Philippines’ 1Q22 Entertainment City GGR seen up 15% from the prior quarter

Solaire Resort & Casino

Gross gambling revenue (GGR) in the Philippines’ Entertainment City is likely to be up 15 percent in the first quarter compared with the prior three-month period, driven by domestic demand in mass and slot revenue, says Morgan Stanley.

The firm sees GGR for the quarter of PHP27 billion, which would be about 68 percent of its 2019 levels, prior to Covid. 

Morgan Stanley expects industry GGR in the country to reach 85 percent of its pre-pandemic levels by the fourth quarter as travel mobility resumes. 

“Pent-up demand and election-induced consumption could provide upside to our estimates,” it said, referring to the upcoming presidential elections on May 9th.

Bloomberry Resorts, the operator of the Solaire Resort & Casino, is the firm’s top pick in the Philippines’ casino sector. 

Judging by recently reported figures from rival Okada Manila, Morgan Stanley estimates that Solaire has maintained its leading market share at 34 percent. It estimates the company will have generated PHP2.3 billion in EBITDA for the quarter, although it says it is 7 percent below consensus estimates.

For 2022, the firm sees Bloomberry reaching EBITDA of PHP11.3 billion, which would be 57 percent of 2019 levels. 

Okada Manila saw its EBITDA decline 20 percent from the prior quarter to PHP1.2 billion, due to a drop in VIP revenue of 33 percent. Mass and slot continued to grow, rising 7 percent to reach 76 percent of its pre-Covid level.

“We expect Okada to have lost GGR market share from 30 percent in 4Q21 to 25 percent in 1Q22, it said.