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Cover Story<br />
“CNMI is a self-governing US territory of<br />
57,000 in the Pacific, about five hours by<br />
air charter from Shanghai, expected to<br />
welcome 500,000 visitors this year to its<br />
idyllic beaches, with mainland China, Korea<br />
and Japan the largest source markets.”<br />
his reputation and loyal following developed in Macau than to the<br />
Philippines, favorable tax rates and commission rebates and the<br />
leisure facilities themselves,” Dean Macomber says.<br />
Jimei’s ownership of its eponymous Macau casino came about<br />
in 2009 when Mandarin Oriental International sold its 50% stake<br />
in what’s now the Grand Lapa Hotel, next to Sands Macao, to its<br />
partners, Stanley Ho’s STDM and Shun Tak Holdings. They chose<br />
Jimei to operate the gaming area, previously Oriental Casino, under<br />
SJM’s license as a satellite facility. Jimei renovated the casino, which<br />
has about a dozen tables and 60 slots machines, to feel like an elegant<br />
sitting room, fitting the hotel’s grande dame ambiance. There’s<br />
casino access from the hotel and the street. With both Fontana and<br />
Jimei Casino, the junket promoter became an owner in established<br />
gaming destinations where it had extensive experience.<br />
DISTANT BEACHHEAD<br />
For its foray into casino ownership, Hengsheng Group focused<br />
on a new gaming jurisdiction. Investors affiliated with Hengsheng<br />
acquired Hong Kong listed First Natural Foods for HK$400 million<br />
(US$52 million) in November 2013 and renamed it Imperial Pacific<br />
International. Around the same time, associates of the junket group<br />
began efforts to get casino gaming legalized in Saipan, the largest<br />
island in the Commonwealth of Northern Marianas Islands. CNMI is<br />
a self-governing US territory of 57,000 in the Pacific, about five hours<br />
by air charter from Shanghai, expected to welcome 500,000 visitors<br />
this year to its idyllic beaches, with mainland China, Korea and Japan<br />
the largest source markets.<br />
Smaller CNMI islands Tinian and Rota had previously legalized<br />
gaming with limited success: Tinian’s long struggling casino got<br />
raided by US Treasury officials last year, resulting in record fines for<br />
money laundering violations; and Rota’s casino closed within weeks of<br />
Alvin Chau<br />
<strong>IAG</strong>: Do you think people in<br />
China are getting bored with<br />
Macau?<br />
AC: I’m not worried about that,<br />
since there is a huge market in<br />
China. Also the range of products<br />
in the Macau market of the future<br />
will bring in different kinds of<br />
tourists in addition to gamblers.<br />
<strong>IAG</strong>: Does consolidation of the<br />
junket business help Suncity?<br />
AC: It’s an advantage in the short<br />
run, but in the long run, it will<br />
cause damage when investors,<br />
gamblers, visitors or [the gaming]<br />
industry lose confidence in the<br />
junket business.<br />
<strong>IAG</strong>: Suncity is a partner in the Hoi An South integrated resort<br />
project in Vietnam [with Chow Tai Fook Enterprises and<br />
VinaCapital]. What will Suncity’s role be?<br />
AC: Right now we are not in a position to talk about specific projects<br />
in Vietnam. However, we are seeking some other business models.<br />
Our aim is to develop our VIP business worldwide and extend the<br />
existing VIP business in gaming jurisdictions such as Vietnam,<br />
Seoul, Russia, the Philippines or even in Macau. We will gradually<br />
extend our business to the casino hotel segment while, of course, still<br />
running our VIP business.<br />
<strong>IAG</strong>: Is that part of a strategy to change from being a junket<br />
promoter to having ownership in casino projects?<br />
AC: Yes, our future development aim is to move our investments<br />
from junket operations to owning casinos. We don’t want to be<br />
limited to being only a junket promoter. We want to further develop<br />
our assets.<br />
<strong>IAG</strong>: Do you see any disadvantages of being a casino owner?<br />
AC: No.<br />
<strong>IAG</strong>: Obviously, Suncity is interested in other jurisdictions beyond<br />
Vietnam. Are there any particular markets you are looking at?<br />
Would you be interested in operating a casino in Macau if that<br />
opportunity arose?<br />
AC: We want to develop our VIP business worldwide, and if we<br />
operate casinos in the future, we are looking to do something like<br />
boutique type casino hotels but we don’t have specific destinations.<br />
We hope to establish a chain of small-scale casinos mainly in the<br />
Asian region.<br />
<strong>IAG</strong>: If the junket business in Macau wasn’t currently so<br />
depressed, would Suncity still be considering casino ownership?<br />
AC: Actually there is no connection with the downturn of the business<br />
here in Macau. Due to the economic conditions in China, Macau’s<br />
business is in bad shape, and relatively speaking business overseas<br />
is also affected. The reason why we invest in overseas markets is<br />
not because of the bad business conditions in Macau. VIP business<br />
globalization is a strategy and a casino hotel chain business is part<br />
of that strategy.<br />
<strong>December</strong> <strong>2015</strong> inside asian gaming 11
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