Inside Asian Gaming

inside asian gaming November 2015 38 Business Not as Usual Blast from the Past IAG has been covering the Asian Gaming industry for over 10 years and our “Blast from the Past” columns take a fresh look at an article from the past with the benefit of hindsight. This month we take a fresh look at an interview we conducted back in October 2012 with Neptune Group’s CEO Mr Nicholas Niglio. The dramatic changes in Macau’s junket industry over recent months allow Niglio’s words to be seen in a new light — especially his comments regarding consolidation of the sector. His predictions for year-on-year growth in Macau’s GGR for 2012 and 2013 were both very close to the final result — but he’s probably glad we didn’t ask him the same question about 2014 and 2015! W hile so much has been written and studied about the massive investment in resort development that is transforming Macau from a Cantonese gambling enclave into a multifaceted leisure destination for all of China and beyond, so little is known publicly about the junket operators and VIP room promoters that drive the growth behind this largest andmost unique of the world’s casino markets. What we get instead—journalism, like Nature, abhorring a vacuum—generally is ill-informed or surmised, a lot of it simply imagined; and, not surprisingly, what we think we know about the junkets and their operations is almost always negative, which not only does them a disservice, it gets in the way of our understanding of this amazing evolutionary tale and of the vital role the junkets have played, and continue to play, in moving it forward. Fortunately, this is changing, and it’s changing because of companies like Neptune Group. Under CEO Nicholas J. Niglio, publicly traded Neptune, the largest junket player listed on the Hong Kong Stock Exchange (0070.HK) , has been in the forefront of a business model that is evolving side by side with Macau. It’s a diverse, financially sophisticated, highly transparent model through which Neptune invests in VIP room promoters in exchange for a share of the rolling chip turnover the rooms generate—a partnership model in which everyone benefits: the promoters, the casinos and Neptune. Mr Niglio’s long career was forged in the intensely competitive Atlantic City market, where he served in numerous executive roles, including vice president of casino operations and senior vice president, Eastern operations, at Caesars World and as an executive vice president at the Trump casinos, where he oversaw domestic and international marketing. Under his leadership, Neptune has grown profits more than 300% in the last three years to HK$200 million in 2011. And the company continues to expand, both through its ties to privately held Neptune Macau, which directly promotes some 220 VIP tables, and through its own profit-sharing agreements. The Group recently concluded memoranda of understanding that will add 64 tables at Grand Lisboa, Wynn Macau and MGM Grand to its existing investments in rooms at StarWorld, The Venetian and Sands Macao. These agreements will more than double its portfolio of tables and triple the total rolling chip turnover in which it shares to about HK$45 billion a month. Mr Niglio recently spoke with Inside Asian Gaming about these moves and shared his thoughts on Neptune’s plans going forward and the state of the VIP market in Macau.