Four of a kind
Ben Blaschke: Firstly Mr Chun, the name of the show has changed this year from Macao Gaming Show to MGS Entertainment Show. What was the reason for the change?
Jay Chun: The straight-forward answer is that it’s about delivering the whole casino and gaming experience to the global industry. The casino marketplace is so different now – it’s constantly evolving and repositioning itself. And we need to represent that force of progress and change.
Our industry has a core base – gaming. That’s the real lifeblood that keeps the business thriving and that’s represented through the cutting edge, creative and innovative forces in platforms, systems and content.
But there is far more that drives a casino or a resort. Now more than ever, the player is a consumer, a visitor, a customer. And that requires a broader and more challenging perspective from our business.
The casino or gaming mix is radically changing, but in a very exciting way. It’s growing up, it’s becoming truly mainstream which is what the name change is all about. We want to bring the full casino experience to the MGS Entertainment Show. After all, what is gaming if it isn’t entertaining?
BB: This year represents the fourth year since MGS started. How has the show evolved in that time?
JC: I feel the show has certainly established itself as a permanent fixture on the international expo calendar. Three years of sustained growth in the number of exhibitors, visitors and countries represented on the show floor has undoubtedly helped make that happen.
But it’s also the sense of partnership that we’ve been working hard to achieve that has had a crucial role in our development. This has been a vitally important emphasis for us.
We’ve managed to secure the confidence of the Macau SAR Government which has provided consistent and expanding support through various key departments – the PRC, too, is now playing a significant part through their liaison office in the SAR – and we have ever-growing support not just from our domestic Chinese buyers community, but buyers from across the globe.
I think it’s an impressive start to the show’s development, but we all recognize that you cannot stop evolving and moving forward. So there is definitely more to come.
BB: What new additions can we expect from this year’s show?
JC: MGS is an interesting concept. Because it’s relatively young as an event, and owned and run by a very broad based industry, we’re able to represent the marketplace trends quite effectively.
Our key focus is making MGS the home to innovation and creativity. And whilst that’s a philosophy, it does translate itself on to the show floor. That means the new platforms and systems in technology; the latest creative ideas behind gaming and entertainment content; the innovations that bring changes to the way we run our businesses; and the supporting sectors of style, culture and hospitality that keep people in our resorts and casinos for longer.
MGS is designed to deliver a broad balance of the products and services that makes our industry tick, from new arenas such as social gaming to the traditional new games that will electrify our players; from pioneering ideas like, dare I say it, robotic dealers to those iGaming initiatives that combat money laundering and fraud attacks; from the finest cuisine and wine makers to artists whose work adorns our casino halls and rooms.
This is just a snapshot of what we’re working towards both now and over the next decade. It’s clearly varied, but it’s also focused. This portfolio is what you see, feel and experience in our casinos every day and it’s what makes our industry progress, develop and deliver every day.
BB: Can you tell us a bit about the Technology Zone at this year’s show? What was the motivation to add this zone specifically and what will we see there?
JC: Technology is at the very heart of everything we do in our industry, so an area dedicated to this pioneering sector is a natural progression for us.
In terms of motivation, you only have to look at the incredible excitement generated by the boundless creativity on display at exhibitions like China Joy, for example, to understand what we want to achieve.
The gaming and entertainment industry is alive with this innovation – especially on our own doorstep here in Macau – and we want to convey that to the global market.
Also, we’ve been courted by many companies who we met at our events at ICE and G2E Asia who want to explore ways to promote their technology through the MGEMA and the show itself.
So the zone has evolved as part of our long term vision – this is an investment we are making over the coming few years and we start the launch at MGS 2016.
BB: I also note that MGS will be featuring a “full casino and entertainment resort experience” this year. What will this entail?
JC: The gaming industry is one of the most innovative, pioneering and creative sectors in the business world – and as a result of this, a whole vibrant economy has been built around this central force.
The senior executives, the serious investors, the Government, the manufacturers – they’ve all recognized this is a game changer. Now it’s about “entertainment” – delivering a full rounded entertainment experience to the consumer. MGS is aiming to reflect this new wave of thinking.
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It is becoming increasingly less viable to think inside the“casino” box anymore. The new consumer is much more savvy than that – they want the full experience. They want to game, they want to dine, they want to luxuriate, they want to dance, they want culture – they want entertainment in as many forms as possible. And we need to understand how to deliver this and to find the formula that keeps people coming back again and again.
This is what the resort experience is really about – make gaming fun, make it entertaining, make it exciting, make it a full visitor experience.
And so this is where we will be enhancing and broadening our offering. We will remain totally committed to delivering the core essentials of top quality, cutting edge gaming technology with the leading slots, ETGs and table games from the biggest and the best around the world. All the new innovations will be there providing the best on the market.
But the buyers will also be coming from other areas of the casino operation – the hospitality side, the back-office management side, the shopping side, the food and drink side, the entertainment side. They will also be walking the floor at MGS looking to add to the services that make the full casino resort experience work.
BB: In addition, MGS will be adding a Tourism and Culture Zone and a Style and Fashion Zone. What will we see in these and are they in response to the government’s all-round push for a more diversified entertainment experience in Macau?
JC: The machinery that drives the casino economy is vast – it now pulls its resources from such a broad range of industries, some of which you could not have envisaged last year, let alone five years ago.
Most people in the industry would appreciate that my own businesses are very much aligned to the gaming concept and making the games exciting and fun for the player, so I’m always meeting with the technical innovators and the content creatives.
But more recently the calls to meet are coming from far more diverse quarters. In the past few weeks, I’ve been invited to Europe for the launch of a new luxury chocolate brand; to Paris for the opening of a new collection of paintings by a talented French artist; and to London for dinner at a Premier League match. This isn’t because I eat a lot of chocolate, can paint a wall or am on the transfer market to play football!
It’s because of the allure and potency of the broad based casino industry.
So you will see at MGS exactly what a pioneering, innovative and creative business sees – an opportunity to trade through the casino and gaming marketplace.
If you want gaming you go to the gaming zone where you will find the best the industry has to offer; if you want technology, we have a dedicated area for that; if you want art or culture, there’s the culture zone; lifestyle, food and wine – whatever makes business work in our industry should be there.
And going back to your question, this diversification is a response, not just to the Government’s push, but the market direction. I think the industry has long recognized that it needs more in its reserves than just gaming. To bring people in and keep them coming back requires a broader offering and that’s a vision that not just MGS has developed, but so too most of the businesses within the MGEMA, the broader Macau and Chinese community and around the Asia Pacific region.
It’s good, sound business sense.
BB: The new zones aside, how has the recent downturn and the push towards diversification affected the way you have approached putting MGS together over the past two years? Has it affected MGS significantly?
JC: It’s a fair question that deserves a straight answer. Of course it has. This is the real world – businesses have got to balance their books and so costs will always be uppermost in their mind.
But as I have said before, MGS is quite unique on the global exhibition stage. It’s probably the most costeffective trade event in the world to exhibit at, both in terms of stand pricing and the benefits on offer through IPIM grants and initiatives such as the Qualified Buyers Programme.
Its profits go back into developing the event and not as profit to shareholders in another country. It has been working with the Government to raise the funds to make exhibiting in Macau easier and financially viable. And most importantly, it has bought into the vision of diversification because it works for our core industry, our local community and the global marketplace.
Diversification means globalization – not in the sense that we currently understand it, but in a way that we are redefining through our economic proposals and projects.
The diversification of the Macau economy means more construction; more infrastructure; more investment; more trading opportunities, in more industries, for more visitors and more companies from all over the world. The Government has invested in the MGS Entertainment Show to convey this message and to bring people into this message.
We are open for business. Just look around Macau today – it is not a city that is shying away from investment. It’s not a city that is running away from development and expansion. MGS has been delivering this message for some time now – the global market is listening ever more intently to it and I think our three year vision will excite and entice the marketplace.
BB: More generally Mr Chun, given your broad experience right across the gaming industry – both as a supplier and an operator among other things – how do you believe Macau is positioned at the moment?
JC: I’m very excited at the opportunities. I don’t say that as a salesman’s pitch – I genuinely believe that Macau is in an excellent position going forward.
But I also accept that we have a very hard job in hand. We are in tough times – a few short months of growth is not a recovery. Yet it’s a huge relief and great reward for the endeavors of so many hard working people in our community.
I think we deserved this latest rise in figures – a lot of effort has been put into making the economy turn around. And we still have a great deal to do.
We have to try and look at things through a broader lens. There are markets all over the world that are experiencing rapid growth and decline in equal measures, but Macau is quite special. It is acknowledged as the gaming capital of the world – we know that. Our next step is to make it the entertainment capital of the world. That in itself is a big task and many, many years in the making, but there is a sense of determination within the industry to deliver on this promise of development and evolution of the economic model.
Macau is growing up in an international sense. It’s entering the next stage of its progression – and that’s as a global tourism and culture destination. The casino sector will likely be the fiscal force behind this, which is why we have to be so committed to the concept of innovation and creativity. But through this financial resource, and with the right vision, we can end up with a city that will stand alongside the best on the destination map.
That is where I believe we are positioned – right at the gateway of commercial opportunity. But I also appreciate the tough conditions we have to endure and overcome.
BB: As you noted previously, we have now finally seen year-on-year GGR growth after more than two years of consecutive decline. We have also seen Wynn Palace and Parisian open. Should these be seen as positives or is it too early to be jumping to any conclusions?
JC: We have to see these as positives. We are a resilient and resourceful community, but also one with creative flair and skill.
We clearly need to see more monthly figures in order to identify the trends and patterns. That said, analysts are more optimistic than they have been for some time. And the two casinos are a crucial bonus to the city. They bring new offerings and a fresh impetus to the marketplace.
Obviously there are no conclusions as of yet. We are all playing our part to drive the economy forward and that’s a key focus. But I have tried to emphasize this point above all – Macau has a plan in hand. And it’s an enticing one.
This is what will shape the city going forward – economic diversity. The two years of decline have only reinforced the argument that the economy has a strong dependency on one single sector, which is something we are addressing.
That sector, gaming, is still the lifeblood of Macau and that will remain so. But our future is about building a diversified industrial base around it that will protect and inspire our economy for the long term.
BB: DICJ Director Mr Paulo Chan recently said the government would be introducing new regulations regarding ETGs next year. As someone with a particular interest in this segment, what are your thoughts on the government’s plan, which could potentially cap ETGs as it has with live dealer tables?
JC: Macau already has ETG regulation and we should remember that the home market has been working within this framework during what has been an unprecedented economic downturn.
As for the prospect of capping ETGs, I don’t think Macau will introduce a cap. The case to do so is not compelling and it doesn’t really sit comfortably in an overall plan to bring revenue into an economy that has been striving for recovery.
Equally important, in recent months, the Macau SAR Government has channeled efforts into encouraging the casino operators to place more focus on increasing the mass market revenues. The logic in this process is that the slots and ETGs are the main engines to drive revenues, so to damage this with caps would have a tough impact on the economy – especially when operators cannot look to other sources for income generation such as table games because table caps are already in place.
One area, though, that could help alleviate pressures on the Macau mix is the status of the Live Dealer ETG. Macau is slightly out of step with the rest of the world in this area insofar as it’s the only jurisdiction that considers it a table game. The United States, Canada, Europe, Singapore and most of Australia consider it as an ETG under the EGM category. Queensland, Australia considers it a semi-automatic table.
So this is a particular gray area that could be examined. Regulatory consistency is very important not just to the future of businesses in our own domestic marketplace, but within the global industry. Macau plays a key role on the international stage and I think it would respond very positively to certain revisions.
BB: Back to MGS, there has long been discussion about whether Macau can sustain two gaming trade shows per year. What does the future hold in this regard?
JC: The MGEMA has long argued that the marketplace will determine what happens here. That said, it’s probably not down to the exhibitors or the visitors as to whether we have two shows going forward. It’s probably down to the machinations of the casino exhibition industry. Now that’s a very aggressive, cut throat industry and I fear that margins make the difference here rather more than markets themselves.
You’ve heard it so many times, because it’s true, but MGS is a unique exhibition. It’s owned and organized by the domestic trade association, it’s supported by all the key gaming bodies in Macau, it’s backed financially by four Government departments; it has a PRC Government officer sitting on its board; and it reaches all the companies around the world. That’s our current status – and I feel it’s a strong one.
But we’re a young, ambitious exhibition which has a USP of Government support, industry support and the Chinese and international buyers support.
And more importantly, we’re here to stay.
MGS has a three-year vision that it is determined to see through. And then it will be producing a further three year plan for the next phase of expansion and development.
I can only speak for our own show, but that’s our commitment.
But your point about two gaming shows is there to see and debate. However, you must assess it from the perspective that they offer different propositions; they are priced differently; they are funded differently; and their proceeds are distributed differently.
I’ve always been a major supporter of G2E Asia through my own businesses, and the MGEMA membership have been ardent backers of the show since it began.
Funnily enough, one could argue that the MGEMA members are probably the reason why we have two shows in Macau! We have supported G2E all the way down the line and its success and growth is actually a measure of our members’ commitment to it as much as anything else. And this commitment remains a key factor.
I think it’s a good show. I would obviously prefer a stronger influence in the running of the exhibition from our own marketplace. I would also prefer more investment from the G2E Asia exhibition making its way back into the operations of the domestic market through MGEMA and its members.
I think these initiatives would be a major step forward, but that’s the politics of the situation. Shows are about business and our task is to make sure MGS continues to make its mark and make good on its vision of growth and development.
