Inside Asian Gaming

September 2015 inside asian gaming 45 formed in 1998 to restore the community’s economy and ecology. A small casino began taking bets in 2000, and a full-scale hotel, casino and theme park opened in 2003. The casino has grown from 30 table games at the outset to 200, with 1,360 slot machines, in an expansion completed in June 2013, all under the watchful eye of the Ministry of Culture, Sports and Tourism. Restrictions on the casino to discourage problem gaming have expanded over time as well, including a ban on Koreans entering the casino more than 15 days a month, and Kangwon Land runs rehabilitation centers for problem gamblers on site and in Seoul. To create a complete resort destination, Kangwon has added a convention hotel and attractions such as a ski resort, golf course and vacation homes under its High1 Resort brand. A US$150 million indoor-outdoor water park is due for a soft opening in the second half of 2016. Having the 2018 Winter Olympics in nearby Pyeongchang will bring new roads that will shave an hour or more off the now-harrowing three-and-a-half-hour drive from Seoul as well as highlight the region’s recreational charms. But for now Kangwon Land is all about gaming. While South Korea’s foreigners-only casinos were negatively impacted in the second quarter of this year by reduced tourism numbers in the wake of the outbreak of Middle East Respiratory Syndrome, locals-reliant Kangwon soldiered on, posting a 9.3% year-on-year increase in Q2 revenue to 389 billion won, with over 97% of revenue deriving from gaming. South Korea’s loosening of its policy on foreigners-only casino development is not expected to impact Kangwon Land as a gaming destination. With up to four times more players than seats on weekends and a vibe at the tables that one player compared to a factory assembly line, bettors are there because they have no other choice. If Korea lifts its ban on local players at other casinos, then all bets are off. It was a rough first half of the year for Macau’s Ponte 16 Resort— not surprisingly, given the market’s current travails—and profits plunged 73% for Sonny Yeung’s Hong Kong-listed Success Universe Group, which owns just less than half of the 408-room hotel casino along the city’s historic Inner Harbour. For the six months ended 30th June, the company reported a net loss of HK$1.9 million as EBITDA took a beating to the tune of 40% year on year, mainly due to a 13% drop in turnover from continuing operations at Ponte 16. But with the world’s largest casino market now 15 months into an epic correction it’s not as if the veteran Hong Kong financier and political mover and shaker, together with Stanley Ho’s SJM Holdings, which owns 51% of the resort, didn’t see it coming. Mr Yeung’s attempts to diversify around it with other gaming-related ventures haven’t exactly borne the desired fruits. A majority stake in a cruise ship operation in Hong Kong was sold off last year. Beijing’s suspension of online lottery sales earlier this year has hurt his bid to cash in on the mainland’s lottery boom. Which is not to say these weren’t eminently sensible investments in the face of ill political and economic winds blowing through Macau from China. And it would be a mistake to allow them to obscure how strongly positioned Success Universe is at Ponte 16 when the market eventually rebounds. Talk about sensible investments, the resort cost only HK$2.4 billion (US$310 million) to build, a relative pittance compared to the fortunes being plowed into Cotai. For that, Mr Yeung and SJM got 2.3 hectares in a choice downtown location to experiment, to hone Sonny Yeung Chairman Success Universe Group their operational chops and grow with the mass market that will define Macau’s future. To date the property features a Sofitel- managed hotel that includes a block of 19 luxury apartments, an outdoor pool, a fitness center with a sauna, a L’Occitane- branded spa and seven multi- purpose meeting rooms. There are nine restaurants, cafes and lounges. The casino provides a spacious 25,000 square meters of floor space for refining and tweaking the gambling product as the market evolves. A three-tiered players club card knits both the gaming and non-gaming offering into a comprehensive loyalty program. Looking ahead, plans are in the works to build out at the Inner Harbour with a 3,700-square-meter shopping arcade. Add it all up and a case can be made that Success Universe deserves more credit as an innovator than it has gotten up to now. (Think Michael Jackson memorabilia museum. Ponte 16 boasts the only one in Asia. Does it get any more out-of-the-box than that?) The next phase of the resort’s development won’t be uninteresting either if its new Macau 3D World is any indication. Conceived with the Chinese tourist’s love of a photo-op in mind, the attraction features six themed “zones” spread across 1,672 square meters of interactive 3D and 4D exhibits, paintings and special effects. As the official literature states, “Unlike traditional art museums, visitors here can be part of the art piece and change the formation of the painting by their participation. Every visitor is the director of their own photos in this 3D universe.”