Inside Asian Gaming

INSIDE ASIAN GAMING | February 2014 14 COVER STORY R umors of the Malaysian government allowing a second gaming resort in addition to Resorts World Genting have been circulating but have recently been scotched by both officials and the company most thought to be involved, property giant Berjaya Assets. Berjaya is going ahead with a resort development, which it said in December could possibly include slot machines before saying in January that no gaming is planned. The chief minister of Johor, the state where Berjaya wants to build, said he had not received an application for a casino and would not approve it if he did; further, he said, Johor would oppose any such approval by the federal government. Berjaya is controlled by Forbes -listed billionaire and Cardiff FC boss Vincent Tan, who is no stranger to gaming. Mr Tan bought Sports Toto, the government lottery agency, when it was privatized in 1985 and claimed in 2010 that another of his companies had been granted a football betting license, which implied that this had been legalized. A furor resulted, and the government withdrew the approval. In another recent controversy, one of the country’s slot machine clubs faced government censure for doing a deal with a slot- licensed company to lease and relocate its machines outside the club. The incident shone light on what one report called a billion- ringgit industry, one in which a handful of government-connected tycoons control hundreds of licenses and have been offering to lease machines from private clubs around the country and relocate them to other venues. In Malaysia, only private clubs are allowed to operate slot machines, and only for members, another condition that had reportedly been habitually broken. Of course, in all venues, the ban on Muslims partaking in gaming remains. Malaysia’s best-known gaming destination, and only legal casino, remains strong and free from imbroglio. Resorts World Genting continued its strong performance to the end of the third quarter of 2013. The resort, together with a pair of non-gaming tourist hotels in Langkawi and Kijal, account for 67% of the company’s global revenues and 87% of EBITDA. It is one of Asia’s largest, and includes six hotels totaling 10,000 rooms, family attractions, 170 dining and shopping outlets, an 18-hole golf course and MICE facilities. The company has also agreed on a deal for the world’s first Twentieth Century Fox World, to be undertaken with government assistance. Visitation is expected to fall off, though, when the existing theme park is closed to make way for the new attraction. Malaysia’s tourism statistics are also impressive. To September 2013, the country had attracted close to 19 million visitors, an increase of 3.3% on 2012, which was in turn an increase on 2011. MALAYSIA Steady as She Goes Resorts World Genting’s theme park is closing to make way for an entertainment complex called Twentieth Century Fox World. MYANMAR Tourism’s New Star T he opening up of resource-rich Myanmar since 2011 has drawn much attention. Since the lifting of sanctions, foreign investment has risen fromUS$1.05 billion in 2011 to $1.4 billion in FY 2012-13 and $1.8 billion in the first five months of FY 2013-14, which has proven excellent news for the government, except for the spike it has caused in the price of already-short office space. In tourism, the country has seen arrivals rise similarly, with a more than 20% increase between 2011 and 2012 showing the desirability of the country as a tourist destination despite ongoing unrest. The government’s current target is for the country to host 7.5 million visitors annually by 2020. Optimism about consumption growth in Myanmar, however, must be tempered by the caveat that while there are 60 million consumers most are rural and do not even have electricity. On the opposite end of the spectrum, the resource boom has created a wealthy minority. In addition, the country’s infrastructure needs a lot of work, though money is coming in, including from the Asian Development Bank and other multilaterals. Flights now connect directly to Bangkok. There is already a gaming industry in the country, small as it is. Illegal online gambling exists, but is being tackled through cooperation among regional police forces. Regulating the sector is being discussed as is the legalization of lottery-style scratch cards. The casino sector is not officially accepted but in practicality is tolerated. Legal loopholes, ownership by influential individuals, operations in semi-autonomous areas such as Shan State bordering