The Philippines casino industry has been showing impressive growth, and now it looks like everyone wants to get in on the game. On May 20, Prime Asset Ventures Inc. (PAVI), the corporation of the richest family in the country, proposed a new casino complex called “Gold Coast Entertainment City.”

The Philippine Daily Inquirer reports the new complex would be built nearby Manila’s international airport “on a 10 to 15-hectare site.” It would be developed and operated by PAVI and its subsidiary Vertex Entertainment and Resorts Corp.

In the announcement, PAVI President Teodulo San Juan Jr. and Vertex President Caroline Cadelina wrote: “The project will include a casino complex, hotels, food and beverage and retail outlets and entertainment centers.” The letter was addressed to Las Piñas City Mayor Imelda Aguilar, who won her reelection bid on May 13.

Her city council will now have to discuss if they will clear PAVI to start construction on the project. As opposed to the Vertis North Solaire complex that will be built in Quezon City, they will be incentivized by this PAVI resort’s goals to cater mostly to tourists arriving at the airport.

The Philippines casino industry has been showing impressive growth, and now it looks like everyone wants to get in on the game. On May 20, Prime Asset Ventures Inc. (PAVI), the corporation of the richest family in the country, proposed a new casino complex called “Gold Coast Entertainment City.”

The Philippine Daily Inquirer reports the new complex would be built nearby Manila’s international airport “on a 10 to 15-hectare site.” It would be developed and operated by PAVI and its subsidiary Vertex Entertainment and Resorts Corp.

In the announcement, PAVI President Teodulo San Juan Jr. and Vertex President Caroline Cadelina wrote: “The project will include a casino complex, hotels, food and beverage and retail outlets and entertainment centers.” The letter was addressed to Las Piñas City Mayor Imelda Aguilar, who won her reelection bid on May 13.

Her city council will now have to discuss if they will clear PAVI to start construction on the project. As opposed to the Vertis North Solaire complex that will be built in Quezon City, they will be incentivized by this PAVI resort’s goals to cater mostly to tourists arriving at the airport.

Macau’s share of the VIP gaming sector might be at risk, and that could in part be because rivals in the region are scooping up their fair share. The Tigre de Cristal casino resort, located in Vladivostok, Russia, looks to be one of the operators capitalizing on that shift, with one analysis pumping up its expected forecast 250%.

Union Gaming Securities Asia Ltd now believes the casino will bring in HKD 59.7 billion ($7.61 billion) in 2020, up from the 2019 forecast of HKD17.2 billion ($2.19 billion).

Part of the reason for this huge increase is due to the increased stake taken by Suncity Group Holdings in the promoter of the casino, Summit Ascent Holdings. Union Gaming wrote:

“Suncity [Group Holdings] has taken a material ownership stake in the company [Summit Ascent] and we expect the VIP volume story at Summit Ascent’s Tigre de Cristal to grow by nearly 250 percent next year (with notable upside risk based on the amount of volume Suncity has at its disposal).”

Macau’s Paradise Entertainment Ltd. published its financials for the first quarter of the year and the results don’t look good. The electronic gaming equipment (EGM) manufacturer saw its revenue drop 6.3% year on year and its EBITDA (earnings before interest, taxes, depreciation and amortization) plummet five times that much.

Revenue came in at $36.8 million for the period, of which $3.898 million came from EGMs. A year ago, Paradise reported first-quarter revenue of $6.47 million.

Because of the drop in performance, Paradise saw its EBITDA drop from last year’s gain of $1.758 million to a loss of $50,962 this year.

Paradise had seen gains as it prepared to install gaming terminals at MGM Cotai before that venue opened in the first quarter of last year. That launch helped boost the company’s profits in 2018.

Japan will, most likely within the next year, begin to decide on the first three locations for an integrated resort (IR) in the country, as well as who will manage those operations. One of the casino operators that has been high on the candidate list is Melco Resorts and it even started hiring employees late last year in preparation of being accepted. Now, the company’s chairman and CEO, Lawrence Ho, has upped the stakes, asserting that he, along with Melco’s headquarters, will relocate to Japan if the company is chosen.

Melco is currently headquartered in Hong Kong and Ho has hinted at a possible move to Japan in the past. However, during a Japan Gaming Congress presentation in Tokyo last Thursday, he reasserted his decision and “officially” made it public. He stated, “If we win a license to develop an integrated resort, I will personally move to Japan, my executive team will move to Japan and our head office will move to Japan.”

Melco has already allowed the world to sneak a peek at what it has in store should the company be chosen to operate an IR in Osaka. The venue, which is still being conceptualized, would be centered around a MICE (meetings, incentives, conventions and exhibitions) space that is “not just big but offering extraordinary experiences,” according to Melco VP, Design (Japan) Pim Robberechts.

The property would span over 121 acres and would be located on Yumeshima Island in Osaka. It would include one of the largest gardens ever constructed in Japan, six hotels with about 1,000 keys each, a water-themed amusement park, gambling facilities and other attractions.

Tom Watson, the Deputy Leader of the UK’s Labour Party, has been almost singularly focused on chopping the legs out from under the gambling industry for more than two years. He was the man behind a push to ban gambling sponsorships of soccer teams in 2017 and, more recently, began a campaign to introduce stricter control of online gaming. Now, he thinks the entire online gaming industry is fouled up and basically wants it to be scrapped.

Obviously, no one is calling for the demise of online gaming – although Watson would be the type of guy to try. Instead, what certain politicians want is to have all licenses canceled and for operators to have to reapply. It would stand to reason, given the source of the request, that any new licenses would most likely take at least six months to be issued.

The Labour Party argues that this is a necessary step, given the fact that one-third of online gaming operators are failing their clients. In addition to other penalties, the UK Gaming Commission (UKGC) just fined four online companies a total of just over $5.73 million for not following the rules. Quizzically, the same reaction isn’t seen when banks are found to have laundered billions of dollars or cooked their books.

Watson sent a letter, on behalf of the Labour Party, to the CEO of the UKGC, Neil McArthur, and Culture Secretary Jeremy Wright, calling out the online gaming industry for a lack of integrity. Watson states in the letter that any operator who received its license after 2014 should be forced to reapply. The reapplication process would be used to conduct an overhaul of the industry and would allow a refresher, of sorts, of the operators’ responsibilities.

Interblock have established themselves as one of the leaders in luxury game manufacturing and electronic table game (ETG) development, so their deal with the Philippine Amusement and Gaming Corp (PAGCOR), the regulator and casino operator, in June 2015 was truly a partnership that benefited both groups. Both sides seem to agree with that assessment, as they have renewed their agreement for the next three years, according to an announcement made on May 16.

It seemed only logical to continue a relationship that has worked well for both. The original deal required Interblock to supply, install, and maintain 192 G5 Diamond play stations that included automated roulette and video baccarat stadiums. By December 2018, the number of seats increased to 204 play stations installed in the 14 casinos operated by PAGCOR.

Explained Interblock’s President of Asia Pacific, Michael Hu:

“The revenue generated from our first installations had increased strongly from month to month through our continuous performance appraisals. It is with great honor that through our partnership with Indepth and PAGCOR and their continued support of our ETG products we have been able to extend the lease agreement for another 3 years, through January of 2019. This is a win-win partnership combination.”

Macau’s gambling scene is being impacted by VIP growth in other regional areas, but there’s more to it than that. A number of factors have come together at once to create the “perfect storm” of reduced VIP revenue in the city and Grant Govertsen of Union Gaming believes that there is a “sustainable threat” to Macau’s economic future.

Govertsen points out that VIP growth has weakened not necessarily because it strengthened in other areas, but that the strength seen in those regions is because of the drop in Macau. That drop has been fueled by the ongoing US/China trade war, the new smoking ban in Macau, regional politics, a softer Chinese economy and junket maturity.

The analyst asserts, “The threat is real. Clearly, there is a growing realization that Macau VIP play (or, in some cases, liquidity) is bleeding to regional markets, with Cambodia and Vietnam being the primary beneficiaries. While history does, indeed, suggest that Macau VIP players will trial new regional properties and then ultimately come back to Macau, we think this time is different.”

For 2019, Union Gaming is not seeing good things for the VIP segment. Having previously forecast a recession of about 8%, it now expects the drop to reach as much as 15%. Mass-gaming, however, will be strong and the firm anticipates 10% growth, similar to what it had previously forecast. Overall, Macau’s gross gaming revenue (GGR) will be around -2% for the year.

India gaming giant Delta Corp. saw a substantial selloff if its shares last week after reports started surfacing that the country’s government could be investigating the company for possible tax evasion. Only on Friday, the amount of shares dropped 12% as shareholders became nervous and started looking at ways to unload their holdings and the price had dropped by 20% across the week. However, Delta asserts that it is in compliance with sales tax laws and analysis provided by Union Gaming shows that the ordeal boils down to creative math interpretation on the part of the government.

India’s taxman wants to collect about $891.87 million (62 billion rupees) in “unpaid taxes” on casino revenue over a seven-quarter period. Over those seven quarters, Delta’s casino revenue equaled $178.37 million – 20% of what the company reportedly owes.

Apparently, tax authorities want to collect India’s 28% goods and services tax (GST) on all wagers, instead of just on gaming revenue. Union Gaming’s Grant Govertsen points out, “This is, of course, preposterous as there isn’t a single relevant jurisdiction in the world that taxes gaming revenue in this manner (either via a direct gaming tax and/or via a GST like in Singapore), and any attempt to do so would result in negative net revenue after paying winning bets and taxes. So not only are the allegations unsubstantiated at this point, the math just doesn’t work and we would expect the company to prevail in any legal action should the government actually try to pursue a tax case.”

As a result of the media reports and the subsequent selloff, Delta’s stock is trading seven times lower than Union Gaming’s fiscal year 2021 EBITDA (earnings before interest, taxes, depreciation and amortization). Fortunately for the company, though, it is still one of the fastest growing casino companies in the world and, if it receives approval to move its riverboat casinos to dry land, could see even more growth. Govertsen adds, “We maintain our Buy rating and view the current selloff as opportunistic.”

The Wampanoag Tribe of Gay Head has been trying to put together a casino in Martha’s Vineyard, Massachusetts for the past couple of years, only to have to fight a series of battles to receive permission. Things began to look more promising in January of last year, and the project seemed to be ready to move forward, but the fight rages on and there has been yet another obstacle put on the path of the casino. Massachusetts authorities have figured out a way to block construction and take back control of the situation.

The Martha’s Vineyard Commission (MVC) will meet with tribal representatives this Wednesday to discuss the casino and the instability it has caused in the area. Following that meeting, there will be two public meetings held – one by the MVC’s Land Use Planning Committee on June 3 and the second by the full MVC on June 6.

Two of the town’s in Martha’s Vineyard, Chilmark and Aquinnah, have asked the MVC to review the tribe’s plans, which they deem is a “development of regional impact.” As such, the commission is required to review the project and to assess the impact it can have on the community and could add more requirements, such better traffic control, enhanced aesthetic designs, lower energy usage, etc. Those requirements, should they be added, would delay the venue’s construction even more than has already been seen.

The tribe had to take its case to the Supreme Court in order to try to get Massachusetts to back off and allow it to build the casino. In January of last year, the court rejected to hear the case, which was seen as a victory for the tribe, who once again began working on its gambling facility on the upscale Massachusetts island.

According to a report by AGTech Holdings, a subsidiary of the company just received a big contract to augment reality products for the China Sports Lottery. The technology will be specifically used for “online promotion activities” for the lottery, according to a filing provided by AGTech to the Hong Kong Stock Exchange.

In the filing, the company explained:

“The group will utilize its expertise to assist National Sports Lottery Center in promoting sports lottery products and expanding its youth customer base. The group’s involvement in this project demonstrates its continued commitment in China’s lottery technical service and technical development market.”

No financial details were provided as part of the filing. Very few details were provided other than the statement of working together to expand the sports lottery products as well as reaching a younger audience.