Macau-based Laxino Systems Ltd should post reveunue growth in the range of 15 percent to 20 percent in 2017, says company chief executive Lam Iao (pictured).
The firm is a provider of online gaming technology and games. The Laxino group is also involved in land-based casinos in Asia as a distributor for several equipment brands, via partner company Blue Technology Ltd.
“You can find the products that we distribute in casinos in Macau as well as in Cambodia, the Philippines or Malaysia,” Mr Iao told GGRAsia.
Blue Technology distributes slot machines and gaming-related peripherals and systems. Brands represented by the firm include: Novomatic, Hydako, APEX, Gold Club and Amatic, according to Mr Iao. The firm recently completed a deal to represent European gaming equipment supplier Casino Technology.
Laxino group’s main business stream is however online gaming: it accounts for 90 percent of overall revenue, said Mr Iao.
“We are the biggest software development house in the Hong Kong and Macau regions,” he added, stating the firm has more than 120 workers.
“As the head of the company, I would like to leverage the risk: I would like to develop both sides of the business to be proportional. But the way I see it is that the current ratio will persist for the next five years,” he said.
Mr Iao stated he expects business for Laxino group to continue growing in 2017. “I anticipate at least 15 percent to 20 percent growth in terms of revenue for us, combining land-based and online gaming,” he said.
Growth for next year is to be driven by two main factors, according to Laxino’s CEO: the increase in casino equipment brands distributed by the group; and a stronger bet on the mobile gaming segment.
In 2016, Laxino completed the migration of most of its online game portfolio to mobile format. “Mobile gaming is the trend for the future,” Mr Iao said. “So we converted about 60 percent of our games to be available already for mobile gaming platforms.”
From cash to social
Mr Iao said the online gaming segment has evolved significantly since 2008, when Laxino was established.
“Right now, many of the [online casino] operators are changing strategy, focusing on social casinos, social games, as well as play for points,” he explained.
“If you change your business model from play for cash to an online social casino, your games or your platform can become available anywhere in Asia, because there are no legal restrictions on that field.”
Currently, the Philippines is arguably the main online gaming jurisdiction in Asia when it comes to play for cash. The arrival of President Rodrigo Duterte to power earlier this year and his stance against online gaming has however raised several questions regarding the industry’s future in that country.
Macau, the world’s largest land-based casino jurisdiction as measured by gross gaming revenue, does not allow online betting. “I don’t see it being legalised any time soon,” Mr Iao said.
Laxino group does not manufacture slot machine cabinets. But the firm partners with third parties to support the development of slot games for land-based casinos. “We provide mathematics and graphics to help them produce Asian-centric, localised games,” Mr Iao said.
He added: “Laxino is well positioned in the intersection between gaming and software development. In that niche market, I would say our products can fit well any market.”
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"Given the opaque nature of the VIP segment (56 percent of gross gaming revenue in first quarter 2017), forecasting Macau GGR with a fair amount of certainty is difficult; therefore, we remain cautious"