IAG December 2015

inside asian gaming 

INDUSTRY PROFILE 

Ken Jolly: 

35 years in Slots 

Insights 

Retail Review 

december 2015 

30 MOP 

TECH TALK 

The Art of Cash 

House 

Buying the 

Is casino ownership the next step 

in Macau junket promoters’ evolution? 

www.asgam.com

COVER STORY Contents December 2015 

Cover Photo: 

© He Yujun | Dreamstime.com 

6 

Buying 

the House 

Is casino ownership the 

next step in Macau junket 

promoters’ evolution? 

INDUSTRY 

PROFILE 

14 Ken Jolly 

A perennial figure with more than 35 years in the industry under 

his belt including over a decade here in Asia, IAG gets to know 

Ken on a more personal level. 

TECH TALK 

20 The Art of Cash 

Giesecke & Devrient has become one of the most trusted names 

in high-volume cash processing for casinos, banks and other 

cash-intensive enterprises. 

INSIGHTS 

24 Retail Review 

Formerly an afterthought, the rising Chinese middle class and 

its voracious appetite for brands has seen retail emerge as a 

crucial aspect of any Asian integrated resort. 

CASINO MARKETING 

28 A Tipping Point 

The gaming industry has a high preponderance of tipped 

employees. How can a casino company strategically align its 

interests with the interests of its tipped employees? 

GAMBLING AND THE LAW 

30 Lessons from the Insurance Industry 

What can the insurance industry teach us about framing 

licensed gaming as just another legal business? 

BLAST FROM THE PAST 

34 Foreign Affairs 

IAG revisits the history behind the Wynn/Okada fallout and its 

relationship to the Foreign Corrupt Practices Act. 

BRIEFS 

42 Regional Briefs 

44 International Briefs 

46 Events Calendar

EDITORIAL 

Flick Flicked 

Chief Executive Officer 

Andrew W Scott 

Founder and Adviser 

Kareem Jalal 

Chief Operating Officer 

Michael Mariakis 

Chief Marketing Officer 

Derrick Tran 

Director 

João Costeira Varela 

Administrator 

Cynthia Cheang 

Administrative Assistant 

Suie Ng 

Editor at Large 

Muhammad Cohen 

Contributors 

Muhammad Cohen, Dennis Conrad, Paul Doocey, 

Kareem Jalal, I Nelson Rose, Andrew W Scott 

Graphic Designer 

Rui Gomes 

Photography 

Dave Aglosolos, Gary Wong, Ike, 

James Leong, Wong Kei Cheong 

Inside Asian Gaming 

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ISSN 2070-7681 

Inside Asian Gaming 

is part of 

Some of you many have heard of the infamous Voynich manuscript. Named after Wilfrid 

Voynich, a Polish book dealer who purchased it in the early 20th century, the Voynich 

manuscript has been radiocarbon dated to the early 15th century and has been described as 

the world’s most mysterious book. Why? Because no-one can read it. That’s right, hundreds 

of years of analysis by the world’s best code-breakers have yielded nothing but frustration, despite the 

book being neatly and clearly handwritten using distinct characters organized into well over 200 pages 

of orderly but coded words and paragraphs. The book’s secrets have remained hidden for centuries. 

The Voynich manuscript may be a book no-one can read, but right here in Macau we have a 

21st century equivalent – a movie no-one can watch! “What movie is that?” I hear you ask. It’s The 

Audition, the very movie that itself played a starring role during the opening of Macau Studio City 

in late October. Starring Robert De Niro, Leonardo DiCaprio, Martin Scorsese and Brad Pitt, and 

produced by Brett Ratner of RatPac Entertainment, the actors were reportedly paid US$13 million 

apiece for clocking on for a mere two days – nice work if you can get it. 

James Packer is the Co-Chairman of Melco Crown, the company that operates Studio City and 

owns 60% of it. In an interview with The Los Angeles Times on Studio City’s opening day, Packer 

described The Audition as “the best marketing campaign in the history of the world.” It ought to be, 

as the total budget for this 14-minute masterpiece has been widely reported as a whopping US$70 

million. It is noteworthy that Ratner and Packer are partners in RatPac Entertainment, and of course 

De Niro also owns the world-famous Nobu restaurant and hotel brand that can be found at Melco 

Crown’s City of Dreams Manila and Crown Melbourne – the latter of which Packer is the largest 

shareholder of. We’re certainly keeping things in the family here. 

From what I hear De Niro and his Hollywood buddies had the power to effectively block most 

distribution of the film outside China, including on Studio City’s website, if they weren’t happy with it. 

They weren’t. And they are not the only ones. Let me quote the one review I was able to find online: 

This is not too great of a movie. The actors and Scorsese all play themselves in slightly more 

over-the-top versions. The dialogs weren’t really that great and basically it is just what you could 

expect: a promo ad for a new casino. Wish this had better dialogs and more interesting action, 

but it’s not the case unfortunately and the actors also seem pretty hammy and over the top here. 

Not recommended. 

Without exception, every person I have spoken to who has had the privilege of seeing The 

Audition has described it in less than flattering terms. “Lame” is a word that has come up more than 

once. “Boring” is my description. I would not be surprised if De Niro, DiCaprio, Scorsese and Pitt 

want to see The Audition buried and forgotten like a Presidential Candidate’s compromising sex tape 

from the ’80s. The film is conspicuously absent from Studio City’s website. When we quizzed Studio 

City about the availability of the The Audition, we were told, “It is available in all the guest rooms. 

There no need to show it around the building as it is available online.” It is true that the movie is 

in the rooms at Studio City and also can be viewed in China online (such as on the Chinese video 

platform iQiyi) – but this is hardly the major worldwide distribution one would expect for a film from 

four members of Hollywood royalty. 

The Macau concessionaires have had a very chequered history with the marketing of their product. 

Let’s be honest, who needs marketing when your revenue grows from US$6 billion in 2005 to US$45 

billion in 2013 – an average year on year growth of 29% for eight consecutive years? Who could blame 

the concessionaires for being less-than-polished in the marketing department? 

But all that has changed now. The GGR contraction for 2014 was 3% year-on-year and for 2015 

we’ve experienced a dramatic 36% contraction year-on-year to date. Then factor in the massively 

increased stream of supply that has already begun to come online with Galaxy 2 and Studio City and 

will continue for several years to come with Wynn Palace, Parisian, MGM Cotai, Lisboa Palace and 

the uber-luxurious (and uber-hyped) Louis XIII. All of a sudden it’s going to be important to spend 

on marketing and spend big in this vastly more competitive environment. No company, not even the 

multi-billion dollar Studio City, can afford to waste US$70 million. 

The Audition is not absolutely worthless. Having DeNiro and company at the Studio City opening 

added serious A-list star power. But “the best marketing campaign in the history of the world”? US$70 

million worth? Absolutely not. 

4 

inside www.wgg9.com 

asian gaming December 2015 

Andrew W Scott 

We crave your feedback. Please email your comments to admin@asgam.com.

Cover Story 

Buying the 

house 

Is casino ownership the 

next step in Macau junket 

promoters’ evolution? 

By Muhammad Cohen, Editor At Large 

Muhammad Cohen also 

blogs for Forbes on gaming 

throughout Asia and 

wrote Hong Kong On Air, a 

novel set during the 1997 

handover about TV news, 

love, betrayal, high finance 

and cheap lingerie. 

Junket promoters say they’re bearing the brunt of 

Macau’s gaming slump. VIP revenue fell 11% last year 

and 41% through the first three quarters of this year, 

well ahead of Macau’s overall decline. Union Gaming 

Securities Asia estimates VIP play now constitutes less 

than half of Macau’s gross gaming revenue, factoring in mass tables 

moved to VIP to beat the smoking ban, down from 73% in 2011. 

Many high rollers have stopped coming to Macau or substantially 

cut back on their play amid China’s anti-corruption crackdown and 

greater scrutiny of money transfers. Debt repayments to junkets 

have slowed and assets securing loans have lost value. The theft 

from junket room operator Dore Group in September, after last 

year’s US$1.3 billion heist by junket promoter Huang Shan, reminds 

investors that junkets pay interest rates as high as 2% a month 

precisely because providing capital to VIP rooms is risky. In the wake 

of the Dore scandal, Macau authorities are requiring more financial 

disclosures by junkets. To rub it all in, Melco Crown opened Studio 

City in October without VIP rooms, focused solely on higher margin 

mass market play. 

Junket promoters have reduced their Macau operations over 

the past 18 months and some of the smaller ones have closed 

shop. Top five junket Neptune Group, in its annual report released 

in September, calls its liquidity position “extremely vulnerable” and 

they have contemplated pulling out of Macau. While some analysts 

6 

inside asian gaming December 2015

Cover Story 

forecast an imminent VIP rebound, Union Gaming’s Grant Govertsen 

expects more junket closures, possibly including “one of the major 

players … carried out on a stretcher.” 

Some junkets have a Plan B – buy all or part of casinos. Jimei 

Group has shown the way, long operating Fontana Hot Spring Leisure 

Parks in the Philippines plus a Macau casino. Hengsheng Group is 

building a hotel in Saipan and has taken steps toward developing 

an integrated resort in South Korea. Suncity Group, Macau’s largest 

junket promoter, has invested in a Vietnam IR project as a starting 

point for larger ambitions. 

Suncity Chairman Alvin Chau characterizes casino investment, 

as a partner and eventually sole owner, as a natural evolution of 

its junket business rather than a reaction to Macau’s woes. “The 

reason why we invest in overseas markets is not because of the 

bad business conditions in Macau,” Mr Chau says. “VIP business 

globalization is a strategy, and a casino hotel chain business is part 

of that strategy.” (See more of IAG’s interview with Mr Chau on 

page 10.) 

PROSPEROUS METAMORPHOSIS 

“Junkets are going to continue to morph and evolve with the times, 

by selling or joint venturing part or all of their business to casino 

owners or becoming casino owners themselves,” Macomber 

International President Dean Macomber says. “The better junket 

owners and operators will not suffer; indeed, they will prosper from 

this metamorphosis.” 

As China continues opening to the global financial system and 

adapting to world standard business practices, the unique role of 

junkets for players from the mainland and other Asian markets will 

diminish, and casinos will become more willing to take on traditional 

Fontana Hot Spring 

Tony Tong 

junket functions, including player finance, Mr Macomber, a former 

CEO of Jimei’s Fontana resort, suggests. “It may take 10 years, 20 

years, 50 years and certain pure boutique style junket companies 

will still exist, but beside the repercussions of the decrease in VIP 

play, even more fundamentally, junkets as middlemen can’t survive 

big company corporate ownership, which does not like sharing their 

profits with others. This inevitability was put in motion the moment 

Macau gaming was opened to large Western and Asian gaming 

operators.” 

“Junkets don’t want to be the wedding dress,” Pacific Financial 

Services founder Tony Tong says, citing the Chinese saying that the 

wedding dress gets used on the day of the wedding then is forgotten. 

“Sooner or later they lose their customers to casinos.” 

Industry insiders say it’s no great leap for junkets that operate VIP 

rooms in Macau to run their own casinos. There’s a range of opinions 

about junkets’ capital capabilities as investors and whether casino 

operation or junket promotion is the more profitable business. Jimei, 

Hengsheng and Suncity illustrate different approaches to junkets 

becoming casino owners. 

“Some junkets have a Plan B – buy all or 

part of casinos. Jimei Group has shown 

the way, long operating Fontana Hot 

Spring Leisure Parks in the Philippines 

plus a Macau casino.” 

December 2015 inside asian gaming 7

Cover Story 

PHILIPPINE DREAM 

Jimei pioneered casino ownership by junkets with Fontana, an 

opportunity that followed the US withdrawal from Clark Air Force Base 

in 1991. Located about 80 kilometers (50 miles) northwest of Manila, 

Clark and surrounding areas and totaling 632 square kilometers (244 

square miles), Clark once housed 15,000 US military personnel and 

their families. The vast plot was divided into a Philippine military 

facility, commercial Clark International Airport and Clark Freeport, a 

special economic zone with duty free imports and 5% corporate tax 

for qualifying investors, leveraging the airport as a magnet for cargo 

and passenger traffic. 

In 1998, Fontana’s original investors acquired a 300 hectare plot 

including the US base’s officer housing area, laid out like an American 

suburb with extensive green areas, a stark contrast to urbanized 

Manila or Macau, and just a 10 minute drive from the airport. 

Conceived as a membership resort and secured with gated, guarded 

entrances, Fontana refurbished former military duplex homes and 

built new villas, nearly 500 units in all, offered on an ownership or 

timeshare basis. Pagcor, the Philippine casino regulator and operator, 

granted Fontana a gaming license “to cater to foreign junket players 

and certified club members” in 1999. As a leading Macau junket 

promoter, Jimei was already doing business with Philippine casinos. 

Fontana chose Jimei to operate the casino, with Pagcor’s consent, in 

2004, the year the resort opened. Jimei eventually took control of the 

leisure park operation as well. 

Fontana has grown into Jimei’s flagship property, open to the 

Beating the House 

Casinos complain that junkets get the biggest 

share of gaming profits. Junket promoters contend casinos and 

the government hold the best hands. Inside Asian Gaming asked 

University of Macau gaming expert Ricardo Siu to settle the argument. 

Using conservative commission estimates IAG provided, Dr 

Siu’s calculations found that junket promoters collect up to 65% 

more of VIP revenue than casinos in four jurisdictions where junket 

promoters are or hope to become casino owners. Casinos have 

revenue streams beyond VIP play, but the numbers are striking 

nevertheless. 

Dr Siu finds the carping from both sides in Macau understandable. 

“Casino operators and junket promoters may complain because what 

they each get here is less than their counterparts get in the other 

jurisdictions,” the Associate Professor of Business Economics says. 

“The primary reason is that in Macau, the government shares a larger 

portion.” Macau’s gaming tax and other levies reach 40%. As tax rates 

drop, casinos get more of the gain but 

still trail junkets’ percentage. 

Those numbers don’t tell the whole 

story, junket investor and consultant 

Tony Tong says. When junkets prosper, 

operators react. “Junket promoters 

complain that casinos change the rules, 

especially outside Macau,” the founder 

of Pacific Financial Services says. “They 

raise rents and other charges if they see 

junkets making a lot of money. If they’re 

jealous, they’ll try to get a bigger piece of 

the revenue.” Junkets also face high costs 

Dr Ricardo Siu, 

University of Macau 

for capital and debt collection issues. 

What happens on the gaming floor is the 

easy part of the junket business. 

Who gets what? 

Jurisdiction Tax rate Commission 

Macau 39% 1.25% 

Philippines 15% (1) 1.40% 

Vietnam 17% (2) 1.50% 

Saipan 0% 1.7% (3) 

(1) This rate for VIP. Mass rate is 27% 

(2) From 1 Jan 2016 rate is 35% but commissions are deductible making 

estimated effective rate 17% 

(3) Conservative estimate 

Assumptions 

1. VIP play is predominantly baccarat 

2. VIP play utilizes dead chip program 

3. House advantage is 2.9% of dead chip rolling (pair bet is available) 

Macau Saipan Vietnam 

Philippines 

Casino 

Casino Junket Government 

Macau 16.9% 43.1% 40.0% 

Philippines 36.7% 48.3% 15.0% 

Vietnam 31.4% 51.7% 16.9% 

Saipan 41.4% 58.6% 0.0% 

Junket 

Government 

8 



Cover Story 

public as well as members, with a total investment in excess of 

US$100 million. There’s a 66 room hotel plus 115 villa and townhouse 

rental units, with plans to expand to 1,000 villas plus a high rise hotel 

with 2,000 rooms. The water park has theme areas, slides, a wave 

pool and lazy river ride. Other activities include sports such as tennis 

and basketball, a spa, a dozen F&B options, banquet and meeting 

facilities, plus a nine hole par-three golf course. Fontana’s adjacent 

golf club has two 18 hole courses designed to appeal to Koreans, the 

Philippines’ largest visitor group and a significant resident minority. 

Jimei Chairman Jack Lam is an avid golfer and tournaments are a 

regular feature. 

The casino has about 150 tables and a like number of gaming 

machines. Fontana members can bring up to two guests to the casino 

but its focus remains on overseas VIPs. Macau junkets besides Jimei 

regularly provide players. Gaming taxes are low, so commissions are 

well above Macau’s 1.25% cap. Under its license, Fontana pays a 10% 

fee to Pagcor on mass gross gaming revenue and 10% on net VIP 

win after commissions. Jimei also continues operating as a junket 

promoter at other Philippine properties, including Solaire Resort and 

Casino in Manila and Fort Ilocandia Resort Hotel on the beach in 

northern Luzon. 

“Fontana’s success owes more to Dr Lam, his vision as well as 

“We are all waiting 

for economic recovery 

in the mainland” 

– Alvin Chau 

Suncity Group Chairman Alvin Chau wants to take 

Macau’s leading junket promoter to the world, both in VIP rooms 

and as a resort investor and owner. In his interview with Inside Asian 

Gaming Editor at Large Muhammad Cohen excerpted here, Mr Chau 

wouldn’t discuss specifics of Suncity’s investment in Vietnam’s Hoi 

An South integrated resort project, but shared his views on the state 

of Macau gaming and his vision for Suncity. 

IAG: How do you see the current junket situation in Macau? 

Alvin Chau: I have great confidence since we have 1.3 billion people 

in China as the foundation of the market. The junket business in 

Macau is currently affected by the economy in mainland China. Every 

business has its ups and downs. Because everything has happened 

all at once – the slowdown of the Chinese economy as well as the 

policy adjustment – the junket business in Macau declined quickly 

and people haven’t had time to adapt. I think this is a normal 

adjustment for the business. We are all waiting for economic recovery 

in the mainland. 

IAG: Do you think Macau’s market changes are permanent or 

temporary? For example, Studio City opened with zero VIP tables. 

Could you imagine that happening five years ago? 

AC: It’s just a matter of the government’s table distribution – delaying 

the distribution of VIP tables until next year. It is known that their 

license for VIP rooms hasn’t started. [Macau gaming regulator DICJ did 

not respond to IAG’s request for clarification or comment on Mr Chau’s 

assertion.] I don’t believe a casino hotel can be complete without 

VIP tables. Overall, you won’t achieve diversified development by 

reducing the number of VIP rooms. 

IAG: Are you happy to see a resort like Studio City that has a so 

many non-gaming attractions as opposed to just building big 

casino hotels with restaurants? 

AC: Of course I’m happy to see those new entertainment facilities. 

This is a business where people are free to determine their own 

business development. When the market gets up to a certain size 

with more hotels, hotel rooms and tables, competition increases. 

People are not satisfied with large gaming revenue only; therefore 

diverse products will keep appearing. 

IAG: Do you think people need to view Macau more as a tourist 

destination rather than a gaming destination? 

AC: Products in the market will become more diverse. Gaming 

revenue will still account for the lion’s share, but the reasons for 

visiting Macau will become more varied. 

10 


Cover Story 

“CNMI is a self-governing US territory of 

57,000 in the Pacific, about five hours by 

air charter from Shanghai, expected to 

welcome 500,000 visitors this year to its 

idyllic beaches, with mainland China, Korea 

and Japan the largest source markets.” 

his reputation and loyal following developed in Macau than to the 

Philippines, favorable tax rates and commission rebates and the 

leisure facilities themselves,” Dean Macomber says. 

Jimei’s ownership of its eponymous Macau casino came about 

in 2009 when Mandarin Oriental International sold its 50% stake 

in what’s now the Grand Lapa Hotel, next to Sands Macao, to its 

partners, Stanley Ho’s STDM and Shun Tak Holdings. They chose 

Jimei to operate the gaming area, previously Oriental Casino, under 

SJM’s license as a satellite facility. Jimei renovated the casino, which 

has about a dozen tables and 60 slots machines, to feel like an elegant 

sitting room, fitting the hotel’s grande dame ambiance. There’s 

casino access from the hotel and the street. With both Fontana and 

Jimei Casino, the junket promoter became an owner in established 

gaming destinations where it had extensive experience. 

DISTANT BEACHHEAD 

For its foray into casino ownership, Hengsheng Group focused 

on a new gaming jurisdiction. Investors affiliated with Hengsheng 

acquired Hong Kong listed First Natural Foods for HK$400 million 

(US$52 million) in November 2013 and renamed it Imperial Pacific 

International. Around the same time, associates of the junket group 

began efforts to get casino gaming legalized in Saipan, the largest 

island in the Commonwealth of Northern Marianas Islands. CNMI is 

a self-governing US territory of 57,000 in the Pacific, about five hours 

by air charter from Shanghai, expected to welcome 500,000 visitors 

this year to its idyllic beaches, with mainland China, Korea and Japan 

the largest source markets. 

Smaller CNMI islands Tinian and Rota had previously legalized 

gaming with limited success: Tinian’s long struggling casino got 

raided by US Treasury officials last year, resulting in record fines for 

money laundering violations; and Rota’s casino closed within weeks of 

Alvin Chau 

IAG: Do you think people in 

China are getting bored with 

Macau? 

AC: I’m not worried about that, 

since there is a huge market in 

China. Also the range of products 

in the Macau market of the future 

will bring in different kinds of 

tourists in addition to gamblers. 

IAG: Does consolidation of the 

junket business help Suncity? 

AC: It’s an advantage in the short 

run, but in the long run, it will 

cause damage when investors, 

gamblers, visitors or [the gaming] 

industry lose confidence in the 

junket business. 

IAG: Suncity is a partner in the Hoi An South integrated resort 

project in Vietnam [with Chow Tai Fook Enterprises and 

VinaCapital]. What will Suncity’s role be? 

AC: Right now we are not in a position to talk about specific projects 

in Vietnam. However, we are seeking some other business models. 

Our aim is to develop our VIP business worldwide and extend the 

existing VIP business in gaming jurisdictions such as Vietnam, 

Seoul, Russia, the Philippines or even in Macau. We will gradually 

extend our business to the casino hotel segment while, of course, still 

running our VIP business. 

IAG: Is that part of a strategy to change from being a junket 

promoter to having ownership in casino projects? 

AC: Yes, our future development aim is to move our investments 

from junket operations to owning casinos. We don’t want to be 

limited to being only a junket promoter. We want to further develop 

our assets. 

IAG: Do you see any disadvantages of being a casino owner? 

AC: No. 

IAG: Obviously, Suncity is interested in other jurisdictions beyond 

Vietnam. Are there any particular markets you are looking at? 

Would you be interested in operating a casino in Macau if that 

opportunity arose? 

AC: We want to develop our VIP business worldwide, and if we 

operate casinos in the future, we are looking to do something like 

boutique type casino hotels but we don’t have specific destinations. 

We hope to establish a chain of small-scale casinos mainly in the 

Asian region. 

IAG: If the junket business in Macau wasn’t currently so 

depressed, would Suncity still be considering casino ownership? 

AC: Actually there is no connection with the downturn of the business 

here in Macau. Due to the economic conditions in China, Macau’s 

business is in bad shape, and relatively speaking business overseas 

is also affected. The reason why we invest in overseas markets is 

not because of the bad business conditions in Macau. VIP business 

globalization is a strategy and a casino hotel chain business is part 

of that strategy. 


Cover Story 

“In South Korea, Imperial Pacific 

participated in the first round of 

competition for two new licenses for 

foreigner-only casinos. It was one of four 

groups proposing an integrated resort 

near the previously approved Caesars 

Entertainment/Lippo IR site in Midan 

City on Incheon’s Yeongjong Island.” 

opening in 2011. Saipan voters twice rejected casinos in referendums. 

Nevertheless, CNMI’s legislature legalized Saipan casinos in March 

2014. Imperial Pacific subsidiary Best Sunshine International, then 

led by former Genting Singapore General Counsel Terence Tay, 

moved to secure the license, which requires development of an 

integrated resort with a minimum $2 billion investment and 2,000 

guest rooms. Even with an annual license fee of $15 million in lieu of 

gaming taxes, the lofty investment requirement appeared designed 

to dampen interest. Mega Stars, the Hong Kong-based owner of 

Tinian’s casino also applied, leading to a spirited competition. Best 

Sunshine promised a $3 billion resort and a $30 million community 

development fund, including $10 million in direct payments to 

Saipan citizens, and won the license. 

Even though it had the only hand left in the game, Best Sunshine 

raised the ante again in September last year, issuing a $7.1 billion, 

five phase development plan encompassing 4,252 hotel rooms, 300 

villas, 1,600 gaming tables and 3,500 slot machines at two sites, a 

town hotel and a beach resort. To replace Mr Tay, who left shortly 

after the license was granted, Imperial Pacific hired Mark Brown, 

former president of Sands China and most recently chief operating 

officer for NagaWorld in Cambodia, who was tasked with scaling 

up junket operations. As Best Sunshine’s president and CEO, Mr 

Brown secured a 59,000 square meter site for the town hotel that 

will have 50 rooms, 300 tables and 500 machines in its initial phase. 

Construction began in July, due for completion late next year. 

To prepare gaming floor personnel, CNMI allowed Best Sunshine 

to open a training casino in July, 16 months ahead of the projected 

hotel opening date, in a shopping mall that caters to tourists. 

Dubbed Best Sunshine Live, the temporary casino with capacity for 

about 40 tables and 100-plus machines, added VIP operations early 

last month, held its grand opening on November 27 and expects 

to “commence collaboration with junket operators” this month, 

according to Imperial Pacific’s filing with the Hong Kong stock 

exchange. (In October, Imperial Pacific dropped its profit share 

agreement with Hengsheng, tied to a HK$400 million convertible 

loan, but company ownership remains linked to the junket.) 

Imperial Pacific continues to search for a site for its larger resort 

project. CNMI’s Department of Public Lands last month issued a 

Request For Proposals on a 1.61 million square meter (398 acre) site 

currently occupied by Mariana Resort and Spa, whose lease expires 

April 30, 2018. Mr Brown says Best Sunshine “will be as heavily 

involved as we possibly can be” in pursuit of the site. “We are here 

on the island and we have proven the type of business and type of 

neighbor that we are, so we are not going to sit back and watch 

someone else go in for the RFP,” Mr Brown told local media. 

Mariana Resort’s owner Kan Pacific, Saipan’s largest remaining 

Japanese hotelier, dating to CNMI’s 1980s heyday as a getaway for 

Japan’s middle class, has mounted a legal and grassroots campaign 

to extend its lease. Kan Pacific lawyers charge the RFP violates lease 

terms. Hundreds attended a public rally in support of lease extension. 

“We expect robust competition for a parcel of this magnitude,” 

Public Lands Secretary Pete Tenorio wrote in a letter to the Saipan 

Tribune newspaper. “If Kan Pacific makes the best proposal, we 

welcome them to continue to operate Mariana Resort. If not, we 

welcome the bidder who proposes the highest and best use for the 

entire premises that will generate the most income for the collective 

owners of public lands.” 

In South Korea, Imperial Pacific participated in the first round of 

competition for two new licenses for foreigner-only casinos. It was 

one of four groups proposing an integrated resort near the previously 

approved Caesars Entertainment/Lippo IR site in Midan City on 

Incheon’s Yeongjong Island. Imperial Pacific didn’t indicate whether 

it joined the final proposal phase that was scheduled to close late 

last month. However, Seoul based KORE Policy and Management 

Consulting General Manager Tim Lee says that, days ahead of the 

deadline, Imperial Pacific was one of just two groups that made the 

$50 million deposit required to submit a proposal. Independent 

activist investor and US corporate director Michael Levin, who has 

worked in Korea, thinks it’s possible Imperial Pacific’s October 

decision to drop its profit share agreement with Hengsheng, tied 

to a HK$400 million convertible loan, divorcing it from the junket’s 

operations, could be helpful to win licensing approval from Korean 

regulators, even though Imperial Pacific’s ownership remains linked 

to Hengsheng. 

FIRST STEP 

Suncity’s first move into casino ownership was announced in 

March, as a partner with Chow Tai Fook Enterprises and VinaCapital 

in central Vietnam’s Quang Nam province. Genting Group and 

VinaCapital originally planned to develop an IR on the site, known as 

Hoi An South, but Genting, a 20% partner, pulled out in 2011. Chow 

Tai Fook, which owns 10% of STDM and is part of the Destination 

12 


Cover Story 

Brisbane consortium led by Australia’s Echo Entertainment which 

was awarded the Queen’s Wharf IR development project in July, 

reportedly has taken a majority stake in the Vietnam project’s revival. 

Suncity is believed to have a small piece, in exchange for providing 

customers from its database. The proposed IR site is some two hours 

by road from the nearest international airport in Danang, which gets 

four flights a day from Macau. Danang’s Crowne International Club 

regularly receives Macau junket players and is located on the grounds 

of a four star beachfront hotel. 

Vietnam requires IRs to invest US$4 billion, acceptable in phases. 

Hoi An South’s US$500 million first phase, planned to open in 2017 

or 2018, is expected to have a casino with 90 tables, a hotel and golf 

course. Vietnam permits gaming for foreign passport holders only. 

However, the government’s long awaited Casino Decree, expected 

imminently for nearly two years, may include some provision for 

limited local play. 

Looking at the three junket promoters’ initial moves into casino 

ownership, some common themes emerge. Most notably, junkets 

favor low tax jurisdictions. Saipan has no gaming tax. Clark offers a 

discount on the Philippine’s already low rates — 5% for VIP play and 

17% for mass market. Vietnam has a nominal tax rate of 30%, rising 

to 35% on January 1 accompanied by a corporate tax cut from 22% 

to 20%. But it allows commissions to be deducted from revenue, so 

Vietnam’s effective tax rate under the new rules will be an estimated 

17%. South Korea levies total 14% for foreigner-only casinos. “Lower 

taxes mean better rebates and commissions,” Tony Tong says, plus 

more profit into the operator’s pocket. 

As owners or promoters, junkets favor jurisdictions with liberal 

regulatory regimes. “Southeast Asian countries are more open 

minded about proxy betting, phone betting and online betting, which 

is unavailable in Macau,” Mr Tong says. With live video streaming 

from casinos and online gaming licenses available, he estimates offsite 

play constitutes 30% of VIP revenue in the Philippines. 

Pagcor has evolved as a regulator since 2004, when Jimei got 

its license, to the point where Caesars thinks it can have a Manila 

casino without risk to its US operations. Jimei has adapted to 

changing rules there as well as Macau. In Vietnam and Saipan, 

authorities are still creating regulatory regimes, though Saipan is 

subject to US federal law. 

Like other resort developers, junkets want attractive destinations. 

Quang Nam and Saipan have pristine beaches and are near historic 

areas including ancient temples in Vietnam and the atomic bomb 

launch site in Tinian. Fontana offers an escape from urban drudgery 

with greenery, golf and nearby mountains. 

Some things don’t seem to matter to junkets moving into 

casino ownership. While the Philippine market supports Fontana’s 

gaming and non-gaming segments, the newcomers don’t seem 

interested in local play. Korea and Vietnam are essentially 

foreigner only markets, while Saipan has just 50,000 people. 

Again excepting Fontana at Clark, easy commercial air access also 

doesn’t seem to be a major consideration. Junkets seem confident 

that they have the players and can get them to their destinations 

with the right incentives. Increasingly, they’re willing to put their 

money on it. 

“Vietnam requires IRs to invest US$4 billion, acceptable 

in phases. Hoi An South’s US$500 million first phase, 

planned to open in 2017 or 2018, is expected to have a 

casino with 90 tables, a hotel and golf course.” 


Industry 

profile 

Ken 

Ken Jolly is Executive Vice President 

for Shuffle Master and also 

represents Scientific Games and 

Bally in Asia – but has been in the 

slot machine industry working for 

a variety of companies all over the 

world for over 35 years. A perennial 

figure with more than a decade here 

in Asia under his belt, IAG sat down 

with Ken for a chat on the industry 

and also get to get to know the man 

on a more personal level. 

IAG: Let’s start at the beginning. Tell us a 

little of your history with gaming over the 

years. 

Ken Jolly: I have truly been very fortunate 

in my career and had a global experience in 

the gaming industry by working and living in 

different regions. My career started 36 years 

ago in New South Wales, Australia, involved 

in gaming industry technical operations then 

sales, followed by business development 

and senior management roles. Over the 

last 22 years my international market roles 

have included the General Manager of New 

Zealand, Vice President of Sales, Service and 

Marketing in the Americas (North, South 

America and Canada), General Manager of 

Sales and Marketing for all of Europe and 

General Manager of Asia Pacific for another 

global publically traded gaming machine and 

products supply company. 

Before originally joining Shufflemaster 

I served as the Executive Vice President 

and General Manager for a global Japanese 

gaming manufacturer having responsibility 

for Australia, Asia, Europe and Africa. After 

joining Shufflemaster as a consultant initially 

I helped spearhead Shufflemaster’s Asian 

business through a period of growth and 

market expansion. In late 2013 Shufflemaster 

was purchased by Bally Technologies and 

then a year later by Scientific Games. During 

these periods I have managed the Asian 

business as we integrate. 

IAG: How was the transition from Australia 

to Macau for you personally? 

KJ: After eight years abroad and living in 

New Zealand, USA and London I was asked 

to develop and manage the business of my 

then employer Aristocrat in Asia. As the 

company didn’t have an Asian headquarters 

or employees living permanently in Asia 

then, I did this from Australia for the first 

two years with hundreds of hotel nights and 

many flights. When it came time to move to 

Macau it was easy as I had experience living 

away from Australia and had just spent two 

years and many nights here. Macau was just 

another place to call home. I found doing 

business in Asia similar to the rest of the 

world, an honest upfront approach rewards 

you similarly. 

IAG: Any memorable stories from the early 

days of Macau? 

14 


Industry 

profile 

“I can remember in the early days before Sands Casino on 

Macau Peninsula was built thinking they want to turn this 

place into another Las Vegas and wondering how that was 

going to happen. Casino construction and experiences in 

Macau are now amongst the best in the world — it truly has 

been a transformation from a sleepy village.” 

KJ: Not so much stories but fond memories 

for those of us here 10 years ago, whilst 

staying at the then Mandarin Oriental 

(now Grand Lapa Hotel) with its nightlife 

(Embassy Bar, the only place then everyone 

went to meet and socialize) and watching 

Sands casino being built during visits to the 

hotel swimming pool. I learnt construction 

workers in this part of the world can sleep 

absolutely anywhere during breaks. 

Upon returning home to Australia numerous 

times I was asked by friends where I had 

been travelling so I had to explain where 

Macau was – it was basically unknown then. 

I remember landing one evening in Hanoi 

(for the first time ever) and finding myself 

in a taxi heading to a hotel in the pitch dark 

wondering why the car was on a dirt road and 

if I would survive past the visit. Of course 

the next day I discovered we were taking a 

shorter route on a road under construction 

that went around the outside of the city. One 

time I was going to local Macau Chinese 

restaurant and had to walk around inside the 

restaurant looking at everyone’s meal and 

pointing to what I would like to order. There 

were no English menus in those days. There 

have been many stories and great times over 

the last 11 years in Macau. 

IAG: In your view, how has Macau changed 

over the years? 

KJ: I can remember in the early days before 

Sands Casino on Macau Peninsula was built 

thinking they want to turn this place into 

another Las Vegas and wondering how that 

was going to happen. Casino construction 

and experiences in Macau are now amongst 

the best in the world – it truly has been a 

transformation from a sleepy village. Another 

change – traffic, traffic and more traffic, 

Macau is now one big traffic jam. There’s 

more variety in restaurants, new apartment 

living and more western faces since my early 

days. Another big change is international 

recognition of where Macau is and the role it 

now plays in the Pearl River Delta. 

IAG: How do you think slots have developed 

in the Asian market over the last 10 years? 

KJ: Asian slot development has seen Chinese 

language, Chinese themes, Chinese proverbs 

and Chinese culture being shown and told 

on the machines. The Macau slot market 

has driven volatility and jackpots causing 

manufacturers to offer more range in their 

development studios so as to cover Asia. 

Choy Sun Doa to 88 Fortunes and the Fa Fa 

Fa to Duo Fu Duo Cai links are all products 

of this. 

The early changes started when I was 

at Aristocrat (where previously games 

developed and installed in Australia were 

brought to Asia), the request came in Asia 

asking how we make machines more suited 

to Chinese players. Firstly we changed the 

credit meter, bet meter and win meter on 

the screen to show in Chinese characters 

above the English. Additionally the game 

feature was translated to Chinese characters 

to better explain the game feature in the 

top artwork so players knew what to chase. 

Machines today are primarily Asian themed 

with Chinese characters and language 

appearing throughout. Manufactures use 

the tools at hand to produce better graphics, 

better mathematics and more aesthetically 

pleasing cabinets. 


Industry 

profile 

IAG: What do you see as the major 

differences in the slots markets of Australia, 

the US and Asia? 

KJ: The Asian slot market is still small in 

terms of world market, less than 100,000 

machines. If you look at the North American 

market its about 900,000 and Australia 

200,000 today. The US market growth was 

astonishing over the last 10 years as more 

North American states introduced casinos. 

Australia has been relatively stagnant in 

machine volume growth – it’s mainly a 

replacement market and Asia has slow and 

steady growth. 

TV themes play a large role in the game 

themes of slot machines for the US market, 

Asia is very much about the Chinese theme 

today and games in Australia have stayed fairly 

traditional. Some Asian themes have even 

carried around the world in popularity, since 

every large city in the world has a Chinatown. 

Return to player percentages from the game 

maths and the additional promotions seem 

to be varying in the different markets. Recent 

reports from the US generally show higher 

house percentage returns. 

“The Macau slot market has driven volatility and jackpots causing 

manufacturers to offer more range in their development studios 

so as to cover Asia. Choy Sun Doa to 88 Fortunes and the Fa Fa Fa 

to Duo Fu Duo Cai links are all products of this … Duo Fu Duo Cai 

is one of the most outstanding products in this industry I have 

seen in my 36 year history.” 

IAG: There’s been a lot of M&A activity in 

the industry in the last few years, including 

with Scientific Games. What are your 

thoughts on that? 

KJ: The M&A is offering opportunities for 

companies to become larger industry players 

and offer a greater range of products and 

services to their valuable clients. Scientific 

Games has been one of these allowing 

customers to partner in all aspects on their 

gaming requirements and to work with the 

company to bring products that entertain 

their players. It’s exciting to work in a 

company with many product lines and which 

understands both electronic and live casino 

products and environments. 

IAG: The Duo Fu Duo Cai link has been a 

great success in Asia and indeed around 

the world. What factors do you feel have 

led to this? 

KJ: Duo Fu Duo Cai is one of the most 

outstanding products in this industry I have 

seen in my 36 year history. Great games 

and concepts are derived from specialized 

teams focusing on good math packages. 

Duo Fu Duo Cai is one of the most complex 

game math design packages I have seen 

in my history in gaming. Volatility has 

rewarded players with fun and excitement 

on DFDC allowing more winners and greater 

16 


Industry 

profile 

entertainment for casino patrons. Game 

design is a real art! 

IAG: Slots still only account for a small 

percentage of GGR in Macau. What needs 

to happen for that percentage to go up 

substantially? 

KJ: Yes, slots are still a small percentage of 

GGR in Macau. However it’s been a growing 

segment up to recently. I strongly believe that 

the segment will have continuous growth 

over the many years to come, however 

steadily, as further innovation is introduced. 

IAG: Given the strength of Pachinko in 

Japan, what do you think the slot industry 

would look like in Japan if say three 

medium to large scale IRs were approved 

for the country’s major population centers? 

KJ: The Japanese market, whilst large in size 

by units for Pachinko and Pachislot today, 

would be affected with the introduction of 

IRs, allowing more traditional slots and table 

games. The question today is if and when? 

IAG: Who do you most admire in the 

industry? 

KJ: The industry is made up numerous 

people on both the operator and vendor side, 

some of them great industry legends from 

all parts of the globe. It is a dynamic industry 

to work in which has giving me a career and 

opportunity to work and live all over the 

world. I often say “I go to work where people 

go to play.” This dynamic casino industry has 

some real entrepreneurs! Look at the casino 

structures throughout the world. 

IAG: Are you a gambler yourself? If so, what 

do you like to play? 

KJ: I have played a little roulette in the 

past. I have my own system but doesn’t 

every player? It’s fair to say that I’m not 

really a gambler but more fascinated in 

understanding the games and outcomes that 

bring players to play. 

IAG: What do you like to do in your spare 

time? 

KJ: I travel extensively for work and on annual 

leave which I enjoy however I also enjoy a 

quiet time at home particularly on Saturday 

evening cooking some dinner and relaxing in 

front of the TV. I enjoy dining out to experience 

new restaurants and catching up with friends, 

some of whom I have made acquaintances 

with from my years of living abroad in different 

countries. I can often be found at a resort 

swimming pool or on a beach in the sun. 

IAG: Where do you see yourself in five 

years? 

KJ: When I moved to Asia 11 years ago I was 

unsure if I would like it here or not. I enjoy 

my time in Macau and recently became a 

resident. I’m staying here for now and don’t 

see moving any time soon. I do see this 

as my base however I would like to spend 

some time in island life on white sands and 

aqua blue water in the future. I’m a beach, 

swimming pool and sun person that enjoys 

time on the water. 

“I would like to spend some time in island life 

on white sands and aqua blue water in the 

future. I’m a beach, swimming pool and sun 

person that enjoys time on the water.” 


18 inside asian gaming December 2015


Tech Talk 

The Art of 

Cash 

Giesecke & Devrient has 

become one of the most trusted 

names in high-volume cash 

processing for casinos, banks 

and other cash-intensive 

enterprises. It all started 

from the company’s passion 

for banknotes, fostered 

over its 160-year history of 

manufacturing them. 

Munich-based Giesecke & Devrient is a leader 

in large-scale cash-processing technologies, 

providing fast, reliable, fully-automated, highsecurity 

systems designed to meet the needs of 

organizations including central and commercial 

banks and cash-transit enterprises as well as casinos. 

G&D’s cash-processing technologies are a natural complement 

to its other big segments — manufacturing banknotes as well as the 

production of substrates and foils. G&D is one of the world’s leading 

suppliers of both banknotes and the paper used to print them. It has 

printed more than 125 billion banknotes for various currency zones 

and exports banknote paper and high-security foil to more than 100 

countries. In 2014 alone, it produced 22,500 tons of banknote paper 

and 15 million square meters of security foil. 

G&D began as a printing business founded in Leipzig, Germany 

in 1852 by Hermann Giesecke and Alphonse Devrient, who set out 

to establish new technological standards for the banknote printing 

industry. Through the acquisition of Papierfabrik Louisenthal in 

1964, the company eventually became involved in the production of 

banknote paper and security foil. 

Earlier this year, Inside Asian Gaming was privileged to attend a 

special media event hosted by G&D in Munich that included a tour 

of its Louisenthal paper mill and foil plant and a half-day seminar 

covering topics ranging from the future of payments to the challenges 

of banknote design. 

The Louisenthal facility is nestled in the Bavarian countryside 

an hour’s drive south of Munich, and it would be putting it mildly 

to say security in and out of the building is tight. In contrast to the 

impression given by its rustic surroundings, the inside of the plant 

is decidedly high-tech, dominated by special-purpose machines 

churning out bobbins of security foil and reams of banknote paper in 

a multitude of hues for various nations. 

20 


Tech Talk 

Cash Still King 

Banknotes have proven resilient in maintaining their position as the 

most secure and flexible means of payment worldwide. 

Despite strong growth in the adoption of electronic payments, 

G&D expects no fall-off in the demand for banknotes, with banknote 

circulation volumes forecast to rise 5% a year for the foreseeable 

future. Even in an advanced economy like Germany, more than half of 

payments are still made in cash, while globally the figure is about 80%. 

“Cash is 100% reliable in times of crisis. It’s in periods of 

panic where a solid financial system has to prove itself,” said Ralf 

Wintergerst, a G&D board member. “In a crisis situation, the 

demand for cash typically rises sharply. The reason for this is trust 

in real currency.” 

The magic of modern banknotes is that the average person can 

quickly distinguish between a genuine and fake one using just their 

eyes and hands — it either “feels” real or it doesn’t. Acceptance 

by people and machines ultimately determines the success of 

banknotes. It’s a testament to the tireless innovation of companies 

like G&D that the immediately apparent security features are easily 

identifiable yet resistant to counterfeiting. Of course, banknotes also 

incorporate further levels of security features that require tools for 

verification. There are even concealed security features known only 

to central banks. 

“It has printed more than 125 billion 

banknotes for various currency zones and 

exports banknote paper and high-security 

foil to more than 100 countries. In 2014 

alone, it produced 22,500 tons of banknote 

paper and 15 million square meters of 

security foil.” 


Tech Talk 

“The Louisenthal facility is nestled 

in the Bavarian countryside an hour’s 

drive south of Munich” 

A particularly memorable seminar session – featuring Marc 

Mittelstaedt, G&D’s head of banknote design – provided a layer-bylayer 

exposition of the creation of a new banknote. As G&D points 

out in its promotional literature, banknotes are an expression 

of the identity of a nation, serving in a way as calling cards. 

The creation of banknotes is therefore a complex art, melding 

aesthetics and the latest advances in security technology. To 

illustrate the various steps in the process, Mr Mittelstaedt’s team 

designed and produced a colorful sample banknote — after the 

Bauhaus-style, the influential art school that played an important 

role in Western architecture in the 20th century — incorporating 

all the latest security features. 

The base layer consists of the banknote substrate. Banknote 

substrates incorporate several embedded components such as 

watermarks, which have been an important security feature for over 

100 years, as well as security threads. 

Adjusting for differing climactic and circulation conditions across 

countries, G&D treats substrates with special coatings before and 

after printing to maximize the durability of banknotes within their 

given environment, while ensuring the security features are not 

compromised in the process. 

The next step involves printing of the background using a 

simultaneous offset method that makes possible security features 

such as see-through registers and intricate, multi-colored designs. 

Additional invisible but multicolor luminescent motifs, which appear 

under UV light, may also be included. 

Then comes a layer of intaglio printing, a technique whereby an 

image is engraved into a metallic printing plate, and the incised line 

or sunken area holds the ink. This gives banknotes their unique strong 

colors and contrasts, the tactile texture and high-quality appearance. 

The final stages involve screen printing and numbering. Screen 

printing is used to apply layers of newly developed functional 

pigments that can produce striking dynamic effects. Furthermore, 

the thickness of the coating involved in screen printing produces a 

substantial optical brilliance along with a high level of resistance to 

wear and tear during circulation. 

The all-important sequential serial numbers are added using 

letterpress printing. There are various options when it comes to 

serial numbers. They can be encrypted or designed to be additionally 

machine-readable, using magnetic pigment, for example. In addition 

to traditional numbering, G&D has also introduced the laser as a 

printing tool, making it possible to integrate the serial number into 

the banknote in whole or in part, possibly as a color motif within 

the area of the watermark, or a hologram — providing yet another 

line of defense against would-be counterfeiters. In the last step of the 

cash cycle, banknote processing systems, equipped with high-tech 

features such as very sensitive sensors, immediately detect and reject 

all counterfeits or banknotes with defects. 

22 



Insights 

Retail 

review 

In years gone by retail was an afterthought for an Asian integrated 

resort. But with the rising Chinese middle class and its voracious 

appetite for brands, retail is as crucial as any other non-gaming 

element. How is retail shaping up in Macau’s new normal? 

IAG recently sat down with Gloria 

Siu, Galaxy’s Assistant Vice 

President of Retail, for a chat 

about how Macau’s retail sector 

is faring. While Siu was quick to 

clarify her words represented her own 

personal point of view rather than her 

employer’s, they nevertheless provide 

interesting insights to the retail sector. 

IAG: How is the general level of retail sales 

now compared to what it was before the 

gaming revenue plunge? Gaming revenue is 

down over 30%, is retail the same? 

Gloria Siu: With the recent macroeconomic 

effects and government policies, in general 

retail business has dropped compared 

to last year. Unlike gaming, retail is a big 

word and has a wide range of components, 

including the “luxury”, “affordable” and 

“must-buy” product mix. Most of the drop 

in gaming has come in the VIP sector. In 

such an environment, customers tend to 

spend less in luxury, maintain affordable 

purchases and increase buying must-buy 

products. Also some shops and brands 

benefit from differences between Hong 

Kong, Macau and China, such as tariff 

24 


Insights 

differences with duty free goods, quality 

assurance differences (think baby products, 

healthcare and drugs) and daily price 

variation such as with gold. 

IAG: How have the new openings of Galaxy 

phase 2 and Studio City affected retail in 

Macau? 

GS: The new openings of retail portfolios 

offer a wide range of choices to both locals 

and tourists. Quite a few international 

brands have entered Macau for the first 

time. With environmental and political 

policy changes, Macau is stepping into a 

“new normal”, which means apart from 

gaming as the major revenue, non-gaming 

sectors such as retail and MICE are playing 

more important roles. The increased 

diversification is a healthy and positive 

direction that Macau is heading in. 

IAG: Are the tastes of the mainland visitor 

maturing compared to a few years ago? 

GS: Definitely. The middle class clusters 

have been growing rapidly with China’s 

booming economy in the past few years 

and Chinese people’s brand awareness is 

growing. More and more shopping malls 

are opening in China with international 

brands and Chinese people travel more 

to Hong Kong, Macau and destinations 

outside China. Visa requirements for 

travelling Chinese are relaxing. A few years 

ago Chinese people might look for brands 

with big logos that are easily recognizable 

on the street to show off, but now they 

are looking for subtle luxury symbols that 

makes them feel different. Things like 

luxury designer labels, limited editions 

and so on. While there is no doubt the 

overall brand awareness of mainland 

tourists in Macau is still behind those 

from Hong Kong and Macau – especially 

with more and more mainland tourists 

from second and third tier Chinese cities 

entering Macau – catching up the gap 

won’t be too far away given all the rapid 

changes in China. 

IAG: There are plenty of high-end offerings 

in retail for the VIPs, but what about midrange 

for the growing mass floor player? 

GS: Types of retail offerings are all about 

supply and demand. Usually retail mix 

positioning and planning is implemented 

and confirmed before retail professionals 

approach retail brands to come into the 

malls. The whole planning, leasing and 

opening process generally takes around 

two to four years. Therefore, what you see 

now reflects the market demand two to 

four years ago, which explains why there 

are plenty of high end offerings for VIPs in 

the current retail mix at most malls. With 

the “new normal” market, I believe the 

retail mix will be inclined to become more 

affordable. However, the retail mix also 

depends on the whole positioning of the 

property and its branding. If the property’s 

“A few years ago Chinese people might look for brands 

with big logos that are easily recognizable on the 

street to show off, but now they are looking for subtle 

luxury symbols that makes them feel different.” 


Insights 

“The three golden rules in retail mall value 

are location, location and location. 

In Macau? It’s gamers, gamers and gamers!” 

branding is still VIP-oriented, the retail mix 

will follow. If the retail area is big enough, 

it would be ideal to have a full range of 

offerings to cover all clusters. 

IAG: What specific difference are there 

doing retail in an IR setting compared to 

normal retail say in Hong Kong or Shanghai 

for example? 

GS: The three golden rules in retail mall 

value are location, location and location. In 

Macau? It’s gamers, gamers and gamers! 

Well, at least it still is right now. In a normal 

retail industry, rental income is the major 

revenue for a mall, therefore everything is 

retail leasing oriented, while in Macau, retail 

is a relatively small proportion compared 

with gaming, therefore things are more 

gaming oriented. It shows in many ways. 

The first is mindset, which is not how other 

business and operations would help retail, 

but how retail would help gaming. Then 

there is marketing, in that different target 

customers decide different marketing 

strategies and promotion and membership 

systems. The population and customer 

bases are more versatile in Hong Kong 

and Shanghai – there’s a bigger pie for 

differentiation. Properties in Hong Kong 

and Shanghai are normally a mix of office 

and retail or residential and retail, where 

office workers and residents are regarded 

as providing important spending power in 

the mall, while in Macau it is mostly IR and 

tourist-oriented. Then you have HR factors, 

it is more difficult to get retail professionals 

and qualified staff in Macau, which limits 

some good brands or interesting concepts 

from entering Macau. In places like Hong 

Kong and Shanghai you can easily find lots 

of interesting designer or niche brands – 

not so easy to do in Macau! 

IAG: How are retail space deals 

struck between the retailer and the 

concessionaire? Typically what’s the mix 

between fixed cash monthly rental and 

percentage of sales? Has this been changing 

over the years? 

GS: Normally a typical retail lease has a fixed 

rent and a turnover rent, with the retailer 

paying whichever is higher each month. 

However, every landlord is different and 

every deal is different, depending on how you 

negotiate and the attitudes of both sides. It 

has not changed too much over the years in 

the Hong Kong and Macau markets. 

IAG: We’re hearing Hong Kong is getting a 

bad reputation with mainland tourists with 

analysts predicting much lower growth 

rates in the future. Is this a boon to Macau 

retail? 

GS: It can be a risk or an opportunity to 

Macau. The risk side is that tourists may 

choose to come to Hong Kong and Macau 

on the same trip. If the number of tourists 

entering Hong Kong decreases, it might 

affect Macau too. The opportunity side is 

that if Macau can offer better hospitality 

and customer experiences than Hong Kong, 

together with entertainment, gaming and 

other elements, Macau might benefit from 

the current Hong Kong situation. 

IAG: Will greater critical mass of retail on 

Cotai propel Macau into more of a shopping 

destination in the minds of tourists? Could 

it help extend the average stay in Macau? 

GS: Cotai is becoming the shopping 

destination for tourists, although it still 

has a lot to improve to catch up with Hong 

Kong. I don’t think shopping alone can help 

extend the average stay in Macau. Tourists 

won’t stay in a city for three days or more 

purely for shopping. Instead, if Macau 

offers more attractions, entertainment, 

resort facilities, F&B and places of interest 

combined with shopping, it will significantly 

help to extend the average stay. 

26 


WE’RE HIRING A DEPUTY EDITOR 

Sick of your current employer? 

Looking for a change? Come join our fun-loving dynamic team! 

Employer 

Position title 

Reports to 

Salary 

Bonus 

Medical coverage 

Working location 

Working hours 

Transportation 

Public holidays 

Annual leave 

Sick leave 

Telephone 

Languages required 

Experience 

Qualifications 

Must Read Publications Limited (incorporated in 

Macau), publisher of Inside Asian Gaming. 

Deputy Editor – IAG and WGM. 

Managing Editor – IAG and Managing Editor – WGM. 

Range of MOP$18,000 to MOP$23,000 dependent 

on experience, qualifications and suitability of the 

successful candidate. 

A very attractive bonus structure is provided. 

Basic medical insurance will be provided. 

The company has offices located in Central Macau and 

Central Taipa. The successful applicant will be able to 

work from home when appropriate, but will generally 

work from company offices. 

Officially Monday to Friday 10:00 to 19:00, but as needed 

to achieve the functions of the role. Great flexibility is 

offered by the company in relation to working hours. 

From home to work and return most days in a chaffeurdriven 

luxury company vehicle (no Macau buses to catch!) 

All Macau government public and bank holidays. 

1.5 annual leave days per full calendar month worked 

(18 days per year), taken by mutual consent of the 

successful candidate and the company. 

up to 8 sick leave days per year. 

The company will provide a smart phone and data plan 

to be used for company business. 

Fluency in oral English and Cantonese and able to write 

in English and Chinese. 

At least one year of experience in a role involving 

journalism and/or professional writing is highly 

desirable but not essential. 

A tertiary degree in Chinese, English, communications 

or journalism is highly desirable but not essential. 

Training and mentorship 

• As appropriate to the successful candidate, a high level of training 

and mentorship will be provided to the successful candidate by the 

Managing Editors of WGM and IAG. 

Essential skills and attributes 

• Able to write professional level magazine and website copy. 

• Excellent organizational skills. 

• Able to work collaboratively and harmoniously with other staff. 

• Able to confidently attend press conferences and other events 

representing the company at such events and asking appropriate 

questions (with guidance and training). 

• The ability to work with an extensive contact list of many thousands 

of contacts. 

• An outgoing personality with the ability to build genuinely warm 

relationships over time. 

• Basic computer skills: Microsoft Word, PDFs, email, etc. 

Desirable skills and attributes 

• A basic understanding of casinos and gaming. 

• An existing network of contacts amongst Macau local businesses. 

• Video production skills. 

Duties 

• At times publicly represent Inside Asian Gaming and/or WGM. 

• Write professional magazine level copy for Inside Asian Gaming and 

WGM in one of English and Chinese and create a good quality first 

draft translation in the other language. 

• Manage and develop relationships to maintain and build the 

company’s extensive industry contact list. 

• Assist with other operational activities as required, for example with 

conferences and events. 

• Any other duties as necessary from time to time. 

For more information please contact Andrew W Scott at ceo@wgm8.com. 


CASINO 

MARKETING 

A tipping point 

One thing that is very unique to the gaming industry is the high 

preponderance of tipped employees. Other service industries have 

some tipped employees but in gaming it seems almost everyone 

can make tips including, sometimes, managers. 

By Dennis Conrad 

Dennis Conrad is president 

and chief strategist for 

Raving Consulting Co, a fullservice 

marketing company 

specializing in assisting 

gaming organizations. He 

can be reached at +1 775 329 

7864 or by e-mail at dennis@ 

ravingconsulting.com. 

Not many casino companies pay close attention 

to this “customer provided wage contribution,” 

other than to establish the necessary procedures 

and record keeping for it, ensure some fairness to 

tip earning opportunities among employees of the 

same job classification, and occasionally (usually among casino 

dealers who keep their own tips), try to ensure that tipped employees 

don’t earn too much and upset the whole wage scale applecart. 

Casino companies tend to like, or at least tolerate, such a 

pervasive tipping culture because, I suppose, the more a team 

member is tipped, the less a casino has to pay in base salary. 

Having been a tipped employee at several early jobs in my gaming 

career, I’m not sure how I feel about that. 

28 


CASINO 

MARKETING 

One would think that employees earning tips would contribute to 

great casino customer service. However, from my experience, that is 

not always the case. Sure, great tipped employees tend to make great 

“tokes” (as tips are called in our industry), but too often this “gratuity 

culture” leads to only well-tipping casino customers getting great, 

friendly service. Perhaps that is human nature. 

What I have yet to see in the gaming industry (and what I think is a 

great opportunity) is a casino company strategically align its interests 

with the interests of its tipped employees – ok, Barona Resort and 

Casino in San Diego is the one huge exception. 

What exactly do I mean by that? I’ll try to explain and highlight 

the huge marketing opportunity that I see with this tipping culture 

and then offer some tips (pun intended) on aligning those interests. 

The “casino tipping world” and the unique flow of the casino’s 

business patterns (most business occurring from Friday night to 

Sunday afternoon) creates some interesting tip situations, such as: 

Employees working busy times make a lot more in tips than 

those working during slower times. 

Certain tipped positions (cocktail server, dealer, gourmet room 

food server, and so on) make a lot more in tips than most other 

tipped positions (cage cashier, guest room attendant, players 

club rep, and so forth). 

All else being equal (and certainly there are glaring exceptions) 

tipped employees serving VIP customers make a lot more than 

those tipped employees serving the masses. 

Casino employees who are allowed to keep their own tips in their 

job role will make a lot more than employees in that same job 

role who pool their tips with other employees. 

With these “tip realities” in mind, here are some suggestions for 

leveraging the casino tip environment to help your business (let HR 

figure out how to make it happen): 

Always have your best employees, by whatever objective measure 

you decide, work the best tip-earning shifts in all tipped positions. 

Where tips are pooled, try to find ways to have best employees 

keep their own tips instead of contributing them to the pool. 

Investigate ways to create career paths across tipped positions in 

ascending order of their tipped value (for example players club, 

to valet, to dealer, to cocktail server to server in high-limit room). 

And don’t tell me it’s impossible! 

Find ways to promote tips for your best employees with your 

customers. I’ve always felt that there should be a sign at every 

blackjack table that said, “We encourage generous tipping for 

great service. For anything less, do not feel obligated to tip.” 

Quit sweating the great employees who make huge tips in 

whatever job role they have (unless they are doing it in an unethical 

way). I know a casino that has several slot attendants that make 

over US$100,000 a year in salary and tips combined. But they 

magnificently serve slot players who, combined, spend several 

million dollars a year at that casino. What’s wrong with that? 

One acronym for “TIPS” is “To Insure Prompt Service.” I say 

use tips to ensure your best people are paid best for providing best 

service to your best players. And that is a great marketing result. 

Reprinted with permission of Casino Journal. 

“One acronym 

for ‘TIPS’ is ‘To 

Insure Prompt 

Service.’ I say, 

use tips to ensure 

your best people 

are paid best for 

providing best 

service to your 

best players.” 


Gambling 

and the law 

Lessons from 

the Insurance Industry 

Licensed gaming 

is slowly becoming 

just another legal 

business—which is a 

very good thing 

By Prof. I. Nelson Rose 

Professor I Nelson Rose is 

recognized as one of the world’s 

leading authorities on gambling 

law and is a consultant and 

expert witness for governments 

and industry. His latest books, 

Gaming Law in a Nutshell, 

Internet Gaming Law and Gaming 

Law: Cases and Materials, are 

available through his website, 

www.gamblingandthelaw.com. 

Many of the strangest 

restrictions in the law 

arose from centuries of 

gambling being seen 

by society, or at least by 

opinion-leaders and lawmakers, as an activity 

that was simply not respectable. Gambling 

debts were unenforceable, and courts would 

no more allow casinos to advertise than they 

would brothels. A gaming license was similar 

to James Bond’s “license to kill”: It merely 

protected the operator from being prosecuted 

for what was otherwise an illegal act. 

In the past, other industries struggled 

with becoming respectable in the eyes of 

the law. This usually took the route of trying 

to show they were not forms of gambling, 

even if they were. They also knew they had to 

come up with arguments on why they were 

actually good for society. The best examples 

are trading in securities and commodity 

futures and insurance. 

Insurance is, of course, gambling. 

Looking just at the required three 

elements, insurance has “prize”, “chance” 

and “consideration”. After all, a policy 

30 


Gambling 

and the law 

holder is merely betting a small sum with 

the expectation of winning a larger sum if a 

certain contingent future event occurs. 

Systems similar to modern insurance are 

at least 3,500 years old. Shippers, merchants 

and financiers developed schemes to share 

the risk and spread unexpected losses 

caused by pirates and shipwrecks. 

Insurance as a separate contract first 

developed in Genoa in the 14th century, and 

was again focused on marine shipping. The 

long history of maritime insurance made 

it the least susceptible to being viewed as 

merely gambling in more modern times. 

The Great Fire of London, in 1666, 

appears to have led to the creation of the 

first fire insurance. 

Insurance probably would have been 

ignored by lawmakers if not for two 

developments. Owners of fire insurance 

policies seemed to be having a few too many 

fires. And operators found ways of turning 

insurance into pure gambling. 

A gambling fever swept England in the 

17th and 18th century. As UNLV scholar 

David G. Schwartz put it, men would bet on 

anything: “on whose grandmother would 

live longer or whether a surgeon might 

successfully save a particular patient.” 

This turned what was merely a way for 

merchants to lessen their risks into wideopen 

wagering. People would take out life 

insurance policies on celebrities. During the 

Nine Years’ War of 1688 to 1697, insurers 

took wagers on which cities would be the 

targets of military action. 

Probability theory, on which both 

insurance and gambling is based, was 

developed in the 17th century at the behest 

of professional bettors. 

Conventional gambling and insurance 

came together with the creation of “lottery 

insurance” and “insurance offices.” Lottery 

tickets were extraordinarily expensive, at 

least £10, more than a year’s wages for 

most workers. So, shares in full tickets 

were sold for much less, similar to how full 

tickets for Spain’s “El Gordo,” which cost 

€200, are sold today in half-, quarter- and 

smaller slices. 

But hustlers figured out how to sell 

chances for even less. “Clients” could 

“ensure,” for one shilling, that a particular 

number would not be drawn from the state 

lottery wheel on a particular day. These 

“policies” paid £10 if the number was drawn. 

Looking just at the required three elements, insurance 

has “prize”, “chance” and “consideration”. After all, 

a policy holder is merely betting a small sum with 

the expectation of winning a larger sum if a certain 

contingent future event occurs. 

The practice spread to America. Even 

today, the illegal numbers racket is often 

called “policy.” 

Parliament made sporadic efforts over 

the years to eliminate lottery insurance. On 

April 4, 1792, the House of Commons debated 

The Lottery Bill, to help reimburse loyalists 

who had suffered during the American 

Revolution. The standard arguments were 

raised about the evils of gambling, whether 

the state should profit from the vices and 

weaknesses of its citizens, the dangers of 

competition from foreign lotteries, and the 

discussion of lotteries as a “voluntary tax.” 

But then one Mr Rose (probably no relation) 

defended the lottery by declaring “that 

the evils complained of formerly existed … 

but he had reason to think they existed no 

longer. They had not arisen from lotteries 

themselves, but from the illegal insurance 

offices that had been opened. Those offices 

were now put an end to …” 

What finally led to a crackdown on 

insurance was the unseemliness, and 

danger, of people buying life insurance on 

well-known strangers. 


Gambling 

and the law 

Probability theory, on 

which both insurance and 

gambling is based, was 

developed in the 17th 

century at the behest of 

professional bettors. 

The argument that the purchaser of 

insurance is actually trying to avoid risk did 

not work in this case. Business owners do 

not think they have lost bets when they do 

not have a fire, any more than when they 

hire security guards who never have to 

draw their guns. But while a theater has 

a business reason for insuring against 

the death of its box-office draw, even the 

biggest fan does not. 

In the US and England, courts and 

legislatures developed the “insurable 

interest” rule. You cannot take out a life 

insurance policy on someone you have no 

connection with. That would be too much 

like making a bet that another person would 

die. Plus, government is afraid that you 

might be tempted to do something to try to 

increase your chances of winning. 

The insurance industry won its battle to 

remain legal by showing that true insurance 

was different from pure speculation. 

This is similar to the arguments that 

advocates for Internet poker are making 

today. Poker sites would like to have online 

casino operators as allies. But they know they 

have more chance of winning over religious 

conservative Republicans and paternalistic 

liberal Democrats if they show that poker is 

a game of skill. 

Of course it is an easy argument to 

make. As noted poker author Richard Sparks 

observed: “I’ve been outplayed far too often 

on the Internet not to have learned the hard 

way that poker is, very sadly, a game in which 

skill predominates.” 

State lotteries can’t make this argument. 

But they were originally sold as ways of helping 

education or the elderly. They successfully 

shifted their image, to the public, as being 

merely another form of entertainment; while 

legislators and governors see lotteries as 

essential to balancing state budgets. 

Insurance eventually overcame its 

gambling roots because it was seen as 

creating a benefit for the general public, as an 

efficient way of spreading and lessening risk. 

Still, insurance had to be outlawed 

if the sole purpose was merely to make 

money by betting. Pure speculation was 

not only of questionable morality, but 

also considered economically inefficient, 

because it did not contribute anything to 

the greater society. 

Advocates for expanding gaming need 

to study history to see how insurance 

succeeded. Insurance is, by far, the largest 

form of legal gambling. In fact, by some 

standards, the insurance industry is the 

largest industry in the world. 

In the US and England, 

courts and legislatures 

developed the 

“insurable interest” 

rule. You cannot take 

out a life insurance 

policy on someone you 

have no connection 

with. That would be too 

much like making a bet 

that another person 

would die. 

32 



Blast 

from the Past 

Foreign Affairs 

December 2012 

Exactly three years ago in December 2012 IAG examined the Wynn vs 

Okada feud in light of increased prosecution of US companies engaging 

in overseas bribery. Despite a set of circumstances that seemed to be 

begging to be investigated, it’s been all quiet on the Eastern Front. We take 

a look back at the history behind the falling out of Wynn and Okada and 

its relationship to the Foreign Corrupt Practices Act. 

The Act’s criminal provisions have swept up more than 170 

individuals and entities, foreign and American both, just 

in the last dozen or so years—owners, CEOs, presidents, 

CFOs, directors, treasurers, general managers, employees, 

joint venture partners, trust fund managers, contractors, 

translators, even Hollywood producers—mostly in connection with 

actual or purported schemes to bribe foreign government officials 

to obtain business or secure some kind of commercial or financial 

advantage. At least 29 men and women have lost some measure of 

their physical freedom as a result of FCPA convictions or guilty pleas. 

More than US$3 billion in fines and other monetary penalties have 

been exacted. A Louisiana congressman convicted of bribery in a 

2009 jury trial that included FCPA charges is doing 13 years. In 2010, a 

corporate vice president got 87 months after pleading guilty to paying 

bribes to secure maritime contracts in Panama. 

And the Act is being enforced more vigorously now than at any 

time in its history, something Wynn’s lawyers would not have failed 

to note as relations with Mr Okada got uglier, and from the board’s 

standpoint increasingly worrisome, over his plans to develop a 

resort-scale casino in Manila in competition with his own company. 

Or so it’s portrayed in Wynn’s 2012 lawsuit charging the Japanese 

billionaire with “breach of fiduciary trust”. 

As Justice Department records show, almost half of all 

enforcement actions initiated under the FCPA or related statutes 

have occurred since Barack Obama took office in 2009—92 to 

date—more than under any president going back to Jimmy Carter, 

34 


Blast 

from the Past 

who signed the FCPA into law—more than under the 16 years of the 

Bush and Clinton administrations combined. 

In the casino industry one hears about the Foreign Corrupt 

Practices Act mostly in connection with a tangled history of relations 

between Las Vegas Sands and the powers that be in Beijing and 

Macau and a cast of assorted middlemen peddling influence in the 

shadowy terrain in between, among them, so it’s alleged, a prominent 

Macau lawyer who is a member of the territory’s Legislative Assembly. 

Most of this was dragged into the light when Steve Jacobs, who 

was fired in 2010 as head of the company’s China operations, sued 

for wrongful termination. In March 2011, LVS disclosed that it had 

been subpoenaed by the Justice Department and the Securities and 

Exchange Commission “relating to its compliance with the Foreign 

Corrupt Practices Act.” 

It is not uncommon for FCPA investigations to begin this way, 

with somebody talking out of school. In his March 2012 counterclaim 

challenging the forced redemption of his Wynn Resorts stock, Mr 

Okada says he was ousted from the corporation for challenging the 

authority of Chairman and CEO Steve Wynn, who he claims runs Wynn 

Resorts as his “personal fiefdom”. This extended to questions he says 

he’d raised about the propriety of a sizable donation the company 

pledged in May 2011 to a University of Macau foundation—$135 

million in 11 annual installments, the final payment to be made the 

year Wynn’s Macau casino concession is due to expire. 

Likewise, much of what former FBI Director Louis Freeh would 

report from the Philippines in support of Wynn’s breach-of-trust 

against Mr Okada appears to derive from information supplied by an 

attorney with an axe to grind and relationships with people in high 

Sheldon Adelson, who has said he fears 

“vilification” as a foe of the Obama 

administration, spent 2012 writing enormous 

checks to Republican candidates, political 

action committees and dark money non-profits 

to try to keep Mr Obama from returning to the 

White House. 

Barrack Obama—stepping up FCPA enforcement 

places, including former executives with the Philippines Amusement 

and Gaming Corporation (PAGCOR), the government agency that 

licenses and regulates the industry. The report, compiled in late 

2011 and early 2012, touched at some length on links between local 

affiliates of Mr Okada and one Rudolfo “Boysee” Soriano, who had 

been a comped guest of Mr Okada’s at Wynn Macau and Wynn Las 

Vegas on at least four occasions and is described as a PAGCOR 

consultant and confidante of Efraim Genuino, the agency’s former 

chairman. Soriano’s name acquired sudden notoriety last month 

after Reuters reported that Mr Okada’s Universal Entertainment 

Corp. was under investigation by the Nevada Gaming Control Board 

and the Philippines Department of Justice in connection with a 2010 

transfer of $40 million from the United States to a company in Hong 

Kong, $30 million of which found its way to companies controlled by 

Mr Soriano. The money was moved through Aruze USA, the Nevadaregistered 

entity that held Mr Okada’s Wynn Resorts shares. Aruze 

USA is wholly owned by Tokyo-based, JASDAQ-listed Universal, 

which is licensed in Nevada as a gaming machine manufacturer 

and is 67.9% controlled by an Okada family entity. Mr Okada is the 

chairman of Universal and president, secretary and treasurer of Aruze 

USA. Reuters reported that at least two former Universal employees 

were talking to the FBI in connection with the investigations. 

Las Vegas Sands, meanwhile, has marshaled the services of 

legal heavyweights Mark Mendelsohn, former head of the Justice 

Department’s FCPA unit, and Richard Grime, an FCPA expert in the 

White Collar Defense and Corporate Investigations Practice of D.C.- 

based O’Melveny and Myers; while Sheldon Adelson, the company’s 

famously combative chairman, who has said he fears “vilification” 

as an outspoken foe of the Obama administration, spent 2012 

writing enormous checks to Republican candidates, political action 

committees and dark money non-profits to try to keep Mr Obama 

from returning to the White House. 

Had he succeeded it’s likely his FCPA worries would be behind 

him. As it stands, $150 million or so in direct and indirect campaign 

contributions later, his company is also the target of a federal probe 

into alleged money-laundering at its Las Vegas casinos. Mr Adelson 

was planning to travel to Washington this month, according to a 

Huffington Post report, to meet with Republican lawmakers. The 

agenda was to include the Foreign Corrupt Practices Act, the Post 

said, citing party insiders. 


Blast 

from the Past 

In January 2011, Wynn’s independent 

directors led by former Nevada Gov. Bob Miller 

undertook the first of two risk assessments 

of the Philippines. Their conclusion was 

that corruption is “deeply ingrained” in the 

gaming industry there and that newly elected 

President Benigno Aquino [pictured here] 

wasn’t likely to do much about it. 

“It looks like Sheldon is shooting himself in the foot when 

it comes to the FCPA,” says a source with ties to the regulatory 

authorities in Macau. 

For what it’s worth, Mr Wynn is also a major Republican donor. 

Similarly outspoken in his dislike for the Obama presidency, he 

acknowledged “urging” his 12,000 Las Vegas employees to vote for 

Mitt Romney. 

Love Gone Sour 

In January 2011, Wynn’s independent directors led by former Nevada 

Gov. Bob Miller, who chairs the board’s Compliance Committee, 

undertook the first of two risk assessments of the Philippines. 

Their conclusion was that corruption is “deeply ingrained” in the 

gaming industry there and that newly elected President Benigno 

Aquino wasn’t likely to do much about it. The 

committee also claimed to have evidence leading 

to “reasonable suspicion that persons acting on 

Okada’s behalf had engaged in improprieties,” 

possibly a reference to the allegations currently 

swirling around Boysee Soriano. 

According to the company’s 2012 lawsuit, 

these findings were presented at a board meeting 

the following month with Mr Okada present. 

Steve Wynn announced at the meeting that 

he’d been invited by Mr Okada to meet with Mr 

Aquino. The independent directors responded 

that “involvement in the Philippines was 

inadvisable” and recommended against it. The 

meeting with Mr Aquino was canceled. Mr Okada 

was “embarrassed and angry”. 

The committee’s second investigation, 

commissioned that August, went further, 

declaring that it had “identified anomalies and 

improprieties in Universal/Okada’s dealings in 

the Philippines”. The findings included concerns that Mr Okada was 

“engaging in acts that would render him unsuitable under Nevada 

gaming regulations, and breaching the fiduciary trust duties he owed 

Wynn Resorts”. 

Sometime around the end of October, Washington, D.C.-based 

Freeh, Sporkin & Sullivan was brought in “to examine Mr Okada’s 

efforts in connection with the creation of a gaming establishment 

… but not quite kingmaker 

in the Republic of the Philippines”. Specifically, the board wanted 

something definitive on whether Mr Okada “may have breached his 

fiduciary duties to Wynn Resorts; engaged in conduct that potentially 

could jeopardize the gaming licenses of Wynn Resorts; and/or 

violated the Wynn Resorts compliance policy”. 

It’s difficult to imagine that Mr Okada couldn’t have known 

at this point that his days at the company were numbered, for his 

first written request for corporate records relating to the University 

of Macau donation was submitted on 2nd November. Three more 

requests would follow, on the 17th, the 29th and 12th December. 

On 11th January of this year, he went into state court in Nevada to 

demand the information. He also wanted to see records relating to 

the status of his substantial equity holding as a result of the 2009 

divorce settlement between Steve and Elaine Wynn, who is also a 

director, and records explaining how the company 

had spent some $30 million he says he provided 

back in 2002 to get the Macau business off the 

ground. 

It was almost exactly one month later, on 

13th February, that the Securities and Exchange 

Commission, which jointly enforces the FCPA, 

came calling, requesting through its Salt Lake 

Regional Office that the company “preserve 

information relating to the donation to the 

University of Macau, any donations by the 

Company to any other educational charitable 

institutions … and the Company’s casino or 

concession gaming licenses or renewals in 

Macau”. 

The irony is somewhat striking since, to hear 

Wynn tell it, the company’s standing with regard 

to the FCPA has been of paramount concern going 

back to 2008. That was the year a Philippines 

subsidiary of Aruze USA won one of four no-bid 

licenses from PAGCOR to develop a resort casino on land reclaimed 

from Manila Bay and christened Entertainment City. 

Louis Freeh’s background is indicative of just how much this 

had come to worry the board. His law partners include two retired 

federal judges, one of whom used to head the SEC’s Enforcement 

Division. Mr Freeh had been a US attorney and US District judge 

prior to joining the Clinton administration in September 1993, where 

36 


Blast 

from the Past 

“I love Kazuo Okada as much as any man that 

I’ve ever met in my life,” Steve Wynn once 

proclaimed. “And there is hardly anything that 

I won’t do for him.” 

he would direct the FBI for almost seven years, continuing in the 

post for five months more after George W. Bush took office. After 

leaving the government he represented Prince Bandar bin Sultan, the 

former Saudi ambassador to the US, in the al-Yamameh arms-foroil 

scandal involving Europe’s largest defense contractor, UK-based 

BAE Systems. In 2010, BAE would forfeit US$400 million in one of 

the largest criminal prosecutions in FCPA history. That same year, 

as part of the fourth-largest FCPA settlement up to that time, Mr 

Freeh was appointed to monitor Daimler AG’s compliance with the 

Act after the giant automaker and three subsidiaries agreed to pay 

The Foreign Corrupt Practices Act is being 

applied more vigorously now than at any time 

in its history. Almost half of all enforcement 

actions initiated under it have occurred since 

Barack Obama took office in 2009, more than 

under any president going back to Jimmy 

Carter, who signed the FCPA into law, more 

than under the 16 years of the Bush and 

Clinton administrations combined. 

$93.6 million in fines and hand over $91.4 million in profits to settle 

alleged violations. In 2011, he served as an independent investigator 

for FIFA in the Mohamed bin Hammam bribery scandal. 

While the SEC was poring over Mr Okada’s January petition, Mr 

Freeh was briefing Wynn’s Compliance Committee on what he’d 

learned about the Philippines. His final interview, with Mr Okada and 

Mr Okada’s US counsel, took place in Tokyo on 15th February. On the 

18th, he gave what Wynn describes as a “detailed presentation” to the 

board and provided copies of his final report, which concluded that 

Mr Okada’s conduct “constituted prima facie evidence of violations 

of the Foreign Corrupt Practices Act”. It was on that day, apparently, 

that Wynn issued a 10-year IOU to buy back Aruze USA’s shares, 

amounting to a 19.66% stake in the company, at a 30% discount to 

their market value at the time. The next day, the company filed its 

suit in Nevada District Court in Las Vegas charging the man who had 

helped bankroll Wynn’s empire with “breach of fiduciary trust”. Mr 

Okada was later booted off the board of Wynn Macau. He is still on 

the board of Wynn Resorts, his seat protected by Nevada law unless 

the shareholders vote to remove him. 

“I love Kazuo Okada as much as any man that I’ve ever met in my 

life,” Steve Wynn once proclaimed. “And there is hardly anything that 

I won’t do for him.” 

Obviously, that stopped at Luzon’s steamy shores. 

The “Big Stick” 

On 24th February, the Financial Times reported that a lawyer for Wynn 

Resorts who had served with the US Attorney’s Office in Los Angeles 

had flown to Washington to meet with criminal prosecutors at the 

Department of Justice. It was not known at the time if the department 

has joined the SEC in looking into the company’s affairs. It is still not 

known. 

Writing that month in his “White Collar Watch” column in The 

New York Times, former Justice Department prosecutor and law 

professor Peter J. Henning suggested that Wynn’s suit against 

Mr Okada “means the Justice Department and the Securities and 

Exchange Commission will be scouring the company’s books for 

possible violations, a front that neither side can control.” 

“By invoking the specter of overseas bribery, Wynn has effectively 

opened itself up to a wide-ranging federal investigation of its dealings 

in Macau and elsewhere. Combined with the lawsuit it filed against 

Mr Okada, the company most likely will face soaring legal costs over 

the next year or two as it deals with the fallout from the dispute.” 

Mike Koehler, a law professor with Southern Illinois University 

and a blogger on all things FCPA, calls this battle of the billionaires 

“one of the strangest instances of FCPA scrutiny one can imagine”. 

“The Freeh report puts the DOJ (and perhaps even the SEC given 

Okada’s membership on the Wynn Board) in a difficult position. 

How can the agencies not investigate the conduct at issue when the 


Blast 

from the Past 

“By invoking the specter of overseas bribery, Wynn has 

effectively opened itself up to a wide-ranging federal 

investigation of its dealings in Macau and elsewhere.” 

former director of the FBI is terming the conduct ‘prima facie’ FCPA 

violations. An analogy would be like calling the fire department to 

inform that your house is on the fire, but the fire department fails to 

show up.” 

The UMAC endowment, which has generated at least four 

shareholder lawsuits, is characterized as “suspicious” by Mr Okada, 

who cites “its enormous size, the fact that the 10-year term of the 

pledge matches precisely the length of the casino license Wynn 

Resorts was seeking, and the fact that the lead trustee of the University 

of Macau Development Foundation also has a position in the Macau 

government which enables him to influence the issuance of gaming 

licenses.” Presumably this refers to a prominent local businessman 

named Peter Lam Kam Seng, a charter member of the foundation 

and a member of the committee that elects Macau’s chief executive. 

“I am at a complete loss as to the business justification for the 

donation,” Mr Okada said in September in an open letter to Wynn’s 

shareholders, “other than that it was an attempt to curry favor with 

those that have ultimate authority for issuing gaming licenses.” 

He was the only one of the 16 directors to oppose the endowment. 

Wynn says that’s not true, that he objected only to its length. 

Charitable contributions as such are not prohibited by the Act 

as long as they are not used as a “pretense” to cover bribes to 

government officials. This distinction was reiterated in fresh guidance 

on the Act issued last month by the Justice Department and the SEC. 

The guidance gives the example of a Eurasian-based subsidiary 

of a US NGO that acceded to a request from an agency of a foreign 

government to make a grant to a local financial institution as a 

condition for attaining bank status. The company emerged in the 

clear, however, in part because it informed the DOJ of the request up 

front and because it did its homework by ensuring the money was 

transferred to a valid bank account and requiring the institution to 

provide audited financial statements along with a written agreement 

restricting the use of the funds and a confirmation that none of its 

officers were affiliated with the government. 

Then there’s the example of pharmaceutical giant Schering- 

Plough, which had a subsidiary in Poland that donated money to a 

foundation that restores historical landmarks. The foundation was 

genuine. Its founder and president, however, was the director of a 

government health fund that purchases pharmaceuticals. Worse, 

“Internal documents established that the payments were not viewed 

as charitable contributions but rather as ‘dues’ the subsidiary was 

required to pay for assistance from the government official,” the 

November FCPA guidance notes, adding that the payments also 

violated Schering’s own policies, which require that charitable giving 

“generally should be made to health care institutions and relate to 

the practice of medicine”. 

Wynn maintains that the UMAC donation “was made following 

an extensive analysis which concluded that the gift was made in 

accordance with all applicable laws.” No doubt, corporate counsel 

has since made note of these “Five Questions to Consider When 

Making Charitable Payments in a Foreign Country” from the FCPA 

guidance: 

What is the purpose of the payment? 

Is the payment consistent with the company’s internal 

guidelines on charitable giving? 

Is the payment at the request of a foreign official? 

Is a foreign official associated with the charity and, if so, can 

the foreign official make decisions regarding your business 

in that country? 

Is the payment conditioned upon receiving business or other 

benefits? 

As for Mr Soriano’s visits to Wynn’s casinos, they were part of 

more than $110,000 in room and food and beverage complimentaries 

and other courtesies that were extended to current and former 

members and associates of PAGCOR and their families at the behest 

of Mr Okada and/or his representatives. These sums were all charged 

to a courtesy account maintained by the company for Universal and 

Aruze USA and funded by deposits from Mr Okada or his affiliates. 

In November 2009, the husband of then-Philippines President Gloria 

Macapagal Arroyo was comped a week at Wynn Las Vegas at a cost of 

more than $4,600. In June 2010, his last month in office, Mr Genuino 

was comped $1,870 at Wynn Macau. (The Freeh report claims 

Universal also paid expenses related to a trip by the former PAGCOR 

chairman to Beijing during the 2008 Olympics.) More than $5,900 

was comped in 2010 and 2011 for stays at Wynn Las Vegas and Wynn 

Macau by four South Koreans, one of whom was identified at the 

time as commissioner of the Incheon Free Economic Zone Authority, 

where Mr Okada is also looking to develop a casino. In September 

Mr Okada contends in 

the Freeh report that 

“all his efforts in the 

Philippines prior to the 

change of presidential 

administration in the 

summer of 2010 were 

undertaken on behalf of 

and for the benefit of Steve Wynn and Wynn 

Resorts”. The company vehemently denies this. 

38 


Blast 

from the Past 

2010, two months after Mr Genuino was sacked by President Aquino 

on suspicion of corruption, his successor, Cristino L. Naguiat, and 

a party that included his wife, their children, the nanny and another 

PAGCOR officer and his wife ran up a bill over four days at Wynn 

Macau in excess of $50,000. 

Mr Okada implies that Wynn was complicit in at least some of this, 

contending in the Freeh report that “all his efforts in the Philippines 

prior to the change of presidential administration in the summer of 

2010 were undertaken on behalf of and for the benefit of Steve Wynn 

and Wynn Resorts”. The company vehemently denies this. 

The FCPA does not prohibit a “reasonable and bona fide 

expenditure, such as travel and lodging expenses, incurred by or 

on behalf of a foreign official … directly related to the promotion, 

demonstration or explanation of products or services; or the 

execution or performance of a contract with a foreign government or 

agency thereof.” 

What it does prohibit is conduct like that of a California 

telecommunications company that was slapped with an enforcement 

action for spending several millions of dollars over a period of years 

for hundreds of customer trips arranged for the purpose of obtaining 

systems contracts in China. These included visits by employees of 

state-owned companies to popular US tourist destinations. The trips 

were purported to be for “training,” and approximately $670,000 

of the expenses was falsely recorded as such. A New Jersey-based 

telecom ran into similar trouble over hundreds of trips by Chinese 

government officials ostensibly for training and facility inspections 

that masked holidays in New York City, Las Vegas, Hawaii, Disney 

World, the Grand Canyon and Niagara Falls. The expenses were 

either not recorded or falsely listed on the books as “consulting fees,” 

the Justice Department says. This included cash that was handed to 

some of the officials for spending money. 

According to the Freeh report, everyone in Mr Naguiat’s party 

received US$5,000 in credit for “shopping and gaming”. This was 

granted at the request of Mr Okada’s representatives and charged to 

the Universal/Aruze USA account. Another 80,000 Macau patacas 

(approximately $10,000) was advanced from the cage and charged 

to the Universal/Aruze account for a Chanel bag Mr Naguiat wanted 

for his wife. 

If it is true, as Wynn’s suit alleges, that Mr Okada’s representatives 

Meet the new boss 

Cristino L. Naguiat 

also wanted the stay to be kept secret and instructed the hotel that 

Mr Naguiat would not register as a guest (he would be listed by 

VIP Services as “Incognito” followed by his name) that could prove 

especially damning from the standpoint of the FCPA. The same goes 

for the accusation that they wanted to conceal some of the costs by 

laying them off on Wynn Macau. This included accommodations at 

the “most expensive” suite at the property, the 7,000-square-foot 

Villa. This was refused, according to the Freeh report. 

Mr Okada denies any knowledge of or involvement in wrongdoing 

at the company. 

Wynn likewise maintains that it has followed the law both in letter 

and spirit. In August 2011, the month the Compliance Committee 

commissioned its second investigation into the Philippines, a notice 

was issued to all the members of the board to report in October 

for training on the Foreign Corrupt Practices Act. They also were 

instructed to review the company’s “Code of Business Ethics” and 

“Policy Regarding the Payment to Government Officials” and to 

confirm in writing that they had read and understood them. Wynn 

says every director signed this “Code of Business Conduct and Ethics 

Acknowledgement” save one, Kazuo Okada. He notified the board 

that he would attend the FCPA training, the company says, but the 

week before it was to start he asked for the training materials to be 

translated into Japanese. He also wanted the date of the training 

moved. He never attended. 

The lawyers at Latham & Watkins, a US-based practice specializing 

in international law and regulation, say an effective compliance 

program should be able to satisfy at least three basic questions: 

Is the program well-designed? 

Is it applied in good faith? 

Does it work? 

Currently, the FCPA does not provide for an affirmative 

compliance defense. The US Chamber of Commerce, among others, 

believes it should. 

So does Mr Koehler. “What you’re dealing with is not the law,” he 

says, “but the Justice Department’s and the SEC’s view of the law and 

in some cases that view has been rejected by the courts.” 

The chamber also wants the Act amended so that “willfulness” 

has to be proved for a company to be criminally liable. (Currently, 

this applies only to individuals.) They also want limitations on a 

company’s liability for the acts of its subsidiaries. 

For now, though, good intentions will carry only as much weight 

as federal prosecutors choose to accord them. 

“It’s the enforcement agencies’ view that’s important,” Mr 

Koehler says. “They hold the big stick.” 


40 inside asian gaming December 2015


REGIONAL 

BRIEFS 

Wynn Palace opening delayed 

until June 2016 

Wynn Resorts Ltd – the parent company of local casino operator 

Wynn Macau Ltd – has announced that the opening of its new Cotai 

property Wynn Palace has been delayed until June 2016. 

Just four months after setting an opening date of 25 March 

2016, Wynn Resorts was forced to amend their expectations after 

being informed by their general contractor, Leighton Holdings Ltd, 

that the project would not be ready in time. 

The revised date has officially been set as 25 June 2016. 

However, investment analysts have widely predicted there 

would likely be no change to the US$4.1 billion construction budget, 

nor would the delay have any significant impact to the company’s 

bottom line. 

“While we are surprised by the announcement, given our 

negative view of the impacts of new supply into the current market 

climate, we don’t think the three-month delay is entirely meaningful 

from a fundamental perspective,” said Deutsche Bank gaming 

analyst Carlo Santarelli. 

The delay has been blamed on a range of factors including 

labor shortages and the Macau government’s tendency to delay 

the issuing of necessary permits at various stages of construction 

in order to ensure the opening dates of Cotai’s under-construction 

properties are staggered. 

But Santarelli said it was more likely down to on-site difficulties. 

“They have experienced due course construction delays, some 

of which stem from the level of the expectation for the quality of the 

finishing work,” he said. 

Wynn Resorts Chairman Steve Wynn was recently critical of the 

Macau government for failing to inform casino operators of how 

many new-to-market gaming tables their new properties would be 

granted until shortly before opening. Most had previously budgeted 

for between 500 to 600 new tables but the two big properties to 

open so far – Galaxy Phase II and Studio City – have received just 

150 and 250 respectively. 

When it finally opens, Wynn Palace will feature a 1,700 room 

hotel along with a lake with water displays and a gondola ride. 

South Korea’s only locals casino 

continues to flourish 

The operator of the only casino in South Korea where locals are 

allowed to gamble has announced a 12.8% net income increase 

year-on-year for the third quarter of 2015. 

In a filing to the Korean Exchange, Kangwon Land Inc reported a 

net income of KRW119 billion (US$103 million) in the three months to 

September 30. This included an increase in revenue from sales of 5% to 

KRW413.5 billion and in operating income of 18.9% to KRW157.9 billion. 

The revenue increase was also a significant improvement on the 

previous quarter, with revenue up 6.3% and net income up 22.2%. 

Daiwa Securities Capital Markets Korea analyst Thomas Y Kwon 

predicts Kangwon Land Inc’s profit will continue to grow in the 

following months. 

“We think the company would likely see solid visitor growth 

and gaming demand for slots and mass-table games in the fourth 

quarter of 2015 and 2016,” he said in a note. 

“We forecast Kangwon Land’s revenues and operating profit 

to increase by 9.9% year-on-year and 14.6% year-on-year in 2016 

respectively.” 

The South Korean government is preparing to issue up to two 

new licenses for integrated resorts with casinos that would only be 

open to foreign players. The issuing of any license is dependent on 

the successful party committing to an investment of at least KRW1 

trillion (US$890 million). 

It is believed that as many as 34 groups had initially submitted 

applications with that number since reduced to nine remaining 

contenders battling it out for the two available licenses. 

This is despite the fact that the impact of the current economic 

climate in China appears to have stretched beyond Macau, with profits 

at Korea’s foreigner-only casinos having fallen throughout 2015. 

South Korea currently has a total of 17 operating casinos with 16 

of them available only to foreigners. 

Kangwon Land casino 

Macao Gaming Show to take 

next step in 2016 

The Macao Gaming Show will return in 2016 ready to move to take 

the next step in its evolution following the success of MGS 2015, 

according to the Chairman of organizing body the Macau Gaming 

Equipment Manufacturers Association, Mr Jay Chun. 

Mr Chun said the third edition of the trade show, which ran 

from 17 to 19 November at the Venetian Macao, was “the greatest 

platform for MGS to move forward to the next level” after attracting 

over 100 exhibitors. 

42 


REGIONAL 

BRIEFS 

MGS 2015 also saw its floor space expand by 20% on the 

previous year to around 12,000 square meters while boasting 

representatives from all six of the world’s populated continents. 

Mr Chun said, “The Macao Gaming Show has made a significant 

step forward. The exhibition has signalled its intent to grow in 

numbers and expand in sectors and the positive response from all 

the exhibitors and visitors suggests that MGS must continue with 

its vision through 2016 and beyond. 

“The show saw major innovations on the floor from both the 

gaming and entertainment sectors; key product launches across 

the board; a strong input from the Macau concessionaires and the 

local business community; an increasing overseas contingent; and 

notable commitments to sign up for 2016. 

“Equally important is the impression MGS and the Macao Tourism 

and Culture Summit left on our key partners at the Macau SAR 

Government. MGS 2015 proved that Macau can really make its mark 

on the international stage through both quality trading opportunities 

and ideas and debate that will drive the industry forward.” 

“Our task – which starts immediately – is to build on the success 

of 2015 and push forward with the show’s development as one of 

the world’s ‘must attend’ gaming events.” 

MGS has announced that the fourth edition of the show, to take 

place from 15 to 17 November 2016, would include a greater focus 

on Macau’s growing mass market segment. 

Melco-Crown reaches agreement 

to amend loan terms 

Melco-Crown Entertainment Ltd and its partners have reached an 

agreement with lenders to amend the terms of a US$1.4 billion 

project loan for its recently opened Studio City integrated resort 

in Macau. 

Due in January 2018, Melco Crown stated in a filing to the US 

Securities and Exchange Commission that it “has received the 

requisite lender consent to amend the loan documentation as 

proposed by the Studio City borrowing group. 

“The amendments … include changing the Studio City project 

opening date condition from 400 to 250 tables, consequential 

adjustments to the financial covenants, and rescheduling the 

commencement of financial covenant testing.” 

Melco Crown required consent from more than 50% of lenders, 

which include Bank of China Ltd and the Industrial & Commercial 

Bank of China Ltd, to be granted the amendment. 

Studio City opened its doors on 27 October 2015 with 200 newto-market 

gaming tables, with another 50 becoming available for 

use from January. It also announced that it would operate with no 

VIP tables – opting instead to focus on the growing mass market 

segment which provides better margins on its tables. 

The decision is also in line with the property’s array of nongaming 

attractions which show a clear desire to diversify beyond 

the gaming floor. They include a Batman Dark Flight magic motion 

ride, Franz Harary’s House of Magic, a 5,000 seat multi-purpose 

arena and the Golden Reel – a figure eight Ferris wheel starting 23 

stories high. 

Macau’s casinos wouldn’t have even contemplated having no 

VIP gaming 12 months ago but with the VIP segment continuing 

to shrink on the back of the Chinese Central Government’s anticorruption 

crackdown, the reliance on high rollers isn’t what it 

used to be. 

It “should work,” said Union Gaming Securities Asia 

analyst Grant Govertsen. “VIP as it stands today is approaching 

meaningless as a percentage of profits.” 

International Poker Open 

spreads its wings 

The latest poker tour to try and make its mark in Asia, the 

International Poker Open (IPO), held its first-ever Philippines event 

in November having previously operated solely in South Korea. 

IPO, which is owned by Allwinstar Entertainment based in 

Maryland, USA, held its first event in Jeju last December and its 

second, also in Jeju, in May this year. However, it recently signed 

a three-year agreement with Resorts World that will see it run 

tournaments in Resorts World properties with Manila the first to 

welcome the fledgling tour. 

Resorts World has properties in Singapore and the Philippines 

while Resorts World Jeju is currently under construction and due to 

open in 2017. 

IPO is also in talks with Resorts World’s parent company 

Genting Group to take the tournament series international. Genting 

Group’s casino empire includes multiple locations across the USA, 

the UK and the Caribbean among others. 

The biggest challenge for IPO will be finding its niche in the 

already crowded Asian poker calendar. Tournament poker in the 

region has traditionally been dominated by the Asian Poker Tour 

(APT) and the Asia Pacific Poker Tour (APPT) while the popular 

World Poker Tour (WPT) has also made moves into Asia in recent 

years with events in Manila and Sanya. 

Nevertheless, the partnership with Resorts World could prove 

hugely beneficial in helping IPO gain a foothold – particularly given 

the fact that none of its rivals currently has a stop in Singapore. 

Poker in Asia has been gradually breaking boundaries in recent 

times with Vietnam’s first ever international poker festival, APT 

Vietnam, held at Ho Tram Resort Casino in May followed by the 

country’s first home grown poker series – the Vietnam Poker Cup 

– in August. 

IPO3 at Resorts World Manila has a busy seven day schedule 

boasting 16 events in its first foray outside South Korea. 


INTERNATIONAL 

BRIEFS 

Canberra casino announces 

stunning 80% revenue rise 

Australia’s Canberra Casino, purchased by Tony Fung’s Aquis 

Entertainment 12 months ago, saw profits rise by a staggering 80% 

year on year in October. 

The once ailing casino in the nation’s capital appears to be 

enjoying a stunning turnaround under its new ownership, with 

October revenue reported at AU$2.4 million – a massive 62% rise 

on September profits. 

The results come just two months after Aquis Entertainment 

announced an ambitious plan to embark on a AU$330 million 

redevelopment of the tiny property, which currently houses just 39 

gaming tables. 

The redevelopment is contingent on the ACT Government lifting 

a ban that limits the operation of slot machines to not-for-profit 

clubs within the ACT’s borders. Canberra Casino currently has no 

slot machines but Aquis is requesting approval for 500 machines 

on site which could generate an additional AU$60 million in tax 

revenue for the government. 

Chief Minister Andrew Barr is said to be considering the proposal. 

If approved, the redevelopment would produce the ACT’s first 

integrated resort with a new casino, dining, entertainment and retail 

options as well as an expanded National Convention Centre covering 

3,300 square metres. It would also feature two new hotels including a 

100-room five star hotel and a 12-suite six star boutique hotel. 

Aquis is already close to securing final approval to build a huge 

AU$8 billion integrated resort in the tropical Queensland town of 

Cairns, where they are pushing to have 1,500 slot machines allowed 

on premises. 

The Cairns development would employ up to 16,000 staff and 

include an incredible 7,500 hotel rooms, two separate casinos, a 

golf course and an artificial lagoon. 

Aquis has claimed that a redeveloped Canberra Casino would 

attract around 750,000 visitors per year and tap into the lucrative 

Chinese high roller market however ClubsACT has disputed the figure. 

Ruffin purchased Treasure Island from MGM in 2009 for 

US$775 million at a time when MGM was struggling to raise cash 

for its then-under-construction CityCenter project amid declining 

earnings and a poor economy. He said he was keen to add The 

Mirage – which is already connected to Treasure Island by tram – to 

his portfolio because of its 65 acres including 300,000 square feet 

of convention space. 

However, MGM Resorts has since announced that The Mirage 

would instead be one of 10 resorts owned by the company to be 

included in MGM Growth Properties – a publicly traded real estate 

investment trust – which will now lease the property back to MGM 

to operate. 

MGM originally took over both The Mirage and Treasure Island 

when it purchased Mirage Resorts from Steve Wynn in 2000. 

Ruffin – currently listed at number 279 on the Forbes 400 list 

with a net worth of US$2.4 billion – is no stranger to the Vegas 

Strip, having previously owned the New Frontier before selling it to 

an Israeli group in 2007. It was closed and imploded in 2007. 

He has also been busy picking up real estate around the country 

recently, having purchased an office tower in his home town of 

Wichita, Woodlands Racetrack in Kansas City and a 10-acre property 

near Sunset Park in Las Vegas. 

Ruffin is a business partner with fellow billionaire and US 

Presidential candidate Donald Trump in the Trump International 

Hotel and Tower – Las Vegas’ tallest residential building – which he 

says has almost been fully paid for after Trump recently sold around 

300 condominium units to Hilton Worldwide’s timeshare division. 

The development still has 400 units remaining with just US$12 

million of debt remaining from the US$567 million he and Trump 

started out with. 

Daily fantasy sports head 

to New York Supreme Court 

Daily fantasy sports (DFS) giants FanDuel and DraftKings have 

presented their case to the New York Supreme Court opposing an 

attempt by New York Attorney General Eric Schneiderman to have 

them shut down. 

Schneiderman sent a number of daily fantasy sports companies 

cease and desist letters in early November, claiming they were 

conducting illegal gambling operations. 

MGM reject sale of Las Vegas icon 

The Mirage to Treasure Island owner 

The owner of famous Las Vegas casino Treasure Island, Phil Ruffin, 

recently offered to buy neighboring property The Mirage from MGM 

Resorts International for US$1.3 billion but the deal was rejected, 

according to the Las Vegas Review-Journal. 

44 


INTERNATIONAL 

BRIEFS 

While some of the smaller fantasy sports sites such as 

DailyMVP and DraftOps have shuttered their New York operations, 

FanDuel and DraftKings have countered that their contests are 

skill-based, have operated for a number of years and have attracted 

investments from media companies and major sporting leagues 

who have deemed them legal. 

A lawyer for FanDuel, John Kiernan, argued that daily fantasy 

sports are similar to a real life team manager successfully picking a 

roster of players to increase the side’s chances of winning and were 

therefore hugely skill-based. 

Assistant Attorney General Kathleen McGee presented the 

alternative argument that although compiling a strong roster 

required skill, the result of any DFS contest was nevertheless reliant 

on how the players performed in real life and was therefore subject 

to factors outside the control of the DFS user. 

DFS sites have enjoyed huge growth since the start of the 

current NFL season after embarking on massive marketing 

campaigns, however questions over their integrity emerged when a 

DraftKings employee beat more than 200,000 other players to win 

US$350,000 on rival FanDuel. 

A number of US states are now contemplating regulation of 

the DFS industry while a handful have banned them completely. 

FanDuel has temporarily suspended operations in New York while 

it argues its case. 

Justice Manuel Mendez, who is hearing the case, said he 

expected to arrive at a decision quickly. 

It is estimated that the number of people playing DFS in the 

USA and Canada has tripled in the past 10 years including a 25% 

increase over the past 12 months to around 57 million participants. 

Stay of execution for Atlantic City icon 

Uncertainty continues to surround the future of Atlantic City’s 

remaining casinos with Trump Entertainment Resorts – owner of 

the Taj Mahal – looking to billionaire Carl Icahn to save the company 

from bankruptcy. 

In November, Trump Entertainment named its three man 

executive team to lead the company ahead of Icahn’s takeover with 

Mike Mellon appointed the Taj Mahal’s new general manager and 

existing members of the board of directors David Licht and Michael 

Elkins co-Chairmen of the board. Mellon will also assume the 

company’s CEO role pending approval by state regulators. 

The Taj Mahal very nearly joined the growing list of Atlantic City 

casinos to close their doors earlier this year before Icahn agreed 

to throw it another lifeline. Sister property The Plaza wasn’t so 

lucky, shutting down just days after Trump Entertainment filed for 

bankruptcy in September 2014. 

It’s the fourth time Trump Entertainment has filed for bankruptcy 

over the years and leaves the Taj Mahal as the company’s sole 

remaining casino. 

However, the Taj Mahal isn’t secure just yet with an appeals court 

yet to rule on whether the casino must restore health insurance and 

pension benefits to workers that it previously cancelled in October 

2014. 

Icahn has stated that such benefits are not feasible in Atlantic 

City’s current gaming climate, adding he will likely withdraw 

financial support – thus forcing the Taj Mahal to close – should the 

court insist benefits be restored. 

One matter no longer in front of the courts is the continuing use 

of the Trump name after Donald Trump – who originally founded 

the company – agreed to drop a lawsuit seeking to have it removed 

as part of the Icahn deal. 

Trump retains a 10% stake in Trump Entertainment but has had 

no involvement in its operations for more than a decade. 

Brazil to legalize gaming 

Brazil could be the next country to legalize gaming with the first 

meeting of the Special Committee on National Development in the 

Brazilian Senate set to be the focus of its early discussions. 

Gambling has long been illegal in the South American 

powerhouse, but with the nation in the midst of an economic 

crisis politicians have been actively investigating new methods of 

stimulating the Brazilian economy. And unlike other countries said 

to be considering similar moves, such as Japan, it appears as if 

Brazil is ready to push forward with their plan. 

A revised version of the gaming bill first presented by Senator 

Ciro Nogueira in 2014 will be discussed by the Special Committee 

with casinos, slot parlors, bingo halls and local lottery game “Jogo 

do Bicho” among the main areas of interest. 

Their aim is to finalize legislation defining exactly what types 

of gaming would become legal in Brazil as well as setting out the 

licensing and taxation criteria. 

Senator Blairo Maggi, who revised Senator Nogueira’s bill 

earlier this year, has described the process as “appropriate in order 

to regulate gambling in the country.” He has previously pointed to 

the fact that illegal gambling in Brazil is rife as a compelling reason 

to legalize and regulate the industry. 

The new legislation divides responsibility for various types 

of gaming between state and federal governments with “Jogo do 

Bicho” and bingo to be run by each individual state. The Central 

Government would be responsible for regulating casinos including 

the granting of casino licenses which would be for a period of 20 

years. 

The current proposal is to tax gross revenues from all gaming 

operations at 7% in the states where they are located which would 

generate billions of dollars of much needed revenue. 

Brazil’s tourist industry has also expressed support for the plan 

as a means of luring more visitors. 


Events 

Calendar 

20|21 January 2016 

Fantasy Sports Trade Association 

Bellagio Resort and Casino, Las Vegas, USA 

FSTA is not just for companies that directly support 

the fantasy sports player with statistical services, player 

information, and league organization. The association’s 

current members also include some of the world’s largest 

sports content/information and service companies. 

www.fstaconference.com 

2|4 February 2016 

ICE Totally Gaming 

Excel London, London, England 

Showcasing compelling innovation and expertise, ICE 

Totally Gaming proclaims itself the largest and most 

comprehensive B2B gaming exhibition in the world. 

Bringing together international operators and suppliers 

from the betting, bingo, casino, lottery, mobile, online, 

social and street gaming sectors over three days, ICE 

Totally Gaming promises new opportunities for visitors 

and exhibitors alike. 

www.icetotallygaming.com 

22|24 February 2016 

World Game Protection Conference 

M Resort Spa Casino, Las Vegas, USA 

The World Game Protection Conference (WGPC) is an 

annual 3-day international conference and expo focused 

entirely on casino game protection. Experts and industry 

leaders are on hand to discuss the latest casino scams and 

surveillance technology, as well as game protection and 

surveillance best practices. 

www.worldgameprotection.com 

21|23 March 2016 

iGaming Asia Congress 

Grand Hyatt, Macau 

iGaming Asia Congress conference and exhibition will attract 

over 250 of Asia’s leading sports betting, online casino, 

lottery, social and mobile gaming executives to learn about 

the latest developments in industry, incoming regulations 

and disruptions, and strategies to stay ahead of the curve 

in Asia. It is a must attend industry event for all iGaming 

operators in Asia and the world. 

www.igamingasiacongress.com 

27|29 April 2016 

Global iGaming Summit & Expo 

Hyatt Regency San Francisco, San Francisco, USA 

Established as the leading event focused on the future 

of iGaming in North America, GiGse attracts over 700 

delegates to examine legislative progress, commercial 

strategies and partnership opportunities for all the key 

stakeholders to enter iGaming and achieve first-mover 

advantage in this lucrative market currently undergoing a 

significant regulatory change on a state-by-state basis. 

www.gigse.com 

17|19 May 2016 

Global Gaming Expo Asia 

The Venetian Macao, Macau 

G2EAsia is the premier Asian trade event and the largest 

regional sourcing platform for global gaming and 

entertainment products. G2E Asia services suppliers by 

enabling them to showcase new products, meet qualified 

buyers and establish new contacts. Annually, more than 

95% of top Asian casino operators are at the show. Held in 

Macau — the heart of Asian gaming and one of the fastest 

growing gaming markets in the world, G2E Asia is the hub 

where professionals network and conduct business. 

www.g2easia.com 

46 

inside asian gaming December 2015 

www.asgam.com

IAG December 2015

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