S’pore’s gaming revenues to remain at US$4 billion this year
SINGAPORE: Singapore’s gaming revenues are expected to remain at around US$ 4 billion this year as the VIP segment remains weak, said Fitch Ratings.
We think the probability of the Singapore government awarding additional gaming licenses will be low but acknowledge that it is a risk. Fitch Ratings
The rating firm said gaming revenues continued a downward trajectory last year due to a steep contract ion in the segment, despite a 12.5 per cent gain in Chinese visitors in the first- half of the year.
Fitch Ratings said Chinese visitors were the biggest source of VIP revenue to Singapore but would face pressure from Macau and the Philippines.
“We think the probability of the Singapore government awarding additional gaming licenses wi l l be low but acknowledge that it is a risk,” it said in its latest ‘ Eye in the Sky Series’ on Singapore’s gaming industry.
According to Fitch Ratings, Singapore’s US$ 4 billion gaming market is dominated by Marina Bay Sands ( MBS) and Resorts World Sentosa ( RWS).
Locals are more drawn to state- owned lottery games such as Singapore Pools which also operates sports betting.
“Most revenue comes from foreigners as local residents are required to pay a SG$ 100 entrance fee, while marketing to locals is heavily restricted.
There are also gambling cruises and small- scale slot parlours,” it said.
MBS and RWS have exclusive licences for Singapore through 2017, when additional licences can be awarded and operated under a 30- year concession agreements which ends in 2036 for MBS and 2037 for RWS.
MBS has a 60 per cent share of the gaming market and is owned by Las Vegas Sands Corp while RWS, owned by Genting Singapore PLC, a subsidiary of Genting Bhd which offers theme parks and other family-friendly attractions.
Fitch Ratings said the notable risks and constraints included the possibility of additional compet it ion through new licences and/or increased gaming taxes starting in 2017 and 2022.
Others include a limited ability to expand the gaming f loor size and position restrictions, greater restrictions on local residents’ participation, a high reliance on a concentrated database of VIP players and increased regional competition for VIP players from the Philippines and Australia.
“Positive factors that offset these concerns include a low gaming tax rate and a duopoly structure through 2017 and a well- developed transportation infrastructure with a central location in Southeast Asia,” it said.