Casinos stay robust in Singapore, Malaysia as Cambodia, Thailand take hits: S&P Global
Return of Chinese tourists to the region as well as product stickiness aid the industry’s recovery, says analyst
[SINGAPORE] The casino and gaming industry looks set to remain resilient in some Asean economies, a report by market intelligence provider S&P Global indicated on Tuesday (Jul 8). This is despite increased volatility in the macro environment, as tariffs and labour constraints continue to bring uncertainty.
Industry revenues continue to be propped up by a premium mass gaming market in the region, noted S&P Global analyst Ong Hwee Yee.
Pointing out that gaming as a product has high stickiness, she said: “Affluent players may be less exposed to a weakening economy than the lower-income groups... Players return and remain engaged.”
In particular, gross gaming revenue (GGR) in Singapore, Malaysia and the Philippines is expected to approach, or even surpass, pre-pandemic levels, she added. This is based on improved visitation numbers and a strong domestic market providing a boost to industry players.
Moreover, the return of Chinese tourists to South-east Asia is key to this recovery, the analyst said, noting that Chinese visits to Malaysia and Singapore have reached pre-pandemic figures.
Singapore had a surge in Chinese players following the introduction of visa-free travel for such tourists last February, driving a 50 per cent year-on-year increase in GGR in the first quarter of 2024, the report showed. Malaysia had introduced a similar scheme in December 2023.
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Among the major operators in the region’s casino sector is Malaysian hospitality giant Genting Bhd, which has a presence in Genting Highlands, Langkawi and Kijal in Malaysia, as well as Sentosa in Singapore.
It is considering setting up a casino in the United States, within the state of New York – which S&P Global flags as an “event risk” that could impact the group’s overall revenues.
The firm noted that Genting Bhd could establish a strong foothold in the American market if it secures a full casino licence. The new operation could also benefit from Genting Bhd’s existing infrastructure and network, as it already has a local presence in the form of Resorts World New York City.
However, failing to gain the licence could impede the competitiveness of the group’s New York operations, S&P Global said in its report.
Uneven recovery
Other markets in the Asean gaming industry, such as Cambodia, are expected to have a slower recovery in GGR, Ong said.
Often relying on Chinese junkets – all-inclusive trips for VIP players – casinos in these markets have suffered as Chinese authorities crack down on junket operators, which have been associated with money laundering and corruption.
This has dealt a heavy blow to the Cambodian gaming market, which has long depended on these trips to draw high-stakes gamblers. Chinese junket operators accounted for about 70 per cent of Cambodia’s GGR in 2019, S&P Global noted.
Over in Thailand, hopes that the government would legalise casinos were dashed, as the flagship Bill of suspended prime minister Paetongtarn Shinawatra was dropped on Tuesday.
The Cabinet withdrew the Bill, as it “needs more studies that require further understanding and social context”, government spokesperson Jirayu Huangsab said.
Most forms of betting are illegal in the kingdom. Paetongtarn’s Pheu Thai party had argued that casinos could provide a significant boost to the country’s faltering tourism sector, which this year reported a significant dip in visitor numbers, contributing to the country’s economic woes.
Julapun Amornvivat, Thailand’s deputy finance minister, said the authorities “accept it’s not the appropriate time”. “It’s a shame, the delay is a lost opportunity for the country,” he added.
S&P Global’s Ong said the “market potential is massive”, if Thailand were to pass such a Bill. However, the move could also threaten operations in nearby markets, she added.
Enhancements to regional casino operators’ existing assets could mitigate this risk, the analyst said, citing Marina Bay Sands’ and Resorts World Sentosa’s multibillion-dollar upgrades.
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