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.

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