Inside Asian Gaming

43 International Briefs Merger Creates Russian Slot Giant Unicum and SmartGames, leading manufacturers and distributors of gaming machines and systems in Russia and the CIS countries, have merged to create the largest company of its kind in the region. Financial terms were not disclosed, but the deal has been ap- proved by the boards of directors of both companies, and the new entity will trade under the name Unicum Gaming. It will be headed by Unicum President Boris Belotserkovsky as chairman. SmartGames CEOValery Klesov will assume the post of chief executive.Peter Moffit, Unicum vice president and CTO, will be vice president for product de- velopment, and SmartGames Commercial Director Lyubov Loginova will head sales and marketing with the same title. The combination of established contacts and distribution part- ners, vast distribution and service networks, game portfolios and manufacturing and R&D capabilities will give the new company an “inestimable advantage over its competitors,”said a press release an- nouncing the merger. In addition to its own line of games and systems, Moscow-based Unicum is well-known also as the Russian distributor for Atronic In- ternational, Bally Gaming, Aristocrat Technologies, Ainsworth Game Technology, Konami andWMS Gaming. Unicum Gaming plans to extend its international reach. Both companies already enjoy a presence in Latin America and South Afri- ca, and these markets will “top the list” of expansion plans, they said. Holland Casino Maintains Monopoly Status Holland Casino has beaten back another challenge to its protected status as the Netherlands’ land-based monopoly. The Council of State turned down a request by casino group CFR for a casino license, essentially overturning a 2005 ruling by the Ad- ministrative Court of Breda,which many observers at the time consid- ered groundbreaking as it questioned the state-owned monopoly’s justification in light of EU treaty guarantees for the free provision of goods and services within the Common Market. Compagnie Financiere Regionale, a partnership between French casino operator Groupe Tranchant and Dutch slot maker Orion Gam- 42 ing, had sued the ministries of Justice and Economic Affairs for the right to compete against Holland Casino with a property in Orion’s home city of Bergen op Zoom. The Council, in refusing their petition, stated that even though its decision could not be squared with EU law, it nonetheless was in the public interest. A spokeswoman for the Council explained,“The Neth- erlands has deliberately opted for a single license holder in its desire to protect the consumer, combat illegality and criminality and reduce gambling.” CFR could pursue the case through the European Union, where it may get a more sympathetic hearing in the aftermath of March’s Placanica decision in the European Court of Justice. The European Commission has launched investigations into alleged anti-EU protec- tionist policies in several countries, including the Netherlands.The EC earlier this year issued “reasoned opinions” against Denmark, Finland and Hungary, which could be a precursor to infringement proceed- ings against those nations, which were given two months to respond. The Commission is similarly scrutinizing trade practices in Germany, Italy, Sweden and France. Mixed Results for Online Gaming Software Makers Two of the world’s leading online casino software providers recently reported their first quarter 2007 results. Playtech’s Q1 revenues rose to US$19.8m, up 14% year-on-year. Online poker made a particularly strong contribution to Playtech’s revenue growth, with the company’s revenues from that sector up 58%. Playtech was one of the gaming software makers that pulled out of the American market following the US crackdown on online gaming. The company’s revenues from the non-US market were up 22% compared with the fourth quarter of 2006, and Playtech saw first quarter 2007 non-US player revenue increase 85% compared to the first quarter of 2006. Playtech expects revenue growth to continue into the second quarter of 2007. Canadian gambling software provider CryptoLogic, on the other hand, reported a 27% year-on-year drop in revenues for the first quar- ter of 2007, with its first quarter profits at US$1.5 million. CryptoLogic also pulled out of the US market last year. The company forecasts its second quarter revenues will also decline. US Casino Revenue Reaches Record High Gambling revenues at US commercial casinos rose 6.8% year- on-year to a record US$32.4 billion in 2006, according to a sur- vey released recently by the American Gaming Association. The survey assembled data from about 460 commercial casinos in 11 states from those states’ regulatory agencies. The survey did not include the gambling revenues from 372 American Indian casinos in 28 states, 713 cardrooms in five states or 11,567 video lottery terminal locations in six states. The biggest gambling states by commercial casino rev- enue were Nevada at US$12.6 billion, New Jersey at US$5.2 billion, Indiana at US$2.6 billion, Mississippi at US$2.6 bil- lion, Louisiana at US$2.6 billion, and Illinois at US$1.9 billion. Poker continued its four-year rise in popularity in Nevada and New Jersey, though the survey showed a slowdown in the rate of revenue growth.Casinos in those twostates took inUS$238million inpoker rev- enuein2006,a15%increaseover2005,whenrevenuehadjumped37%. Kerzner’s New Line-up Kerzner International Resorts, whose Bahamas-based flagship prop- erty Atlantis is currently the largest casino in the Caribbean and South American markets, has made a couple of moves to further solidify its leading position in the region. Kerzner announced the appointment Robert F. Cotter as the new president of the company. In this role, Cotter will be responsible for overall operations and marketing of Kerzner International Resorts, and will be actively involved as a member of the executive manage- ment team in the strategic growth and development of the compa- ny worldwide. The functional areas of marketing, human resources, public affairs and entertainment, information technology and global communications/public relations will report directly to him. Cotter was most recently president and COO of Starwood Hotels & Resorts Worldwide, Inc. He will be based in the company’s Planta- tion, Fla. offices and will report directly to Sol Kerzner. Meanwhile, Atlantis Paradise Island continued to unveil new en- tertainment amenities as part of its ongoing Phase III expansion. The latest to open is Aura,a nightclub developed by Las Vegas-based Pure Management Group, the firm that created PURE, the Pussycat Dolls Lounge,Tangerine, Coyote Ugly and other well-known Sin City night- spots. Designed by internationally renowned architect Jeffrey Beers, Aura is a 9,000-square-foot nightclub that aims to transform Bahamas nightlife through exceptional service, distinguished staff and impec- cable design. Elevated off the casino floor, a grand staircase greets Aura guests and invites them into a club experience. Once at club level, guests will enter Aura where the dance floor and DJ booth com- mand attention at first sight.The sunken dance floor is surrounded by banquettes set for VIP bottle service while the raised DJ booth sets the pulse of the nightclub.Two ultra-VIP sections and two bars will sit on the outskirts of the dance floor. Other Phase III additions that have recently opened at Atlantis include: • AQUAVENTURE, a non-stop water experience consisting of thrill- ing new water slides, a mile-long river ride with high intensity rapids and wave surges,and never-before-seen special effects.• Dolphin Cay, a dolphin interaction and education center created with the goal of enlightening visitors about these remarkable ocean inhabitants. • The Cove Atlantis,a new 600-suite resort featuring designs by ac- claimed interior architects Jeffrey Beers and David Rockwell, unprec- edented services and amenities, private all-adult and family pools, lavish cabanas and breathtaking views of the ocean. - Paul Doocey, IGWB Harrah’s Tops Listed LV Companies The In Business Las Vegas newspaper released its rankings of Southern Nevada’s publicly traded companies by revenues.Harrah’s topped the list with US$11.1 billion in revenue, but it will not qualify for the list next year if the announced buyout of the company by two private equity firms proceeds. Harrah’s isn’t the only company making the transition from public to private, a trend analysts say is part of the maturation process of the casino industry. Station Casinos, No. 9 on the list with revenue of US$1.43 billion, is also being acquired by a private equity partnership, Fertitta Colony Partners LLC. In addition, No. 15 American Casino & Entertainment Proper- ties, making its initial appearance on the list, is being acquired by the Goldman Sachs Financial Group for US$1.3 billion in a deal an- nounced last month. The fact that every public company in the top 10 had revenue in excess of US$1 billion is indicative of industry growth. A year ago, eight companies had US$1 billion in revenue and No. 1 Harrah’s had US$7.11 billion – 56% less than this year’s top amount. In 2000, when 40 companies were on the list, the top company had $696 million in revenue. Park Place Entertainment Corp, which operated Caesars Palace, held the top position, followed by MGM Mi- rage, Harrah’s Entertainment and the Mandalay Resort Group. Since that time, Park Place and Harrah’s merged as did MGM Mirage and Mandalay. Two of the companies currently in the top 10 could make leaps in the rankings with the outlook of higher revenue generated by casino properties opened in Macau. Las Vegas Sands Corp, which climbed from No. 5 to No. 4 this year with US$2.34 billion in revenue, will open the Venetian Macau in July and should have about four months of revenue in 2007 counting toward next year’s revenue totals. Wynn Resorts Ltd.,which climbed fromNo.11 to No.8 with US$1.6 billion in revenue, will have the benefit of a full year of revenue from its Macau property after opening there in September 2006. One other company, No. 2 MGM Mirage, will also have the benefit of some revenue generated in Macau with the opening of a property toward the end of the year, but like Las Vegas Sands, it won’t have a full year counting toward next year’s list.