Connecting with

the customers

Asian Racing Conference

Richard Cheung

Rewinding 5 - 6 years ago

1 1

Turnover from 2000 - 2008

HKD (billions)

$81.5 $78.2 $71.4

$65.0 $62.6 $60.0 $64.0

$67.6

$0

$10

$20

$30

$40

$50

$60

$70

$80

$90

S00/01 S01/02 S02/03 S03/04 S04/05 S05/06 S06/07 S07/08

2 2

As of 2009/2010 Season

Aging customers

75% of customer

older than 50 years

old

3

… coupled with perception challenge

Perception:

Racing = Betting

Racing = Complicated

4

Our Strategy

5

High

Value

Young

Rookies

Tourists

Members

Owners

Hardcore

2M

customers

Our strategy starts with segmentation

Mid-High

Value

6

1. Eventful

racecourse

4. Racing as

popular

culture

2.Digital

experience

3. Big-data

innovation

Coupled with segment-specific levers to

connect with customers

High

Value

Young

Rookies

Mid-High

Value

Tourists

Members

Owners

Hardcore

2M

customers

7

$81.5 $78.2 $71.4

$65 $62.6

$102

$64 $67.6 $67

$75 $80

$86 $94

$0

$20

$40

$60

$80

$100

$120

$60

The end result has been encouraging

8

HKD (billions)

1. Eventful

racecourse

4. Racing as

popular

culture

2. Digital

experience

3. Big-data

innovation

Our Segment–specific Levers

9

For the general public

Racecourse master plan

vs. General Very serious

10

For the owners and members

Luxurious venues

11

Racecourse master plan

12

For the young and trendy

Racecourse master plan

For the young and trendy

13

Racecourse master plan

Target market:

25-39 years old

Mosaic A/B/C

International

Besides venues, experience is the key

14

Trendy

Vibrant

Worldly

Interactivity

The Happy Wednesday Brand

15

16

Thematic nights and social media

16

Happy Wednesday video

17

Play Movie 01

Gaming accounts opened

by 25-34 years old

Happy Wednesday

F&B Revenue Happy Wednesday

Attendance

Aged below 35 at Happy

Valley night racing

Young Rookies

Turnover

40% 63% 75%

8x 43%

… impactful results in young segment

Season 10/11 – 13/14

18

Extending the racecourse success

19

New off-course betting branch

Interactive Zone Merchandize Showcase

Our Segment–specific Levers

1. Eventful

racecourse

4. Racing as

popular

culture

2. Digital

experience

3. Big–data

innovation

20

a. Mobility – for everyone

b. Information enhancement – for experienced players

c. Gamification – for new customers

d. Second screen – for new customers

Digital directions to connect

21

22

23% 24% 25% 25%

11% 14%

19% 24%

0%

10%

20%

30%

40%

50%

2010/11 2011/12 2012/13 2013/14

Mobile

Internet

a. Mobility

22

Racing wagering - % of turnover

Race

Simulator

Speedmap

Raceday

Focus

Power Figure

b. Racing content enrichment

23

Real - time

Happening

Dedicated

Section Racecard & Odds

24

b. Racing content enrichment

Drag & drop interface

c. Gamification

25

d. The second screen

An app to go with live TV program

26

Racing touch and 2nd screen video

27

Play Movie 02

Our Segment - specific Levers

1. Eventful

racecourse

4. Racing as

popular

culture

2. Digital

experience

3. Big–data

innovation

28

Data - driven marketing

29

Wed Sun Wed Sat Wed Sun Wed Sun Wed Sun Wed Sat

Not Play

Not Play

Embed Live Audio / Video Broadcast

in App for customer retention

Not Play

Not Play

Not Play

Not Play

Leverage on Big Data to address racing absenteeism

Example: Absenteeism

30

Via data–mining, we have identified the

customer changing needs

• Want higher payout

• Don’t want to study too many races

• Concerned about last minute

odds changes

– want to “catch the movement”

Example: Customer wagering needs

31

USD 1.5 million per race

A global first PMU innovation

New way to “win”

32

• One pay-out for all

“grouped” horses

• Dynamically split

your bet

• Weighing

depending on odds

• Hedge against last

minutes odds drop

• Merge into

traditional Win pool

$10 Longitude Engine

1 4

2 4

3 4

4 15

5 15

6 99

7 20

8 99

9 33

10 60

WIN

odds

One

Pay-out

4.0

$a

$b

$c

$d

$e

$f

$g

(a to g) =$10

* Assume no

take – out rate

Our Segment–specific Levers

1. Eventful

racecourse

4. Racing as

popular

culture

2. Digital

experience

3. Big–data

innovation

33

Sponsored

Races

3rd party social

platform

Racecourse

Gift Shop Celebrity

Non–racing

media

Leveraging non-racing media

34

40 % marcom

spend on non-

racing media

Master Chinese Painter

Xu Beihong “Best Digital Entertainment

Award” of Hong Kong ICT 2014

Leveraging art and culture

35

Our levers recap

1. Eventful

racecourse

4. Racing as

popular

culture

2. Digital

experience

3. Big–data

innovation

36

CNY greeting promotion

37

Play Movie 03

Plenary Speakers

38

Mr. Thomas Ascher

Dr. Lionel M. Ni

Mr. Scott

McLeod