Inside Asian Gaming

September 2013 | INSIDE ASIAN GAMING 47 The Asian Gaming 50 – 2013 operating results since then. It recorded its first profit in 2011, and last year saw EBITDA increase a further 5% to HK$331.5 million. One of the distinguishing features of Ponte 16 vis à vis SJM’s other satellite casinos is the throngs of local players it draws to its main casino floor. Whereas in Macau VIP baccarat accounts for over two-thirds of total gaming revenue, at Ponte 16 its share is closer to 50%, reflecting the property’s strong mass-market appeal. Ponte 16’s trademark attraction is Asia’s first and only Michael Jackson museum, which records the milestones in the King of Pop’s career and displays a collection of more than 40 artifacts related to the artist (including the famous rhinestone- encrusted glove he wore the first time he performed the “moonwalk” on American television). The property’s other major non-gaming draw is its unique location at Macau’s Inner Harbor, within a somewhat dilapidated neighborhood but offering easy access to the city’s UNESCO World Heritage sites. Part of its remit, in fact, is to revitalize the surrounding area. Ponte 16 cost only HK$2.4 billion to build (US$310 million at current exchange rates), a modest sum by contemporary Macau standards. Development of the property’s third phase is in progress, featuring the additionof awaterfront commercial complex with a total floor area of approximately 40,000 square meters. The complex will also include space for the expansion of gaming areas and car parks, with construction expected to be completed by 2014. Sonny Yeung’s formative gaming experience was as a VIP room operator at Stanley Ho’s Casino Lisboa. The relationship forged during that time paid dividends when he was able to broker the investment deal with Dr Ho for Ponte 16. Success Universe has now moved its VIP customers into its own room at Ponte 16. The entire casino houses 109 tables, with 82 designated as mass gaming, 9 high-limit and 18 VIP. In addition to Ponte 16, Success Universe Group also operates a Hong Kong-based casino cruise ship and two travel businesses that help feed customers to the Macau resort. The nine-deck M.V. Success, in which the group has a 55% interest, saw revenue increase 16% to HK$80.4 million in 2012, with profit reaching $2.9 million, versus a $7.8 million loss in 2011. The group’s travel business also registered healthy growth. Mocha Clubs, the largest slot club operation in Macau, saw net revenue rise 6% year on year in the second quarter of 2013 to US$37.2 million. That mirrors the 6% Macau-wide increase in slot revenue over the corresponding period to $436 million. Considering the heavyweight competition the humble Mocha is up against in Macau, home to some of the most opulent new integrated resorts in the world, it has done an admirable job keeping pace withmarket growth. Notably, Mocha achieved that revenue increase despite a reduction in the number of gaming machines in operation at its 10 venues to 2,000 in the second quarter from 2,100 in the year-ago period. That translated to average daily win per unit of $207 versus $181. Adjusted EBITDA was up 7% in the second quarter to $9.1 million. The recovery in win per unit is a reversal from a decline in 2012 following an aggressive capacity expansion. The slot sector in Macau has come a long way since Mocha Clubs opened its first venue in 2003. Previously, slots were regarded as merely decorations at the table- dominated casinos. Worse, they were seen as a bad gamble, “hungry tigers,” as they were called. Mocha has worked hard to shake off that perception, showing Chinese players that slots are not only fair but also 37 Constance Hsu President Mocha Clubs offer strong entertainment value. As Constance Hsu explains: “There are several cultural explanations for the erstwhile aversion to slots in Macau, such as the supposed preference of Chinese to engage in intense face-to-face battles against the house and their belief that they can influence outcomes at tables by spotting patterns and picking lucky cards or numbers, whereas when they play slots they leave their destinies to unfeeling computers. However, from our point of view, themain reason for the previous non-performance of slots in Macau was a lack of quality product offerings, service and comfortable ambience.” Mocha Clubs, owned by Macau casino giant Melco Crown Entertainment, has helped to redress that, creating a chain of locals-focused venues offering cozy, coffee-shop style surroundings, a slick player rewards scheme and one of the best returns to player in the city. The company’s keen attention to service and local game preferences has allowed it to compete in the face of fierce competition from the slot floors of Macau’s resort casinos. Ms Hsu has been with Mocha since the beginning, starting out as a financial controller and rising through management ranks quickly to become chief administrative officer. There, she oversaw finance, treasury, audit, legal compliance, procurement and human resources. In 2008, shewas promoted to her current position as president of Mocha, becoming one of only a handful of Chinese women to rise to the executive ranks in Macau’s gaming industry. Mocha appears intent on branching out from its locals focus and is seeking further opportunities to work as a third-party slot operations manager within existing casinos, a business model launched in January last year at Casino Golden Dragon, one of SJM’s third-party-owned “satellite” casinos. Mocha also seems to be going after more tourists, trying to gear the games mix at locations such as Mocha Macau Tower to appeal to out-of-towners. Given the constraints of the regulatory environment, as well as Macau’s limited land area and population, initiatives such as these will be important to Mocha’s growth going forward.