Japanese racing bounces back

Japanese racing has hit 10-year records for both betting turnover and prize money in 2018 and has shown a strong recovery from the lows in 2011/12 caused by the catastrophic earthquake and tsunami which hit the country in March 2011.


In 2018 Japanese Racing Association (JRA) betting turnover was JPY 2,805 billion and total prize money was JPY 115 billion.

Always seeking to explore new technology, the JRA’s latest innovation is the introduction of cashless betting machines with its partner Fujitsu. These machines use biometric authentication to enable customers to place bets. Customers use their contactless membership card in conjunction with their palm prints as authentication. The machines remove the need for either cash or printed betting tickets and were launched at Tokyo racecourse in September 2018.

Finland: loss limits curb gambling

Governments and regulators in several jurisdictions are on a mission to make gambling “safe”, however that is defined, and to protect people from problem gambling. As part of that mission there is a clear trend emerging to achieve the result by capping the amount that consumers can stake and/or lose on gambling services.


This trend has implications for many components of the gambling value chain besides the operators themselves: suppliers who might work on a revenue share, affiliates, the tax authorities and any entities funded from the proceeds of gambling.

Finland is one jurisdiction where there is some evidence of the consequences of such measures. The Finnish operator Paf has taken the step of publishing the customer loss data to be more open about how a small number of customers can influence an operator’s results. Paf has also introduced a “loss limit” in 2018, setting a maximum annual limit on what a single customer can lose. 

Paf’s CEO Christer Fahlstedt explained, “The figures show that the ‘loss limit’ and our tougher measures in gambling responsibility mean that we have lost over €4 million in revenue annually from our big players. It is a lot of money. But it is unsustainable money that we no longer receive and which the whole gaming industry should say no to”.

We can guarantee that Paf won’t have any ‘high roller’ revenue by 2020 – since the ‘loss limit’ will be fully implemented then. I can also promise that we will continue to report with complete transparency on the revenues from our various customer groups”.

The Finnish state monopoly Veikkaus has also adopted restrictions on its customers’ activity. In 2018 it introduced gaming limits for its digital gaming services. 

The restrictions consist of both limits on money transfers and, for high frequency and draw games, limits on losses. The measures cost Veikkaus EUR 21 million in lost revenue in 2018.

Veikkaus stated: “The first analyses have shown that the players have managed to use the gaming limits to control their gaming to take the direction they wish, and this has also lessened problematic gaming. According to estimates, the compulsory gaming limits decreased the growth of the gross gaming revenue in the digital channel by ca. EUR 21 million in 2018.

The operator found that the compulsory money transfer limit is more effective than the compulsory loss limit because players encounter the transfer limit more often. 

More than half of the players have set both a monthly transfer limit and the loss limit at a hundred euros or less. Veikkaus’ surveys have found that players are more agreeable to a model where they can set the limits themselves rather than a model where an authority or operator sets blanket limits for all customers. 

The various measures have cost both companies several million Euros but could be an early recognition as to where regulation is heading. 

Naga bets big on Chinese tourists

Cambodian casino operator NagaCorp has unveiled plans for a third phase to its NagaWorld casino complex.  NagaCorp has a monopoly on casino gaming in the capital Phnom Penh until 2035 but the plans for Naga 3 are its most ambitious yet. 


NagaCorp intends to spend US$ 3.5 billion on the new Naga 3 hotel and casino resort. The resort will cover more than half a million square meters of floor space and is due to be completed in 2025.  The scale of the proposed investment at Naga 3 does mean it ranks highly with other international projects. 

Genting’s new Resorts World Las Vegas is said to have a first phase costing US$ 4 billion, whilst the two integrated resorts in Singapore have recently agreed to expansions of their facilities which will cost a total of US$ 6.6 billion between them. In Europe, Melco is building what will be the region’s largest casino in Cyprus and is spending around US$ 650 million. Naga 3 is maybe only outdone by some of the figures being quoted for the integrated resorts in Japan, although some of those projects might not happen.

Internationally, NagaCorp is following the trend for developing resorts rather than just solely gaming facilities and using these resorts to attract foreign tourists. It is the same reasoning being employed by Japan, Singapore, South Korea and Cyprus.

But it does mean that competition for the tourists’ dollar is getting fiercer. Macau will always have the advantage of geographical proximity to China. Singapore benefits from being a major transit hub to all parts of Asia, Australia and Europe, which draws tourists and travellers. The Marina Bay Sands is also attaining iconic status. In the Instagram era, don’t underestimate the pulling power of a roof top infinity pool!

Monte Carlo and Las Vegas have the history and brand that NagaWorld and Cambodia will have to work hard to match. To differentiate itself and achieve that international sought-after status as a gaming destination, Naga’s properties will have to find their own selling point and niche. It could take a few years yet.

One of the reasons for the expansion is that NagaWorld has seen a large increase in Chinese visitors and it wishes to capitalise on that trend. Several Macau-based junkets now bring players to NagaWorld’s gaming tables. VIP contributions to revenues have leapt from 35% in 2010 to 72% in 2018. 

There were just over 2 million Chinese visitors to Cambodia in 2018, an increase of 67% on 2017. Chinese visitors now account for 33% of all tourist visits to the country.

Building extra facilities, both gaming and non-gaming, on the back of increased Chinese tourism certainly makes sense. But as both Macau and South Korea have discovered in recent years, the flow of tourists can simply be turned off by the Chinese authorities.

In 2017, in response to the testing of missiles by North Korea, South Korea installed the USA’s THAAD anti-missile system. This, in turn, provoked a response from China, one element of which was the restriction of tourist groups visiting South Korea.

The result was dramatic. In 2016 there were 8 million Chinese visitors to South Korea. In 2017 there were just 4.1 million, a fall of 48%.

2017 was meant to mark a new stage in South Korea’s casino sector, with the opening of new venues and resorts aimed at foreign tourists.

It is always a risk to rely heavily on Chinese tourists. The project is due to be completed towards the end of 2025, six years away. The geo-political situation could change numerous times in that period. With capital expenditure of up to US$ 4 billion, NagaCorp will have to ensure there are enough visitors from somewhere to fill Naga 3 consistently.

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