|The Asian Gaming 50 – 2010|
|The Asian Gaming 50 – 2010: 1-10|
|The Asian Gaming 50 – 2010: 11-20|
|The Asian Gaming 50 – 2010: 21-30|
|The Asian Gaming 50 – 2010: 31-40|
|The Asian Gaming 50 – 2010: 41-50|
|About the Associate Sponsors|
41 (38) Chen Lip Keong
Founder and CEO
NagaWorld’s founder Dr Chen Lip Keong appears to be taking Phnom Penh’s only licensed casino in a bold new direction.
In late August, the management of the property in Cambodia’s capital announced it would refocus its strategy away from mid level high rollers (typically with check in levels of US$25,000) and instead focus on mass-market players. How much this is NagaWorld adjusting its strategy to meet market realities and how much it is conscious effort is an interesting question. Certainly, the company has been stepping up its offer in the slots segment through participation deals.
NagaWorld suffered more than most Asian casino destinations during the financial crisis of 2008-09. Many of its middle ranking VIPs, drawn from neighbouring countries such as Malaysia and Thailand, simply stayed away. In the first half of 2009, VIP revenues at NagaWorld fell 66.8% to US$34.1 million from US$102.8 million in the equivalent period in 2008.
One of the reasons NagaWorld previously eschewed the mass market in favour of VIPs is that local Cambodians are not allowed to enter casinos. Two years ago, nearly all the table activity involved foreigners playing in the VIP rooms, with a modest number of foreign visitors in the slot area near the lobby. But with the post war and post reconstruction return to Phnom Penh of the Cambodian Diaspora—many of them carrying foreign passports—there are potentially more mass market, high margin players to target.
Dr Chen is an official advisor to Hun Sen, the prime minister of Cambodia. He is credited within the country for playing an important role in helping to revitalise the country’s tourism industry following two decades of civil war.
An indication of the potential of the mass segment can be seen in the recent increase in the number of slot machines and electronic gaming tables installed in NagaWorld on a participation basis.
In late August, Entertainment Gaming Asia, formerly known as Elixir Gaming Technologies, announced it had reached 670 gaming machine seats in operation at NagaWorld. That was a more than two hundred percent increase from the number of gaming machine seats the company had at the resort in January 2009.
NagaWorld also has the biggest conference hall in the country, as well as a hotel complex. As Cambodia’s economy booms and foreign trade and exports increase, the resort’s operator, Hong Konglisted NagaCorp, will be well positioned to drive further mass market business via conferences and exhibitions—in the manner of The Venetian Macao. The operator also has a strong competitive advantage, as it is the only casino allowed within a 200-kilometer radius of Phnom Penh.
“Our remodelling strategy is focused on the fact that we want to build predictable results… sustainable results, rather than just explosive growth,” Kevin Nyland, NagaCorp’s Vice President of Investor Relations, told the English-language newspaper The Phnom Penh Post. The idea, Mr Nyland added, was to draw steady yields from steady business and avoid too much volatility. That should please NagaCorp’s public investors.
Results for the first half of 2010, published in August, showed NagaCorp’s net profit for the period totalled US$21.1 million, up 83% from the US$11.5 million recorded for the first half of 2009.
The mass-market segment, comprising the main floor and the gaming machine zones, generated 70.2% of the US$67.1 million gross revenue—a sharp contrast to its 46.4% contribution last year.
Junket revenue fell to 29.8% of gross revenue from 53.6% for the first half of 2009. It brought in US$20.2 million this year from US$34.1 million in 2009.
42 (43) Clarence Chung
Chairman and CEO
Entertainment Gaming Asia
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.
In May, Entertainment Gaming Asia (EGT) announced an agreement to increase the total number of machines it operates at NagaWorld, a casino with an exclusive licence within a 200-kilometer radius of Cambodia’s capital Phnom Penh. That will push Elixir’s inventory at the property to 670 machine seats, from the 640 previously agreed with NagaWorld’s management. EGT will use the additional 30 seats to complement and expand its VIP slot area located on NagaWorld’s casino lobby floor—a zone established under a December 2009 contract with the property’s management.
The balance of EGT machines operated on a participation basis— approximately 900 of them—is at venues 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. Much of the credit for EGT’s upturn must go to CEO Clarence Chung.
Mr Chung has extensive financial and gaming management experience. Previously, he served as the Chief Financial Officer at Hong Kong-listed Melco and over the last 20 years has held senior financial positions at a number of multinational companies.
43 (50) Dennis Valdes
PhilWeb Corp, the first and largest (by market capitalisation) listed Internet company in the Philippines has seen profits continue to soar as lobbying efforts last year by several politicians seeking to ban domestic online gambling in the country ultimately proved fruitless.
PhilWeb, headed by Dennis Valdes, is a lead technology enabler of the country’s state-run casino regulator-cum-operator, PAGCOR (the Philippine Amusement and Gaming Corp). Its main businesses include running e-gaming cafés, Internet sports betting stations, mobile phone gaming and online casino gaming.
Profit in the first half of this year surged 41% year-on-year to PHP322 million (US$7.2 million), while revenue was up 40% to PHP508 million.
The changing political landscape following general elections in May has, however, hindered the company’s expansion this year. Approval for new e-gaming cafés—a core part of PhilWeb’s business— requires the consent of both PAGCOR and local governments, and a fair degree of uncertainty remains as to how much further the country’s new leadership wants PhilWeb to grow.
Between 2006 and 2009, PhilWeb opened an average of 40 new e-gaming cafés every year, and at the end of last year, it had 171 venues in operation. As of last month, though, PhilWeb had only opened an additional 17 cafés in 2010.
PhilWeb’s profit for the whole of 2009 stood at PHP552 million, up 89% from 2008. Mr Valdes plans to sustain that strong growth through regional expansion, and is currently seeking licences to provide online gaming services in several other Asian countries. “In Cambodia, we’re very close to obtaining a license and we’re negotiating for two licenses,” Mr Valdes commented during an interview last month with Dow Jones Newswires. One license is to operate e-gaming cafés in the country, while the other is for mobile lotto.
Mr Valdes predicts that in five years, his company will generate the bulk of its earnings from overseas operations. In addition to Cambodia, PhilWeb is also seeking gaming licenses in Laos, Vietnam, Myanmar, Guam, Saipan, Palau, Papua New Guinea, East Timor and Nepal.
“What we’ve seen so far in those countries are situations very similar to the Philippines: There’s lots of illegal gambling activity and the government is looking to increase its revenue,” explained Mr Valdes. By providing legal gaming alternatives, those governments will be able “to hit the proverbial two birds with one stone,” he asserted.
In another effort to develop new revenue streams, earlier this year, PhilWeb and its sister firm ISM Communications Corp acquired 65% of Acentic GmbH, an international provider of digital television and high-speed Internet services to hotels, tourism facilities, health care premises and other facilities in Europe, Africa and the Middle East. In Europe alone, Acentic serves around 200,000 rooms. Apart from expanding Acentic’s operations into Asia, PhilWeb is also exploring ways to add its e-gaming offerings to Acentic’s services.
44 (28) Subhash Chandra
It’s not an accident that Subhash Chandra, a former rice trader turned mass media entrepreneur, was one of the first people to set up a commercial gaming business in India.
“We have to be very, very clear and adoptive towards consumer needs. Money will follow. If we chase money, it never comes,” Mr Chandra told an interviewer at the 2010 Wharton India Economic Forum in August.
Mr Chandra is founder of Playwin, India’s first online lottery business. Although only a fraction of India’s 1.1 billion-plus people have access to the Internet, low-income adults can play electronic lottery games by visiting terminals located in shops. The lottery is promoted in cyberspace as myplaywin.com. It has a reputation among players as fair in a country where paper lotteries are widely regarded with suspicion as corrupt.
In January this year, Essel Group subsidiary Pan India Network signed a joint venture deal with British gaming company Sportech to create a multimedia sports gaming business aimed at Indian customers. Sportech operates pari-mutuel soccer betting (known in the United Kingdom as football pools) via retail outlets in the UK as well as online sports betting.
The joint venture companies have invested £2 million (US$3.09 million) each to be spread over two years. Operations began in May. A spokesman for Sportech says the Indian website received nearly a quarter of a million visitors between June and early August, with 45,000 people registering online.
But as Mr Chandra told Inside Asian Gaming during a visit to Hong Kong earlier this year, the main impediment to the growth of legal land-based and online gaming in India is domestic politics at national and state level. States are technically responsible for licensing new gaming ventures, but in practice, may find it hard to do so because of vested local interests in paper lotteries.
Mr Chandra’s philosophy is to operate companies that are pre-eminent in their market. “I always pursued in my mind that I wanted to be either number one in any given business or a strong number two. If I am not either of the two, I will exit that business,” he told the Wharton Forum. Given his first mover status in online gaming in India, he should be better placed than others to retain that top position.
Playwin was floated on the Indian stock market in November 2001, initially winning online lottery franchises for the governments of Sikkim, Karnataka and Maharashtra.
Playwin products certainly appear to have captured the public imagination. In a country where, according to the World Bank, half the population earn less than one US dollar per day, Playwin’s record lottery prize (the product of a rollover from previous draws without any top prize winner) amounted to a staggering US$3.5 million won by a resident of Kolkata in May 2006.
Playwin’s potential for profitability is hugely boosted by the fact that its products and services can be supported and cross-marketed by other parts of the Essel Group empire. An example is that Playwin lottery products have now expanded into the offline entertainment market using pre-paid scratch cards produced by ItzCash, another Essel business. The services offered by myplaywin.com cards can also be accessed by mobile phones through SMS. The lottery results are in turn promoted on Play TV, an Essel Group operation and India’s first interactive gaming television channel.
Mr Chandra’s Essel Group also owns Hindi TV broadcaster Zee Entertainment, with an estimated 500 million viewers in 167 countries. His son Punit was named Zee’s chief executive in August last year. The Essel business is still family run, with Mr Chandra’s brothers heading Zee News and Dish TV respectively. Other businesses include amusement parks.
45 (-) Hideyuki Busujima
Mr Busujima junior took over the day to day running and direction of Japanese pachinko maker Sankyo in 2008 after his father, the founder, Kunio Busujima, stepped down as Chairman. The latter is still a Director and Senior Advisor of the company.
Sankyo Co Ltd, based in Tokyo, Japan, was founded in 1966. It engages in the development, manufacture, and sale of pachinko and pachislot machines and related components, and also offers equipment for pachinko parlours, such as parlour management computer systems, ball bearing supplies, and prepaid card systems.
Pachinko has been around since the end of the Second World War. It’s now a mature sector, facing many of the challenges typically found by older industries. These include the need to refresh the product offering, face up to changing consumer demographics and tackle new competition from alternative products and services (in pachinko’s case, multimedia online entertainment including video and roleplay gaming aimed at an affluent younger audience). Pachinko’s ongoing struggle for Japanese players’ attention and money is also potentially under threat from international casino gaming operators if the country’s government ever gets around to legalising land based casinos.
The company cited declining sales as a reason for lowering its revenue estimates for the financial year to 31st March 2010 from ¥270 billion (US$3.16 billion) to ¥220 billion, and its operating profit from ¥67 billion to ¥57 billion (US$670 million).
Sankyo has, however, taken steps to strengthen its balance sheet. In August, the company announced it would repurchase a maximum ¥15 billion (US$180 million) of its common stock—or up to three million shares. That represents approximately 3.11% of its total outstanding shares. The share repurchase was to be conducted between 14th June and 30th December 2010.
The company has also shown a willingness to adapt and innovate to changes in market conditions. It has recently done licensing deals with Japanese comic book publishers to feature popular characters on its pachinko machines. It has also signed an agreement to use the image of Japanese pop singing pin-up girl Kumi Koda.
Sankyo’s spirit of innovation extends to the marketing and management of the pachinko halls it runs. In recent years, Sankyo has featured a Hollywood actor, Nicholas Cage, in its commercials on Japanese television. The fact pachinko can be advertised (even if somewhat obliquely) on television at all gives some indication of the charmed life the industry has led with help from the country’s lawmakers and the ongoing ban on land based and online casinos.
Sankyo has also created women only sections in its gaming parlours—a major step in a country not always known for strong promotion of gender equality.
Sankyo’s willingness to innovate in management and customer service is atypical of Japanese companies focused on domestic rather than on export markets. It is, however, an indication of the company’s belief that there’s a significant amount of life (and profit) in pachinko for some years to come. Sankyo has told analysts it expects a 51% jump in net income for the next fiscal year, reversing a one-third drop in the previous 12 months.
Mr Busujima senior was ranked number five on Forbes’ Japan’s Richest list this year, with an estimated fortune of US$5.3 billion—down three places from his 2009 ranking, although his actual net worth went up by an estimated US$100 million during that period.
46 (33) Paul Steelman
President and CEO
Paul Steelman Design Group
Mr Steelman has reached almost iconic status in the world of casino design, with the mere attachment of his name to a project sufficient to generate excitement among industry analysts and even casino players. It was to Mr Steelman that SJM turned when it needed to inject some glamour into its drastically scaled back Oceanus project next door to Macau Maritime Ferry Terminal on the Macau peninsula.
Thanks largely to the global economic crisis of late 2008, Oceanus went from a US$800 million French-designed flagship property shaped like a sculptural representation of a ship’s sail, to a US$190 million project involving the gutting and re-branding of a former shopping centre, the ‘old’ New Yaohan, as a gaming venue.
Given the modest budget with which Mr Steelman had to work, it’s a credit to his skills and pragmatism that the project managed to make an impression in a crowded Macau peninsula market. It opened on time and on budget just before Christmas 2009. Mr Steelman was also responsible for the iconic design of the Hard Rock Casino that opened in June last year at Melco Crown Entertainment’s City of Dreams resort on Cotai, as well as the stadium configuration of the now internationally famous Sands Macao, Macau’s first decidedly mass market gaming venue, that opened in 2004.
At this year’s G2E Asia trade show at Venetian Macao, Mr Steelman told an anecdote about meeting the singer Frank Sinatra when the latter was performing a season of shows at an Atlantic City casino. Mr Steelman—a novice architect at the time—was summoned to the star’s suite at the casino. It turned out Mr Sinatra wanted a water pipe running to the balcony so that he could water his tomato plants. Old Italian habits die hard, even for second and third generation immigrants.
Nowadays, Mr Steelman is sought out as much for his own advice and consultancy expertise as for his skills at executing other people’s visions. At G2E Asia 2010, he set out his ideas about the future direction of Macau. His view is that the growth of the Chinese middle class with increasing disposable income and sophistication in consumer taste can only be good news for operators and for the development of casino and hotel design in Asia. Expect to see the influence of Mr Steelman and his design partnership grow across the region as China and its Southeast Asian neighbours move up the global GDP rankings.
47 (42) Alfredo ‘Albee’ Benitez
First Cagayan Leisure and Resorts Corp
Business and politics are inextricably linked in the Philippines. So it’s not a surprise that Alfredo ‘Albee’ Benitez stood and won election as a Congressman during the country’s national polls in May.
As head of the Philippines’ First Cagayan Leisure and Resorts Corp, Congressman Benitez also has an unusual (by the rest of the world’s standards) role as a regulator-cumoperator of online gaming.
First Cagayan acts as regulator for all comers wishing to obtain an online gaming licence for offshore operations based out of the Cagayan Special Economic Zone Authority (CEZA). First Cagayan also operates some online gaming businesses on its own behalf. CEZA, a freeport set up in the north of the country by the Philippines government in 1995, is Asia’s first and so far only jurisdiction for legal licensing of online offshore gaming content and services.
First Cagayan Leisure and Resorts Corp is in turn majority owned by a Philippines public company—Leisure and Resorts World Corp. Under the group umbrella, Congressman Benitez operates the country’s largest chain of bingo halls with 36 sites—all licensed and regulated in turn by the national land-based gaming regulatorcum- operator, the Philippine Amusement and Gaming Corporation (PAGCOR). The bingo halls are in the country’s major shopping malls and offer a range of games including traditional bingo, electronic bingo, instant bingo pull-tabs and Rapid Bingo—a keno-type game.
His vested interests with First Cagayan Leisure and Resorts Corp and Resorts World Corp may be what has prompted Congressman Benitez to identify himself with the reforming efforts of the new national president, Benigno ‘Noynoy’ Aquino. President Aquino has talked openly of privatising PAGCOR.
Congressman Benitez said in August that an offer by Philippine businessman Ramon Ang, Vice Chairman of the food and beverage conglomerate San Miguel Corporation, and a group of Malaysian investors to purchase PAGCOR outright from the government for US$10 billion should be “studied”.
The figure was said by the bidders to be equivalent to PAGCOR’s income for 15 years. But Congressman Benitez—possibly wary of setting a dangerous precedent that could be applied to First Cagayan—urged that PAGCOR’s status as a regulator should be retained. He also pointed out that as PAGCOR’s remit still has 23 years left to run, the pricing of the buyout offer may not offer the best value for the public purse.
Time will tell whether Mr Benitez’s canny decision to run for public office—just as the tide of political opinion seemed to be turning against gaming expansion in the Philippines—is enough to protect and nurture his gaming interests in that market.
48 (-) Joe Pisano
Jade Entertainment and Gaming Technologies, Inc
Joe Pisano has more than 20 years of experience in the Asian betting and gaming industry. He is considered a particular authority on the markets in Southeast Asia and the Philippines and holds a Masters in Business and Technology from the University of New South Wales in Australia.
Mr Pisano recently formed a gaming consultancy with David Briggs, former Managing Director, eGaming, for British betting group Ladbrokes, and Anna Sainsbury, a former Commercial Director at Technical Systems Testing, a specialist Internet and land-based gaming test laboratory and consultancy, which was acquired earlier this year by Gaming Laboratories International.
The aim of Mr Pisano’s new consultancy, Jade Entertainment and Gaming Technologies, is to provide market and regulatory insights for governments, leading equipment manufacturers and operators attracted by the strong potential of Asian land-based and online gaming, but who want to understand more about the risks as well as the returns.
The consultancy also offers advice on how to establish, gain and then maintain market share in Asia. Mr Briggs complements that work by acting as a consultant on how to both structure an Internet gaming company in Asia and market it effectively to Asian consumers.
Jade operates globally, but with an emphasis on opportunities in the Asia Pacific region. Its main office is located in Metro Manila in the Philippines. The majority of Asia’s online gaming companies are domiciled in the Philippines, which was the first regional jurisdiction to license online operators.
Jade also has a gaming operation based in the Philippines. It currently runs 200 machines at the Oxford Casino in Clark, central Luzon, about an hour’s drive from Manila. The product mix includes the only IGT Wheel of Fortune® Special Edition™ Super Spin™ in the Philippines. Games on the floor use TITO (ticket in, ticket out) technology. Jade has plans to expand the gaming floor in November and has ordered IGT’s new American Idol® video slot game for immediate install once it is released in November.
Jade will also start installing machines in a second property—the Crown Regency in Cebu—within weeks. It will open with 200 units, including IGT, Novomatic, Aristocrat and Aspect Gaming machines. Jade says there is potential to double the capacity to 400 units.
Jade provides machines to venues on a revenue share basis. It expects by the end of September to announce distribution agreements for the Philippines market with some of the world’s major gaming manufacturers.
49 (49) Leonard H. Ainsworth
Ainsworth Game Technology
Given 87-year-old Len Ainsworth’s famous gallows humour, he may have regarded the bestowal of a G2E Asia Visionary Award at the gaming industry trade show and convention in Macau this year as a hint it was time for him to cash in his TITO voucher. It’s traditional, after all, for Hollywood acting legends to be given an honorary Oscar shortly before they leave the sound stage for the last time.
In a telephone interview this July with an Australian journalist, Mr Ainsworth—who in 1954 founded the business that later became Aristocrat Technologies—responded to an inquiry about his health with the pithy observation: “Still breathing”.
Mr Ainsworth’s race is not yet run. Ainsworth Game Technology is very much in the game regarding the modern industry. The company unveiled its latest slot products at G2E Asia, including its GamePlus™ range. Among Ainsworth’s new releases was its latest multi-level link progressive, Players Paradise™. Players Paradise features four new Vegas themed games: Vegas Fantasy™, Vegas Fortune™, Vegas Fever™ and Vegas Frenzy™. Based on Ainsworth’s successful Double Shot™ formula, Players Paradise combines a linked progressive with dual standalone progressives, frequent bonus prizes and free games features to keep players engaged.
In a July interview with The Age newspaper based in Melbourne, Mr Ainsworth explained his continuing role in the business.
“We’re regulated in America and all around the world and I’m invariably asked what do you do? And my answer is that I ride shotgun. By looking and listening and watching what’s going on and by getting out and meeting and greeting the customers.”
50 (47) Alfonso R. Reyno Jr
Chairman and CEO
Manila Jockey Club
Alfonso R. Reyno Jr owns 11.91% of Manila Jockey Club’s stock, according to a filing made with the Philippine Stock Exchange in May last year. So even though gross sales from horse racing betting in the Philippines fell 10.6% year-on-year in 2009 (the last available published figures), Mr Reyno is a wealthy and influential man in the country’s gaming industry.
Despite the 2009 slowdown, the industry as a whole still managed to book 4.9 billion pesos (US$100 million) in sales in the eight months to the end of August. The Club also operates PAGCOR Club San Lazaro (PGSL), a gaming venue at the San Lazaro Leisure and Business Park in Manila, which opened in 2006. It is a joint venture between the Philippine Amusement and Gaming Corporation (PAGCOR) and the Club. PGSL initially started with 110 slot machines, and four gaming tables. Within a year, it had expanded to 250 slot machines and six gaming tables.
Manila Jockey Club Inc, (MJCI) founded in 1867 and the oldest such organisation in southeast Asia, has to a degree been protected from the economic effects of the national horse racing sales downturn thanks to product diversification under Mr Reyno, who took up the post in 1997.
In particular, the Club got into the real estate business. In 2003, Mr Reyno adopted the sort of business model used by many European soccer clubs for their stadia. He moved the race stadium and track from a piece of prime land in the centre of Manila to a bigger, cheaper site in the suburbs at Cavite. The old 16-hectare site was then redeveloped as a mixed-use project with 3,400 high-end condominiums and townhouses in partnership with Ayala Land Inc.
At the new racetrack site, MJCI and its partner Century Properties also developed a 77-hectare estate with an up-market residential village known as Canyon Ranch, overlooking the sporting complex.
MJCI also operates more than 200 off-track betting stations (OTBs) in Metro Manila and in the neighbouring provinces, with the number of OTBs still growing. The Club also has its tele-betting facilities, which it reports have been adopted enthusiastically by race fans.