Inside Asian Gaming

INSIDE ASIAN GAMING | September 2013 54 The Asian Gaming 50 – 2013 PhilWeb hopes to expand its online business to at least six countries across the Asia-Pacific region over the coming months. The Philippines-based operator, whose far-flung activities include scratch cards, sweepstakes and Web gambling, is eyeing Thailand, Myanmar, Sri Lanka, Palau, Nepal and Mongolia in a bid to grow the international segment of its revenues, which currently comprises about 9% of the total. “Asia in general is booming,” President Dennis Valdes said earlier this year in announcing a 20% increase in net profit for 2012 on PHP1.5 billion in revenues (US$450 million), a 27% increase. He is bullish as well about the company’s domestic prospects, despite the growth of land-based competition. “We found that the gamers are very different,” he said at the earnings 49 Dennis Valdes President PhilWeb Corp. announcement. “You see in our track record on revenue that there has been no effect on e-games. The reason for that is that Resorts World Manila and Solaire are in a very small section of the entire country, which is the city of Manila and Paranaque, while e-games is in every island.” PhilWeb operates some 277 Internet gaming cafes nationwide—the “7-11 of gaming,” as Mr Valdes characterizes them. “It’s your corner convenience store.” On the other hand, it is a difficult country to call when it comes to predicting how politicswillaffecttheprospectsofcompanies like PhilWeb. Calls to outlaw Internet cafes, which have been heard for years, continue to resound among Philippine politicians and lawmakers. This is also true overseas, in Guam, for example, where Web gambling, and PhilWeb, have found themselves in the crosshairs of a prominent senator. Such regulatory risks will continue as the company pursues its aggressive plan of regional expansion, although it appears to have enough irons in the fire to mitigate the fallout of negative political developments in any single jurisdiction. Last month, PhilWeb landed on Forbes Asia’s roster of 200 best up-and-coming companies for 2013, the only Philippine company to receive that honor. It has also been on the magazine’s list of top Asian companies with less than $1 billion in market capitalization for four straight years. TheMacau integrated resortmodel offers a compelling proposition for jurisdictions seeking to attract hordes of Chinese tourists. Tony Fung believes Australia’s far north is the ideal place to transplant that model. “I am looking at Macau and so are others— everyone is looking at how to take a piece of the Macau pie,” he says. The 61-year-old billionaire scion of one of Hong Kong’s best-known financial services families is pitching an A$4.2 billion gaming and entertainment mini-city near the Queensland city of Cairns, Aquis Great Barrier Reef Resort it’s called, and it will dwarf anything they’ve ever seen Down Under. Speaking recently to The Australian Financial Review , he explained one of the area’s major appeals to Chinese travelers seeking a punt overseas: “I think it will be an easy sell for us. You see, if you go to Macau your colleagues think you are a gambler. If you go to Singapore they think you are a gambler. But if you say you are going to Cairns and the Great Barrier Reef, then you 50 Tony Fung Chairman and Founder Yu Ming Investments are still a family man.” Mr Fung has purchased an option through a local company he controls on about 300 hectares of farmland some 13 kilometers north of Cairns in a seaside hamlet called Yorkeys Knob. Here he wants to build five hotels totaling 3,750 rooms and 1,335 apartments and luxury villas, plus a golf course, a 25,000-seat sports stadium, two theaters, 13,500 square meters of high- end retail, a lake and a reef lagoon and one of the world’s largest aquariums. Initial plans call for 750 table games and 1,500 slot machines. He is shooting for a 2018 opening. Cairns is home to one gaming venue already, the Reef Hotel Casino, owned by Reef Casino Trust, but its exclusive license expired a fewyears ago, andMr Fung, with 15 years of Queensland investment experience under his belt and holdings that include shopping malls, residential and commercial property and real estate in China and the United States, has timed his proposal at a juncture when foreign tourism has become a policy priority across Australia. Asians, the country’s largest contingent of visitors, are the primary focus, especially the Chinese, the country’s fastest-growing source of inbound tourism. Mr Fung now faces the more challenging task of getting his proposal approved. Though local environmental and community groups are already voicing their opposition, state officials appear to be enamored of the idea, and of Mr Fung, a son of one of the founders of Sun Hung Kai & Co. and a former chairman of SHKI Group and the man credited with building the Hong Kong Convention and Exhibition Centre. They especially like the part about the 9,000 construction jobs and 10,000 full- time positions once the resort is open, and they have streamlined the review process by declaring it a “coordinated project,” which means they will look in full at the plan, enabling Mr Fung to avoid having to seek separate approvals for different parts of the proposal.