Inside Asian Gaming

August 2008 | INSIDE ASIAN GAMING 43 Briefs (US$72 million) for the first half of this year. SJM plans to invest HK$20 billion (US$2.6 billion) to build new, flashier resorts and upgrade the older ones, which have been declining following the arrival of glitzy new properties from the new operators. Laos to Open First Border Casino Laos is set to open its first casino along the Thai-Lao border opposite Mukdahan province in November. Construction of the Savan Vegas casino-cum-entertainment complex at Nongdeune village in Laos’ Savannakhet province is nearing completion. The project includes a casino,a five-star hotel with 160 rooms,restaurants, an amusement park, an aqua-park and a traditional spa. All the other countries bordering Thailand, including Malaysia, Myanmar and Cambodia, already operate casinos. Some of the casinos in Myanmar and Cambodia in particular are focused on targeting Thais, who do not have casinos in their home country. Laos will be the last of Thailand’s neighbours to open a casino, which, of course, will focus on serving Thais. Apichart Phetcharat, the Thai consul in Savannakhet, said the Savan Vegas casino is expected to draw more tourists to Laos. Macau Fuels Strong Wynn Resorts Q2 Strong growth in Macau revenues and a tax benefit drove profits at Wynn Resorts sharply higher in the second quarter, even as the flagging US economy hurt revenue at its Las Vegas property. Wynn Resorts reported earnings of US$272 million in Q2 2008, compared to a US$89.6 million profit in the same quarter last year. However, some US$140.7 million of the Q2 2008 figure came from a tax benefit. Revenue in the quarter was US$825.2 million, compared to US$687.5 million in Q2 2007. The revenue jump came primarily from a more than 50% increase at Wynn Macau to US$530 million.In Las Vegas, however, the company’s casino revenue fell to US$120.7 million from US$159.4 million in the year-ago quarter, compounded by an unusually low hold percentage. Non-gaming revenue in Vegas, however, held relatively steady at US$211.9 million. The growth in gaming revenue atWynn Macau was helped along by an expansion in the property’s VIP gaming capacity completed in December. This resulted in a nearly 75% increase in VIP baccarat turnover to US$16.3 billion. Furthermore,Wynn Macau’s VIP baccarat win percentage of almost 3% was at the top end of the expected range,though slightly lower than the win percentage recorded in the same quarter of 2007. BMM Establishes Asia Operations in Macau BMM Compliance has established BMM Macao as its first Asian office, as it continues its global expansion. BMM Macao will help grow BMM’s presence in the fast-growing Asian market by providing local compliance, testing and consulting support for gaming manufacturers, operators and regulators in the region. It will also provide clients with international gaming and regulatory knowledge and experience to facilitate access into other regulated markets around the world. “BMM Macao is our response to the significant demand we are experiencing for our services in this market and around the world, including the United States.We have been successfully servicing the Asian market for a number of years and believe that our approach will establish BMM as the number one test lab in this market, as it has in many others,” said Martin Storm, President and CEO of BMM International. The new BMM office will be headed by Dora Deparis, who has extensive business experience in Asia and lives in Macau. Ms Deparis will serve as BMM’s Senior Representative in Macau. BMM Compliance is the longest established private independent gaming test lab in the world. The company offers insight, expertise, testing, customized training and education for gaming compliance issues affecting manufacturers, operators and regulators in the gaming industry. The company’s global compliance expertise and commitment to innovation and quality are the foundation of its growing client partnerships. BMM is headquartered in Las Vegas and has offices in Lima (Peru), Midrand (South Africa), Graz (Austria), Barcelona (Spain), Melbourne and Sydney (Australia). Amax Reports Strong July Turnover Amax Entertainment Holdings Ltd announced that rolling chip volume (which represents the aggregate amount of bets made byVIP baccarat players) generated by junket aggregator AMA International Ltd amounted to HK$40 billion (US$5.1 billion) in July 2008, having recovered from a drop to HK$36 billion in June as the new visa restrictions and higher commissions offered by competitors ate into its business (volume had averaged HK$40 billion prior to June). Amax, which has an indirect 80% interest in AMA’s profits, responded by shifting its focus from low-volume players to middle- and high- volume players, and the initial results are encouraging. Amax CEO Ted Chan commented:“While restrictions on visas for visitors from the Guangdong Province travelling to Macau that were enacted in June continue to impact rolling chip volumes for the lower tier of junket players, the improvement in July reflects the strength and depth of the top tiers of our VIP players. In addition, the strength of our relationships with the junket operators is being proven, as we were able to achieve the monthly sequential growth despite some competitors currently offering higher commission rates.” Crown Macau had sparked a junket commission war by offering AMA a 1.35% commission on sales of rolling chips for VIP players fromDecember,and quickly gained a leading share in the VIP market, before its competitors followed suit and raised their rates. Rather than working directly with junkets and/or gaming customers, AMA aggregates the business of junket operators to whom commissions of 0.9% to 1.21% of rolling chip volume are payable. The government has stepped in to stop the escalation of the cutthroat commission war that was eating into casinos’ margins by setting a 1.25% cap on commissions. Mr Chan is positive about this development: “Following the expected implementation of a commission cap of 1.25% of rolling chip volume, competition for VIP players in the market will be based on the quality of each gaming facility as well as the liquidity available to be extended to junket promoters.We believe the stability that will be established following the implementation of a commission cap will play into Amax’s strength, as we operate in one of the finest VIP facilities in the world and have the ability to extend liquidity in a risk-free manner.”