Inside Asian Gaming

September 2015 inside asian gaming 39 joint venture between Melco Crown and Philippine property giant Belle Corp.—has taken it down something of a different path than originally envisioned as it focuses on the domestic mass and premium-mass markets for its 365 table games and 3,560 machine games while waiting for its Macau-based parent to deliver the VIPs. PSX-listed Melco Crown (Philippines) Resorts is taking it on the chin in the meantime, incurring losses through the first half of PHP4.91 billion (US$105 million). But junket operations were finally launched in July, and management is looking ahead to a strong second half. As for his other job running Entertainment Gaming Asia, the Nasdaq-traded company responsible for much of Lawrence Ho’s Southeast Asia operations, Mr Chung has been working to achieve a turnaround. It began in the spring when EGT, as it’s known, engineered a 1-for-4 reverse stock split to regain compliance with Nasdaq listing rules. From there it motored into the second quarter with a reversal of last year’s net loss in favor of $1.5 million in profit on a 54% surge in consolidated revenues, most of it driven by a strong performance from the company’s Dreamworld Poipet casino on Cambodia’s border with Thailand. EGT, which is 38% owned by Mr Ho’s Melco International Development, also enjoys income streams from machine games it supplies on a revenue-sharing basis—major clients currently include the NagaWorld monopoly in Phnom Penh, Cambodia’s largest casino, and the country’s Thansur Bokor Highland Resort, located in a tourist enclave in Kampot province—and from casino currency sales. The latter, marketed under the Dolphin brand, are growing impressively, generating sales good for $2.7 million in the second quarter, handily surpassing the $524,000 realized in Q2 2014, and looking forward to $4.5 million more in the second half and another $6 million next year. With $24 million in cash on the company’s books, Mr Chung is making no secret of his determination to build EGT bigger. When the second-quarter numbers came in, he said, “We believe we have greatly improved our ability to secure new projects that could enhance our existing operations and provide the opportunity to expand into new businesses and markets.” An accountant by training, he joinedMelco in 2003 as chief financial officer after serving as an investment banker and vice president of Hong Kong’s Pacific Century Group. He is an executive director of Melco International and also sits on the board of Melco Crown. When Thomas Arasi arrived at Manila’s Solaire Resort and Casino two years ago, he seemed tailor made for the assignment. Philippine billionaire Enrique Razon had built a splendid property but needed someone to put the business end of it in order. Mr Arasi, a hospitality business veteran on the numbers side, had delivered a record opening quarter as CEO at Singapore’s Marina Bay Sands. True to his bean-counter roots, Mr Arasi instituted cost cuts at Solaire, made the operation more efficient and reshaped marketing with a pan-Asian strategy similar to what succeeded in Singapore. With a steadily growing Philippine economy at its back, Solaire’s EBITDA increased from P1.1 billion ($26 million) for 280 operating days in 2013 to P10.1 billion for a full 2014. Gaming revenue more than doubled to P30.4 billion, and EBITDA margins increased from 9% to 42%. In the first half of this year, Solaire soundly passed crosstown rival Resorts World Manila as the market’s gaming leader with revenue of P15.6 billion. That’s what you’d expect from a numbers guy. But Mr Arasi has shown that he’s much more than a clever bookkeeper. He’s become a key figure in parent company Bloomberry Resorts’ brain trust, holding the corporate president and chief operating officer titles. He has been involved in Bloomberry’s Thomas Arasi President and Chief Operating Officer Solaire Resort and Casino expansion into South Korea, where it’s bidding for a gaming license in Incheon to build a seaside integrated resort and bought a casino hotel on Jeju island. At last year’s Japan Gaming Congress in Tokyo, Mr Arasi wowed attendees with a presentation in Japanese, which he picked up when he’d done mergers and acquisitions there. If and when there’s an opportunity for gaming licenses in Japan, expect Mr Arasi to play a big role. Solaire’s Sky Tower addition was well underway when he arrived, but Mr Arasi oversaw design changes to enhance $1.2 billion Solaire’s positioning as a boutique luxury destination. Despite the changes, Sky Tower opened “on track and on spec,” Mr Razon noted, last November to rave reviews. The new wing’s 312 suites brought Solaire’s room count to 800, added 66 VIP tables in 10 contemporary salons with dedicated F&B outlets, plus a Broadway-style theater, luxury spa and other non-gaming amenities. A nightclub and retail mall will open in the months ahead. Sky Tower has made Solaire