Operations in Macau rise; those in China and Southeast Asia less so: Moody’s

Over the next 12 to 18 months, Moody’s predicts a recovery in casino industry earnings and cash flow, mostly in Macau, due to an increase in post-pandemic tourist numbers. However, because of Chinese official advisories against gambling abroad, the future of other Asian casino markets is unclear.

Due to Singapore’s varied tourism and non-gaming attractions, Moody’s cites lesser risk for Malaysia’s Resorts World Genting and Singapore’s Resorts World Sentosa and Marina Bay Sands when compared to Southeast Asia, including Cambodia.

According to the analysis, Macau’s gross gaming revenue (GGR) will slow down from the 2023 spike with the implementation of border restrictions and reach 75–80% of pre-pandemic levels by 2024–2025. Macau saw 75% of 2019 GGR in Q1 2024, with mass-market segment GGR at 110% of that of China, despite slower economic development in China levels in 2019 and predicted to increase to 115% by 2025. It is anticipated that strict laws governing junket operators will limit the expansion of Macau’s VIP gaming industry.

According to Moody’s, there could be a risk to Southeast Asia’s tourism and casino earnings if Chinese visitors drastically drop out as a result of embassy advisories against gambling abroad. Given that both Singapore and Malaysia have substantial non-gaming businesses and are less dependent on Chinese visitors than Cambodia, their gaming sectors are thought to be less vulnerable than Cambodia’s.

Revenue for NagaCorp Ltd. in Cambodia is still below 2019 levels, but over the following two years, a gradual recovery is anticipated. Though it is predicted that Chinese tourists will return, China’s stringent rules mean that a big comeback in the VIP gaming market that depends on junket operators is not envisaged.

Moody’s expects enhanced gaming operators in Macau and Southeast Asia to be able to pay off debt from the pandemic thanks to their earnings and cash flow; by 2024–2025, Macau-focused enterprises will have greater capacity to reduce their indebtedness.

Original Story by: GGRAsia