And over the week, Tan had entered into a RM108mil deal with a group associated with Sabah tycoon Yap Yong Seong – the former police officer turned businessman who is also popularly known as Duta Yap – that will soon give him full control of his Sarawak number-forecast operation (NFO) via Berjaya Assets (BAssets).

While upping his stake in the Sarawak NFO business is unlikely to give a significant boost to his wealth, the Vietnam venture will present a different story.

Experts reckon there is huge earnings potential in Vietnam, whose lottery market is estimated to be worth at least US$3 billion (Bt105 billion) per year. Tan has an effective stake of 51 per cent in the Vietnam lottery business through BCorp and Berjaya Sports Toto (BToto).

BCorp and BToto respectively have 49 per cent and 10 per cent interest in BGTI, while state-owned Vietnam Computerised Lottery One Member llc (Vietlott) owns the remaining 49 per cent stake in the company. The group was given the exclusive right to operate a nationwide computerised lottery in Vietnam for the next 18 years in January this year.

“We think the fact that Tan has parked the bigger portion of the BGTI stake in the holding company, that is, Bcorp, in which he has direct interest, speaks volume of the potential he sees in the Vietnam venture,” an analyst with a local bank says.

“By keeping a smaller portion of the BGTI stake in the subsidiary level, he will be able to limit the dilution of the potential gains from the Vietnam venture,” he explains.

According to Maybank Investment Bank’s (MIB) estimation, Berjaya’s Vietnam lottery business could potentially rake in a net profit of 522 million ringgit per annum during its steady state. This could translate into a net profit accretion of 209 million for BCorp and 52 million for BToto based on their effective stakes in BGTI.

“We are positive on this development but unsure as to when BGTI will reach steady state, and thus contribute materially to BToto,” MIB said in its recent report, noting that BToto’s 10-per-cent shareholding in BGTI will likely be recognised as an investment only.

“We opine that the larger beneficiary is BCorp due to its larger 41-per-cent shareholding in BGTI,” the brokerage argued.

The Vietnam venture is Tan’s second overseas lottery licence after getting one such licence in the Philippines in the mid-1990s. Among the products that will be offered by the Vietnamese operation are Lotto Games, Digit Games and Fast Draw Games. These will be distributed through various channels, such as computerised terminals, telephones and mobile phones, and the Internet.

“The risk for Berjaya group in Vietnam is the potential competition from the illegal gaming market,” an analyst says. “But the fact that a Vietnamese government-linked company is the group’s partner in the business could send a positive signal that such risk could be contained,” he adds.

No game changer

Meanwhile, the increase in BAasset’s stake in the Sarawak NFO business is not expected to be a game changer for the group. After all, the NFO market in Malaysia will likely remain sluggish over the medium term because of the prevailing weak consumer sentiment in the country.

Over the week, BAssets through its subsidiary Tropicfair Sdn Bhd (TSB) entered into a share sale agreement yesterday to acquire the remaining 50% stake, or 3.5 million shares, in Megaquest for a cash consideration of RM108mil, or RM30.81 per share, from Violet Circle Sdn Bhd (V-Circle).

The deal will enable BAssets to raise its effective stake in Natural Avenue Sdn Bhd (NASB) – the exclusive licensed agent for Sarawak Turf Club’s Special Cash Sweep Number Forecast Lotteries to conduct the 1+3D Big/Small and 3D Big games in Sarawak – from 65% to 100% upon completion of the proposed acquistion in the next six months.

The Megaquest group has a 70% stake in NASB, while the remaining 30% stake in NASB is directly held by three other wholly owned subsidiaries of BAssets. vDuta Yap and his son Yap Wee Sean are among the directors of Megaquest, which is a 50:50 JV between TSB and V-Circle. V-Circle, on the other hand, is jointly owned by Duta Yap’s wife Puan Sri Leong Li Nar and son Yap Wee Chun.

“The deal can help boost earnings for BAssets, but we do not think it will be significant mainly because NASB itself is already experiencing shrinking earnings amid a challenging market,” an analyst says.

“BAssets itself has conceded that the rampant illegal gaming in Sarawak is negatively impacting NASB’s earnings,” he adds.

In its filings with Bursa Malaysia, BAssets revealed that the Megaquest group posted a net profit of 9.35 million ringgit and revenue of 225.52 million ringgit for the financial year ended June 30, 2015. This represented a decline of 31 per cent from a net profit of 13.53 million ringgit and 6 per cent from revenue of 239.8 million ringgit in the preceding financial year. In fiscal 2013, the group’s net profit was 14.13 million ringgit against revenue of 236.86 million ringgit.

“The NFO market in Malaysia is rather saturated, with limited growth opportunities, so we don’t see much excitement with BAssets increasing its stake in NASB… it is certainly not a game changer for Berjaya group,” a market observer argues.

Be that as it may, Tan is still seen as putting his bets at the right places.

And as US presidential hopeful Donald Trump once said, “it’s good business being the house”.