It’s the kind of company that typifies gaming in the New Macau. To start with, it’s a locally owned business that provides software services to the casino industry. It has landed some of the biggest names in gaming as clientele. It’s also on the cutting edge of the booming online gaming field in Asia.
Founded in 2000 by Macau local Jason Chan as a marketing company catering to casinos and junket operators, Macom Communications is quickly becoming a hot Chinese online gaming play, says the company’s Chief Operating Officer, Kinny Woo.
Part of Macom’s appeal stems from the recent restrictions imposed against online gambling in the United States and the simultaneous expansion in the number of Asians placing bets over the internet.
Macom is one of four software providers currently permitted to supply online gaming operators in the Cagayan Special Economic Zone and Free Port in the Philippines—the only legal online gaming jurisdiction in Asia. First Cagayan Leisure and Resort Corporation, the entity charged with running the Cagayan zone, has decided to restrict the choice of software providers available to operators in the zone for at least two more years.
In announcing the restriction, First Cagayan Chairman and President Albee Benitez said in a press statement earlier this year that “Playtech and Macom in particular have been fundamental to our success and have demonstrated that they fully understand Asian licensees’ requirements and have customized their product accordingly.” The two other providers allowed to supply Cagayan licensees are RTG and iFaFa.
Mr Benitez added: “These software providers have extensive teams on the ground in the Philippines, internationally tested and accredited software, and continue to roll out new games and features to ensure that licensees have the best products available.
“Without the experience and customer base that these software providers brought with them in the early stages of our development, it would have been far more difficult for us to have b u i l t the First Cagayan gaming jurisdiction into what it is today. We have decided to reward these software companies that have invested capital, time, and technological know-how, and most importantly have provided significant jobs to Filipinos.”
Kinny Woo credits Macom’s extensive China links with making his company such a popular choice among online gaming operators targeting the Chinese market.
Macom—which moved from its sole focus on marketing and communications solutions to online gaming software solutions in 2005—deals with some of China’s largest internet portals and online media groups, including Sohu.com, Sina.com, Tom.com, the Titan Group, the China Soccer Newspaper Group, the Apple Group, and the Oriental Group.
So does Macom drive the hundreds of millions of viewers from these sites and media outlets to some of the many online gaming sites it supports? Mr Woo won’t comment on this point, but notes “if you look at our growing market demand, it’s booming in Europe with clients chasing after Chinese gamers. That puts us in a very competitive position”—especially now that the US ban on online gaming has spurred online gaming operators to more aggressively pursue virgin markets like Asia.
Although Asians are renowned for their love of gambling, they still only account for about 10% of the global online gaming market.
One of factors holding back the Asian market is limited broadband access, but this is changing fast. What could take longer to resolve, however, are immature online payment mechanisms and currency controls. In a recent Wall Street Journal article, Macom CEO Jason Chan pointed out another major hurdle, which could be difficult to overcome: “You’ve also got the issue of culture; the reason Asian online gaming has not grown as fast as the rest of the world is because people are skeptical about putting money upfront, and fears of credit-card fraud persist.” Macom is working hard to overcome these obstacles, and the potential rewards from doing so are huge.
Macom has a long list of European customers, from Ladbrokes to bet365.com. Asia-based clients range from Victor Chandler’s Asian subsidiary to China gambling portal g-win.com. Macom also resells Chinese software to the likes of RNG and Lotto, and provides the Entertasia Live Dealer Casino (allowing players to place bets over the internet via live videos streaming), which is the game of choice in Cagayan.
The live dealer game is one of the most prominent online games based in Cagayn, and is one of the solutions aimed at making Asians more comfortable with betting over the internet. For a mere US$300 a month, an attractive woman will stand behind a baccarat tabledealing like any other croupier would—except she makes plenty of eye contact with the web camera trained on her. Mr Woo can’t say how many online visitors they get at casinos based inside the 12-year old Cagayan Special Economic Zone and Free Port, but will say that “traffic is increasing substantially.”
According to a recent International Herald Tribune report, Eastern Hawaii Leisure—one of around 40 operators in Cagayan—is seeing as much as US$13 million in bets every day. That could grow much further if Beijing continues to tighten its grip over illicit online gaming on the mainland. In 2006 alone, Chinese authorities claimed to have cracked down on 347,700 illegal gambling operations and seized US$445 million in cash.
Sure, there’s Macau for mainland Chinese gamblers, but the city still forbids online gaming operations—and mooted plans to implement regulations and taxes for online gaming will likely gather dust until the next Macau Chief Executive comes into power in 2009, according to media reports in Macau.
Moreover, the Cagayan zone is fertile ground for Macom thanks to the backing of powerful 83-year-old Senator Juan Ponce Enrile, who is in charge of the zone, and is “very friendly to us,” says Mr Woo.
Macom also stands to benefit from the growing demand from online gaming operators in Europe and the Caribbean for providers who can deliver solid Chinese language support and content management. Everyone wants a piece of the China action and Macom is well poised to deliver it, remarks Mr Woo.
It’s critical for companies like Macom that Chinese internet gamblers have nearby legal jurisdictions to go to. As such, Macom is anticipating that more jurisdictions in Asia will warm to internet gambling in the future as gaming liberalization catches on.
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