Inside Asian Gaming

INSIDE ASIAN GAMING | May 2011 54 Briefs International Briefs The earthquake—centring on the Canterbury region of the South Island on 22nd February—closed about a quarter of Christchurch’s gaming machine bar venues (known as ‘pokie pubs’) and the 500-machine, 37-table Christchurch Casino, said the DIA. DIA’s Acting General Manager for Regulatory and Compliance Operations, Mike Hill, said gambling increased significantly in many Christchurch venues not affected by the earthquake. He added it reflected similar trends across the hospitality industry in Christchurch. Spending nationally on gambling usually drops during the southern hemisphere’s summer months, added the department. That pattern was maintained in 1Q 2011, with countrywide revenue of NZ205.1 million—5% down on the NZ$215.8 million revenue garnered in 4Q 2010. The country had 365 operators, 1,430 venues and 18,484 gaming machines as of 31st March. Record growth in Bally Technologies gaming ops in first three months 2011 Bally Technologies Inc grew its gaming operations revenues by 15% year-on-year in the three months to 31st March—to an all- time record US$80 million. The improvement was driven by placements of new premium games throughout the quarter and the performance of its lottery systems installed base, said the company. New gaming device sales decreased to 3,417 units as compared with 4,571 units in the equivalent quarter in 2010 due to fewer international units sold during the quarter and a continued sluggish North America replacement market. But the average selling price of new gaming devices increased by 11% to US$15,556 per unit from US$13,979 the year before, primarily as a result of product mix—including sales of Pro Series cabinets— said Bally. Research and development expenses increased to 12% of total revenues as compared with 11% last year. Operating margin increased to 20% as compared with 18% the year before. The company also reported that since the beginning of fiscal year 2011, it had purchased over twomillion of its shares for approximately US$76 million. Bally cited the move as evidence it is committed to creating long-term value for stockholders. The company announced diluted earnings per share from continuing operations of US$0.43 and US$1.31 on revenue of US$191 million and US$544 million for the three months and nine months ended March 31, 2011, respectively. “We are pleased with our operational and financial positioning for the future,”said RichardM. Haddrill, the company’s Chief Executive Officer. “While current industry conditions remain challenging, we have a number of opportunities, both domestic and international, that are attractive and exciting for the company. Additionally, the early acceptance of our new Pro Series cabinets has been excellent, and we continue to be pleased with the strength of our gaming operations business.” “While The Street is fixated on systems—which should return to growth in fiscal 2012 after multiple quarters of slippage, we believe game operations is a more relevant story for BYI,” said Union Gaming Moody’s upbeat on in-state legalisation of Internet poker in US Moody’s ratings service believes the recent United States federal government crackdown on Internet poker could open the door for individual US states to legalise the activity within their borders. Analysts for Moody’s Investors Service said in a report in late April there is still a chance online poker will be legalised nationally in the US, but it will take several years before the first wager is accepted. Online poker is estimated to be a US$4 billion to US$6 billion-a- year business. Moody’s said the casino industry views the activity as a way to grow its customer base by attracting younger gamblers rather than as a competitive threat. Moody’s suggested that Caesars Entertainment Corp., which operates the World Series of Poker, “would have the upper hand” because of the well-known brand. Caesars is already in partnership with British online gaming company 888 on World Series of Poker Internet gaming sites in the UK, Italy and France. With many states trying to close large budget deficits, tax revenues from legalised gambling may be too lucrative to ignore, according to Moody’s. The report comes in the wake of the US Department of Justice’s shutdown on 15th April of PokerStars, Full Tilt Poker and Absolute Poker. Federal prosecutors charged 11 individuals, including the websites’ founders, with fraud and money laundering. Nevada lawmakers are still considering Assembly Bill 258, which was backed by PokerStars. The bill was originally written to authorise Internet poker in the state. Since the indictments, the bill was watered down to say Internet poker can only be legalised in Nevada once the activity gains federal approval. Gaming spend rises in quake-hit Christchurch Gaming revenue rose in Christchurch during the first three months of 2011—the same quarter when a 6.3-magnitude earthquake hit New Zealand’s third city, destroying its central business district. Gambling expenditure in the city for the first three months of 2011 was NZ$19 million (US$15.4 million) said the country’s Department of Internal Affairs (DIA), which regulates the industry. That was NZ$600,000 more than 1Q 2010. Positive mood on state laws for Internet poker in US Christchurch’s historic Carlton Hotel, now demolished