fiscal growth fuelled by casinos - 14th June 2015
down: Casino chips displayed at the Global Gaming
Expo Asia in the worlds biggest gambling hub
of Macau. With casino revenues plummeting, Macau is
seeking to reinvent itself as a family-friendly mass
market destination. AFP
Asian gaming industry is going through a shake-out
as Chinas corruption crackdown and slowing economic
growth are scaring off its golden goose from Macau
high-stakes Chinese gamblers.
casino operators are betting that the downturn is
temporary and that the drop in VIP gaming revenues
will bottom out. Across Asia, the race is on to open
more integrated resorts in the region.
2020, analysts say the Asia-Pacific region, including
Russia, could see at least 17 casino projects coming
online six in Macau, three in South Korea and
at least two each in the Philippines, Australia, New
Zealand and Russias integrated entertainment
for Singapore, it has seen its share of VIP gamblers
shrink in recent quarters, but analysts do not see
this rash of new projects coming onstream as a threat
to the Republic. The market is big enough, they say.
the boom in gaming projects in Asia? The answer lies
in two words: Chinese customers.
tourism from China topped 100 million travellers for
the first time last year.
Kong and Macau remain the biggest beneficiaries of
the travel boom, but North Asia, particularly Japan,
has seen rising Chinese tourist flows due to the weaker
yen and relaxed visa policies.
Singapore, even though some Chinese gamblers are shying
away, its two casinos are still profitable, owing
to steady mass gaming growth from Malaysia and Indonesia.
is betting on new projects to stimulate demand, by
appealing, for example, to a fresh fad for all things
French among affluent Chinese.
where Las Vegas Sands US$2.7bil (RM10.28bil)
Parisian comes in, with its half-scale replica of
the Eiffel Tower.
is also a Louis XIII casino resort, named after the
French king who built the hunting lodge that eventually
became the Palace of Versailles.
strategy is based on the belief that the market can
withstand additional supply as long as there is a
Korea is also getting into the game. Mainboard-listed
Genting Singapore is in a US$1.8bil (RM6.76bil) joint
venture with Landing Jeju Development to build Resorts
World Jeju, to be completed by 2017.
is one of three new casinos in the works in South
South Korea still has some way to go before it can
catch up with Singapore. Last year, it generated US$2.4bil
(RM8.99bil) in casino revenues, a little over one-third
of Singapores revenues.
for another new kid on the block the Philippines
its revenue reached US$2.5bil (RM9.36bil) last
year, according to regulators.
is the unknown factor in this equation.
it takes off, as several casino operators hope it
does, it could be a massive market. With estimated
annual revenues of between US$15bil (RM56.18bil) and
US$30bil (RM112bil), it could potentially be the second-largest
market in Asia, behind Macau.
attempts to legalise casino gaming in Japan have been
delayed repeatedly by lawmakers concerned about addiction
and organised crime.
industry experts do not see the rash of new integrated
resorts as a significant threat to Singapores
is unlikely that new entrants to the casino market
in Japan, Korea, Cambodia, Vietnam or the Philippines
will significantly cannibalise the Singapore market.
The biggest threat to Singapore would likely be if
Thailand or Indonesia were to legalise gaming, but
that is unlikely to happen in the near term,
said Paul Bromberg, CEO of Spectrum Asia, a regional
if competition is still not as dire as some make it
out to be, there is no denying gaming revenue growth
in Singapore has stagnated, analysts say. Would a
third IR (integrated resort) help Singapore regain
experts say there appears to be little support among
Singaporeans for a third IR.
does the government seem to have any plans in the
offing, going by comments from Senior Minister of
State for Trade and Industry Lee Yi Shyan in Parliament
last month, even with the moratorium on such licences
ending in 2017.
the economic case for a third IR has not been made.
operators themselves now also recognise that casinos
alone do not necessarily bring additional visits and
have stepped up efforts to offer more innovative retail
and family-oriented entertainment.
rather than build more IRs, perhaps Singapore can
look closely at how to beef up its non-gaming offerings.