Inside Asian Gaming

INSIDE ASIAN GAMING | September 2011 38 In a little over three years, Neptune Group has grown to be one of Macau’s biggest junket investors. It coordinates the marketing and accounting effort for nearly 200 VIP tables across ten venues in the Asian Gaming 50 – 2011 21 (-) Ted Chan Co-COO, Gaming Melco Crown Entertainment 22 (25) Nick Niglio Executive Director and COO Neptune Group Ted Chan is part of the‘newwave’of local executives brought into key positions at Melco Crown Entertainment’s (MPEL) Macau casino operations in the last 12 months. Mr Chan—still only 39—is a long-standing and trusted associate of Lawrence Ho, MPEL’s Co- Chairman and CEO and himself only in his mid-30s. Mr Chan worked with Mr Ho first at Mocha—the slot clubs operation aimed at local Macau players and started by Melco but now part of the MPEL joint venture. He then took a role as CEO of an outside firm— albeit one that worked in close cooperation with MPEL. Amax Holdings Ltd, a Hong Kong-listed business, played a key role in sustaining Crown Macau (now Altira), MPEL’s first Macau property. Crown Macau opened as ahigh roller-focusedproperty inMay2007, but initially found the market tough to crack. Amax provided a pipeline of VIP players in exchange for receiving an industry-leading 1.35% rolling chip commission. By November 2008, Mr Chan was back in the MPEL fold as President of Altira. Following the resignation of Greg Hawkins as President of MPEL’s flagship Cotai resort City of Dreams (CoD) in the summer of 2010, the company decided to make a radical shift in its management structure. Instead of simply replacing Mr Hawkins with a different executive under the same job title, MPEL decided to split the role between gaming and non-gaming operations, and make those two new roles strategic ones across the company, rather than venue-specific. Thus, Mr Chan became Co-COO, Gaming, for City of Dreams, Altira Macau and the Mocha Clubs slot venues. Nick Naples was appointed Co-COO, Operations, with responsibility for all non-gaming operations across the group. MPEL has been an early adopter in Macau of marketing techniques already familiar to Western casino operators, such as data mining of the player database—a policy further developed under Ted Chan. The database is now past the 600,000 mark. Another simple but effective concept is MPEL’s ‘New Game Zone’ at CoD. Although not a new idea in the industry, it was reportedly groundbreaking for Macau, and needed lengthy negotiations with Macau’s gaming regulator, the DICJ, and industry suppliers before it could be implemented. MPELwas also the first operator inMacau to offer floor-wide slot jackpots. Dragon’s Treasure Floorwide Jackpot, launched on 30th July 2010 at City of Dreams, starts at HK$3 million. The company plans to boost its jackpot appeal by linking the floor-wide jackpots at City of Dreams and Mocha Clubs (the slots at Altira are currently run as a Mocha venue). Slot play is currently only a modest contributor to the Macau bottom line (in the second quarter of 2011, it was 4.3% of Macau gross revenue market-wide). But for MPEL, slots are a vastly more important component of the business. They accounted for just under 62% of the gross across Macau operations in 2Q 2011 (US$568.9 million out of US$984.3 million in gross casino revenues). Mr Chan’s detailed knowledge of slot operations from his Mocha days was probably an important factor in the decision to make him head of operations across the group, rather than in CoD alone. Under Mr Chan’s watch, rolling chip volumes in the VIP segment appear to have increased at an above market-average rate across the group. Rolling chip volume for the second quarter of 2011 totalled US$19.3 billion, an increase of 59% from US$12.2 billion in the comparable period of 2010. Market-wide in Macau, VIP baccarat gross gaming revenue—another business indicator—grew by 50% in the same period. biggest high roller live table market in the world by gross gaming revenue. As Executive Director and Chief Operating Officer of Neptune Group since 2007, Nick Niglio has played a major role in that rapid growth. The company’s most recent project has been the launch of a new 12-table VIP facility at Galaxy Macau, Galaxy Entertainment Group’s new resort on Cotai. In addition, at the time this issue went to press, Mr Niglio informed IAG his company would be making “some surprise announcements of new venues over the next ninety days.” Before the rapid growth of it VIP room business in Macau, Neptune Group was probably best known to the general public in the region as the operator of a casino cruise. That ship was recently sold to other Macau VIP operators. A big factor in Neptune’s rise in land- based gaming appears to be the company’s success at making friends. Neptune isn’t necessarily the most aggressive at making commission deals with casinos, but it does seem to have considerable goodwill in the local industry and among players for fair and friendly dealing. That counts for a huge amount in the VIP sector and also ultimately pays off in terms of the bottom line. The company’s approach reflects Mr Niglio’s own personality and approach, and that of his operational management team. “It’s truly a relationships business,” says Mr Niglio. He has extensive experience of relationship management from the US gaming sector, including a stint as Executive Vice President for Caesars World Marketing and Executive Vice President of Trump Taj Mahal Casino Resort in Atlantic City, New Jersey. In Macau and Hong Kong, Mr Niglio served as a gaming consultant for several large international concerns seeking to position themselves in Asian gamingmarkets.