MERS can impact Asia’s gaming sector — analysts

KUALA LUMPUR: The arrival of the Middle East respiratory syndrome coronavirus (MERS) in Asia could negatively affect every gaming jurisdiction if the situation is not contained.

Analysts opine that this outbreak could have a similar impact on the gaming sector as the severe acute respiratory syndrome (SARS) outbreak more than a decade ago, which caused gaming operators’ gross gaming revenue (GGR) to contract by one to 11 per cent in the Philippines, Malaysia and Cambodia.

For now, with the status quo (MERS contained in South Korea), Maybank Investment Bank Bhd (Maybank IB REsearch) expected South Korean foreigners-only casino operators (Paradise, Grand Korea Leisure) to suffer the worst followed by Philippine casino operators (Bloomberry, Travellers and Melco Crown Philippines).

It also opined that Malaysian and Singaporean casino operators are not expected to be materially affected at this point.

The research arm explained, Malaysian operators’ GGR are split between very important people (VIP) and mass market by 40 per cent by 60 per cent at Resorts World Genting Malaysia.

It noted that the mass market and VIP GGR are largely driven by Malaysians, as such, it viewed that Genting Malaysia is unlikely to be materially affected by the MERS outbreak.

Similarly, for Singaporean operators, Maybank IB Research pointed out that South

We hope that Beijing will wind back UnionPay curbs, transit visa curbs and smoking bans in Macau and Malaysia will exempt Chinese visitors from requiring visas, if MERS batters their gaming industries.

Maybank IB Research

Korean VIPs or mass market do not contribute much to its operations.

However, it cautioned, the MERS may spread to Malaysia due to pilgrims returning from Saudi Arabia after Eid-al-Adha in October.

“If the MERS spreads across Asia, every gaming jurisdiction will be negatively affected.

“There may be silver linings though.

“We hope that Beijing will wind back UnionPay curbs, transit visa curbs and smoking bans in Macau and Malaysia will exempt Chinese visitors from requiring visas, if MERS batters their gaming industries,” Maybank IB Research commented.

All in, it maintained a ‘neutral’ recommendation on Asia’s gaming sector.

Analysts opine that this outbreak could have a similar impact on the gaming sector as the severe acute respiratory syndrome (SARS) outbreak more than a decade ago, which caused gaming operators’ gross gaming revenue (GGR) to contract by one to 11 per...