from Gaming & Leisure Magazine
Summer 2018
full issue at: https://digital.mygamingandleisure.com/issue/summer-2018/
 |
| Gaming & Leisure Magazine Summer 2018 |
One common thread in the marketing efforts of each these markets is the focus on Chinese tourists. The expenditure of each country on boosting inbound Chinese tourism is a key driver of gaming performance in all ASEAN casino sectors. Chinese visitors were the largest segment by nationality in each of these markets through 2017.
VIP casino tourism from China is expected to continue expanding in mass-market gaming tourism within the region. Some believe that this mass-market segment is under-represented and will continue to grow.
The Philippines
The Philippines is one of the fastest-growing casino hubs in Asia after Macau and Singapore. The high level of growth has some concerned that over-investment in the nation’s thriving gaming sector could become a reality as investors chase lucrative returns in an already crowded market.
In the Summer 2015 issue, it was mentioned that the Philippine government had rightfully recognized that casinos and gaming are central to their drive to boost tourism and the economy. This effort continues with an expanded focus on integrating the casino market with the hospitality sector.
Already noticeable in other markets, casinos in the Philippines have been moving to integrate their businesses with upscale hotels, restaurants and nightclubs, adding to the sense of luxury entertainment for guests with high disposable income.
Despite high growth in recent years, the market is expected to continue growing at a compound annual growth rate (CAGR) of around 10% through 2020. The recent growth is due in large part to the VIP customer segment. Casinos continue adding more VIP tables to press the growth of the market upward.
In the Summer 2015 issue, it was estimated that “the Philippines relies on Chinese VIPs for about 30% of its gaming revenues” due to ties to Macau junkets and the businesses that connect the wealthy to casinos. These VIP customers accounted for approximately 50% of the Philippine casino gaming revenue in the last couple of years. In 2018, and for the foreseeable future, the revenue contribution from the VIP segment will continue to grow. The VIP audience generally includes gamblers who seek entertainment value over ROI for their investments.
New casinos are expected to open in the future as junkets continue to set-up operations in the country. Further, the casinos in the Philippines strive to match the casinos in Australia, South Korea and Vietnam in terms of features and affordability.
Singapore
After a couple of years of falling gross gaming revenues (GGR), Singapore’s casinos have been building on a recent trend of steady growth, expected to be around 10% in 2018-2020. The growth is expected to be driven by increases in visitor arrivals.
Following a peak of 15.6 million arrivals in 2013, growth in tourist arrivals had stalled, declining to 15.1 million in 2014 and 15.2 million in 2015. The recent pickup in tourist arrivals seen in 2016 – 2017 was led by arrivals from mainland Chinese.
China also ranked number one for contribution to Singapore’s tourism receipts for three straight years helping make-up for the fall in entry levies paid by Singaporeans and permanent residents (PRs) in the country’s two casinos.
Citizens and PRs are required to pay a $100 daily levy or $2,000 annual levy to enter a casino. In the financial year ending in March 2017, total levies were at their lowest level since the casinos at Resorts World Sentosa and Marina Bay Sands opened in 2010. The Singapore Totalisator Board reported that it collected $134 million in casino entry levies in its last financial year, down 21% from the $170 million collected in financial year (FY) 2012/2013.
Counsellors who work with gambling addicts said fewer Singaporeans and PRs are going to the casinos as they are put off by the required entry levy. Additionally, there are some who have lost all their money are have barred themselves or have been banned from the casinos. Reports by the National Council on Problem Gambling shows that more than 25,000 Singaporeans or PRs have banned themselves from the casinos, or their families have applied for an exclusion order to ban them from entering. Some have simply attributed the decline in entry levies by Singaporeans as: “The shine of the casinos and the novelty have worn off.”
Despite the drop in revenues from entry levies, growth has returned to the Singaporean casino market with the increase in international arrivals from China, the USA and neighboring countries.
Vietnam
In the Summer 2015 issue, one of the significant concerns to casino executives was the law banning Vietnamese citizens from entering a casino. Studies at that time indicated the country of 95 million people was losing $800 million (18.2 trillion Vietnamese dong) a year with its citizens crossing into Cambodia and Laos to gamble.
A year ago, to the delight of international gaming executives, Vietnam approved gambling in certain casinos for citizens who met minimum income requirements. The government has allowed locals to gamble at two locations as part of a three-year pilot scheme. News that the government is liberalizing its gaming regulations has given a significant boost to Vietnam’s growing casino and hospitality industry.
Vietnam’s large growth in domestic tourism is a key driver for casino developments. Records show that in 2015, there were 57 million domestic travelers, an amazing 48% growth from the previous year. Their national initiative launched in 2014 and themed “Vietnamese travel in Vietnam – Each journey to love the fatherland more” has also been instrumental in contributing to the growth in domestic tourism.
As with the Philippines, Vietnam has been moving to integrate their casinos with upscale hotels, ensuring a sense of luxury entertainment for guests with high disposable income. Unlike Singapore, however, a significant portion of the growth in Vietnamese gaming will come from domestic gamblers.
These three tigers of SE Asian gaming – the Philippines, Singapore and Vietnam – will see continued growth for the foreseeable future.
Based in Bali, Bill Healey has been consulting, installing, and supporting solutions in the global golf and leisure industry since 1982. He has been involved with over 1,000 systems installations in 40+ countries from North America to Africa to Asia and Australia.
