Casino Workers of the World, Unite

What happens when there’s a sunrise industry with more jobs than workers that’s situated only an hour’s flight away from a trained workforce only too willing to leave the Motherland? You get an exodus.

The company with a mega-sized HR headache is Pagcor, according to columnist Boo Chanco.  Don’t forget it’s not just Macau that will draw on Asia’s casino professionals. On the horizon is the city-state of Singapore, which has its own ambitions of becoming Asia’s Las Vegas (look at the want ads in Singapore and you’ll spot companies promising to train you for the lucrative jobs that will come when the hotel-casinos open next year).

A Deutsche Bank study of Cotai, one such new development, notes that Macau only has a population of 450,000. “When the Cotai Strip is fully developed, the area itself can potentially employ over 120,000 people, according to Las Vegas Sands.”

There goes the staff of Pagcor! There is supposed to be a gentleman’s agreement that prevents casinos in Macau from pirating staff from Pagcor, but given the higher wages and benefits here, I am sure those who want to work here will find a way around it. I heard Pagcor had lately been deluged with resignations and applications for early retirement from among the most experienced of its staff.

Pagcor’s loss will be the nation’s gain… more OFWs sending precious dollars home. I am told that right now, there are at least 15,000 immediate openings for gaming professionals in Macau. Since we are the most proximate nation with trained gaming professionals, we are a natural source of manpower to fill in the need.

Maybe Efraim Genuino should have been allowed to put up his Pagcor Academy after all. The Pagcor chief once upon a time proposed that such a training center be established to fill in the manpower needs of Pagcor itself. But it was opposed by the usual suspects who have problems with gambling being here at all. Now, it may be too late to satisfy Pagcor’s needs as it hemorrhages its staff to Macau casinos.

The Law Taketh, the Law Giveth

Across the pond that we call the Pacific, in the heartland of America, the state of Kansas passed a bill that would allow the construction of casinos, one in each of four “gaming zones.”

The bill also would allow resort-style “destination” casinos to be constructed in southeast Kansas near Pittsburg, near Wichita and in Dodge City. Slots would be allowed at existing horse and dog racetracks.

The bill began as a reauthorization of the Kansas Lottery. During debate in the House, provisions allowing state-owned casinos and slots at dog and horse tracks were added.

The casinos would be owned by the Kansas Lottery, which would contract with private companies to manage each casino. The manager could be an Indian tribe, the bill says. The state lottery and the Kansas Racing and Gaming Commission would be responsible for all oversight and regulation.

Like other gaming measures, the hope is the new measure will attract tourists, and  revenues from gambling will help Kansas cover its expenses.

“This is an opportunity for our state to generate out-of-state dollars from visitors, to reinvigorate Kansas agribusinesses raising horses and greyhounds and to maximize state revenue while maintaining strict regulatory oversight,” Sebelius said in the news release.

In casinos, at least 22 percent of the gambling revenue will go to the state. The bill dictates 40 percent of slot machine revenue will end up in state coffers.

Meanwhile, one of the U.S. laws passed last year making it illegal to make payments for online gambling was declared illegal by the WTO. Don’t hold your breath waiting for the law to be overturned, though. Better to save up money and drive to Kansas. 

The U.S. ban on offshore Internet gambling payments is illegal, the World Trade Organization said yesterday, upholding a decision that allowed for sanctions.

The WTO said the United States ignored the previous ruling, which challenged the U.S. ban on payments to gambling Web sites while allowing bets on its own soil.

Antigua and Barbuda, a Caribbean nation with about 70,000 people, challenged U.S. government efforts to close the estimated $12 billion worldwide business to U.S. residents, who accounted for half the market. Last October, the U.S. government banned credit card companies from processing payments to betting sites such as SportingBet and Empire Online, which then ceased U.S. operations or sold them for nominal amounts.

Here’s the impact on the tiny Caribbean nation’s economy of UIGE:

Income for the 32 registered online casinos in Antigua and Barbuda has fallen to $130 million a year, from $1 billion in 2000, the Antiguan government said. The country developed online gambling to boost a tourism-dependent economy after several hurricanes in the 1990s.

Show Money: $1Billion

Wow. Pagcor Chairman Efraim Genuino is talking big. Excerpts from ABS-CBN:

State-owned gaming operator Pagcor said on Thursday it was expecting to receive proposals next week from prospective investors for the right to develop the first phase of the government’s 800-hectare gaming project in the capital.

The project, called Bagong Nayon Pilipino Entertainment City, is envisioned to be a total entertainment complex, complete with casinos, resorts, restaurants and a theme park.

“Seven (groups) have expressed interest already. They may give their letters of intent by next week,” company chairman Efraim Genuino told ABS-CBN on the sidelines of an international gaming conference in Manila. . . .

Genuino said the minimum investment requirement is a $1 billion from every investor. A potential bidder must deposit $100 million in an escrow account to prove their financial capability. If the investment did not push through, the group may get the money back. Pagcor is hoping to complete the first phase of the project covering 42 hectares in the next two to three years.

Here’s the thing to remember. Even if just one of these billion-dollar projects comes to fruition, what percentage of the joint-venture can Pagcor, which generated about $520 million of revenue in 2006, afford to take? Is it 50%, 30%, 20%, or 10%? We’ll let you do the math on this one.

Wynn Win for Pagcor E-City

You’ll know that the Pagcor dream of creating a Las Vegas on Manila Bay will come closer to reality when one of the Big Boys actually signs a contract or joint-venture agreement with the state gambling monopoly. For the optimists, there’s recent news that Wynn Resorts, Ltd. (annual sales: US$1.4 billion and market cap of US10.3 billion) is interested. Given the Pagcor E-City’s ambitions, only those in the billion bracket (dollars, not pesos) can undertake this. But right now, it’s all just talk-talk, in contrast to Macau where it’s build-build-build.

Tim Shiah, a representative of Jack Binion of Wynn Resorts, said the company is “committed to look at all opportunities in the Philippines.” Jack Binion runs the international operations of the hotel casino chain, the first of which was Wynn Macau.“Wynn Macau is actually looking into the Philippines. Jack Binion is director of Wynn International that’s why he’s been down here for the last couple of years and they’re looking [around],” Shiah said at the Asia Gaming and Entertainment Expo briefing.“You know the biggest asset in the Philippines—and I can’t preach this loud enough—is the people here, the workforce,” he added.Hotel chain owner Steve Wynn and Binion had talked about duplicating Wynn Macau in the country, Shiah said, adding that the renewal of the license and eventual amendment to the charter of Pagcor would make it easier for the group to enter the local gaming scene.

Shooting Horses

Some people went to a great extent to place dart guns at Hong Kong’s Happy Valley Racecourse, apparently aimed at the horses. The NYTimes is calling it a mystery; everyone else thinks it’s just another plot by gamblers to make the odds go their way.  

A remote-controlled mechanism with a dozen launching tubes was found buried in the turf at Hong Kong’s most famous horse racing track last week; it was rigged with compressed air to fire tiny, liquid-filled darts into the bellies of horses at the starting gate. . . .

Police officials refused to discuss the device found at Happy Valley, except to say that it was under investigation. One popular theory is that gamblers installed it in an attempt to fix the outcome of races.

The liquid in the darts was being analyzed at a laboratory to determine whether it was a tranquilizer, poison or something else entirely. A long trench was dug underneath where the starting gate stands during a race, and the footlong launching tubes were placed in the trench and concealed under the locations where each horse would stand at the beginning of a race.

Donald Tsang, who was re-elected Sunday as the chief executive of Hong Kong, said in an interview that he believed gamblers were responsible.

Pursuing the Bay of Dreams, Part 2

Today Pagcor again talked in public about its dream to build something bigger than Macau on the shores of Manila Bay.

Chairman Ephraim Genuino of the Philippine Amusement and Gaming Corporation (Pagcor) today revealed that some 800 hectares of property by the Manila Bay will be developed into a resort-style “Pagcor City” that could be completed in two years at a cost of about 10 billion U.S. dollars.

Genuino spoke at the opening today of “Asia’s Gem –Gaming and Entertaining Lesure Expo” in Manila. He was joined by industry giants in gaming and leisure such as Andrew Love of the Ritz Hotel in London, Michael Boettcher of Storm International, which operates casinos in Russia, and Henki Kivits of the Netherlands.

Genuino said that the recent extension by Congress of Pagcor’s franchise, due to expire in 2008, amended to allow for Pagcor to enter into investment and management agreements with private sectors, spurs development plans. The development of “Pagcor City” will employ about 250,000 persons.

Here’s the ABS-CBN article on it:

State-owned gaming operator Pagcor said on Wednesday it was in talks with Greece’s Loutraki Casino which wants to bid for the right to develop the first phase of the government’s 800-hectare gaming project in the capital.

The Philippine Amusement and Gaming Corp. (Pagcor) hopes to bid out the contract this year for the $10-billion development of the first phase covering 42 hectares, company chairman Efraim Genuino said on the sidelines of an international gaming conference in Manila.

“Loutraki is the biggest gaming operator in Europe. It’s from Greece,” said Genuino, who expects development of the first phase to be completed in two to three years.

We’re all for such grand plans and sweeping visions. With Pagcor’s three decades of operational experience in running casinos, the Philippines has always been a strong contender to become a major Asian gambling destination. But the painful truth is that only a fraction of the 800 hectares is actually reclaimed; the rest is still under water. Even if started tomorrow, a reclamation project of the scale that Pagcor envisions, as any engineer will tell you, takes years to settle down. Ah, if we were only an oil-rich kingdom like Dubai that can afford to throw money to realize a “build it and they will come” strategy.

Critical View of Macau

There was bound to be someone to express a darker view of what’s going on in our neighbor to the northeast, Macau.   

“Build and they will come” is clearly the motto of Sands’ boss, Sheldon Adelson, and the investors who have followed him, banking on the growing wealth of China and the Chinese passions for gambling and designer labels.

But will they? Last year 21 million visitors came to Macao, mostly by bus from across the border. Some fly in from mainland cities, or come by ferry or helicopter from Hong Kong. But at present most just come for the day. Can the rich of China and East Asia be persuaded that they need a local Las Vegas with huge luxury resorts as well as gambling?

It is a political gamble to bet so heavily on the future of gambling, even in China. Macao may be a safety valve for pleasures illicit on the mainland. But the bigger gambling gets here, the more it becomes a symbol of the extent of corruption and ill-gotten wealth on the mainland.

The massive money laundering that goes on in Macao may not matter while China has such excesses of foreign currency. But Beijing could pull the plug any time on big money bets or scare Chinese to less-conspicuous locations. Then, no amount of promotion elsewhere in Asia will fill all those malls and rooms with high rollers.

UK Super Casinos

How many “super casinos” will the entire United Kingdom have? Only one — in Manchester.

As defined by regulators there, a super casino is one with at least 5,000 square meters of area for customers to gamble and up to 1,250 slot machines.  How many does Las Vegas have? 30.  How many are in Asia? Good question…..

Manchester was a 16-1 outsider at the bookmakers to be selected as a test-bed for the UK’s first regional “resort” casino.

There has been speculation that more super-casino licences might be awarded but Ms Jowell told MPs that there would definitely be no more granted during this Parliament.

Any further casinos would have to be approved by parliament and would not be considered until there had been a “proper evaluation over time” of the social and economic effects of the 17 new casinos.

Casinos Ads in Your Favorite TV Show

If you were a Philippine lawmaker, how would you make it acceptable for broadcasters to accept ads for casinos? The Brits have their answer, making it legal for casinos to advertise their services, under numerous restrictions, such as not showing anyone under 25.

From September, advertisers must stick to a set of rules designed to ensure they are “socially responsible”. They must not, for example, depict gambling as a solution to debt.

Adverts must not show gamblers behaving in a way which is irresponsible or could lead to “financial, social or emotional harm”.

And as with alcohol, anyone promoting gambling must not link it to sexual success or enhanced self-image.

Mr Caborn said the restrictions were needed to protect children and other vulnerable groups.

“They set out clearly what is and isn’t acceptable advertising practice for all gambling operators, while making sure that the protection of children and vulnerable people is a central consideration of all advertising campaigns.”

Pursuing the Bay of Dreams

Any bets that there will be a major announcement from Pagcor Chairman Efraim Genuino this week? 

Big wigs in the gaming industry are arriving in Manila for a conference and exhibition. Genuino’s dream is to establish E-City, a gambling-cum-enterntainment complex  on reclaimed property in Manila Bay that would rival Las Vegas and Macau. He had earlier been stymied from pursuing it because Pagcor’s charter was expiring in 2008. Last month’s Congress renewed the charter, removing an obstacle in developing E-City.  

Recognizing the synergies created by a strong combination of tourism, entertainment and gaming, Pagcor is actively involved in soliciting offers from potential foreign investors and locators in the planned P15-billion development complex on the 300-hectare Manila Bay property.

Initially, the proposed tourism investment zone will dwell on a tropical resort setting. It will be marketed as E-City Manila (E for Entertainment), and will be positioned as the hub of gaming, entertainment and tourism in Asia.

Chairman Genuino, I understand, had been in exploratory talks with several possible business interests as early as 2005. Genuino is confident that the impasse created by the issue of Pagcor’s expiring franchise is finally out of the way and that discussions are moving forward on firmer ground.

There should also be some substantial agreements during the 2nd meeting of the Euro-Asian Cooperation on Gaming on March 21 at the New Hyatt in Manila which would be attended by prominent gaming complex owners, operators and gaming suppliers based and/or operating in Asia and Europe.