Legalising online gaming and liberalising sports betting using the Philippines or British legal frameworks would help the Macau gaming market retain more gamblers and increase revenues for the city’s coffers. So says Kevin Li, CEO of Inteplay, a Hong Kong based company with representation in Macau, Las Vegas, London and the Philippines that provides a platform and contents for online gaming operators
Photos provided by Inteplay
How did Inteplay come about and what does it provide?
Previously, I was working at UBS Securities and started Inteplay in 2014, with operations in Macau starting the same year. Currently, we have three full-time employees in the city.
We provide gaming contents and systems for gaming operators, including mobile and online operators. Basically, we provide content and services for the iGaming industry. We create our own content or integrate the software into the platform and provide it to B2B operators like bet365 in Europe or larger Asian operators. The company is based in Hong Kong but since we provide these services to enterprises we have partners in Macau, Las Vegas and Europe who help sell our service solutions.
What is your largest market?
At the moment the majority of our services are provided to Europe and Asia, with most of our business partners, around 45, being in the Philippines, as the only Asian market that fully licenses online gaming. The second largest markets for us would be Thailand, Malaysia, Indonesia and other Southeast Asian countries.
Do you currently provide services to Macau gaming operators?
Now for us Macau is more a sales centre and meeting place for the business, especially for annual conferences and industry events such as G2E Asia and MGS. It’s a good city for people in the industry to gather.
We used to have a sales office in Macau but don’t anymore because it just wasn’t efficient. Gaming operators and clients wouldn’t come to our office to discuss business and since online gaming is not allowed in the MSAR it’s not our main target. We have a sales office in the Philippines though.
Looking at the Philippines market, was legalising online gaming and sport betting profitable for the country?
Yes, I’d say so since the online gaming business has made large contributions to the country’s gross domestic product (GDP). As the Philippines was the first Asian country to legalise online gaming they’re the number one portal for any gaming operator coming from Europe and other countries, and the first hub in Asia for the sector.
Will recent statements by President Rodrigo Duterte about weeding out non-licensed online gaming operators affect the sector?
In the country there are two types of online gaming: one targeting Filipino residents and another targeting overseas gamblers. The Philippines authorities want to tackle illegal gaming businesses that target Philippine residents but for legal licensed operators targeting overseas gamblers there won’t be any effect.
Can you see Macau legalising online gaming any time soon?
Macau plays a heavy role in the gaming industry in Asia, but the majority of its business is land-based so currently there are no companies betting on online gaming since nobody is sure if it will be legalised. However, online is the current trend, and with countries like Japan legalising gaming there will be a push for it. But nobody can know the exact date for when it will be legalised.
There is interest, I think, and the government knows that it could help increase revenues for its coffers, too, with taxation and hosting all the services from this industry.
Another important impact would be to reduce the amount of illegal gaming businesses and better protect the players by setting certain rules and legislation for the operators who would join this new sector and would have to follow its rules.
In conclusion, increased revenues and player protection would be some of the main positive effects (if it were legalised).
With the amount of land-based casinos in Macau do you think online gaming has space in the market?
I believe it would be a supplement and would help Macau retain certain players enjoy gaming in the city and come back more often. It doesn’t need to be direct cash payment for playing online; it could be a system based upon rewards and mix land-based and online components, which could help player retention. Currently, I’d say online sports betting and live dealer games are the most popular forms of online gaming.
With sports betting only existing as a single licence in Macau, should the government liberalise this area to increase the market?
Yes, breaking the monopoly is an obvious move to free the market and add competitors to provide much better services to target players.
What are the advantages online gaming has for land-based casinos?
Online businesses are more efficient and you have many tactics to reward and attract players who can play anywhere at any time without constraint.
Do you think gaming addiction is more prevalent in online gaming?
Actually, if the government can provide a clear regulatory framework, it’s easier to set certain restrictions on online gaming for the permitted age groups, the allowed time spent gambling, and blacklisted gamblers. It’s easier to control compared to land-based casinos.
What is the future of online gaming?
I think the age group of players will become younger and younger, and different age groups will want different gaming experiences. No matter if it’s online or offline you have to adapt your business to the necessities of the different age groups and provide a better service. The market is also technology driven, with augmented reality and virtual reality in the first stages in the industry. Skill-based gaming is also pretty promising in markets like Mainland China, Hong Kong and even Macau, since it’s player against player; and I can see these contents becoming more and more popular than player against machine. It can also attract a younger generation of gamers, hardcore players will always be more attracted to traditional casino gaming but more casual gamers could also be attracted to this new form.
Some people have argued that skill-based gaming would give too much advantage to experienced players. Do you think that would be an issue?
As long as a skill-based tournament is organised equally and fairly I think it would be normal for experienced players to have an advantage.
Do you think the Philippines model could be a model for the future legalisation of online gaming in Macau?
I think the Philippines model just follows the example of international jurisdictions that try to regulate and make the system work. There are some weaknesses and breaches but the government can change that.
What country in the world would offer the best online gaming legislation model to emulate?
I believe the United Kingdom since it was the first country to legalise online gaming and has a very adaptable and clear law and licence system.
What country in Asia do you think is now closer to legalising online gambling?
Probably Japan and South Korea.
Does the recent legalisation of integrated resorts in Japan threaten the Macau market?
The entertainment industry competition is worldwide. There could be a certain impact and effect upon the Macau business but the city’s obtained an important position in the Asian gaming industry that’s hard to change.
What are your predictions for how the gaming market in Macau will fare in 2017?
I think the gaming market has already reached bottom and with Macau’s economy closely dependant upon Mainland China’s economy I believe it will slowly recover, with gaming operators betting more on mass entertainment for the mass market.
Online gaming status
The first country to regulate online gambling, in 2005 the UK defined the sector as gambling operated remotely through methods such as the Internet and telephone. Operators are able to install operations in the UK to explore online gaming such as poker, sports and race betting, casino games, and online slots after obtaining a licence from the UK Gambling Commission with a 15 per cent consumption tax.
According to UK Gambling Commission data, as of March 2016 remote gambling in the
country generated £4.5 billion (MOP44.5 billion/US$5.6 billion) in revenue.
The Philippines is the only country in Asia where online casinos are licensed with permits granted to online sports bookmakers, online casinos and bingo, with domestic websites licensed by the government-owned Philippine Amusement and Gaming Corporation (Pagcor) and Special Economic Zone Cagayan.
However, in the Cagayan special area betting is only permitted for players from overseas with sports betting only allowed for offshore sporting events.
According to Pagcor data, in the first nine months of 2016 the electronic gaming sector registered total revenues of 18.3 billion pesos (MOP3 billion/US$370.3 million)
The MSAR does not currently offer a legal framework for online gaming licences, with sports betting licences granted only to the Macau Jockey Club for horserace betting, and Macauslot – Sociedade de Lotarias e Apostas Mútuas de Macau managing bets on football and basketball. However, residents are not forbidden to use international gambling websites.