Mass market to drive gaming performance in SEA: Fitch

Chinese tourism expenditure is expected to drive gaming performance in South-east Asia, with mass-market gaming tourism looking to continue growth, wrote a report from Fitch Ratings on Tuesday.

“We feel VIP tourism across the region will continue to recover, and ongoing growth in mass-market gaming tourism will support regional expansion and Australian construction. Overall, we view the APAC market as underpenetrated, at least in the mass-market segment,” wrote Alex Bumazhny, senior director at Fitch Ratings.

Fitch says it expects Macau revenues to grow in the high-single-digit range in 2018, or slightly above China’s GDP growth, led by the mass market segment.

A rising middle class in China and improving infrastructure development will support this growth, it added.

In Singapore, with GGR grew around 10 percent in 17H1, after falling 30 percent in 2015-2016. Fitch says it expects GGR to continue to grow in 2018, driven by a sustained growth in visitor arrivals.

The Malaysian gaming market will likely remain stable, says Fitch, underpinned by a domestic, mass-market focus at Resorts World Genting.

Fitch noted that visitor arrivals at the resort were steady in 1H17, but are likely to grow in 2018 as more attractions open following redevelopment.

Finally, Fitch says it expects Australian gaming operators’ VIP revenue to stabilize in 2018, following a 34 percent decline in 2017 as a result of “Chinese regulatory actions”. Fitch here is referring to the arrest of Crown resort employees in 2016 over illegal marketing of casinos in the country.

“However, resilient underlying domestic demand, supported by a favorable regulatory environment, continues to be the main factor supporting our expectation of stable cash and EBITDA generation in 2018,” it wrote.

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