Casino Equipment Market to Have Positive Trajectory Over Next 3-5 Years: RGB

October 17, 2024 CambodiaMalaysiaPhilippines Casino & Hotel

The Philippines and Cambodia are key to the growth strategy of Malaysian casino equipment supplier RGB in the future.

Malaysian casino equipment supplier RGB International Bhd is optimistic about the future of the casino equipment market. The company anticipates significant growth over the next three to five years, driven by strategic expansions in key regions such as the Philippines and Cambodia.

In a recent interview with Malaysian publication The Edge, RGB’s Chief Operating Officer, Steven Lim Tow Boon, emphasized that the gaming industry, particularly the casino equipment sector, is set for strong performance. He noted the Philippines’ crucial role in this upward trajectory, positioning the country as a key driver of growth.

In May, RGB made headlines by securing a major contract with the Philippine Amusement and Gaming Corporation (PAGCOR). This order involves supplying nearly 2,000 slot machines to 16 state-run casinos. Such significant contracts reflect the rising demand for gaming equipment in the region and RGB’s capability to meet this demand effectively.

RGB operates through three main divisions. Its SSM division focuses on the manufacturing and distribution of electronic gaming machines (EGMs), spare parts, a variety of casino equipment, and comprehensive casino management systems.

The Philippines is home to more than 15 privately operated integrated resorts and casinos, utilizing approximately 25,000 electronic gaming machines. The country has consistently achieved impressive gross gaming revenue, totaling US$3.3 billion (RM13.89 billion) in the first half of this year, positioning it to potentially outpace Singapore by next year.

Plans are underway for PAGCOR to privatize all 16 of its casinos and 24 VIP clubs in the coming years.

Despite having around 25,000 electronic gaming machines (EGMs) in its privately-operated integrated resorts and casinos, the Philippines is still one of the least penetrated slot machine markets in the region, particularly when considering the number of EGMs per million residents.

For comparison, Australia has about 200,000 EGMs for its 25 million population, while the Philippines, with its 110 million residents, hosts only 12.5% of that figure.

Lim is optimistic about the gaming industry’s future, especially within the casino equipment sector, predicting a positive trajectory over the next three to five years.

“In the Philippines, there are currently up to eight new integrated resorts approved, with at least one expected to launch each year,” he notes.

Expanding its regional footprint further, RGB has signed an exclusive agreement with Firm 614, a company uniquely licensed by Cambodia’s Commercial Gambling Management Commission (CGMC). This partnership enables RGB to import, sell, and distribute gaming equipment and software to licensed operators in Cambodia. The collaboration highlights RGB’s commitment to increasing its presence in this emerging market.

Chuah Eng Meng, RGB’s senior vice president for sales, support, and marketing, shared insights about the Cambodian market. Currently, approximately 6,500 slot machines are operational across 118 casinos in Cambodia. With ongoing developments, this number is expected to reach 10,000 machines in the coming years. This projection underscores the potential for growth in the region and highlights RGB’s strategic positioning to capitalize on it.

Despite challenges, including impairments totaling RM37.1 million ($8.6 million), RGB reported a remarkable increase in net profit for the financial year ending December 31, 2023. The company’s net profit surged 5.5 times to RM21.21 million ($4.9 million), a substantial leap from RM3.82 million ($886,344) the previous year. Excluding these impairments, the earnings would have more than doubled, reaching RM58.3 million ($13.5 million), demonstrating the robust health of RGB’s operations.

Looking ahead, Chuah expressed confidence in RGB’s ability to overcome financial challenges. He pointed to positive trends already evident in the company’s second-quarter results for FY2024. The outlook remains bright, with RGB expecting to surpass its previous net profit record of RM40.17 million ($9.3 million) set in 2019. In the first half of FY2024 alone, RGB reported earnings of RM40.7 million ($9.4 million), indicating a strong trajectory.