STDM, is probably
why the idea of other online sports betting
domiciled in Macau seems to have gone off
the agenda.
In September last year, Manuel Neves,
Director of Macau’s gaming regulator, the
Gaming Inspection and Coordination Bureau
(DICJ), told Macau Business the legalisation
of online gaming “was never a priority”.
Times and opinions do of course change.
But the main impediments to Macau-based
Crime pays—record receipts for illegal HK bookies during World Cup 2010 cross border online sports betting seem to
be political. Chief among the objections
happens with the so-called Australian model Vegas casino sports book operations. seems to be the possible piggy backing
of inter-state online gaming. of illegal bookies on the official product
This was pretty much the proposal made Parallel bookmaking and such parallel services then being
back in 2007 when Jorge Oliveira, who at One serious flaw in this plan is that offered to mainland Chinese customers. So
that time was the Commissioner for Legal it would be next to impossible to block until something changes in the political
Affairs of the Macau Gaming Commission, such legitimate online sports betting landscape regarding the way these three
said an online gaming bill could be in place sites from mainland Chinese customers. jurisdictions—the People’s Republic of
in two years. Some enterprising souls would in all China, Macau SAR and Hong Kong SAR—
Shortly after the impromptu likelihood set up proxy or ghost servers think about cross border online sports
announcement at a gaming industry with innocuous http addresses to link to betting, expect to see more police raids and
conference, Las Vegas Sands Corp said it was the legitimate gambling site even if China’s enforcement action against unauthorised
interested in running online sports books Internet firewall blocked the official site. bookmakers during major international
from its properties, in the manner of Las Even if credit card issuers within China were football and other sports tournaments.
Solution—legalise sports books in Macau casinos?
24 INSIDE ASIAN GAMING | August 2010
Macau Policy
School of Hard
Knocks
Forcing casino operators to use local construction workers
won’t solve Macau’s labour issues
T
here is a commonly held belief, five for science and the top six for something University Grants Committee.
expressed on occasion in this called ‘problem solving’. The gap between Macau and Hong
magazine, that Macau residents are, One problem that the next generation Kong is even more marked in primary and
educationally speaking, underachievers. of Macau’s leaders will have to solve is not secondary education. A total of 31.7% of
It seems that’s not strictly accurate. In so much educational underachievement Macau residents haven’t gone beyond
2006, Macau was in the top eight countries (the territory’s young people clearly do primary level education, according to
or regions for performance in mathematics rather well, especially in the sciences, when figures released in Q1 2010 by DSEC,
among 15 year olds, according to a triennial opportunities are available) as a lack of a Macau’s Statistics and Census Service. One
study by the Organisation for Economic Co- strong tradition for ongoing education. would hope that this figure is an historical
operation and Development (OECD). Perhaps In the first quarter of this year, only 9.5% anomaly that will be reduced as social
that’s the real reason so many Macau school of Macau high school graduates were in conditions improve in Macau. And yet
leavers want to become casino dealers. tertiary education (i.e. study beyond the age the percentage leaving education
This achievement wasn’t singular. In of 17 or 18). In Hong Kong, 18.5% of 17 to 20 with only primary instruction
the 2003 edition of the OECD study known year olds took a first year, first-degree course actually went up year on year in
as PISA—the Programme for International in higher education during the academic Macau in the first quarter of 2010
Student Assessment—Macau was in the top year 2009-10, according to Hong Kong’s compared to Q1 2009.
A further 8.4% either
Educational attainment in Macau never went to school or
2009 2009 2009 2009 2010
2007 2008 2009
Q1 Q2 Q3 Q4 Q1
Highest education attained (%)
No schooling/Pre-primary education 8.9 8.3 9.1 8.5 10.5 8.7 8.5 8.4
Primary education 27.9 26.4 25.8 23.5 30.4 25.9 22.8 31.7 Degree of
Junior middle education 31.6 27.4 30.4 34.0 27.9 29.0 30.9 30.7 scepticism—Macau
residents aren’t
Senior middle education 21.9 22.1 21.5 22.1 19.7 19.8 24.8 19.6
rushing to
Tertiary education 9.7 15.7 13.2 11.8 11.5 16.6 13.0 9.5 upgrade their
Source: Macao Economic Bulletin/DSEC skills.
26 INSIDE ASIAN GAMING | August 2010
Macau Policy
Non resident workers in Macau, 2007-2010
2007 2008 2009 2009 2009 2009 2009 2010
Q1 Q2 Q3 Q4 Q1
Inflow of non-resident workers number 62206 65905 33250 8863 9004 7702 7681 7837
y on y % change 18.7 5.9 19.5 12.0 53.9 58.6 38.5 11.6
Non-resident workers in Macao number 85207 92161 74905 87789 83616 77239 74905 72843
y on y % change 31.8 8.2 18.7 2.5 15.1 25.9 18.7 17.0
Source: Macao Economic Bulletin/DSEC
received only pre-school instruction. Before That said, the number of imported The issue is not Macau’s sovereign right
a new Labour Relations Law was enacted in workers in Macau is well below the peak (or at least subsidiary sovereign right as a
2008, Macau residents could leave school reached in 2008, when there were 92,961— Special Administrative Region of China) to
at 14 and legally start work. The age for equivalent to 28.8% of the employed do that. It’s that it would probably benefit
full time employment has now been raised population at the time. After the global everyone if it could be done in as rational
to 16. That policy certainly didn’t create a financial crisis that began in September and coherent a way as possible.
stampede for university places. In Q1 2010, 2008, the Macau government ordered casino Despite the skills gap in the local
30.7% of the Macau school population got operators to reduce the number of ‘blue economy, most Macau residents already
no further than junior middle education card’ holders on their books. People were have jobs, even if not always particularly
(i.e. age 16). let go almost overnight, with just ten days interesting or glamorous ones. So when
In other words, there is currently in Macau to leave Macau after the termination of their the government sets quotas for a certain
a culture of exiting education as quickly as employment. Between the end of 2008 and proportion of locals in a key industry such
possible in pursuit of work. During the days the end of 2009, the number of non-resident as construction, the employers have to
of Stanley Ho’s gaming monopoly under workers in Macau fell by 18.7%. poach workers from other sectors. The
STDM, that lack of a strong tradition in post- At the end of Q1 2010, there were 72,843 unemployment rate among residents was
16 education wasn’t a significant impediment non-resident workers in Macau, with the only 3.7% in the first quarter of this year,
to Macau’s economic progress. Up until the inflow down 11.6% in Q1 2010 compared to according to DSEC. That would be counted
mid-1990s, Macau was still a relatively low the same period a year earlier. as statistical full employment in many
skill, low wage, industrial and commercial It’s only by the good grace of the Macau European Union countries.
economy with some gaming. That was at government that foreign investors were Local residents need to be moved up the
a time when Hong Kong, by contrast, had allowed into the local casino market in the value chain in terms of skills and income so
already significantly de-industrialised and first place. It’s perfectly reasonable, therefore, that more of them are doing the higher level,
was starting to reinvent itself as a gateway that Macau would want to engineer its job well-paid jobs and the migrant workers are
for investment into China. market to benefit its own people, and not mostly doing the low paid ones. That’s how
Since the liberalisation of the Macau those of Hong Kong or foreign countries the labour market increasingly works in the
casino industry in 2002 and the opening thousands of miles away. United Arab Emirates, where there’s been
of the first foreign owned casino, Sands
Macao, in 2004, the locals’ culture of early
exit from education has been reinforced
by a policy decision that casino dealer jobs
should be reserved for permanent residents.
Competition between casino operators
vying to employ 18 year old school leavers
looking for their first job has helped push
the median dealer wage up to MOP13,000
in Q1 2010. That makes card dealing one of
the best-paid occupations in Macau behind
public administration and financial services.
It’s also, however, a job with a distinct glass
ceiling unless dealing staff are willing to
return to education to develop new skills to
perform other roles within the organisation.
Modern gaming resorts are systemically
very complex and need highly skilled and
highly trained professionals to manage
them effectively. Currently, therefore, Macau
cannot avoid importing some people to
occupy that role. Straight ahead—the UAE is gradually replacing expats with locals
August 2010 | INSIDE ASIAN GAMING 27
Macau Policy
Macau unemployed population (permanent residents)
2007 2008 2009 2009 2009 2009 2009 2010
Q1 Q2 Q3 Q4 Q1 (%)
Unemployed population thousand 9.5 10.0 11.7 12.8 11.9 12.3 9.9 9.5
y on y % change -9.1 6.1 16.3 32.9 30.2 17.5 -10.3 -25.8
Age group (%)
16-24 28.9 27.9 27.6 28.8 27.8 30.0 22.7 23.5
25-34 16.4 13.6 14.1 15.2 11.9 16.4 12.2 12.5
35-44 19.0 20.8 17.4 17.8 19.4 15.9 16.3 18.7
45-54 25.7 29.1 28.9 28.0 27.1 28.3 33.2 31.9
55-64 10.0 8.5 12.0 10.2 13.8 9.4 15.6 13.4
≥65 - - - - - - - -
Source: Macao Economic Bulletin/DSEC
a policy of localisation of labour, known as isn’t going to help if the local people don’t to create administrative and practical
‘Emiratisation,’ for the past 12 years. have the necessary skills and perhaps even bottlenecks in the execution of two of the
The UEA’s Council of Ministers issued a the motivation to do those jobs. biggest gaming real estate projects in the
directive as long ago as 1998 requiring all According to the Macao Economic territory. Those projects are the US$1.8
banks to increase their intake of UAE nationals Bulletin for the first quarter of 2010 published billion Galaxy Macau, the Cotai resort from
at the rate of 4% per year. In 2004, the cabinet by the government, there were only 9,500 Galaxy Entertainment Group, and the US$2.4
issued another resolution approving a set of residents registered as unemployed in the billion Cotai 5 and 6 from Sands China.
measures for boosting Emiratisation of jobs territory. Sands China has said previously The casino operators and their
in the private commercial sector. it needs 10,500 workers for its Cotai 5 and contractors and sub contractors will
Inside Asian Gaming understands from 6 project. It doesn’t need all of them all at eventually jump through the necessary legal
gaming industry sources that Macau, once, but it needs them nonetheless across and commercial hoops and employ more
aside from reserving casino dealer jobs for the life of the project, which could take up to locals. That may mean throwing more money
permanent residents, also has a policy of three years to complete. at the problem and raising construction
incremental localisation for pit supervisor The net result of the government’s one- sector wages to attract locals from other
and pit manager jobs. Insiders say the crucial for-one policy on construction workers sectors. Something similar happened in the
difference in Macau is that this objective has seems to have been not to produce greater casino dealer segment at the time of the ‘Big
not been formalised and written down as a opportunity for the people of Macau, but Bang’ of new casino openings on the Macau
directive or government policy. As a result,
casino operators can’t be sure that the
policy is being instituted evenly across the
local industry, nor can they be sure that their
cooperation will pay the political dividends
they might reasonably expect in terms of
building goodwill with the locals and the
government.
Arguably, the advantage of the
UAE approach to localisation is that it is
transparent, managed incrementally and
backed by policies to improve the take up
of higher education and professional skills
among locals. The latter element means
that in the medium to long term, employers
don’t suffer a fall in efficiency by taking on
local people, because there’s a managed
programme to improve and develop the
skills of those local staff.
A similar process of localisation will take
time in Macau, and needs the help of strong
and clear policies backed by a higher take
up of further education to make it work
effectively. Simply announcing overnight
that one local should be hired for every
outsider brought in, as happened recently
with the construction industry in Macau, Galaxy and Sands will overcome the labour headaches
28 INSIDE ASIAN GAMING | August 2010
Macau Policy
peninsula in 2006 and 2007. But such an
approach simply shifts Macau’s structural
labour problems down the line to other
sectors that find it hard to compete with
casino and construction wages. Between
2007 and 2008, median wages in Macau’s
construction sector rose 17.6%. In the same
period, hotel and restaurant median wages
grew by only 10.9%.
In Q1 this year the median monthly
income in the hotel and restaurant trade was
MOP7,000. In the same period, the median
construction salary was MOP9,300. The
median monthly salary for a casino dealer
was MOP13,000.
Hiking construction wages this time
around could mean a flight of local people
from jobs in the restaurant trade, leading to
more establishments closing. The surviving
Back to the drawing board—educational policy rethink for Macau
restaurant businesses may then be forced
to pay better wages to compete with added that those casino workers under 21 A condition of the support grants could
construction, thus helping to drive up the at the time a new law was enacted would be that the students must return to Macau
cost of restaurant meals and further fuelling be allowed to stay on. He was backed at the after graduation—possibly to take up
an upward inflationary spiral in the local cost time by Dr Stanley Ho. Nobody could accuse placements with casino operators and other
of living that affects everyone. Dr Ho of being a ‘here today gone tomorrow’ key employers, and thus preventing a brain
In 2008, inflation in Macau peaked at kind of capitalist. drain out of Macau by its brightest and best.
8.6% according to DSEC, but fell back to Locals can join the police at the age of18, Educational support grants may be the
1.2% in 2009. It is currently creeping up, so some fretted that could create a bizarre only answer in the short term. With two new
reaching 1.5% in Q1 2010, compared to situation whereby police wouldn’t be able to casino resorts due to open on Cotai between
1.2% a year earlier. enter a casino on official duty. That’s clearly 2011 and 2012-13 requiring a possible
Inflation has certainly been cited by a red herring. Dispensations could be made 22,000 new workers, according to some
Macau residents quoted in local media as a for public security personnel on official duty. estimates, there’s virtually no chance of the
cause for concern. In some cases, residents Getting more people into tertiary and higher casino entry age being raised before then for
have put the blame on expatriates and their education is a question of political will, not fear of creating a chronic shortage of already
generally above local average salaries for technicalities. scarce local staff.
pushing up the cost of living. The Monetary Authority of Macao The time may have come, however,
Perhaps a more relevant point is that announced it had foreign exchange reserves when Macau’s lawmakers need to rethink
the arrival of a new wave of expatriates is of MOP163.7 billion (US$20.42 billion) at the policy of reserving casino dealing jobs
a function of economic development. Such the end of June 2010. If Macau can afford to for locals. In theory, it’s a good idea to allow
development often produces inflationary spend US$1 billion on a light rail system to the locals to benefit from the casino boom by
pressures as a side effect, as has also been move tourists around, it can certainly afford reserving for them some of the highest paid
seen on the Chinese mainland. to pay its young people educational support entry-level jobs. In practice, it’s in danger of
So how should Macau tackle its grants. That would allow students to stay in institutionalising the economic rationale for
underlying labour market weaknesses? education beyond 18 without their choice leaving education early. That risks leaving
Macau’s first chief executive, Edmund Ho, having a short-term negative impact on their Macau permanent residents permanently at
suggested during his second term the idea family’s income. And if there aren’t enough the bottom of the educational achievement
of raising the casino entry age to 21, thus places at local educational institutions, ladder, giving highly complex businesses
creating an immediate incentive for locals then they should be paid to attend courses such as casino resorts little choice but to ask
to attend tertiary or higher education. He on the Chinese mainland or Hong Kong. to import more highly skilled staff.
Advertise with Inside Asian Gaming
For advertising enquiries, please email: ads@asgam.com
or call Domingos at +853 2832 9980
August 2010 | INSIDE ASIAN GAMING 29
Regulation
Carrots and
Sticks
Lawyer Bruno Nunes
on Macau’s efforts to regulate its long standing
tradition of gambling credit
I
n July, we looked at the rules governing payments to any company with which the
Macau junket operations. This month, we concession itself has a relationship.
consider how junket regulation meshes The commission cap was determined by
with other aspects of Macau gaming law and the Dispatch of the Secretary for Economy
how the whole system is enforced. and Finance No. 83/2009, which came into
Two gaming regulations have an effect on 22nd September 2009.
impact specifically on the commercial Article 1 says commissions or any other
incentives that drive the gambling agent type of compensation to a junket cannot be
system in the VIP rooms of Macau casinos. higher than 1.25% of the total wager (net
They relate to the commission cap and rolling), regardless of the basis used for its
the provision of gambling credit by the calculation.
gaming operators in Macau. By making the legal provisions so
broad when defining junket commission or
Commission cap compensation, it seems the Government
As mentioned in our previous article, has taken into consideration the highly
Administrative Regulation No. 6/2002, imaginative forms of payment and perks
amended by Administrative Regulation that were being granted to and from some
No. 27/2009, is the main legal document junkets following the establishment of
regulating junket activity. The latter the junket regulatory framework in 2002.
regulation, published on 10th August 2009, As a further safeguard, casino operators
is the one the Macau government relies must file with the Gaming Inspection
upon for enforcement of the much discussed and Coordination Bureau (DICJ) a copy
commission cap. of any agreements entered into with the
The cap was achieved by amending junket operators. The casinos must also
an article in another Administrative submit any complementary agreements
Regulation—No. 6/2002. This confirms that or other documents involving obligations
Macau’s Secretary for Economy and Finance or payments equal to or higher than one
has the power to establish, by legal dispatch, million patacas (US$120,000).
a maximum cap on the commissions and In an attempt to ensure the enforcement
other types of payments that can be made of the commission cap, the Government
to junkets by the casino operators. The went ahead with a minor change on one of
second part of the same provision goes on to the duties of the casino operators set forth
clarify that any bonuses, gratuities, services in Article 30, Paragraph 1 of Administrative
or other pecuniary advantages that can be Regulation no. 6/2002. This change imposes
subject to pecuniary determination, will be an active responsibility on the casino
considered as retribution. The cap, while in operators to submit all the information
force, applies whether such payments are needed for the DICJ to verify calculation of
made in Macau or abroad. It also applies junket incentive payments.
to the following: payments made directly; As stated in the previous article,
payments made through a company in infringement of these limits or reporting Back door closed—no way round the
which the concessionaire has a stake; and obligations can lead to sanctions, including commission cap?
30 INSIDE ASIAN GAMING | August 2010
Regulation
The carrot—junkets can be authorised credit The stick—every
providers in Macau government department
mobilised to root out
loan sharking
fines, under Article 32-A and 32-B of - between a casino operator (provider)
Administrative Regulation no. 6/2002. and a junket operator.
Credit provision agreements
Provision of gaming credit between a casino operator
Provision of gaming credit is one of the and a junket operator and any
key elements of the success in the Macau complementary documents or
gaming industry. VIP high rollers account for changes must be approved by
approximately two thirds of the total volume the DICJ, in writing and with notarised
of gaming revenues in Macau. Many of those signatures. A copy of the agreement
high rollers are mainland Chinese and can must be submitted to the DICJ within
only legally bring a maximum of RMB20,000 15 days of the agreement coming into
(US$2,950) across the border. The provision effect (as per Article 8).
of legal gaming credit, especially through Interest may be charged by the
junket operators, provides alternative forms provider under the agreement if the
of funding. debtor does not repay the credit within
Gaming credit is regulated under Law no. an agreed time. Article 1073 of the Civil
5/2004, in force since 1st July 2004 as part of Code determines that such interest
the territory’s Legal Regime of Provision of cannot exceed three times the maximum
Credit for Games of Fortune and Chance. annual percentage rateii of 9.75%.
Article 2, No. 1 states gaming credit Article 4 of Law No. 5/2004 makes
issuance occurs when a credit provider it clear that the provision of properly
transmits to a third party the ownership authorised gaming credit creates a civil
of casino chips for games of fortune and liability on the part of the borrower that
chance without the immediate payment of can be pursued by the creditor through the
money i. Macau courts.
Under Article 3, only casino operators are
legally authorised to provide gaming credit.
It adds that junket operators can also be an
authorised gaming credit provider if they
enter into “credit provision agreements” with
casino operators.
The Law specifically forbids, in Article 5,
the provision of credit through third parties
(i.e. anyone other than the authorised casino
operator or the authorised junket operator),
and would nullify any such contract or act
under Macau law.
Article 3 No. 6 states only the following
gaming credit relations may exist:
- between a casino operator (provider)
and a player;
- between a junket operator (provider)
and a player; or Loan sharks beware—an outsider’s view of Macau prison
i No. 2 of Article 2 clarifies, in very broad terms, the understanding of “money” in this context, providing a long list of examples, which include:
cash, travellers cheques, certified cheques, cashier’s orders or cashier’s checks, money orders, electronic fund transfers through electronic
means of payment (credit or debit cards or prepaid cards).
ii Legal interest is currently determined by Executive Order no. 29/2006.
32 INSIDE ASIAN GAMING | August 2010
Regulation
This civil liability has not yet been organisation of providing unauthorised DICJ’s workers and its service providers.
tested in the Macau courts with regard credit, it can demand clarification and Loan sharking continues to be an
to debts contracted by high rollers from inspect the location in which the alleged issue in Macau. A total of 153 cases were
mainland China. Any such judicial ruling in activity has taken place. If evidence is registered between June 2009 and May
Macau against a passport holder from the gathered to support the allegation, the 2010. The fact the figure actually represents
People’s Republic of China would probably DICJ will prepare a report and submit it, a decrease of 15.47% on the equivalent
need to be confirmed and executed as quickly as practicable, to the Public period a year earlieriii suggests that Macau’s
upon by a court in China. That’s because Prosecution Office. legal and administrative efforts to regulate
the respondent’s assets are likely to be Article 16 of Law No. 5/2004 protects the gambling credit market are workingiv.
domiciled there. Given that gambling legally authorised credit providers from Ultimately, the aim must be to make the
debts are not recognised under PRC law being classified as ‘loan sharks’. Under legal gambling credit system so efficient and
as enforceable contracts, a PRC court Macau’s criminal law, loan sharking is so equitable for the parties involved and the
may seek to invoke a statute of limitation punishable with up to three years in prison enforcement against unauthorised lending
of liability. That right comes from an or up to five years if an aggravated offence. so exacting that the commercial demand for
agreement between mainland China loan sharking falls away. It happened in Las
and Macau concerning the reciprocal Penalties Vegas, so it can also happen in Macau.
confirmation and execution of judicial Further aggravating factors, such as
decisions in civil and commercial matters. where illegal gaming credit providers keep
Law No. 5/2004 requires all of Macau’s hold of the identification document of the
government departments to cooperate person to whom they have granted credit,
with the DICJ in its task of supervising can result in a prison sentence of up to eight
the gambling credit system. The practical years. In all three scenarios, the court can
effect of that is to create extra safeguards ban the offenders from entering any Macau
against the establishment of unauthorised, casino gaming rooms for at least two years
‘underground’ credit networks. and up to 10 years.
If an authorised gaming credit provider Other provisions of Law No. 5/2004,
seriously infringes any legal or regulatory namely Articles 9, 10 and 11, impose a duty
provision, or acts incompetently, the on gaming credit providers and their workers
government has the right to suspend that to act in a prudent manner, complying with
provider’s credit activity or impose conditions any laws, regulations and internal company
upon the provider. That’s notwithstanding rules of professional conduct. They also have Bruno Nunes is a lawyer based in Macau with
any criminal and administrative procedures a duty of confidentiality regarding financial a practice focused on gaming, corporate
that may be launched. information relating to credit provision. That and intellectual property law. bnunes@
If the DICJ suspects a person or duty of confidentiality also applies to the bnlawmacau.com
iii & iv Speech of the Judiciary Police Director, Wong Sio Chak, made on the Judiciary Police Day Prize Delivery Ceremony held on July 15
A Sure
Bet
Log onto www.asgam.
com for the latest
industry intelligence and a
subscription
to our digital edition—all
absolutely free
34 INSIDE ASIAN GAMING | August 2010
August 2010 | INSIDE ASIAN GAMING 35
SJM
A Tale of Two Cities
Taipa’s SJM-licensed casinos are underused, but SJM doesn’t mind
I
n the red hot gaming market of Macau, the mass-segment live
tables in SJM-licensed casinos in the ‘midtown’ zone, Taipa, appear
to be significantly underperforming in revenue terms.
Some VIP players may find sufficient motivation to trek to Taipa,
but mass-market customers are thin on the ground. In gaming terms,
Taipa is something of a dormitory settlement no man’s land across
the water from the Macau peninsula and on the way to Cotai.
The SJM-licensed Taipa casinos—Greek Mythology (New
Century), Macau Jockey Club Casino and Grandview—between
them have about 200 tables. That’s only just over 4% of Macau’s
live table inventory, but nearly as many as there are in SJM’s
directly managed flagship property, Grand Lisboa. Those tables
could go a considerable way to boosting SJM’s profitability if at
least some of the mass tables were reassigned to busier floors on
the peninsula.
Taipa’s table inventory is an important resource, because the
number of live tables in Macau has (in theory at least) been capped
by the government at 5,500 until the end of 2012. There were already
4,828 of them out there in the market at the end of the second
quarter of this year, according to Macau’s gaming regulator, the DICJ.
What slim quota is left will be fought over by Galaxy and Sands China
for their new Cotai resorts. Both those operators seem to be under
the impression they have each been given an allowance of 400 new
tables for the first phase of their Cotai projects. If phase one of Sands’
Cotai 5 and 6 opens before the end of 2012 as the company seems Sands China’s Cotai 5 and 6
36 INSIDE ASIAN GAMING | August 2010
The mass market prospects of Greek
Mythology have essentially been
overlooked by Ho family interests in
order to ensure the success of next
door Altira Macau, run by Melco
Crown Entertainment (Nasdaq: MPEL),
a company co-chaired by Dr Stanley
Ho’s son Lawrence.
SJM
to think, it will create, to put it mildly, an interesting situation re: the SJM could help out Greek Mythology’s shareholders by
enforcement of the table cap. marketing the property to mass segment customers more
intensively—or even a little. But it hardly does that even for the
Shuffle time legacy casinos on Macau peninsula, with its more developed
Sands has already indicated it may shuffle some of its existing tourism transport links, so why would it do so on Taipa?
table inventory around in order to populate Cotai 5 and 6. That
highlights the fact table utilisation is patchy even in the most popular VIP focus
casino destinations. Variables affecting utilisation include day and In overlooking the mass market potential of Greek Mythology
time of day, the weather and seasonal factors such as public holidays. in favour of chasing VIP table dollars, SJM and its associates have
In Asia, table utilisation also depends on whether players feel that a been absolutely true to the traditions and spirit of Dr Ho’s gaming
particular dealer will be lucky for them. operations. In that context, the mass market focus of the Grand
In the end, however, audited results don’t generally lie. If a casino Lisboa over on the Macau peninsula is actually an aberration and a
spends too much time with too many tables underused, it will show break with SJM tradition.
up on the balance sheet—especially in the Macau market, with its In any case, Amax is getting compensated for the
fearsome overheads. The annual government licensing fee on a mass underperformance of the mass market tables at Greek Mythology
market live table in Macau is MOP100,000 (around USD12,500) and by its involvement in a junket consolidation business feeding VIP
a lot more for a VIP table. A dealer salary is around MOP13,000 per players to Altira Macau.
month (USD19,500 per year). And with nearly 40% coming off the top The commercial incentive for SJM to involve itself in the details
in government tax, you really need to make your Macau table assets of running satellite casinos such as Greek Mythology isn’t strong,
sweat to make profits—especially in the game of choice, baccarat, because it doesn’t own the full economic benefit of the revenues.
with its narrow house advantage and volatile hold. Instead, SJM gets a share (traditionally 20%) of a satellite’s revenue
The evidence to support the proposition that SJM-licensed mass in return for access to its gaming licence and in some cases for
market tables on Taipa are under-utilised comes from a brief study of supplying floor staff.
the Greek Mythology property. Nonetheless, there are reasonable arguments in a table-capped
The mass market prospects of Greek Mythology have market in favour of shifting tables from underperforming districts
essentially been overlooked by Ho family interests in order to or venues and putting them in places with greater profit potential
ensure the success of next door Altira Macau, run by Melco (such as the Macau peninsula). A publicly-listed Las Vegas gaming
Crown Entertainment (Nasdaq: MPEL), a company co-chaired by company would have its shareholders howling at the moon if it
Dr Stanley Ho’s son Lawrence. Altira not only has MPEL’s own in- allowed too many precious Macau tables to lie empty and unloved
house marketing machine behind it, but also benefited back in for any length of time. In reality SJM would be unlikely to make such
2007 from an injection of much needed junket roll from new VIP a demand on its affiliates.
players. This was possible because MPEL was able to enlist the
help of one of Greek Mythology’s shareholders that also has an The Chinese way
interest in junket activity. Even leaving aside contractual niceties, it’s not the Chinese
Amax Holdings, a Hong Kong-listed company, is a 49.9% way. The Chinese way—especially among medium- to large-sized
shareholder in Greek Mythology, and from 2007 onwards earned, companies such as SJM—is to share business interests with a network
via its junket consolidator subsidiary, commission from Altira’s high of collaborators. Although this carries the downside of having to
roller business. share profits with others, it has a number of structural advantages.
It can spread regulatory and financial risk, and create an exponential
David versus Goliath growth in the network of people available for business collaboration
The 16 VIP tables at Greek Mythology actually overperform and favour-asking.
relative to next door Altira Macau, but the 100 mass-market tables at A great example of the spread of this SJM spider’s web of mutual
Greek Mythology bring the average down with a bump. interest is the rise of Ted Chan. Mr Chan went from Mocha Clubs
In its interim report issued in December last year, Hong Kong- (originally a Melco business under Dr Ho, passed on to Lawrence
listed Amax Holdings, a 49.9% shareholder in Greek Mythology, Ho when he took over at Melco and now part of MPEL) to become
reported that in the six months to 30th September its portion of chairman of Amax, then to Altira as President and now as co-Chief
net win from the 16 VIP tables in the casino was HK$14.5 million. Operating Officer of Gaming for the whole of MPEL.
That’s equivalent to HK$906,000 per table for Amax’s share or HK$1.8 The presence of those 200 or so SJM tables in Taipa also gives SJM
million per table for all the shareholders. Pro rata, that’s better than and its friends coverage in the southern part of the Macau market. The
Altira’s performance. Altira managed HK$658 million net win across Macau government’s position so far has been to restrict any further
210 VIP tables in the full year to 31st December 2009. That works out expansion of gaming in suburban areas. So the strategic benefit of
to HK$1.6 million per table. SJM’s Taipa coverage is probably to provide a support network for
But Amax’s share of Greek Mythology’s final profits for the marketing purposes should SJM finally take the plunge and sign up
six months to 30th September was only HK$1.97 million. That’s a for its own resort on Cotai. The arrival of Macao Dragon’s ferry service
relatively miserly (by Macau’s inflated standards) US$250,000 from into Taipa as a competitor to LVS’s CotaiJet could also provide SJM
116 tables. One of the drags on Greek Mythology’s performance is fresh marketing options for the mass tables. In any case SJM’s attitude
likely to be the 100 mass-market tables. In IAG’s experience, they are toward Taipa is essentially that as the incumbent concessionaire it
often empty. can afford to sit and wait. How very SJM. How very Chinese.
August 2010 | INSIDE ASIAN GAMING 39
Feature
Lending a Hand
Some investors find Macau junkets an attractive alternative to parking
their money in a bank, says CLSA Asia-Pacific
A
possible side effect of the inter-bank 3% per month. This is higher than keeping counter party risk since September 2008
lending crisis and its depressive money in banks or even some mutual funds,” may be creating opportunities for private
effect on bank deposit interest rates adds the CLSA research paper by analyst investment in junkets.
may have been to channel cash to Macau Huei Suen Ng, Regional Head of Consumer Parking your money in a junket for
junkets. and Gaming Research Aaron Fischer and a month here or there, with none of the
Secret Macau, a new 80-page report research associate Mariana Kou. punitively high charges for early withdrawal
by the consumer and gaming research Macau junket capitalisation is thought or punitively low interest rates associated
team at CLSA, an independent brokerage of typically by people inside and outside with short term bank deposits, must
and investment group, covers all aspects the local casino industry as a specialist field. seem like an attractive option for those
of Macau’s casino gaming business. One It’s not generally seen as a mainstream local entrepreneurs with a sophisticated
development reported by CLSA following investment opportunity for recognised understanding of the junket system.
its research is that Macau junkets are willing financial institutions. As an illustration, in the first week of
in some cases to pay private investors up CLSA points out, however, there is a August, the Hong Kong Interbank Offered
to 3% interest per month on injections precedent for using mainstream capital Rate for one month was 0.23000%. During
of working capital equal to HK$5 million markets to raise junket working cash. that week, time deposit rates for Hang Seng
(US$640,000) or more. Several companies with interests in Macau customers on deposits of HK$1 million and
“Friends/shareholders of junket junket operations have listed in Hong above stood at 0.0100%. The junkets can
companies may channel private funds into Kong in order to raise junket capital. Given afford to pay significantly more interest
their working capital through lending (for a the current volatility of equity markets, to capital providers because of the spread
certain fee) or gambling these amounts as though, share issuance is a less attractive created by borrowing on monthly terms and
chips,” says the CLSA report. way to capitalise junkets than it was in lending out to VIPs who then repay on 10-
“Investing in junkets is also possible in the bull market of 2007. But the shrinkage day terms, according to CLSA.
Macau. What we hear from sources on the of bank retail interest rates linked to a “Casinos extend credit (marked chips) to
ground is a minimum of HK$5 million is corresponding fall in inter-bank lending junkets to be settled within a month. Given
accepted for interest payments of 1.5% to rates that happened as a response to the improving economy, these amounts
40 INSIDE ASIAN GAMING | August 2010
Feature
have increased over time,” points out CLSA.
“Casinos book these as casino
Casino receivables as a portion of VIP gross revenue
receivables (a component of account Sands China
25 (%)
receivables) in their balance sheets. They Wynn
typically extend credit against last month’s SJM
commission to the junkets to safeguard 20 Melco Crown
any potential irreclaimable debt. Some
agreement can be made to advance up to 15
two to three months worth of credit if the
junkets have longstanding relationships 10
with solid performance as well as financial
backing,” adds the CLSA team. 5
If an investor chose to deposit HK$5
million with the Hang Seng Bank at monthly
0
interest of 0.0100% as quoted by the market
at the beginning of August, then on a non 2006 2007 2008 2009
compound basis the investor would earn Source: Companies
HK$500 (before any tax liability owed to the
investor’s tax domicile) in one month. Were Liquidity requirement to fund VIP revenue
an investor to lend HK$5 million to a Macau
junket at 1.5% monthly interest, he or she Net win
would earn HK$75,000 pre-tax during the Gaming revenue (US$bn) 10
term of the loan. VIP portion 7
Direct VIP (15% of VIP) 1,05
Junket VIP (85% of VIP) 5.95
Mass portion 3
Rolling chip/wagered amount
Junket VIP @2.85% holding rate 209
Sensitivity
Ratio of player pledged amount: junket borrow (x)
Player 1 1 1 1
Junket 1 2 4 10
Contribution from player junket
Player pledged portion 0.5 0.3 0.2 0.1
Junket portion 0.5 0.7 0.8 0.9
Player pledged portion (US$bn) 104 70 42 19
Junket portion (US$bn) 104 139 167 190
Total (US$bn) 209 209 209 209
Were an investor to lend HK$5 million
Junket repayment days (No.) 10 10 10 10
to a Macau junket, he or she would earn Junket equity needed (US$bn) 34.8 46.4 55.7 63.3
HK$75,000 pre-tax Source: CLSA Asia-Pacific Markets
According to CLSA’s junket sources, “To achieve gaming revenue of US$7 be willing to lend capital to that junket
junket players generally pay back their billion in the VIP segment, assuming because he personally knows some of its
borrowings to the junkets in about 10 days, junkets extend credit based on the ratio customers and knows their track record
allowing junket liquidity to be sustained. of 1:1 (US$1 of credit received in Macau for repayment. And although mainstream
Lending to junkets is potentially very for every US$1 pledged by a player), financial markets are used to dealing with
profitable for capital providers. That in US$35 billion of working capital is needed intangible assets, the fact the ‘asset’ on
turn is linked to the fact the junkets must from the junkets (about 6x revenue from which a junket’s capital debt is secured is
chomp through a lot of capital to generate junket VIP).” the chip rolling of the particular junket’s VIP
sufficient rolling to make a profit on the Despite the theoretical profit potential players may be a step too far in terms of a
gambling action. CLSA says the amount of of lending capital to junkets, it seems lending institution’s risk appetite.
capital needed to operate Macau junkets is unlikely from IAG’s perspective that financial CLSA comments: “The clear risks lie in
around six times the revenue generated by institutions will become involved in the the repayment days, which will have a large
VIP players. process to any great extent. That’s because impact on subsequent month’s working
“Understanding the math behind junket the risk involved is not easily understood capital.”
liquidity is important,” state the report by people outside the junket system. For But the report authors say that repayment
authors. example, a friend of a junket operator may cycles are likely to remain stable.
42 INSIDE ASIAN GAMING | August 2010
Parking your money in a junket for a month here or
there, with none of the punitively high charges for early
withdrawal or punitively low interest rates associated with
short term bank deposits, must seem like an attractive
option for those local entrepreneurs
“Junket sources we talked to do not see “While the direct-VIP segment is more same terms and commissions.
drastic changes in players’ debt-repayment profitable, casinos have limited expertise in “Having scale in this business is
pattern, with the credit cycle remaining at collecting debts from mainland players.” advantageous as the smaller-scale junkets
around 10 days with the players.” The authors add, however, that further will be less able to offer decent rebates
In current junket trading conditions with consolidation of the Macau junket sector to their customers over time. To achieve
huge year on year growth in VIP play, the is likely. higher commissions, junket operators need
junkets are also able to generate significant “Consolidation of junket operators and to increase volumes, and higher volumes
internal cash flow, suggests CLSA. agents is inevitable, although the process require greater working capital to prepay
The report states: “Internally generated will be gradual. As more casinos rebate casinos for chips. This will favour the bigger
funds (junkets receive 1.25% of rolling chip junkets based on rolling-chips turnover, junkets that have better access to capital,”
wagered) have increased as a result [of lower-volume operators will not enjoy the says CLSA.
VIP market growth]. Therefore, lending to
players should increase.”
From IAG’s perspective, internal Junket Licences
cash flow could also enable junkets to
absorb some bad debt. That was much 140 (No.) Legal Entity Individuals
harder during more challenging trading
conditions, such as the near two-year 120
commission price war of 2008 and 2009.
That only ended with the imposition by the 100
Macau government of a 1.25% commission
cap in September 2009. 80
“A junket operator’s monthly working
capital is affected if debt is not collectible,”
60
states CLSA.
“For example, we understand that during
the Asian financial crisis [of 1997], 70% of the 40
junkets got wiped out. And during 2009, the
number of licences fell 18%.” 20
Despite the better margins theoretically
available to casinos when they issue credit 0
direct to VIPs, in reality the junket system is
2006 2007 2008 2009 2010
likely to be around for some time to come,
says CLSA. Source: DICJ, CLSA Asia-Pacific Markets
August 2010 | INSIDE ASIAN GAMING 43
Briefs
Regional Briefs
holding company STDM is a 33.03% shareholder in the airport.
With Galaxy’s new Cotai resort Galaxy Macau due to open in
the first half of 2011, it could be helpful for the company to have a
friendly ferry operator serving the Taipa ferry terminal which is the
SJM makes move for Cotai maritime entry point to Cotai.
Dr Stanley Ho’s Sociedade de Jogos de Macau (SJM) appears The incumbent operator into Taipa, CotaiJet, is a Las Vegas
finally to be making its move for a property on Cotai, the Las Sands Corp entity primarily focused on delivering passengers to The
Vegas Strip-style enclave to the south of the territory’s traditional Venetian Macao on Cotai. LVS takes ferry services very seriously as
gaming hub. part of its overall marketing strategy. In its first quarter results for
SJM has started fencing off a piece of land near the Macau 2010, the company said it had US$201.7 million of long term debt
Dome, although the Macau government hasn’t yet officially related to ferry financing.
assigned the land to SJM for a casino project. TurboJET, operated by Ho family-led shipping and property
“We are in the process of negotiating the concession,” said Dr conglomerate Shun Tak Holdings, makes one trip a day to and from
Ambrose So, SJM’s Chief Executive Officer. Dr So hinted the new Taipa to Hong Kong International Airport. But TurboJET is currently
property may be more resort-focused than other SJM casinos, but mainly focused on serving Macau peninsula, where the bulk of SJM’s
didn’t give details. properties and customers are.
New World First Ferry Services Ltd, owned by Chow Tai Fook
Enterprises Ltd, serves Hong Kong and ports in neighbouring
Murren cagey on MGM Macau IPO Guangdong, China, via Macau Maritime Ferry Terminal.
There’s been no official Chow Tai Fook is a Hong Kong based private conglomerate with
announcement yet on the interests in property development, hotels, casinos, transportation,
size and pricing of MGM jewellery, port and telecommunications businesses. Its chairman Dr
Resorts International’s Cheng Yu-tung, the chairman of New World Development Co Ltd,
planned share offer for its was one of the investors behind L’Arc, the SJM-licensed casino that
Macau operation via the opened in Macau last September.
Hong Kong stock market.
The initial public
offering (IPO) is expected
to take place this year, CityCenter continues to be a drain on
though with Asian equity MGM Resorts International
markets still showing considerable volatility, MGM will hope the
offer coincides with a sustained upswing.
A figure of US$1billion for the IPO was mentioned in Hong
Kong press reports earlier this year. Jim Murren, MGM’s chairman,
wouldn’t be drawn on the details during the company’s second
quarter earnings conference call. MGM Grand Paradise, the 50:50
joint venture with Pansy Ho, recently raised US$950 million in
debt financing to pay off existing debt and provide additional
Macao Dragon—new ferry operator serving Taipa
working capital.
“The [IPO] timing is not totally in our control under the Hong
Kong listing rules,” Mr Murren said. Pagcor likely to honour foreign investor deals for Manila Bay
He did indicate the joint venture plans to go ahead with at The new management of the Philippine Amusement and
least one more resort in Macau. Gaming Corporation (Pagcor) hints it will honour agreements
“We’re obviously very interested and have been very committed made by the former national government with joint venture
to expanding our footprint in Macau with another property over casino partners.
time,” stated Mr Murren. That’s thought to
include a so-called
‘midnight deal’ done by
CotaiJet competitor has Galaxy and SJM links former President Arroyo’s
Macao Dragon, the new ferry operator serving the southern administration allowing
part of Macau via Hong Kong, has business links to both Galaxy Aruze Corporation title to
Entertainment Group and SJM. land at an ‘Entertainment
One of the people behind privately owned Macao Dragon is Ng City’ by Manila Bay. The deal,
Fok, a Macau businessman. Mr Fok is chairman of Hotel Presidente in contravention of normal
Macau, a four-star Galaxy-licensed boutique casino hotel under the government policy regarding
City Clubs brand. overseas investment, was Philippine President Benigno Aquino
Mr Fok also has long standing links to Dr Stanley Ho as an brokered by former Pagcor [left] swears in new Pagcor Chairman
executive director of Macau International Airport. Dr Ho’s investment chairman Efraim Genuino Cristino Naguiat last month
44 INSIDE ASIAN GAMING | August 2010
Briefs
to ensure Aruze didn’t pull out of the scheme for an Okada Resort, and crossed the floor again to become President of Altira, before
including casino. coming to rest in his new job as “co-Chief Operating Officer of
But incoming Pagcor Chairman Cristino Naguiat indicates he Gaming” for the whole of MPEL.
wants Entertainment City to be heavier on general tourism than
on casinos.
Jay Santiago, Pagcor’s new spokesman, said last month: “We LVS hints at permanent return for Stephen Weaver
have four proponents which have made commitments to start off Las Vegas Sands Corp hinted on that Stephen Weaver’s return
construction on the Entertainment City, which is connected to the to Sands China’s management team in Macau could be extended
Bagong Nayong Pilipino. beyond the consultancy role announced last month following the
“We are in the process of reviewing the contracts they’ve departure of Steve Jacobs as CEO.
entered into, the business models that have been proposed, and The company also indicated that whoever gets the job on a
we’re looking at the lay-out of the project. Chairman Naguiat full time basis will need to have strong diplomacy skills to ensure
wants it to be more of a tourist attraction rather than a gambling good relations with the Macau authorities. But the company also
destination.” said the new boss’s job would be made easier if it was being clearly
There had been some speculation that even the already demonstrated that Sands China continues month by month to add
built and running Resorts World Manila casino and hotel project value to Macau’s economy.
opposite Manila International Airport would be up for discussion “I think the combination of having a strong current operating
in the wide ranging review of gaming policy ordered by the new situation, along with the gaming, will give the next CEO the ability
national president Benigno Aquino. Resorts World Manila is a joint to deal in the financial, legal, government affairs area. So that’s how
venture between Genting Hong Kong (formerly Star Cruises) and we are structuring the business,” said Michael Leven, President and
Alliance Global Group, a local conglomerate specialising in real Chief Operating Officer of LVS during the company’s second quarter
estate development. Sources in the Philippines say although the earnings call last month.
Resorts World deal may be looked at, it’s highly unlikely that the Mr Weaver would be a strong candidate on the hearts and minds
government would order it to close given that it’s now an important front. He was widely praised for his project management on The
tourist facility in the capital. Venetian Macao’s construction, and he was generally seen as a less
abrasive figure than Mr Jacobs within the Macau industry and in
government circles.
Ted Chan appointed co-COO of Gaming at MPEL Mr Jacobs was brought in during May 2009 to cut costs
Ted Chan was promoted and turn round the operational side of the business following
last month to a co-COO of the global credit crisis in the autumn of 2008. Not long after, Mr
Gaming job at Melco Crown Weaver’s public profile began to diminish. One of his last set piece
Entertainment (MPEL). This performances as ostensible head of the business in Macau was the
follows the departure of signing in late July last year of the deal to set up an association for
Greg Hawkins as President the Macau concessionaires. Eventually, his role as President of Asian
of MPEL’s City of Dreams Development was eclipsed by Mr Jacobs’ CEO role.
(CoD). The property has “Stephen Weaver has come back as a consultant to help us
generally lagged behind the through the transition period and maybe even longer depending
underlying growth in the upon his personal situation,” added Mr Leven during last month’s
VIP segment, with MPEL’s conference call. Mr Leven is acting CEO for Sands China until a
second quarter EBITDA permanent replacement for Mr Jacobs is found.
of US$73 million missing
analysts’ consensus by 13%.
Mr Chan’s ascent up TransAct expands Macau office
the Macau management TransAct Technologies Incorporated, a global leader in market-
pole began as General specific printers for transaction-based industries, announced the
Manager of Mocha Clubs. expansion of its office in Macau as it increases its presence in the
Mocha, the locals-focused Asia-Pacific region. The office will continue to be led by Andrew
slot chain, was started by Ted Chan Hanley, TransAct’s Vice President-International Sales.
Lawrence Ho in 2003 when he took over as boss of Melco. Having In addition to Mr Hanley, the Company has hired Sonny Su
caught Mr Ho’s eye at Mocha, Mr Chan was recruited by Hong Kong- as Technical Sales Manager for Asia and Australia. Mr. Su will be
listed gaming operator Amax Holdings as Chief Executive. Some responsible for sales and technical product support in the Asia-Pacific
industry analysts found the relationship between MPEL and Amax region, particularly leading the integration process for the complete
suspiciously symbiotic. It didn’t stop Macau’s gaming regulators from range of the Company’s “Epic” brand of gaming products, and will
approving a deal in December 2007 whereby junket consolidator report to Mr Hanley.
AMA, a subsidiary of Amax, brought in lots of high rollers to the Mr Su previously worked for IGT’s Macau office as a Systems
struggling MPEL property Crown Macau (now Altira) in exchange Engineer, while at the same time lecturing part-time about
for a record 1.35% rolling chip commission deal. Information Systems & Management Systems Technology at the
The symbiotic relationship continued when Mr Chan left Amax Asian International University (Macau).
August 2010 | INSIDE ASIAN GAMING 45
Briefs
International Briefs
MGM reports US$883 million 2Q net loss
MGM Resorts International announced its second quarter net
loss was US$883 million, compared to a loss of $212 million in the
same three-month period a year ago. MGM Resorts blamed much
of the loss for the quarter, which ended 30th June, on a pre-tax, non-
cash impairment charge of approximately $1.12 billion related to the
investment in CityCenter, the US$8.5 billion Strip development that
opened in December.
There was a separate US$29 million non-cash charge due to an
impairment of CityCenter’s 2,400-unit residential inventory. MGM
Resorts owns CityCenter in a 50-50 joint venture with Dubai World,
the investment arm of the Persian Gulf emirate.
Despite the results, MGM Resorts Chairman and Chief Executive
Officer Jim Murren said CityCenter is seeing improved business
activity. Aria, the development’s centerpiece 4,004-room hotel
casino, saw occupancy increase in the quarter and grew non-casino The elegant lobby at Encore Macau
revenues. and 13 of the revenues from the market,” Wynn said during a
“The Las Vegas operating environment remains difficult, but as conference call with analysts. “Now, we have 10% of the equipment
we expected, we are seeing a gradual recovery,” Murren said. “Our and 16-17% of the revenue. We are on our way to the best year in this
adjusted (cash flows) improved compared to the first quarter, despite company’s history, or in the history of any company I’ve ever been
low hold percentages.” involved with.”
Company wide net revenue grew in the quarter to $1.54 billion, During the conference call, Wynn told listeners he had
compared with $1.46 billion in the first quarter of 2010. CityCenter completed preliminary designs of the company’s next hotel-casino
reported net revenues of $401 million in the second quarter, which in Macau, planned for a 52-acre site on the Cotai Strip. In previous
included $218 million related to sales of condominium units at Vdara, comments, Wynn said he didn’t expect the project to be completed
Mandarin Oriental and Veer Towers. Part of the residential revenues by 2014. He said he thought he might be able to share some
included $56 million in forfeited residential deposits. CityCenter had proposed renderings by the company’s fourth-quarter earnings
a total operating loss of $128 million. call early next year.
One sign of improvement was the results from the MGM Grand Wynn added that after completing preliminary designs, the
Macau, the company’s 50% owned resort in China. MGM Grand Macau company had 12 acres left over, which could be used for further
earned operating income of $40 million in the quarter, including development. “It will be a chance for us to expand or add other things
depreciation expense of $21 million. A year ago, the resort reported to make Macau more attractive,” Wynn said.
an operating loss of $8 million, which included depreciation expense Despite the focus on Macau, Wynn said the company will spend
of $22 million. $99 million to remodel all 2,700 rooms at the now 5-year-old Wynn
Las Vegas. The project is expected to be completed by the spring. The
Wynn Las Vegas baccarat pit will be remodeled and two restaurants
Wynn Resorts sees profit rise will be added to the resort. “Wynn Las Vegas will be spruced up from
Wynn Resorts reported net income of US$52.4 million, or 42 the golf course to the Strip by next spring,” Wynn said.
cents per share, for the three month-period that ended 30th June. A
year ago, Wynn earned $25.5 million, or 25 cents a share.
At Wynn Macau and Encore at Wynn Macau, the two resorts LVS narrows net loss
collected US$723.3 million in revenues, a jump of 74% from $410.4 Las Vegas Sands Corp (LVS) said it lost US$4.7 million, or 1 cent
million in the same quarter a year ago. Encore at Wynn Macau opened per share, for the three months ended 30th June. A year ago, the
on April 21 with 410 suites and a casino expansion. company lost $222.2 million, or 34 cents per share.
Companywide revenues, which includes Wynn’s two Strip Companywide revenues grew 51% to $1.59 billion, helped by
resorts, was $1.03 billion, up from $723.3 million in the same quarter results from its three resorts in Macau. LVS said revenues produced
a year ago. Wynn’s two Las Vegas Strip casinos lost $17.2 million by the Venetian Macau, Sands Macau and Four Seasons Macau
during the period. increased 40.7% to $1.04 billion in the quarter, compared to $738.9
Wynn Resorts Chairman Steve Wynn said the company’s Macau million in the second quarter of 2009.
casinos picked up a larger piece of the Chinese gambling market Meanwhile, the company’s US$5.7 billion Marina Bay Sands in
after Encore opened. Singapore, which opened 27th April, generated $94.5 million in cash
“Prior to the opening of Encore, we had 8.5% of the equipment flow in its first 65 days. “Both gaming volumes and visitation to the
46 INSIDE ASIAN GAMING | August 2010
Briefs
property have been robust and we are gratified by the overwhelming program. “Despite challenges in the broader marketplace, we
reception the property has received,” LVS Chairman and Chief continue to manage our business to increasing levels of efficiencies,”
Executive Officer Sheldon Adelson said in a statement. Hart said. “Our efforts have resulted in the generation of significant
On the Vegas Strip, LVS said its net revenues declined 5.4% to cash flow for reinvestment into the business in areas that create
$276.2 million during the second quarter. The Venetian and Palazzo innovative and customer centric products and services.”
resorts reported increased gaming volumes, improved group IGT Chief Operating Officer Eric Tom said several of the company’s
booking volumes and improved hotel occupancy during the three- newest slot machines have helped boost sales figures. Since it was
month period. However, results were negatively impacted by low introduced earlier this year, some 1,300 slot machines themed after
table games win percentage. the HBO television series “Sex and the City” have been placed in
casinos.
EU court reaffirms Sweden’s right to ban online gambling
The European Union Court of Justice ruled last month that EU Bally re-enters Australia and New Zealand gaming market
countries have the right to ban online gambling. Bally Technologies, Inc, a leader
The Swedish case before the court concerned newspapers in slots, video machines, casino-
running ads for foreign bookmakers. Sweden had prosecuted on management and networked and server-
the basis of violating the country’s lottery laws, the individuals then based systems for the global gaming
appealed the prosecution and the ECJ was consulted. industry, announced this month that
ECJ found in favour of the right of countries to ban online it has appointed veteran Australian
gambling being consistent with “community law”, but would gaming executives Michael McNee and
not allow countries, such as Sweden, to impose what it termed Ron Jeffrey to help lead its return to the
“discriminatory penalties”. Australian and New Zealand gaming
market. McNee steps into the role of
Managing Director of Bally Australia,
IGT profit up despite revenue dip and Jeffrey assumes the position of Sales Ron Jeffrey
Reno-based IGT said its net income for the quarter that ended Manager for BallyAustralia. Both will be
30th June was US$94.6 million, or 32 cents per share. In the same based out of Bally’s new regional office in
quarter a year ago, IGT reported net income of $62.2 million, or 21 Sydney, New South Wales, Australia.
cents a share. Without one-time charges, IGT would have earned 21 “We couldn’t be more pleased
cents a share during the quarter. that longtime gaming industry
Revenues fell 5.3% in the quarter to $489.7 million, compared experts and my former colleagues
with $517.3 million a year ago. IGT said 56% of the quarterly revenues Michael McNee and Ron Jeffrey have
came from slot machines where the company shares in profits with agreed to help lead Bally’s advance
casino operators. into Australia and New Zealand,” said
As for direct sales of slot machines, IGT’s revenues decreased 8% Gavin Isaacs, Bally Technologies’ Chief
from a year ago. Operating Officer. “Michael and Ron
Michael McNee
In North America, IGT’s slot machine sales revenues decreased will be teaming up with Cath Burns,
16% in the quarter, mainly because there were fewer openings of Vice President and Managing Director of Bally Asia-Pacific, who
casinos in the three-month period compared to a year ago. is also an Australian. This experienced team’s understanding of
Internationally, however, sales revenues increased 8% for the the gaming market in Australia and New Zealand ensures that we
quarter, primarily due to favorable will hit the ground running as we introduce our award-winning
foreign currency exchange. IGT portfolio of industry-leading games and systems technology
said its sales were boosted by to Australia.”
the opening of Marina Bay Sands Michael McNee recently joined Bally Technologies after serving
in Singapore, in addition to in a consulting capacity with Bally for the past year. In his new full-
improved sales in Mexico. time management role, McNee will be principally responsible for
IGT sold 4,500 slot machines the Company’s overall product and marketing strategy for the
domestically during the quarter, Australia and New Zealand gaming market. He comes to Bally after
compared with 6,700 a year ago. a very successful 18-year career with Aristocrat Technologies. Most
Internationally, the company recently, McNee was Aristocrat’s General Manager, Games and
sold 5,400 machines, compared Licensing.
with 5,500 games last year. Ron Jeffrey’s responsibilities will include overseeing sales
However, the sales margins for operations activities and customer- relationship management
all slot machines were up three throughout the Australia and New Zealand region. Jeffrey brings
percentage points. more than a decade of sales experience within the gaming
IGT CEO Patti Hart said the industry, with a specific focus on the Asian and Australian gaming
company benefited from last markets. Most recently, Jeffrey was National Sales Manager for
year’s corporate restructuring Aruze Gaming, Australia.
August 2010 | INSIDE ASIAN GAMING 47
Events Calendar
Events Calendar
A more comprehensive events listing is available on our website, www.asgam.com.
26-28 August, 2010 20 October, 2010
GTI Asia China Expo 2010 I Gaming Forum
Poly World Trade Center, Guangzhou Grand Hyatt Macau, Macau
GTI Asia China Expo saw its successful debut in 2009 and definitely Website: www.tun.sg
proved itself as an excellent platform for the industry to know
more and better about the Chinese market.
Website: http://www.gtiexpo.com.tw/cnen/ 15 - 18 November, 2010
Global Gaming Expo
05 - 07 October, 2010 Las Vegas Convention Center, Las Vegas
The 10th edition of the annual gaming event “by the industry,
Asian Casino & Gaming Congress for the industry”. The largest show floor in gaming featuring
Marina Bay Sands, Singapore the world’s leading exhibitors showcasing the industry’s latest
Incorporates the 3rd Annual Asian Gaming & Regulation products, services and technologies.
& Investment Summit, plus focused days on Operations & Website: http://www.globalgamingexpo.com/
Strategy and Marketing & CRM, giving insights into the market
fundamentals of each of the key gaming jurisdictions and advice
on how to manage and market a gaming operation in Asia.
Website: http://www.beaconevents.com/2010/
asiangamingcongress/
18 - 19 October, 2010
2nd Annual Asian Casino Symposium
Grand Hyatt Macau, Macau
Covering investment opportunities; legal and regulatory;
developments in emerging markets; HR and talent retention
issues for casinos; security and surveillance; marketing and
operations.
Website: www.tun.sg
denotes events where Inside Asian Gaming will be available. To list your event here and on our website, email dom@asgam.com.
48 INSIDE ASIAN GAMING | August 2010
May 2010 | INSIDE ASIAN GAMING 49
50 INSIDE ASIAN GAMING | May 2010
