Inside Asian Gaming

April 2009 | INSIDE ASIAN GAMING 45 Briefs responsibility to come up with the casino and then to attract the tourists,” says Mr Subba. Besides boosting the economy of the region through tourism, the casino is also creating employment opportunities, says the government. Domestic Online Gaming Ban? A Philippines politician has called for a ban on domestic online gambling in the country, according to a report published by Online- Casinos.com. The move would not affect the Philippines-based offshore online gaming industry. The country is the only jurisdiction in Asia with a formal system for licensing and regulating offshore online betting. As a condition of the licence, service providers are strictly prohibited from accepting bets from Filipinos. The proposed ban would potentially affect Internet cafes offering casino games to domestic customers and licensed by PAGCOR, the country’s gaming regulator-cum-operator. The idea has been put by politician Narciso Santiago, of the Alliance for Rural Concerns Party. He cited worries about young people gambling via the Internet. Under the proposal, some onshore betting would be exempted, namely live horse races regulated by the government, legal betting via the Philippine Charity Sweepstakes Office lotto and officially sanctioned fantasy sports league wagering. Online operators based in the Philippines but with products aimed only at the overseas market come under the jurisdiction of the Cagayan Export Zone Authority (CEZA).They have the right to operate or own directly, indirectly or through a third party any tourism related activities including gambling casinos, under priorities and standards set by the CEZA. The Joy of Sharing Dreamgate Corporation Bhd, the Malaysian company that manufactures and distributes gaming equipment via its multiple subsidiary RGB, says the current economic downturn makes sharing revenue with casino operators an attractive proposition. “Everybody wants to be conservative and with the tightening in the market, they are also delaying their purchasing. So as a result, we have many opportunities to tap more into this [revenue sharing] market where in the past, there wouldn’t be such an opportunity,’ said Datuk KS Chuah, Dreamgate’s managing director, in comments to the regional media. “In the past, Macau [casinos] wouldn’t offer you a concession programme because the absolute term return there was very good so they wouldn’t share it with you,” he added. Mr Chuah said that in the changed tradingconditions his company was prepared to offer casino operators in Macau and elsewhere the chance to have brand newmachines on a revenue share basis without the upfront capital costs of outright purchase. “To date, we have signed many deals. We have at least 2,500 machines in revenue-sharing deals,” explained Mr Chuah. Dreamgate’s net profit for 2008 fell nearly 75% year on year to RM10.4 million (US$2.82 million) But the company said it expected new business in Macau and the Philippines to absorb the impending loss of income in Cambodia caused by the government’s closure of slot clubs in the capital Phnom Penh. Dreamgate added that the average income per machine per day for Cambodia was around US$70, whereas in Macau it was between US$130 and US$250 and in the Philippines between US$100 and US$180. Mr Chuah said the company was also looking to build margins by assembling more equipment on behalf of third party companies. Melco’s 2008 Loss Led by Write Downs Melco International Development Corp., the Hong Kong-listed gaming investment vehicle chaired by Lawrence Ho, recorded a net loss last year of HK$2.36 billion, compared with a profit of HK$2.69 billion a year earlier. Sales also fell 32% to HK$690.86 million. Melco booked a so-called ‘impairment loss’ of HK$1.86 billion, mainly from the fall in the values of listed units. “I remain optimistic on China’s consumption prowess,”said Mr Ho in a bullish response to the results. Melco Crown Entertainment, the joint venture between Mr Ho and James Packer’s Australian gaming company Crown Ltd, will open its US$2.1 billion City of Dreams casino on Cotai in June. Who’s Sorry Now? An item on Macau from Bloomberg News way back in August 2007 caught the eyes of the hard-working elves here at Asian Gaming Intelligence. In the online article, Sheldon Adelson, Chairman and Chief Executive of Las Vegas Sands Corp., was quoted as criticising his Las Vegas rival Steve Wynn for being too cautious in his Macau development plans. “Competitors and venues should work to bring people to destinations and then fight over them later, but Steve doesn’t think so,’’ Mr Adelson said in the interview. “We think it’s a big mistake,’’WilliamWeidner, then President and Chief Operating Officer of LVS added, in his own commentary on Mr Wynn’s strategy. “We’ll build more and more and more,” said Mr Weidner at the time. The Chinese government had imposed new visa rules because it was “disappointed’’ at the quality of some casinos being built in the city, Mr Weidner added. “The Chinese government cannot be proud of its Special Administrative Region when some of these cheap little buildings that are makeovers with bubble gum and spray paint are coming into the market,” he continued, warming to his theme. Smaller and older casinos “will not survive. They can’t survive,” said Mr Weidner. Well it turns out the so-called ‘cheap’ casinos may not be such a bad investment after all, even if Mr Weidner is no longer here to see it. At the time Mr Wynn declined to comment on the wisdom of his own strategy. We bet he wouldn’t mind commenting now. Steve Wynn