Inside Asian Gaming

INSIDE ASIAN GAMING DECEMBER 2017 68 ASIAN GAMING POWER 50 2 0 1 7 It was 1975 when Hajimi Satomi founded Sammy Corporation and began his first venture selling pachislot machines. Forty-two years later he remains as ambitious as ever, positioning the company he now presides over to become one of Japan’s first IR operators. Sega Sammy Holdings was formed in 2004 after Sammy Corp purchased a controlling share in video game giant Sega. The resulting conglomerate’s business focus has since centered around four key segments – pachinko and pachislot sales, amusement center operations, arcade machines and video games. But with dark clouds hovering over Japan’s pachinko and pachislot industry, Satomi has steered the company in a new direction. In 2013, Sega Sammy teamed up with Korean foreigner-only casino operator Paradise Group to build Korea’s first integrated resort, Paradise City. The US$1.3 billion project opened for business in April this year with Sega Sammy holding a 45% stake. But Paradise City is only a warm- up vehicle for the company’s real goal – operating a casino at home in Japan. Sega Sammy has made no secret of this and even declared recently that it had dispatched 50 employees to Korea to learn the trade. “Initially, only six employees were dispatched to Paradise, but this number has steadily grown since, coming to approximately 50 Exactly what the future holds for the government-affiliated Grand Korea Leisure (GKL) is open to debate, but there is no doubt the wind has been knocked out of its sails over the past two years. A subsidiary of the Korea National Tourism Organization, GKL was established in 2005 to promote tourism and raise funds, opening a number of foreigners-only casinos under its Seven Luck brand. For the most part the plan has worked, with GKL one of two companies – alongside Paradise Group – to dominate market share with around 90% between them. But cracks began to appear in 2015 when six GKL employees were arrested in China for allegedly marketing the company’s casino operations to Chinese gamblers. While Paradise was also caught up in the scandal, the fact that GKL has government ties didn’t sit well with their primary market. How much this impacted the company’s decision not to bid for one of two new licenses issued last year for integrated resorts in Incheon is unknown. It does, however, suggest its gaming ambitions are limited. For Lee Ki-woo, who took over from Lim Byoung-soo as GKL’s President and CEO shortly after the 2015 arrests, his time in the top job has been anything but smooth. And if he had hoped for a better run in 2017, the THAAD missile crisis quickly put paid to that with GKL’s revenue by the middle of the year declining 11.5% and profit 37% on 2016 numbers. Hajimi Satomi CHAIRMAN, PRESIDENT AND CEO Sega Sammy Holdings POWER 551 LAST – SCORE YEAR CLAIMS TO FAME One of Japan’s biggest pachinko operators Partner in Korea’s first integrated resort 49 [as of ] September 2017,” it said in its 2017 annual report. Sega Sammy’s Chief Operating Officer Haruki Satomi, Hajimi’s son and heir, said the company’s Japan ambition is “to participate in all aspects of the integrated resort business, including casino operations” and that “we have been preparing steadily to realize this ambition.” Given their progress so far, who would doubt them?