They may seem like small fry but they make our world go around. Whether in Tesla cars, toasters or tumble dryers, computer chips are so integral to our daily lives that, without them, our world would grind to a halt.
So it’s a worry as the world gears up for a faster recovery that global demand for semiconductor chips is outstripping supply. It could be symptomatic of a more widespread global supply-side shortage of key production goods, which might lead to increased prices and higher inflation.
The OECD reports that inflation in the major economies rose to 2.4 per cent in March. Inflation is coming back, but it’s not the bogeyman that markets need to fear. Higher prices are a sign of economic vitality, of which the world has been in short supply since the Covid-19 crisis began.
The pandemic may be far from over, but the combination of stronger recovery and inflation shows the global economy is returning to some semblance of normality.
It’s not purely the pandemic which is to blame, although production dislocations due to lockdowns and factory shutdowns certainly haven’t helped. As companies around the world slashed production during the early phase of the coronavirus crisis last year, semiconductor manufacturers were forced to scale back output as well.
Now, chip producers are playing catch-up, trying to keep pace with the surge in global demand for semiconductors as world economic activity bounces back.
With the International Monetary Fund projecting that global growth will accelerate to 6 per cent this year after a 3.3 per cent contraction in 2020, it’s no surprise that the world semiconductor industry is facing volatile demand conditions, which could cause bottlenecks for key industries like carmakers, with their high consumption of chip components.
Last week, German semiconductor manufacturer Infineon, a major supplier to carmakers, warned that up to 2.5 million cars might not be produced in the first half of 2021 due to ongoing supply chain shortages. With market conditions booming for autos and consumer electronics after such a long period of pent-up demand, chip producers are being forced to step up production, but it will take time to reach optimal capacity.
The Semiconductor Industry Association reports that, worldwide, sales rose 3.6 per cent during the first quarter of 2021, an increase of 17.8 per cent over the past 12 months. Although chip output is being cranked up, companies like Ford are still warning that car production will be affected in some plants until the shortage is resolved.
In the meantime, fine-tuning the balance between recovery and rising inflation expectations could prove challenging. There may be some short-term price distortions but global policymakers still need to err on the side of caution and keep monetary policy as loose as possible until the world fully recovers from the pandemic and sustainable growth is secured.
It wasn’t too long ago that policymakers were complaining that inflation was too low and that the global economy was in danger of slipping back into deflation, so the temptation to jump the gun and rush back into tightening should be avoided at all costs.
As yet, there are no signs of either demand-pull or cost-push inflation surfacing. Global growth is bouncing back, but it is happening from an extremely weak, non-inflationary base.
Right now, global recovery needs nurturing, not cutting off in its prime. US Federal Reserve chair Jerome Powell is quite correct to give stronger growth the benefit of the doubt until there is a much more convincing case for higher rates. Global output gaps are still extremely negative, industrial capacity levels are slack and wage pressures remain low, given the fallout from the pandemic. The Organisation for Economic Cooperation and Development estimates the global economy might currently be operating as much as 5.2 per cent below potential output levels, suggesting little or no inflation danger this year.
China’s producer prices may have surged 4.4 per cent year on year in March, but inflation risks remain benign with the headline consumer price index extremely low, at 0.4 per cent. Base effects mean that the headline inflation rate will pick up in the coming months, but Beijing can afford to stay relaxed for now.
Until the Fed signals that the time is ripe for tightening, the world can rest easy. No interest rate hikes in 2021 should be the equity market’s rallying cry.
With all the comings and goings of the new project to change some of the parameters of the Online connection systems, there are many operators who are worrying about the possible new adjustments that could happen according to the text.
It is worrying because if Coljuegos is going to have all the information of our businesses, being centralized, any of these companies of "promises of future partnerships" could have access to know from a very good source how to move and start something like the D1 stores, which are gradually ending with the neighborhood shopkeepers and that in our case would be the small and medium-sized entrepreneurs of casinos. It may sound silly but we are already living what we sowed some years ago when we enthusiastically allowed sports betting to enter our casinos, we made altars for them, we invested in marketing and personnel to promote them, and now they have taken a good slice of the cake from us, catapulted by the 2020 contingency, but if it had not been for casinos they would not have been in a privileged position.
As of today, there are few or almost no one who says that the sports games are leaving them profits in the casinos, except for those who operate in a "gray" manner because the players have already left our premises.
I see one good thing in the project and that is that it will put an end to these greedy operators that increase the payments through the AFT or remote credits to declare losses and pay less tax.
What is certain is that on the way until it is approved, we are allowed to go through it and our suggestions are taken into account, and it does not happen as it did at the beginning of the connection when comments were published but not taken into account. It is worthwhile for you who read this column to join us and comment, not only the associations have the floor, if you pay Coljuegos you have the right to give your opinion.
More than 12 years ago, banks fought against permanent bets in order not to be deprived of the slice of money orders and remittances that at that time was around 2,500 million dollars and that by December 31, 2021 closed at the not inconsiderable figure of 8,000 million dollars.
With Ruling C-823 of the Constitutional Court of November 2, 2011, the banks' claim to prohibit money orders outside the financial system was put to an end, by establishing that money orders were not financial activities, because they neither capture money from the public nor are they financial intermediaries. That is to say that they did not exercise financial activities, deciding then that the money order was just another order, but of money and could not be conceived as a collection of public resources or as financial intermediation.
This round was won by the chanceros (salesman), making them the preferred means for Colombians to make money orders due to their proximity to the end customer as well as their varied portfolio.
Today, money orders are a billionaire source of income for permanent betting companies that ensure financial muscle and cash flow. By acquiring BALOTO, these companies consolidate their presence and become a conglomerate that will concentrate more than 90% of the money coming from the money orders, since, although BALOTO does not generate the expected profits from the sale of the game, it does leave an interesting percentage from the commissions of remittances and intermediation in the payment of different agreements.
Needless to say that it is a source of pride to witness how Colombian companies have learned the know-how of many businesses, but at the same time it is intimidating and not so healthy that so much concentration of power ends up forming a dominant position and becomes a monopoly, since they are in the process of developing an exclusive payment gateway for the sector, in sports betting, they generated a scratch and win through other operators, they operate localized games and now the jewel in the crown: the Baloto.
Today I will tell you what the big casinos do in terms of security. This aspect is not taken seriously because the operators of small casinos or gambling halls are limited to put 4, 6 or 8 cameras just to see how crowded the place is and not to provide real security to the business.
What makes casinos unique is the convergence of four essential points:
Regulation: it is a tremendously regulated sector. It is a very strict regulation, but at the same time it has created a working environment that guarantees the good development of the business. The magnificent relationship between the casino security departments and the State Security Forces and Corps, who maintain a very close collaboration, in which they work every day to improve. Sharing information is and will be the best weapon against crime.
Procedures: casinos, due to their own management and existing regulations, have a specialization incomparable with other sectors. All the functions of each member of the casino are subject to procedures. It is the Security and/or Compliance department that supervises that all functions are carried out with the utmost professionalism and guarantees the necessary peace of mind of the customers in a pleasant evening in a leisure center, such as a casino.
Technology: the use of technology is critical in a casino, since they are obliged to keep themselves always updated, both by the regulations and by their internal procedures. The information they manage is very high and not only as statistics. They continuously and systematically analyze all the procedures of the premises: cashiers, cashier, counting, table opening, the game itself, slots, accesses... thousands of operations. This eagerness for supervision and excellence forces the sector to maintain and be in constant search of the highest possible technical quality standards. Any technology that allows them to improve their procedures is an essential tool, such as video analytics, facial recognition, RFID in chips or cash management.
Technology in casinos is effective if it is procedural, otherwise it is an excessively high cost for the business.
Cameras have taken on enormous weight within the sector. The IP world favors diversity due to its lack of standards, but this has made it possible to solve problems that were previously insurmountable in the analog world.
These are the four pillars of good surveillance, but it is not as simple as it sounds, it requires effort and a lot of planning "because it is a matter of taking care of the prettiest girl in the neighborhood from the rascals who want to stain her".
Somehow I have always thought that the “live” events in the casino industry were the most important element of communication throughout our craft. I can remember the first World Gambling Congress that I attended at Showboat in Atlantic City back in the mid-’80s, followed a few years later by the International Gambling Business Exposition at the Tropicana in Las Vegas.
Being relatively new to the industry, it was exciting to meet the executives who ran both the casino operating companies and the suppliers. Having a heart-to-heart with people like Si Redd, who invented video poker, or Bob Stupak, the crazy man who ran Vegas World and dreamt up the Stratosphere, was something special for a former dealer.
We enjoyed those events so much that we started our own, the Southern Gambling Summit, the first conference and trade show that capitalized on regional gambling. When we partnered with what is now the Mississippi Gambling Association, we landed in Biloxi every spring for 15 years.
We later partnered with a Nevada law firm, investment bank Bear Stearns and the American Gambling Association to launch the American Gambling Summit, which was something of a gathering of all the gambling leaders held on the Las Vegas Strip—kind of a “Davos” for the gambling industry. While AGS only lasted a few years, it was very inspirational.
That’s why I’m so pleased to see meetings and conventions for the gambling industry returning. The International Casino Exposition (ICE) will return in London in early April, followed a week later by Indian Gambling 2022, commonly referred to as NIGA, in Anaheim, California. While the full slate of gambling trade shows and conventions won’t be back completely for another year—May’s G2E Asia in Macau has been delayed until late August—it’s a sign that things are getting back to “normal” and we’re able to move forward.
When the Global Gambling Expo was launched in 2001, I was honored to join it as a conference consultant, helping to determine what issues should be discussed, how to raise the educational programs in the industry and what keynote speakers would be most attractive to attendees.
Of course, the conflict between G2E and the World Gambling Congress, the two major trade shows in the business, was interesting. WGC was owned by International Gambling & Wagering Business (IGWB) magazine, and when G2E was announced, IGWB bought Casino Journal, the only other competing trade magazine in the gambling business in those days, which employed me. I decided to separate since I was not enamored with the executives who ran IGWB at the time, and because the entire reason for the purchase was to deny G2E any gambling publication with which to promote the show.
Frank Fahrenkopf, the president of the American Gambling Association at the time, asked me to launch a competing magazine, and Global Gambling Business was born. We became an integral part of the marketing of G2E and it only took one year for the WGC to close its doors.
So the return of ICE, NIGA and G2E later this year is an important step. And there’s no shortage of topics we need to address. The lingering effects of the pandemic, the growth of private equity in gambling, chaotic Asian Pacific markets, rapidly evolving technology, the explosive growth of cashless transactions, and the evolution of sports betting in the U.S. are just a few of the issues we’ll need to address during these upcoming conferences.
And if you thought the world stopped when it came to new games and hardware, you’d be sadly mistaken. The slot manufacturers are lining up a parade of innovative products, unique games with unusual game play, and seamless integration with the players, their money and their rewards. The new trade show floors are going to be bursting with creativity.
But most of all, I want to utilize those always-great networking events to shake some hands and give some hugs to people I’ve missed so much over the last two years. This pandemic has been difficult for everyone, but I think coming out of it, we all recognize what we had because its absence was so striking. So I hope to see you either at ICE or NIGA this month, but for sure at G2E in Las Vegas in October. Time to take the masks off!
The news of the lack of interest of the operator of the game called Baloto, has fallen like a bucket of water among the regular gamblers and why not to Coljuegos, which has had to reverse the increase of the exploitation rights, and now prays that the only suitable operator does not get bored and terminate the contract.
Something similar happened with us, the operators of localized games 3 years ago when the previous administration headed by Juan B. decided to change the way of liquidation of the rights from fixed to variable rate, which gave us a respite and prevented many companies from going bankrupt making viable the operation that today maintains a growth rate that is a reason for pride, being the line that contributes the most to the entity's coffers.
The common point of these decisions is to listen to the entrepreneur who is finally the one who puts the chest and knows the business.
Decree 1451 of 2015 says it well and I quote: ... "To issue the regulations of the games of chance of its competence ...To develop and maintain an offer of games of chance that allows the effective exploitation of the Rentistic Monopoly on them, in the matters of its competence".
And here I enter with the marrow of this Column: watch out for the street, there is already a resolution since 2016 and there is no one to measure it , there is a company that is managing the permit but it is going to burst , the project as it is not viable and meanwhile , illegality is encircling the legal ones and Coljuegos is losing billions . I do not have to tell you how many illegal machines have been confiscated because you (Coljuegos) know it perfectly well, the street market can be equal to the localized ones but lowering the duties and VAT.
Listen and do the same ...