THE dice are rolling in the Asia-Pacific - and they could come up snake eyes for the Philippines.
Competition from Macau and the rest of the region is likely to put a crimp on gross gaming revenue (GGR) growth, especially among high-end punters, according to an industry report.
Casino revenues in Manila crossed the US$2.5 billion mark in 2018, on contributions from the fourth and latest player - the Okada Manila, which Fitch Ratings analysts expect will drive near-term GGR growth in the high single digits.
But regional competition will put a lid on expansion in the long term, the analysts added, noting that the VIP segment makes up almost 30 per cent of private casinos’ GGR in the Philippines.
“The Philippine regulatory framework is less established than other countries in the region, such as Macau, Singapore, Malaysia and Australia,” the report added, as it flagged shades of uncertainty from Philippine President Rodrigo Duterte’s criticism of gambling.
“However, Fitch does not expect such potential changes to be materially harmful to the casino sector as the Philippines benefitted from gambling bans in other South-east Asian countries, with (integrated sorts) providing new jobs and generating substantial tourism and tax revenue.”
Elsewhere in South-east Asia, Fitch said that it does not expect competitive pressure in Singapore to increase, as the Government is unlikely to issue more casino licences beyond the duopoly now enjoyed by Las Vegas Sands and Genting.
“We expect revenues to remain about flat, with the weakness stemming from the Chinese slowdown, offset by continued strong Singapore visitation trends,” the analysts added.
And, across the Causeway, a 10-point hike in Malaysian casino duties could eat into Genting’s earnings before interest, tax, depreciation and amortisation - which came up to RM8.1 billion in 2018 - by around RM700 million a year, Fitch has estimated.
But the analysts added that they “also expect revenue growth, particularly from the non-gaming segment, with new facilities under the company’s redevelopment master plan at Resorts World Genting driving visitor volume”.