Inside Asian Gaming

INSIDE ASIAN GAMING | September 2010 42 42 (43) Clarence Chung Chairman and CEO Entertainment Gaming Asia 43 (50) Dennis Valdes President PhilWeb Corp Things are looking up for Entertainment Gaming Asia (formerly known as Elixir Gaming Technologies), with strong growth in slot participation revenue and plans for its own casino resort in Cambodia. In May, Entertainment Gaming Asia (EGT) announced an agreement to increase the total number of machines it operates at NagaWorld, a casino with an exclusive licence within a 200- PhilWeb Corp, the first and largest (by market capitalisation) listed Internet company in the Philippines has seen profits continue to soar as lobbying efforts last year by several politicians seeking to ban domestic online gambling in the country ultimately proved fruitless. PhilWeb, headed by Dennis Valdes, is a lead technology enabler of the country’s state-run casino regulator-cum-operator, PAGCOR (the Philippine Amusement and Gaming Corp). Its main businesses include running e-gaming cafés, Internet sports betting stations, mobile phone gaming and online casino gaming. Profit in the first half of this year surged 41% year-on-year to PHP322 million (US$7.2 million), while revenue was up 40% to PHP508 million. The changing political landscape following general elections in May has, however, hindered the company’s expansion this year. Approvalfornewe-gamingcafés—acorepartofPhilWeb’sbusiness— requires the consent of both PAGCOR and local governments, and a fair degree of uncertainty remains as to how much further the country’s new leadership wants PhilWeb to grow. Between 2006 and 2009, PhilWeb opened an average of 40 new e-gaming cafés every year, and at the end of last year, it had 171 venues in operation. As of last month, though, PhilWeb had only opened an additional 17 cafés in 2010. PhilWeb’s profit for the whole of 2009 stood at PHP552 million, up 89% from 2008. Mr Valdes plans to sustain that strong growth kilometer radius of Cambodia’s capital Phnom Penh. That will push Elixir’s inventory at the property to 670 machine seats, from the 640 previously agreed with NagaWorld’s management. EGT will use the additional 30 seats to complement and expand its VIP slot area located on NagaWorld’s casino lobby floor—a zone established under a December 2009 contract with the property’s management. The balance of EGT machines operated on a participation basis— approximately 900 of them—is at venues in the Philippines. The machines at NagaWorld are EGT’s big earners, achieving an average win per unit per day of over US$180 in the six months to May on a growing installed machine base. Much of the credit for EGT’s upturn must go to CEO Clarence Chung. Mr Chung has extensive financial and gaming management experience. Previously, he served as the Chief Financial Officer at Hong Kong-listed Melco and over the last 20 years has held senior financial positions at a number of multinational companies. through regional expansion, and is currently seeking licences to provide online gaming services in several other Asian countries. “In Cambodia, we’re very close to obtaining a license and we’re negotiating for two licenses,” Mr Valdes commented during an interview last month with Dow Jones Newswires . One license is to operate e-gaming cafés in the country, while the other is for mobile lotto. Mr Valdes predicts that in five years, his company will generate the bulk of its earnings from overseas operations. In addition to Cambodia, PhilWeb is also seeking gaming licenses in Laos, Vietnam, Myanmar, Guam, Saipan, Palau, Papua New Guinea, East Timor and Nepal. “What we’ve seen so far in those countries are situations very similar to the Philippines: There’s lots of illegal gambling activity and the government is looking to increase its revenue,” explained Mr Valdes. By providing legal gaming alternatives, those governments will be able “to hit the proverbial two birds with one stone,” he asserted. In another effort todevelopnew revenue streams, earlier this year, PhilWeb and its sister firm ISM Communications Corp acquired 65% of Acentic GmbH, an international provider of digital television and high-speed Internet services to hotels, tourism facilities, health care premises and other facilities in Europe, Africa and the Middle East. In Europe alone, Acentic serves around 200,000 rooms. Apart from expanding Acentic’s operations into Asia, PhilWeb is also exploring ways to add its e-gaming offerings to Acentic’s services. Asian Gaming 50 – 2010 44 (28) Subhash Chandra Non-Executive Chairman Essel Group It’s not an accident that Subhash Chandra, a former rice trader turned mass media entrepreneur, was one of the first people to set up a commercial gaming business in India. “We have to be very, very clear and adoptive towards consumer needs. Money will follow. If we chase money, it never comes,” Mr Chandra told an interviewer at the 2010 Wharton India Economic Forum in August. Mr Chandra is founder of Playwin, India’s first online lottery business. Although only a fraction of India’s 1.1 billion-plus people have access to the Internet, low-income adults can play electronic lottery games by visiting terminals located in shops. The lottery is promoted in cyberspace as myplaywin.com . It has a reputation