Wednesday, August 10, 2022

Resorts, regulations and risks -- a look at the year ahead


With signs Macau is well on the road to recovery; the Philippine market growing in double digits; and the prospect of casinos in Japan, 2017 is starting on a more promising note for Asia’s casino industry.

Vietnam is on the verge of finally publishing legislation that will lay the framework for its gambling sector, allowing locals to bet in casinos for the first time on a limited basis, while Cambodia may also produce its own set of regulations.

Add to that, further expected resort openings will expand the offering across the region, starting with the official launch of Universal Entertainment’s Okada Manila in the first quarter, to the expected opening of Imperial Pacific’s new resort in the Commonwealth of Northern Mariana Islands. The latter is being closely watched given the huge turnover being generated by its temporary facility on the remote Pacific Island.

While the nature of the market is Asia in often unpredictable, one thing we can say with near certainty is there will not be any shortage of news. With this in mind, we asked a few brave souls to stick their necks on the line and give us their predictions for what are likely to be the most notable events and trends to watch out for in the coming year.

Here is what they had to say...in reverse alphabetical order this time.

Michael Zhu, Innovation Group, vice president, operations, planning, analysis

The continuous political climate in China could curb many casino resorts’ marketing efforts and focus on the VIP segment, especially the direct VIP channel. In this context, operators will need to overcome challenges to create some unique and exotic experience to attract a large base of mass guests, engaging the natural assets, cultural elements, and other factors specific to the region they are located in. Of note, many affluent Chinese tourists from the country’s first-tier metropolitans have already visited the “must-see” cities such as New York and Paris, and are now looking for more exotic destinations, such as Iceland and Sweden for example.

Additionally, we think the strong tourism trend presents a great opportunity for the Native American tribal casino resorts in the US. With the record high tourist arrivals, road trips in the US, national parks and other remote natural assets are becoming increasingly attractive to Asian tourists.


We believe these trends and dynamics also bode well for further expansion of Asian gaming operators and gaming companies with a strong Asian background/footprint into regions far from China, such as Eastern and Northern Europe. The European market, for the most part, has a stable political environment and strong regulatory control, which also enables Asian operators to capture a wider range of guests and corresponding spend as Europe remains on top of the “dream destinations” list for many Chinese/Asian middle class patrons. As a matter of fact, many companies have already taken actions. Melco’s move in Cyprus, Galaxy’s investment in Monaco, to name a few. The similar trend can also be seen in the Pacific islands.

Additionally, we think the strong tourism trend presents a great opportunity for the Native American tribal casino resorts in the US. With the record high tourist arrivals, road trips in the US, national parks and other remote natural assets are becoming increasingly attractive to Asian tourists (especially younger generations such as the Millennials), boding well for more Asian tourists hitting Indian reservations and tribal casino properties if the “right” products and services are made available.

Augustine Ha Ton Vinh, president and CEO of Stellar Management

By 2018, the country will see a total of 6 integrated resorts, 50 hotel electronic gaming lounges, and 7 small casinos for foreign tourists, and gaming rooms at departure level of the country’s 7 international airports. In addition, a new sports betting decree is expected to come out sometime in the first half of 2017.

Sam Sheng, director Double Square Consulting

For 2017 and beyond, I think we will likely see accelerated casino resort development in Southeast Asia, especially Vietnam and Cambodia. I think patrons will favor resort setting casino resorts with exotic beauty and rich amenities over urban casinos. The shifted demand patterns calling for total resort experience instead of just gaming. Personally I think ‘Club Med with Gaming’ would be appealing concept for Asian, especially Chinese patrons.

Tim Shepherd, co-founder and president of business development at Silver Heritage Group

In 2017 I think we will continue to see the larger players in Macau flex their muscles internationally looking for ROIC no longer available in Macau. Seeking similar growth are the larger junket groups who will continue to diversify into bricks and mortar across Asia Pacific – they are saying “why give 50 percent of the profits to the licensee/builder?” They are going to back themselves to run a casino as well as anyone by recruiting the right managerial talent (much of it streaming out of Macau because of blue card issues) and already they have the player base. They also have a growing understanding of AML issues.  

Proxy betting from the comfort of a KTV or a hotel room anywhere in Asia on tables broadcasting live from Cambodia or the Philippines is now almost a commodity product and that trend will continue to play out for the VIPs who used to travel to Macau in large numbers and now don’t for fear of the spotlight being cast upon them. No numbers are ever going to be recorded but you know it’s a bigger business than the Macau groups would like to hear.

Finally, and  admittedly on a personal level, in early 2017, Silver Heritage Group’s flagship Tiger Palace Resort will open on the Indian border in Nepal, and, as we’ve seen from The Millionaire’s Club & Casino in Kathmandu, the vast, high energy and wealthy Indians are simply not being catered to by groups buried in the China weeds.  


Finally, and on admittedly on a personal level, in early 2017, Silver Heritage Group’s flagship, Tiger Palace Resort will open on the Indian border in Nepal, and, as we’ve seen from The Millionaire’s Club & Casino in Kathmandu, the vast, high energy and wealthy Indians are simply not being catered to by groups buried in the China weeds.  

Look for that opening to astonish the industry in 2017.”

Mike Santangelo

Predictions for the 2017 Asian Gaming market could be precarious, but I speculate we will begin to see disruptive technologies migrate to the mainstream. The market leaders have been talking long enough about what future millennials desire, however, 2017 should see commitment to long term strategies and investment in eSports, mobile-based connectivity, more robust online platforms and potentially skill-based gaming. MGM and several smaller gaming companies have already began trialing these technologies but I forecast this trend will quickly migrate to the other Asian market leaders in 2017.

While the Asian gaming market is unpredictable, one thing we can all be 100 percent sure of is that there is never a lack of excitement and 2017 will be no exception.


Additionally, I expect to see Japan and Vietnam announce their entry to the casino gaming foray in 2017, with major Macau and Asian based operators positioning themselves for the few lucrative licenses. I also anticipate the Philippines to continue with their double digit GGR growth rates, while Korea continues its swift descent with more non-Korean gaming companies running for the exits. Macau will also continue to see a steady growth in 2017 although one major caveat could be the swifter exodus of junket promoters directly handling their players such as Sun City’s casino in Danang, Vietnam.

While the Asian gaming market is unpredictable, one thing we can all be 100 percent sure of is that there is never a lack of excitement and 2017 will be no exception.

Jay Sayta, founder Glaws.com

Elections are scheduled in Goa in early 2017 and one of the key issues for political parties is the fate of casinos. Political parties like the Aam Aadmi Party (AAP), whom political pundits feel have a decent shot at power, have promised to eliminate casinos if voted to power, while other opposition parties like the Congress party have stated that they would consider removing casinos altogether or phase them out, if required. The ruling Bharatiya Janata Party (BJP) however maintains that casinos are a necessary evil and have brought in considerable investment and attracted tourism.

2) The online skill games space is likely to see more consolidation with big enterprises entering this sector. One could see launch of more rummy, poker and gaming websites and more announcements on the lines of the Delta Corp acquisition of Adda52.

3) Amaya Group CEO Rafi Ashkenazi has indicated that Pokerstars will launch an India facing website by the first or second quarter of 2017 and is in discussions with local partners. Pokerstars formally making an entry to India will make the online skill games space highly competitive and smaller players may be forced to exit the space.

4) Delta Corp has announced the launch of its new casino in Hotel Denzong Regency in Gangtok, the capital city of Sikkim. The company has already received a provisional license from the state government and is in the process of refurbishing the gaming space. The new casino is expected to start operations by the first quarter of 2017.   

5) 2017 could see one or two more states regulating and licensing casinos. There are talks with the governments of Puducherry, Telangana, Andhra Pradesh and Karnataka and one or two of these might probably commence the process of regulating and licensing casinos for the purpose of promoting tourism.

Ben Lee, managing partner IGamiX Management & Consulting

Looking forward to 2017, the picture is less than clear. With the recent detention and arrests of Crown’s staff in China, all but one of the operators in Macau have ceased their direct marketing efforts across the border. Most if not all the foreign operators who have been targeting China have adopted the same risk minimization approach. What this means is that the direct VIP/Premium Mass players who have been relying on the casinos’ own staff to facilitate their logistics and assist with their funds transfers, will probably end up going back to the junkets. This is after all the raison d’etre for this unique Asian business model in the first place.

The Macau gaming industry insofar as we are concerned is a political market rather than a free demand vs supply equation, and what we will get here is what China deigns to let us have.


 China has previously warned Macau to keep its gaming industry under control, and if past comments were to serve as guide, we need to maintain a growth rate consistent with China’s own GDP growth forecast. Any increases higher than that would most likely elicit a response reminiscent of 2014.

A clearer picture of the future direction of the gaming industry will emerge once the new Director of the China Liaison Office in Macau has reviewed 2016 in its entirety, and given us his comments, and that will probably be some time in Q1. The Macau gaming industry insofar as we are concerned is a political market rather than a free demand vs supply equation, and what we will get here is what China deigns to let us have.

A single digit growth in line with China’s own economic growth will probably be our guide.

Sudhir Kale, CEO GamePlan Consulting

Operators will, first and foremost, have to change their corporate culture from one of “build it and they will come” and outmoded hubris to “customer centricity” and servant leadership. To signal a visible shift in culture, casino companies need to mandate that their senior executives, regardless of functional area, walk the main gaming floor each day and make an attempt to engage with their frontline employees as well as customers. Above all, every single casino executive needs to take to heart Sam Walton’s admonishment, “There is only one boss. The customer. And he can fire everybody in the company from the chairman on down, simply by spending his money somewhere else.”

Ebbe Groes, CEO EveryMatrix

Believe the hype! Asian gaming is not only big but growing very fast. It seems to us that the region, while already boasting huge volumes, keeps growth rates that can stun even the more experienced players on the market. So software that was great in 2015 may have started to show problems in 2016, with increased competition and with technical solutions starting to show their limitations. In 2017 this will lead more of the large operators to seek for better software. I'm sure that some are right now busy building and others are busy scouring the market for good suppliers.

David Green, CEO NewPage Consulting

1) Regulators and policymakers alike will come under increasing pressure to address issues such as the integrity of sports betting, whether social gaming should be regulated, what prescriptive standards and requirements should be set aside in favour of risk-based regulatory oversight, and how emerging technologies like virtual reality games should be evaluated for suitability to be offered as gambling propositions. The challenges of short cycle technology in the gaming industry are not new, but the current proliferation of new technologies is. Regulatory lag is likely to become an increasingly evident constraint on industry growth in 2017.

Proponents seem focused on their capacity to buy such a license, in addition to any legal privilege they may be able to purchase. In my view, that is a dangerously misguided and culturally imperialistic view.


2) While Japan is seen by the industry as perhaps the last great untapped opportunity for investment, that is not necessarily a view shared by the Japanese. A social license to support legalization is likely to be far more significant than in any other Asian country which has moved to allow integrated resorts, with the possible exception of Singapore. Proponents seem focused on their capacity to buy such a license, in addition to any legal privilege they may be able to purchase. In my view, that is a dangerously misguided and culturally imperialistic view.

3. I expect the Macau SAR government will give industry some guidance as to how it will handle the looming expiry of the casino concessions. The first of the concessions (SJM/MGM) is scheduled to expire on March 31, 2020. Given both SJM and MGM are yet to open their Cotai developments, there is a pressing need for clarity around the process…will it require a re-tender? Will exceptional circumstances justify the extension of the term of the SJM concession, and by extension, of the MGM sub-concession, by the Chief Executive prior to his departure from office in December 2019? What will the government expect from the concessionaire in consideration of the concession being extended, or a new concession granted? What will be the term of any new concession? And so on it goes.  

Global Market Advisors

Andrew Klebanow

I think the Philippines remains an intriguing story in 2017. President Duterte’s call to PAGCOR to privatize its casinos was a wise decision, although that decision was driven more by the President’s sense of morality rather than a purely business decision. PAGCOR’s dual role as operator and regulator has traditionally discouraged outside investment. PAGCOR branded casinos also have been starved of capital re-investment as the agency strove to upstream as much revenue to the central government to support its mission of generating funds for nation building. The value of those PAGCOR properties could be significant, particularly if private operators re-invested and improved the quality. If PAGCOR can appropriately value its casino properties based on future cash flows, it will be able to maximize the value of those assets while attracting operators more adept at operating casinos. The challenge is mitigating any uncertainty for those operators. Duterte’s call to arrest casino operator Jack Lam is an example of that uncertainty.

Steve Gallaway

Japan will prove to be the largest opportunity in gaming today and all hospitality companies will be active in the market evaluating the potential opportunity while the legislation is being written. Large-scale casinos will bid to build some of the world’s most iconic integrated resorts, similar to the magnitude the world saw constructed in Singapore. The IRs will create a significant number of jobs and have a positive economic impact that will ripple throughout the Japanese economy.  

Similar to what occurred in Singapore, the local population will come to realize that integrated resorts do not result in the proliferation of problem gambling, and rather have a positive impact on the fabric of society. 


Similar to what occurred in Singapore, the local population will come to realize that integrated resorts do not result in the proliferation of problem gambling, and rather have a positive impact on the fabric of society. From a developer’s perspective, one of the greatest advantages of gaming in Japan is that revenue can rely on a comparatively wealthy and sophisticated local population and existing tourism industry, rather than having to develop a business plan contingent on wooing the VIP gamer from China, a market that continually proves unreliable due to Chinese public policy. In terms of market potential, this question cannot be answered until the tax rate and number of licenses to be issued are known.

GMA projects that Macau will generate $25 billion in gaming revenue in 2017. This estimate is based on a comment made by Macau’s Chief Executive Fernando Chui in November. While we know demand is far greater than $25 billion, gaming revenue in 2017 and beyond will continue to be based on public policy out of China.

Harmen Brenninkmeijer, managing partner at Dynamic Partners

For 2017 the Macau market will continue to stabilize and grow, but the operators will have to work harder to get the players to come back. The future looks good with regards to the general mass player but the VIP’s will be careful in how, where and what they play. The certainty of them coming and playing the same numbers as they did in the years previously can not be counted upon. My prediction is that more focus has to be given to the mass and premium mass players to make them feel they get value for their money. The junkets will have to work harder and the controls they will be facing will make it more challenging to fill their VIP rooms.

My prediction is that more focus has to be given to the mass and premium mass players to make them feel they get value for their money. The junkets will have to work harder and the controls they will be facing will make it more challenging to fill their VIP rooms.


From the suppliers point of view, more technology will be sold and the electronic table games will be sold in greater quantities. However, prices will remain stagnant and the operators will keep on demanding primarily popular products, creating higher risks as products will have to be tested live. The DICJ promised additional measures to streamline the process which is highly necessary to provide more variety and interesting products which today have not yet appeared in the casinos. HK traffic, once the bridge is open will demand more than what is on offer today.

The PAGCOR privatization process will be painful as many employees are bound to lose their jobs, since the buyers likely can’t count on their loyalty and willingness to work as is expected in the private sector. How this will be managed and how PAGOR will transfer the properties will be key to the development of the Philippine casino industry as a whole.

The additional potential impact will be on the online industry. How will PAGCOR’s involvement be handled? Will the online operators still be able to be First Cagayan-licensed and operate from Manila or will all operations in Manila be forced to be covered by its license? If so at what cost, as today’s proposed tax is very high. The handling of this will make or break the level of confidence with the present operators. If handled wrong most will leave the Philippines and create thousands of job losses.

Asia Gaming Brief is a news and intelligence service providing up to date market information for worldwide executives on relevant gaming issues in Asia.

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