LANDING'S JEJU JEWEL - inside asian gaming
←
→
Page content transcription
If your browser does not render page correctly, please read the page content below
inside asian gaming
Kazuo Okada Part 2
IAG Power 50 Gala Dinner
MGS Entertainment Show
november 2018
#149 | 30 MOP
LANDING’S
JEJU JEWEL
www.asgam.com
CONTENTS NOVEMBER 2018 COVER STORY
Cover Image:
FEATURES Landing International
The man who
would be Wynn
Happy Landing
12 Breakfast Briefs
18 in Jeju
Jeju Shinhwa World beat long odds to
COLUMNISTS
raise the bar for South Korea’s holiday
26 Super amenities island. Has Landing International’s
Non-gaming amenities that stand out from the crowd are
becoming an increasingly important aspect of global IRs. US$1.5 billion IR launched a casino
takeoff for Jeju and Korea?
FEATURES
32 The man who would be Wynn
Kazuo Okada says he’s been “vindicated” of the
accusations that led to his ouster as vice chairman at
Wynn Resorts, so he should have succeeded Steve Wynn
as chairman – and he still might.
TRADE EVENTS
40 Asian gaming’s night of nights
IAG will host the very first Asian Gaming Power 50 Gala
Dinner at Studio City on 23 November 2018, counting
down this year’s “Big 50” during a glamorous evening.
44 New year, new look
MGS Entertainment Show has reshaped its offerings as
it celebrates six years in 2018.
BLUE PAGES
50 Powering your live casino with
nanoStream Cloud & H5Live Player
The online market’s move from Flash to cross-platform
HTML5-based technologies for live streaming applications
has enabled iGaming platforms around the world to
improve player experience.
54 “It’s all about what’s inside” for Aristocrat
Aristocrat will display new additions to its Asian
portfolio at MGS Entertainment Show 2018.
58 Token economy
Alphaslot wants to use tokenization to expand casinos’
customer segments and bring the social, eSports and
land-based gaming worlds together.
62 EVENTS CALENDAR
EDITORIAL Still Photography Distribution Supervisor
Danomad Kuan Emily Vong
Managing Editor Video Producer Distribution Officers
Ben Blaschke Danomad Kuan Anson Ip
Peng Cheang
Editor at Large Mak Man Wah
Muhammad Cohen DIGITAL Hoi Hou Wai
Deputy Editor Director of Digital Business Development
Oscar Guijarro Kevin Sam CORPORATE
Founder and Adviser Journalist and Social Media CEO
Kareem Jalal Joseff Musa Andrew W Scott
Graphic Design Chief of Staff
Rui Gomes SALES & MARKETING Helene Wong
Copy Editor Director Sales Chief Financial Officer
Ray Granlund and Business Development Marcel Fenez
Jadeson Ho
Director and Administrator
Social Media and Content Pam Chang
Cynthia Cheang
Production Manager
Hong Kong Sales
Yvonne Cheong Accounting and Compliance Director
Angel Wong
Anita Loi
Contributors Client Relationship Manager
Paul Doocey Administration Assistant
Caroline Iau
Dr Brian To Suie Ng
Steve Karoul
Executive Transportation Officers
Rui Pinto Proença DISTRIBUTION André Ng
Peter T Treadway
Fong Chi Meng
Dr Glenn McCartney VP Operations
I Nelson Rose Karen Cheong
Advertising Enquiries Subscription Enquiries
Jadeson Ho jh@asgam.com +853 6331 5577 Emily Vong emily@asgam.com +853 6647 4123
Inside Asian Gaming Must Read Publications
Macau registered publication number 295 is a subsidiary of
Published by Must Read Publications Ltd
Macau registered press company number EP98
Press releases – bb@asgam.com | Enquiries – admin@asgam.com
+853 2883 6497 | Price MOP$30
Printed by Cochin Advertising Printing Service Co., Ltd.
EM Macau, Est. Marginal da Ilha Verde, N°S
1281-1291 Kam Loi Kong Ip Tai, Ha 2° Andar H
www.asgam.com
ISSN 2070-7681 www.omedia.mo
8 INSIDE ASIAN GAMING NOVEMBER 2018
EDITORIAL
No cause for doom and gloom
H
AVING enjoyed a 26-month run of consecutive year-on- Macau. Negatively putting pressure on certain operators is not how
year growth through October, the writing seems very you’re going to achieve that ultimate goal and I think the Chinese will
much on the wall that Macau’s winning streak is on the probably rise above the rhetoric of the trade spat to recognize that
verge of coming to an end. Although September’s GGR the current competitive environment in Macau doesn’t need political
growth of 2.8% over the same period in 2017 was heavily impacted headwinds that would stifle investment.”
by the effects of Typhoon Mangkhut mid-month – particularly the Macau is also starting to reap the benefits of the government’s
closure of all Macau casinos for 29 hours at the height of the storm – push for diversification, with reliance on the more volatile VIP market
it is hard to deny that analyst predictions of a slowdown towards the declining and mass market revenue increasing. Not withstanding
end of the year look like coming true. September’s typhoon-related difficulties, August GGR recorded a
The reasons are at least twofold, coming on the back of China’s surprisingly strong 17.1% year-on-year growth to MOP$26.6 billion
own slowing economy and the added pressures of the US–China trade (US$3.3 billion) of which mass proved to be the driving force.
war, which some predict could hurt Macau either directly or indirectly. “We continue to believe that mass market remains the strongest
But are fears of another dramatic downturn similar to the one that segment, likely at or north of a 20% growth rate, with VIP remaining
decimated Macau’s gaming revenue between 2014 and 2016 justified? in the mid-teens,” said Union Gaming’s Grant Govertsen at the time.
Fragile minds still reel in horror at those memories, when annual The same trend was reflected through 3Q18 as a whole, with
GGR plummeted from US$45.3 billion in 2013 to US$28.04 in 2016 figures released by Macau’s Gaming Inspection and Coordination
with VIP revenue slashed in half. However, despite the impending Bureau in late October showing mass baccarat growing 21.5% year-
slowdown, confidence remains high that Asia’s gaming hub is far on-year to MOP$25.4 billion. While VIP baccarat still enjoyed a larger
better positioned to cope with global pressures this time around. share of the pie at MOP$40.1 billion, that figure represented growth
For starters, concerns over possible retaliation by China against US of just 3.6% on 3Q17.
casino operators operating in Macau – namely Sands, Wynn and It is undeniably cause for optimism, with the coming slowdown
MGM – has been dismissed by most analysts. tipped to be more about market stabilization than any return to the
Jonathan Galligan, the head of Asia Gaming and Conglomerates gloomy days of the recent past. If so, that’s great news for Macau.
for CLSA, recently stated at an investors’ forum in Hong Kong that
“You would need to see the trade war deteriorate significantly before
that would be brought on to the table because I don’t think it’s in the Ben Blaschke
interest of China to do that. Managing Editor
“I think, ultimately, the Chinese will take a very rational view on We crave your feedback. Please email your comments to bb@asgam.com.
www.asgam.com
10 INSIDE ASIAN GAMING NOVEMBER 2018NOVEMBER 2018 INSIDE ASIAN GAMING 11
ARNALDO HO UNVEILS NEW
“CLASSIC MACAU” THEMED IR
LISBOETA, A NEW Integrated Resort (IR) inspired by classic Macau the company’s products. On the other hand, Casa de Amigo will
venues, will be developed next to SJM’s Grand Lisboa Palace in Cotai. include rooms decorated with the Friends Line characters.
Operated by Macau Theme Park and Resort Limited (MTPR), Lisboeta will also have a zip-line attraction, indoor skydiving
Lisboeta will cost HK$5 billion and cover 141,000 square meters of facilities and Emperor Cinemas, featuring Macau’s first IMAX and
floor space once completed in 2020. MX4D movie theatres. Emperor Cinemas will have 1,200 seats.
“Lisboeta will become the next classic of the future,” said Ho, The entertainment offering will be complemented by food and
the son of Macau gaming godfather Stanley Ho and SJM Co-Chair beverage facilities recreating traditional food from Macau. The IR
Angela Leong. Its architecture will be inspired by local landmarks will also include a futuristic retail arcade and space for MICE events.
such as Macau’s first casino, Hotel Estoril, the floating casino “It is not a theme park, it is an integrated resort,” said Ho,
Macau Palace and the city’s streets as they were last century. dismissing previous reports claiming a theme park would be built
Lisboeta will include three hotels, totaling 820 rooms. Lisboeta on the premises. He added that there are no initial plans for gaming
Hotel will have 574 rooms, Maison L’Occitane 164 rooms and Casa space but that the final decision would come down to permission
de Amigo 82 rooms. for gaming being granted by authorities.
Maison L’Occitane will be the first boutique hotel in the world The official launch ceremony was officiated by the directors of
designed by the cosmetics brand with its rooms to be inspired by MTPR – Arnaldo Ho, Angela Leong, Lee Wai Man and Li Chi Keung.
12 INSIDE ASIAN GAMING NOVEMBER 2018Macau’s casinos to face
MOP$200,000 fines for
illegal smoking rooms
from 2019
Any Macau casinos found to be operating illegal or unapproved
smoking rooms after 1 January 2019 face a fine of MOP$200,000 and
Macau’s mass market
forced closure of the room.
News of the impending punishment formed part of an
baccarat enjoys 21.5%
announcement by Macau’s Health Bureau in which it outlined its
timeline for operators filing smoking lounge applications either late surge in 3Q18
or with missing or incorrect information. The government introduced
the New Tobacco Control Act from 1 January this year, extending non-
smoking areas across the city including a ban on smoking in the VIP Macau’s mass market baccarat drove citywide GGR growth
areas of casinos. However, casino operators have 12 months before in the three months to 30 September 2018, with mass
they must fully implement the ban at which time smoking will only be baccarat revenue up 21.5% year-on-year to MOP$25.4 billion.
allowed inside specially ventilated smoking rooms. The figures, released by the Gaming Inspection and
According to the Health Bureau, just 27 of Macau’s 47 gaming Coordination Bureau, compare with just 3.6% year-on-year
establishments submitted applications for a total of 404 smoking growth in VIP baccarat to MOP$40.1 billion.
lounges before the 28 September 2018 deadline. So far a mere 12 While VIP baccarat still comprised slightly more than half
rooms inside three casinos have been approved. of Macau’s GGR in 3Q18, its share of the pie declined from
In its announcement, the Health Bureau said it will continue to 57.7% in the same period last year to 54.3% this time around.
accept applications for smoking rooms but that they “will be strictly By comparison, mass baccarat’s share grew from 31.2% last
handled according to the established procedures.” year to 34.4% in 3Q18.
Those found to be operating smoking rooms without a permit will Notably, mass baccarat GGR also increased sequentially
have their rooms shut down and the MOP$200,000 fine issued from for the quarter – up from MOP$24.1 billion in 2Q18 – while
next year. VIP baccarat revenue declined 2.3% sequentially.
NOVEMBER 2018 INSIDE ASIAN GAMING 13ARISTOCRAT KEEN TO BRING
OASIS 360 CASINO MANAGEMENT
SYSTEM TO ASIAN MARKET
ARISTOCRAT IS PREPARING to launch its have expressed an interest in our Oasis engagement is very high, so we’re looking
popular US casino management system, 360 system. now to our broader global portfolio to see
Oasis 360, into Asia. “In the last quarter in Asia there have what else we can bring and seed into Asia
The move comes on the heels of the also been some requests around systems to continue the growth that we’re on.”
company’s recently announced 10-year with Aristocrat. While we are a very strong Robson said that Oasis 360 had
agreement with Boyd Gaming under which product and content player in Asia, attracted particular interest from customers
Oasis 360 now connects around 20,000 systems are not something that we have in Macau and the Philippines, as well as
devices across Boyd’s 24 US properties. typically pursued in recent years but on some interest from Korea and Vietnam.
Speaking with Inside Asian Gaming the back of this show and the momentum Oasis 360 combines Aristocrat’s
at G2E in Las Vegas, Aristocrat’s Sales globally it’s something that we really want portfolio of casino management technology
& Business Development Director Asia to explore. comprised of slot management, bonusing,
Pacific, Lloyd Robson, said, “We don’t have “Obviously our typical slot product is digital, table management, single card
a system in Asia per se but we’ve had a performing really well in Asia, we’ve got loyalty solutions, kiosk and a media
number of customers through G2E that strong market share and our customer management hub.
14 INSIDE ASIAN GAMING NOVEMBER 2018Sega Sammy wants involvement
in “majority” of Japan IR projects
The Chairman and Group CEO of Japan’s wide range of possibilities for the Group,” know-how gained from such successes.”
Sega Sammy Holdings says he wants to be Satomi said. Sega Sammy is currently a joint venture
involved in most of the country’s integrated “Many companies have announced their partner in Korea’s first integrated resort,
resort operations following recent passage intention to participate. However, I want the Paradise City in Incheon, with local firm
of the long-awaited IR Implementation Bill, Group to hold the majority of projects and Paradise Co and has made no secret of
with a view to global casino expansion. develop businesses in a broad range of fields the fact that it views the partnership as
Discussing Sega Sammy’s vision in with casino operations as the central focus. an opportunity to gain casino operations
its annual report, Hajime Satomi outlined “If we can realize participation and experience. The company has around 60
ambitious plans for the coming years build successful businesses, it will open up employees based at Paradise City learning
including a desire to be a dominant player a wide range of possibilities for the Group the trade.
in the Japanese IR industry. going forward, including the expansion of It also operates non-gaming resort
“Integrated resorts will open up a businesses in the global market using the Phoenix Seagaia Resort in Miyazaki, Japan.
Studio City launches new resident stunt show Elēkron
Melco Resorts & Entertainment has unveiled
its new theatrical stunt show, Elēkron, at
Macau integrated resort Studio City. Combining
spectacular performances with tailor-made
electric vehicles, the 75-minute spectacle portrays
a post-apocalyptic future in which a tribe must
battle hardships in order to reach a power
station from where they can control electricity.
To recreate this script, Melco has
employed the expertise of Stufish, the world-
renowned entertainment architecture company
responsible for the opening and closing
ceremonies of the 2008 Beijing Olympics
as well as shows by the likes of Elton John,
Madonna and Beyoncé.
Elēkron will feature over 70 sports cars,
buggies, quads, trials bikes, FMX bikes and
even a biplane, all designed from scratch
specifically for the show and powered by electric
engines provided by car manufacturer Tesla.
More than 150 cast, crew, creative
specialists, designers and technicians –
including Guinness World Records holders –
have been handpicked for the show from nine
countries around the globe.
NOVEMBER 2018 INSIDE ASIAN GAMING 15STAR TARGETS CHINESE PLAYERS WITH
NEW BRANDING AND WECHAT ACCOUNT
AUSTRALIA’S STAR ENTERTAINMENT the one we will now present to Asian
Group has launched new Chinese branding, markets,” he said, pointing to ongoing
supported by a new WeChat account, aimed upgrades to The Star Gold Coast and the
at positioning the company’s integrated development of the Queen’s Wharf precinct
resorts as more appealing destinations to in Brisbane.
Chinese travelers. “This showcases what we bring to
The branding sees The Star’s Chinese our destinations in Sydney and southeast
name under its existing eight-pointed Queensland, which is premium offerings
logo reworked from the previous literal and experiences.”
translation of “Star Harbour City” to a new The brand will be supported by a new
translation: “Millions of Stars”. WeChat account for the group.
Managing Director and CEO Matt Bekier said the new “Millions of Stars”
Bekier explained that Star Entertainment brand continues the work The Star has
Group was keen to increase its share of the undertaken to drive its appeal to Chinese
booming Asian tourism market and more tourists. The company recently installed
specifically of those travelling internationally terminals that accept WeChat Pay and
from mainland China. Alipay alongside China UnionPay to make
“The previous brand was really only it easier for Chinese visitors to complete
identifiable for Sydney and certainly less transactions at its flagship The Star
prestigious, distinctive and dynamic than Sydney property.
Suncity expands Sihanoukville IR agreement
Suncity Group Holdings Limited’s subsidiary, Suncity Group
Management and Consultancy (Sihanoukville) Limited, has expanded
its agreement with Golden Sun Sky Entertainment Co., Ltd to
include pre-opening and casino management services at an under-
construction casino resort in Sihanoukville, Cambodia.
The expanded agreement comes one month after Suncity agreed
to provide consultancy services for the US$360 million property.
According to Suncity, the new agreement will see it provide
pre-opening and technical services for the casino of Golden Sun
Sky’s integrated tourism resort project during various stages prior to
opening. The technical services include assistance in the preliminary
design for the casino as well as reviewing the designs and approving
drawings in relation to the construction of the IR complex.
The pre-opening services will include providing assistance to
Golden Sun Sky in relation to preparation for the IR’s operation
and design plan, as well as reviewing the timetable and budget for
the development. After opening, Suncity will provide management
services for the casino for a term of 20 years.
16 INSIDE ASIAN GAMING NOVEMBER 2018NOVEMBER 2018 INSIDE ASIAN GAMING 17
COVER STORY
HAPPY
LANDING
IN JEJU
By Muhammad Cohen | Editor-at-Large
18 INSIDE ASIAN GAMING NOVEMBER 2018COVER STORY
Jeju Shinhwa World beat long odds to raise the
bar for South Korea’s holiday island. Has Landing
International’s US$1.5 billion integrated resort
launched a casino takeoff for Jeju and Korea?
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.
NOVEMBER 2018 INSIDE ASIAN GAMING 19COVER STORY
L
ANDING International’s US$1.5 billion Jeju Shinhwa visitors from mainland China and nearly every other jurisdiction. It’s
World opened its casino on 25 February 2018 and for just a 55-minute flight from Shanghai, 1 hour 20 minutes from Osaka
the first half of this year reported gross gaming revenue and within 2 hours 30 minutes of Beijing and Tokyo. With an effective
of HK$2.4 billion (US$307 million), 50% more than the tax rate around 15%, less than half of Macau’s levy, it can offer greater
combined GGR for Jeju’s eight casinos for all of 2017. incentives to VIPs than many other jurisdictions.
That’s a result worthy of a US$1.5 billion integrated resort, achieved
under difficult circumstances. The challenge for Landing, and for BLACK TO WHITE
Jeju, is to build on that impressive launch. Yet last year, Jeju reportedly mustered GGR of US$200 million,
Shinhwa World brings first-class gaming and visitor amenities just over 0.5% of Macau. Jeju has suffered from a reputation for
to what’s already a top tourist destination, attracting 15 million so-called “black casinos” that don’t play honest across the board.
visitors last year. A volcanic island off the Korean peninsula’s One executive recalls joining a casino and finding surveillance didn’t
southwest coast, Jeju has a trio of UNESCO World Heritage sites, extend to the counting room. In 2015, Jeju established a Casino
with Mount Halla, Korea’s tallest peak, at its center. Two and a half Regulatory Division, affiliated with the police department. CRD
times the size of Singapore with a more temperate climate than “turned casinos from black to white,” one executive says, and gets
peninsular Korea, Jeju is a lush green lung for urban dwellers with a high marks from the industry for its cooperative attitude. But in some
network of hiking trails, dramatic vistas and dozens of conventional circles, Jeju’s bad reputation persists.
and quirky museums. A recent hurdle is China–South Korea tension over deployment of
Jeju is also home to half of South Korea’s 16 foreigner-only casinos the US supplied THAAD missile defense system last year to counter
and, as a special self-governing province, offers visa-free access for North Korean missile threats. China barred group tours to South
Landing Casino
20 INSIDE ASIAN GAMING NOVEMBER 2018COVER STORY
Landing Casino
Korea and Jeju’s mainland China visitor arrivals fell from 3.06 million
in 2016, 85% of Jeju’s total foreign arrivals, to 747,315 last year, Shinhwa World brings first
then fell another 46% through the first seven months of this year,
according to Jeju government statistics. Overall foreign arrivals are class gaming and visitor
down from a daily average of 9,871 in 2016 to 2,842 this year. While
Jeju’s tourism industry draws from the full arrival pool, projected at
amenities to what’s already
14.3 million this year, including 13.5 million Koreans, gaming relies on
foreign visitors, particularly Chinese.
a top tourist destination,
Industry insiders report Chinese arrivals picking up recently.
China has relaxed the group tour ban selectively by province, starting
attracting 15 million
with Beijing and Shandong. The crowds swarming Jeju’s three-
storey Lotte Duty Free Shop – South Korea’s Lotte Group became a
visitors last year.
particular target of Chinese officials after military authorities placed
a THAAD battery on a Lotte golf course – suggest the worst may
be over.
Landing also has its own issues, with Chairman Yang Zhihui
unavailable since August, reportedly detained by Chinese authorities, Jeju. When phase one is completed in the coming months, Shinhwa
and its proposed IR project in Manila under fire from Philippine World will top 2,000 guest rooms, along with family attractions, a full
President Rodrigo Duterte. Landing says neither situation impacts range of F&B, retail, the first hotel-linked convention center in Jeju
Shinhwa World operations and a recent visit by Inside Asian Gaming and the island’s largest casino.
supports that assertion. In February, Landing transferred casino operations from the
Hyatt Regency in Jungmun, Jeju’s south-shore beach resort area.
QUANTUM LEAP The Hyatt had 28 gaming tables and 16 slot machines in 800 square
Beyond current rows, the key impediment for Jeju realizing its gaming meters with GGR of HK$235 million in 2017. Shinhwa World’s casino
potential has been lack of investment in visitor “infrastructure” to measures 5,775 square meters and, for the first half of this year, GGR
expand foreign arrivals, Landing Chief Operating Officer Jay Lee hit HK$2.4 billion.
explained to IAG at G2E Asia in May. The jump stems from more than size. Executives cite room
“Infrastructure in terms of new hotels and F&B outlets, the whole availability as a key advantage of operating a casino where your
entertainment options for the tourists,” he said. company controls the hotel. If you want to bring in a VIP, or one shows
Shinhwa World is the largest foreign direct investment in South up unexpectedly, you don’t have to beg for rooms from a different
Korea’s history, a quantum leap beyond anything previously seen in ownership with its own priorities. Landing has taken advantage of
NOVEMBER 2018 INSIDE ASIAN GAMING 21COVER STORY
controlling guest rooms by staging poker and baccarat tournaments. Jeju Island’s Mount Halla
Promotions are a key to drawing customers to a new property in is Korea’s tallest peak.
what’s a new destination for many players, and more are in the cards.
In this “acquisition phase,” a knowledgeable source says Landing is
offering commissions up to 1.5% and generous perks, “the kind of
deal you’d get in Sihanoukville.”
FIRST IMPRESSION
After the passport check, Shinhwa World casino customers enter a
dramatic rotunda with an elegant chandelier and 20 mainly high-
limit tables. The main floor stretches to the left with 65 tables and
most of the property’s 239 machines, including a 40-seat multi-game
stadium. VIP areas extend to the right. In-house VIP club D’Solitaire
– Ding Sheng or “great prosperity” in Mandarin – has 37 tables,
with another 52 tables in private suites for junkets, the largest room
holding 10 tables, high-limit slots and a bar featuring Scotch whiskey.
Macau junkets visit on a casual basis.
VIP play starts at KRW300,000 (US$263) with a maximum
bet of KRW300 million. On the mass side, bets are as low as
KRW10,000 for roulette and blackjack, KRW20,000 for baccarat, but
KRW200,000 for a “squeeze game” where bettors can handle their
cards. Landing says mainland Chinese customers account for about
70% of casino revenue with 15% from Taiwan – “a good surprise,”
COO Lee says – and the rest widely shared among Southeast Asia,
Japan and Hong Kong.
The mass gaming floor has a food court offering Korean,
Chinese, Japanese and Western options that resembles the one at
Resorts World Sentosa, a reminder that Genting was a Shinhwa
World partner until November 2016, just six months before roll out.
Many management figures have résumés including Genting or Les
Towering ambition
Grand Hyatt with 1,600 suites, Korea’s largest outdoor pool deck, a
38th-floor observation deck by day, ultra lounge by night and, if the
Jeju government approves, a casino with net gaming space of 4,800
square meters (51,648 square feet).
“We believe Dream Tower is a game changer,” Lotte Tour COO
and Executive Vice President Lawrence Teo says. “The more IRs, the
more visitors, the bigger the pie.”
Dream Tower is scheduled to open next October, giving relations
W
ITH its Genting ties, theme park, suburban setting and between China and South Korea 11 months to continue thawing. In a
low-rise profile, Jeju Shinhwa World evokes Singapore’s capital-light construction model, Lotte Tour used Chinese developer
Resorts World Sentosa. Jeju Dream Tower aspires to Greenland to finance one hotel tower then sell rooms to individual
the Marina Bay Sands role, an iconic downtown integrated resort Korean investors for leaseback to Lotte Tour with a guaranteed
cementing Jeju’s place on the regional gaming map. A tall order for annual return and 24 days’ annual room use.
169 meter twin towers soaring above Jeju’s usual 55 meter limit with “That’s US$500 million we didn’t have to invest,” Teo, previously
views of Mount Halla, the city and the sea. a top Melco Entertainment executive in Macau, notes.
Developed by Lotte Tour – with distant family ties but no business
relationship to Korean top-five conglomerate Lotte Group with its SHANGHAI STRATEGY
own Dream Tower in Seoul – Jeju Dream Tower will be the vacation Lotte Tour sees competitive advantage in its inbound tourism
island’s second US$1 billion-plus IR. Features include Asia’s flagship experience. It’s learning about gaming running LT Casino, the
22 INSIDE ASIAN GAMING NOVEMBER 2018COVER STORY
Shinhwa World is the largest
foreign direct investment
in South Korea’s history, a
quantum leap beyond anything
previously seen in Jeju.
Ambassadeurs, the high-end London gaming club Landing acquired
in April 2016 and sold 18 months later for a HK$447 million profit.
“THE WHOLE WORKS”
Shinhwa World, 30 minutes by car from the airport, also resembles
Resorts World Sentosa in its genuine integrated resort ambitions.
Strong non-gaming elements are essential because Koreans normally
comprise three-quarters of Jeju visitors – the 50-minute Seoul-Jeju air
route was the world’s busiest last year – and they are barred by law
from entering Jeju casinos.
“With that in mind then we took the option of, ‘Okay, build
former Paradise Jeju Lotte, with 27 tables and 24 machines on
the island’s south shore, acquired in July for US$38 million. It’s
also banking on Dream Tower’s downtown location, in the midst
of 5,000 registered hotel rooms and potentially six of Jeju’s eight
casinos, all minutes from Jeju’s airport and cruise terminal. From
Shanghai, Jeju is a 55-minute flight or overnight cruise away, with
visa-free entry.
A “tougher competitive landscape” has driven Bloomberry
Resorts to begin a long-contemplated US$15 million renovation of
Jeju Sun casino hotel’s 200 guest rooms, CFO & Treasurer Estella
Tuason-Occeña says. Bloomberry, operator of Manila’s Solaire IR,
purchased Jeju Sun, a 10-minute walk from Dream Tower, in 2015 and
has already renovated the 50-table, 51-machine gaming floor.
“It’s got potential specifically in terms of location close to China
and visa-free access,” says non-executive director of junket promoter
Rich Goldman Holdings, Nicholas Niglio, of Jeju. “Disincentives
could go away pretty quickly.”
Niglio, previously CEO of Rich Goldman predecessor Neptune
Group, calls Jeju’s “medium term good, long term very good.”
NOVEMBER 2018 INSIDE ASIAN GAMING 23COVER STORY
The Waterpark at Jeju Shinhwa World
Jeju’s attractive setting and
visa-free entry present a major
MICE opportunity. Shinhwa
World’s 12,180-square meter
convention center, opened
a year ago in November
2017, is Jeju’s first with
accommodation attached.
something that is more resort oriented and complementary with center, opened a year ago in November 2017, is Jeju’s first with
families, for holidays and things like that.’ And that’s why we came accommodation attached. The ballroom seats 2,000 theater style or
up with Jeju Shinhwa World,” Lee says. “We have hotels, F&B, theme 1,000 for dinner. Shinhwa World casts a wide net for MICE, starting
park, water park, K-pop, casual dining, retail, the whole works.” with Korea and China, extending to Southeast Asia.
Lee notes Jeju room rates hover around US$300, “by far the The 230-hectare development also includes Shinhwa Villas –
highest in Korea.” Shinhwa World accommodations include a 486-key 350 townhouses and villas available for purchase. Foreigners can
Marriott above the casino, 615-room Landing Resort, 342 Somerset- obtain local residency with a KRW500 million purchase. With these
branded three-bedroom townhouses and, launching by early 2019, varied income streams, Shinhwa World’s first-half net revenue was
Shinhwa Resort with 538 rooms plus an additional Marriott wing 80% gaming, 20% non-gaming, toward its goal of a 50-50 split. It’s
raising its room count to 627. Occupancy runs 80% on weekends, another indicator of a great takeoff for Landing.
40% during the week. Phase two, opening 2020, features a 200-key
Four Seasons, Jeju’s first, and Lionsgate Movie World.
Current family offerings include Shinhwa Theme Park featuring
Larva, a Korean cartoon series for all ages, an indoor-outdoor water Jeju Shinhwa World includes Shinhwa Villas – 350 townhouses
park opened in August with 18 slides and pools plus a jimbilbang and villas available for purchase.
(Korean style sauna) and Transformers Autobots Alliance, a virtual
reality activity center based on the film series. A combination ticket
for the three attractions costs KRW49,000, and no one goes alone.
The resort offers room packages including attraction admissions,
and entertainment areas include places parents can regroup over
a cold beer.
K-CUISINE
Shinhwa World’s two dozen food options run Korean, Chinese and
Japanese fine dining to American chain Johnny Rockets and local fast
food. YG Republique is inspired by talent agency YG Entertainment’s
performers, notably K-Pop icon G-Dragon, a member of boy band
Big Bang. The G-Dragon-designed cafe Untitled 2017 echoes his
solo single Untitled 2014. His creative input went into an urban chic
bowling alley cum lounge pub that, like the precinct’s four Asian and
international casual restaurants, pays homage to G-Dragon with local
specialties such as seafood and black pork plus seasonal ingredients.
Jeju’s attractive setting and visa-free entry present a major MICE
opportunity. Shinhwa World’s 12,180-square meter convention
24 INSIDE ASIAN GAMING NOVEMBER 2018COVER STORY NOVEMBER 2018 INSIDE ASIAN GAMING 25
COLUMNISTS
SUPER AMENITIES
Non-gaming amenities that stand out from the crowd are
becoming an increasingly important aspect of global IRs.
By Mike Vanaskie and Michael Zhu, The Innovation Group
T
HERE is no doubt that the non- something more than just a necessary evil 360-degree aquarium at the facility’s center
gaming amenities in today’s and financial loss-centers for IRs. Super bar. In February 2018, Las Vegas Sands and
integrated resort projects have amenities have arrived – and they’re here the Madison Square Garden Co. announced
been consistently gaining more to stay. plans to build the MSG Sphere – a 360-foot
weight of capital spend on a tall, 500-foot wide arena. In March 2018, the
global basis. And these non-gaming projects THE ARRIVAL OF “SUPER AMENITIES” Pechanga Band of Luiseño Indians officially
continue to get bigger, bolder and better. In December 2015, the Poarch Band of unveiled their US$300 million expansion
Whether it’s through sheer development Creek Indians opened a US$246 million that included a 4.5-acre pool complex, a
size or diverse and dramatic elements, expansion of their Wetumpka, Alabama two-level luxury spa and 40,000-square foot
non-gaming amenities have evolved into property, which included an iconic Pechanga Summit.
26 INSIDE ASIAN GAMING NOVEMBER 2018COLUMNISTS
In Asia, in addition to the Golden Reel experiences and indoor waterparks among it comes to non-gaming amenities and,
and Macau eStadium at Studio City, City others. Properties considering any non- perhaps, the global standard for the
of Dreams Manila just opened its new gaming expansion must now focus their entertainment industry in general. Non-
virtual reality (VR) game zone covering over development on differentiated offerings gaming revenue as a percentage of total
2,700-square meters on the upper ground more than ever. Strip revenue reached an all-time high
floor of the resort, with close to 600-seat in 2017 at 66%. This comes as Strip
capacity. Additionally, South Korea’s Paradise THE NON-GAMING GOLD STANDARD properties continue to jockey for a larger
City has recently completed the second VS THE REST: INSIGHTS THROUGH share of the seemingly ever-increasing
stage of new non-gaming facilities including JUXTAPOSITION flow of visitors to the destination – visitors
a high-end shopping mall, boutique hotel, The chart over the page illustrates a fact who are seeking a one-of-a-kind experience
film studio, family entertainment compound that is nothing new in the gaming world that often involves minimal time spent on
and art gallery. – Las Vegas is the gold standard when the gaming floor, if any.
While some of the first diversified gaming
experiences relied on relatively “standard”
amenities such as traditional food and
beverage outlets and box-style meeting
space, gaming properties can no longer While some of the first diversified gaming
rely on cookie-cutter non-gaming facilities.
Industry professionals anticipate a wider
experiences relied on relatively “standard”
variety of amenities to appear to seduce new amenities such as traditional food and
customers and to keep older ones.
Now, both destination and regional beverage outlets and box-style meeting
gaming facilities are expanding their
non-gaming offering to include unique
space, gaming properties can no longer rely
amenities such as Topgolf, social bowling on cookie-cutter non-gaming facilities.
Galaxy Macau’s Grand Pool Deck is one of the most popular non-gaming facilities in the city.
NOVEMBER 2018 INSIDE ASIAN GAMING 27COLUMNISTS
future, how then can these properties
Non-Gaming Revenue as Percent of Las Vegas Strip Total Revenue
learn from the Vegas bellwethers and other
regional players?
70% Examining completed and announced
non-gaming amenity developments over
the past several years from forward-
63%
looking developers and operators reveals
key considerations for future non-gaming
55% development.
48% ESPORTS AND VR
In response to the ever-growing popularity
of eSports in Asia, Melco Resorts &
40%
Entertainment opened the Macau eStadium
1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015 2017 at Studio City this summer. Other than
hosting major multi-player eSports
Source: Nevada Gaming Control Board tournaments and promoting live-streaming
of eSports events taking place outside
Macau, the venue will also be equipped
From eSports arenas to social bowling less than 5% of total gross floor area. with more rooms where eSports training
venues, Las Vegas integrated resorts Throughout its history, Las Vegas has and other activities can be held. To take
continue to reinvent themselves from a transformed itself from the epicenter of it even further, it is reported that Melco’s
non-gaming perspective. Recognizing the gaming to the epicenter of entertainment. development effort in Japan will involve the
revenue split of non-gaming to gaming, Is Vegas’s transformation a sign of things integration of an eSports stadium into a
the focus on non-gaming innovation is to come for gaming markets throughout the future casino resort in the country.
justified. In terms of absolute floor space, rest of the US and the globe? Studio City is also set to feature the
gaming floors undoubtedly continue to Recognizing that gaming revenue largest virtual reality (VR) zone in Asia for
shrink within integrated resorts, from will be the main driver for the top lines the 2019 Chinese New Year, with fantastic
already miniscule levels – now frequently of regional properties for the foreseeable entertainment and cutting-edge technology
Both destination and regional gaming
facilities are expanding their non-gaming
offering to include unique amenities such
as Topgolf, social bowling experiences and
indoor waterparks among others.
MGM Resorts added the hugely
popular Topgolf facility at MGM
Grand in Las Vegas in 2016.
28 INSIDE ASIAN GAMING NOVEMBER 2018COLUMNISTS
group of customers to their properties. The
pool amenity is often built to capture one of
two seemingly opposite customer segments:
the younger patron traveling to the resort
in search of fun and entertainment, or the
older patron visiting the resort, perhaps with
a family, in search of rest and relaxation.
To capture one of these two segments,
many properties have historically created
an atmosphere that caters to only one –
the pool party atmosphere to capture the
younger demographic or the spa-style pool
to capture the older demographic.
More recently, however, properties are
City of Dreams Manila recently launched its new VR
Zone and innovative food truck facility called The Garage.
creating pool areas that offer value to a
diverse set of patrons. One such example
is “The Cove”, the 4.5-acre pool area that
was part of Pechanga’s recently completed
US$300 million expansion project at the
No matter the location, many gaming Southern California IR. With multiple,
properties need to focus on customer segmented areas that cater to each of the
distinct guest segments, the new pool retains
segments outside of their core gamer to not only families and millennial party guests,
but also those non-participating guests who
thrive. Providing an atmosphere that just want to watch the party pool.
pleases a diverse set of patrons is key to An important caveat to consider as
properties look to expand their customer
expanding a property’s customer base. base with non-gaming amenities – especially
through the targeting of families: don’t
forget about your core customer. Experts
stress that creating an overall theme for
to allow for a whole new experience, whereas one of the many new faces of non-gaming a casino resort that strays too far from the
it sister property, City of Dreams Manila, has for IRs. Las Vegas represents perhaps one of core gaming customer can be a fatal flaw.
just opened a similar game zone. the best environments for eSports as the city
In the US, from eSports arenas to arcades welcomes over 40 million visitors per year. REGIONAL PROPERTIES MUST
to diverse pool concepts, IRs are increasingly No matter the location, many gaming GIVE OUTER MARKET VISITORS A
looking to draw new customers from outside properties need to focus on customer COMPELLING REASON TO VISIT
of the Baby Boomer demographic and are segments outside of their core gamer to When targeting customers from outer
doing so with amenity concepts of novelty. thrive. Providing an atmosphere that pleases markets, it’s imperative for regional and
The rise of eSports-oriented amenities is a a diverse set of patrons is key to expanding a local gaming properties to offer a compelling
clear trend targeting the much-discussed property’s customer base. reason to visit. As many of these properties
and elusive (to gaming floors) millennial compete with metropolitan areas that
customer segment. FAMILY can provide a diverse set of leisure and
This bet on eSports appears to be While the millennial customer segment entertainment offerings, gaming properties
warranted. A 2017 study completed by may not be available as a target customer often must provide something more than a
Limelight Networks found that 22% of for regional gaming properties, one steakhouse and mediocre entertainment to
American millennials polled say they demographic group that is available to many entice outer market visitors to make the one
regularly watch competitive gaming and gaming properties is the family. More and to two-hour drive to their properties.
that males between the ages of 18 and more gaming properties are introducing Continuing to innovate and positioning
25 in the US say they prefer eSports over family-oriented amenities, offering a one- themselves as one-stop shops for
traditional sports. Luxor’s eSports Arena stop entertainment destination for the entertainment is crucial for regional casino
Las Vegas is one of the recent eSports-only entire family. properties to capture and retain outer
developments. With a space of more than For example, some operators are market visitors. For gaming customers,
3,000 square meters, the arena represents reinventing the pool to attract a diverse more amenities mean more to do and more
NOVEMBER 2018 INSIDE ASIAN GAMING 29COLUMNISTS
gaming properties, but are they financially
viable? Perhaps more importantly, does it
matter if they represent financially attractive
investments on paper?
It is true that these so-called super
amenities may not be for every property.
Some research suggests that building a
parking garage shows the highest return
on investment for gaming properties, so
our recommendation has always been to
build the amenities with the greatest return
on investment first. Then, the focus can be
switched to other things that may be desired
but are less profitable.
While a successfully operated hotel
project at a casino resort, for example,
will generally have a payback period of
three to five years, it may take developers
of more atypical super amenities longer
to recoup their investments. However,
anecdotal evidence suggests that some
resort elements in this new class of
Luxor last year launched its specially designed eSports Arena Las Vegas. amenities, such as movie theaters and
tech-infused golf ranges (with capital
costs ranging from roughly US$5 million
to US$50 million), provide very strong
reasons for a visit. The Pala Casino Spa & in Las Vegas. Besides the aforementioned financial returns.
Resort in North San Diego County, California, wine country in Southern California, the new Given the small sample sizes, it remains
introduced a wine cave in recent years. This Ocean Resort Casino in Atlantic City seeks to be seen whether the success will translate
is a fitting additional non-gaming amenity as to capitalize on the growing popularity of from market-to-market and it is a rigorous
the greater area seeks to position itself as a Topgolf without the space required of a full- financial debate. In the end, it may not be
“wine country” destination similar to that in scale Topgolf range. The resort will offer the possible to completely quantify the ROI on
Northern California. world’s largest Topgolf Swing Suite, which something that creates an iconic definition
From an entertainment perspective, will include 11 golf-simulator bays. At less for an IR that is used in multitudes of ways
attracting and securing a diverse set of than 30,000 square feet, the amenity is still to embody its brand.
entertainers (and at the right cost) can be large but significantly smaller in scale than a The Bellagio celebrated its 20th
a major differentiating factor for regional full-fledged Topgolf range. anniversary in October. The fountains at the
gaming properties, even if they’re competing Elsewhere, there has been a trend of world-renowned property have been running
with urban centers. After all, there are few introducing “food hall” food and beverage for many years, but the sidewalk is still
city-center destinations that can offer dinner concepts at regional gaming properties. packed with onlookers when the fountain
from a high-quality restaurant, a show from From an operator’s perspective, these show starts. The emphasis on non-gaming
a well-known entertainer, a potential night- offer an attractive speed of service, amenities at Bellagio hasn’t dampened the
cap on the gaming floor and a hotel to spend allowing gamers to return to the casino property’s profitability at all. In the first six
the night in, all under one roof. Not only can floor quickly, and a similar footprint to months of 2018, according to MGM Resorts
regional casino resorts offer a diverse set quick service food courts. From a patron’s International’s earnings reports, Bellagio
of amenities to patrons, they can also offer perspective, these concepts offer a diverse had the third-best occupancy rate in Las
them to potential entertainers. set of higher quality food offerings – from Vegas at 94.5%, but the highest average
wood fired pizza to specialty ethnic cuisine daily room rate at US$283 and the highest
“SUPER AMENITIES” COME to specialty cocktails. revenue per available room at US$268.
IN ALL SHAPES AND SIZES Globally, Bellagio had the highest six-month
Don’t be fooled by the term “Super amenity”. ARE “SUPER AMENITIES” operating income among MGM properties
Super amenities don’t have to be super in size, SUPER INVESTMENTS? at US$222.2 million and the second-highest
although they often are. Unsurprisingly, the Super amenities may draw press coverage cash flow, US$267 million, behind MGM
largest of the super amenities can be found and attract a new type of customer to China in Macau.
30 INSIDE ASIAN GAMING NOVEMBER 2018NOVEMBER 2018 INSIDE ASIAN GAMING 31
FEATURES THE MAN WHO WOULD BE WYNN Kazuo Okada says he’s been “vindicated” of the accusations that led to his ouster as vice chairman at Wynn Resorts, so he should have succeeded Steve Wynn as chairman – and he still might. By Muhammad Cohen 32 INSIDE ASIAN GAMING NOVEMBER 2018
FEATURES
K
AZUO Okada and Steve Wynn jointly created companies settled with Universal receiving US$2.6 billion
Wynn Resorts. In February 2012, Wynn Resorts for its shares. Wynn also dropped its lawsuit against Okada,
directors removed Okada as vice chairman and alleging misconduct as a director. Okada says that if he still
redeemed Universal Entertainment’s 20% stake ran Universal he would have wanted the shares back, making
at a US$900 million discount, payable over 10 Universal Wynn’s largest shareholder again.
years, accusing Okada of granting improper hospitality to In this second installment of excerpts from his three-
Philippine government officials. hour-plus interview with Inside Asian Gaming Editor at Large
Okada’s ouster initiated a legal battle that ended with a Muhammad Cohen, Okada recounts his history with Steve
settlement in March this year. With their founders sidelined Wynn, who called Okada his best friend then removed him
under different yet equally extraordinary circumstances, the from their company.
At the beginning, things were working very well. I think [Steve
Wynn] appreciated the fact that I was a relatively silent investor,
not complaining very much, not putting too much input into things.
Steve Wynn and
Kazuo Okada started
Wynn Resorts
as 50-50 partners.
NOVEMBER 2018 INSIDE ASIAN GAMING 33FEATURES
Muhammad Cohen: Tell me about your relationship with Steve Wynn
Steve Wynn.
Kazuo Okada: The beginning was in 1998 when Universal went
public. I realized that the pachinko business was not the only
way to go, so in the long run you had to do something besides
pachinko. I read in a book somewhere that it’s best to look for new
opportunities during the best of times.
At that time, I had really wanted to get into the casino industry.
So, I bet my future on the casino industry.
Back in 2000, I looked into Las Vegas and was introduced
to Steve Wynn. At that time, he was working with the Mirage,
including other casinos there. But around 2001, he had just lost
his battle with MGM [for control of Mirage]. He was in a very
unfortunate position.
The discussions between us went relatively well. He was in
need of monetary support to move forward in the industry. At
the time, Mr Wynn had just bought a property in Las Vegas that
Howard Hughes used to own (the Desert Inn).
The initial discussions that took place with Mr Wynn was
with the understanding that we would go 50-50 – 50% on the
funds and 50% on the number of directors. The discussions were
relatively simple and I welcomed that. I wanted to keep the story
very simple.
The initial decision was to let Steve Wynn become chairman
of the board and I would remain as vice chair. Wynn had the
know-how of the design and the operation of the casino and
the construction in that field. He did those matters with pride,
experience and confidence.
At the beginning, things were working very well. I think he
appreciated the fact that I was a relatively silent investor, not
complaining very much, not putting too much input into things.
Things were very good for a fairly long time. Then [in late
2010/early 2011], Mr Wynn brought up to the board that he wanted
to make a US$130 million donation to the [government-affiliated]
University of Macau.
I raised some issues with that because, first, it was really
unheard of to make that amount of donation. The university
donation was his personal desire – I thought that it should come
individually and not through the company. Also, I mentioned that
perhaps US$10 million – which is still a relatively high amount –
would be a sufficient amount to a university to receive significant
recognition and appreciation.
At that time, Macau was a very successful market, one of
the most affluent places on the globe – so why this particular
university at this time? Part of me was asking, “Why are you
Initially it was 50-50 shares
really doing this? Why won’t you open up to what your intentions between him and me, but
really are?”
When he didn’t truly give me a full answer, that’s when
with his wife about to take
I started thinking that maybe he’s not truly open to me on half of Steve Wynn’s 50%,
everything. Not necessarily that he’s hiding something, but maybe
he’s not at the same level of trust with me.
I would then become the
Prior to that, I had talked several times to Mr Wynn about controlling shareholder.
34 INSIDE ASIAN GAMING NOVEMBER 2018FEATURES
truly making the 50-50 amount for the directors. I wanted more and me, but with his wife about to take half of Steve Wynn’s 50%, I
directors in my camp that would bring up my opinions and would then become the controlling shareholder.
my thoughts – perhaps some more directors that understood
Japanese. I had approached several Japanese attorneys who MC: Did you ever think about taking over Wynn Resorts?
might fit the bill of becoming a board member and had raised KO: I hadn’t really had ambitions of doing so. Going back in
this with Steve Wynn. But Steve Wynn asked us to wait, hold off time, back to 2008, I had already bought some property in the
a little longer. Philippines and then I was thinking about moving forward and
But in 2011, with his divorce taking place, his wife was going to developing something on that in 2010.
take 50% of his shares. Initially it was 50-50 shares between him I had explained to Steve Wynn that I had bought that property
NOVEMBER 2018 INSIDE ASIAN GAMING 35FEATURES
Steve Wynn’s ex-wife Elaine Wynn.
My suspicion is [Steve Wynn] to the Philippines in June 2010 to show him.
At the time, PAGCOR, the government authority in charge of
may have thought that with licensing, was in place and we went to visit [Efraim] Genuino, then
chairman of PAGCOR.
his impending divorce and Steve Wynn – when we went there – he looked at the property
losing half of his shares, the and he engaged for a decent amount of time in discussions with
the chairman. He also discussed about trying to come back to
fact that I would have more investigate in November 2010.
shares and more control than
MC: Where did things go wrong in the Philippines
he would, he may have feared with Wynn?
that I was literally trying to KO: He didn’t go back to the Philippines [with me] in November.
I went back to the board and I was perplexed because not only
take over his company. did he not go back, but he had said that there was no way he can
develop something there.
Not only was his sudden change of attitude perplexing, but he
also started mentioning that there must be something fishy going
on in the Philippines. I believe he said there must be something
in the Philippines and that it was allowable to put up a casino on
like bribery taking place in the Philippines. I believe he may have
that property. Looking at the Philippines at that time, they were
even mentioned in rude terms that he would never go to a place
going through an economic growth of about 7% and it was ripe
that might have possible corruption, such as the Philippines. That
for development.
was about the same time he was discussing the donation to the
University of Macau.
MC: Did you ask Mr Wynn to become a partner in that?
I think the situation was also compounded by the fact that, up
KO: Yes, I brought that up with Steve Wynn. I took Steve Wynn
until then, I was the silent investor – I didn’t really raise any issues,
36 INSIDE ASIAN GAMING NOVEMBER 2018FEATURES
When we first met, [Steve
Wynn] was more down-to-
earth, more laid back. He was
very respectful. After the
explosive success that Wynn
Resorts had, perhaps it went a
little to his head ... he became
a little full of himself.
didn’t raise any challenges – but now I raised a question regarding and acknowledge how much a sales department employee
his thoughts about making the donation to University of Macau. I uses for travel, expenses or entertainment. So, it was not within
suspect it also compounded with the timing that he was about to my knowledge to be able to answer and really to provide any
split with his wife and then when I started asking for the increase information concerning that.
in the number of directors in my camp. Freeh explained to me that this employee, [Masato] Araki, had
Steve Wynn had asked me for specific authorization used money for entertainment fees, it was an excessive amount
and acknowledgment for passing of half of his shares to his and that it would be a compliance violation.
wife, would I have any issues with that? I had no issue, so I Prior to Freeh mentioning this about Araki, another Universal
acknowledged that it was okay. employee by the name of Tokuda [Hajime Tokuda, Universal’s
The timing was about 2011/2012 and in February 2012, Wynn president at the time] had asked me whether we can terminate this
Resorts started its lawsuit against me. The lawsuit was based on Araki for excessive usage of funds. My answer was, as a chairman,
a report that was commissioned and conducted by Louis Freeh, that’s not really my place to determine who gets fired from a
an ex-FBI Director, and it included some reports about some ex- company. But if this person had in fact done what’s been said,
Universal employees who reportedly made possible payments to a then there’s probably no choice but to fire him.
PACGOR official. This termination had taken place before Freeh had visited me
In connection with that, [Steve Wynn] had mentioned in the Philippines. So, Freeh comes by and mentions Araki and
that Mr Freeh will be doing an investigation, would I mind the use of funds and I said, “Wait this is already a done matter. We
cooperating with it? I said I don’t mind, if something comes up, know about Araki and he has already been terminated.”
please let me know. When Freeh mentioned that in three years, they had used
Mr Freeh came [to Manila] to ask questions and to investigate maybe about US$100,000 [the report alleges US$110,000],
– that was February 2012. Freeh had brought up the issue about basically, my reaction was, “Wait, wait, wait … so over three
these entertainment fees. I told him that it was really not to my years, it’s US$100,000? It’s about US$30,000 a year. Is this really
knowledge, that as chairman of a publicly traded company that a problem?”
has over 1,000 employees – the company has its own rules and Freeh, by the time he made his report to the board, the
those rules do not require a chairman of a company to authorize directors already knew the content. So I believe the board had
NOVEMBER 2018 INSIDE ASIAN GAMING 37You can also read
