Inside Asian Gaming

INSIDE ASIAN GAMING | January 2008 16 Online Gaming proach of the delegates at the recent CAC event is exactly the right tactic when dealing with Asian regulators. Asia in general, and Chi- na in particular, is a very different beast to the United States when it comes to culture and the culture of regulation. America’s Anglo Sax- on Puritanism tends to work in absolutes of black and white. Asia is a more nuanced, subtle environment, where grandstanding is rarely rewarded. Americans would probably use different words for this— at best ‘opaque’, at worst ‘corrupt’.Whatever one’s perspective, man- agers and investors in Asian online gaming are likely to focus on tactics that get results. It’s widely perceived in Macau, for example, that the planning for Steve Wynn’s first casino project was com- promised by his megaphone diplomacy with the Macau government regarding the issuing of credit to gamblers. Mr Wynn put himself at risk of another dose of passive resistance recently when he made an insulting remark about Mao Zedong—whose portrait just happens to feature prominently on the renmin- bi banknotes that Mr Wynn hopes to see pass- ing from the hands of Mainland Chinese visitors to his casino coffers in the coming years. In another industry—real estate develop- ment—foreign investors were quietly and prof- itably pursuing tax-efficient offshore mezzanine finance deals in China until some bright spark at an Australian investment bank started boasting publicly about howmuch money his employ- ers were making. Chinese officials—faced with this potential loss of face and au- thority, or perhaps disgruntled that they weren’t getting a slice of the action—clamped down on such deals. Global Betting and GamingConsultants (GBGC) the UK- based indus- try analyst, e s t i - mates global online betting revenues for 2007 at US$15.2 billion,rep- resenting around 5% of global gaming revenues. That global online take is forecast to rise to US$24.4 billion by 2012, says GBGC. How much of that growth will be in Asia is hard to calibrate, it adds. High stakes The stakes are significant given that online gaming revenue globally is widely predicted to expand rapidly from its current level of 5% of global revenues (currently estimat- ed at US$238 billion) up to 12% of all gaming rev- enues over the next five to ten years. As global online revenues rise, the number of operators is likely to fall, thinks Mr Hall. “Three years ago there were lots and lots of poker networks. Now a lot of the smaller ones have already been eaten up by the bigger ones or disappeared completely. Consolidation in the marketplace is already happening, and there will be more. At the moment there are probably 20 poker networks out there. Give it another year or so and there will only be 25.” MANSION, the international online casino, poker and Internet betting company, is one of Play- tech’s casino software licensees and certainly seems to have faith in Asian online gaming. The firm is the kit sponsor for Tottenham Hotspur, the English Premier League club.This season MANSION ar- ranged to have its name writ- ten in Chinese characters on the yellow shirts worn by the play- ers for some away matches. Given the popularity of English soc- cer on tele- vision in China, it gives some indication of where the online gaming market may be heading. Currently the only Asian ju- risdiction formally to issue online gaming licences is the Philippines, though Macau signalled recently it may legislate to regulate online and remote gaming within two years.The absence of a formal online licence doesn’t, however, necessarily indicate active disapproval by governments. Calling shots Although land-based gam- ing operators require a new na- tional licence every time they wish