Tom Hall is recognised as one of the world’s leading experts in the field of interactive gaming, specialising in the Asia Pacific Region. He is a regular key note speaker at Gaming Conferences and Investor Forums around the World.
PokerUpdate: What do you predict for the future of E-gaming in Asia, and in particular online poker in Asia?
Tom Hall: Online gaming is generally on the increase in Asia due primarily to ever increasing internet penetration and increasing internet access via mobile phone. Online sports betting would be the largest segment, followed by online live stream video casino, RNG casino, keno/numbers game and then probably poker and other Asian P2P games. Most Asian countries seem to be some way away from a regulated framework for online gaming right now, though long term I would expect it to follow in the footsteps of Europe with individual countries taxing and regulating gaming.
HK already offers online horse racing and soccer betting via the Hong Kong Jockey Club. It’s the only legal form of online gaming with everything else strictly prohibited. (Hard to argue with this as they generate a huge amount of tax for the Government and their residual profits are invested back into the community). Singapore and Macau also have licensed online sportsbetting.
The take up of poker in Asia has been slower than most of us expected. Historically, poker has grown where there has been TV exposure but this has been very limited in Asia as gambling content on television is usually very restricted. It’s interesting to note that where it was allowed in TV, poker jumped in popularity. The best example is the Philippines where poker is shown regularly on TV and PAGCOR (the Philippines Government Gaming Regulator) has licensed over 20 poker rooms in the country and there is now a large grass roots land based poker community. Online isn’t formally licensed in the Philippines but many people play online at the international sites.
Globally online gaming represents between 5-8% of total gaming. I would estimate in Asia that the figure is still less than 1% of all gaming (taking into consideration the huge casino industry, horse racing of HK and Japan, pachinko industry in Japan and Asian lotteries), so in theory it has a long way to grow and probably explains why a lot of the Western operators are setting up shop in Asia as well. Asia has long enjoyed online games and I also see that there will be popular variants of social poker / P2P games with in game revenue generation as opposed to full on gambling.
PU: Currently, how large is the online poker & gambling market in Asia?
TH: I don’t have any accurate market statistics but my best guess would be that if the online gaming pie was split up it would be 50% online sports betting, 35% online casino (65% videostream/35% RNG), 10% (keno/numbers games/lottery), 4% poker and 1% other online games. Games such as online bingo have yet to be adopted and even popular Asian land based games such as mahjong and Do Di Zhu haven’t caught on online, primarily due to collusion concerns. There are 3 or 4 online gaming companies in Asia that dwarf their comparable Western operators, but they are privately held and the owners keep a low profile. As far as the land based casino market is concerned, I think most people know that Macau has grown far larger than Vegas and even Singapore with only 2 casinos has already become bigger than the Vegas strip. The Genting Resorts World casino in Manila, Philippines has done fantastically well since launch and has shown that you can generate growth in both domestic traffic and international visitors if you offer a quality product. This has led to other major groups reviewing the Philippines with the second major casino due to open early next year. Vietnam has an integrated resort project underway (I think MGM is involved in this), Japan is further reviewing casinos and places like Cambodia, Malaysia and Laos have had casinos for some time.
As far as online poker is concerned the most well-known brand, is as per usual, Pokerstars. They have been in the region a long time, are well run here and are supported by their APPT tour and their branded poker room in Macau. Danny, the defacto poker room manager and APPT Tournament Director is very well known and liked and respected by players across the Region. The next largest brand would have been Full Tilt that had a strong following in Korea but now the second largest would be dafapoker, one of the larger skins on the ipoker network and that caters specifically to Asian players. I have to state here that I have a vested interest in Dafa. Party don’t do much business in the Asia Pacific Region and whilst there are a number of rooms on the other networks, none have gained any real traction. Probably the most interesting new player would be Bodog who launched their new poker platform into Asia and in conjunction with their overall growth in the Region, this seems to becoming quite popular.
PU: What other challenges does the development of the Asian gaming industry face?
TH: It depends what perspective you are looking at this from. From a macro perspective or software vendors perspective I think the Asian marketplace offers the best opportunities in the world right now. The market is growing, you have access to relatively cost effective programming resource and there is a very large gambling community. There are a raft of exciting new products being delivered by a large selection of firms, both big and small and I’m seeing lots of innovation in sports / casino / side games / numbers games with a particular emphasis on mobile. I’m working for a sportsbook platform provider which supplies most of Asia’s major sportsbooks and we (like most other gaming software vendors in Asia) are pretty busy right now dealing with both Asian customers and Western Groups looking to do business in Asia.
From an Operator’s perspective, regulation is always going to be a challenge and generally the privately held firms have done better as they are more flexible and can adapt quicker. Bet365 as an example have been extremely successful in Asia (as well as the rest of the world) and they have the right mix of great product, good reputation and excellent customer support. Asia also has a very stable licensing regime for nearly 10 years through the CEZA Philippines regulatory environment which has provided Operators with an efficient base to work from. Some 50 licensees have their headquarters in the Philippines and have invested significantly to base their businesses there. This has generated in the region of 5,000 Filipino jobs as well as all the associated taxation revenues and increased spend from what is now a large expatriate community in the country working in the gaming industry
Payment processing is arguably the biggest challenge ongoing for operators, as it’s a constantly moving playing field in Asia, but with perseverance most of the larger Operators have overcome these issues.
PU: Will the potential development of online gaming & online poker in Asia benefit players in the other online poker markets? Or will the progression of regulation probably prevent this?
TH: That’s a difficult question to answer. In the sportsbetting field I would say definitely yes as Asian punters for years have preferred in-running betting and have typically been offered far more in-play events and more competitive pricing. As the Asian groups have begun to sponsor Premiership soccer teams and have become generally more well known, people have landed on their sites, have seen the better pricing and many have switched to these sites. Price competition in the betting market has to be of benefit to the punter (similar to the way Betfair shook up the traditional bookie market in the UK a few years ago) and there has been a second wave of this. As a software supplier in this area with Oneworks, I have seen this first hand and not only do punters have access to better pricing, but also more events to bet on.
In the poker arena, I don’t see Asia currently offering online poker players too many new ideas or benefits. Poker is still in its infancy in Asia – as Europe was 5-10 years behind the US, Asia is probably 5 years behind Europe. I think you will see more Asian P2P games moving online and becoming more popular globally but don’t see innovations like Rushpoker coming from Asia. I do believe we will however see some major operators come out of nowhere in Asia into the online poker space. I am fortunate to be involved in working on the software side with a consortium of some of the largest gaming operators in Asia (that have both land based and online interests) that are launching their own network. This hasn’t been done successfully for some time, but I believe they have the scale to generate necessary player liquidity and will have designed the product to exactly what an Asian based player wants. I can’t say too much here but this will be launched relatively soon so will be interesting to see how this goes. From an online player’s perspective, my guess would be that the player base would be pretty soft, though it might be a challenge for non Asian based players to get on the network as the payment processing will be very much Asian country focused.
Whilst slightly off topic, as far as benefiting players, having played cash and tournaments all over the world, Asian fields are still far softer than the US or Europe. Whilst the cash games have got a lot tougher, it’s still nothing like Commerce during a WPT event and there are still a lot of good spots, particularly if you are a PLO player as this is a relatively new introduction to Asia and players still learning the game. As far as tournaments go, I have had great fun being involved with the APT and working with the team to help grow poker in Asia. We deliberately kept the APT neutral from any online brands so as to be a truly independent poker tournament series and always focused on the quality of the Event as opposed to banging out tournament after tournament of an average nature. We always try and make it a really memorable experience for the player, many of whom may be visiting Asia for the first time. We came up with the concept of displaying an overload of models giving out the prizes and being involved in the publicity. I’m happy to see Steve from WPT use a similar concept with his Royal Flush Girls after coming to one of our Tournaments in the early days and getting far too drunk. Thanks Kim Loan from PM Models for supplying us with a never ending supply of stunning ladies! We also always feature one or two parties during each of our Events and make sure it’s not the usual 90/10 male / female ratio. Nothing worse than being at a player party and having to spend your whole time talking to some online Scando nerd that only moans about the speed of his hotel internet connection. Anybody that’s been to one of our parties can vouch for that!! We think poker tournaments should be fun combined with the opportunity to play in a variety of side events and a large field Main Event. We have a great relationship with Matt Savage whom we regard as the premier Tournament Director in the world and Matt ran our earlier events and also trained our own team headed by Lloyd that now run our Series Events as well as the Main Events. Looking forward to seeing Matt put in a cameo appearance at the end of July for our Macau APT Super High rollers. Sorry in short, back to the question and a bit of a plug I guess, come to our APT events, you will have fun, fields are soft and cash games around the tournaments are soft
PU: How’s the live Poker scene in places like Macau? Is the emergence of a ‘big game’ in Macau increasing more local interest in the game as opposed to just Western media interest?
TH: The Macau poker scene is pretty stable, not really growing or shrinking. The main reason for this is that the casinos have a table cap on the number of gaming tables they can have within their properties. Poker is far less profitable than baccarat, and there is pressure on them to maximize profits and with most of the casino operators already at capacity, poker growth is sacrificed for other forms of gaming. Interestingly, mahjong is treated differently and I believe 20 mahjong tables are treated the same as 1 standard gaming table so you may see an upsurge in what is already a very popular P2P game – Mahjong as opposed to poker. Time for me to relearn mahjong that I haven’t played since my gran taught me in the 80’s!!! The Big Game is relatively unknown in Macau beyond the relatively tight knit poker community, even baccarat tournaments would get more coverage in the general media so it hasn’t really generated that much local interest. We have invited kevmath from 2+2 to Asia in April to cover the Macau and Manila poker scene so that the 2+2 community gets some coverage from one of their own trusted mods. I think we will also see a few super high roller tournaments over the next few months, there seems to be appetite for HK$1m-2m buy in tournaments so that could be fun. There is often a waiting list of 8-10 people for the Big Game and the Buy In there is usually HK$2-3m so a fast structured tournament I think will be of interest.
Visit the Asian Poker Tour website for more information on the live poker scene in Asia.
PU: Do you know much about how the well known professional players are doing right now? I think many poker fans feel very out of touch with many of the household names since BlackFriday, only occasionally hearing rumours of their exploits over in places like Macau.
TH: I do but can’t comment. All I can say is that in the first 2 months of this year Gus Hansen, Patrick Antonius, Tom Dawn, Johnny Chan, Sam Trickett, John Juanda and Andy Robl have played at various times. You will have to check out their blogs, a few of them post from time to time. You will see the big game periodically online later this year so hopefully then the poker fans will be able to follow some high stakes action and some of the biggest names in the game and certainly some of the biggest pots!!. More news to follow on this in April!! I played twice this last month, won one session and lost the second. The loss at the second was somewhat tempered as we were watching Barcelona crush somebody 7-0 from the table and were fortunate enough to see Messi score 5 goals in a single game – guy is a genius!!
PU: Are there any undiscovered gems in the Asian poker market? Most people hear Asia and think of China; what about India or Pakistan?
TH: I played in Goa recently at the APT Event held at the Royale casino. That was an eye opener for me, actually quite a big poker community and some reasonable cash action as well. Whilst there are some excellent individual players, the tournament field was definitely the softest I have ever seen (a view shared by some of the pros that came from Europe and the US to play the APT event). Goa is a pretty cool spot too if you go to the right places so definitely some +EV there. I haven’t been to Pakistan for many, many years so not sure about poker there. Cambodia has a poker room in the Naga Casino in Phnom Penh and I played a few fun sessions there a while back. Wasn’t going to make any tourist comments, but go and play some poker at Naga and take the time to jump on a 1hour flight and check out Angkor Wat, been there many times and still amazes me. Cambodia is a great place to visit and the people are some of the friendliest anywhere in the World. There is a tournament in Hainan Island, China next week, but I don’t know too much about that, tournaments in China run in a different manner due to regulations and are more of a corporate free roll tournament, but this one has a US$150k prize pool so I guess that’s worth looking at but not sure how you played to get a seat. As previously mentioned poker is all across the Philippines and both APT and APPT host a tournament in Cebu every year which is one of the islands so a great way to combine the beach and poker and hotel and expenses are about 1/20th of PCA so better value for money, though admittedly the prize pool is a lot less. I hear Mongolia has a flourishing poker scene and Japan seems to be picking up to as social poker becomes more prevalent.
PU: Last question – in your opinion what does the future hold for online poker? We’re beginning to see poker become localized with regulation, is this good for online poker? Dominik Koffert, PokerStrategy CEO, recently made this post on the future of online poker, noting that innovation is key for the future life of the online poker market which in his view is a currently unsustainable. Do you agree?
TH: In Europe we have seen fragmentation of the market due to one country after another regulating and forcing the large international operators to split their liquidity pool. This is only likely to continue and probably only stars, Ipoker and a few others will survive. I personally feel that the smaller operators and smaller multi brand networks will slowly die over time as they will simply not be able to compete. On the flip side, for those domestic market operators in countries that can support the liquidity (like Italy), I think there is a long term sustainable business there. I also think the US will be very interesting and the larger states like California should have some very good poker action. It’s a complete dogs breakfast over there at the moment as nobody is quite sure how the regulations will pan out, partnerships are being made (and broken) between US operators and overseas Groups trying to get in on the action. It will sort itself out over time and for those people living in the US I think the poker should be a good mix of recreational players as well as the seasoned pros.
I read Dominik’s posts and have met him at industry events from time to time, a very shrewd guy who runs a very successful business. I agree with what he says and there is no point fighting the inevitable. I am fortunate that in my part of the world there is still a large recreational pool of players still to come to poker, but hopefully we can learn from some of the mistakes we all made in Europe and offer a more sustainable form of poker. Zynga have shown everybody how it can be done and I think the likes of PKR are well positioned with a 2D/3D product that lends itself well to both social and play for real poker. Nobody thought they would survive but their customer demographic was a little different and I think they are as well placed as anybody to succeed as poker changes. In places like China, where online gambling whilst not technically illegal, is certainly not encouraged, a huge industry has grown around P2P card games where a very enjoyable playing environment has lead to in-game revenue generation rather than any form of gambling. Online poker is also used in a different way by gaming operators in Asia (more of an acquisition tool) as casino side games account for a far higher % of revenue than would be common on an equivalent European facing site. The affinity to casino gaming is so strong and from an operator perspective far more profitable as the player is losing money to the house rather than to another player.