Inside Asian Gaming

15 18 LIVE Baccarat system is theoretically capable of handling up to 20 times more players than one at a traditional baccarat table – hence the impressive labour cost saving. Mr Park stresses the value of reducing la- bour costs given Macau’s worsening labour crunch and the ban on employing imported workers as dealers.He points out that SJM is in the process of altering its revenue sharing ar- rangements with its joint venture partners, re- ducing its 20% share of gross gaming revenue (GGR) in exchange for the partners assuming labour costs. Pre-liberalisation, dealers were paid 5,000-6,000 patacas (US$625-750) per month.Staffing costs then were probably only around 7-8% of GGR, with other overheads adding up to maybe 13-14% of GGR, leaving SJMwith a net of around 6-7% profit.With the arrival of competition and increased demand for dealers,SJM’s labour costs alone nowprob- ably account for 15-17% of GGR. “The major component is the labour cost component,” says Mr Park,which is why SJM is now asking a mere 5% in “franchise fees” and will cede 15% GGR as well as casino management control back to the JV owners on the main hall busi- ness, in return for the owners accepting all costs. Low max The greatly reduced labour costs allow LIVE Baccarat to offer aminimumbet of just HK$20 (US$2.6), compared to the HK$100 minimum on normal baccarat tables.Themaximumbet, however, is restricted to HK$10,000 per sec- tion of 20 terminals. In other words, the total of all bets – banker,player,tie and the side bet on the progressive jackpot – on each section cannot exceed HK$10,000.Thus, if one player places a HK$9,000 bet, all the other players in the section combined can only bet HK$1,000. This creates a sense of urgency for players to place bets before the limit is reached. Mr Park explains the maximum bet is set so low because the system is still being test- ed and in order to reduce volatility of wins and losses, given the relatively small installed capacity.“From our perspective, we have 280 terminals. There are 20-25 terminals per sec- tion, which roughly corresponds to only 10- 14 of our version of tables.” The max bet is increasing, however – it previously stood at HK$8,000. As more termi- nals are put in place, the maximum bet can be raised, at which time Mr Park expects net win per terminal to increase considerably. Progress on progressives LT Game has just launched a progressive jackpot as a side bet on LIVE Baccarat. The company’s trademarked Paradise Jackpot is the world’s first baccarat-based jackpot, which pays out when specific card sequenc- es are dealt during a LIVE Baccarat game. The “Paradise Jackpot” pays out 100% of the pool when the five cards constituting a Royal Flush are dealt, while fixed payouts are also available for four of a kind, three of a kind and banker or player pairs. LT Game has filed patent applications in the US and Macau for the rules and system of LIVE Baccarat and Paradise Jackpot. Baccarat is hugely popular in Macau, and progressive jackpots – “we call it the ‘life changing jackpot’” says Mr Park – hold great allure for Chinese gamblers. Last year, Macau casinos generated about US$6 billion in bac- carat revenue, suggesting that even assuming amodest-sized side bet,a baccarat-based pro- gressive jackpot could accrue to the millions of dollars and gain a huge following in Macau. LT Game is in the process of linking the jackpot on LIVE Baccarat across the SJM ven- ues it is located at – the linking is expected to be completed imminently, pending resolu- tion of technical issues by Macau’s monopoly internet service provider, CTM. LT Game has also developed a system to implement the Paradise Jackpot on regular baccarat tables. Mr Park assumes a side bet of HK$20 on mass market tables and HK$200 on VIP tables.“We believe we’ve got a hit product. Over time we would have a penetration for the majority of all baccarat tables in SJM and Galaxy.We think we can get 800 mass market tables and 300 VIP tables at SJM and Galaxy properties by the end of the year,”he predicts. “If for each game 50%of players place the side bet, the pool will grow by about half a million a day.The potential payout will take about one month or even longer. I wouldn’t be surprised if the jackpot goes up to 50 million. Even if 30% of people bet on the progressive each game, the numbers are staggering,”he adds. For Mr Park, the Paradise Jackpot is a no- brainer, and offers “a win-win for everyone.” Casinos would gain a side bet offering an added attraction for players and an alternative revenue stream to the traditional banker,play- er and tie bets. LT Game, meanwhile, plans to cover all CAPEX associated with the Paradise Jackpot, in exchange for a share of a potential goldmine. Operator Property No. of Terminals SJM Mona Lisa Palace Casino 120 Jai Alai Casino 40 Greek Mythology Casino 40 Holiday Inn Diamond Casino 40 Galaxy Waldo Casino 40 Total 280 No. of LIVE Baccarat machines by property