Gaming – Singapore | Fitch predicts no growth in revenues

The Marina Bay Sands hotel and casino (center right) stands near commercial buildings in Singapore’s central business district

International credit debt watcher Fitch Ratings predicts that casino revenues in Singapore will remain stable this year, devoid of growth, at approximately USD4 billion (about MOP32 billion).

“Gaming revenues continued a downward trajectory in 2016 largely due to a steep contraction in the VIP segment, despite a 12.5 percent gain in Chinese visitors (the biggest source of VIP revenue) in first-half 2016,” the company noted in a statement. “Most revenue comes from foreigners, as local residents are required to pay a SGD100 [MOP567] entrance fee and marketing to locals is heavily restricted.”

Singapore’s two integrated resorts will continue to be plagued by an underperforming VIP segment, and may also feel the heat from heightened competition from other gaming hubs in the Asia-Pacific region.

“Singapore will face added competitive pressure from Macau and the Philippines,” the Finch analysts predicted.

The company also noted several risk to Singapore’s gaming sector, including the ability of the state regulator to issue new gambling licenses: “We think the probability of the Singapore government awarding additional gaming licenses to be low.”

Other risks include the possibility of higher gaming taxes starting from 2022, significant limitations to physical expansion of resorts, greater restrictions for Singapore residents’ participation and a high reliance on a concentrated pool of high-rollers.

Contrarily, Fitch Ratings pointed to the city-state’s competitive gaming tax, central location in Southeast Asia with well-developed transport links and a “duopoly structure at least through 2017” as positive attributes for Singapore revenues this year.