The gaming sector is projected to continue to grow steadily during 2017, according to Praveen Choudhary, managing director of Asia Gaming Research at Morgan Stanley.
Choudhary was citing the findings of the latest research done by the Asian branch of the American financial services company. “Macau’s cycle has turned and 2017 could show 10 percent Gross Gaming Revenue [GGR] and 13 percent earnings before interest, tax, depreciation and amortization [EBITDA] growth, the first in four years,” the research reads.
The analyst was speaking on the sidelines of a presentation on integrated resort development in Asia that was included at the press conference that launched the 2017 edition of the Global Gaming Expo (G2E Asia).
The positive estimate revisions and growing dividends should also extend positive benefits for the stock prices of some of the gaming operators, and in particular Morgan Stanley mentions Wynn Macau and Galaxy as being well positioned for 2017.
Questioned on the potential threat for the territory of the recent legalization of gambling operations in Japan, Choudhary said the impact of such a decision in the local market would be “unlikely” to be great since Macau enjoys a superior location and closer relations with the Chinese mainland that facilitates the continued growth of gaming-oriented tourism.
Choudhary took the example of Singapore to make his argument: “When Singapore opened casinos in 2010 the gaming market earned USD6 billion in the first year without impacting Macau at all. So it’s possible that Japan opens up, and that will take three to five years, and the same happens. […] The implementation bill [of Japan’s casinos] which will come out in the next six to twelve months, will have a lot more details.” Those details, he said, will determine whether the casinos in Japan will be VIP or mass market-centered and will cater to Japanese only or also attract overseas gamblers.
During his speech, Choudhary addressed the topic of the integrated resorts in Asia and the advantages for the places where they are located not only in terms in visitation and job creation (as are most commonly addressed) but also on less visible criteria like “a higher service mentality,” and even a “fashion sense.”
In this perspective, the analyst claims that Macau gaming operators are putting a focus on the mass market and on the non-gaming elements, which are responsible for 65 percent of revenues in Las Vegas.
According to his figures, non-gaming revenue is now responsible for around 13 percent of sector revenue, a figure that has almost doubled in the last three years (from 7 percent in 2014) and that according to Choudhary will tend to grow and find stability around the 15 percent mark.
Other advantages of the region mentioned for the short- and mid-term were the completion of the HKMZ bridge as well as the increased number of high-speed railway connections to the mainland, pointing out many reasons why Macau still continues to make sense and deserve investment from all gaming concessionaires.
Global legal guide for gaming to be launched at G2E Asia
A new set of resources for gaming sector clients will be launched during the upcoming G2E Asia expo. The Lex Mundi Global Client Program will offer a broad network of certified law firms that can be reached by clients in order to solve problems or ask questions relating to the gaming industry of any jurisdiction.
Presented by the Head of Business Development and Strategy, Asia/Pacific, Edwin Seah, the program has partnered in Macau with law firms MdME Lawyers and Private Notary, aiming to provide a more efficient and faster service to all current and potential gaming professionals and investors in fields ranging from gaming law to taxation, among many others.
2017 G2E Asia to follow ‘diversification’ trend
Promising to exceed expectations after the record-breaking 10th anniversary edition, the 2017 Edition of the Global Gaming Expo (G2E Asia) will be larger and bigger in its approach. This year the Expo will shine a spotlight on gaming but also beyond gaming, the organizers announced yesterday in a press conference held at Banyan Tree Hotel to launch this year’s event.
In her speech, the executive vice president of Reed Exhibitions Greater China, Josephine Lee, said “G2E Asia 2017 is set to reach new heights.” she explained that “the show is growing very rapidly and today the show has already achieved 11,000 square meters,” a figure that represents a growth of about 21 percent from 2016 and according to Lee is likely to reach a level of about 30 percent higher than last year.
As for the number of visitors, Lee said to expect about 12,000 from 90 countries and regions out of which about 30 percent will be senior executives. From the 12,000 visitors, organizers believe that at least 9,000 will arrive from abroad, which includes attendees through a governmental project, that will allow 500 of these visitors to come expense-free.
New technologies will also be used during this year’s edition “to help to connect the visitors and exhibitors” for networking purposes. Organizers and visitors will mingle using an app that will allow a closer and simpler exchange of contacts and improve networking capabilities in a new and paper-free method.
As for the event, it will be comprised of three major sectors: Gaming, Integrated Resort Experience, and Parts and Components, of which the last two will be included for the first time in Asia.
“Gaming is always our core and in this sector we will have both the traditional land base gaming and also the iGaming,” Lee said, “On top of that we will add two new sectors […] the Integrated Resort Experience and the Parts and Components that is related to all components and technologies that help our gaming equipment to bring a new excitement to our customers,” she remarked.
The 2017 G2E Asia will take place over May 16 to 18 at The Venetian Macao.