As 2021 draws to a close, Fortuna Investments Director Tim Shepherd offers up his forecasts for what we might expect in the year ahead. He says 2022 will be the year of the local casino/club market in Asia Pacific.
China’s Belt and Road initiative, now well underway, will continue to provide massive loans to poorer governments around Asia. Those loans are accompanied by plane loads of businessmen and labour who will take over land, factories and build strong, vibrant mainland Chinese communities, supported by Chinese banks locally licensed and operating, wherever they go. This is already well underway in Laos and Cambodia. These are facts.
The West-driven propaganda move for multinationals to move investment into manufacturing ABC (Anywhere But China) can only benefit Southeast Asia and South Asia. Every Samsung factory comes with hundreds of parts manufacturers, suppliers, consultants as well as entrepreneurs opening restaurants, KTV and more.
The casino industry loves regulars and everything is set up in SE Asia for the local clubs and smaller casinos to make big returns from that sector, while the bigger ones will struggle to realign their expensive investments into the VIP sector into any decent return overall.
Lastly, the days of the mainland Chinese traveling long distances to gamble is over, (remember CLSA predicting 200m a year outbound?). Casinos and clubs close to the Chinese border will succeed, providing post Olympics China accepts the need to allow its citizens to cross land-based borders to trade and that those casinos and clubs have other attractions and do not chase players inside the country.
Those players and tourists will experience travel as before, but be close enough to home to bolt back if the situation deteriorates quickly, as the last two years has proven it can.
Conclusion? In terms of returns on investment in 2022, smaller and local will win the day across the region.