RGB is triumphing the next casino capital of the world, Nepal.

RGB aims to expand its markets by growing geographically as well as through strategic partnership and acquisitions.

Nepal seem likely will be RGB next crown of jewel.

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SHAHKAR ABIDI | Fri, 4 Sep 2015-07:35am , dna

With the gambling industry in India estimated to be over $60 billion despite the ban, Nepal, touted to be the next casino capital of the world, has aggressively started targeting the growing Indian middle class to its shores.

To start with, Nepal's national carrier, Nepal Airlines, has restarted direct services connecting Mumbai with capital Katmandu from Friday. The airline has already started flights from Delhi and Bengaluru and has plans to fly from Kolkata and even several tier-2 cities. It has also tied up with travel agents to offer travel packages for the same.

Nepal Airlines had exited its operations from India about a decade back due to lack of enough aircraft and other operational reasons. At present, Air India, Jet Airways and IndiGo fly to Nepal, with only Jet Airways serving Mumbai.

"Casinos are picking up again in Nepal, and, hence, we expect to attract a lot of Indian tourists," said Saroj Kasaju, director, commercial department, Nepal Airlines.

All the casinos were shut about one-and-a-half year ago due to certain law compliance issues and political reasons, but they have reopened recently.

Nepal's thrust to promote casinos is backed by a report released last month by leading global gaming investment company, Union Gaming Securities Asia Limited, which states that the opening of Singapore's two casino resorts in 2010 coincided with a sharp rise in the number of Indian visitors to that city-state.

The report further states that India produces approximately $10 billion a year in gross gaming revenue, which includes both legal and illegal gambling coming from casino and non-casino gaming. In addition, most middle-class people in India are familiar with several forms of gambling but don't have places to play in. Another positive sign is that Nepal casinos are allowed to accept bets in Indian rupees.

Nepal already attracts tourists from India for religious, adventure and business tourism, though the number declined drastically by about 25% since the devastating earthquakes which rocked the Himalayan country earlier this year.

Gambling is considered auspicious by Indians during Diwali, when hundreds of crores of rupees are said to be won/lost during day-night-long illicit sessions of card games, such as teen patti and poker among others. It is banned in India by a law first enacted in the 19th century, except in Goa, Daman and Sikkim.

Globally, Las Vegas, Macau, Singapore and, to an extent, Malaysia and South Africa are prominent gambling venues, where rich Indians are know to splurge in the game of chance.

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This article first appeared in digitaledge Daily, on September 3, 2015.

KUALA LUMPUR: RGB International Bhd, an electronic gaming machine operator, plans to enter the gaming sector in Nepal, spurred by the introduction of a new charter on gaming rules and regulations that will help attract more gaming operators into the country.

“We can see the potential there. We are now in talks with some of the bigger casino operators in Kathmandu, to work on a strategic partnership," RGB chief operating officer Steven Lim told digitaledge DAILY yesterday after an analyst briefing on its first-half 2015 (1HFY15) results.

“It would be premature for me to share the details as nothing has been signed yet ... but we are very confident that we are getting there,” he said.

He noted that while the gaming sector in Nepal is regulated, the country does not have a specific government body to govern the sector.

“Right now, they (Nepal) have introduced a charter on gaming rules and regulations … I think this is a very exciting market for us to look into as RGB’s strength has always been to look at emerging markets,” he said.

Lim noted that Nepal’s close proximity to India also means that it will be able to attract customers from India, the world's second most populous country after China.

Lim said RGB’s compliance with the US Foreign Corrupt Practices Act (FCPA) since July 1 has enhanced the group’s reputation among its clients — the gaming operators, giving it the credibility to drive expansion into developed gaming markets such as Macau and South Korea, which it had difficulty penetrating in the past.

RGB’s markets have typically been confined to the Philippines, Macau, Cambodia, Singapore and Malaysia.

“With that (FCPA compliance), we are able to do bigger things with bigger companies that want to expand into Asia, to be their strategic partner.

“Because of this strategic exercise that we have done, companies are now more comfortable with RGB and we are given more opportunities to do more work in the region,” said Lim. This is evident from the increased sales of machines in Laos and Goa, India.

Apart from Nepal, RGB is also eyeing the South Korean market, where Jeju Island has the potential to be an attractive gaming and tourism destination.

“There are more opportunities, meaning we foresee better income and better revenue for RGB moving forward,” said Lim.

For the second quarter ended June 30, 2015 (2QFY15), RGB saw its net profit decline 12.9% to RM6.56 million from RM7.53 million a year ago, dragged down by lower revenue for its sales and marketing (SSM) division.

RGB group executive director Mazlan Ismail said revenue for its SSM division fell 34% year-on-year as the group sold fewer machines during 2QFY15.

He added that 300 machines were on trial, which will only contribute to the group's revenue in 3QFY15.

In 1HFY15, RGB sold 387 SSM machines. It targets to sell 1,500 units for the full year. The group sold a total of 1,452 SSM machines last year.  

“We have some machines that are still on trial … we are very confident that all those trials will be converted into sales,” Mazlan said.

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The Star, Monday, 1 August 2016

RGB eyes new markets in Europe, S. America

GEORGE TOWN: Electronic gaming machine and equipment maker is eyeing new businesses in Europe and South America, as the company seeks to expand its market reach.

RGB derives 95% of its sales from the Asia-Pacific region.

“We want to move away from our traditional markets to broaden the revenue base for the group,” said group managing director Datuk Chuah Kim Seah (pic).

The company, he said had secured orders for 700 units of gaming machines valued at RM80mil for the first half 2016.

“The remaining 200 will be delivered in the third quarter. With the delivery of the 700 units, we are projecting double-digit percentage growth over last year’s net profit,” he told StarBiz.

The sales of gaming machines made up about 70% of the group’s revenue, while the remainder was contributed by the RGB’s gaming concession programme, which included the leasing of machines and equipment.

Chuah said the group was targeting to sell more machines than last year’s 1,300 units, which generated RM145mil in revenue.

For the second half, the group had 400 more gaming machines with an estimated market value RM45mil to deliver before the end of the year.

“The total undelivered units to date is 600, which includes the 200 yet to be delivered units secured in the first half.

“To surpass last year’s goal, we need to secure sales for 300 more units,” he said.

On RGB’s concession business, the leasing of the machines in the Asia region is expected to generate RM7.6mil per month for 2016, compared with RM7mil in 2015.

RGB leases its gaming machines to customers in Indochina, the Philippines, Timor Leste and Nepal.

“The Philippines is one of the largest markets for us,” he said.

Chuah said the group would be leasing machines soon under its concession programme to Kathmandu, which is a new market for the group.

“The machines are ready to be shipped out and should be operational by the fourth quarter,” he said.

RGB reported a 37% increase in net profit to RM5.9mil in the first quarter ended March 31, as revenue improved 45% to RM56mil.

Meanwhile, the group has settled the remaining RM27mil debts owed under the Commercial Papers Medium Term Notes (CPMTN) programme ahead of the scheduled final payment due in 2019.

“The group has more than RM60mil cash in hand, after settling the CPMTN debts,” Chuah said.

This cashpile will come in handy as the group explores opportunities in new markets.

Conclusion:

Will Nepal be the next "The Philippines" market for RGB?