Author: Admin VietNamGaming

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Kangwon Land opens; GKL remains closed

Posted on by Admin VietNamGaming

01-10-2020 |  

The two big state-run gambling firms, Kangwon Land and Grand Korea Leisure, have just taken divergent paths on the Covid-19 crisis.

Kangwon Land reopened its doors at the beginning of this week with a capacity limit on the casino floor of 1,200 people. It’s latest closure had lasted two months after being closed for a much longer period of five months in the spring and summer of 2020.

Meanwhile, Grand Korea Leisure announced that its Seoul casinos would remain closed until March 1, having originally suspended operations on November 24 of last year.

Kangwon Land also released its annual financial report for 2020.

Last year, Kangwon Land reported an operating loss of KRW431.6 billion (US$388 million) on a consolidated basis, which was its first annual loss since its founding.

Even the non-gaming division’s annual sales fell 58.3 percent to KRW74.2 billion.

The total number of visitors to Kangwon Land last year was 590,265, a 79.3 percent year-on-year decrease.

Source: AGBrief

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Universal eyes U.S. market debut for Philippine IR assets

Posted on by Admin VietNamGaming

01-10-2020 |  

Universal Entertainment is planning to test U.S. investor appetite for the Philippines by listing the holding company for its integrated resort business in Manila.

The Japan-listed company said it has taken on multiple advisors in both the U.S. and Japan to help prepare for a listing on either the Nasdaq or the New York Stock Exchange some time in fiscal 2021.

Universal, which operates Okada Manila through its Tiger Resort Leisure and Entertainment unit, said that business had been slow over the past year due to Covid-19-mandated restrictions. However, the group has used the time to cut fixed costs and reinforce marketing, which had been areas of concern.

The group says those measures will stay in place and it will be better placed in the future in terms of profit margins.

The announcement comes as Q4 gross gambling revenue figures for the Philippines showed a strong rebound from the prior quarter. Total industry GGR, which includes bingo and electronic games, as well as licensed casinos, saw a 46 percent rebound from the prior quarter to PHP27.79 billion ($577 million).

Casinos in Manila’s Entertainment City, where Okada Manila is based, reported GGR of PHP16.9 billion, up from PHP12.9 billion the prior quarter.

Although the borders are closed to international visitors, domestic tourism in the country has been strong. According to Dr Mario Hardy, CEO of the Pacific Asia Travel Association, spending by locals has risen significantly.

Unlike many jurisdictions around Asia, Filipinos are allowed to enter the country’s casinos, which enjoy strong support from the local mass market.

Despite the promising signs of recovery, there are issues facing the industry in the country, which could dampen investor interest.

China is making clear it will not tolerate overseas casinos seeking to target its nationals for gambling and the Philippines is believed to be firmly in those cross hairs. That’s likely to mean a reduction in Chinese travellers once the borders do open and especially when it comes to the VIP market.

Competition has also been rising, especially in Manila, where operators have warned margins are being eroded. The capital potentially faces the opening of a further three casinos in coming years.

Universal said it’s mulling a listing to help further expand its integrated resort segment, which has become a core business for the group. The debut will be achieved through a Special Purpose Acquisition Company.

Source: AGBrief

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MGM says US regional operations leading firm’s recovery

Posted on by Admin VietNamGaming

01-10-2020 |  

MGM Resorts announced its fourth quarter and full year financial results this morning, commenting that it was the firm’s operations in various regional markets in the United States that were recovering most quickly from the pandemic era.

Las Vegas continues to be one of the most difficult spots for recovery.

MGM China saw its net revenues decrease 58 percent compared to the prior year quarter to US$305 million. Adjusted Property EBITDAR decreased 78 percent to US$41 million.

For the full year 2020, MGM China net revenues decreased 77 percent year-on-year to US$657 million. The Adjusted Property EBITDAR loss was US$194 million in 2020.

For MGM Resorts as a whole, consolidated net revenues decreased 60 percent for the full year to US$5.2 billion. Net losses attributable to the company were US$1.0 billion in 2020, being buoyed by the US$1.5 billion gain related to the MGM Grand Las Vegas and Mandalay Bay real estate transaction.

Bill Hornbuckle, president and CEO of MGM Resorts, observed, “We are engaged on pandemic response while staying focused on the future. This includes maintaining a strong balance sheet to seize opportunities and continuing to drive BetMGM, our US sports betting and iGaming venture. BetMGM gained significant market share throughout 2020 while successfully launching in seven new states. We expect to be in twenty markets by the end of the year.”

In the earnings call that followed, Hornbuckle observed, “We remain diligent in navigating the near-term operating environment, aggressively managing our operating model and our cost structure… I am optimistic about the long-term recovery about all of our markets and believe that MGM is well positioned to gain share.”

Source: AGBrief

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Japan’s quiet explosion of online gambling

Posted on by Admin VietNamGaming

01-10-2020 |  

Largely ignored by the media and the policymakers, Japan has clearly entered an era of explosive growth for online and mobile gambling.

Like an iceberg that is only partially visible above the waterline, the only people who seem to be paying close attention are the businesses directly participating in the industry and the punters who are laying down their bets.

One recent signpost, however, was an announcement that Google Play app store will begin, effective March 1, offering real money gambling apps to be downloaded in Japan. This will make Japan the only Asian nation among the nineteen states globally where such apps will be offered.

Google’s support page specified four gambling categories that may be allowed in some jurisdictions: online casino games, lotteries, sports betting, and daily fantasy sports. In the case of Japan, it noted that real money gambling apps related to horse racing, motorboat racing, bicycle racing, and lotteries would be hosted.

Legal forms of online and mobile phone gambling are thus beginning to proliferate in Japan, and the industry is on a trajectory of sharp growth.

The shift toward online betting for horse racing, motorboat racing, bicycle racing has been underway for a number of years, with the proportion of revenues coming from this source gradually eclipsing the more traditional approach of heading out to tracks for the weekend and placing one’s bet.

Needless to say, the coronavirus pandemic accelerated this shift with stadiums often empty of spectators, but nevertheless with total sales commonly rising rather than falling.

The distribution of real money gambling apps on mobile devices will, in this sense, only entrench these practices even further.

Less easy to track are all of the international online casino sites now available in the Japanese language. They may be illegal, but the online advertisements are easy to find. The police would seem to have decided to turn a blind eye for the time being. Anecdotally, it’s not hard to assume that both the number of Japanese gamblers using these websites and the amount of money being wagered has also been on the rise.

These are social and business realities in this era, but not only does Japan not have any established policy framework to cope with them, there doesn’t even seem to be much of an appetite to discuss what might be the best approach.

This is hardly a surprise in an era where so much of Japanese politics is dysfunctional. This week the nation is debating about a failed former prime minister who apparently is too powerful to be fired even after embarrassing the nation before the world with overtly sexist comments, and the less noticed scandal of an incumbent prime minister who just declared in the national parliament that Covid-19 vaccine approval needs to be delayed because Japanese people are somehow biologically different from the rest of the human race, so new tests are necessary.

If that’s the level of politics, then it is no surprise that questions about whether or how to regulate online gambling have slipped through the cracks. One would hope, however, that at least in the universities and in the news media serious discussions could emerge.

Indeed, the passing of the IR legislation had seemed for a time to herald a more substantial debate in Japan about gambling addiction and the sorts of public policies and infrastructures that would be needed to address this long-ignored public scourge.

But even though the opportunities to gamble these days are not only at the pachinko parlor or at the race track, but increasingly right there in our own homes on our desktop, or even in our pockets on our mobile phones, the serious debate seems to have faded. Japan appears to be falling back into its old habit of ignoring things that are unsightly, uncomfortable, or which generate controversy.

One thing is clear. By the time that those three IRs open their doors later this decade, they will hardly make a difference for Japanese society as a whole. While watching those giant buildings go up at a few venues around the nation, the practice of gambling will have already silently slipped into most people’s pockets.

Source: AGBrief

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GKL reports nearly US$80 million loss for full year 2020

Posted on by Admin VietNamGaming

01-10-2020 |  

Grand Korea Leisure has turned in its unaudited financial reports for the full year 2020, headlined by the fact that it had a consolidated operating loss of KRW88.8 billion (US$79.9 million) in the year of the coronavirus, a sharp reversal from the state-run company’s fortunes before the pandemic.

Operating losses in the fourth quarter of last year came to KRW52.7 billion, capping three straight quarters of losses.

Overall casino sales for 2020 reached only KRW202.5 billion, which was down 63.3 percent year-on-year. The fourth quarter was the company’s worst, with only 17.4 billion in sales.

GKL explained in a filing that “sales and profits declined due to business closures and restrictions on entry to major customers due to the impact of the novel coronavirus infection.”

As a result of the latest and so far most intense Covid-19 wave in South Korea, GKL suspended operations at its two Seoul casinos on November 24, following suit with its Busan casino on December 1. The latest word is that these facilities may open at the beginning of next week.

Source: AGBrief

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Crown loses directors as post-Bergin shakeout begins

Posted on by Admin VietNamGaming

01-10-2020 |  

Heads have begun to roll at Crown Resorts, a day after a bombshell report found it was unsuitable to hold a Sydney license, with regulators warning the company will need to “blow itself up” to regain suitability.

Less than 24-hours after former Judge Patricia Bergin delivered her findings, Crown Resorts announced that directors Guy Jalland and Michael Johnston had stepped down. It also said that major shareholder, Consolidated Press Holdings, no longer has any representation on its board.

That’s after James Packer’s private company terminated its private consultancy accord with Poynton, who is a non-executive director at Crown.

Bergin warned that to convince regulators of its suitability to hold a license for its new $2.2 billion property at Barangaroo in Sydney, Crown would need to purge its board and face a regulatory deep dive into its accounts and management practices.

However, regulators went one step further. Speaking to the media, NSW Independent Liquor and Gaming Authority Chair Philip Crawford said that headlines reporting that Crown will need to “blow itself up to save itself” are not “far wide of the mark.”

“It needs a lot of change. A lot of the concern we have is around the links to organized crime. I think Bergin’s terminology was that Crown had been infiltrated by organized crime,” he said. “For any regulator or any government, they are pretty scary terms.”

Crown chairman Helen Coonan on Thursday released a statement welcoming the report and Crawford for his constructive comments.

“The Commissioner has made findings of serious conduct, culture and compliance issues that clearly do not accord with our values. I accept criticism is warranted and reiterate our unreserved apologies for these shortcomings.”

“While we have already taken a number of important steps to improve our governance, compliance, and culture, I recognize from the Commissioner’s report we have much more to do.“We do not underestimate the scale of the problem and appreciate there is a need for ‘root and branch’ change. This change has commenced.”

The regulator may begin talks with Coonan as early as Wednesday, Crawford said.

The report has cast doubt over the future of Australia’s biggest casino operator, with regulators in other states now probing its business.

Victorian Gaming Minister Melissa Horne said in December that she was fast-tracking the regular review of its suitability to hold a casino license and appointing a special commissioner to oversee the process.

“This review is needed given the evidence we’ve seen come out of the NSW inquiry,” she said. The review was to have taken place in 2023.

The Victorian Commission for Liquor and Gambling has come under criticism that it has been slow to react to allegations aired in an investigative report by The Age, The Sydney Morning Herald and 60 Minutes, with many of the accusations related to Crown’s flagship property in Melbourne.

Source: AGBrief

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Jeju may call for casinos to upgrade community contributions

Posted on by Admin VietNamGaming

01-10-2020 |  

The eight casinos on Jeju island, South Korea, may soon be required to enhance their contributions to the local community as concerns have risen about their possible negative impacts on the region.

On Monday, Representative Kim Hwang-Guk of the Jeju-do Council’s Culture, Tourism and Sports Committee announced that he is planning to propose a partial amendment to the ordinance on the management and supervision of the Jeju-do casino business that will require such contributions. His initiative has eight co-sponsors.

These requirements, as yet unspecified, will likely be integrated into the next Jeju-do Casino Business Comprehensive Plan, the second five-year plan for the industry which will begin to be compiled in the near future.

Kim also called for a more concrete evaluation system the next time a company applies to establish, expand, or relocate a casino in Jeju; a process which Lotte Tour Development recently underwent in relation to the Jeju Dream Tower.

Kim explained, “The impact assessment for the expansion and relocation of the casino in Jeju Dream Tower has been completed, the appropriate decision has been made, and the procedure for approval is now in progress; but there is still a lot of concern about the socio-cultural and environmental impact of the casino facility in the downtown area.”

He added, “I hope this will help to prepare a plan for a corresponding expansion of the contributions of the casinos to the community.”

Source: AGBrief 

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Crown faces board purge, forensic audit to regain suitability

Posted on by Admin VietNamGaming

01-10-2020 |  

Crown Resorts will need to overhaul its board of directors and carry out a full audit of its operations as the very minimum requirements to become suitable to hold a license in Sydney and in the meantime its Barangaroo casino will remain closed.

The long-awaited report into whether Crown should be allowed to keep the license for its $2.2 billion property in Sydney following an investigation into anti-money laundering practices was released on Tuesday by the New South Wales government.

The two-part, 768-page report by Patricia Bergin will not be easy on the eyes for the Melbourne-based operator, with Bergin finding Crown Sydney as not a “suitable person” to hold the Sydney Barangaroo casino license.

However, the report highlights steps that would make Crown a suitable person to hold the license – such as a full purge of the Crown board, as well as a “full and wide-ranging forensic audit” of accounts to “ensure that its operations are free from criminal influence or exploitation.”

“We expect that the conversion to suitability will at a minimum include implementing the actions recommended by the report, including a restructure of the Board and a full forensic audit, said Kelly Amato, Director, South East Asia Industrials at Fitch Ratings speaking to Asia Gaming Brief.

“Crown has already begun implementing a number of the measures, including forming compliance and financial crime department. But we expect these measures will probably go further to address the concerns around corporate culture which were highlighted throughout the inquiry, and this will probably include increasing prioritization of and education around compliance with regulations within Crown, as well as greater co-operation and ongoing dialogue with regulatory authorities to actively manage risks.”

In the matter of whether the disposal of shares held by Consolidated Press Holdings (CPH) in Crown Resorts to Melco in 2019 constituted a breach of the Barangaroo license or any other regulatory agreement, the company was cleared by Bergin of any wrongdoing.

Further recommendations of the report include the establishment of an Independent Casino Commission (ICC) as a specialist casino regulator to “meet the extant and emerging risks for gaming and casinos.”

“The ICC has the powers of a standing Royal Commission comprised of Members who are suitably qualified to meet the complexities of casino regulation in the modern environment.”

This would include giving the ICC power to pursue any disciplinary action with respect to casino licensees and giving them the power to enforce rules under the Casino Control Act over that of any other government or authority.

There are also a number of recommendations to amend certain parts of the Casino Control Act, with the aim of combating money laundering. Most notably, there is a recommendation to prohibit casino operators in New South Wales from dealing with junket operators.

“The recommendation to prohibit junkets in NSW would have a negative impact on VIP revenues at the two Sydney casinos, particularly from Chinese VIPs where direct promotion of gaming activities is prohibited,” said Amato.

“However, the stable domestic mass-market gaming operations are the main source of strength of gaming operators in Australia, which has been highlighted by the resilience of the businesses as pandemic restrictions are relaxed in Australia, while international border closures have left VIP turnover at close to zero. Even with open international borders, VIP has historically made up a smaller proportion of Australian gaming operators revenues than domestic, it is inherently more volatile and operates at a lower margin than the domestic business and these characteristics would limit the impact of any decline in VIP revenues for the operators.”

“We expect that Crown will work with the NSW authorities over the next few months as it embarks on a process to remediate the deficiencies identified by the inquiry and convert itself to a suitable person,” concludes Amato.

“We wouldn’t expect that it would be able to open its gaming operations in Sydney until these issues are resolved, however it has already been able to open its non-gaming facilities at its Sydney property and we expect that it will continue to operate these in the meantime, while also dealing with operations in Melbourne and Perth amidst changing social distancing restrictions.”

According to the local press, Customer Service Minister Victor Dominello, who oversees gambling regulation in NSW said he welcomed the Bergin report saying his office will consider its recommendations “very carefully” before providing a formal response.

A similar response has been heard from WA regulators, who, according to WA Today, said they won’t consider the NSW report until it meets in two weeks’ time.

Amato notes that the Victorian regulator has already brought forward its seventh casino review required under the legislation – which is due to be completed in 2021. It has also issued Crown Melbourne with a show-cause notice in October 2020 as to why disciplinary actions should not be taken in relation to alleged non-compliance with its Internal Control Statement for junket operations, she said.

Source: AGBrief 

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Genting Singapore 2021 outlook flat on continuing travel curbs

Posted on by Admin VietNamGaming

01-10-2020 |  

Genting Singapore expects a lacklustre year in 2021 as visitation to Singapore is likely to remain restricted and does not see a significant improvement from the results achieved in H2, 2020, analysts said.

The operator of Resorts World Sentosa reported a 90 percent drop in net profit for 2020 to $69.2 million ($53.1 million) and said that two thirds of that result had been generated during Chinese New Year prior to the Covid-19 mandated lockdowns.

However, for Q4 of 2020 the numbers were better-than-expected as luck played in the operator’s favour and it also benefited from one-time items.

Revenue for Q4 was $315 million, up 5 percent from the prior quarter, while adjusted EBITDA was $211 million, up 42 percent, which was 70 percent higher than forecasts. Gaming revenue was flat on the prior three-month period.

Bernstein analysts Vitaly Umansky and Tianjiao Yu said the group had “significant high VIP hold, reversal of bad debt, government support for salaries in light of the Covid epidemic and full reversal of accrued bonuses.”

The VIP win rate in the month was 3.8 percent, compared with the historical average of 2.85 percent.

Umansky cited management as saying that the group still remains committed to pursuing an IR in Yokohama, Japan and to press on with its expansion plans in Singapore.

However, major construction on the $4.5 billion extension to Resorts World Sentosa won’t begin until next year.

The Singapore market has proved to be resilient during the crisis, with strong local support for its two IRs. However, analysts in the past have noted that there are limits to how far Singaporean residents could push growth, with Genting Singapore appearing to suggest it is close to that limit.

Meaningful expansion is unlikely without the return of international travellers.

“Vaccinations will pick up pace in Singapore, but large-scale inbound tourism is unlikely to pick up much this year, in our view,” Nomura said in a note. “Also, given tapering JSS subsidies, and no more impairment reversals, we believe FY21F revenue might not see a material uplift from 4Q20 run rate, and EBITDA margins are likely to normalise downward.”

Nomura said to be prudent it has cut it forecast for revenue, EBITDA and net income by 11 percent, 7 percent and 18 percent respectively. It has only cut its 2022 forecast for earnings by 5 percent as it expects tourism to improve.

Source: AGBrief

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China anti-gambling drive to have long-term IR impact in Asia

Posted on by Admin VietNamGaming

01-10-2020 |  

China’s ongoing crackdown on casinos and junkets targeting its nationals may have long-term implications for the industry in Asia and force changes in the business models of many of the region’s integrated resorts.

Beijing has signalled that it means business when it comes to cracking down on those seeking to lure Chinese to gamble and last year passed a law making it a criminal offence for junkets and overseas casinos involved in such activities.

The Chinese government followed up on Friday with a press conference ahead of the Chinese New Year, urging “criminal suspects in cross-border gambling to surrender,” saying authorities would be taking action to crack down.

“Overseas casinos that rely significantly on junkets are clearly in the cross hairs and will suffer the impact – especially if China has plans for long-term enforcement of existing policies (which we believe it does),” Bernstein Research wrote in a note. “We also question the strategy of certain Chinese companies trying to set up casino operations in foreign countries that are now clearly the target of a long-term anti-gambling campaign targeting such jurisdictions.”

China hasn’t published its so-called “blacklist” of overseas jurisdictions, which first emerged last August and was recently expanded. Although, countries are believed to include the Philippines, Cambodia, Vietnam, Myanmar and potentially Korea.

The crackdown leaves major question marks over the future of Asia’s glitzy integrated resorts, which were built to target China’s army of VIP clients and their junket-enabled gambling trips. This is doubly true in jurisdictions which don’t allow their locals to gamble.

Already hurting due to Covid-19 mandated travel restrictions, there is now a distinct possibility Chinese guests won’t flood back when the borders are open.

“If I can use an analogy — before the market exploded with Chinese VIPs, the casinos were quite happy driving Corollas,” Ben Lee, managing partner at iGamiX Management and Consulting said. “Then China opened up and Rolls Royces became the norm. They built bigger garages to house the Rolls. For them to downsize back to the Corollas is a new old paradigm they need to reacquaint themselves with.”

Lee pointed out that the China-driven casino boom has pushed up executive pay, bonuses and perks for those in the industry. Unfortunately, the sheer size and spending power of the Chinese tourist is not going to be easily replaced.

“With a truncated market, existing casinos will have to realign their marketing strategy with the much smaller SouthEast Asian market,” Lee said. “New projects will have to be revisited. The focus will swing back towards their respective core domestic market to realize their business objectives.”

Some analysts had already raised question marks over how sustainable the IR building boom in Asia was. In 2019, Union Gaming estimated that there was a pipeline of new projects worth about $65 billion, including those in Japan, which it said was “too much in too short a period of time.”

That was before the Covid-19 pandemic and China’s crackdown.

So where is likely to be safe? Analysts agree that Macau, as a special administrative region of China, is not likely to be on the radar, and its casinos may ultimately benefit from China’s policies. That being said, Macau authorities will be expected to work with the Mainland to prevent nationals from being targeted either by online operations, or by those seeking to encourage them to travel to another overseas destination.

Singapore, with its strict regulations and lack of junkets, is also viewed as a benign jurisdiction.

Outside of these two destinations, those Mainland Chinese that can may prefer to remain relatively local.

“I think cross border /close border traffic on foot or by vehicle will survive as trucks, goods and people pass through daily en masse and that isn’t slowing down,” said Tim Shepherd, director of Fortuna Investments. “You can think of a couple, Aristo International, Tigre de Cristal, to which Chinese can travel without flying and being scrutinised in a sanitised/secure area like an airport,” he said, referring to Donaco International’s property in northern Vietnam and Summit Ascent’s resort in Vladivostok, Russia.

“Also the fear of being far from home (and stuck) is now embedded in all of us, so if you want to have fun, why not go locally and forgo the albeit bigger, brighter lights of IRs in countries far away.”

On an operational level, operators are likely to continue a shift towards a direct VIP model, which entails greater risk, but will ultimately be more profitable. Bernstein said it doesn’t believe junkets will disappear altogether, but the system will “undergo a fundamental change.”

“It won’t be business as usual for the junket promoters,” said independent consultant Andrew Klebanow. “That’s an issue because so much of the revenue is still generated by the junkets.”

Still the potential for a prison sentence will act as a significant deterrent to those flouting the rules, he added.

Last year, China said it had detained 75,000 suspects in 3,500 separate illegal gambling cases. It shut down over 2,260 gambling platforms and 1,960 illegal payment platforms. A further 600 Chinese wanted for illegal gambling were repatriated to China from overseas.

Source: AGBrief

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