Inside Asian Gaming

INSIDE ASIAN GAMING | September 2009 36 50 (35) Dennis Valdes President, PhilWeb Corp. million) for January to March, 108% higher than the previous year’s P46.2 million, the company said in a filing to the Philippine Stock Exchange. During a special stockholders’ meeting in August Mr Valdes said he expected annual net income for 2009 to reach P584 million (US$11.94 million). That’s exactly double the P292 million net income booked by the company in 2008. Mr Valdes is said to have excellent contacts within the Philippines Amusement and Gaming Corporation (PAGCOR), the licensing body for land-based and Internet gaming in the Philippines, and with politicians in the country. Challenges do however remain for PhilWeb’s business. Internet cafés were especially lucrative in the Philippines in the early Noughties when domestic broadband was not widely available. Online gambling content providers are also increasingly competing for consumer cash with providers of casual or role- playing games. To counter the squeeze on the Internet café sector, PhilWeb has been aggressive in expanding its range of mobile gaming products delivered direct to users’ cellular telephones. The Philippines is a difficult market to call when it comes to predicting how politics will affect a gaming company’s prospects. PhilWeb Corp., the online gaming operator led by Dennis Valdes, seems to have cast off the gloom experienced by the sector early in 2009. At that time, several politicians were lobbying for a ban on domestic online gambling in the country. The local media said the initiative was aimed at Internet cafés—a core part of PhilWeb’s business. That regulatory threat appeared to have receded by the end of the first quarter. In April, the company said it had more than doubled earnings for the first quarter this year, as it opened 10 new e-gaming cafes. Profits reached P96 million (US$1.96 By their very nature, lists such as Inside Asian Gaming ’s ranking of the 50 most influential people in Asian gaming are bound to incorporate elements of subjectivity, though we have applied a rigorous analytical methodology to arrive at the results. We enlisted a panel of eight independent gaming industry executives and analysts from around the region to compile the rankings, which will likely result in lively debate and even controversy. Even measuring the objective criteria posed difficulties, because many of Asia’s biggest gaming companies remain in private hands, making it difficult—if not impossible—to obtain accurate financial records. Therefore, market share and other business KPIs were estimated after extensive discussions with peers, competitors, suppliers and customers. Another consideration is that Asia’s gaming sector can often be particularly country-specific, so we endeavoured to select panellists from not only high profile casino jurisdictions such as Macau, but also emerging gaming markets around the region. We sought feedback from various gaming sectors including parimutuels and Japan’s massive pachinko industry— omitting pachinko just because the Japanese government does not technically consider it gambling would, in our view, be a misrepresentation. We also included online operators, who are making an ever greater impact in the region, regardless of the official status of their businesses. Even though government agencies ultimately control and influence all regulated gaming in Asia, after much discussion we decided to exclude individuals such as Macau’s Chief Executive, gaming regulators in the various jurisdictions (including Macau’s Direcção de Inspecção e Coordenação de Jogos and Singapore’s Casino Regulatory Authority), and senior officers of the Culture, Welfare, Sports and Finance Ministries in China, who set out the framework that gaming takes place in. One exception to the exclusion of government officials was made for the Chairman of PAGCOR. The eight panellists were instructed to nominate individuals for the Asian Gaming 50 – 2009 . The initial list of 78 individuals was put through a scoring process to arrive at the final rankings. The panellists gave each of the nominated individuals a score of between 1 and 10 on the following criteria: 1. How well known is the individual within the gaming sector in Asia? 2. How successful has the individual been historically in the gaming sector? 3. How fast has their business grown over the last 5 years? 4. What is their potential for future growth in their current gaming sub-sector and other gaming sub-sectors in Asia? 5. How successful are they financially (individually and/or company, or individual together with company, where relevant)? 6. How influential are they with the government and regulators within their jurisdictions of operations? 7. How influential are they internationally within the gaming industry (individually and/or company, or individual together with company, where relevant)? 8. How much of an innovator are they within the gaming industry? 9. How well are their products and/or services marketed and promoted? 10. Howmuch do they own of their principal business and/or how much control do they have over their company? 11. How well positioned are they to cope with competition within their existing jurisdictions of operation and from overseas competition? 12. How do you perceive their dominance in their current major markets of operation? Feedback from the panellists led to each question being given a specificweighting—between 90%and 115%. Further weightings were applied relating to the company the nominated individual either works for or controls. These include the company’s status (public or private), financial performance and size (in terms of both operations and market capitalisation/value), as well as the size/importance of the markets it operates in. Finally, panellists applied a further weighting for each nominated individual with respect to his or her perceived personal integrity, effectiveness in management, overall track record and foresight. Asian Gaming 50 – 2009 Core Ranking Methodology