Inside Asian Gaming

February 2009 | INSIDE ASIAN GAMING 19 “W hen we opened in Dar es Salaam in 1997, the clientelewasmainlyAsian people from the Indian sub-continent, from the communities that have been in east Africa for many generations. The product mix at that time was 80-20 in favour of table games,” explains John A. Robbins of KaiRo International. “I would say in about 2000 to 2001, we started seeing more Chinese people coming in, beyond just the local owners of businesses that we would see previously. “The first group were mainly involved in agriculture. They didn’t have a lot of money, but they’d come into the casino and look around. Now in Africa there aremany, many, wealthy people from East Asia—I would say mostly Mainland Chinese. I would estimate the number of Chinese and East Asians in Africa is in the high 30s of millions. “As well as Chinese, there are also Korean and Japanese businessmen. I would say the mix is 70% East Asian. It’s our main source of business in Tanzania and in Ghana. We have built a room in our Ghana venue, the La Palm Casino in Accra, called the Saigon Lounge, with karaoke bars and a noodle bar and mainly slot machines,” adds Mr Robbins. The biggest change heralded by the arrival of Mainland Chinese customers was a dramatic shift in the business model for sub-Saharan casinos, from live table games to slots, he explains. “What we’ve found is that although they play the live games, the Chinese in Africa are really into the slot machines. The mix is now probably 70-30 in favour of slots.” The reason, thinks Mr Robbins, is that Chinese business people travelling abroad are quite a sophisticated group who understand the good returns offered by slots. Turn of the Cards How sub-Saharan Africa changed from a table to a slots market In Focus “When I first worked in southern Africa in the late 1970s, most of the Chinese people I knewwere from families who had been there for several generations and were established as professionals. “Then when I worked in Lesotho and SwazilandwithSunInternational,theChinese people we saw were mainly Taiwanese who went out there because of the textile industry. They kept to themselves but liked to gamble. They generally visited the casinos in a group of 20 to 30, and actually became the main clients,” recalls Mr Robbins. In 1991, Mr Robbins and a business partner, Tommy Kai, who also happens to be ethnic Chinese, set up KaiRo International, an independent management company, in order to develop casinos at several Hilton Hotels venues in Turkey. The name of the company, formed from the surnames of the partners, also turned out to be prophetic, as Mr Robbins was soon back in Africa. In 1996 KaiRo sold its Turkish casino business to a local group called TGI, spotting instead a gap in themarket for small club-style casinos in some of the newly liberalised African economies. The countries targeted were Ghana in the west and Tanzania in the east, away from the more developed southern tip of the continent. Eastern Promise How the rapid growth in Asian players changed the African casino scene John Robbins, chairman of KaiRo International “T he first opportunity we spotted outside southern Africa was in Dar es Salaam, Tanzania,” says John A. Robbins of KaiRo International. “We started with the shell of an old hotel ballroom. We converted it and put in all the latest technology, which hadn’t been seen outside southern Africa. Until then, the tendency in the rest of Africa was to open venues with second hand equipment, such as old electro mechanical slots. But we decided if we’re going to do it, let’s do it with the latest technology and see what we can achieve.” At that time, the market for modern slots outside southern Africa wasn’t proven. “Equipment suppliers don’t typically offer credit or deals to operators based outside southern Africa. You pay cash for machines up front and take your chances. Once we got established, though, we had all the major companies knocking on our door saying ‘Try this machine’.” Mr Robbins says Novomatic is now an important supplier for KaiRo International in Africa. “We work very closely with Novomatic and have a very good relationship with them. They were the leaders in that market for us. Thenwe came inwith Aristocrat, IGT etc.We’ve always had Ballys andUniversals over the years, but I would say Novomatic has taken the major share. We’re not big operators, more like a club operator—200 or 300 slot machines, that sort of size, in a few biggish cities.” And this is where the unlikely story of the test bed for Asian slot players comes into play. A few years after the company’s first African venue, The New Africa Hotel and Casino, opened in Tanzania, there was an explosion in the number of Chinese nationals travelling the globe in search of commodities, trade and investment opportunities as China’s economy took off.