Resorts World Sentosa

Genting Singapore’s gross gambling revenue isn’t likely to return to its pre-Covid levels due to an expected lack of Chinese gamblers and greater competition from around the region, Maybank said in a note. 

Analyst Yin Shao Yang has revised upwards his estimates for the company’s earnings for this year and next due to an earlier-than-expected opening of the country’s borders. However, for 2024, he expects a two percent dip in earnings. 

“China has changed the Asian gaming landscape,” he wrote, explaining that VIP won’t return to pre-Covid levels given that China made cross-border gambling a crime in March 2021, imposing a penalty of up to ten years.

In addition, the mass market is likely to be aggressively targeted by integrated resorts in the Philippines, Cambodia and Singapore as they seek to attract the island’s premium mass gamblers. 

The real game-changer could be if Thailand were to open up its market, which is a possibility currently being evaluated by a parliamentary committee. 

These resorts would potentially draw a lot of Chinese mass gamblers away from Singapore.

“Even without IRs, a whopping 11 million Chinese visited Thailand in 2019,” the note said. “Should Thai IRs materialize, we would wonder how financially viable the S$4.5 billion RWS 2.0 expansion will be.”

Both Genting Singapore and Las Vegas Sands announced in 2019 that they were planning a major expansion of their non-gaming offerings, which came in return for more gaming tables.

Maybank said Genting Singapore had already invested $929.1 million in the upgrades to Resorts World Sentosa by the end of last year. 

Maybank has raised its forecasts for 2022 earnings by 163 percent and for next year by 123 percent. It said it has brought forward its forecast that RWS’ VIP volume will return to 83 percent of 2019 levels to mid-2022, compared with its earlier expectations for that to happen from 2024. It sees mass recovering to 92 percent of its prior levels next year, from 2024.

Singapore reopened its borders from the beginning of April and axed pre-departure and on-arrival testing from April 26th. Maybank said its channel checks have noted a discernible rise in tourists ever since. 

Executives at rival Marina Bay Sands have said that they are seeing a strong recovery in Singapore traffic.

“Assuming there’s no more surprises from the COVID situation. We like to think that Singapore will return to a $1 billion run rate in this year. So, $58 million in March feels pretty good, and that momentum is continuing,” Chairman and CEO Rob Goldstein said on the company’s 1Q22 results call.

“It’s all coming back. We saw outsized demand from free independent travelers on the pure leisure side, we saw premium mass. We saw high-end plate coming out over the rim,” he told analysts, adding that at present Singapore is uniquely positioned due to the ongoing travel restrictions around Asia.