The credit quality of gaming companies across the Asia-Pacific region is no longer primarily driven by gaming demand but by the regulatory and political environment within which they operate, according to S&P Global Ratings.
The ratings agency also names Macau and Singapore as the safest gaming jurisdictions for investors because their regulatory stability, high barriers to entry and predictable cash flows outweigh the advantages of lower taxes and monopoly operations enjoyed by operators in places like Malaysia and Cambodia.
In a detailed report issued Wednesday, S&P said that while regional gaming revenue should continue to grow at between 3% and 5% annually over the next few years, such healthy demand masks a “widening divide in credit quality across Asia-Pacific gaming firms,” with policy decisions, capital allocation and market-specific risks to increasingly determine which operators perform.
“In our view, regulatory risk is structural and intrinsic to the Asia-Pacific gaming sector,” the ratings agency explains.
“In many Asian jurisdictions, political incentives to prioritize social safeguards frequently override economic stability, leading to abrupt policy shifts. Cultural stigma and political rifts drive this volatility.
“Assessing regulatory risks of the respective markets is essential to discerning the credit quality of each player. The quality and predictability of cash flows for regional gaming operators depend largely on the attractiveness of each country and its competitive landscape.
“The importance of these factors varies, but market scale and regulatory stability are more significant than elements such as gaming taxes or market dominance.”
In this respect, S&P has split jurisdictions into four categories based on regulatory maturity, growth prospects and credit characteristics. The four categories are: established hubs, headwind markets, mid-tier markets, and potential markets.
Macau and Singapore represent the “established hubs,” benefiting from mature regulation, tourism infrastructure and high barriers to entry. Although competition between Macau’s operators is intense, regulatory stability and the low risk of disruption from online gambling continue to underpin cash generation, S&P said.
Australia, New Zealand and the Philippines are the headwind markets where regulatory tightening and weaker consumer spending continue to impact earnings. S&P also noted that the Philippines and New Zealand are the two jurisdctions in APAC to adopt more lenient stances toward online gambling which may reduce the returns and feasibility of large-scale physical casino investments.
The mid-tier markets of Malaysia and Cambodia are seen as less appealing to international visitors, who tend to prioritize the security and transparency of hubs such as Singapore or Macau, according to S&P. As for potential markets, Thailand and Japan represent significant long-term addressable markets but “long development timelines and political uncertainty mean they are unlikely to contribute materially to sector cash flow before the next decade.”
Detailing how Asian cultural sentimentality can impact credit quality, S&P explained that, unlike their Western counterparts, many Asian policymakers place a high emphasis on the perceived social costs of gambling which can at times result in rapid and unpredictable policy shifts.
Specifically, the ratings agency referenced a 2025 Pew Research Center survey which found that roughly 70% adults in Indonesia, India and South Korea view gambling as immoral compared to around 30% of adults in the US or Australia.
“This social stigma acts as a political lever. When rapid industry growth triggers public outcry, legislators often respond with high-impact policy U-turns to maintain social order,” S&P said.
“The Philippines is a case in point. Twenty-fold growth in online gaming between 2022 and 2025 ignited concerns over addiction, prompting sudden restrictions on e-wallet linkages in August 2025. Such shifts can cause severe revenue erosion, as seen with the dominant operator DigiPlus Interactive Corp.
“Political risks also affect project development. For example, shifting political coalitions and public backlash led to the shelving of casino legalization plans in Thailand.
As emerging gaming markets such as Japan and Thailand move toward liberalization, operators must navigate a landscape where political decisions are tied to shifting cultural perceptions.”
