India and Philippines “high-potential” gaming markets to dig into: GR8 Tech deputy CEO

Viviana Chan

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July 11, 2024

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India and Philippines “high-potential” gaming markets to dig into: GR8 Tech deputy CEO

Alex Feshchenko, deputy CEO and CRO of sportsbook and iGaming provider GR8 Tech, envisions India, the Philippines, and South Korea as “high-potential” markets deserving deeper development.

Gaming, India, Philippines, “high-potential" gaming markets, GR8 CEO — Alex Feshchenko, deputy CEO of sportsbook and iGaming provider GR8 Tech

In an interview with AGB, Feshchenko highlights Asia as the world’s largest and fastest-growing market, drawing significant attention and investment from numerous companies.

With its vast population base and steadily increasing per capita GDP, Asia has become essential for industries, particularly entertainment and gaming.

“For companies aiming for global dominance, focusing on the Asian market is practically unavoidable,” notes the executive.

“We have strategically chosen a few high-potential markets for deeper development within Asia. Currently, our key markets include India, the Philippines, Malaysia and South Korea.”

Feshchenko emphasizes that achieving success in any region requires focusing on key markets for initial breakthroughs rather than attempting comprehensive coverage.

He notes that GR8 Tech’s sports betting product has already attained high standards in India, capturing market share and establishing the nation as its primary market. Looking ahead, GR8 Tech aims to replicate this success in other targeted markets.

The company’s sports betting product for cricket is designed to handle the sport’s complexity and popularity. Utilizing an in-house developed model, it aims to provide accurate data and comprehensive coverage. The system integrates data from top providers with proprietary algorithms, managing risk and delivering dynamic odds and live updates.

This approach meets the specific demands of the cricket betting market, particularly in regions like India where cricket enjoys immense popularity. Covering local leagues and international tournaments, the cricket betting product offers a reliable platform for bettors, says the executive.

Feshchenko acknowledges that the Indian market requires robust risk management due to fraud prevalence. To address this, GR8 Tech offers flexibility with two risk management modes: full responsibility by the service provider or tools for operators to manage risk independently.

According to Statista, the online sports betting market in India is experiencing significant growth, projected to reach $1.97 billion in revenue by 2024. The market is expected to grow annually at a rate of 6.51 percent from 2024 to 2029, reaching a projected volume of $2.7 billion by 2029.

Southeast Asian markets

In the same interview, Feshchenko notes that Southeast Asian markets, including the Philippines, Malaysia, and Indonesia, boast large populations and significant market potential.

“These markets share some commonalities, but there are also subtle differences.”

Feshchenko observes: “the energy and vibrancy of the Philippine market are notable, but its structure is not fully developed yet, and there is no clear brand leader. This presents enormous opportunities for new players.”

Additionally, many Southeast Asian markets exhibit gambling habits similar to Western countries, and their high acceptance of English facilitates the spread of dynamic content.

Statistically, the Philippines’ iGaming revenue saw substantial growth in 2023, increasing by 92.3 percent compared to the PHP30.24 billion ($518 million) generated in 2022. This growth also surpassed the previous yearly high of PHP32.24 billion ($553 million) set in 2019 by 80.4 percent.

Regulated iGaming in the Philippines is overseen by the Philippine Amusement and Gaming Corporation (PAGCOR), covering online games, bingo, specialty games, and sports betting.

South Korea

South Korea is also drawing attention from market participants, as South Korean gamblers are increasingly influencing both online and land-based gaming markets in recent years. Despite its smaller population size (51 million) compared to China (1.4 billion), the market potential and spending power are significant and hard to ignore.

Feshchenko identifies South Korea as a promising market for sports betting, sharing similarities with Western markets in terms of high acceptance of dynamic content and preference for structured, technology-driven solutions.

South Korea’s well-developed infrastructure and tech-savvy population create an ideal environment for the adoption of innovative sports betting platforms. Despite these advantages, the market remains relatively untapped, offering substantial growth potential.

GR8 Tech aims to capitalize on these opportunities by offering tailored betting solutions that meet the specific preferences and regulatory requirements of South Korean bettors.

Overall, the Deputy CEO of GR8 Tech envisions significant changes in the Asian market in the coming years, driven by technological advancements and market maturation. The group anticipates new opportunities for players, leveraging their technological edge to handle large player volumes and bets, and providing various front-end solutions including native apps and web front-end technology.

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‘For grind mass or low-end premium mass players, their liquidity needs should be covered by the daily RMB20K ($2,750) limit one can physically bring across the border and RMB10K ($1,370) per card via ATM machines. It is those who gamble or lose an amount in between who may be more affected if they cannot source liquidity from legitimate money exchangers in pawn/jewelry shops or elsewhere.’

Sequential EBITDA decline of 4% in 2Q24

Due to softer June GGR, the brokerage anticipates that gaming industry EBITDA could decline by 4 percent in 2Q24 from the previous quarter.

Simultaneously, with Chinese travelers gradually broadening to other provinces, the GGR mix may shift towards higher-margin low-end premium and grind mass players.

‘This shift may be offset by higher promotional allowances reflecting a full-quarter impact of stepped-up promotional activities by Galaxy and Melco, although competitive intensity has somewhat eased in recent weeks.’

Galaxy Entertainment, Raffles Hotel, Macau

Galaxy EBITDA growth at the expense of Wynn

Goldman Sachs calculates that Galaxy Entertainment’s EBITDA could increase by 9 percent sequentially, while Wynn and MGM China could see declines in EBITDA of 13 percent and 10 percent respectively.

Analysts noted that in previous analyses, Galaxy and Melco gained market share from Wynn and MGM in April-May by increasing promotional activities, leveling the playing field with MGM China while Wynn refrained from similar actions.

Galaxy and Melco’s market share regarding GGR slightly rebounded in June, with Galaxy’s share normalizing to 19 percent.

Despite The Londoner undergoing renovation, Sands China’s market share held relatively well at 24 percent, though estimates suggest it might have lost around $20 million quarter-on-quarter in non-gaming revenue.

As reported by Philstar, PAGCOR chief Alejandro H. Tengco disclosed that Roque appeared before his office in July 2023 to provide legal support for Cassandra Lee Ong, who sought assistance from PAGCOR regarding financial issues at Lucky South 99. Ong serves as the authorized representative of the sprawling POGO compound in Porac, Pampanga.

Ong requested PAGCOR to permit Lucky South 99 to settle its outstanding taxes in installments, estimated by Tengco to be no less than $500,000, notes the publication.

Tengco stated that, in her appeal, Ong alleged being deceived by Dennis Cunanan, who purportedly collected six months’ worth of tax payments on behalf of Ong but failed to remit them to PAGCOR. Cunanan reportedly is the person who applied for the POGO license of Lucky South 99.

The revelation was made during the Senate Women and Gender Equality Committee’s fourth hearing, which discussed the possibility of banning POGOs in the country, as well as the case involving POGO Mayor Alice Guo.

Harry Roque is a former Cabinet official under then-President Rodrigo Duterte, who facilitated the issuance of licenses to POGO hubs.

According to local media outlet, Tengco displayed the organizational chart including the documents submitted by Lucky South 99 for their initial license application, which identified Harry Roque as the “legal head.”

In a video statement posted Wednesday afternoon, Roque denied the accusations, clarifying that he has never had a lawyer-client relationship with Lucky South 99.

He emphasized that, when he assisted in their license reapplication in 2023, the POGO hub had not yet been flagged as illegal. Roque further stated that he did not authorize his inclusion in the POGO hub’s organizational chart.

China Ecotourism also underlined that lottery sales have become a powerful driver for the advancement of public welfare causes, with public welfare funds raised from lottery ticket sales directed towards supporting the elderly, the disabled, children, social welfare and the development of mass and competitive sports.

In China, lottery operations are authorized and issued by the state, with the proceeds used as public welfare funds.

The comments were included in a release by China Ecotourism, in which it reveals that its subsidiary Guangzhou Lottnal Terminal Company Limited has successively won the bids for the sports lottery terminal procurement projects of Shaanxi Province, Inner Mongolia Autonomous Region, and Henan Provincial Sports Lottery Management Centers.

China Ecotourism Group Ltd is an investment holding company principally engaged in the provision of core technology and operation services for China’s public welfare lotteries, terminal equipment, and gaming products.

In May of this year, the company had already secured significant contracts for sports lottery terminal procurement projects in Guizhou and Guangxi provinces.

‘The group’s lottery business has been steadily developing, riding on the high-quality growth of the industry. The group will continue to deepen its involvement in the sector, constantly exploring new market opportunities and providing advanced products and technologies to serve the growing public welfare needs,’ the dispatch – signed by China Ecotourism Chairman Ling Di – adds.

The group considered that the new contracts cemented Guangzhou Lottnal’s ‘industry-leading position’, as it continues to dominate the number of bids won for sports lottery terminal procurement projects in China in 2024.

Still, in April the Hong Kong Securities regulator initiated a disciplinary action against China Ecotourism Group and seven of its executives, after it criticized the company for making statements to some executives that harmed the rights and interests of investors.

Melco’s City of Dreams will be the first integrated resort in South Asia and the development aims to capitalize on the growing interest and financial capability of Indian tourists. However, Morgan Stanley warns that this demographic has traditionally spent less on casinos compared to their Chinese counterparts, as observed in markets like Singapore.

The group’s investment is substantial, with a planned expenditure of $125 million for fitting out the gaming space, set to commence this year. The company has secured an independent 20-year gaming license, marking a long-term commitment to the Sri Lankan market.

According to Morgan Stanley, the partnership with John Keells, a veteran in the leisure and hospitality industry – with its Cinnamon brand operating around 2,500 rooms across Sri Lanka and the Maldives, is a cornerstone of this venture.

Under the agreement, Melco will operate the around 180,000 square feet casino and manage 113 Nuwa ‘ultra high-end’ hotel rooms.

‘Financial arrangements dictate that Melco will receive EBITDA from the gaming operations after remitting 50-55 percent to John Keells and paying a subsequent 30-40 percent income tax on the remainder. Additionally, Melco will earn management fees for the Nuwa hotel operations,’ Morgan Stanley analysts pointed out.

Projected timeline and financial expectations

The commercial space of the City of Dreams is already open, with the majority of hotel rooms scheduled to open in October this year. The casino is anticipated to commence operations by mid-2025.

John Keells has invested $900 million into the project, aiming for a return hurdle rate of 15 percent ROIC, with an expected cash flow generation of $100 million.

For Melco, the financial outlook is promising, with Morgan Stanley estimating that the property casino could generate 50 percent of the IR’s EBITDA, indicating that returns on the $125 million investment could be significant.

However, the brokerage projects that the gross gaming revenue (GGR) needs to surpass $300 million to achieve the desired EBITDA of $100 million, which translates to a cash flow of $30 million for Melco post-tax and profit sharing.

‘The overall impact from Sri Lanka to Melco’s earnings will initially be small in our view, but it is an opportunity to capture rapidly growing wealth in India,’ the brokerage noted.

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Wazdan’s latest release pays testament to one of its most successful games in recent years whilst ensuring innovative new features drive player retention and establish proven results for its partners.

Andrzej Hyla, Chief Commercial Officer at Wazdan, said: “We look forward to 9 Lions enthusiasts enjoying the comeback of the successful title with increased opportunities to win through our all-encompassing bonus gameplay and stimulating bonus games on offer.”

The addition of Zitro’s slot games at these prestigious gaming destinations marks a major milestone for the company. Okada and Newport World Resorts players can now experience the company’s innovative and engaging products, renowned for their cutting-edge technology, stunning graphics, and captivating gameplay. The positive reception in the Philippines positions Zitro for even greater success in the region, with future installations already in the pipeline.

The company is also actively expanding its footprint across other key Asian markets. New installations are planned for jurisdictions such as Laos and Cambodia. Recognizing the unique preferences of each market, Zitro is strategically adapting its products to ensure successful integration and resonate with local players.

Nadège Teyssedre, EMEA Sales Director at Zitro, commented on this significant achievement: “We are incredibly excited about our recent installations in the Philippines, which reflect our ongoing commitment to expanding our footprint in Asia. The positive reception of our games at these prestigious resorts is a testament to the quality and appeal of Zitro’s gaming offerings. This expansion solidifies our presence in Asia and sets the stage for continued growth in the continent.”

According to local media reports, during Wednesday’s Senate panel on women’s issues, Senator Risa Hontiveros, chair of the Senate Committee on Women, Children, Family Relations, and Gender Equality, issued the ruling following separate motions by Senate President Pro Tempore Jinggoy Estrada and Senator Sherwin Gatchalian.

Hontiveros resumed the investigation into reported crimes associated with POGOs, including human trafficking and torture. On Tuesday, Alice Guo informed the senator that due to illness and death threats, she would be unable to attend the hearing. This is Alice Guo’s second time skipping the resumption of the Senate investigation into the raided POGO hub in her town.

Alice Guo, POGO, POGO Mayor of Bamban, Tarlac, Philippines — Alice Guo, “POGO Mayor”

Also cited in contempt were the mayor’s father, Jian Zhong Guo; her mother, Wenyi Lin; her siblings, Seimen Leal Guo, Shiela Guo, and Wesley Leal Guo; POGO incorporator Nancy Gamo; and Dennis Cunanan, former Technology and Livelihood Resource Center deputy director general.

“This committee is ordering the arrest of the individuals cited for contempt, pending submission to the Senate President for his signature,” said Hontiveros.

She also mentioned that she would send a letter to Senate President Chiz Escudero’s office after the hearing.

Alice Guo is known as the “POGO Mayor” as she has been linked to illegal POGO operations. She is also facing various accusations, such as allegations of being a Chinese spy, and identity theft.