Inside Asian Gaming

July 2014 inside asian gaming 43 Macau. Separately, Mr Ho is pursuing gaming developments in Vladivostok and Barcelona, while Crown is pursuing casino licenses in Sri Lanka and in Brisbane, Australia, and is approved to develop a resort casino in Sydney. Crown’s flagship casino is in Melbourne. It also operates a resort casino in Perth in Western Australia. Kangwon Land OK—Not So South Korea as a tourism driver and a source of foreign investment and has designated a special economic zone around the main international airport near Incheon for large-scale casinos. Paradise is developing a gaming resort there with a hotel and supporting attractions in partnership with Japanese pachinko giant Sega Sammy. A joint venture led by Las Vegas-based Caesars Entertainment also has won tentative approval to build in the zone. In the far south, on the popular tourist island of Jeju, a joint venture led by Genting has been approved to develop a mixed-use resort with a casino. EGT Unloads Cambodia Border Casino Entertainment Gaming Asia has sold its struggling Dreamworld Pailin casino in Cambodia to an unidentified buyer for US$500,000. The sale does not include the casino’s 50 or so machine games and some other equipment and assets, the company said. The buyer also is not allowed to use the “Dreamworld” name. In connection with the sale, the company also said it has terminated all agreements with its partner in the casino, who is a relative of the purchaser and owns the land under the casino. Dreamworld Pailin, located in the northwestern province of the same name on the border with Thailand, opened in May 2012 as Entertainment Gaming Asia’s first foray as a developer. The Nasdaq- listed company (EGT) is known mainly as a lessor and operator of machine games on a revenue-sharing basis in Cambodia (notably at Naga Corp.’s NagaWorld monopoly in Phnom Penh) and in the Philippines. Pailin was considered a trade up from the rest of the border offering and EGT followed it in May 2013 with a larger Dreamworld- branded casino also serving the Thai market in the border town of Poipet. Pailin never quite found its legs, however, and EGT said that while operating losses have narrowed in recent months the property has suffered from what it calls a “low level of natural player traffic,” and in December, EGT wrote off the entirety of its US$2.5 million investment. The company said also that it has been unable to secure a long-term third-party operator for the casino’s 26 table games, and revenue has been additionally crimped by the political unrest in Thailand, where news reports have it that fewer Thais are crossing into Cambodia to gamble since the May military coup. EGT also manufactures and sells RFID and traditional gaming chips and plaques to casinos in the region under its Dolphin brand. The company is indirectly linked to Lawrence Ho’s Melco Group through a wholly owned Melco entity called EGT Entertainment Holding, which owns 38% of EGT’s stock. REGIONAL BRIEFS South Korea’s Kangwon Land Casino posted an increase in turnover of 5.8% in 2013, good for 1,279 billion won (US$1.25 billion). Admissions at the casino, the only one in the country open to Korean nationals, were up slightly last year (1.4%) to 3 million; and despite its remote location in a depressed former coal-mining region in the far northeast of the country, the property has managed to grow turnover 10.7% since 2009, according to new figures from the Korea Leisure Industry Institute, a government-sponsored think tank. However, sports betting (Sports Toto) and lottery (Lotto) have far surpassed that pace with rates of growth of 75.5% and 30.9%, respectively, over the same period. Last year, South Korea generated 18,284.7 billion won from all forms of domestic gambling, essentially flat with 2012, with pari- mutuel betting on cycling and boat racing suffering declines in revenue of 7.4% and 4.3%, respectively, and declines in attendance of 16.3% and 13.2%. Lotto sales, which account for 17.7% of the total domestic market, rose 1.5% last year to 3,234 billion won. The institute didn’t factor in the 16 casinos open to foreigners, whose combined annual revenues historically have roughly matched Kangwon Land’s. Two companies, privately held Paradise Group and government-backed Grand Korea Leisure, control about 90% of the take, split roughly between them. Neither has shown especially robust growth. Grand Korea Leisure, which is publicly traded, reported a 4% increase in revenue in the fourth quarter, but that was attributed mostly to above-average hold, as table drop was down 13% and fewer Chinese and Japanese high rollers patronized its three properties in Seoul and Busan. Operating profit was up 30%, but higher expenses resulted in an 11% decline in net profit. The government, which generally is cool to gambling, has more recently come around to recognizing the value of the industry Kangwon Land Dreamworld Pailin