Singapore’s casino duopoly, and to a lesser extent Malaysia’s Resorts World Genting, could suffer a short-term hit to their gaming revenues in the coming months as premium players increasingly fly to Macau, according to a new research report by Nomura analysts.
In a Wednesday note, analysts Tushar Mohata and Alpa Aggarwal said that the number of people travelling to Macau from Singapore and Malaysia had been steadily increasing since China’s border restrictions were relaxed in January, with around 4,000 visitors from each country visiting Macau in March alone – representing 43% for Singapore and 24% for Malaysia of pre-COVID levels.
Many of these, they added, are likely to be VIP and premium-mass players from visiting Macau after almost three years of border restrictions.
“Premium players have a higher propensity to gamble in different jurisdictions because of better affordability,” they said, noting that the impact would be felt by casino operators back home, particularly in Singapore.
“In the near-term, this might lead to some gross gaming revenue which was ‘accruing to’ Singapore and Malaysia casinos to shift to Macau due to pent-up demand.
“Given Singapore’s more premium mix vs Malaysia’s most domestic-oriented customer base, we believe the impact will be somewhat more pronounced for Singapore casinos.
“However, we believe any negative impact of this GGR shift is likely to be minimized as the initial pent-up travel demand to Macau stabilizes after the first few months.
“Further, resorts in Singapore and Malaysia are likely to see a positive offset from incremental GGR from inbound Chinese tourists as their numbers scale up gradually.”
Macau reported GGR of MOP$14.72 (US$1.82 billion) in April, its highest monthly tally since the start of the COVID-19 pandemic.
