Ratings agency Fitch expects gaming revenue in Singapore to grow by 10 percent in 2024, following a 2023 return 15 percent higher than pre-pandemic levels.
In its latest Global Gaming Outlook 2024 report, Fitch notes that it expects Singapore revenue to be driven by increasing foreign visitors in 2024, as in October 2023 arrivals were at around 25 percent below 2019.
‘In particular, arrivals from mainland China are still well below pre-pandemic levels, despite improvements since the reopening. Market leader Marina Bay Sands has opened around 1,200 renovated rooms in the first nine months of 2023 and Genting Singapore Ltd., has extended credit to customers over 2023.’
Meanwhile, the rating agency considers that the recovery in Malaysia will ‘continue to lag’, although anaylsts expect revenue to grow by 9 percent in 2024. However, ‘revenue remains well below pre-pandemic levels, mainly due to weather-related events since 2022’.
‘Nonetheless, growth over 2024 should be driven by a steady increase in domestic traffic and foreign tourists, and supported by the likely repair of the access road by 1H24.’, it wrote.
The report that was released on Thursday notes that the Macau gaming industry will continue to recovery in 2024, as the entity expects Macau’s total gaming revenue (including VIP) to be 79 percent of 2019 levels despite concerns of growing economic weakness in China.
Fitch mentions that the relaxation of strict coronavirus policies and continued growth of airline travel has brought mass market baccarat to 97 percent of 2019 levels during 3Q23 versus 11 percent in 3Q22.
‘Early 2024 comparisons will be favorable while increasing visitation due to the return of air capacity to the Hong Kong and Macau airports should further drive growth.’
‘Despite the rapid improvement in Macau, there are concerns by North American investors regarding regulatory and political changes, such as the revamping of VIP regulations that has caused a material, and potentially, permanent change in the level of gaming revenue from that segment.’
Regarding the Australian gaming market, Fitch notes that wary consumers and compliance costs may mute profits. ‘Fitch expects that rising cost-of-living pressures will see demand across both casinos and online gaming operators continue to show signs of weakness in 2024.’
Although we expect a resilient base level of domestic demand gaming across online gaming operators and mass play in casinos. Fitch believes betting agencies will be better able to absorb the weakness as the casino operators are dealing with increased costs from elevated compliance and remediation costs.’
As a result, Australian casino operators are expected to remain focused on shoring up their financial profiles as they resolve outstanding investigations, most notably with the Australian Transaction Reports and Analysis Center (AUSTRAC), and adapt to regulatory changes.
‘The regulatory landscape also continues to evolve for betting agencies, with ongoing harmonization of regulations across states and moves to ban advertising. However, we expect the impact to differ by operator, with the changes likely to reduce structural advantages that foreign-owned online agencies have benefited from and benefit incumbent operator, Tabcorp Limited.’