In a note issued on Saturday, brokerage Morgan Stanley Asia Ltd. pointed out that the tragic incident in RWM will only have a short-term, negative impact on Philippine casinos. But it’s a different story for RWM, which the brokerage believes will have difficulty recovering.
“GGR growth in July should rebound from [the] 5 percent to 10 percent [experienced] year-on-year in June,” Morgan Stanley analysts Alex Poon and Praveen Choudhary pointed out. “Resorts World Manila reopened on June 29, and we expect business for the overall market to recover in July, but Resorts World Manila could see difficulty recovering its lost share completely.”
Last month, state regulator Philippine Amusement and Gaming Corporation (PAGCOR) admitted that the suspension of the gaming license of casino operator Travellers International Hotel Group, Inc. had put a dent on the state-regulator’s target revenue for the year.
PAGCOR Chairperson Andrea Domingo said that the government is losing around P12 million to P14 million a day from the non-operation of RWM and these losses could reach billions of pesos if RWM’s gaming facility remains shuttered.
Morgan Stanley stated in its Saturday note that “the June 2 incident at Resorts World Manila could have reduced market GGR by PHP1.7 billion [US$33.6 million] to PHP2 billion or 20 percent of total based on year to May run-rate.”
Mr Poon and Mr Choudhary added: “For [regarding fresh] regulations, we think the reopening of Resorts World Manila on June 29 with improved security and safety measures has put away the risk of enforcing a casino entry fee.”
Morgan Stanley’s note forecast market-wide earnings before interest, depreciation and amortisation (EBIDA) in the Philippines casino sector would have grown by 8 percent to 12 percent quarter-on-quarter in the April to June period. That would represent 26 percent to 27 percent year-on-year expansion.