Ratings agency Fitch expects strong growth across all of Asia’s major gaming markets in 2018, led by high single-digit increases in Macau which will slightly outstrip China’s GDP growth.
In a report on the 2018 Global Gaming Outlook released on Tuesday, Fitch also expressed confidence in both Singapore and Malaysia, while it tipped Australia’s VIP segment to rebound after falling 34% in 2017 in the wake of 16 Crown Resorts employees being jailed in China for gambling offences.
However it said the mass market would drive gaming forward across the majority of the region, including Macau.
“Fitch maintains a positive long-term outlook on Macau, which should benefit from the rising middle class in China and surrounding infrastructure development,” it said. “Macau’s gaming revenues grew 19% in 2017 through October, reflecting double-digit growth in the VIP segment (28% growth through September), 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.”
In particular, Fitch said it expects Chinese tourism to continue Asia-Pacific’s upward trend, supporting “regional expansion and Australian construction.
“Overall, we view the APAC market as underpenetrated, at least in the mass-market segment,” it said.
A lack of competitive pressures and the opening of more attractions at Resorts World Genting as part of its Genting Integrated Tourism Plan will aid Singapore and Malaysia respectively while Australia can expect a far more positive 2018 with VIP revenue to stabilize.
“However, resilient underlying domestic demand, supported by a favorable regulatory environment, continues to be the main factor supporting our expectation of stable cash and EBITDA generation in 2018,” Fitch said.
