Singapore Casino Market Forecast to Grow in 2018

Singapore’s two casinos are expected to see their businesses grow in 2018, with their gross gaming revenue (GGR) driven higher by continued growth in visitor arrivals. This is the latest assessment of the Southeast Asian country’s gambling market by Fitch, which is in stark contrast to the report it released at the start of 2017, when GGR at the island’s two integrated casino resorts were expected to stay flat at around US$4 billion versus the previous year due to weak VIP play.
Fitch Ratings Inc has reassessed its forecast following a good first half of the year in which GGR increased by 10% year-on-year, after experiencing a huge 30% decline over the 2015/2016 period. Helping to propel the numbers forward is an impressive 4% jump in visitor arrivals for the first eight months of 2017, with Chinese tourists by far the biggest segment and representing 19% of all arrivals over the period.
In fact, for the first half of 2017, visitors from mainland China topped 1.55 million people, up by 5% y-o-y, with Fitch also describing the Asia-Pacific market as “underpenetrated” in terms of its mass-market sector. Given its view on the competitive nature of Singapore’s casino market, Fitch further noted in its report published on Monday:
“We do not believe competitive pressures in the Singapore market will increase in the near term as new licences are unlikely.”
Echoing the overall positive sentiment, brokerage firm Sanford C. Bernstein Ltd also revised upward its full year estimate for Singapore’s VIP casino market in 2017 by a whopping 18%. According to the firm, combined VIP revenues for Marina Bay Sands (LVSC), and Resorts World Sentosa (Genting Singapore Plc) will reach almost US$1.73 billion in 2017, versus its prior estimate of around US1.47 billion.
Meanwhile, Fitch said that the Australian gaming market would “stabilise” in 2018 after experiencing a sharp 34% decline this year due to “Chinese regulatory actions”, and fallout from the Crown Resorts incident. In addition, Macau is forecast to generate single-digit growth nex year, with the mass-market segment helping to drive the market. As the report subsequently explained:
“Macau’s gaming revenues grew 19 percent in 2017 through October, reflecting double-digit growth in the VIP segment, which tends to be more volatile and is heavily reliant on credit availability on the mainland. Our 2018 and longer-term expectations discount the current year-to-date VIP trajectory.”