Inside Asian Gaming

17 16 Sharing is Winning LT Game is the only gaming technology supplier to secure profit sharing agreements with Macau casinos. The company is now set to follow up its innovative LIVE Baccarat system with the world’s first baccarat-based progressive jackpot pstart casino gaming systems sup- plier LT Game is 82% owned by Hong Kong- listed LifeTec Group.which,until recently,was engaged primarily in the biopharmaceuticals business. LifeTec’s stock price has recently been on a roll thanks to the performance and prospects of its gaming arm – the price has tripled over the past six months.To reflect its new success and focus, Lifetec will rename itself Paradise Entertainment Ltd. LifeTec has earned the envy of other leading gaming industry suppliers. In its lat- est earnings call, Shuffle Master expressed a desire to replicate LT Game’s profit sharing agreements with two Macau casino licens- ees – erstwhile monopoly operator Stanley Ho’s Sociedade de Jogos de Macau (SJM) and Hong Kong-based Galaxy Entertainment Group.LTGame ExecutiveDirector AaronPark says those agreements were struck thanks to the company’s“local connections,”especially those of Chairman and CEO Jay Chun, who “has tremendous experience in Macau and knows everybody in the field here.” Still, despite its connections, LT Game would have been restricted to either lease or purchase agreements – as are all other suppliers – if its proprietary LIVE Baccarat system did not offer a major value proposi- tion to casinos.The system has the potential to shave over 90% off labour costs, accord- ing to Mr Park. The first LIVE Baccarat terminals were in- stalled in May last year at the Greek Mythol- ogy Casino, which operates under the license of Stanley Ho’s Sociedade de Jogos de Ma- cau (SJM). The largest LIVE Baccarat venue is at the Mona Lisa Palace at Casino Lisboa – the LIVE Baccarat hall occupies the entire third floor of the venue with 120 terminals ar- ranged in a theatre-style seating configura- tion. LT Game announced its agreement with Galaxy in April this year, installing 40 termi- nals at Waldo Casino that month to bring the number of terminals in Macau to 280. LT Game is “moving aggressively to have 800 terminals in place by the end of the year,” claims Mr Park.The company provides the ter- minals and bears all installation, maintenance and tech support costs, as well as paying the salaries of promotional staff for LIVE Baccarat, while the casino operator provides the venue and dealers. LT Game receives a 31% share of net win – i.e.after the 40% government tax on gross gaming revenue. Those net wins have reached an average of HK$1,000 (US$128) per terminal per day, which, according to Mr Park, allows LT Game to recoup its capital expendi- ture in just a fewmonths. By providing LIVE Baccarat terminals to casinos at no cost, Mr Park argues LT Game offers operators a “risk-free opportunity to see if these machines work for them.” The company has also recently reached agree- ments with Malaysia’s Genting Group and the Philippine Amusement and Gaming Cor- poration (Pagcor) to supply 40 live terminals each to the casino at the Genting Highlands Resort and a Pagcor property in Manila. Testing Ground Prior to the liberalisation of Macau’s casino industry in 2001, table-loving Chinese gam- blers were averse to playing on gaming ma- chines. In order to lure Chinese gamblers to slot machines, Macau casino operators, led by Mocha Slot, installed electronic versions of popular table games such as sic bo, bac- carat and roulette.These electronic table ma- chines, known as multi-terminal games, offer a hybrid between tables and slots, and are a fairly new innovation globally. Initially, multi-terminals accounted for the bulk of Macau gaming machine revenue, but gradually, players started trying out the traditional slot machines located next to the multi-terminals, and following a migration over the past three years, Macau gamblers now spend more on regular slots than on multi-terminals. LIVE Baccarat, like Shuffle Master’s Rapid series of table games (including Rapid Rou- lette and Rapid Sic Bo, available in Macau), employs electronic terminals in order to process bets – dramatically increasing the productivity of a dealing table while pre- venting fraud and errors – but maintains a live dealer. Live video of the dealt hands are streamed to the individual terminals, and also displayed on large LCD screens in front of the banks of terminals. Mr Park claims players prefer the hybrid system with a live dealer to purely electronic terminals:“As op- posed to looking at a computer generated animation, they feel a live dealer is more fair and believable.” Inside Asian Gaming visited the LIVE Baccarat locations around Macau and observed that players at the LIVE Bac- carat terminals did appear more engaged than those at fully electronic terminals. Productivity comparison A regular baccarat table in Macau sees roughly 500 hands (blended average over the past few years) dealt over a 24-hours pe- riod, with three dealers working eight hour shifts. “Since our games are timed, we can play 1,000 hands per day on a LIVE Baccarat table,”says Mr Park. Furthermore, each dealer on the LIVE Baccarat system currently han- dles two tables simultaneously (scaleable up to three tables, so that three dealers working over a 24-hour period on the LIVE Baccarat system can deal up to 3,000 hands). In addi- tion, while a normal baccarat table seats six to nine players (an average of 7.5), each LIVE baccarat table is linked to separate sections consisting of up 25 terminals (20 in the cur- rent configuration). All told, a dealer on the U

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