LAST WORD 78
Gaining critical mass Sharon Singleton
Managing Editor, AGB
Asia’s gambling industry is heading into 2018 on a firmer footing than it has for several years, with most major markets having chalked up strong growth in 2017, though China and its policies will continue to be the main driver when it comes to performance.
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acau, the region’s gambling capital, saw gaming are concerned. However, elsewhere, most still gross gambling revenue jump 19.1 percent need to court that mainland visitor. To be sure, Asia’s in 2017, rising for the first time in three middle class is expanding, with Thailand and India in years. The growth was unexpectedly led particular, showing promise as source markets, but the by the VIP market, which many analysts had given numbers are still eclipsed by China. So what are the latest trends and what are the risk? up for dead following Beijing’s anti-corruption drive. According to figures from the Gaming Inspection According to analysts, in the most recent quarter, and Coordination Bureau (DICJ), VIP revenue in the mass market sector in Macau performed better the final three months of the year, rose 21.9 percent, than expected. Although some surveys have indicated that the moderating from the 35 percent clip 17Q3, but still outstripping the 17.1 percent growth rate recorded by more savvy China tourist may be looking further afield than Macau, Morgan Stanley contends that the the mass market. Analysts are expecting another year of growth, with visitation base has spread to second-tier cities… and Morgan Stanley upping its estimates to 16 percent for that bodes well for the outlook. It says it expects these cities to become bigger and overall GGR, while Bernstein wealthier, with their residents sees an increase of 10 percent. more willing to spend. The Philippines also In the first 11 months of recorded a strong year, despite To be sure, last year visitation to Macau coping with the fallout from Asia’s middle class from second-tier cities was up a major attack on the Resorts 13 percent, while visitation World Manila casino in June, is expanding, with from Tier 1 cities, such as which killed 37 people. The Thailand and India in Shanghai and Beijing, was IRs in Entertainment City up only 3 percent, it said. chalked up 27 percent growth particular, showing And according to a survey, and that is likely to extend promise as source residents of these cities to a 32 percent increase this indicated a strong propensity year, according to Morgan markets, but the to want to travel this year. As Stanley estimates. numbers are still a result, Morgan Stanley has Likewise, Singapore’s IRs upped its 2022 estimate for showed a steady recovery, eclipsed by China. Macau GGR to $60 billion helped by the VIP business, from $53 billion previously. while casinos in Cambodia This renewed focus on and Vietnam also powered ahead. Although overall market figures are not available, mass will be a positive for the Macau market, especially NagaCorp, Cambodia’s biggest operator, posted a 40 as VIP is forecast to slow again this year. According to Bernstein, the sector will face renewed headwinds from percent gain in interim GGR. While VIPs were the main story in 2017, the focus cooling measures on Chinese real estate, credit tightening is expected to switch back to the mass market this year. in China and a continued focus on capital outflows. In the short term, other regional destinations are China will continue to be the dominating factor due to the sheer strength of numbers. It is the world’s largest unlikely to get such as lift from China’s new travellers, outbound travel market, with figures projected to top who judging by prior patterns will likely opt for familiar 200 million by 2020, according to CLSA estimates. destinations such as Macau for their first foray abroad. Gaming venues will be key beneficiaries, the firm said. However, lessons from the past have also shown that Operators in the Philippines, which does allow locals these travellers are prepared to spread their wings to play in casinos, can boast decent support from the relatively quickly. If they do the pie is big enough to domestic market, at least as far as visitation and non- go around Asia’s IRs.
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Asia Gaming Briefings | February 2018
