Rolling the dice at Marketplace
BY JULIAN RICHARDSON Assistant Business Co-ordinator email@example.com
DESPITE the recent proliferation of gaming lounges in the Corporate Area and a weak domestic economy, the gambling market is not saturated, says the Kingston Live Entertainment Group (KLE).
KLE, in collaboration with Supreme Ventures Limited (SVL) subsidiary Prime Sports, is developing a high-end 125 seat gaming lounge at the Marketplace in Kingston.
On the heels of several other high-profile investors entering the gaming lounge market in the nation's capital, it has led to some questions on whether the industry has reached its saturation point, especially in an economy where discretionary income is being severely squeezed.
But Gary Matalon, KLE's chief executive officer, said there is sufficient market share for the venture, tentatively to be operated under the name "The Secret Room".
"Much like we demonstrated in the nightclub business, our philosophy is that if you are the best at what you do, the market will appreciate and support the business," said Matalon.
"We feel there is plenty of room in the gaming industry to establish products that will deliver exceptional value for customers and, in turn, become a part of the people's choice for entertainment," he said.
The average 30,000-plus patrons per month visiting Marketplace form a compelling case for additional entertainment offerings at that location. "The Secret Room will sit between two KLE establishments, Usain Bolt's Tracks & Records and Fiction Lounge.
"The concept and ultimately the environment along with the games and the service will attract the large market of patrons who seek out high- quality entertainment," said Matalon.
KLE successfully raised $94.6 million through an initial public offering (IPO) last week.
According to KLE's prospectus, "The Secret Room" will host "high-stakes gaming on the mezzanine level" and will be open 365 days a year.
Construction work has already begun on the lounge, which is expected to have access doors on either side in order to allow patrons to move to and from both Tracks & Records and Fiction, the company said.
Prime Sports leased the location and will operate and manage the "The Secret Room" at its cost, the prospectus said, noting that KLE will provide food and beverage and marketing and public relations services for the venture.
KLE's investment in the gaming lounge is mainly in "time to conceptualise the model as well as some design work to make the venue unique," Matalon said.
"The capital outlay was not our responsibility for this venture. In order to execute the food and beverage offerings, there we will incur some minor costs associated with the reworking of our POS [point of sale] infrastructure to enable the service delivery planned for the gaming lounge," he said.
Gross turnover in the gaming lounge sector totalled $25.1 billion in fiscal year ending March 2011, according to government figures.
The Hussey Family-controlled Monte Carlo at Terra Nova All-Suite Hotel in Kingston is the market leader, with gross profits of $1.3 billion in 2010-11, followed by SVL's Acropolis in Barbican, which made $360 million over the period.
Government's recent lifting of an eight-year ban on the issuing of licences for gaming lounges, which are allowed to operate with 20-150 machines at a time, opened the door for a proliferation of new players.
Recent entrants in the Kingston market include the 50-machine Macau Gaming Lounge and a US$2-million ($180-million) state-of-the-art gaming lounge in the Wyndham Kingston hotel.
KLE's Matalon said "The Secret Room" will complete a one-stop-shop entertainment complex at the Marketplace.
"With the foundation established at the Marketplace — five high-end restaurants, a celebrity sports attraction and a premium nightclub — the opportunity for a premium gaming lounge was prime.
Much like destinations such as Las Vegas, Bahamas, etc, "The Secret Room" completes the entertainment eco-system we set out to build right there at Marketplace.