Hong Kong-listed Paradise Entertainment Ltd has unveiled the largest e-table casino in the world in Macau at the Kam Pek Casino, hoping to parlay its local connections and innovative spirit to grab a greater slice of the booming gaming market.

Live-dealer baccarat
Paradise Entertainment Ltd has the Macau patent on electronic baccarat terminals based around a live-dealer game, blocking the entry of more recently developed competing products, such as Shuffle Master Inc’s Rapid Baccarat.

Paradise’s LIVE Baccarat is a hybrid system, with players sat at electronic terminals that process bets on a game dealt by a live dealer. Having a live dealer makes LIVE Baccarat appear more ‘fair and believable’ to players than fully automated baccarat multi-terminals, according to Paradise Entertainment Ltd Executive Director Aaron Park. Players also appear to be more engaged when playing against a live dealer than a computer generated image, and consequently are likely to bet more aggressively on the LIVE Baccarat system. Meanwhile, the automated processing of bets dramatically increases productivity of a dealing table while preventing fraud and errors.

Sharing is winning
Paradise is the only gaming machine manufacturer to have secured profit sharing agreements with Macau casino licensees, while all other suppliers are restricted to either lease or purchase agreements.

Paradise currently has profit sharing agreements with two of Macau’s six licensees, SJM and Galaxy Entertainment Group. Mr Park says those agreements were struck thanks to the company’s local connections, especially those of Chairman and CEO Jay Chun, who has tremendous experience in Macau and knows everybody in the field here.

Paradise bears all installation, maintenance and tech support costs, as well as paying the salaries of promotional staff for LIVE Baccarat. In return, SJM and Galaxy provide the venue and dealers and give Paradise a share of net wins from the terminals.

Paradise unveiled the largest e-table casino in the world in Macau on December 28, 2007. The Paradise Casino, which houses 280 of the company’s LIVE Baccarat terminals, operates under the license of Stanley Ho’s Sociedade de Jogos de Macau (SJM), and brings the number of terminals deployed around Macau by the company to 540 the company has an additional 160 terminals placed on a profit sharing basis at a Philippine Amusement and Gaming Corporation (PAGCOR) venue in Manila. According to Mr Park, the company’s target is to have 1,200 terminals installed across Macau by the end of 2008, including an additional 100 terminals at the Paradise Casino.

The Paradise Casino is located on the third floor of the Kam Pek site, which was previously home to the flagship outlet of Melco Crown’s Mocha Slot, before Melco PBL acquired its own local casino license, forcing Mocha out of the SJM-owned site for regulatory reasons (Mocha previously operated under SJM’s license). If all goes to plan, Paradise hopes to also take over the first and second floors of the Kam Pek site in the near future.

Mr Park points out that as Paradise demonstrates the value proposition of its product and its bargaining power with casino licensees increases, it has now been able to command a greater share of the gaming revenue generated by its terminals. Whereas Paradise previously received a 31% share of net wins on its machines at SJM venues (with 40% going to the government as gaming tax, and the remainder to SJM), the company receives 40% of net wins on the 280 terminals at the new Paradise Casino at Kam Pek.

SJM has been steadily switching its profit sharing agreements with all its 40:40:20 partner’s 40% to the government, 40% to the property owner, 20% to SJM to a new 40:55:5 arrangement, whereby SJM only takes a 5% cut, but the property owners must assume all labour costs. Paradise expects to switch to that arrangement in the near future.

Paradise is in a unique position to benefit from assuming labour costs, as the major value proposition of the LIVE Baccarat system is a more than 90% reduction in labour costs. Dealer costs in Macau have been spiralling since the government liberalized the local gaming industry in 2002 leading to an explosion in the number of tables, while the government has maintained a strict ban on casinos hiring foreign workers as dealers.

The Paradise Box

The opening of the Paradise Casino saw the introduction of the company’s Paradise Box, the second generation terminal for its LIVE Baccarat system. The Paradise Box is the result of the company’s quest to provide products responsive to the needs of players in Macau and the rest of the region. The Paradise Box is an attempt to provide a more intense and immersive gaming experience to players at the LIVE Baccarat terminals.

A dealer on the LIVE Baccarat system currently handles two tables simultaneously (scaleable up to three tables), with each table linked to a separate section of 20 terminals. One hand is dealt to each section of terminals every fifty seconds twice as fast as each hand is dealt at a regular baccarat table.

Chinese gamblers are renowned for the intensity at which they play, and Mr Park acknowledges the LIVE Baccarat players in Macau are ‘pretty hardcore’ many of them want the game to go even faster.

It usually only takes people ten seconds, maximum, to place a bet, so they have 40 seconds of downtime, and during that downtime they’re very fidgety, Mr Park reveals, adding that at the first generation LIVE Baccarat terminals, it’s not uncommon to see one person standing up and moving between both sections, so that they can play two hands every fifty seconds four times the pace at which they could play at a regular table.

Courtesy. Inside Asian Gaming

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