The surge in housing prices was the primary driver behind Singapore’s mass gross gaming revenue (GGR) surpassing pre-COVID levels, according to Samuel Yin Shao Yang, associate director at Maybank Investment Bank.
Speaking with AGB, the analyst highlighted that wealth in Singapore largely surged during the COVID period. This increase was fueled by a sharp rise in local asset prices, contributing significantly to mass GGR performance, primarily from the domestic market.
According to Marina Bay Sands‘ (MBS) financial results, its mass win stood at $569 million in 3Q23, representing 139 percent growth compared to 3Q19.
During the quarter, net revenue at Marina Bay Sands (MBS) saw a 34.3 percent growth, reaching $1 billion from $756 million the previous year. This increase coincided with the ongoing recovery of travel and tourism spending in Singapore.
The analyst underscored the significance of gaming machines, emphasizing the popularity of slot machines in the market and their substantial contribution to GGR. He added, “Slot machine GGR in MBS grew by 20 to 30 percent.”
Geopolitical tensions continue to benefit Singapore
Singapore’s VIP recovery has not lagged behind either. Yin noted that the industry-wide VIP segment in Singapore only recovered 75 percent compared to 2019 levels. However, MBS VIP figures fully recovered in 3Q23.
According to the analyst, the geopolitical tensions between the West and China have actually benefited Singapore. Many wealthy Chinese individuals no longer want to migrate to Western countries.
He additionally pointed out that many mainland Chinese are increasingly choosing Singapore as their destination. Despite China’s economic slowdown, it is evident that the Chinese prefer moving to Singapore over Canada or Australia and this trend also contributes to further VIP rebound, he indicates.
The analyst notes that due to China’s government crackdown on cross-border gambling and strengthened outflow controls, Chinese punters no longer play a significant role in the segment.
He recalls that when MBS opened in 2010, the VIP market was predominantly Chinese-based.
On the other hand, Yin notes that there has been a shift in the VIP and mass market dynamics with Chinese players. Now, more Chinese players choose to gamble in the mass room rather than the VIP.
Duopoly
Currently, both MBS and Genting Singapore’s Resorts World Sentosa (RWS) are investing billions in expansion plans.
According to the latest financial results disclosed by RWS, Genting Singapore has significantly increased its investment amount to $5 billion for the expansion plan, whereas the original amount was only $2.8 billion.
Genting Singapore stated that the investment plan would “firmly anchor RWS as the most sought-after tourism destination in Asia and propel the group’s strong future growth.”
MBS pledged a SG$4.5 billion ($3.4 billion) expansion plan in 2019, but the project faced setbacks due to COVID. Singapore authorities have granted an extended period to MBS to commence construction.
The gaming operator must start works by April 2024, with the completion deadline set for April 2028.
In response to the overall picture of the expansion plans, Yin notes that the operators aim to align with the government’s requirements to enhance the country’s tourism offerings.
Singapore has a duopoly in the gaming industry. The analyst notes that MBS holds approximately 60 percent of the market share, while RWS accounts for 40 percent.
However, the two properties have distinct characteristics that cater to different markets. MBS is situated near the main business district and is well-connected to public transportation via the metro, while RWS is not.
As a result, MBS serves more as a business destination, while RWS is oriented towards holiday visitors. MBS hosts numerous events, making it a suitable space for business activities, while Sentosa is busy during the summertime and less occupied for the rest of the year.
