FMIC: Philippine gaming slump to continue

TAGs: FMIC, Macau, Philippines

According to a recent report by First Metro Investment Corp (FMIC), the Philippine gaming market is expected to continue to mirror the decline experienced by Macau’s casino sector.

FMIC: Philippine gaming slump to continueFMIC, the investment arm of Metro Bank Group, said in a report that the Philippine gaming industry is “still highly correlated to Macau gaming.”

“Listed Philippine casino and hotel operators have seen their share prices decline by more than 50 percent year-to-date despite consolidated gross gaming revenues in the country increasing by a fifth in 2015,” The Philippine Star quoted FMIC.

Macau casino gaming revenue declined for the 17th straight month in October, despite a boost from the annual Golden Week holiday period, falling 28.4% year-on-year to MOP 20.1b.

FMIC believes that stricter regulations on junket operators and a future full-smoking ban weakens the business outlook in Macau and could maintain the so-called “Macau-led contagion” overhang on Asian gaming hubs, including Manila, where investor sentiment toward gaming stocks has soured. The investment firm added that the expected spillover of Chinese VIP business into Philippine casinos did not happen because of the territorial dispute between China and the Philippines in the South China Sea.

However, local casino operators are still optimistic for the future of the gaming industry. City of Dreams Manila, a joint venture of Melco Crown and Belle Corporation, projected a strong second half of the year on gaming revenues from its VIP segment.

Bloomberry Resorts, operator of the Solaire Resort and Casino in Entertainment City, expects the company’s losses to narrow as gaming revenue grows. Bloomberry boss Enrique Razon believes that even though the whole industry has been painted with the same brush, Philippine casinos are still growing and the reality is nowhere near the dire situation in Macau.

“Both gaming and retail operations will be in full blast next year so a revenue boost is anticipated. These integrated resorts have started to alter strategy by growing the revenues of the mass segment,” FMIC said. “However, this shift will generate lower but stable revenues in the long-term.”

FMIC believes the short-term revenue boost will not apply to the Resorts World Manila casino in Paranaque as gamblers transfer to Entertainment City, the home of City of Dreams and Solaire. Travellers, which operates Resorts World Manila, should recover when it opens its new casino in Entertainment City as early as 2018.


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