Casino Journal February 2012

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ALL GAMING

ALL THE WORLD

CASINOJOURNAL.COM CASINOJOURNA

FEBRUARY 2012

Are Las Vegas resorts the next big thing for the SUNSHINE STATE?

INSIDE: RUMBLE IN THE JUNGLE Southeast Asian nations vie for integrated casino resort development

GROWING WITH THE FLOW Electronic table games evolve with consumer acceptance

DEFENSIVE LINES Latest products from security and surveillance vendors 1

CASINO JOURNAL • MAY 2009 • CASINOJOURNAL.COM

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Contents February 2012

» www.casinojournal.com 18

COVER STORY

18 Resorting to Growth The desire for integrated casino resort development is strong within certain segments of Florida’s business and political community. This support may be enough to pass enabling legislation—but exactly when and for what types of gaming properties remains very much up in the air. By Paul Doocey

24 FE ATURES

COLUMNS

FOCUS ON: ASIA 24 Run to the Jungle

MARKETING 14 Underappreciated Casino Marketing Tools

Spurred on by the success of Singapore’s casino model, a number of Asian nations are vying to become the next port of call for massive, multi-license and multi-phase gaming resort development. Among the leaders of this race are the Southeast Asian nations the formerly comprised Indochina.

GAMES & TECHNOLOGY 30 Power Play By John Grochowski Once thought of as a novelty device, electronic table games are now taking up bigger swaths of the casino floor at properties that seek traditional table game excitement at lower cost. Manufacturers are responding with nextgeneration products that are both more attractive to the consumer and easier to use and maintain.

Dennis Conrad

SECURITY 16 A View from the Surveillance Integrator Side Laurie Jackson

THE BACK PAGE 38 Putting Asia First Charles Anderer

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DEPARTMENTS 04

Editor’s Letter

12

08

In the News

34

Trade Shows Product Focus

— Security

36

On the Move

37

Ad Index

CASINOJOURNAL.COM • FEBRUARY 2012 • CASINO JOURNAL

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EDITOR’S LETTER FEBRUARY 2012 • VOL. 25, NO. 2 • CASINOJOURNAL.COM

Right direction I don’t think I’m giving away any trade secrets when I write that the Connecticut casinos are at something of a crossroads. Like Las Vegas and Atlantic City before it, the tribal casinos that reside in Connecticut are having their feeder markets potentially hijacked by emerging gaming in neighboring jurisdictions—in this instance, by Massachusetts, which recently approved legislation establishing destination-style casino resorts, and by New York, where Gov. Cuomo is pushing to create a commercial casino industry. By some Paul Doocey counts, the Connecticut casinos (Mohegan Sun and Foxwoods) derived $613 million in gaming spend from Massachusetts alone in 2010. Losing a large chunk of this trade would likely be catastrophic for the Connecticut properties, which are just now emerging from financial difficulties brought on by the recession and the tightening of the lending marketplace. In many ways, what Connecticut is about to go though is analogous to the situations faced by Las Vegas in the 1990s with the emergence of tribal gaming in California and by Atlantic City in the 2000s when gaming came to Pennsylvania. Las Vegas came out of this challenge stronger than ever, thanks to a firm casino industry/government connection, some inspired marketing and, ultimately, the creation of the megaresort model to keep people interested and coming back. New Jersey, however, did not fare as well for a whole host of reasons—a less than cordial relationship between the various casino operators and state and local officials, the inability to create any kind of cohesive marketing campaign, the lack of desire to re-invest into existing properties, a general lack of urgency… the list goes on and on. Atlantic City is still paying for the inaction and these missteps—PricewaterhouseCoopers recently released a report predicting Atlantic City gaming revenues were likely to decline through 2015, and would bottom out at $2.8 billion annually, an astounding 46 percent decline from market’s high point, which was the $5.2 billion it earned in 2006. The good news is that it appears the gaming industry and local/state governments are starting to work in tandem to revive the market through a combination of liberalized regulation and new construction. If these are the two paths Connecticut tribal casinos can go down, I’m assuming they would rather head in the direction of Las Vegas than Atlantic City. On a positive note, as tribal enterprises, both Foxwoods and Mohegan Sun have the advantage of being nimble, meaning they can react quickly to market changes without having to wait for group consensus or state/local government buy-in. On the other hand, being tribal enterprises, it will be interesting to see how much economic and legislative relief/support the state of Connecticut will supply (one would think quite a bit if for no other reason than to protect its tax revenue from tribal slots) and whether Foxwoods and Mohegan Sun can make decisions in tandem that benefit the market as a whole, which may not be as easy as it appears since they have been primary competitors for such a long period of time. So far, recent news out of Connecticut appears positive, at least when it comes to the tribes and the government working together for the common gaming good. Gov. Dannel P. Malloy recently told The Day newspaper he wants to “play offensively” in regards to gaming expansion in neighboring jurisdictions, and has made Lt. Gov. Nancy Wyman the point person to work with the Mashantucket Pequot and Mohegan tribes to create a unified approach going forward. “How do we protect that investment - that’s what I’m working on,” Gov. Malloy told The Day. “We have an industry to protect now.” Here’s hoping that all stakeholders in Connecticut gaming stick to this proactive approach in the days and weeks to come. Years from now when I look at Connecticut casinos, I hope to see a strong and vibrant industry.

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CASINO JOURNAL • FEBRUARY 2012 • CASINOJOURNAL.COM

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CASINO JOURNAL (ISSN 1535-2110) is published 12 times annually, monthly, by BNP Media II, L.L.C., 2401 W. Big Beaver Rd., Suite 700, Troy, MI 48084-3333. Telephone: (248) 362-3700, Fax: (248) 362-0317. No charge for subscriptions to qualified individuals. Annual rate for subscriptions to nonqualified individuals in the U.S.A.: $178.00 USD. Annual rate for subscriptions to nonqualified individuals in Canada: $216.00 USD (includes GST & postage); all other countries: $228.00 (int’l mail) payable in U.S. funds. Printed in the U.S.A. Copyright 2012, by BNP Media II, L.L.C. All rights reserved. The contents of this publication may not be reproduced in whole or in part without the consent of the publisher. The publisher is not responsible for product claims and representations. Periodicals Postage Paid at Troy, MI and at additional mailing offices. POSTMASTER: Send address changes to: CASINO JOURNAL, P.O. Box 1080, Skokie, IL 60076. Canada Post: Publications Mail Agreement #40612608. GST account: 131263923. Send returns (Canada) to Pitney Bowes, P.O.Box 25542, London, ON, N6C 6B2. Change of address: Send old address label along with new address to CASINO JOURNAL, P.O. Box 1080, Skokie, IL 60076. For single copies or back issues: contact Ann Kalb at (248)244-6499 or fax: (248) 244-2925 or [email protected].

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» O N LI N E

Contents

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Here are some of the exclusive articles and services featured in this month’s Casino Journal Online at www.casinojournal.com FE ATURED AR TICLES

Place Holders Casino architects and designers are reconsidering casino interior and exterior space, coming up with concepts that are both pleasing to the eye and more likely to attract and keep the interest of today’s discerning and easily distracted consumer.

Board Gains The gaming companies that performed well over the financial downturn and are best positioned to deal with ongoing economic uncertainty are likely those with strong and wise corporate governance. HVS’s annual study of the industry’s best board rooms determines the companies that have excelled in leadership, and will likely remain so over the coming year.

GAMING INDUSTRY NEWS Want to catch up on the latest happenings from all the segments of the global gaming industry? Go to Casino Journal Online to view the week’s top gaming headlines as determined by the editors of Casino Journal. For more informat ion,

ONLINE ARCHIVES Missed a recent issue of Casino Journal or want to revisit a previous article? Digital version of the magazine can be accessed by visiting www.casinojournal. com and clicking the “Digital Edition Archives” button.

EVENTS SPOTLIGHT visit wvisit www.floridagam

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eNEWSLETTERS Visit www.casinojournal.com and click on the eNewsletter button to sign up for our two newsletters:

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WEBINARS Empire City Casino—Empire City Casino, a $600 million per year facility in Yonkers, N.Y., is undergoing a $40 million, 66,000-squarefoot-expansion. Tim Rooney, general counsel, shares the details.


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CRITICAL

MASS Impact of Massachusetts casino legalization discussed

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In the News

N E W S , P E O P L E A N D E V E N T S O F T H E I N T E R N AT I O N A L G A M I N G I N D U S T R Y

SINGAPORE AIR TRAFFIC HITS RECORD ON ECONOMIC, CASINO STRENGTH Passenger traffic at Singapore’s Changi Airport rose 11.4 percent in December, capping a record-setting year for the facility, which has seen volumes rise on the strength of the Southeast Asian region and the addition of two casinos representing a total investment of $10 billion to the local economy. Growth has been strong at both facilities, with visitor volume at Resorts World Sentosa, the city-state’s largest integrated gambling resort, alone doubling in 2011 to between 18,000 and 20,000 people per day, according to published reports. “December 2011 was Changi Airport’s busiest month ever with 4.53 million passenger movements,” Changi Airport Group said, in a statement. For the whole of 2011, the airport handled 46.5 million passengers, up 10.7 percent from a year ago. Low-cost carriers accounted for one in four

Marina Bay Sands is now linked to Singapore’s mass transit system. passengers last year, up from one in five in 2010. Over half (53 percent) of visitors came from the five biggest markets; Indonesia, China, Malaysia, Australia and India. Changi Airport connects Singapore to 210 cities in 60 countries, serving more than 100 airlines. The airport handled 167,000 tons of cargo in December, an increase of 6.9 percent from 2010, and the highest figure in three years, and yet another indicator of regional strength. Meantime, transportation within the citystate was strengthened last month with the opening of a 2.4-kilometer extension of the 8

Casino Filipino Cebu was among the PAGCOR properties that posted strong 2011 results.

Island Hop PAGCOR posts 16.5 percent revenue gain in 2011 The Philippine Amusement and Gaming Corporation’s (PAGCOR) total revenues last year reached P36.65 billion, a P5.19 billion or 16.52 percent growth compared to its total income of P31.46 billion in 2010 (US$1 = P43.27), putting the government-run gaming agency on solid ground as it prepares for new competition from the private sector. PAGCOR Chairman and CEO Cristino Naguiat, Jr. noted that “2011 was truly a recordsetting year for PAGCOR. We were able to break our monthly income record six times during the year, and we posted the highest winnings record twice in PAGCOR’s own gaming operations.” The agency began to post record-breaking monthly earnings in May, and ended 2011, “on a high note when we earned a staggering P3.50 billion gross income last December. This is by far the highest revenue ever earned by PAGCOR for a single month in its history.” PAGCOR’s gaming win reached P25 billion in 2011, up by P3.13 billion from 2010. The company’s previous highest annual gaming income was P23.28 billion in 2008. The results in 2011 were highlighted by two monthly records from Casino Filipino’s own operations—P2.32 billion in November and P2.45 billion in December. The previous record was P2.24 billion posted in August 2009. Naguiat said PAGCOR’s results were attained through “a more aggressive campaign to improve Casino Filipino’s gaming operations. We also employed a more practical approach to spending for our marketing-related expenses. We are more efficient and cost-effective now in terms of doing our marketing programs, particularly those programs intended for our foreign players.” Growth also came via other gaming activities such as licensed private casinos, poker clubs, e-games, and commercial bingo. “Our earnings from these operations in 2011 reached P11 billion, which exceeded by P2 billion the total amount PAGCOR earned from them in 2010,” Naguiat said. Naguiat anticipates tougher times ahead for the state-owned gaming firm because of new competition from hotels and casinos at the Entertainment City Manila project. “Bloomberry’s Solaire and the SM Consortium’s Belle Grande are expected to open by 2013 at the Entertainment City Manila (ECM). That means we will be up against two more integrated resorts with a gaming component by next year.” Naguiat, however, expects the Entertainment City Manila to do more good than harm against PAGCOR as the project will bring “a million tourists” to the area benefitting all gaming operators and, as regulator, PAGCOR “expect to get substantial earnings in the form of regulatory fees.”


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In the News

In the News

Resorts World Sentosa visitation doubled in 2011. Circle Line, the islands fourth largest subway line, linking the Marina Bay Sands with its new Bayfront Station to the public transport network for the first time. John Postle, executive director of The Shoppes, the resort’s shopping mall, told

the Wall Street Journal Southeast Asia that the new station “allows our visitors to access Marina Bay Sands with ease from all parts of the island.” Aaron Fischer, a gaming analyst at Hong Kong-based brokerage house CLSA, said the Bayfront station will help increase MBS’s slice of Singapore’s gaming pie by making it easier for people to travel there, according to the Journal. “We understand the connectivity between the station and the (integrated resort) is quite impressive,” he said in emailed comments. He added, MBS “will have to manage the perception that too many locals are gambling at the casino.”

In a move that was designed to discourage excessive gambling by the local population, Singaporeans are obliged to pay a S$100 entry fee or an annual subscription of S$2,000 to enter Marina Bay Sands or Resorts World (S$1 = US$0.79). Local visitor volume has nonetheless exceeded expectations. Las Vegas Sands last year was reportedly told by local authorities to cap it at no more than 30 percent of total volume.

NY’S CUOMO SUBMITS CASINO GAMING AMENDMENT LANGUAGE Gov. Andrew Cuomo has submitted language to the New York State Legislature amending Article I of the Constitution that would make casinos the third form of legalized gaming in the state along with lotteries and horse racing.

Letter to the Editor In the November 2011 issue of Casino Journal, an article by Jose Luis Benavides and Carl Emerson Faris was published on the state of the Mexican gaming industry (“Heading South”). As the head of AIEJA, one of the two Mexican gaming associations, I would like to clarify some misconceptions and provide some additional perspectives on our industry. Since 2005, the market has been the most rapidly growing slot market in the world, with an estimated 115,000 slot machines in place today, which already makes Mexico the third largest slot market in the world (behind the U.S. and Australia). We estimate that this industry has generated more than 40,000 direct and 120,000 indirect jobs. Certainly, given such rapid growth, the regulatory framework, and its enforcement, has been far from perfect and uniform. However, the authors’ statement that Mexico “has not been so much a regulated gaming jurisdiction as it is an economic free for all” is highly misleading. According to the Mexican Interior Ministry (SEGOB-Secretaría de Gobernación), which regulates and supervises gaming, there are 378 casinos currently operating in Mexico, with 318 operating under federal permits, 53 under regulatory exemptions or final judicial resolutions and only seven operating under judicial injunctions (amparos), pending final review. While some casinos (around 30, according to published figures) may indeed operate illegally, a significant majority are fully legal— possessing effective federal permits or authorizations issued by SEGOB that the federal government or the judiciary consider valid. Moreover, the federal government has been active in strengthening its regulation of gaming since at least 2008. Notable examples include: • Smoking ban—A law was published in 2008 and was made a regulation in 2009. Both the law and the regulation were observed by casinos. • Enhanced monitoring of industry by the Federal Revenue Service (SAT)—Fourth Miscellaneous Resolution published in March 2010, which set the rules for the gaming tax (IEPS), the central monitoring system for all casinos, as well as compliance with certain technical standards for gaming devices (software and hardware) similar to international GLI standards (NMX standards).

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• In 2008, the government raised gaming taxes from 2 percent to 20 percent through instituting a new gaming tax. In 2010, IEPS was raised to 30 percent. • Currently, the federal government (SEGOB, Secretaría de Economía, and SAT) is working with the official Mexican technical certification body, NYCE, on developing a new NOM (Official Mexican Standard) for gaming devices in Mexico, based on the established NMX technical specifications, which will govern all gaming equipment vendors in Mexico. As can be expected, after the fire-bombing of Casino Royale in Monterrey in August 2011, the federal and municipal authorities have gotten more active in their inspection and enforcement efforts, including closure of multiple illegal casinos, 25 as of today (concentrated in the northern states of Tamaulipas, Chihuahua, Nuevo Leon and Coahuila). In addition, there is now broad consensus in the industry and the government that a new gaming law and enhanced regulatory infrastructure is a requirement for the industry moving forward. We hope that the industry—Mexican gaming operators and foreign gaming equipment manufacturers—will work together with government leaders in the coming months and years to strengthen the industry and to continue to provide substantial tax revenues and new jobs for Mexico and its citizens. New laws and regulations would not only strengthen the existing locals gaming market but also provide a solid platform for the development of the potentially significant tourist/destination business in developed areas such as Cancun/Riviera Maya and Los Cabos, further increasing employment, foreign investment, and tax revenues.

MIGUEL ANGEL OCHOA President, AIEJA www.aieja.com.mx

In the News

N.Y. Gov. Cuomo seeks commercial casino legalization. The language, a simple eight-word insertion, “and except casino gambling regulated by the state,” exempting such activity from state prohibitions, caught some observers by surprise as it was devoid of any detail such as where state-regulated casinos may or may not be located. Some supporters of expanded gaming think such detail will be essential for public support. Any changes in the state’s constitution must be approved by a popular vote after passing successive sessions in the legislature, meaning the soonest the amendment could become law is after the 2013 elections. “It would be my preference to specify all the locations where the casinos could go in the state,” State Sen. John Bonacic, from Orange County in the Catskills region, told the Buffalo News. “Voters need to know where [casinos] are going, and how it affects their particular region, and the people that are going to invest and market the referendum in 2013 have to know the end game. For all those reasons, it is my wish and hope that we specify all the regions in 2012.”

TEA PARTY SUPPORTS FLORIDA CASINO BILL A bill that would create three new destination resorts in South Florida has garnered the formal support of the state’s conservative Tea Party movement. Everett Wilkinson, chairman of the South Florida Tea Party and state coordinator for the Florida Tea Party, announced his support last month in the political blog Red County, stressing the measure’s potential for job creation and positive economic impacts. Wilkinson cited a meeting with Genting’s KT Lim and Colin Au, who he described as “free-market guys” who would be Tea Party supporters if they were U.S. citizens, at the unveiling of their resort last September. Genting rolled out, “an incredible, beautiful

resort, not an ugly cheap casino.” The resort, “would create an estimated 5,000 new jobs at a temporary facility, 25,000 jobs at the permanent facility, and 10,000 construction jobs…I started to think of it as a resort that had gambling versus a Las Vegas casino.” Wilkinson also signaled his intention to advocate aggressively for the bill through the coming political season. “I believe that any legislator that is opposed to building resort casinos which will create thousands of jobs in South Florida should be given the title of ‘Job Killing Czar,” he wrote. “The Tea Party will be watching this bill closely and hold legislators accountable in November.”

Digital Signage Expo (DSE), the world’s largest international tradeshow and conference dedicated exclusively to digital signage, interactive technology and digital out-of-home networks (DOOH), will present an all new immersive four-part Digital Signage Fundamentals Seminar Program designed specifically to prepare those investing for the firsttime to deal with initial planning and execution challenges. The Digital Signage Fundamentals Seminar Program, to be presented in Las Vegas March 7-8, 2012, is part of DSE’s eight-track Educational Conference and is designed specifically for those DOOH network operators of both revenue- and non-revenue generating systems, digital signage (DS) end-users, and systems integrators and installers who are relatively new to the industry. This educational track is intended to provide an introduction to the DS industry by promoting a better understanding of the seven elements that comprise a DS system. For more information, visit www. digitalsignageexpo.net.

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Trade Shows SHOWING THE ANSWERS Casino expansion among the topics to be tackled at the Florida Gaming Summit All eyes are on Florida right now as the state legislature debates the Destination Resort Act which, if passed, would clear the way for multi-billion-dollar integrated gaming resorts in the southern part of the state and slot machine expansion at established gaming facilities. While this legislation holds a promise of increased tourism and expanded tax revenue for Florida, it leaves serious questions about the impact on the existing gaming operators throughout the state and region. These and other topical issues will be covered at the seventh annual Florida Gaming Summit, which takes place February 27-28, 2012, at Seminole Hard Rock Hotel & Casino, Hollywood, Fla. The Summit is the ideal venue to learn of the latest gaming trends and developments and network with the hundreds of attending gaming executives, regulators, public officials,

GROWTH PLAN Southern Gaming Summit announces expanded conference program, new theme The 19th annual Southern Gaming Summit and its companion show Bingo World Conference & Expo to be held May 8-10 at the Mississippi Coast Coliseum and Convention Center, Biloxi, Miss., will offer attendees a significantly expanded conference program and a new theme: Work Smart. The Southern Gaming Summit portion of the conference program will feature 18 breakout sessions, up 50 percent from 12

Seminole Hard Rock Hotel & Casino will once again be home to the Florida Gaming Summit. investors, attorneys, analysts, architects and vendors from Florida and beyond. Session topics include: • Racinos, Casinos and Beyond: Florida’s

prior years, adding operations-oriented titles and topics such as “The Efficient Casino: 50 Ways to Meet Your Numbers,” project development, slot and table game math, as well as hotel yield management, to an established agenda of executivelevel conference topics. Bingo World will offer 10 breakout sessions, plus its popular customer service and Bingo U workshops. “Profitability in highly competitive markets is the key focal point for our audience of gaming operators, and the Work Smart theme is a direct response to that,” said Larry Gregory, executive director, Mississippi Casino Operators


Changing Competitive Landscape • Tribal Gaming: Legal and Regulatory Update • Florida’s Card Rooms: Is Poker Up to the Challenge? • Casino Design and Construction Trends • Florida Gaming by the Numbers: The Wall Street View Speakers participating in Florida Gaming Summit include: Donald H. Dissinger, AIA, RAIC, senior vice president, EwingCole; Alan B. Koslow, shareholder, Becker & Poliakoff; Robert R. McGhee, tribal council member, Poarch Band of Creek Indians; Austin Miller, president, Calder Casino and Race Course; Steve Norton, CEO, Norton Management LLC; Tim Ritvo, president and general manager, Gulfstream Park; Victor Rocha, owner and editor, Pechanga.net; Adam C. Rosenberg, managing director, Goldman, Sachs & Co.; Robert Sturges, chief executive officer, Nevada Gold; Joe Valandra, president, VAdvisors, LLC and many more. For more information on this event, visit www.floridagamingsummit.com.

Association, which co-produces the event with BNP Media, parent company of Casino Journal. “This year’s conference will also offer the high-level sessions that attendees have come to expect from Southern Gaming Summit, such as the Executive Management Roundtable, and top-level regulatory updates from the commercial and tribal sectors. All told, we think it adds up to great value for our attendees.” All Southern Gaming Summit & Bingo World conference attendees will have access to the full program, which includes 28 breakout sessions, two general session keynote speeches, and three, half-day educational workshops, including Bingo U, which will present three interactive, one-hour classrooms designed to improve management skills, understand player needs and retain and expand the customer base. The opening keynote on Wednesday, May 9, will be delivered by Keith Smith, chief executive officer, Boyd Gaming, which last fall closed on its acquisition of IP Biloxi Casino Resort & Spa and operates a total of five properties in Mississippi and Louisiana. Full details on every aspect of the show, including how to register, are available at www.sgsummit.com.

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Underappreciated casino marketing tools Casinos spend a lot of money on marketing. Other industries would kill to have the typical casino’s marketing budget.

Dennis Conrad is president and chief strategist of Raving Consulting Co., a full-service marketing company specializing in assisting gaming organizations. He can be reached at +1 775 329 7864; or by e-mail at dennis@ ravingconsulting.com.

Some might argue that casinos spend too much on marketing. After consulting with scores of casinos, I don’t know if that’s true, but I do believe there are areas where casinos tend to overspend, like in advertising and in offering free play. But I also believe there are numerous marketing tools and tactics that are underappreciated and underutilized by most casinos in North America. I’m not advocating you drop your entire strategic marketing plan and start using the following marketing suggestions willy-nilly. But I do think you will find real value if you cherry pick some of the following: • Senior executive events — this is not where the general manager shows up to shake a few hands at a casino special event, but is the entire focus of the VIP affair, like a GM’s Sweepstakes Drawing or Dinner with the GM.

• Tee shirt, coffee mug and other assorted tsotchke offerings — don’t ask me why cheap trinket giveaways drive business, but they do. Make the quantities limited, put your casino’s logo on them and make your customers do something simple that has revenue value to you. • Collectible offers — similar to the tsotchke giveaway above, these collectibles (commemorative coins, figurines, kitchen settings, etc.) are typically higher quality and have to be earned over time as part of a collectible set. Make your guests do a little more to earn them. They will. • The killer lobster buffet — whether on special nights or every night, the “all you can eat lobster buffet” will drive throngs of people to the casino, if the seafood is great and the cost is attention grabbing.

Pepsi, Budweiser, bottled water companies and others all have dollars for co-op marketing. If you can offer them a compelling reason to do so, they will spend it with you to drive your business and theirs. • Letters from frontline employees — this tactic involves personal notes from real employees (who the guests actually encounter) asking if they enjoyed their stay, thanking them for joining the players club, or reminding them that they have unredeemed points in their players club account. • Bring a friend — encourage existing customers to bring a friend on their next visit to the casino and giving them an incentive to do so (discounted entry into a tournament, point credit equal to points earned by the friend, free amenity, etc.).

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• Free sports contests — whether it’s a free contest to pick the weekly NFL games, the Kentucky Derby, NASCAR races or Academy Award winners, “free contests” will drive sports and affinity event enthusiasts through the doors. • Free play offers on new slot machines — I continue to believe that every good slot customer should be allowed a “free trial” on every new slot game that hits the casino floor. Isn’t that how Costco does it? • Continuous new table game trials — but only if there is a plan to market them and dealers are

motivated (and incentivized) to teach and promote them. • Tribute artists — you have to be careful to book high quality acts, but I know tribute artists to Michael Jackson, Fleetwood Mac, Bruce Springsteen, ABBA, Elvis and others will draw crowds to the casino. • Food service for customers wagering on the casino floor— forget the food and beverage director’s complaints, menu service at slots and tables will keep players in action and make for happier guests. Ask Barona Resort & Casino. • Co-op marketing with vendor partners — Pepsi, Budweiser, bottled water companies and others all have dollars for co-op marketing. If you can offer them a compelling reason to do so, they will spend it with you to drive your business and theirs. • Desirable first-day incentives for new players club members— don’t just give them $10 in free play for joining the club, give them incentives to reach increasingly valuable prizes based on how many points they earn on their first day of membership. • “Play this $20 on me” promotion — just as it sounds, this tactic involves casino managers and supervisors giving money to losing players at the slot machines. Just be sure to feed the money into the bill validator with genuine words of consolation and encouragement. • Free Thanksgiving pumpkin pies — Station Casinos does this every year. You’ll run out of pies and your slot revenues will be cooking. I guarantee it. Underappreciated casino marketing tactics — there are a ton of them. I encourage you to try a few.

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SECURITY

A view from the surveillance integrator side The changes to the economic climate over the past few years have impacted the construction industry as a whole, and the once-booming casino industry was not spared.

Laurie Jackson is vice president of sales for North American Video (NAV), a leading provider of advanced security systems integration. She is responsible for large systems gaming sales and integration projects across the U.S., Latin America, and Asia Pacific, while continuing to manage and grow the NAV sales team. A 10 year industry veteran, Jackson has worked on many of the largest gaming projects in the world, creating longstanding relationships with clients and manufacturers. Through her detailed interaction on large scale projects—from design to completion—she has developed a keen perspective of each client’s surveillance and security needs and how to meet them. She can be reached at www. navcctv.com.

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While there are still new casinos being built around the country, overall the scale of construction does not approach the megacasinos that have dominated the industry for the previous 20 years. Many of the new builds today are smaller casinos with different budgets and requirements of past projects. In addition, existing casinos are choosing to upgrade their current properties in lieu of building additional properties. The good news is, for integrators who take the right approach to this changed marketplace, there is still plenty of opportunity to be found.

Adapting To Smaller Systems The technology of IP networks makes new and upgraded systems especially attractive in a tight economy, making it possible to create any size system cost efficiently—and, for the integrator, profitably. Utilizing network infrastructure can eliminate the need to install an individual coaxial cable to each camera, and network technologies can be more easily scaled to the specific application. For instance, centralized computer storage takes the place of multiple DVRs, and software offers additional flexibility to manage video at an operator’s workstation. Another key point for integrators when dealing with smaller systems is that these customers may require a greater commitment of service resources. Smaller casinos are less likely to have in-house expertise and are therefore more dependent on their integrator. Servicing several smaller systems requires that the integrator devote more labor and resources than needed to service a single large system, and service level expectations may be higher as well. Upgrading installed systems requires that integrators


accommodate existing infrastructure and technology, which can be more labor-intensive than starting from scratch. To deal profitably with these demands (and the associated smaller budgets), integrators should identify additional efficiencies in their own operations that will enable them to provide customers the best possible value.

Better Internal Processes and Training Fortunately, standardization of key technology applications in a network environment can help create simpler, more robust systems that are easier to maintain, upgrade, expand and manage. Downward pricing pressures have already compelled integrators to develop strategies to maintain the same or improved levels of service while minimizing costs. These new levels of efficiency and attention to customer needs are positive byproducts of the changing environment.

personnel be familiar with new technologies and their optimal application. Integrator companies that continue to invest in training and professional development/ certification of employees will be best equipped to adapt to the changing technology mix.

Choosing An Integrator It’s a challenge for end-users to choose the right integrator. In the past, the sheer size and scope of certain projects tended to limit the choice of integrators to a select few. However, competition may increase in a time with fewer new major projects being shopped. If the size of the project doesn’t weed out all but the top integrators, it falls on the customer to be more careful than ever in making the choice. It is imperative that even customers with smaller jobs carefully evaluate the integrator’s skills before awarding jobs.

Integrator companies that continue to invest in training and professional development/ certification of employees will be best equipped to adapt to the changing technology mix. It is important to note that installation of IP-based systems requires that installers have better networking skills and be more knowledgeable about available products overall. New choices such as higher-resolution cameras provide better quality images, but require additional integrator knowledge and understanding. Issues of bandwidth and storage can arise in a system that uses megapixel video cameras, especially given the casino market’s requirements for real-time video and response. More than ever, it is critical that installers and other integrator

Competition is fierce in the changing integrator market for casino surveillance systems. With fewer large jobs, more companies are competing for business. Customers should emphasize service and experience above price when evaluating an integrator. New operational efficiencies and the advantages of networking are driving a changing environment in which the best, most experienced integrators can provide service, experience and a reasonable price. Opportunity is still strong for those who make the effort to change with the times.

COVER STORY

Resorting to growth BY PAUL DOOCEY

Integrated gaming resorts seem to be a winning proposition for the South Florida tourism market.

But getting them there is proving to be quite a challenge.

W

hen I first started to report on the gaming industry back in the early 1990s, every month or so I got a call from someone called Casino Stan. He was a Bronx native and long-time gaming aficionado—a veteran of the Las Vegas and Atlantic City resort scenes who decided to retire to bright and sunny Southern Florida.

Our talks always began with the weather; Stan would needle me about how tropical it was in Florida compared to the typically harsh weather I was living through in New York City. But eventually the conversation would turn to Stan’s favorite subject and latest raison d’être—his one-man attempt to bring fullscale casino gaming to his new home. For the most part, this consisted of him writing editorials to newspapers about the benefits of casinos and how South Florida— thanks to its weather, beaches and population—was ideally situated to make a killing in this industry. He would sign these letters Casino Stan, hope they would get published, and when they did he would give me a call to let me know what newspaper they were in and to grill me on recent gaming developments and if I had heard anything about resort casinos coming to Florida, which in those days I never did. I lost track of Casino Stan over the years, but if he is still alive I imagine he’s walking tall and talking proud since it appears his dream may come to fruition. Two bills are currently wending their way through the Florida Legislature, the gist of which would allow the development of three multi-billion-dollar Singapore-style integrated gaming resorts in MiamiDade or Broward counties. The gaming industry has 18


been positively abuzz since the Destination Resorts Act was unveiled late last year, and for good reason. An economic study conducted by Spectrum Gaming Group determined that the three 5,200-room resorts could generate between $4.5 billion and $6 billion a year in casino win, eventually surpassing the Las Vegas Strip as the top grossing gaming market in the United States. “You’ve certainly got the population,” Spectrum Managing Director Michael Pollock told the Florida Sun-Sentinel newspaper. “You’ve got the tourism infrastructure. You’ve got access to multiple markets, many of which are untapped by gaming, such as Latin America.” “South Florida is a huge market that is underserved with respect to resort gaming,” added Eugene Martin Christiansen, CEO and owner of Christiansen Capital Advisors, a New York City-based independent research and consulting firm. “It is also a market with yeararound good weather, especially compared to other gaming destinations on the Eastern Seaboard which are very seasonable. In this respect at least, South Florida resembles Las Vegas. If you are a very big gaming company like Wynn Resorts or Las Vegas Sands and you have the whole world to choose from, there are definite advantages to investing in Florida.”

COVER STORY

Indeed, Wynn, Las Vegas Sands and Genting Group immediately jumped on the South Florida integrated casino resort proposal, eyeing potential sites and announcing their attention to bid for one of the licenses if and when enabling measures passed through the state legislature. Since that time, however, momentum for the Destination Resorts Act has lessened as it goes through the sausage-making process of becoming law. Detractors—a long and eclectic list that includes parimutuel operators, tribal gaming entities, local business groups and family tourism giant Disney—and their political allies voiced concerns about various aspects of the casino resort bill. In an attempt to placate these concerns and create legislation palatable to all involved, a once simple and straightforward proposal has morphed into separate, lumbering House and Senate versions that may be impossible to put back into a single compromise bill—if the measures even get that far. “There’s been a political movement for the resorts bill and a gaming industry movement for the resorts bill and a lack of unified vision overall,” said Michael Soll, executive vice president of The Innovation Group, a provider of consulting and management services for the gaming industry. “It’s been a challenge to get everyone on the same page.” The problem: time is quickly running out for agreement and compromise. Florida’s legislative session for new bills is brief and ends this month. The Destination Resorts Act has a long way to go before it’s assured of both House and Senate passage, and some are beginning to doubt it will make it this year. “If you had asked me a couple of months ago, I would have said there was a greater than 50 percent chance of the casino resort measure passing,” said Suzanne Leckert, director of gaming, feasibility and land use for TMG Consulting, a New Orleans-based firm that provides market assessments and studies for the gaming industry. “Now I’d say it has less than a 50 percent chance. It doesn’t look like it will make it this go-around. Maybe now they’ll work on all the negotiations needed to make it pass in another year or so.”

GENTING CATALYST This measured observation is a far cry from the general euphoria that greeted the Destination Resorts Act when it was introduced last October. Sponsored by Sen. Ellyn Bogdanoff (R-Fort Lauderdale) and Rep. Erik Fresen (R-Miami), HB 487/SB 710 20

called for the licensing of three “destination casino” resorts that would require a $2 billion investment commitment from each prospective license holder and would have a 10 percent tax on slot revenue. The resorts could only be established in jurisdictions that had previously approved slots and pari-mutuel facilities, essentially paring potential locations to Miami-Dade and Broward Counties and circumventing the need for local referendums to approve the sites for gaming. As a carrot to conservative politicians likely to look askance at gaming expansion, the Destination Resorts Act also called for the creation of a state gaming

Hence the reason for the size and scope of the proposed resorts, according to Bogdanoff. “We have to focus on the type of resort that brings in the trade shows and the conventions and the national tours,” she told the Sun-Sentinel. “I’m not just looking for another casino.” Another motive for the legislation may have been to placate Genting Group, which had just made a major land purchase in Miami, buying the shuttered Miami Herald building and the 140 acres of waterfront land surrounding it for $236 million in June. At that time, the company announced it would invest $3 billion in a 20-year build-out at the site to create Resorts World

The pari-mutuel industry immediately assailed the [Destination Resorts Act] measure, primarily decrying the fact that the proposed resorts would be taxed at 10 percent of machine win, while they were yoked with a 35 percent slot tax rate. commission and a new Department of Gaming Control to regulate all gambling in Florida. Surprisingly, the Sunshine State is the fourth largest gaming jurisdiction in the U.S., home to tribal casinos, racetrack slots, video poker outlets, quasi-legal internet gaming parlors and a lottery, all operating without a oversight from a unified statewide authority. “This is the opportunity to actually control and harness it for the first time,” Bogdanoff told National Public Radio shortly after the Destination Resort Act was unveiled. “We have a proliferation of gaming in this state, and I don’t even know that the public understands just how much it’s growing. It’s growing tremendously— and it’s growing in the wrong direction.” Ostensibly, the goals of the bill are to bring in outside investment to the state, create jobs, generate tax revenue and boost lagging tourism and convention trade.


Miami, a multi-purpose complex that will include a luxury hotel, convention and entertainment centers, restaurants, retail, commercial and residential real estate, and, potentially, a casino. Mike Speller, the New York-based president of Genting’s Resorts World U.S. subsidiary, let it be known that a green light on a commercial casino for the site would accelerate the pace of development and cement the company’s monetary commitment. Whatever the reasons for its creation, the gaming industry responded to the Destination Resort Act and potential South Florida integrated casinos in a big way. Resorts World Miami upped the ante, unveiling plans to build a sprawling $3.8 billion complex with six hotel towers totaling 5,200 rooms, 50 restaurants and two casinos Genting was not alone in declaring its intentions for the South Florida

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COVER STORY

marketplace. Las Vegas Sands, Wynn Resorts, Caesars Entertainment and MGM Resorts International expressed interest in competing for one of the $2 billion destination resort licenses, and began eyeing potential sites and partnerships in and around Miami. “A lot of these same players have expressed interest in the Massachusetts market for pretty much the same reasons,” Christiansen said. “These are large markets and an investment should generate a reasonable return.” As interest in the destination resort licenses grew, so too did the potential economic impact of the projects. Officials from Genting, probably sighting a best case scenario, told a senate committee that the resort casinos would generate millions of dollars in tax revenue, create 100,000 jobs (although Las Vegas Sands predicts a much more modest 12,000 jobs per resort) and subsidize 12 new flights from Asia to Miami each week. The Spectrum Gaming study reported Resorts World Miami alone could rake in $1.4 billion to $2 billion in yearly revenue. Other analyst firms found this figure low, believing the completed resorts could bring in between $2 billion and $3 billion each year.

percent wanted commercial casinos and that 61 percent believed commercial casinos could improve the state’s economy.

POWERFUL OPPOSITION

Rendering of Resorts World Miami

Revenues aside, the job creation numbers quickly caught the attention of labor groups, considering South Florida is currently saddled with a 10 percent unemployment rate. Associated Industries of Florida, Associated Builders and Contractors, the Florida Concrete Products Association, the Florida United Business Association, the Florida Transportation Association, the Latin Builders Association and other labor entities have come out in support of the Destination Resorts Act. The general public was also starting to take a shine to the resorts legislation. A January poll of 1,412 registered voters by Quinnipiac University found that 48

Despite these projected benefits and public support, the Destination Resorts Act was far from universally acclaimed. The parimutuel industry immediately assailed the measure, primarily decrying the fact that the proposed resorts would be taxed at 10 percent of machine win, while they were yoked with a 35 percent slot tax rate. Racino operators began pushing for parity—either by lowering their tax rate or increasing the resort rate so all operate on a level playing field. “There is enough business to go around,” said Izzy Havenick, vice president of Miami-based Magic City Casino, which is located at the Flagler Dog Track. “People are going to go where they want to go, but if everyone is competing on the same level, there is enough for everybody. So we’re not going to let go of parity; parity of tax rate, product or regulation. We think it’s only fair that if you’re in the casino business, you’re treated the same and that’s

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PRODUCERS

In our models, we are seeing there is really enough demand out there that everyone can do well. Florida is such a destination for international tourist and we are seeing that tourist numbers are going up from emerging markets such a South America. I think there is room for everyone. —Suzanne Leckert, TMG Consulting

that. That for us is the number one point.” Leckert agrees. “I think parity will help the track facilities,” she said. “In our models, we are seeing there is really enough demand out there that everyone can do well. Florida is such a destination for international tourist and we are seeing that tourist numbers are going up from emerging markets such a South America. I think there is room for everyone.” Equally upset with the resort destination bill was the Seminole Tribe of Florida, operators of seven casinos in the state. The tribe currently pays the state $250 million

a year for the exclusive right to operate casinos, and was less than thrilled to hear the new integrated resorts would house Las Vegas-style gaming operations. “From the beginning, when we first heard about the current legislation to significantly expand gaming in Florida, the Seminole Tribe of Florida has stood squarely in support of the gaming compact the tribe signed with the state of Florida in 2010,” wrote Seminole Tribe of Florida Council Chairman James E. Billie and Board President Tony Sanchez Jr. in a prepared statement. “We have called

them

upon Governor Rick Scott, his Cabinet and the Florida Legislature to protect this agreement, signed in good faith, against all attacks against its integrity.” Opposition to the gaming resort measure also came from outside the gaming industry, most notably from Walt Disney World, the Florida Chamber of Commerce and other organizations concerned about the scale of the proposed commercial gaming enterprises and the potential harm they could have on the state’s image as a family vacation getaway. Continued on page 37

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STRIP STAKE Hardly a week goes by without someone stepping forward to claim they’re building an IR in Vietnam. Only one company really is, and that’s Asian Coast Development Ltd (ACDL) at the Ho Tram Strip, which is currently under construction and scheduled to open its $430 million first phase of what will eventually be a $4.2 billion multibranded project in the first half of 2013. The Ho Tram Strip is prime beachfront property located in South Vietnam around 120 kilometers north of Ho Chi Minh City and its population of 10 million—though as the law currently stands Vietnamese nationals will not be allowed to use the casino facilities unless they hold foreign passports. Still, Ho Chi Minh City and Vietnam attract upwards of five million visitors a year, and the promise of this location attracted the backing, brandpower and marketing support of a major international operator—MGM Resorts International, which will open MGM Grand Ho Tram as part of phase one development. ACDL also has other backers. A syndicate of Vietnamese banks is providing the debt. The equity is coming from New York based Harbinger Capital Partners; the U.S. regional casino operator Pinnacle Entertainment which in May took a 26 percent stake for $95 million; and from a recent private offering that raised $237.4 million according to a September 2011 filing with the U.S. Securities and Exchange

The first phase of the Ho Tram Stip development will feature an MGM Resorts International integrated gaming complex.

Commission. Subscribers listed for the private offering included Lloyd Nathan, CEO of ACDL (and former president of Global Gaming Development for MGM MIRAGE), and Anthony Sanfilippo, a director of ACDL and the chairman and CEO of Pinnacle. The aforementioned MGM Grand Ho Tram will be the first of five planned resorts to be developed along the coastal strip by ACDL and its partners. MGM Grand Ho Tram will feature a 13,600-square-meter casino with 90 live table games and 500 electronic games, as well as a five-star hotel with 541 rooms. The tax rate for the property is uncertain, but reports believe it will be approximately 30 percent for mass-market play and 14 percent for the VIP trade. The second phase of MGM Grand Ho Tram will see a further 500 electronic games added to the casino offer, another 559 hotel rooms and villas, plus a full range

of retail, dining and conference facilities. There will also be an 18-hole golf course designed by champion golfer Greg Norman. Under the terms of its agreement with ACDL, Pinnacle will enter into a management agreement through 2058 (with the potential for a 20-year extension) for the second integrated resort of the Ho Tram Strip. This IR will be similar in scope to the one currently being developed by MGM Resorts. “Our investment in ACDL and longterm management agreement for the second integrated resort bring meaningful strategic benefits to Pinnacle, including further diversification and potentially very significant returns on invested capital,” said Anthony Sanfilippo, president and CEO of Pinnacle Entertainment, in a statement released when the deal was first announced this past summer. There is talk about two other consortia building two further IRs in Vietnam; one on the central coast near Da Nang, and another on the northern coast at Halong Bay. So far there’s been no action. So although there’s no clarity yet on whether the Vietnamese government is going to open up the market to domestic players, it does seem that the Ho Tram Strip will be the only IR project within the country for at least several years to come.

WORLD OF PROMISE

When completed, the Ho Tram Strip will include multiple casinos and a wide variety of resort and MICE amenities, all designed to attract tourist and business dollars.

As with Vietnam, Cambodia appears to be placing its IR strategy in a single, all-encompassing development. The only investment-grade gaming property currently in the Cambodian market is NagaWorld in the capital Phnom Penh. Its


25

F O C U S O N : ASIA

Seeking integration Here’s a rundown of other Asian nations fostering integrated casino expansion THE PHILIPPINES—Actually, the Philippines already has an integrated casino resort—Resorts World Manila, conveniently situated across the road from the capital’s international airport. Even better, one of the partners in this joint venture is an internationally-proven casino operator—Malaysia’s Genting Berhad via its Genting Hong Kong unit. Resorts World Manila is a $700 million, 50:50 joint venture between two listed companies—Genting Hong Kong (quoted on the Singapore market) and Philippines developer Alliance Global Group (listed on the Manila exchange). Genting Hong Kong—formerly known as Star Cruises—also operates casino cruise ships out of Hong Kong and other ports in the Asia Pacific region. Other potential Philippines IR opportunities are on the horizon. A joint venture IR—Belle Grande Manila Bay between local companies Leisure and Resorts World Corp and Belle Corp, and with a reported price tag of $750 million—is currently under construction in Manila. A third resort—possibly with investment from Aruze Corp, the gaming company founded by pachinko machine maker and Wynn Resorts Vice Chairman Kazuo Okada—has also been proposed for the Manila Bay area. The Philippines offers gaming tax rates (25 percent on the ‘grind’ or mass market and 15 percent on the VIP, plus 2 percent levied in both cases on restoration of cultural heritage) that are lower than Macau’s 39 percent across the board fees. The rates are still a little higher than Singapore’s applicable tax of 22 percent on the mass and 12 percent on the high roller segment (inclusive of gaming tax and goods & services tax). JAPAN—The August appointment of Japan’s sixth prime minister in five years is unlikely to derail plans for legalization of casinos in the country claims Tokyo-based consultancy Gaming Capital Management (GCM). Time will tell. On the plus side, Japan’s current economic difficulties— compounded by the natural and nuclear disasters in the northeast of the country in March—seem to have pumped up the normally flaccid political will of lawmakers. They and their advisors are now starting to put some administrative flesh on the bones of Japan’s

owner and operator—Hong Kong-listed NagaCorp—is also the only company to have been granted a casino license within a 200-kilometer radius of Phnom Penh. That exclusivity is due to last until 2065, but it’s not clear just how cast-iron that exclusivity deal will prove to be. Hun Sen, the incumbent prime minister of Cambodia who approved it, will be 113 years old by the time the agreement 26

draft Casino Bill. Among the details disclosed so far by a crossparty association of lawmakers and experts are: • At least one IR may be located in the Tohoku region—the northeast part of the main island of Honshu worst affected by the earthquake, tsunami and subsequent nuclear accident. • For the first few years of casino operations the government’s tax revenue from the industry will contribute to the earthquake recovery plan, although tax rates are still to be decided. • The costs of industry regulation will be borne by the casino operators. • An entry fee will be charged to pay for gambling dependence prevention; and for regional development measures. • Casino entry will be controlled via a system of identity checks. Policy on how to prevent fraudulent entry of barred persons or the entry of criminals using aliases is still to be developed. • The necessary amendments to Japan’s Criminal Code required for legalization of casino gambling will be the responsibility of the Ministry of Justice. TAIWAN—Taiwan’s Ministry of Transportation and Communications (MOTC)—which oversees the country’s Tourism Bureau—released its draft casino legislation last April. The good news for overseas operators and investors is that the draft bill for casino regulation envisages the casinos as being part of large-scale IRs built on the islands of Penghu, Matsu and Kinmen, with the winning bidders for the two licenses selected largely on the basis of their investment commitments and previous experience of developing successful gaming resorts. The successful bidders will also get a good run at the market. After the two permits are awarded, there will be a 10-year moratorium on the awarding of any more. And the license period will be 30 years. The notso good news is that the bidders will have to pay an upfront franchise fee of $97.8 million plus a license fee of $7 million million for every three years of operation. The operators are expected to face a gaming tax rate (excluding corporate tax and other fees) of 12 percent-15 percent. Residents of Penghu, Matsu and Kinmen must vote in favor of casino expansion before the bidding can proceed. Previous gaming referendums failed to win islander support.

expires. And Cambodia has a turbulent political history to put it mildly. But NagaCorp, founded by Malaysian businessman Chen Lip Keong, does have a seemingly robust business model as well as some friends in high places. Aside from long-term exclusivity, the principles are: low capital and labor costs relative to the region; and a market positioning that is carefully pitched. That equates to player


check-in limits of around $25,000—way below the stratospheric levels of creditfuelled VIP roll seen in Macau casinos’ high roller rooms (thereby avoiding the worst extremes of baccarat hold volatility). But it also means a quality of customer and probity of business practice well above the cheap-and-not-so cheerful gambling operations seen in some of Cambodia’s border casinos.

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F O C U S O N : ASIA

NagaWorld isn’t currently a ‘true’ integrated resort. It doesn’t yet have a shopping mall. Changes are coming soon, however. In June NagaCorp announced a deal with its founder, CEO and majority shareholder Dr Chen to expand its facilities. Within a three- to five-year period, he will develop two projects next to NagaWorld— NagaCity Walk, a two-level pedestrian mall linked to the existing site, plus a complex including hotel rooms, more shops, and more convention facilities. The combined development costs are expected to be $369 million. On completion, Naga will acquire the buildings from Dr Chen, and give him shares or convertible bonds to the capital value of the project. After conversion of the instrument issued to Dr Chen, minority shareholders in NagaCorp will be diluted by approximately 42 percent, though analysts point out that shareholder dilution should be quickly offset by increased earnings generated from the new project. Union Gaming said in a note to investors that the 7,300 square meters of extra gaming space allocated to NagaWorld should accommodate between 200 to 250 table games and 500 to 600 slots. Union Gaming estimated NagaWorld’s gaming revenues in 2011 from its existing facilities would be $217 million, less third-party slot operator fees. Citi Equities said in an August report that NagaCorp had a fixed monthly tax of $292,000 in 2010, growing by 12 percent per year through to 2013. Citi added this equated to an estimated effective tax rate of 5 percent for 2011. Another piece of positive news is that the number of international tourists to Cambodia is on the rise. In the first quarter of 2011, Cambodia’s Ministry of Tourism reported a 13.9 percent increase in international visitors year-on-year. Around 735,000 of the arrivals (94 percent of the total) were related to leisure travel.

BURMA TIGER It’s not long ago that Myanmar (formerly Burma) was considered a pariah country by Western governments. The United States, European Union and Canada imposed sanctions on the ruling military junta in 2007 following an army crackdown on anti-government protestors. The sanctions included a freeze on regime members’ bank accounts and restrictions on imports of gems and timber from Myanmar. Now, fewer than four years later, Myanmar 28

is being talked about as the next Asian tiger economy, with opportunities to build a significant mainstream casino industry. Myanmar already has casinos—eight on the border with Thailand and a handful on the border with China. But they are generally gambling halls with a few hotel rooms aimed at the nationals of Thailand and mainland China—where casino gambling is not legally permitted. Those establishments only survive due

German tour organizers have started taking customers there, as have the Japanese.” An important question from Western casino investors’ perspective is whether a future Myanmar government would pass enabling legislation to make casino gambling an officially-sanctioned industry. Most sophisticated casino investors seem to have a couple of reactions to the ‘Myanmar spring’ notion. The first is to point out that if indeed an economic and

Nations across Asia hope to emulate the success that Singapore has had with its integrated gaming facilities.

to the personal patronage of members of the Myanmar government—in return for a percentage of the action. It’s a big leap of the imagination to go from that to modern integrated casino resorts. Yet the idea may not be so far-fetched. It’s not impossible that a rejuvenated Myanmar, with a popularly-elected government and reintegrated into the family of nations, could become a holiday playground for the newly-rich of China and India. It shares land borders with both and has been a trading partner for the two great civilizations for centuries. India and China both avoided getting dragged in to the West’s sanctions gesture and have continued to trade with Myanmar during the diplomatic crisis that followed the 2007 crackdown. “The mainland Chinese are already in there in droves,” said Ben Lee of Macau-based iGamix Management and Consultancy, who recently guided some Asian investors on a trip to the country to investigate gaming investment opportunities in the main cities there. “But this year the number of European visitors has actually increased—in particular the number of Germans. A couple of the big


political thaw has set in, it’s still very early days. No one is likely to invest integrated resort-style amounts of cash into a casino project until it’s clearer where the country is heading, legally- and politically-speaking. The second is that the Western casino brands won’t be able to touch the place— at least officially—until Western sanctions are lifted. “The people who would be comfortable with Myanmar as it currently is are predominantly Asian entrepreneurs who don’t have to adhere to economic sanctions the way American or European investors have to,” Lee said. “The people I was working with aren’t looking at the border casinos. They’re looking at hotels in cities like Yangon and Mandalay with a view to purchasing, improving and refurbishing the infrastructure, and putting a gaming operation inside— provided the properties get the necessary permission from the authorities.” Information for this article was reprinted and excerpted with permission from Inside Asia Gaming magazine. Editing and additional reporting was provided by Paul Doocey.

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GAMES & TECHNOLOGY

Power PLAY Electronic table games become more than niche devices as popularity grows BY JOHN GROCHOWSKI

T

hrough one set of lenses, electronic table games are a way to bring the experience of roulette, blackjack, craps and other table favorites to slots-only casinos. They’re potential cost-cutters, saving on dealer salaries and training, eliminating human error in decisions and payouts, as well as cutting the cost of cards, dice, chips, lammers and other live table needs.

Above: Shuffle Master’s iTable game concepts on display at Global Gaming Expo. Right: Aruze’s Shot to Win Craps features a Bash Button that rolls the dice located under a central dome.

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But as the presence of electronic tables grows in North American and around the globe, companies including Aruze Gaming, Interblock and DigiDeal see something larger than just an all-slots niche. “How do you get people to have a new interest in a segment they may not have been interested in before?” Steve Walther, marketing vice president at Aruze Gaming America asked, pointing out that Aruze has had success with its Shoot to Win Craps at full-service casinos from the Las Vegas Strip to Macau. “That’s where these electronic table games, if they’re done right, like we think we’re doing, helps transition players into


new experiences. The player mix? “Probably 25 percent are table players who just want to get away and relax,” Walther said. “Another 25 percent are slot players who would never play a table game, and 50 percent are people who just like to play games. The feedback that I get from my customers is that it’s doing a fantastic job of teaching new people about the game of craps.” Part of that ties into attracting a generation of players comfortable with high-tech products, according to Tom O’Brien, vice president of sales at Interblock. “Many operators are now interested in electronic table games so that they can

provide an environment that meets the needs of today’s tech-savvy player who are incredibly comfortable in this type of computerized playing environment,” O’Brien said. But the natural jumping off point remains all-slots casinos, according to Dave Krise, DigiDeal’s senior vice president of product development.“Certainly the entry point for electronic tables is with the slot-only type jurisdictions,” he said, pointing out that DigiDeal’s product line includes hosted games as well as fully automated tables. “Harrah’s Cherokee in North Carolina has operated 40 hosted electronic table games for over six years. The tables are packed and very profitable for the operator. Parimutuels in Indiana, Arkansas and Florida can now offer players the table game experience. “The success in these markets is in part due to the effective hiring and training of new host /entertainers for the games,” Krise added. “In full-service casinos, one of the biggest road blocks is the acceptance by the existing dealers who feel electronic table games will eliminate

their jobs. In fact, our tables make their jobs easier, more enjoyable and more valuable while earning them greater tips through the increased hands per hour.”

DigiDeal’s Digital Table Systems combines interaction of a live host with the convenience of an electronic play format.

HOST OF AN ISSUE There is a division in the market among fully automated games and hosted games. DigiDeal goes the hosted route on its new DTS, or Digital Table System, platform. The system is Linux-based, and flexible enough to be configured as a fully hosted game with a dealer/cashier interacting with players and making payouts, semihosted or fully automated. Cards are dealt electronically using a random number generator for games including Digital 21,

Texas Hold’Em Bonus Poker and Dragon Baccarat, but wagers and payouts can be made with chips, keyed-on credits or TITO. The system also allows for automatically tracked side bets, “Electronic table games eliminate the cost of cards, peeking devices and shufflers while offering full backend connectivity and player tracking, plus increased hands per hour by three to four times,” Krise said “In slot-only jurisdictions, electronic table games allow operators to offer hosted tables with the social appeal and excitement of table games while attracting table game players to better compete with full-service casinos in nearby cities and


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GAMES & TECHNOLOGY

payouts, the dealer can be stationed between two wheels. INAG designates a “red” game and a “blue” game, and players can flip between red and blue layouts on their screens. That leads to a fast-moving game of 120 decisions an hour, while easing dealer training, eliminating payout mistakes and enhancing game security.

HAVING A BASH

Interblock’s line of Organic table games have found a home in Resorts World New York and other gaming facilities.

states. With our product player’s benefit from technology as well by getting the fairest game available using real table game math and methods of play, plus the social interaction of a live host and the ability to earn reward points.” Shuffle Master also offers hosted games it its iTable, but takes an opposite tack. Instead of electronic game play, the iTable uses a dealer and real cards in its blackjack game, and a real wheel in its new iTable Roulette, but bets are made on a touch screen and wagers are settled electronically. “In roulette, it’s not the betting that takes time; it’s the resolving of those bets,” said Dan Taylor, emerging media manager at Shuffle Master, who said iTable Roulette resolves wagers in just one second. “Not only that, but roulette is one of the hardest games to deal because the payouts are so complex. Even with a world-class dealer, reconciling the action on a full table can take 60 seconds or more.” INAG also shows just how fast dealerassisted games can move with electronic games including the new Turbo Card Roulette. A dealer spins a wheel with slots containing playing cards corresponding to roulette numbers and colors—33 black, for instance. Plastic cards with RFID chips are drawn and placed on a reader so the results can be transmitted to remote betting stations around the casino. In the above case, an image of a 33 black card would appear on the betting stations screens, and wagers would be settled automatically. With no responsibility for making 32

But at Aruze, fully automated, multi-station games have been an entry point even in full-service casinos, including strong play in Las Vegas at South Point, New YorkNew York and Bellagio, Walther said. “The game’s even playing in Macau right now, and craps is not typically a Chinese style game,” he added. “The novelty of it, the Bash Button of it, the lights, the sounds have attracted people even in the MGM, for example, in Macau.” The Bash Button is how players roll the dice that sit under a dome that is surrounded by game consoles. All standard craps wagers are available on a touch screen, and players take turn rolling the dice, just as at a live table. When one player sevens out, the next player becomes the shooter, hitting the Bash Button to launch the dice. Aruze’s new Lucky Big Wheel game has similar play characteristics, with players pulling a handle to spin the wheel. It can be configured for players to take turns as the spinner, or for the player with the largest bet to spin. “Depending upon how fast you pull the handle, there are different settings that will spin the wheel at different speeds,” Walther said. “A random number generator determines what the outcome will be, but the rest is all show, so to speak. There’s excitement as the wheel stops, the sounds go up, the lights blink and it’s really a nice presentation. It’s a much better payout schedule for players on our Lucky Big Wheel than it would be on the Big Six in the casino, so people can play longer and enjoy the Big Six experience.”

NATURAL ACCEPTANCE Interblock USA, a subsidiary of Elektroncek d.d. of Slovenia, is getting a chance to show just what electronic games can do with its


Organic Island installations at the Resorts World New York City casino at Aqueduct racetrack. An October installation brought 118 player stations to the ground floor, with 177 added on the upper level in December. Organic games can be fully automated with random number generators, electromechanical, or use a live dealer. In New York, game play is automated with a Baccarat Card Generator, Roulette Generator and dice shakers for craps and sic bo. Satellite stations throughout the gaming floor can watch gameplay on big screens or on their own terminals. Players can wager on any game at any terminal, with the ability to change from roulette to sic bo at the touch of the screen. “Our blackjack and baccarat games now have a new featured side bet called Lucky Aces and Lucky Nines,” O’Brien said. “This additional side bet will increase the return for the operator of an additional hold anywhere from 4 percent to 6 percent without changing original gameplay for blackjack or baccarat.” But while approaches to electronic games may differ, one thing game developers agree on is that acceptance is expanding. “I think the major trend is realism and interaction,” Walther said. “Part of the fun of a table game is feeling and playing the game, rolling the dice yourself or touching the cards in baccarat and we’re capturing those sensations into our electronic table games. The realism is important, but at the same time there’s the ability to be by yourself on a table playing a game rather than interacting with the dealer or a croupier. The more realistic you get the electronic table game and the more you put the feeling in the players hand, the better the experience is going to be and that segment will just grow.” “Electronic table games are here to stay,” Krise added. As player acceptance continues to grow and operators understand the benefits, the final look and feel of electronic tables will evolve.” John Grochowski is an Illinois-based freelance writer who specializes in gaming issues.

FROM THE ARCHIVE… For these related stories, please visit the Casino Journal Digital Issue Archive at www.casinojournal.com.

Product Focus: January 2012 Table Games Technology On The Right Track November 2011 The More, The Merrier October 2011

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33

Product Focus:

Security

MAXPRO VMS & VideoBloX » HONEYWELL

Honeywell, a Louisville, Ky.-based diversified technology company, has been selected to overhaul the video surveillance system at Casino Niagara, one of the top tourism attractions in Canada’s famed Niagara Falls. The project includes retrofitting the existing surveillance network with IP video technology that will allow casino officials to use a single command and control center to view and remotely manage the systems at both Casino Niagara and its nearby sister facility, Fallsview Casino. The project calls for Honeywell to provide its MAXPRO VMS (video management system) and VideoBloX video and audio matrix to oversee the casino, which houses 1,600 slot machines, 28 gaming tables, a 12-table poker room and several other attractions. Additionally, it will upgrade the casino’s VCR recording system to an enterprise-wide digital recorder network.

“By consolidating our operation with this new technology, we will be able to better utilize our staffing resources to maximize our operational efficiencies, and provide more proactive and resourceful solutions for the organization as a whole,” said Brian McDonough, director of surveillance for Casino Niagara and Fallsview Casino. In addition to MAXPRO VMS, Honeywell’s wide portfolio of entry level-to-enterprise IP offerings includes IP-based network video recorders, hybrid digital video recorders and a full line of cameras. These offerings are designed to help organizations simplify the transition from analog to IP video surveillance. For more information, visit www. honeywell.com.

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PROFILE: CityCenter hotels opt for Kaba’s RFID lock systems When you are setting the hotel industry standards for luxury and prestige, you cannot have guests complaining that their mag-stripe keycards have been demagnetized by their cell phones. For hotels with thousands of rooms, door lock reliability is particularly important. That is why CityCenter in Las Vegas took action to make ARIA at CityCenter one of the first Las Vegas resorts to install an RFID guest room locking system with benefits that go far beyond eliminating keycard complaints. The hotels in the luxury complex are achieving levels of elegance and technological sophistication in guest service with an electronic locks system from KABA, a Montreal, Canada-based supplier of integrated security solutions for building and information access points. “We singled out RFID technology for our new hotels because it eliminates the demagnetization problem we experienced at other properties,” said John Lowes, executive director of guest technology for MGM Resorts International. “We also recognized RFID’s virtually limitless potential to integrate with ‘smart room’ technologies. We implemented KABA Saflok Messenger lock system because KABA was able to put our hotel door locks system on a network that enables us to continually interact with rooms enhancing our guests’ experience.” The new RFID system at CityCenter’s ARIA Resort & Casino, Vdara Hotel and Spa and Mandarin Oriental, Las Vegas is part of an advanced guestroom technology project. All of the nearly 6,000 guest rooms and suites at CityCenter incorporate hotel door locks using RFID technology, which enables guests to unlock the door by flashing their key over a lock reader. Unlike mag-stripe keys, an RFID key cannot be demagnetized by cell phones or other articles in a guest’s pocket or purse and there is no need to move the key in and out of a slot. When a guest unlocks his or her room at a CityCenter location, the Saflok RFID system communicates with a wireless network of technologies within the room. CityCenter collaborated with Control4 Corporation to develop a level of personalized guest automation. When a guest first opens their door Saflok sends a message via a Zigbee mesh wireless network to the Control4 in-room controller, which activates a ‘welcome theme’ if it is the guest’s first time in the room. Lights come up; curtains automatically part to showcase the spectacular mountain and city views, and the TV displays controls for guests to personalize. For more information, visit www.kaba.com.


Product Focus:

Security

VEZ-400 camera

» BOSCH SECURITY SYSTEMS Bosch Security Systems has added the first moving camera to its Advantage Line. The VEZ-400 mini pantilt-zoom (PTZ) camera offers features more typically found in larger PTZ domes. Among these are a 26x optical zoom for an increased monitoring range and easier identification of objects and people. The camera provides 360 degrees of rotation, 600 TVL (television lines) high-resolution imaging, and a wide dynamic range to capture all the important details in scenes with both bright and dark areas. Day/night functionality delivers round-the-clock performance for retail shops, schools and small-to midsized corporate offices, among other applications. For more information, visit www. boschsecurity.us.

The DCS-3710 and DCS-3112 cameras » D-LINK

The DCS-3710 and DCS-3112 HD Day and Night Network Cameras are megapixel box cameras ideal for CCTV system integrators and IT professionals looking to upgrade their current surveillance solution, supporting analog out and video motion detection. Both cameras capture HD video at resolutions of up to 1280 x 720/1280 x 1024 with frame rates up to 30 fps, and allow for multiple independent video streams, including H.264, MPEG-4 and MJPEG video. Further, both cameras incorporate Sony Exmor CMOS sensors for enhanced low light performance, as well as a mechanical IR-cut filter for day and night functionality. For more information, visit www.dlink. com.

PROFILE: Dallmeier video surveillance system finds home in UK’s largest casino Dallmeier, a Germany-based producer of CCTV/IP solutions, in partnership with Grace James Security, have installed the largest CCTV system in any UK casino. The state-of-the-art Dallmeier SeMSy III system installed at Westfield Stratford City Casino is a highperformance video management system with high reliability, achieved through an elaborate redundancy concept. It offers a comprehensive range of functions, including the display of live images, various search options within the footage, the control of PTZ cameras and an easy archiving of relevant sequences. The cameras’ pictures are recorded on a DMX 1600 Smatrix. The Smatrix is a hybrid VideoIP appliance with integrated storage system. It is characterized by its space-saving design as well as by its low power consumption and low thermal output. It is ideally suited for applications requiring high-speed recording, expanded storage capacity and low power consumption while ensuring maximum security. Opened in December 2011 and located at Westfield Stratford City, in the heart of east London, the Aspers Westfield Stratford City Casino represents a new model of casino in a fun and relaxed atmosphere. The Casino currently has 50 gaming tables, 150 gaming machines, 100 electronic gaming terminals, a sports book as well as bars and restaurants with views over the 2012 Olympic park. For more information, visit www.dallmeier.com.

ARTPEC-4

» AXIS COMMUNICATIONS Axis Communications, a Chelmsford, Mass.-based provider of network video, has introduced the newest version of its in-camera chip: ARTPEC-4. The latest version of this system-on-chip, specifically designed for network video products, significantly enhances image quality and video analytics performance in Axis’ network cameras and video encoders. In this latest chip, Axis has added support for the H.264 Main Profile, which is a more efficient compression method. ARTPEC-4 supports

simultaneous H.264 and Motion JPEG streams, which means that video streams can be optimized individually based on the needs of the customer. All in all, this leads to better HDTV video, increased flexibility and lowered costs for network infrastructure and storage. For more information, visit www.axis.com.

Have your new products featured in PRODUCT FOCUS by sending information and descriptions with high-resolution photos/artwork to: Paul Doocey, Editor, Casino Journal, at [email protected].


35

On the Move

»

Who’s going where and doing what in the gaming industry

Mauro Franic

Sigmund Lee

Marcel Zangger

Cynthia Simms

Kay Day

Jody Miles

Joe Ellis

Adam Jowett

36

» CADILLAC JACK

» DALLMEIER

Cadillac Jack, a leading supplier of games and technology to the global gaming industry, has promoted Mauro Franic to chief operating officer and Sigmund Lee to chief technology officer. Franic and Lee continue to report to Gene Chayevsky, Cadillac Jack’s chairman and chief executive officer. As chief operating officer, Franic will continue to oversee global product management, business intelligence, marketing, revenue planning, and business development, while adding U.S. sales and operations, including production, supply chain management, and field service to his responsibilities. Prior to his role as COO, he served as vice president of product management and marketing where his expertise and strategy helped to strengthen Cadillac Jack’s profitability and market share. Franic joined Cadillac Jack in September 2006 as director of product management, during which time he was instrumental in the development and introduction of new product lines in the U.S. and Mexico. His experience includes more than seventeen years of product management and business development for Exxon Mobil in Argentina and for Radiant Systems in the U.S., Spain, and the Caribbean. In his new position as chief technology officer, Lee continues to lead Cadillac Jack’s global technology and product strategy, responsible for R&D, advanced gaming operations, engineering customer support and corporate IT. He joined Cadillac Jack in 2006 as vice president of engineering. Under his leadership, Cadillac Jack’s engineering teams dramatically improved product performance, elevating the player experience to new levels, and helped to build the company into a leading gaming provider in the U.S. and Mexico. Prior to Cadillac Jack, Lee helped streamline the technology direction of Bally Technologies.

Suveillance systems provider Dallmeier electronic USA has promoted Marcel Zangger to director of operations. In this position Zangger will be responsible for supporting Dallmeier’s customers and internal employees in the design, planning and deployment of the company’s IP Video Surveillance Systems. He will also be responsible for technical support, service contracts and overall logistics of the company’s operations. Zangger began working for Dallmeier in their European headquarter in Regensburg, Germany, in 2006. He transferred to Dallmeier USA in 2009 where he became a field sales manager. He will remain located in Florida and will service the company’s growing list of installations nationwide. Zangger started his career in the security industry in Switzerland in 1988 with one of Europe’s largest security integrators. In 1996 he joined Sensormatic where he held different positions until joining Dallmeier electronic in 2006.


» MARGARITAVILLE CASINO & RESTAURANT BILOXI As the project nears its anticipated Spring/Summer 2012 opening, Margaritaville Casino & Restaurant Biloxi has named key members to its management team. Cynthia Simms will serve as director of human resources. Simms has more than 10 years in the gaming industry, beginning at Harrah’s Casino, Joliet, Ill., and rising to regional vice president of human resources for Caesars Entertainment, Tunica, Miss. Simms was tapped to administer all human resources tasks associated with the $9 billion acquisition of Caesars Entertainment by Harrah’s Entertainment. Kay Day has been named director of marketing. Day has 20 years of marketing and management experience, specializing in the areas of VIP and special events. Traveling

around the world with NIKE, Inc. and Park Place Entertainment, Day has worked with some of the top names in sports and entertainment such as Michael Jordon, Roy Jones, Jr., and Pavarotti. Jody Miles has been named director of surveillance. He has 18 years experience in surveillance and security along the Mississippi Gulf Coast. During that time, he has worked for Isle of Capri, Hard Rock and IP casinos. Miles holds certifications in Table Games Protection, Internal Theft Control, Interview & Interrogation Techniques and other specialized areas. Joe Ellis will serve as director of facilities & environmental services. A native of Biloxi, Miss, Ellis began his career with Grand Casino in 1988. By 2001, he was a facilities shift manager for two hotel/casinos. Later, as casino/hotel facilities manager, he prepared the Grand Casino facilities in an effort to mitigate damage from Hurricane Katrina. He was an integral part of the team that reopened the Grand Biloxi in 2006. Adam Jowett, the newly named director of security/transportation, began his security career with the Trump Organization in New York City. As a security leader, he has held positions of investigator, supervisor, manager, and director in the Gulf Coast gaming/ entertainment industry. Most recently, he has been a member of the Palace Casino Resort’s security department during its renovation and reopening. Margaritaville Casino & Restaurant Biloxi is located on the eastern tip of Biloxi’s Back Bay and is scheduled to open Spring/Summer 2012. Over 1,000 people are projected to be employed. The resort will have a 26,000 square-foot casino, a signature Margaritaville restaurant, a buffet uniquely themed and a multi-purpose events center. The marina will have complete facilities for 12 vessels and tie-up space for an additional 30-40 boats.

COVER STORY

Continued from page 23

The resorts act was also something less than popular among many state politicians. Despite being introduced by two Republican legislators in an overwhelming Republican legislature, a number of representatives and senators came out against the measure, including the governor’s entire cabinet, according to some reports.

LEGISLATIVE UNCERTAINTY Pressure from these politicians and special interest groups forced changes to the formerly matching Senate and House version of the Destination Resorts Act. To make the senate version of this bill palatable to her colleagues and survive a committee vote, Bogdanoff was forced to drastically expand the scope of gaming in the measure. SB710 still calls for three $2 billion resorts, but allows them to be located anywhere in the state so long as they are approved by local referendum; allows pari-mutuel facilities to offer the same games as any destination casino located in their county, equalizes the tax rate at 10 percent for both the resorts and pari-mutuel facilities and allows any parimutuel facility in the state to have Las Vegas

Some wonder if there is a compromise to be had between two such divergent bills if and when it comes to presenting reconciled legislation to the Governor. And the measures still have to go through a number of committees—two in the Senate and three in the House—before they come up for a vote. For these reasons, some politicians are already talking about next year for any destination casino resort legislation. “We can’t do this in one year,” Sen. Maria Sachs, (D-Delray Beach) told the Sun Sentinel. “We need to go slow. We need to be careful. And we need to go in the best direction for Florida.” Sen. Charlie Dean, (R-Inverness), echoed these sentiments to Bloomberg Businessweek. “I think we’re reaching way too far; we’ve gone too fast and in too big a hurry.” Still, there is some urgency to get resort destination debated and approved while gaming companies are still interested and money and jobs remain on the table. “It isn’t every day in this economy you have companies stepping forward willing to spend billions,” said Sen. Miguel Diaz de la Portilla (R-Miami).

style slots if approved by local referendum. “This is a big lift and there’s a lot of stuff in here,” Bogdanoff told Bloomberg Businessweek. “Call it what you want. Call it an expansion. Call it a reform. Call it a redirection.” Meanwhile, the conservative nature of the Florida’s representatives has forced the House version of the Destination Resorts Act in the opposite direction. Like SB710, HB487 calls for three resorts, a uniform 10 percent machine tax rate for pari-mutuel facilities and resort casinos and countywide referendums before a casino is approved for a jurisdiction. Unlike the Senate version of the bill, HB487 still calls for the casinos to be located in Southern Florida, repeals 17 dormant pari-mutuel permits, prohibits the state from issuing future pari-mutuel permits, and bans Internet wagering cafes and maquinita parlors that were allowed to operate slot-like machines. The changes “scale back existing gaming and ensure there is no additional gaming,” Fresen told the Miami Herald. Even with these changes, Fresen acknowledged he may not have enough support to secure passage when the bill comes up for a floor vote.

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iGaming North America. . . . . . . . . . . . . . . . . 27

Spielo . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19

www.igamingnorthamerica.com

www.spielo.com

IGT-International Game Technology. . . . . . . 5 & 40

Watson Rounds Law Firm . . . . . . . . . . . . . . . 23

800-688-7890 • www.igt.com

702-636-4902 • www.watsonrounds.com


37

THE BACK PAGE

Putting Asia first Another year, another round of firsts for the Asian gaming market.

Charles Anderer is executive editor of BNP Media Gaming Group and also oversees content development, sales and marketing for the company’s trade shows and conferences, which include Bingo World, Southern Gaming Summit, Gaming Technology Summit and Casino Marketing. He can be contacted at [email protected].

Chinese New Year made for a very happy January, not just in the world gaming capital of Macau, but anywhere Chinese gamble, which is just about everywhere in the world. This year, people will stop talking about how Macau is six or seven times larger than Las Vegas, and they will note that it has become larger than the entire American commercial casino and racetrack gaming industry. That would be nothing more than a fun fact for most American operators, if, that is, the impacts of the Asian market were confined to Asia. They’re not. Asian gaming money is a factor in some of the biggest headlines in the American gaming industry at present. Resorts World doesn’t propose a $4 billion public/private partnership with the state of New York to build the largest convention center in the country without its holdings in Malaysia and Singapore. Nor do they compete with Asian gaming powerhouses Wynn Resorts and Las Vegas Sands without it either.

that; this is gaming legislation, we know to be patient), several of the top brands in the casino industry will have unparalleled global marketing platforms, being able to shuttle and/or cultivate high-end play to and from some of the nation’s most glamorous destinations—New York, Miami and Las Vegas. The way the world is going, staying on the sidelines in the global battle for highend Asian play could put one at a permanent competitive disadvantage. That’s why it was smart for a company like Pinnacle to get in the game by taking a stake in one of what will be a five-project development on the Ho Tram Strip outside of Ho Chi Minh City in Vietnam. Pinnacle made that move last May, and, by October, it had a new Asian gaming powerhouse competitor in its critical Lake Charles, La., market, when Dan Lee’s Creative Casinos entered into an operating agreement with MGM. Vietnamese players coming out of the number one feeder market Houston are an important part of

The way the world is going, staying on the sidelines in the global battle for high-end Asian play could put one at a permanent competitive disadvantage. The entire investment climate in the American gaming industry has benefitted from Macau and Singapore. Think of the alternative headlines post-2008 for Wynn, LVS and MGM Resorts if they hadn’t been able to pull enormous cash flows out of Asia. They wouldn’t have been the only companies suffering, certainly. The impacts go beyond perceptions, however, should the expected eventually happen; that is New York gets live table games and legalizes commercial casinos and Florida, perhaps not this year but maybe next (or the year after 38


the Lake Charles business. Being able to cross-market Lake Charles with a world class destination in Vietnam is a neat hook that only MGM would have been able to exploit had Pinnacle not made its earlier investment in Ho Tram developer Asian Coast Development Ltd. The good news is as new markets open up in Asia, new opportunities will arise for other gaming companies who have yet to diversify to do what Pinnacle did in Vietnam; strengthen its overall competitive position and being able to offer new forms of value to rated players. As our “Focus on Asia” story

(see pages 24-26) also illustrates, Myanmar (the former Burma), Cambodia, The Philippines, Japan and Taiwan each hold the potential for more growth in Asia. India and Korea have also been discussed as opening the door to new casinos. All of this takes time, and the immediate benefits might not seem compelling, but Asia is only getting wealthier, the American casino market is only getting more competitive, and highend players will be able to pick and choose to an unprecedented degree. The spillover effects will touch all operators, not just the big names. Asia is to the global gaming industry as the Internet is to the content business. “What’s your Asian strategy?” is fast becoming the equivalent of “What’s your Internet strategy?” In both cases, if you’re of a certain age, you never thought you’d need one. But here we are.

HELP FOR THE BLACKFEET Early last month wildfires destroyed 18,000 acres of Blackfeet Nation land in northwest Montana, exacting an enormous toll in terms of lost homes, structures, fencing, grazing lands, and feed, putting tribal members at risk of severe hunger at the worst possible time of the year as a result. Those familiar with tribal gaming know that a disproportionate amount of attention is paid to the small number of fortunate tribes that have been able to achieve economic success through gaming. The vast majority of tribes remain poor, and the Blackfeet, whose per capita Christmas payment was $75, is one of them. The National Indian Gaming Association has put out a call for help. The key Fire Relief contacts are Nora Kennedy at [email protected] and Mary Wilson at [email protected]. If even one of our readers reaches out, this space will have been well used.

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