Inside Asian Gaming

September 2010 | INSIDE ASIAN GAMING 31 24 (44) Nick Niglio Executive Director and COO Neptune Group Ltd 23 (23) Choi Young CEO and President Kangwon Land, Inc As Executive Director and Chief Operating Officer of Neptune Group Ltd since 2007, Nick Niglio has played a major role in the rapid growth of Macau VIP baccarat, and his own company’s rising market share in that sector. The group currently coordinates the promotion of 152 VIP tables in seven Macau casinos. This month, the company is due to add significant extra capacity at one of those venues in a new luxury facility for top level high rollers. That will push its total table inventory up to 172 tables. Considered now to be the biggest junket in the world, a big factor in Neptune’s rise appears to be the company’s success at making friends. Neptune isn’t necessarily the most aggressive at making commission deals with casinos. But it does seem to have considerable goodwill in the local industry and among players for Kangwon Land, South Korea’s only casino open to locals, is planning amajor expansion of its gaming facilities, to be completed by March 2012. But in a graphic illustration of the delicate job that CEO Choi Young has and the political sensitivity surrounding the growth of the domestic casino market, the government has indicated Kangwon Land will only be allowed to apply for more gaming tables after building work is completed. Although Kangwon Land is a state enterprise and must abide by the government’s wishes, it could certainly use more tables. Locals inform Inside Asian Gaming that the casino is so popular among South Koreans that hard-up pensioners with time on their hands arrive early at Kangwon Land to occupy seats at the crowded tables, and then charge eager gamblers arriving later up to US$700 for those seats on the weekend. The first quarter of 2010 produced the casino’s best ever result, with gross gaming revenue equivalent to US$282 million. Still, crowding and a six-year-long freeze on the number of gaming tables permitted at the property are causing revenue growth to plateau. In the second quarter of 2010, gaming revenue slipped back to US$260 million—an 8.3% increase fromQ2 2009, but only 3% up on Q4 2009. Kangwon Land was originally conceived as a government initiative to rejuvenate Kangwon Province—a former coal production centre which became impoverished after the mines shut. The casino opened in March 2003 with 30 tables. Following 18 months of steady capacity expansion, the National Gaming Control Commission imposed a cap of 132 tables in November 2004 in line with government orders to limit the casino industry’s income. Kangwon Land’s casino currently covers nearly 300,000 square feet and also offers 960 video slots that are upgraded regularly via a rolling acquisition programme. There has been much speculation over the past few years that the cap would be lifted, but that has yet to happen. South Korean finance house Hyundai Securities welcomes the prospect of an end to the moratoriumon additional tables.“Casino expansion is expected to be completed in March 2012. This is positive since: 1) enhancement in gaming environment will likely help attract more visitors; and 2) if table additions, which have been delayed for more than seven years, are carried out, it will immediately generate more sales,” said Hyundai Securities in a research report on Kangwon Land published in late July. Mr Choi told the Joong Ang Daily newspaper in May that a total of KRW1.39 fair and friendly dealing. That counts for a huge amount in the VIP sector and also ultimately pays off in terms of the bottom line. “It’s truly a relationships business,”he says. Mr Niglio brings extensive experience from the US gaming sector to Macau, including a stint as Executive Vice President for Caesars World Marketing and Executive Vice President of Trump Taj Mahal Casino Resort in Atlantic City, New Jersey. In Macau andHongKong, Mr Niglio servedas agaming consultant for several large international concerns seeking to position themselves in Asian gaming markets. Neptune Group is probably best known to thegeneral public in the regionasoperator of the casino cruise ship HMV Neptune. The company acquired the vessel in June 2005 for HK$68 million (US$8.7 million). It sails out of Hong Kong to international waters daily, with special promotional events at least once a month. Neptune Group is a Hong Kong-listed conglomerate with a range of business interests. In today’s market conditions, some investors seem to be happy to inject capital directly into this business. The junket sector’s short credit cycles and attractive interest accruing on working capital (because of the gambling credit system) means Macau junkets are becoming a more appealing option for cash-rich local investors than parking money in a bank. trillion would be spent by 2012 on the overhaul of Kangwon Land, which also has a hotel, a golf course, a ski slope, condominiums and a theme park. The resort attracted 4.3 million visitors and generated KRW1.2 trillion (US$1 billion) in gross revenue last year. The infrastructure investments will boost the number of annual visitors to the resort to 7 million by 2012, Mr Choi said. The renovation includes construction of a 500- room condominium and a 22-storey hotel with a convention centre. Mr Choi previously served as President of South Korea’s SH Corporation, a clothing and footwear manufacturer, and has also worked for the Seoul Metropolitan Government. He holds a Master’s degree in Urban Administration from the University of Southern California in the US.