n a recent interview, you said you had decided to participate at the Caribbean carnival because “SAGSE standed out as as the premier show to help broaden a company's presence in the Latin American region.” What can you tell us about the firm's experience at the Panamanian trade show?
I found the SAGSE PANAMA SHOW to be a great place for meeting a wide array of industry professionals from all across Latin America. As a global gaming consulting firm, we have done business in the region for many years now, however our decision to serve as cosponsors for some of the events at the show allowed us to gain great exposure and interact with multiple companies who quickly grew to know who we are, our experience in the market and our ability to provide value-added support to business needs. I would have liked to have seen more representation from the Caribbean side of the market but as our primary focus was to make deeper connections in the Latin American region, overall I was pleased.
What are the main concerns of both local operators and OEMs?
As global gaming advisory firm that focuses on gaming and leisure development, we have had the opportunity to work with a number of operators and developers across the region. Specific to the Caribbean there is a lot of noise going with delays with Baha Mar which presents a lot trepidation in the market about some operators and industry professional feel these is just noise that have caused people to lose sight of other countries currently on the verge either of introducing or expanding their gaming legislation or are activity seeking opportunities for larg(er) scale casino resort facilities unlike what is currently seen now with the exception of the Bahamas (i.e. Jamaica, Bermuda, Grenada, Antigua). No area has more attention than that of Mexico. Many potential operators and investors wait with baiting breath to see what direction government officials will take with the legislation. It is no doubt that their antiquated laws are in bad need of an overhaul and number of good-standing operators are anxiously waiting for things to get locked in to comfortably expand their business without competing with illegal operations that undermine their ability to operating as competitive and sustainable facility. Meanwhile there are a number of investors all across the globe with their eyes on Mexico, some with formulized plans to penetrate the market. Even Cuba has been tossed around as a future venture to consider down the road given the sheer volume of airlines and cruises coming out the wood works and lining up to provided direct services the country in anticipate of legalized leisure travel. Central America continues to be fairly well-established market albeit full of small scale facilities and betting shops.
This is largely driven by its nature of being more a local market then its nearby Caribbean neighbors. Still, there are opportunities to for some higher-scale casino facilities to be introduced or expand in certain areas of the market which can help change the current dynamics of that central region. This type of plan will have to be carefully balanced against the nature of local consumer habits as well as other outside legislative impacts such as import and export taxes. Right now Panama, still stands as one of the most ideal countries for development with a growing number of investors looking outside and around Panama city itself for the next big thing. With South America, the growth opportunities are best presented in Colombia and Peru, however there are issues with illegal gaming via the black market that must be aggressively addressed to allow casinos to optimize their potential. While Argentina was once a prime location for development, the ongoing political turmoil has caused many internal, as well as external potential, operators to be at a standstill in terms of expansion until an ultimate outcome is determined. Most certainly the elections in the fall will play a major role in this.
What is your opinion on Panama's new tax regime, which was approved by the Congress?
Unfortunately, at this time, we are not intimately unfamiliar with the new tax regime in Panama, however, as a general rule of thumb we have found in the may studies we conducted across the globe that, for the most part, any given gaming market can with stand a certain level of tax increase assuming a reasonable figure existed prior to increase. If and when, however, taxes are increased at a significant level it may drastically limit a facility's s ability to acquire any excess funds necessary to be able to reinvest in their business and remain competitive. This is a common problem we've seen in a number of markets in the U.S. which we have done a number of impact studies on. At a lower tax rate, facilities have a greater ability to reinvest in their property, particularly their casino which almost always serves as the most profitable revenue department in the facility all the while allowing an opportunity for them to diversify their business potential and attract a wider array of clientele.
What are you going to do in order to become a household name in the Latin American region?
While we have over 20 years of experience working in the gaming market from Mexico down, our plan is to aggressively penetrate the market more strategically so that we are not just a consulting firm in the gaming industry to regional professional, but rather, we are The consulting firm in the gaming industry. As such, we hope to continue gaining more exposure through conference attendance such as the Peru Gaming Show and through major publications such as Yogonet to help our company become a household name by keeping regional industry professionals well informed on our core competencies. This includes feasibility analysis with in-depth market research into the gaming, leisure and/or entertainment sectors, Financial Analysis, Strategic Planning as well as options for diversification strategies, due diligence and legislative support just to name a few. As such we encourage all those interested in our company to visit our website at www.theinnovatoingroup.com and learn more about who we are, where weâve worked and how we have provided value-add support to our clients.