Inside Asian Gaming

45 44 International Briefs Casino Closure Hits Atlantic City Revenue Casinos in Atlantic City, New Jersey, won 4.8% less money year-on- year from gamblers in July, when they were forced to close for three days. Casino revenues totalled US$480.5 million during the month. New Jersey Governor Jon Corzine ordered the shutdown of non- essential state government on July 1 and the dismissal of approxi- mately 45,000 state employees when the Legislature failed to pass a fiscal 2007 budget bill. Among the employees dismissed were the casino inspectors required by New Jersey law to supervise operations in Atlantic City’s casinos,forcing the casinos to shut down.The casinos lost two court battles to have their state inspectors considered essen- tial personnel.The governor ultimately lifted his shutdown order after the US$30.9 billion budget was finally approved. The twelve casinos in the second-largest US gamblingmarket saw their slot machine revenue fall 8% year-on-year to US$345.8 million, while table game winnings rose 4.7% to $134.7 million. For the first seven months of the year,casinos won US$3 billion from gamblers,up 4% over the same period last year Among the casinos that were forced to close was the Borgata Ho- tel Casino and Spa,which lost US$1.9 million a day in gaming revenue during the shutdown. Atlantic City’s casinos contribute about US$1.2 million in tax receipts daily to the state. Atlantic City casinos, like those in Macau, are still dominated by gambling, but both cities are moving in the direction of Las Vegas – where non-gaming revenue contributes half of casino resort rev- enues – by adding hotel rooms, shopping and dining. Nevada Endorses Another Wireless Venture International Game Technology (IGT) won provisional approval from Nevada regulators to compete in the state’s emerging market for hand-held, mobile gambling devices. In May, Cantor Gaming – which led the effort to gain legislative approval for wireless gambling in Ne- vada – became the state’s first licensed manufacturer and distributor of the devices. In March this year, Nevada became the first US state to allow wireless gambling in public areas of casino resorts, including restaurants, lounges and poolsides. Hotel rooms and other locations that cannot be supervised are off-limits. Proponents of mobile gambling argue the devices will allow re- sorts to better utilize space, with increasing space being devoted to non-gambling activities, including retail, dining and entertainment. Tech-savvy gamblers in their 20s to mid-40s are seen as the likely market. A range of games are allowed to be offered, including poker, blackjack, horse race betting, slots, roulette and keno, though under state and federal law, the devices cannot be linked to Internet gam- bling sites. IGT research shows that about half of the gamblers surveyed about the devices said they would try them. Biometric fingerprint readers have been discussed as a way to ensure minors do not use the devices to gamble, though the survey also revealed some players view the fingerprint readers as an invasion of privacy. The wireless devices can be linked to a main casino server that verifies the gambler is the person who checked out one of the de- vices at a casino. Players could establish betting limits in advance by depositing money on account. IGT’s prototypes range from a small device to a 10-by-12-inch laptop. Meanwhile,theVenetian Resort Hotel Casino in Las Vegas recently announced it will shortly begin field trials of mobile gambling devic- es.The Venetian is the first and only Vegas casino resort to announce it will participate in the trials, and other resorts are on the sidelines waiting to see what will happen, with concerns over security, under- age use, and possibly even a rise in gambling addiction related to the introduction of the devices. WTO to Investigate US Online Gambling Restrictions A new World Trade Organisation (WTO) investigative panel has been requested by the Caribbean island nation of Antigua and Barbuda to investigate whether US restrictions on internet gambling breach world trade rules. US laws banning interstate betting over the inter- net will be examined by the investigators. Antigua and Barbuda, which hosts several online casinos, has been in a long-running battle with the US over the legality of its stance on the industry.The Antiguan authorities asked for the panel to be set up after negotiations with the US broke down. The WTO earlier found that some of the US laws were not in line with trade rules, though others were permissible, and it recommended that the non-compliant rules, which referred to Internet horse race betting, be addressed.  Antigua and Barbuda claim the US online gambling prohibitions are hampering its economy. The island government has invested heavily in the industry in a bid to lessen its reliance on the tourism sector, and it says three US laws are preventing companies from le- gally accepting bets from the US. The announcement of the WTO investigation comes at a time of turmoil for the online gambling industry, with anti-online gaming legislation being passed by the House of Representatives in the US, and the arrest by the Department of Justice of a senior online gam- bling executive on his way through the US to his Costa Rican base. David Carruthers, chief executive of one of the world’s largest online gambling companies, BetOnSports online, was arrested on July 16 by federal agents at Dallas-Fort Worth International Airport. The government claims that BetOnSports and its employees took billions of dollars from US residents by phone and internet without paying taxes. Mr. Carruthers was fired from the company in July, and BetOnS- ports has agreed to a judge’s order to stop accepting US sports online gambling bets.The London Stock Exchange has also suspended trad- ing of the company’s shares.Court proceedings against several BetOn- Sports executives commenced on July 31, and all entered not guilty pleas to charges of federal racketeering and wire fraud charges. Chaves (Solverde), Sao Miguel (ASTA) and Porto Santo (Siram). US Congress Bans Online Gaming The US House of Representatives has voted to stop US citizens gam- bling on the internet. Rather than go after the gambling and bet- ting sites themselves, they have made it illegal for any credit card company, or other institution, to allow payment to any betting site. The bill is an attempt to stop US gamblers from spending over US$6 billion a year on illegal, untaxed sites, and still needs to pass the Sen- ate before becoming law. The bill also updates the Wire Act of 1961, which banned betting over phone lines, to include any communica- tion network. There are some exceptions – betting on horse races is allowed. In- dividual state lotteries are also excluded from the ban.The exceptions have been branded as hypocritical by opponents of the ban. The US Justice Department always viewed online gambling as il- legal and most of the sites serving US gamblers are based in Europe or the Caribbean.Politicians said mobile phones, BlackBerries, andWi- Fi networks mean US citizens could soon be gambling from every- where. Despite the legal situation, about half of online gamblers are estimated to be US citizens.Some of themmight need to find alterna- tive ways to pay for their bets. Global Gaming Revenues to Grow In a recent report, PricewaterhouseCoopers (PWC) forecasts global gaming revenues will increase by 8.8% annually to US$125 billion by 2010 from US$82.2 billion in 2005. PWC predicts that growth in the Asia-Pacific region will be most significant, at 14% annual growth. According to the report, the US will remain the largest gambling market and is expected to grow 6.9% per year, from US$53.3 billion in 2005 to US$74.5-billion by 2010. Online gambling is expected to grow by 100%, from approximately US$5.1 billion to US$11.4 billion by 2010. The report also identifies the UK as a high growth area, where re- cent legislation is predicted to create an increase of 16.6% per year, to US$6.6 billion in 2010 from US$3 billion in 2005. The report cited the legalisation of casinos in Singapore,as well as possible future legalisation in Japan, Taiwan, and Thailand as a cause for increased gambling in those markets. UK Seeks Online Gambling Summit The UK is seeking to persuade offshore centres that are benefiting from the explosion in online gambling – including Antigua, Gibraltar, the Cayman Islands, the Turks and Caicos Islands – to sign up to new controls on the websites. UK Culture Secretary Tessa Jowell told the Financial Times she would host a summit in October to try to get international agreement on a new code of practice. The UK government plans to invite the In- ternational Monetary Fund andWorld Trade Organisation, along with ministers from all the main offshore gambling jurisdictions, to the summit. However, the UK will possibly face an uphill task in persuad- ing offshore centres to put at risk a lucrative source of revenue by imposing much tighter regulations. Stanley Ho’s Share of Portuguese Market Rises Estoril-Sol, a Portuguese company controlled by Macau gaming mogul Stanley Ho, boosted its share of the Portuguese gaming and gambling market in the first half of 2006 following the opening of Ca- sino Lisboa in the country’s capital. Estoril-Sol’s market share reached 61.6% in the first six months of the year, almost three percentage points more than in the year-ago period. Casino Lisboa, which opened in May, generated revenues of 14.57 million euros in two and a half months of activity. Contrary to what was expected, the revenues at Casino Estoril, on the outskirts of Lisbon, fell only marginally, by 0.62% to 61.44 million euros. The casino at Póvoa do Varzim in northern Portugal, which is owned by the same group, had revenue of 26.38 million euros, or a rise of 6.5%. Portugal’s total casino revenuewas 166.35million euros in the first half, up 12.2% year-on-year. The country’s second largest gaming group, Solverde, saw its market share fall by 1.7 percentage points, to 29.4%, despite all its casinos having shown an improvement. Four new casi- nos are due to open in Portugal by 2008 – in Tróia (Amorim Turismo),