Inside Asian Gaming

67 September 2013 | INSIDE ASIAN GAMING REGIONAL BRIEFS Tabcorp Blames Victoria for Profit Swoon Australian betting giant Tabcorp reported a 63% decline in net profits to A$127 million for the 2012/13 financial year, attributing the drop to the expiration last August of the machine gaming duopoly it shared with rival Tatts Group in the state of Victoria. Earnings fell 4.3% year on year to $312.8 million on a 30% decline in total revenues to $2.13 billion. On the plus side, the company said handle from digital wagering was up 13.6% for the 12 months ended 30th June, driven mostly by growth in fixed-odds and mobile betting. Mobile accounted for 43% of digital division turnover in the second half of the year, up from 28% in the first half. The company said its TAB iPhone, iPad and Android apps have been downloaded more than 900,000 times since their launch. Chief Executive David Attenborough said strengthening the digital offering would be a “key focus” in fiscal 2014. Tabcorp succeeded last year in securing its New South Wales monopoly through 2033, but it is suing the Victoria government for compensation for concession fees it paid back in the 1990s to secure the slot duopoly. Tatts is suing the state as well. Both also have been hit by new regulations in Victoria that call for a 50-50 revenue split rather than the 75-25 they enjoyed under the old rules. Asian Sales Boost GPI Asian sales of RFID casino currency and solutions drove revenues upward for Gaming Partners International during the second quarter and six months ended 30th June. Sales across the region were up US$600,000 for Las Vegas- based GPI (Nasdaq: GPIC) in the second quarter, but lower gross margins and higher expenses company-wide resulted in a net loss of $54,000, compared with a profit of $1.8 million for the same period last year. First-half net income was $400,000 versus $3.1 million in H1 2012. Q2 revenues were up 8% quarter over quarter to $14.1 million and rose from $28.5 million to $28.9 million in the first half, also driven mainly by the Asia business, the company said. “As in the first quarter, our results reflect the variability of our global customers’ product demands from quarter to quarter,” said President and CEO Greg Gronau, who warned that lower year-on- year earnings are expected for the balance of 2013.“At the same time, we are working to balance production in our manufacturing facilities and to collaborate with our customers to provide new products and increase sales of our current offerings.” GPI ended the quarter debt-free and with $20 million in cash, cash equivalents and marketable securities. The company bought back 20,201 shares of stock during the period under a repurchase scheme that authorizes additional purchases of 231,459 shares. Macau Visitation Surpasses 16M A 10.4% increase in travelers from mainland China drove Macau’s total visitation to 16.7 million through the first seven months of the year. In July alone, more than 1.6 million Chinese came to Macau from the mainland, a 14% increase over July 2012. Guangdong province accounted for the lion’s share at 738,106, followed by Fujian at 74,292. Travelers on the Individual Visit Scheme accounted for 44% of the total. In all, July’s visitation was up 4.9% to 2.6 million, with the average length of stay unchanged from a year earlier at one day. Overnight and same-day visitors stayed an average of 1.9 days and 0.2 days, respectively. Figures compiled by the government’s Statistics and Census Bureau show the total for January-July surpassing the same period last year by 4.3%, with mainland China the source of 63.2% of all visits. Hong Kong, which accounts for 23.7% of total visits, was down 3.8% to 3.9 million. Taiwan accounted for the biggest relative drop among top feeder markets, down 10.5% to 549,298. Philippines visitation was down 3.4%. Japanese visitation was down 34%. The continued surge in mainland visitation was reflected in a record one-day total of 320,000 entries and exits through the Gongbei border gate on 25th August, according to figures published by the English- language Macau Daily Times . Fifty-three percent of the crossings originated in mainland China, 44% in Macau and Hong Kong. It was the eighth consecutive weekend of 300,000 or more crossings, the Times said, and is believed to be driven by a combination of improved transportation via the Guangzhou- Zhuhai Intercity Railway and a more relaxed visa policy. Samoa May Seek Bids for Casino License The government of Samoa could reopen the bidding for a casino license after calling off negotiations with a Chinese developer who has landed in legal trouble in China. Exhibitions Tourism Group had planned to build a 500-room hotel and casino in the tiny, cash-strapped South Pacific nation, which is heavily reliant on foreign aid and remittances from citizens working abroad. The deal called for a tax of 15% of gaming revenue on top of a fee of US$150,000. But talks hit a snag when ETG boss Deng Hong was named in a corruption investigation in mainland China. The Samoan government withdrew the license last month. “We need to make a decision about whether we go back to market for the license or whether we just continue on with one license given to a local firm,” Gambling Control Authority Chief Executive Robbie Kearney told Reuters . The government authorized two licenses back in 2010, including one for local hotel operator Aggie Grey’s, as a way to help recover from a decline in tourism in the wake of the global financial crisis. A 2009 tsunami wrought further havoc with the island’s economy, and a 2012 cyclone added to the damage. The economy was valued last year at $677 million. Tabcorp CEO David Attenborough The Guangzhou-Zhuhai Intercity Railway