Would you introduce Berjaya Sports Toto Berhad and tell us about the company's most recent milestones?
Berjaya Sports Toto Berhad is a gaming and lottery company that was incorporated in 1993. Over the past 25 years, we have evolved significantly. We are now present in several countries, having started off in Malaysia in 1969 under a subsidiary called Sports Toto Malaysia, and thus our history here goes back half a century. In Malaysia, our concept outlets are one of our most important recent accomplishments. These are fully air-conditioned and equipped with electronic information on LED televisions to enhance customer service and customers' experience. We are the largest number forecast operator (NFO) in Malaysia in terms of both our market share of approximately 43% and our geographical distribution, having presence in every Malaysian state except Kelantan and Terengganu. We have a suite of seven games comprising three digital games, three lotto games, and one hybrid digital-lotto game.
What are your strengths and competitive advantages?
As a lottery operator in Malaysia for almost half a century and as a lottery manager in Philippines for 25 years, we believe we are a strong company offering various benefits. There is our experience in managing lottery businesses and developing products and games that are interesting and suitable for local interests and local customer preferences. For example, while four-digit games are highly popular in Malaysia and Singapore, this is not so in other countries, such as in Hong Kong or Australia. We also offer a competitive advantage of being able to develop the back end software and lottery systems for a country's lottery needs through our US subsidiary, International Lottery and Totalizator Systems (ILTS) Company. Here in Malaysia, as well as in the Philippines and Vietnam, we work with government bodies that are entrusted with regulating the lottery industry. Our people are able to coordinate such partnerships and have close teamwork that brings about high-quality lottery systems and facilities within a country.
What are the main trends changing the business environment in which you operate?
We have been working closely with government bodies. All lottery operators, especially in Southeast Asia, are extremely dependent on approvals from government bodies. Over the past seven years in Malaysia, we suddenly had a huge increase in the number of illegal gambling operators, which impacted our sales and those of all NFOs. In 2018, there was an increased effort by the government authorities to reduce and eradicate illegal gambling operations in Malaysia. This will have a huge impact on our sales and improve the government's tax revenues. In Malaysia, the NFO industry is highly regulated, though fortunately the government also recognizes the advancement of technology worldwide and understands the requirement for the NFO industry to move online as well. Mobile applications would be a logical next step for us. We want to explore the options for games online to attract the next generation.
What strategies are you implementing to further enhance your market share in Malaysia?
There are three main players in the industry here. Sports Toto Malaysia has the most outlets, though this is regulated by the Ministry of Finance, and we cannot simply decide to increase the number of outlets. We do not see the other NFOs as our competitors; rather, we ask them to relocate with us if we move to build a new market together, with a varied offering to customers. We have the best sales in locations where all three operators have outlets. We have also been working closely with the other NFOs to battle against illegal gambling operators. So rather than competitors, we are all in the same boat, with a shared interest in the industry. Even our goal to go online is something we will do together as an industry, for example, when we ask for the necessary government approvals.