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inside asian gaming
Mike Bolsover
talks Tiger Palace
US sports betting’s
tax problem
Industry Profile:
february 2018 APE’s Herman Ng
#140 | 30 MOP
Paul Steelman
CASINO
VISIONARY
www.asgam.com
CONTENTS FEBRUARY 2018 COVER STORY
Cover Image:
Steelman Partners
INDUSTRY
PROFILE
Herman Ng
8 Breakfast Briefs
IN FOCUS
20 Climbing the mountain
IAG spoke to Silver Heritage Managing Director and CEO Mike
Bolsover after the long-awaited opening of the company’s Tiger
Palace Resort Bhairahawa in Nepal.
GAMBLING AND THE LAW
28 Can sportsbooks survive a 1% tax on handle?
With many US states licking their lips in anticipation of added tax
dollars should the federal ban on sports betting be struck down,
the industry may well have another big fight on its hands.
INDUSTRY PROFILE
34 Herman Ng: Macau Pioneer
Inside Asian Gaming discovers a bit more about Herman Ng, CEO
and Executive Director of Macau-based slot machine services firm
Asia Pioneer Entertainment.
TRADE SHOWS
38 Ticket to Japan
The eyes of the global gaming industry will be firmly focused on
Japan this spring with the 3rd Japan Gaming Congress taking place
in Tokyo from 10 to 11 May.
42 The big gets bigger
The world’s biggest gaming industry trade show, ICE, returns to
ExCeL London from 6 to 8 February in what promises to be another
record-breaking week.
14 Design
for profit
TECH TALK
46 Cherry on top Architect Paul Steelman
Scientific Games
has launched its
provides his insights
new game into designing the most
“Da Hong Ying Tao”
into Asia’s casinos. expensive privately funded
buildings on earth and
50 EVENTS CALENDAR making and breaking trends.
EDITORIAL Journalist and Social Media Distribution Supervisor
Joseff Musa Emily Vong
Managing Editor
Ben Blaschke Distribution Officers
SALES & MARKETING Anson Ip
Editor at Large Peng Cheang
Muhammad Cohen VP Sales and Marketing Mak Man Wah
Winnie Tan Hoi Hou Wai
Founder and Adviser
Kareem Jalal Associate Director Sales
and Business Development CORPORATE
Graphic Design Jadeson Ho
Rui Gomes CEO
Hong Kong Sales Andrew W Scott
Contributors
Angel Wong
Paul Doocey
Chief of Staff
Dr Brian To
Client Relationship Manager Helene Wong
Steve Karoul
Caroline Iau
Rui Pinto Proença
Chief Financial Officer
Peter T Treadway
Fred Wong
Dr Glenn McCartney
I Nelson Rose IT
Director and Administrator
Still photography IT Director Cynthia Cheang
Danomad Kuan Michael Lau
Accounting and Compliance Director
Video Producer IT Administrator Anita Loi
Danomad Kuan Alison Cheang
Administration Assistant
Suie Ng
DIGITAL DISTRIBUTION
Executive Transportation Officers
Director of Digital Business Development VP Operations Gary Hong
Kevin Sam Karen Cheong José Domingos Guerra
Advertising Enquiries Subscription Enquiries
Jadeson Ho jh@asgam.com +853 6331 5577 Emily Vong emily@asgam.com +853 6647 4123
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4 INSIDE ASIAN GAMING FEBRUARY 2018
EDITORIAL
The magic of the “wow” moment
I
T’S been a little over a decade since I first began working in are known to boost a casino’s profitability. But he also knows what
and around the gaming industry and in that time I’ve never makes people tick – what they want to see, what they want to do,
ceased to be amazed by the sheer magnitude and grandeur of how they want to do it – and with that in mind develops concepts
the world’s iconic integrated resorts. Let’s face it, who didn’t with the goal of making customers feel good about themselves.
marvel the first time they walked the Las Vegas Strip, or wandered Who knew that simply brightening up Macau’s StarWorld as part of
the epically vast expanses of the Venetian Macao? a 2009 renovation might lead to a vastly more successful casino?
What has always intrigued me most, though, isn’t so much Steelman also discussed his thoughts on Japan and although
the actualization of these buildings – which are some of the most we will save those particular insights for our Japan special edition
unique, diverse and innovative on earth – but the fact that someone in the coming months, he caught my attention with the sheer
ever thought of them in the first place. “Who comes up with this clarity of his Japanese vision. As readers of IAG Breakfast Briefing
stuff?” I inevitably find myself asking. will have read recently, that vision includes developing a cluster of
If you’ve ever been to Galaxy Macau, Solaire in Manila, casinos in a single location which together could create a world-
Vietnam’s The Grand Ho Tram Strip, Sydney’s revamped The Star class tourism destination on par with Las Vegas.
or the recently opened Naga2 in Cambodia, then the man who I often wonder if such ambitious imagination might in fact
“came up with it” is the man on the cover of this very edition of hinder, rather than help, efforts to win over local lawmakers in
Inside Asian Gaming, Paul Steelman. countries like Japan, India and Thailand, where “casino” has
Steelman is, of course, one of the most respected and long been a dirty word. Perhaps their preconceptions of what
accomplished casino architects in the world, having first stepped a casino resort would look like are so far-removed from the
into casino design working with Steve Wynn on The Mirage in revolutionary ideas proposed by Steelman and his ilk that they
Las Vegas before reshaping the entire industry with the stunning simply can’t comprehend?
success of Sands Macao. But for the likes of Las Vegas, Macau and Singapore who have
And listening to him discuss his past and present projects with embraced the dream, the results are nothing short of remarkable.
our Editor-at-Large Muhammad Cohen, it quickly becomes clear And if Japan does decide to join them by opening her arms to IRs I
why he and his team are so highly sought after by operators across can’t wait to be wowed once again.
the globe.
Steelman seems to possess an incredible understanding of Ben Blaschke
people. Yes, he knows all about casino metrics too and naturally Managing Editor
his designs incorporate the tried and true tricks of the trade that We crave your feedback. Please email your comments to bb@asgam.com.
www.asgam.com
6 INSIDE ASIAN GAMING FEBRUARY 2018
FEBRUARY 2018 INSIDE ASIAN GAMING 7
MELCO UNVEILS CYPRUS RESORT
AS CITY OF DREAMS MEDITERRANEAN
MELCO INTERNATIONAL DEVELOPMENT will operate in Limassol until the official
Limited’s Cyprus resort will be called City launch of City of Dreams Mediterranean in
of Dreams Mediterranean, the company 2021, while four satellite casinos will also
has revealed. become operational in 2018 in Nicosia,
Unveiling the finalized plans, Melco Larnaca, Free Famagusta and Paphos.
announced that the US$650 million resort City of Dreams Mediterranean is
will be built in a Mediterranean style and expected to contribute around €700
tailored to fit Cyprus’ “natural environment million (US$840 million) a year to the local
and landscape.” The joint venture project economy once open, equal to 4% of the
with local firm Cyprus Phassouri Ltd (CPZ) country’s annual GDP.
– of which Melco holds a 75% stake – will be It was claimed at the unveiling that City
Europe’s biggest integrated casino resort, pool area, high-end retail area, an outdoor of Dreams Mediterranean will attract an
with 136 gaming tables and 1,200 gaming amphitheater and 9,600 square meters of additional 300,000 tourists each year and
machines plus a five-star hotel with 500 MICE space. offer around 4,000 local job opportunities
hotel rooms, 11 restaurants and cafeterias, As part of Melco’s agreement with the during the construction phase and 2,500
a wellness center, sports center, extensive Cyprian government, a temporary casino permanent jobs once fully operational.
Nepal’s Tiger Palace to launch VIP in 4Q18
Recently opened Nepal casino Tiger private gaming tables in 4Q18 along with (SHMK), was granted a casino license
Palace Resort Bhairahawa will introduce its fine dining operations and unspecified in December following final approval by
VIP gaming in the fourth quarter of 2018, “additional expansion.” the Ministry of Culture, Tourism and Civil
according to owner Silver Heritage Group. Silver Heritage also announced that Aviation of Nepal. SHMK also operates the
The news formed part of an update Tiger Palace Resort will hold its official grand Millionaire’s Club at the Shangri-La Hotel
on the property’s gaming operations opening in March 2018 along with a separate in Kathmandu.
following the launch of casino operations formal launch event in Kathmandu. Tiger Palace held its first major event
on 28 December. The company’s Nepalese subsidiary, on New Year’s Eve with a celebration that
Tiger Palace will introduce eight SHL Management Services Private Ltd included gaming and entertainment.
8 INSIDE ASIAN GAMING FEBRUARY 2018
Wynn Macau VIP dealer steals HK$48 million in chips
A 49-year old casino dealer stole gaming
chips with a face value of almost HK$48
million from a VIP room at Wynn Macau
before escaping through the main entrance.
Macau’s Gaming Inspection and
Coordination Bureau (DICJ) and Judiciary
Police revealed in mid-January that the man
worked as a dealer in a VIP room at Wynn
and had been working shortly before the
incident in which he changed into another
jacket before grabbing the chips, putting
them into a large bag, walking out of the
main entrance and jumping into a car.
There had been earlier reports that he
was brandishing a knife at the time but
the Judiciary Police denied this was the
case. The man, identified only as Lei, was
captured three days later alongside his
70-year-old uncle after the pair met up in a
park in Taipa.
The DICJ said that it has subsequently
met with Macau’s six concessionaires
and urged them to step up their staff
monitoring and security measures in the
wake of the theft.
Macau’s gaming regulator added
that it will continue to maintain close
communication with the Judiciary
Police to prevent similar incidents from
happening again.
FEBRUARY 2018 INSIDE ASIAN GAMING 9
NOVOMATIC COMPLETES PURCHASE
OF MAJORITY AINSWORTH STAKE
AUSTRIAN GAMING GIANT Novomatic has confirmed the
completion of its AU$500 million purchase of a 52% stake in Australian
slot machine company Ainsworth Game Technology Limited.
Novomatic confirmed that the acquisition of 172.1 million
ordinary shares was completed on Friday 5 January 2018 with all
international regulatory confirmations now in place. The drawn-
out process, almost two years in the making, involved gaining
regulatory approval from multiple gaming jurisdictions including in
Australia, South America and the United States, it said.
Completion of the sale saw founder Len Ainsworth step down
as an Executive Director of Ainsworth Game Technology Limited
effective immediately, although he will continue to support the
company as a consultant for a period of 12 months.
Novomatic Chairman Harold Neumann said that the
Austrian conglomerate was now one of the few European Union
based companies to have passed strict compliance checks from divisions of Novomatic AG,” he said. “Our shares in Ainsworth
international authorities and the first Austrian company to receive are strategically very important for Novomatic. After all, the joint plan
regulatory approval in Las Vegas. is to increase market share in the US to about 10% over the next five
“The compliance investigations carried out as part of this years. In the long term, Novomatic may become the world market
registration were extremely thorough. They included all corporate leader in the area of gaming.”
Tax body calls for compulsory qualifying
entrance fee in all Philippines casinos
The Philippines’ National Tax Research Manila. However, the NTRC has called for industry to help raise needed revenue to
Center (NTRC) has called for the government the qualifying fee to be made compulsory finance its development projects such as its
to impose a casino qualifying fee of between for all players and increased to between Build Build Build program as the country
Php500 (US$10) and Php1,500 (US$30) for Php500 and Php1,500 per person. gears towards achieving the ‘Golden Age of
entry to any of the country’s 54 casinos in “Perhaps what can be done is to make Infrastructure.’
order to deter gambling and raise funds for the collection of a qualifying fee compulsory “The proposal to impose an entrance
national projects. for players in all casinos operating in the fee in casinos is no longer necessary
In a research paper, the NTRC rejected Philippines whether Pagcor-operated since there is already a qualifying fee
the need for Pagcor to collect a casino casinos or licensed casinos,” the report being collected by Pagcor since 1993.
entrance fee but instead pointed to says. “The amount may also be increased It is recommended that the same be
Executive Order 48, passed in 1993, which since it has not been adjusted for more than strictly enforced in all casinos operating
allows for the gaming regulator to collect two decades now. If indexed to inflation, the in the Philippines. Also, the existing rate
a casino qualifying fee of “not less than amount would be around PhP320 but may of Php100 may be raised to Php500 to
Php100” from any player entering a casino. be rounded off to Php500 or to as high as factor in the effect of inflation when the
As it stands, EO 48 is rarely enforced, Php1,500.” fee was first imposed in 1993. Higher rates
particularly in the Philippines’ large Explaining the reasons for its stance, of say Php1,500 can also be an option
integrated resorts such as Resorts World the NTRC said, “The government may take to discourage low-income earners from
Manila, City of Dreams, Solaire and Okada advantage of the country’s vibrant gaming engaging in casino gambling.”
10 INSIDE ASIAN GAMING FEBRUARY 2018Hong Kong investors look to revive
shuttered Tinian casino
The creditor that backed the former
management team of Tinian Dynasty
Hotel & Casino was one of nine Hong
Kong investors to fly to Tinian in
January with a view to re-opening the
shuttered property.
Tim Chen, the principal owner of
Tinian Entertainment Corp, chartered
the international flight – the first ever
to fly to Tinian from Hong Kong – to
celebrate the long-awaited opening of
Tinian International Airport. But high on
his agenda was advancing the possibility
of purchasing, renovating and re-
opening Tinian Dynasty Hotel & Casino,
which closed in 2015 after former owner
Hong Kong Entertainment (Overseas)
Investments Ltd (HKE) declared bankruptcy.
Chen has revealed that his company
was one of HKE’s backers at the time.
Speaking to local media about his
delegation of investors, Chen said, “I have
been thinking a lot about investing here
so I tried to convince them to put some
investment on this island because it is so
beautiful. We will have a meeting with the purchases Tinian Dynasty. at the time that Tinian Dynasty failed to
mayor and the delegation members to The civil penalty was imposed by the develop and implement an anti-money-
discuss the project.” Financial Crimes Enforcement Network laundering (AML) program.
The biggest obstacle to Chen gaining (FinCEN) in June 2015 “for willful and Chen said he was unwilling to take
control is the US$75 million worth of egregious violations of the Bank Secrecy Act on the US$75 million fine but hoped a
fines hanging over the head of whoever (BSA)” with FinCEN’s assessment finding resolution was still possible.
Mark Brown steps down as Imperial Pacific Chairman
Imperial Pacific International has Sunshine CEO in February 2017 – around His last working day for IPI CNMI was on
announced the departure of IPI (CNMI) five months before casino operations were 20 December, 2017.
Chairman Mark Brown, stating that he “will moved across to soft-opened Imperial “As one of the most prominent and
be missed” after three years with the Saipan Pacific Resort – to become non-executive respected leaders in the gaming industry for
casino developer. Chairman of IPI. over a quarter century, the company is proud
Brown stepped down from his role in In a statement, IPI said that Brown “has to have had Mr Brown in its leadership
late December, having first joined IPI’s made the decision to retire from his current team for the past three years. Mr Brown’s
Saipan unit Best Sunshine as CEO in 2014. position to pursue other projects closer to leadership and expertise were a major
He subsequently stepped aside as Best his family in the mainland United States. contribution to the company’s success.”
FEBRUARY 2018 INSIDE ASIAN GAMING 11ARISTOCRAT COMPLETES US$990 MILLION
BIG FISH ACQUISITION
ARISTOCRAT LEISURE LTD has completed platform and our social casino business will global publisher of free-to-play games
its US$990 million acquisition of social become the second largest social casino that operates across three key business
gaming company Big Fish Games. publisher globally. lines focused on specific game segments,
In a filing to the Australian Securities “Big Fish’s digital-first social casino including Social Casino, Social Gaming and
Exchange, Aristocrat said that all conditions content and industry leading meta-game Premium Paid games.
and requirements for the acquisition have capability and applications are highly Big Fish is headquartered in Seattle,
been fulfilled with CEO and Managing complementary to Aristocrat’s existing USA and has approximately 700 full-time
Director Trevor Croker stating, “the strategic and industry-leading land-based digital staff. It reported adjusted revenue of
and financial benefits of the acquisition are content business.” US$458 million and Adjusted EBITDA of
highly compelling. Big Fish will immediately Big Fish, previously a subsidiary US$83 million for the 12 months to 30
provide scale across our entire digital of Churchill Downs Incorporated, is a September 2017.
Bankrupt developer cites massive fraud
in US$2.25 billion Baha Mar lawsuit
The original developer of Baha Mar Resort Construction Engineering Corp Ltd – Enterprises (CTFE) was confirmed as Baha
has filed a US$2.25 billion lawsuit against sabotaged the project by deliberately Mar’s buyer and new owner.
China Construction America (CCA) accusing understaffing and using it to train workers According to BML’s lawsuit, “The
the Chinese state-backed contractor of for other projects in the area. scheme was based on CCA’s efforts to
massive fraud which ultimately led to the The delays ultimately saw BML industries falsely create the appearance that it was
project’s failure. lose its US$845 million investment when working toward an on time and on budget
As reported by Reuters, BML Properties Baha Mar declared bankruptcy in 2015 opening in December 2014 while knowingly
Ltd, headed by Baha Mar founder Sarkis despite being 97% complete. CCA later and fraudulently concealing its real intent
Izmirlian, filed the 259-page complaint struck a deal with the Bahamian government not to construct the project on time and
with the state court in Manhattan claiming to resume construction and in December on budget and in the process extort more
that CCA – a subsidiary of China State 2016 Hong Kong’s Chow Tai Fook money than it earned and was due.”
12 INSIDE ASIAN GAMING FEBRUARY 2018FEBRUARY 2018 INSIDE ASIAN GAMING 13
COVER STORY
DESIGN
FOR PROFIT
Architect Paul Steelman provides his insights into
designing the most expensive privately funded buildings
on earth and making and breaking trends.
By Muhammad Cohen | Editor-at-Large
E
MINENT casino architect Paul Steelman
Muhammad Cohen helped create the Asian gaming boom with
also blogs for Forbes on the groundbreaking design of Sands Macao,
gaming throughout Asia opened in 2004. Since then, Steelman Partners
and wrote Hong Kong On has participated in casino projects across Asia,
Air, a novel set during including Galaxy Macau, Solaire in Manila, Vietnam’s The
the 1997 handover Grand Ho Tram Strip and, most recently, Naga2 in Phnom
about TV news, love, Penh, as well as Genting Group’s Resorts World Las Vegas.
betrayal, high finance At the Naga2 soft opening, the Atlantic City native turned Las
and cheap lingerie. Vegas resident discussed design with Inside Asian Gaming
Editor-at-Large Muhammad Cohen.
14 INSIDE ASIAN GAMING FEBRUARY 2018COVER STORY
Muhammad Cohen: How has Asian gaming shifted the large footplate where everyone can mingle and interact with one
paradigm for integrated resort design? another. This has led us to a more vertical solution of casinos.
Paul Steelman: The creation of the Macau integrated resorts has We started at Sands Macao with our stadium casino and also
changed everyone’s thinking towards gambling in a big way. One our high limit rooms on multiple levels because of the site size, and
of the big things is that in Las Vegas we would make one very large then we’ve continued that practice to Galaxy, to Solaire, to Ho Tram
room and then maybe a smaller baccarat room or something of in Vietnam and all of our projects here in Asia.
this nature.
What Macau and Las Vegas Sands brought about was the era
of the stratified casino where the casino was designed in five or
six market segments. That has changed the IRs significantly, it has “What Macau and Las Vegas
changed the buildings significantly, it has changed profitability
significantly and it has changed the diversified set of operators that Sands brought about was
use any particular facility.
Now you have a series of junket representatives as well as the era of the stratified
people involved in the gaming floors in unusual capacities. There
are slot machine providers and utilizers, there are junket reps
casino where the casino was
and there are the main casinos doing their own super high limit
VIP business.
designed in five or six market
What we found out from many of the Asian participants in segments. That has changed
this building was that they really wanted to be close to everything,
whereas in a Las Vegas resort we pride ourselves on having one very the IRs significantly.”
The ground-breaking Sands Macao
changed casino design across the globe
FEBRUARY 2018 INSIDE ASIAN GAMING 15COVER STORY
The hotel reception at Naga2
MC: Did Sands Macao’s site size alone lead to the
stadium casino?
“The top casino in Las Vegas
PS: When we designed Sands Macao in 2003, we were given a
long weekend – a Labor Day weekend – to design it. I was always
10 years ago would make
impressed with the Chinese gamblers – how much they cheer and
how much they back-bet. The only other place I’d experienced that
US$200 million to US$300
was a little bit in France and a little bit in South Africa, but I was very million a year, now the top
impressed that they cheered almost like a team against the casino.
So, our basic idea that we shared with [LVS Chairman and CEO] casinos are making US$500 to
Sheldon Adelson back then was the stadium casino that would take
around 30,000 square feet of an approximately 175,000 square foot US$600 million. It has doubled
casino. That in fact allowed it to be opened to below on multiple
levels and have a 60-foot ceiling, which at that time was unheard of. because of smarter operators,
There was some reticence on Sheldon’s part but at the end of the
day they realized it was only a small portion of the casino, not the people working together and
whole thing, so they allowed it to occur.
It’s kind of funny, Steve Wynn called me a year-and-a-half competition, but also the
ago and asked me, “How tall is that ceiling?” because he is now
considering it in his Boston project – a higher ceiling – because buildings. The buildings are
he was the inventor, when we did the Mirage, of the idea that the
ceilings had to be low.
designed to be more profitable.
16 INSIDE ASIAN GAMING FEBRUARY 2018COVER STORY
MC: Is there something you know now about Asia that you and things of this nature. I wish I had known in 2004 that we
wish you knew when you started? could have a brighter, more brilliant casino and in fact have it be
PS: When we started Sands Macao we didn’t realize that the Asian more successful.
customer wants the casino so much brighter. We didn’t actually
realize that until we renovated StarWorld. We took a very dark casino MC: How does integrated resort design respond to
and made it a very bright casino and the casino win metrics proved changes in the business model?
significantly that the Asian gambler wants the casino to be lighter, PS: Casinos have always been starting on the higher end. But
brighter, crisper than normal. casinos have changed drastically and their financial model has
In Vegas it’s always a little bit about hiding. If you read some changed drastically.
of the books about casino design from 10 or 15 years ago, they are The top casino in Las Vegas 10 years ago would make US$200
all about creating confusing layouts with dark colors, dark lighting million to US$300 million a year, now the top casinos are making
“Las Vegas is the most successful entertainment destination in
the world and if you ask anyone in the world what they want to
create in their first design meetings … it’s something that gives
them that feeling of Las Vegas.”
Steelman Partners
rejuvenated Macau’s
StarWorld by
brightening up the
gaming areas
FEBRUARY 2018 INSIDE ASIAN GAMING 17COVER STORY
US$500 to US$600 million. It has doubled because of smarter “Wheel of Fortune” slot machine, who died in January at age 86] told
operators, people working together and competition, but also the me as I was growing up, “Paul you have to realise that these casinos
buildings. The buildings are designed to be more profitable. make their money 25 cents at a time.” You’ve got to keep that in the
There are lots of different ways to design a casino to be more back of your mind whenever you’re designing a casino because this is
profitable and in fact we have around 100 different rules to do that. not a series of efforts that have to do with extreme high rollers losing
We count steps in buildings, we use psychology in buildings to US$21 million. I’ve tried to always keep that in my mind, to try and do
create empowerment in casinos and make it feel like you can win, a value proposition rather than to try and lead the market.
to create “wow” only in the lobby so you’re not distracted from what Naga2 is a value proposition. The metrics on that building are
you’re doing and even to create some kind of period of rest because remarkable – the amount of people per square meter, the cost per
no one can go on forever. We do all sorts of things like that. gaming position. If you were ever to compare those things you
So, our buildings are planned around metrics and that’s in the would be shocked. Some of the Macau casinos have 10 times the
planning and the aesthetics, the layout of them, the lighting of them cost in a metric format than Naga2 does.
but, more importantly, they are planned around the cost. These are Your best customers are your residences, the people that are
the most expensive private-funded buildings in the world and they staying in the hotel, so the whole idea is to get as many people
have to make a profit. Those who spend too much going in the door in residence as possible and the best way to do that is to plan an
without the proper business plan have some difficulties. efficient hotel. Naga2 has to be one of the most efficient gaming
Stan Fulton [developer of “Wheel of Gold”, predecessor to the hotels in the whole world.
The Steelman-designed
Solaire Resort & Casino
in Manila is proving to be
hugely profitable
18 INSIDE ASIAN GAMING FEBRUARY 2018COVER STORY
MC: What do you think of themed properties? feeling that they look good and feeling of diversity in their
PS: I love them, I think they’re fantastic. I don’t think themed product that it can do many things. Then we put a little bit
properties should be themed as Disney would do it, though. of a local spin on it to make sure we accommodate not only
For example, Resorts World Las Vegas will be the first themed the locals but also the different demographic groups – the
property on the Strip in 18 years. We believe in the themed property millennials, baby boomers, Gen Y and so on. We try to do this in
as a basis of where to head with the design. There is a modern every job and we have our customers assist us because most of
interpretation of just about everything and that is what makes people the time we don’t live there.
feel really good about themselves. Take, for example, the motorcycle
that I ride when I’m in America. It’s an Indian motorcycle. Why do MC: What about millennials and casinos?
I ride that? Well it’s modern, it’s got all the fancy gadgets – cruise PS: We’re a little bit concerned about that, which is why we have
control, anti-lock brakes and things like that – yet it’s a classic style. made a new slot machine company, Competitive Interactive. Most
The Sky Casino in Galaxy is one of the most successful casino of our customers have been asking us to predict the future. It takes
spaces we’ve ever done and that is an interpretation of classical us about five years to do one of these buildings, and what is in the
spaces. It doesn’t look and feel classical, it looks and feels as future? We have designed many experimental casinos on paper right
though it’s on its own. It looks like an architect from the 16th or now for what the future might hold.
18th century could have designed it, but he would have designed it My children don’t play slot machines, most of their friends don’t
today. That is how we approach every themed project. play slot machines – the typical slot machine customer is typically
going the way of the racebook customer. They’re getting older and
not as much a part of the gaming scene. We have developed a slot
machine called “Running Rich” which is a driving-based, skill-based
slot machine. Now, once we develop the slot machine that will get
the younger millennial gambler to possibly experience casinos, then
the casino design will change.
"If you read some of the books We are looking at more indoor/outdoor designs of casinos
– maybe there are more pools and recreational facilities directly
about casino design from 10 or outside the casino that interact well with it – and we are looking
at casinos being more suited to color changing studies, digital
15 years ago, they are all about projections within the casino. There are some VR [virtual reality]
studies going on right now and we believe in the near future we
creating confusing layouts with will be doing things within the casino that will be organized in a
dark colors, dark lighting and VR way.
In terms of what the millennials actually want, it’s all over the
things of this nature. I wish I board. We do not believe that architects coming up with the “hip”
thing for that particular moment is good for these buildings. The
had known in 2004 that we could hip thing is in one week and out the next. We can’t do what clothing
brands do and design things for one season. These casinos are
have a brighter, more brilliant designed for 50 years. Of course, they get renovated every seven
years but it takes that kind of futuristic thinking and I hope we’ll be
casino and in fact have it be a part of it.
more successful." MC: What structures are comparable to casinos? Are
shopping malls like casinos?
PS: Shopping malls are definitely not like casinos and the casinos
that are shopping malls are not successful. There are very, very
few buildings like them because an integrated resort is a series of
buildings. It’s a hotel, convention center, a theatre – an assembly
MC: How do culture and location impact IR design? building of sorts.
PS: Locations and cultures are interesting issues. We’ve designed If I said, “What are these buildings like?” – they’re like giant
casinos all over the world now and wherever it might be, we always transit centers, like train stations that have hotels on top of
respond to the various market conditions of the customers – always them or the Orlando airport without airplanes. That’s what these
with a look of Las Vegas behind it. buildings are like. They have more people per square foot in
Las Vegas is the most successful entertainment destination them, they make more money than any other building, they are
in the world and if you ask anyone in the world what they want transient in nature – people come and go – and you must be
to create in their first design meetings, it’s not necessarily to 100% entertained, but you must be entertained how you want to
do something that the locals are totally familiar with, but it’s be entertained. No one will force entertainment upon you. So, if
something that gives them that feeling of Las Vegas, that feeling I had to compare it to one building, it would be a train station in
of entertainment, feeling of excitement, feeling of empowerment, London or Grand Central.
FEBRUARY 2018 INSIDE ASIAN GAMING 19IN FOCUS
FEATURE
Climbing
the mountain
ASX-listed Silver Heritage Group finally launched hotel and casino operations at
its new Tiger Palace Resort Bhairahawa in late 2017, having survived the 2015
earthquake, a fuel blockade on the Nepal-India border and an AU$19 million
(US$14.4 million) funding shortage as a result of the delays. IAG spoke to Silver
Heritage Managing Director and CEO Mike Bolsover about the Nepal-based project.
By Ben Blaschke
Ben Blaschke: How does it feel to finally have Tiger Palace operational phase now following the successful build, receiving
up and running after such a long journey? a 5-star rating and the licensing of the resort, hotel and casino
Mike Bolsover: In one word, fantastic. We have a great team and respectively in the last four months of 2017. We are now right
we have had tremendous support from the shareholder base – old back into managing gaming operations where we have a long and
and new – to get us to this stage. It has indeed been a lengthy successful track record and deep expertise.
journey with the various events in Nepal – the tragic earthquake
in 2015, the new constitution later that year and the related BB: You opened the hotel in September and launched
fuel crisis, plus the intensity of the front-door IPO process in casino operations in late December. What sort of numbers
Australia in 2016. have you been seeing through the property over these first
Personally, on the home front my wife Rebecca and I have had few months?
three children since the company purchased the first parcel of MB: We had a full car park on the third night of operations, which
land in 2014! But there is no time to rest. This is the start of the was New Year’s Eve, and 412 guests. The early feedback has been
20 INSIDE ASIAN GAMING FEBRUARY 2018IN FOCUS
“The delays relating to the
completion of Tiger Palace
… had impacted credibility.
Since then we have bounced
back on all fronts and, having
raised additional capital,
we completed the build and
opening of the hotel and the
casino at Tiger Palace by the
end 2017 timeline.”
Mike Bolsover
very positive indeed. There really is nothing like Tiger Palace in this frames the center of the hospitality area which is Cabana Avenue (a
part of the world. On the non-gaming side we have large MICE and pool bar and grille) with space for 120 covers.
wedding events plus a car launch confirmed already and the future The other food and beverage outlets are Ramro Chowk (24-
looks bright. The grand opening will be on 16 March 2018. hour dining) with approximately 80 covers and within the casino
we have Jackpot Café with approximately 50 covers. In-room
BB: You’ve obviously still got some ramp to come. What dining and à la carte served to players at the tables in the casino
other features – both gaming and non-gaming – are completes the current food and beverage options, serviced from
still to come and how do you expect those to impact the three separate kitchens.
business once operational? To service the MICE and weddings markets we have a main
MB: We have opened with the planned 100 rooms and two villas ballroom, five meeting rooms and a large outdoor wedding and
and we have converted some event space already to cater to the banquet area, at the end of which we have an old historic Rana
demand for MICE. The gaming floor has mass, premium mass Temple for ceremonies and vows.
and VIP but we decided to delay the opening of the private gaming
facilities to ensure that we used empirical data to inform the fit BB: Tiger Palace is obviously situated to take advantage
out and open the rooms ready for the specific demand from those of the massive Indian market just across the border. What
customers preferring a private gaming experience. can you tell us about the resort’s surrounds?
We have 44 tables on the floor today with 34 in main gaming MB: Bhairahawa is in the flatlands of the Terai, which is 100 meters
and 10 in premium gaming and VIP. We have another eight tables above sea level and it is the only 24-hour border crossing between
planned for private gaming that can also be added to the main floor India and Nepal. It has a domestic airport which is soon to become
in any event, so we are able to have all 52 tables readied to meet Nepal’s second international airport and will take at least 30% of all
demand at any time. international inbound air traffic by the end of 2019. It is already very
well frequented as it is just 30km from the birthplace of Buddha –
BB: Can you tell us a bit about the main features of Tiger the UNESCO World Heritage Site of Lumbini – and 120km from the
Palace as of the turn of the year? incredible wildlife zone of Chitwan, also a UNESCO World Heritage
MB: The 100 rooms currently operational include four room types Site containing tigers, black rhino and elephants.
in the hotel (Suite, Junior Suite, Superior and Deluxe) plus the two In terms of the selection process I think it is both an art and a
additional villas. The rooms are set on two levels around a huge science. We have been in Nepal as a company since 2011 and I myself
feature swimming pool which winds between the hotel blocks and have been coming to Nepal since 2003. All that time Silver Heritage
FEBRUARY 2018 INSIDE ASIAN GAMING 21IN FOCUS
FEATURE
The main gaming
floor at Tiger Palace
Resort Bhairahawa
has been involved in casinos along the various popular border BB: What is your primary player segment?
areas in Asia, which include Thailand-Laos, Thailand-Cambodia, MB: We are mass and premium mass focused, but we already
Laos-China, China-Macau and Vietnam-Cambodia. We placed and have the ability to add VIP play in the raised floor section when
managed gaming machines in various licensed properties along the required. The private gaming areas will be for various uses
Nepal-India border and in the capital Kathmandu for a while before including VIP.
we selected Bhairahawa as the location for our first integrated resort,
Tiger Palace Resort Bhairahawa. BB: Do you see India ever truly opening up to gaming?
MB: India is already open for gaming but the casinos are in two
BB: Exactly what regions of India and what sort of states and in hard to reach places such as Goa – where players
population base are you looking at as your primary target need to take tenders to riverboats moored off the coast – and in the
market? highlands of Sikkim. Daman has been slated to open for the last
MB: The principal drive-up target market is the 16 million middle five years and will likely do so in the future with the principal draws
class Indians living within a six-hour drive of Bhairahawa, principally being Maharashtra and Gujarat.
those living in the largest state in India – Uttar Pradesh – which has
a population of 215 million. That’s the equivalent of the population BB: Let’s take a look at Nepal itself. What have you found to
of Brazil. be the pros and cons of operating in a developing nation
Having said that, we have already had customers from China, like Nepal?
Indonesia, Thailand and Vietnam among others as the property is a MB: Nepal is a beautiful country with so much to offer in terms
great base for tourism in southern Nepal and northern India. Once the of tourism, from the peaks of Everest to the jungles of Chitwan
international airport opens in 2019, customers and players will be able and the Kathmandu Valley. There is so much great trekking and
to fly directly from India, China, Thailand, Malaysia and beyond to an adventure tourism as well as eco-tourism and safaris. The people
international airport located just 15 minutes from Tiger Palace Resort. and the culture make it a great place to work and the fact that
Indians do not require a visa to enter Nepal and recently the Nepal everyone speaks English means that we can have interactions
government agreed to issue free visas to Chinese tourists to generate with the government, all ministries and the central bank in
accretive demand in the Nepal tourism market. We also have a great English. It’s very different in that regard from places like Vietnam
feeder property in its third year of operation at the Shangri-La Hotel in or China where you would need to know the language yourself
Kathmandu known as The Millionaire’s Club & Casino. fluently or require a translator.
22 INSIDE ASIAN GAMING FEBRUARY 2018IN FOCUS
“Once the international Cabana Avenue and Poole Bar
& Grille at Tiger Palace
airport opens in
2019, customers and
players will be able
to fly directly from
India, China, Thailand,
Malaysia and beyond
to an international
airport located just 15
minutes from Tiger
Palace Resort.”
From a construction perspective it has been harder due to the the build and opening of the hotel and the casino at Tiger Palace
fact that Nepal is land-locked. Logistically, even though the border by the end of 2017. We have achieved all of the things we set out
area with India is mainly flat and low-lying, all goods must come to do in mid-2017, including our 5-star rating, casino licence and
through Kolkata unless they are flown in, via Kathmandu. 2017 opening.
BB: There were obviously some well-publicized delays and BB: There was at that time an AU$19 million funding gap.
problems that impacted completion of Tiger Palace. Can On a personal level, did you ever fear that you might not
you run through what happened? be able to secure the required funding for completion?
MB: The principal reasons were force majeure including the MB: Never. The IPO was tough enough and a good experience to
earthquake in 2015 and also political with a fuel blockade and a new prepare me and our broader team. The support of the long-term
constitution introduced at the end of 2015. shareholders and the belief from the newer shareholders in the
story, in management and in the fundamental proposition meant
BB: When did you first realize that the initial deadline that it was a case of hard work, application and unwavering effort to
and budget for completion of Tiger Palace were get the job done.
becoming unrealistic?
MB: We held our November 2016 board meeting at Tiger Palace BB: What was the reaction from investors at that time and
and the contractors and Project Director still maintained at the time what feedback have you received more recently?
that the planned end-March date was achievable. But by the middle MB: It wasn’t great at the time but is obviously much better now.
of January 2017 it was clear that logistics and pace of completion Our shareholders are very knowledgeable and understand the
were dragging the timeline. fundamental proposition and changes we made. They backed
We held our January board meeting in Sydney and immediately us to complete and open in the revised time period and we have
commissioned an independent study to confirm fears raised at that done that.
time. As soon as we believed we knew, we informed the market.
BB: Can you talk about your local partners – who are they
BB: In May last year your Chairman noted in his AGM and what is their level of involvement?
address that the company’s credibility was an issue. What MB: We have two local partners who are very experienced and
went wrong to reach that point? well regarded in the tourism and the property and banking
MB: The delays relating to the completion of Tiger Palace and spaces respectively. They own 10% of the Casino Management
the dip in performance at Phoenix during the second half of 2016 company Silver Heritage Management Kathmandu Pvt. Ltd
had likely impacted credibility. Since then we have bounced back (SHMK). It is a legal requirement for the casino manager to be
on all fronts and, having raised additional capital, we completed partially Nepal-owned.
FEBRUARY 2018 INSIDE ASIAN GAMING 23IN FOCUS
FEATURE
Nepal is home to stunning
natural surrounds including the
Himalayas mountain range
BB: Outside of the integrated resort offering, do you
engage in other activities with local communities
“We now have over 450
in Nepal? local Nepali employees at
MB: Yes, we have a great CSR program across the country and
locally in Bhairahawa. These activities are conducted via two main Tiger Palace in the hotel and
conduits, being the Nepal Youth Foundation –also known as
Olga’s Promise – which is an incredible charitable entity focused hospitality and casino areas,
on helping women and disadvantaged children in Nepal founded
and run by 92 years young Olga Murray, and 3 Angels Nepal. 3
bringing our total employee
Angels Nepal, in partnership with Captivating International, have
set up watch programs at each border crossing between Nepal and
number in Nepal to over 800.
India to prevent human trafficking. We have also worked with the The majority are local.”
Bradman Foundation and Dream Cricket working with disabled
children in Nepal.
BB: How many staff are employed at Tiger Palace and how
many of these are locals? Is staffing in Nepal difficult? The government has almost completed a major infrastructure
MB: We now have over 450 local Nepali employees at Tiger Palace project which is a 24km stretch of six-lane highway from the border
in the hotel and hospitality and casino areas, bringing our total to the city of Butwal and that highway runs alongside the access
employee number in Nepal to over 800. The majority are local. to the resort. It is the most frequented border post between India
They are capable and hardworking. Part of our commitment to and Nepal, with 24-hour crossing for pedestrians and 18-hour
the government and the people of Nepal was a skills transfer and crossings for vehicular traffic. There is an Indian domestic airport
injection of knowledge and expertise. at Gorakphur just 100km to the South. It is a four-hour drive from
the huge city of Lucknow, which boasts an international airport, and
BB: For those yet to visit, how accessible is Tiger Palace? adjacent to the largest Indian state by population, Uttar Pradesh.
What are the main access routes and options? The domestic Nepal airport – Gautam Buddha Bhairahawa
MB: We have incredible access both by air and by road. We chose Airport – is only 15 minutes from the resort and is scheduled to
the city of Bhairahawa in 2014 after much deliberation and based on complete the black-topping of the new 3,200-meter runway in the
our experience in Nepal with gaming machines along that particular first half of 2018. Customs and immigration facilities are due to be
border since first launching our Nepal operations in 2011. finished at the end of 2018. This will be Nepal’s second international
24 INSIDE ASIAN GAMING FEBRUARY 2018FEBRUARY 2018 INSIDE ASIAN GAMING 25
IN FOCUS
FEATURE
The pool and VIP villas at Tiger Palace
airport and the plan is for the airport to take 30% of all international area of over two million people, just 20 minutes by car. This city
air traffic. has great domestic Indian airlift and an international airport. The
We liken the situation here with its nearby Lumbini, the entire land bank is approximately 50% larger than Tiger Palace
birthplace of Buddha, to that of Siem Reap in Cambodia with its Resort Bhairahawa.
nearby Angkor Wat, which has been a tremendous success as
Cambodia’s second airport and main tourism destination. BB: You also have interests in Kathmandu and Vietnam,
but how important is Tiger Palace to Silver Heritage and
BB: What are the terms of the casino license and are there the overall bottom line? Is Silver Heritage interested in
exclusivity clauses around it? participating in a Vietnamese IR in the future or other
MB: The licence is perpetual with annual renewal each July, in line Vietnamese expansion opportunities?
with the Nepal tax year. We won the first license for the casino at the MB: Vietnam and Kathmandu are great assets though most of our
Shangri-La Hotel in February 2015 and have successfully renewed it future growth is driven by the Tiger Palace proposition. We have
three times, so we are very familiar with the process. been operating in Vietnam for over seven years and know the market
extraordinarily well. We have a great partner in Phoenix International
BB: Are there future expansion plans for Tiger Palace? and we have also presented credentials and concept plans for a
MB: For sure, we have plans to cater to the demand as it grows and partnership with the owners of Laguna Lăng Cô in the past. No
can react quickly and efficiently. We currently have 10 hectares which decision has been made yet.
are 100% owned by Silver Heritage via its 100% owned subsidiary
and have built on just over half, leaving approximately five hectares
on which to expand. We also have a partner who owns land to the
north-east and the south, contiguous with Tiger Palace Resort, upon
which we could expand. We have construction drawings for two
more hotels of 100 rooms and 200 rooms respectively, so we are very
well prepared for the next phase of room expansion. The casino which
has opened with 44 tables and 216 EGMs has room for expansion in
table games within the already-built gaming floor area too.
BB: I note that recent updates on the ASX refer to a site
for a possible Tiger Palace 2. Can you provide some
details on this?
MB: We have paid a US$3 million deposit on land in the eastern
region where we had previously had experience managing some A Superior Room
gaming machines, in a place called Jhapa/Kakkarbitta adjacent to at Tiger Palace
the Indian border. The nearest Indian city is Siliguri, a metropolitan
26 INSIDE ASIAN GAMING FEBRUARY 2018FEBRUARY 2018 INSIDE ASIAN GAMING 27
GAMBLING
AND THE LAW
Can sportsbooks survive
a 1% tax on handle?
By Prof. I Nelson Rose
The US Supreme Court
The big news coming out of
the United States this year is Professor I Nelson Rose is
recognized as one of the world’s
the likely striking down of the leading authorities on gambling
federal ban on sports betting. law and is a consultant and
But with many states licking expert witness for governments
and industry. His latest books,
their lips in anticipation of Gaming Law in a Nutshell,
added tax dollars, the sports Internet Gaming Law and Gaming
Law: Cases and Materials, are
betting industry may well available through his website,
have another crippling fight www.gamblingandthelaw.com.
on its hands.
28 INSIDE ASIAN GAMING FEBRUARY 2018GAMBLING
AND THE LAW
T
HE US Supreme Court appears
to be about to rule that the
federal law that prevents “There are at least a dozen states that
states from legalizing sports
betting, the Professional and appear ready to enact new laws to introduce
Amateur Sports Protection Act (PASPA), is or expand legal intra-state wagering on
unconstitutional. There are at least a dozen
states that appear ready to enact new laws sporting events this year.”
to introduce or expand legal intra-state
wagering on sporting events this year, once
the High Court decision is announced.
This raises, as always, the question of
who will get the money. the handle a good idea for operators? I prepared a report and recommendations.
Indiana Rep. Alan Morrison has In 2008, the State Legislature of Delaware The following is a simplified version of the
introduced a bill that would give the national was considering reopening sportsbooks report’s discussion of the impact of taxes on
sports leagues 1% of the new sports betting in racinos, which the state was allowed to operators. I follow this with a quick analysis
handle as an “integrity fee.” The sports do, because it had been grandfathered in of the Indiana plan, which appears to be
governing bodies, of course, think this is a under PASPA. I was retained as the legal spreading across the country.
great idea. But is imposing a 1% fee on gross consultant by the Delaware State Lottery,
gaming wagers in addition to a proposed which runs all sports betting, to advise the HISTORY
9.25% state tax on gaming revenue, on top state on what the tax rate should be on the In 1954, Congress imposed a 10% federal
of the existing 0.25% federal excise tax on new sportsbooks. excise tax on all sports wagers, legal and
Sports betting has become
big business in Las Vegas
FEBRUARY 2018 INSIDE ASIAN GAMING 29GAMBLING
AND THE LAW
“Indiana Rep.
Alan Morrison has
introduced a bill that
would give the national
sports leagues 1% of
the new sports betting
handle as an ‘integrity
fee.’ But is imposing a
1% fee on gross gaming
wagers a good idea for
operators?”
illegal. This tax was so high that it was
virtually impossible for even the best sports
handicappers to win consistently. Licensed
sportsbooks were limited to Nevada. At
the time these were called turf clubs, were
limited in number, small in size and not
connected with large casinos. Individuals
who worked in the industry during this
time reported widespread tax evasion to get
around this high tax. For example, a $1,100
bet to win $1,000 was recorded as merely Indiana Rep. Alan Morrison
$11 to win $10. has proposed a 1% “integrity
Sportsbooks make their profit from the fee” on gross gaming revenues
statistical advantage they have over their for the state’s sportsbooks
patrons. The most common wager is a
multiple of $11 to win $10. If the sportsbook
succeeds in having the same amount of
money wagered on both sides of a match, it
is guaranteed to make a profit. For example, tax could not be passed on, because the amount bet in a year – and it holds 4.16%,
if Patron A bets $11 on his team and Patron patrons would no longer be betting $11 to it will win, or have gross gaming revenue,
B bets $11 on the opposing team, the sports win $10, but rather $11 plus 10% ($1.10) for of US$416,000. But when the federal
book now has $22, but the sportsbook a total of $12.10 to win $10. excise tax on wagers was 10%, the federal
pays the winner, whoever he may be, only Sportsbooks allow patrons to make government demanded US$1 million (10%
$21, his original $11 bet back and his $10 a wide variety of bets. The “hold” is the of the US$10 million bet). If the sportsbook
in winnings. The sportsbook keeps the percentage that the sportsbook wins. In had to pay this, it obviously could not; it
additional $1. Nevada, slightly more than US$22.5 billion would be like imposing a 240% tax on gross
It is easy to see why the 10% tax would was bet over a 10-year period and the gaming revenue.
be devastating if it could not be passed on to sportsbooks had gross gaming revenue of In 1974, Congress lowered the federal
the patrons. Of the $22 bet in the example about US$938 million, which means they excise tax on sports wagers to 2%. Using the
above, the federal government would take kept 4.16% of the amounts bet. same numbers for comparison purposes, a
$2.20, obviously much more than the Looking at a single sportsbook: if it sportsbook with a handle of US$10 million
sportsbook’s expected $1 profit. But the 10% has a handle of US$10 million – the total and a hold of 4.16% – therefore producing
30 INSIDE ASIAN GAMING FEBRUARY 2018GAMBLING
AND THE LAW
a win of US$416,000 – now only had to pay 0.25% (illegal sports bets still pay 2%). A
the federal government US$200,000. This is sportsbook with a handle of US$10 million
equivalent to a tax on gross gaming revenue
of 48.07%. Nevada also has a sliding scale
“In 1954, Congress and a hold of 4.16% producing a win of
US$416,000 now only had to pay the federal
of state gaming taxes, with the top tax rate imposed a 10% government US$25,000 (0.25% times
quickly reaching 6.75% of gross gaming US$10 million). This is equivalent to a tax on
revenue. Therefore, the lowering of the federal excise tax on gross gaming revenue of 6.01% (US$25,000
federal excise tax to 2% allowed sportsbooks all sports wagers, divided by US$416,000). Nevada’s top tax
in Nevada to operate and pay the equivalent rate of 6.75% means the sportsbooks were
of approximately 54.82% on their win. legal and illegal. now paying the equivalent of approximately
This was low enough to allow a few 12.78% of gross gaming revenue (6.01%
entrepreneurs to think about expanding
This tax was so high federal plus 6.75% state taxes).
the small turf clubs into true sports betting that it was virtually The direct result of having gaming
parlors. In 1975, the Nevada Legislature privilege taxes at about 13% of gross gaming
passed enabling legislation so that casinos impossible for even revenue for legal sportsbooks was an
could have sportsbooks. But the tax rate
was so high that few casinos were willing to
the best sports explosion of growth and capital expenditures
for Nevada’s sports betting industry. In 1973
devote any of their valuable floor space to a handicappers to win there were only 10 sportsbooks with a total
form of gambling that generated so little to handle of US$2.8 million. Twenty years later
the bottom line. consistently.” there were approximately 100 sportsbooks
In 1983, Congress lowered the federal with a total handle in excess of US$2 billion.
excise tax on legal sports wagers to By the year 2000 there were about 157
sportsbooks, with a total handle greater than
US$2.5 billion, generating more than US$117
million in gross gaming revenue.
Sportsbooks not only became large
and numerous in Nevada, they were
viewed as profit centers and entertainment
enticements for commercial casinos. By 1985
all of the small independent sportsbooks
were closed, replaced by multi-million dollar
casino sportsbooks with dozens of giant
video screens and all the other services
sports bettors could want, including easy
access to other forms of gambling.
IMPACT OF THE PROPOSED 1% TAX
Here is how the same analysis would work
using the numbers proposed for Indiana,
which is a 1% “integrity fee” on handle, a
9.25% state tax on gaming revenue and the
existing 0.25% federal excise tax on handle:
A sports book with a handle of $10 million
and a hold of 4.16% producing revenue of
US$416,000 would pay the sports leagues
US$100,000 (1% times US$10 million).
This is equivalent to a tax on gross gaming
revenue of 24.04% (US$100,000 divided by
US$416,000).
The federal government receives
$25,000 (0.25% times US$10 million),
which is equivalent to a tax on gross gaming
revenue of 6.01% (US$25,000 divided by
US$416,000).
The state receives US$38,480 (9.25%
times US$416,000).
The total in fees and taxes would
FEBRUARY 2018 INSIDE ASIAN GAMING 31You can also read
