Hong Kong-listed casino equipment maker Paradise Entertainment Ltd is introducing new products to diversify its offering and to smooth the volatility of its current single product replenishment cycle, said chairman Jay Chun (pictured).
The company develops, supplies and sells electronic gaming systems in Macau and internationally under the LT Game brand. Its gaming products include the Live Multi Game (LMG) machine, featuring a live dealer but electronic betting and bet settlement.
“We have new products coming out which will help diversify our offering,” Mr Chun said in a press briefing on Wednesday during Global Gaming Expo (G2E) Asia, taking place in Macau. “We are very confident in our products. Our performance is always very good,” he added.
Paradise Entertainment’s new offering includes the E-Baccarat table, the Intelligent Cash Access Machine and the Fast Action Baccarat product.
The E-Baccarat table, which combines a live dealer with electronic betting, is gaining traction and the firm expects to introduce it to new casinos in Macau soon, said Mr Chun. The product allows for between five and 10 players to play on the table simultaneously. The players are still able to flip the cards and have the experience of playing on a table like in any conventional baccarat table, but their payout will be done by the system automatically.
For its established LMG product, the company has 3,539 units installed in 16 casinos in Macau, including 1,608 units at its self-managed gaming venues, it said on Wednesday.
Paradise Entertainment also provides casino management services in Macau under service agreements with two existing Macau operators. The firm currently manages casino gaming at Casino Macau Jockey Club, Casino Kam Pek Paradise and at an LMG hall at Casino Lisboa, all properties under the SJM Holdings Ltd gaming licence. It also manages casino operations at Casino Waldo, under a Galaxy Entertainment Group Ltd licence.
A recent report from Union Gaming Research Macau Ltd suggests that electronic table games (ETGs) can actually offer casinos better win per table per day, and better margin on EBIT (earnings before interest and taxation) than traditional mass market live dealer tables.
LT Game has been able to capture 64 percent of the Macau ETGs market with its specific product, estimated Union Gaming.
“That figure combines fully-automated [ETGs] and our LMG product. On the live dealer product, we have a 100 percent market share as our product is patented,” said Mr Chun.
Revenue in the Macau market from a category of electronic table game using live dealers – referred to by the local regulator as ‘Live Multi Game’ but not specific to the LT Game product – was the only major casino game product category in Macau to show a year-on-year improvement in gross gaming revenue in the first quarter of 2015. It produced a 6.3-percent growth from a year earlier to MOP537 million (US$67.3 million), official data show.
Mr Chun said he expects demand in Macau to pick up with the opening of new casino resorts between 2015 and 2017. The company expects to sell about 1,000 units in the Macau market this year, he said.
Paradise Entertainment – which reported a 36 percent decline in net profit for 2014 despite higher revenue – is also eyeing expansion overseas.
In August 2014, LT Game signed a three-year distribution agreement with U.S.-based gaming supplier, then known as International Game Technology (IGT) for North America and Macau. Under the terms of the agreement, the now IGT Plc – which in April merged with Italy-based lottery equipment specialist GTech SpA – would distribute LT Game’s live and electronic table game systems in the U.S. and Canada. LT Game in turn will serve as distributor for IGT’s slot machines in the Macau market.
LT Game products have already been approved in Nevada, in the United States, and are currently going through approval procedures in other states, said Mr Chun. The firm said earlier this year that 24 LMG terminals on trial at the Palazzo in Las Vegas had been converted “into an outright sale”.
Paradise Entertainment is aiming to deploy 700 machines in the U.S. this year through IGT’s distribution channels.
“The relationship with IGT is very positive and smooth. The approval process [in the U.S.] takes longer time but IGT helps speed up the process,” Mr Chun said.
The company also signed last year a distribution agreement with Australia-based slot machine maker Ainsworth Game Technology Ltd.
Paradise Entertainment has installed 100 machines at Crown Melbourne, after being approved by regulators in the state of Victoria. The firm is now going through the approval process in New South Wales, “which may be completed by August,” said Mr Chun.
“We aim to sell about 300 to 500 units in Australia this year,” he added.
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"If the [Macau casino] concessions are put up for bid, there will also be a lot of giant Chinese companies, some having nothing to do with gaming, which would like to take over these enormously successful casinos”
Professor emeritus at Whittier Law School in California, in the United States, and a visiting professor at University of Macau