Inside Asian Gaming

September 2010 | INSIDE ASIAN GAMING 37 extension of legal casino gaming to neighbouring markets such as South Korea and Macau and could be affected further if Japan ever manages to legalise casino gaming in its domestic market. A further pressure is faced by the JRA because unlike the horse racing government monopolies in Hong Kong and Singapore, the JRA has not been allowed to diversify into other products such as soccer betting and lotteries. On the plus side, the JRA has been busy recently upgrading track facilities to re-brand racing as an entertainment and a day out, rather than as simply an outlet for hard gamblers. The latter image built up around the sport in the years after the SecondWorld War. The changes include a two-year renovation of the Hakodate Racecourse in southern Hokkaido. The course had its gala relaunch in June this year. Innovations at Hakodate include features to allow racegoers to inspect the horses in detail before each race. The pre-parade ring features a ‘dugout’ room enclosed by glass where the legs of the passing horses are at eye level with the fans. Unlike other tracks, where the horses disappear from view into tunnels leading onto the racetrack, at Hakodate, they walk from the pre-parade ring, pass close by the fans along a walkway and make their way onto the ‘stage’ of the racecourse. competitive rebate programmes on a par with the rebates available to direct premium players at Resorts World Sentosa in Singapore. Tabcorp also operates three casinos in Queensland: Jupiters Hotel & Casino on the Gold Coast; Treasury Casino & Hotel in Brisbane and Jupiters Townsville in the north of the state. Queensland has its own gaming tax regime, with the same tax rate as in New South Wales (10%); however, the minimum check in to qualify is A$50,000. In early September, Mr Mullin announced an ambitious new Tabcorp initiative to bring in even more Asian high rollers. Under the scheme, Star City plans to buy a A$100 million fleet of jet aircraft to bring in top players. James Packer’s Crown Casino in Melbourne is the only other Australian gaming property to do that. In addition, Tabcorp is spending A$285 million on refurbishing the Star City property itself—including A$100 million on a 3,000- seat multi-purpose entertainment venue for major international acts, trade shows, exhibitions and conferences. The new venue will be ideal for televised events because of its spectacular backdrop overlooking downtown Sydney and Sydney Harbour. Star City will also convert its own piece of harbour frontage into a wharf for the world’s biggest luxury cruisers to attract gambling whales to Sydney. Mr Mullin is a former President and Chief Operating Officer of the Borgata Hotel Casino & Spa in Atlantic City, a joint venture (for the time being) between Boyd Gaming Corporation and MGM MIRAGE (now MGM Resorts International). He started his casino career literally on the ground floor, working as a concierge, before climbing the ranks at Harrah’s. He also worked closely with Donald Trump during a 15-year career at various Trump resorts. Under Larry Mullin’s leadership, Tabcorp is committing major resources to attracting high rollers from Asia to play in its Australian casinos. Tabcorp’s thinking is that the Asian high roller market is not a zero sum game. VIPs are highly mobile and like new opportunities to play when they travel on business. Some Asian high rollers have a son or daughter studying at an Australian university and like to combine a family visit with play in a casino, says Tabcorp. By presenting Australian VIP play as complementary to play in Macau and Singapore, rather than competition to it, Tabcorp has persuaded junket agents to work in partnership with the Australian operator. It has deals with several of them. Tabcorp shares with the junkets some of its rolling commission earned on these top players when they visit Australia. In Sydney, New South Wales, where Tabcorp operates the Star City Casino, tax rates on VIP table play massively undercut Macau (where the government creams off just under 40% of the gross) and compare very favourably with Singapore (12%, split between a 5% VIP rate and 7% Goods & Services Tax). In NSW, the gaming gross on overseas VIPs checking in a minimum of A$75,000 in the state’s casinos is taxed at just 10% (inclusive of GST). Tabcorp offers very 33 (18) Kenji Tsuchikawa President and CEO Japan Racing Association 34 (-) Larry Mullin Casinos Division CEO Tabcorp Holdings Ltd Horse racing in the Asia Pacific region faces a number of structural challenges over the coming decade and the Japan market is equally affected. Those challenges for Mr Tsuchikawa and his management team at the Japan Racing Association (JRA) include falling track side attendances, falling receipts and an ageing customer base, as the younger generation in Japan find other outlets (legal and illegal) for their gambling and gaming interests. In 2009, the JRA’s average daily turnover declined to ¥9.0 billion (US$107 million), the lowest level since 1989. Average daily turnover peaked at ¥13.9 billion in 1997, and has been steadily declining ever since. Race attendance, meanwhile, peaked at 14.1 million in 1996, but by 2009 had almost halved to 7.3 million. Horse racing receipts may also have been affected by the Asian Gaming 50 – 2010 The number of regular leisure slot players in Macau is on the rise, driving increased demand for a less volatile gaming experience. Leisure players generally view slots as a means to spend some time entertaining themselves—earning reward points and free F&B with their play. This new trend bodes well for WMS’s Sebastian Salat and his team, as WMS is a global leader in providing games that attract players with engaging entertainment experiences, combining gambling and entertainment to an unmatched level. As Mr Salat reveals in an interview on 35 (-) Sebastian Salat President WMS International