Southeast Asia

History and Current Status of Gaming in Taiwan: A White Paper

Posted on June 16, 2016

Taiwan has long been a venue of interest among foreign casino investors, originally because of the importance of Taiwan as a source of customers and more recently because of the potential to reach Chinese customers through the ever-increasing transportation and tourism links between Taiwan and China. The effort to bring casino gaming to Taiwan, however, has been a journey of stops and starts over the past 25-plus years, though there has been fairly steady progress since 2009.

In 2009, the Taiwanese island of Penghu held a public referendum on the establishment of casino-based tourist zones. The referendum was the culmination of nearly twenty years of advocacy on the part of politicians, gaming companies, university professors and professional advisors. The referendum failed. However, in 2012, Matsu held a referendum that passed. While the success of Matsu’s referendum was supposed to politically incentivize the Taiwanese government to pass gaming legislation regulating casino operations, and the government did retain a law firm to draft the Tourism Casino Administration Act (the “Act”), the Act has been stalled in Taiwan’s legislature since 2013.

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Asia’s Sleeping Tiger

Posted on April 21, 2016

Since the emergence of Macau and Singapore as two of the world’s largest gaming markets, casino developers have looked at other jurisdictions within Asia for the next great opportunity. Japan, South Korea, Vietnam, the Primorye region of Eastern Russia, the Philippines and Cambodia have all generated varying amounts of interest from international casino developers. Japan, with its large and prosperous population, now appears to be out of play, at least for the foreseeable future.

The remaining countries’ nascent casino industries are all highly dependent on gamers from China and, as has been clearly demonstrated over the past two years, gaming revenue from Chinese. As such, the next great Asian casino development opportunity remains elusive.

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Gaming in India: An Evaluation of the Market’s Potential

Posted on April 16, 2016

Although Macau’s gaming market is struggling, its reliance on the Chinese gamer still allows it to dominate the global gaming landscape and maintain its role as the largest gaming market in the world. As a result, the global gaming industry remains transfixed by the potential value of the Chinese gaming market. Not surprisingly, gaming destinations throughout the Asia Pacific region, including Singapore, Cambodia, Philippines, Vietnam and South Korea, have opened hoping to capitalize on the market’s potential. Some gaming operators have attempted to target other possible valuable demand segments in Asia like the Japanese. With these large sources of demand capturing the attention of the gaming industry, many gaming operators and markets have yet to fully explore other alternative sources of Asian based gaming demand.

So far, few gaming operators have considered China’s democratic and capitalistic neighbor, India, as a potential source of demand. India shares many of the same characteristics that make China such an attractive source of gaming demand. India also has a large, prosperous economy, an enormous population, and favorable consumer/gaming habits. On top of that, India is able to offer a stable and less reactionary government and volatile economy.

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New Kid in Town: Can Vietnam emerge as an international gaming-resort destination?

Posted on January 13, 2015

Despite the recent downturn in gaming revenue in Macau, Asia remains the region of the world with the greatest opportunities for casino development. While Japan and Taiwan remain the most enticing markets, if only enabling legislation were to be passed, other markets are attracting the interest of casino developers. Unfortunately, most of those opportunities are in markets that are loosely regulated, difficult to get to, surrounded by poor infrastructure or require border crossings that can best be described as challenging.

One market that continues to interest investors is Vietnam. With 92 million citizens, a burgeoning middle class, good airport infrastructure and airlift to a number of nearby countries, Vietnam appears poised to emerge as a regional gaming market that is capable of producing a prodigious amount of gaming revenue. Nevertheless, a number of issues must be resolved before the country can live up to its potential.

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Seven Keys to Casino Success

Posted on February 16, 2013

The success of Singapore’s recently established casino industry, along with the unprecedented growth in gaming revenues in Macau, has attracted the interest of governments throughout Asia. Several are considering instituting new policies that will permit the expansion of casino gaming in their countries in the form of so-called integrated resorts, as a means to boost
economic and tourism growth and generate tax revenues.

The examples of Macau and Singapore, together with those of other Asian countries that did not manage to enjoy quite as much success with their casino initiatives, have helped identify seven factors that are critical to the success of any new gaming venue in the region.

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Asia: Seven Steps to Success

Posted on July 27, 2012

Call it the Macau/Singapore effect.

The initial success of integrated casino resorts in Singapore, coupled with the unprecedented growth in gaming revenues in Macau, has attracted the interest of government policy-makers in
countries throughout Asia. Several are now considering instituting new policies that will permit the expansion of casino gaming in their countries in the form of what is now being referred to as integrated casino resorts, and with it, both economic and tourism growth.

The success of Asian resorts has helped identify those factors that are critical to the success of any new gaming venue. Here are seven factors that are critical to creating a successful gaming policy that grows tourism, enhances tax revenues and acts as an engine for economic growth.

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Swapping Out Debt: Solving the riddle of debt-asset swaps and triangular deal structures

Posted on April 16, 2009

The riddle of “debt-asset swaps” is currently befuddling CFOs, public debt analysts, casino buyers and hedge funds.

All look to profit from discounted gaming company debt and the sale of distressed assets. Right now, there is a disconnect between a gaming company and its debt. On the one hand, the gaming company’s debt—whether $5 billion of publicly traded bonds or $50 million in privately held notes—is trading at prices that may be 10 cents to 70 cents on the dollar. On the other hand, the gaming company may be willing to retire that debt at face value, as part of its de-leveraging process.

The theory of a debt-asset swap is to take advantage of that disconnect. If one could purchase the gaming company debt at today’s steeply discounted price, and then present it to the gaming company for retirement at face value, then one should be able to profit greatly.

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