Inside Asian Gaming

INSIDE ASIAN GAMING | September 2012 48 Asian Gaming 50 – 2012 that at times the resort seems to be a bit of a football for the country’s politicians to kick about. 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. That cap is still in place and has meant revenue growth has been sluggish. The casino also offers 960 video slots that are upgraded regularly via a rolling acquisition program. Revenue grew 3.4% year on year in the second quarter to KRW305.8 billion (US$270 million). There is mounting speculation that the table cap could be lifted following an extensive expansion program that was completed in May. The company is currently negotiating with the Ministry of Culture, Sports and Tourism to use some of the extra space to expand the casino and is also lobbying for more table games. Kangwon Land is clearly capacity-constrained, and any lifting of the table cap should translate to a pickup in revenue growth. Political involvement in commercial ventures can have its upside as well as downside—especially in East Asia. South Korea chose Gangwon Province as the venue when it made a winning bid for the 2018Winter Olympics. The event will be held at Pyeongchang, up the road from Kangwon Land. The property—which itself has a ski resort—is likely to benefit from the huge influx of visitors expected in the region. The downside of government involvement is that no matter how successful Kangwon Land has been—including overcoming the not inconsiderable handicap of being 125 miles and four hours’ drive along difficult mountain roads from the capital of Seoul—as a publicly owned venture, it constantly risks having the rug pulled fromunder it. In 2011, management was informed that Kangwon Land would in principle lose its exclusive right to serve domestic gamblers when the original authorization expires in 2015. Worse, there’s talk of granting a license for a locals casino at Incheon, just up the road from Seoul and in the middle of the country’s most populous conurbation, home to 24.5 million people—half the country’s population. It will be interesting to see whether Seoulites will still be willing to spend hours driving to Gangwon for their casino fun if they have an alternative on their doorstep. It’s not all bad news for Kangwon Land though. In anticipation of theWinter Olympics, the national government is planning to build an upgraded road to connect Pyeongchang and the county of Jeongseon, where Kangwon Land is situated. 46 Leonard Ainsworth Executive Chairman Ainsworth Game Technology In a world where success is increasingly measured in financial quarters, Len Ainsworth’s longevity stands out. He has been involved in the gaming industry for 59 years, starting out in 1953 by taking over from his father a company he would eventually transform into Aristocrat Leisure. Mr Ainsworth has long been acknowledged as one of the fathers of slot and electronic gaming in Australia. He is widely credited with helping to create a sustainable business model for the country’s massive clubs industry through his development of poker machines. Mr Ainsworth gave up control of Aristocrat in the mid-1990s after helping to turn it into an internationally renowned supplierofslots,systemsandrelatedservices. By then, he was in his 70s, but his appetite for business-building was undimmed. He set up Ainsworth Game Technology in 1995. The company listed on Australia’s ASX in December 2001. It now employs more than 300 people and exports worldwide. AGT has greatly increased its share of the Australian market with the strong performance of its Ambassador SL platform and A560 family of cabinets. In the six months ended 31st December 2011, revenue soared 56% year on year to A$68.3 million. Notably, within that total, $16.8 million was made up of international sales, representing a 98% year-on-year increase and signalling what looks to be the start of AGT’s growing prominence outside Australia. As part of the company’s efforts to establish itself as a serious player in the North American market, it has set up a new Las Vegas headquarters and started manufacturing there. Mr Ainsworth says there are significant advantages to manufacturing in Vegas: “It’s traditionally the source of new and forward technology, and Las Vegas has a reservoir of skilled and experienced people necessary for success.” Mr Ainsworth, now in his 89th year, has received numerous awards in his native Australia and overseas for his many contributions to the industry—at G2E Asia 2010 in Macau he was presented with the “Asia Visionary Award” by Frank Fahrenkopf, president and CEO of the American Gaming Association. AGT’s reins have since passed into the capable hands of industry veteran Danny Gladstone, formerly of Konami Australia, who was appointed CEO in February 2007. But Mr Ainsworth remains very much in the public eye and is a regular on the gaming trade show circuit. As he explained in an interview with Melbourne-based The Age , “I’m invariably asked, ‘What do you do?’ And my answer is that I ride shotgun. By looking and listening and watching what’s going on and by getting out and meeting and greeting the customers.”