Inside Asian Gaming

INSIDE ASIAN GAMING | March 2010 4 Editorial Inside Asian Gaming is published by Must Read Publications Ltd 8J Ed. Comercial Si Toi 619 Avenida da Praia Grande Macau Tel: (853) 2832 9980 For subscription enquiries, please email subs@asgam.com For advertising enquiries, please email ads@asgam.com or call: (853) 6646 0795 www.asgam.com Inside Asian Gaming is an official media partner of: http://www.gamingstandards.com Michael Grimes We crave your feedback. Please email your comments tomichael@asgam.com Publisher Kareem Jalal Director João Costeira Varela Editor Michael Grimes Business Development Manager Domingos Abecasis Contributors Desmond Lam, Steve Karoul I. Nelson Rose, Richard Marcus Shenée Tuck, James J. Hodl Andrew MacDonald William R. Eadington Graphic Designer Brenda Chao Photography Ike Joker in the pack “Never make predictions, especially about the future,” said Casey Stengel, the legendary American Major League Baseball player. The launch of a major new casino market such as Singapore and a new venue such as Resorts World Sentosa is an interesting time. A big part of the fun is in matching industry predictions—whether they come from journalists, the financial and investment sector, the operators, the equipment suppliers or the regulators—against how things actually turn out. Mostly by skill and judgement, and sometimes by luck, particular predictions prove more accurate than others. There is, however, one certainty among all the variables—a new opening or new launch will always throw up a wild card; something that no one had predicted or expected. So what’s the ‘wild card’ in Singapore’s nascent casino gaming market? Actually, there doesn’t seem to be one—so far. Since the opening of the first casino, at Genting’s Resorts World Sentosa (RWS), on the first day of the Lunar New Year, the virtuous opposition has been predictably self-righteous. Local gamblers (especially those from neighbouring Malaysia) have been suitably enthusiastic. Union Gaming Research in Las Vegas says it believes the RWS casino generated daily revenue of about US$3 million for the first couple of days of operation, followed by an average of US$7 million to US$8 million per day in the first full week after the holiday. Even the Singapore Casino Regulatory Authority’s near legislating away of traditional Asian gambling agents through super strict financial reporting rules could hardly be described as unexpected. The standards of service at the new resort have also followed the formbook, being very similar to the approach taken at Genting’s core gaming operation in Malaysia’s Genting Highlands, according to seasoned observers of the local scene. Perhaps that’s the wild card. Having spent a cool US$4.4 billion on a bells and whistles resort, including luxury hotels and one of only four Universal Studios theme parks in the world, Genting seems to be having a little trouble with part of the ‘software’—i.e., its customer service. Requiring mass-market punters virtually to beg for a drink from an infrequently passing attendant—as reported by one of our sources present on the opening day, doesn’t at first sight look like the best way of building lasting customer relationships—even accounting for inevitable opening day glitches. Nor does asking punters to line up and pay for use of the cloakroom when they are about to pour their hard earned money down the hungry throat of the nearest baccarat table. Inside Asian Gaming can’t see Las Vegas Sands Corp doing something similar at Marina Bay Sands (MBS) when it opens on 27th April. To assume that RWS will struggle to match its early gaming revenue performance once MBS opens is, of course, another prediction. The experience of the Macau market is that more supply creates more demand. The dynamics of Singapore are admittedly different. Singapore nationals and permanent residents have to pay a hefty daily or yearly casino entry fee, and junkets are not so much endangered as stillborn. But to quote the words of the eternally optimistic character Mr Micawber fromCharles Dickens’novel David Copperfield, it’s likely that “Something will turn up.”Whatever that “something” is in Singapore, it’s unlikely to be the thing of which we first thought. Jeux sans frontières Online betting theoretically knows few borders when it comes to reaching out to customers. The famous exceptions are the United States and Japan markets, where the governments are inclined respectively to lock you up or block you for trying to sell such services to their people. Paradoxically, given the trans-national nature of the Internet, the business end of online gambling tends to be clustered in a tiny number of places—mostly offshore tax havens. Offshore Ruritanian jurisdictions short of space for economic infrastructure or short of people have traditionally welcomed banks and other financial institutions to locate there with the offer of low tax rates. Many have been happy to extend that low tax offer to online betting companies. The Philippines is an exception, rather than the rule in the short history of online gambling licensing jurisdictions. The country is neither lacking in space nor in people, but it has traditionally lacked infrastructure and foreign investment. The idea, therefore, of issuing online companies with politically- sanctioned, internationally-recognised licenses to provide gambling services outside the Philippines looks like a good money earning opportunity for the nation. Some operators are nowbeginning toquestion the value of having such a licence fromthe Philippines because of the country’s widespread reputation for rackety government. Those seeking to serve online customers in Greater China might even reach the conclusion they would be better off getting an online licence from their second cousin for all the good a Philippines licence will do them in the eyes of the authorities in the People’s Republic of China, Taiwan, Macau and Hong Kong (where the latter jurisdiction actively and aggressively polices unauthorised online betting). If a relative isn’t willing to jot down the terms of an online ‘licence’on the back of an envelope, there’s an alternative. Online operators can approach another gaming-friendly government that’s less troubled by the stop-go party politics of the Philippines. Cambodia, which has recently displayed distinctly liberal and free market tendencies when it comes to the licensing of land-based gaming, has been mentioned as a possible alternative. The Philippines is due to hold presidential elections in May. The new chief executive could do well to address the concerns of the offshore online industry currently signed up to the country’s licensing system, before operators start voting with their feet.