If Asian gaming jurisdictions up their game and prove to be highly regulated markets, Entain would be happy to move back into those markets it had stepped away from. Michael Charlton, Asia Pacific Director for Entain, notes that the Philippines is serving as a good example of an improved regulatory framework that’s not stifling innovation.
We’re joined today by Michael Charlton, Asia Pacific Director for Entain. Thank you for being with us.
Thank you, Kelsey. And thank you for inviting us back to ASEAN (Gaming Summit). It’s amazing to see even in 12 months how much it’s grown, and how much the conference is so much bigger than last year. You look down the attendee list and there’s the great and the good of the industry here. So, it’s an honor. And it was an honor this morning to be invited up straight after the fantastic speakers you had with obviously (PAGCOR) President Tengco and Tom (Arasi) and these wonderful delegates that you have at ASEAN this year. So I’m delighted to be here and delighted to be sitting talking with you again.
We’re looking forward to growing more. As you mentioned we were sitting here, basically, about a year ago. I wanted to ask, what has kind of changed for Entain in the meantime? Is Asia-Pacific looking better? How’s it going?
For Entain, we continue to be focused on the purely regulated opportunities, which hasn’t changed in 12 months. So, my role as the development director is to simply try and convince the territories that haven’t regulated yet as to how they could do it, explain the benefits of doing it: for player protection, for taxes, for getting rid of the negatives of the grey market and the black market.
So, for us the last 12 months has continued to be more of the same. The positive thing for me is, in some territories we have seen some real movement when it comes to that. Other territories, maybe not so much.
But places like the Philippines – when I stand on stage and wax lyrical about the great work done like PAGCOR, it’s not just because PAGCOR are sitting in front of me, it’s because they genuinely have done some really progressive work. I think Alex Leese, from Pronet Gaming, said on the stage as well that they work with the operator. And it’s so obvious when you see what they’re doing, and the steps that they’re making and how open they’re being about it.
Where has the biggest movement and the biggest progress been in the last year? I would say undoubtedly, it’s the Philippines for me. And I hope it continues that way. And I hope that they continue to cherry-pick the best bits from the rest of the world and ultimately produce the sorts of gaming regulations – betting and gaming regulations – that I’d like to see as a showcase for the rest of Asia. And LatAm, Alex (Leese) talked about this morning as well, those kinds of territories. So, it has been progress, but possibly not as much in some areas as I’d like. But yeah, definitely a lot in other areas.
Well, it is a bit of a shining light. And we’ve seen that by some major corporations deciding to move their operations to the Philippines. In regards to regulation itself, as the regulatory environment improves within countries throughout Asia, does that mean that Entain would then be interested in moving back into those markets, which it had previously stepped away from?
Oh, 100 percent. If you look at the position that the board took years ago, that was to say: look, we’re taking a long-term view that the best way to secure the long-term strength and stability of the company is to focus purely on the regulated markets, and only going in commercially where we can get a license and have the full support of the government, and be completely open about it.
Now, obviously, that makes things a challenge. And that means turning away from some quite strong opportunities. But for us, it’s definitely going to be, we think, in the benefit in the long run by saying: okay, then here’s to the regulated, new regulated territory, we’ve been very good.
So, if you are handing out licenses, and if you are regulating, then perhaps one of our entities might be at the front of the queue to get one of those licenses. That’s the long-term play. As I say, it’s not guaranteed to be successful. But the noises I hear are very positive. And again, as we heard this morning, places can flip very quickly. So South America, Brazil, as soon as that first domino falls, then the rest of the territories in that region go: Okay, that’s interesting. And so, if something similar happened in Asia, then I think it would definitely be for the long-term benefit of the company and would be a huge commercial opportunity. Definitely.
But competition is heating up in the sphere. And by giving up some of those, grey market opportunities, it does make it more difficult, you’re facing more and more challenges. How then do you try and stand out? Is it because of that long term view?
Yeah, I mean, you’re right. When you look at how other companies compete with each other, traditionally it would be on customer service, on product, on margin, and so on. For us, specifically in Asia, our point of differentiation is simply that we are not operating, which is counterintuitive.
But it’s sort of an ability to say: okay, look, here we are, we’re taking a long-term view. And we’re going to do this step-by-step, we’re going to talk to regulators, we’re going to try and push for the right licenses, the right legislation. And if that means that all our other competitors are commercially more successful in the short term, we hope that in the medium to long term, this point of differentiation between us now will be a huge point of differentiation in the future. That’s the plan.
Yeah, I bet you can’t answer this. But some of those talks that you’re having with regulators, which countries are they?
Some of it is very public. So, the Philippines, obviously, we’re here, we have a local presence in the Philippines that services the rest of the globe. Services, customer services, and marketing employs over 1,000 people here in Manila, and is completely non-customer facing, which has allowed us to develop a fantastic relationship. So, Ian Dunning and the team have built a great relationship with the regulator in the Philippines. And hopefully, that means that they are comfortable in talking with us about ideas that they might have on what the future could be, and the potential for how you develop a state-of-the-art regulated environment in the Philippines.
There are other areas that I could talk about. So, Japan, obviously, it has the integrated resorts. So, they are understandably, (looking at) what they could do digitally as well. But, again, that’s significantly farther away than other territories. Vietnam, I mentioned this morning, we know the decree is progressing through Parliament. So, that’s an obvious area where we’re willing to help, if and when the have decided the time is right. And most of the other territories you could mention, we have looked at or at least had some kind of discussion with but they’re all in different stages of development.
I have to ask it, because I think we’ve heard it about 18 million times just within the morning session. How is AI factoring into Entain’s environment?
I mean, it’s the buzzword for everything at the moment. It doesn’t matter what industry you’re in, doesn’t matter what sphere of life you’re talking about. AI is affecting everything. I’m old school, so I’ll admit that it’s kind of like when I heard about Bitcoin 10-15 years ago, and I thought: Oh, that’s a fad, that’ll pass. And then next thing you know, everybody else is a millionaire. And I’m sitting here.
We’re both sitting here. I understand your pain.
AI, you really see it. And from a betting point of view, when you look at how many things are automated, and what we do, in markets we offer, but also in the way that you interact with customers. So, for me AI, from an end point of view, is big and becoming bigger. But more on the customer-focused things, as you’d expect. For my role, business development, then clearly it’s not such a big issue at the moment. Maybe if I just plugged into chat GPT: “How can we get territory X to legalize gambling, maybe my life would be a lot easier. I haven’t tried that yet.
Yeah, well now you got something to do after this interview.
Yeah, I’ll do that after we finish it.
We’ve covered a lot of ground here. I just wanted to thank you again for your time. Michael Charlton, APAC Director for Entain. Thank you.
Thank you very much.
