Absence of Chinese high rollers impacts APAC casino jurisdictions

According to a research by S&P Global Ratings Inc, the lack of Chinese high rollers is having an effect on casino jurisdictions in Asia-Pacific outside of Macau, with Cambodia being used as an example.

The gross gaming revenue (GGR) of Cambodia’s casino business behind that of its regional competitors despite the country’s tourist sector having returned to roughly 84 percent of pre-COVID levels. This is because fewer high rollers are visiting the country’s casinos. Through its NagaWorld complex, S&P Global stated NagaCorp Ltd, which has a monopoly on casino activities in the capital of Cambodia, Phnom Penh. 70% of Naga’s GGR between 2017 and 2019 comes from VIPs. However, S&P Global anticipates VIPs to contribute less than 10% of Naga’s overall GGR when Chinese junkets are eliminated. Naga’s activities won’t be back to pre-pandemic levels for more least three to four years, according to the institution.

As the gaming industry changes, NagaCorp may need to modify its plans for the $3.5 billion Naga 3 expansion, according to S&P Global. The building schedule for Naga 3 has previously been extended by the corporation by four years, until September 2029.

By advertising non-gaming attractions in the meantime, NagaCorp may concentrate on capturing a greater piece of the mass market. The company’s rating is “CreditWatch with negative implications” as a result of the risks involved with refinancing $472 million in senior unsecured notes that mature in July 2024. According to S&P Global, “We believe the outcome of its refinancing efforts will drive the credit rating on Naga for the rest of the year.”

The country’s casino monopoly operator, Genting Malaysia Bhd, has helped GGR in Malaysia display a steady resurgence. By 2024, S&P Global anticipates “a full recovery”. The rating company predicts an improvement in credit quality for Genting Malaysia and its parent company Genting Bhd by 2024, with investments staying restrained in relation to cash flow producing capacities.

S&P Global predicts that the Macau market will completely recover in 2024, with VIP GGR lagging behind as a result of stricter controls on junkets brought about by revisions to the gaming legislation. As a consequence, it will likely take at least the next one to two years for Macau’s total GGR to reach pre-pandemic levels.

Original story by: GGRAsia