Inside Asian Gaming

inside asian gaming September 2014 48 MGMResorts International pulled out as management partner of Vietnam’s The Grand Ho Tram Strip on the eve of the US$500 million resort’s much-anticipated opening last July. That it got open at all is a tribute to the reputation, the steady hand and the lobbying skills of Colin Pine. Mr Pine heads Ho Tram Project Company, which took the helm after MGM’s exit as a subsidiary of Asian Coast Development (Canada) Limited, the investment consortium that conceived The Grand and whose backers include American hedge fund tycoon Philip Falcone. Mr Pine is well-known and respected in Vietnam and was able to negotiate with the central government on reforms to regulations concerning tax and international banking transactions to bring the country into line with international norms prevailing in other major gaming jurisdictions. A fluent Vietnamese speaker who’s been working and investing in the country for 18 years, he is credited with winning approval for the first foreign-owned school in Hanoi to acquire land for a purpose-built campus. At one time he ran a Vietnamese company that acquired a foreign-owned five-star hotel. He also helped found the country’s first privately owned airline Challenged by a longstanding ban on domestic play and its distance from Ho Chi Minh City, an arduous three-hour drive under current conditions, The Grand has struggled to recoup its investment. For all that, though, it is a beautiful property, Vietnam’s Colin Pine General Director Ho Tram Project Company first true destination casino, with 541 five-star hotel rooms and loads of inherent appeal. It fronts two kilometers of gorgeous beach on the South China Sea coast of Ba Ria-Vung Tau province, surrounded by protected forest land, and now boasts a Greg Norman-designed golf course that is holding its official ribbon-cutting next month. The game changer for The Grand would be an end to the prohibition on domestic play, something Mr Pine and his team have been working to achieve. The Ministry of Finance has drafted a new set of gaming regulations that includes a provision for opening the country’s casinos to its 90 million citizens, and political momentum appears to be building in favor of it. The draft is slated to be submitted to Prime Minister Nguyen Tan Dung this fall and could be approved by the end of the year. In his first year heading Grand Korea Leisure, Lim Byoung-soo has delivered mixed results. Perhaps that’s to be expected from a government-controlled company with a somewhat restrictive mandate. GKL was founded in 2005 as a subsidiary of the Korea National Tourism Organisation. In 2009, 30% of its equity was floated on the Seoul Stock Exchange. Its core mission, however—promoting tourism, raising money to fund tourism projects and helping to reform the Korean image of gaming as a social evil—didn’t change. LimByoung-soo President and Chief Executive Grand Korea Leisure Nationally, tourism promotion seems to be working, welcome news for the government. Casinos play a role, but the main growth engine is hallyu, the so-called Korean Wave of pop culture engulfing Asia. Visitor arrivals to South Korea show a double-digit compound annual growth rate over the past five years, reaching a record 12.2 million in 2013. The government claims tourism created an estimated 240,000 jobs last year, four times more than the nation’s 47 largest companies combined. Over those same five years, visitors from China have grown from 1.3 million to 4.3 million, last year overtaking Japan as the country’s largest source market. Korea is the most popular destination for Chinese travelers after Hong Kong and Macau. Chinese visitor arrivals rose 46% in the first seven months of this year, toward a projected total of 5 million. Many of those tourists are visiting Korea’s 16 foreigners-only casinos. Casino visits have posted a 12.7% CAGR since 2009, reaching 2.7 million last year, with a 10.6% CAGR for gaming revenue.