Asian Casinos Moving Towards More Matured Long-term State

Posted: October 16, 2012 in Uncategorized

Important Indicators For Asian Casino Landdscape, Including Singapore Casinos Future…

The following scenario is reported in Macau by Inside Asian Gaming…

In Macau, the largest gaming hub in Asia, VIPs compared with up to 40% on mass-market gamblers, who spend a lot less but come in on their own, deal with the casinos directly and wager in cash. On $100 of gaming revenue, the 72% generated by VIP play at the end of 2011 delivered a theoretical $7.2 in EBITDA (earnings before interest, taxes, depreciation and amortization), the accepted measure of a casino’s effectiveness in turning revenue into net income. The remaining $28 in mass play (comprised of 26% tables, 4% machine games) at a 40% margin delivers EBITDA of up to $11.2. Combined, that’s $18.2 in EBITDA.

By the third quarter of 2012, the percentage share of VIP tomass had reverted to a more historical 68/32, suggesting the industry derived $19.6 in EBITDA ($6.8 VIP and $12.8 mass) from every $100 in gaming revenue. As mass market growth continues to out-strip VIP


growth—the former increased 29% year on year in 3Q 2012 while the latter declined 1%—casinos’ EBITDA margins will improve further. A 60/40 VIP to mass revenue split is not unthinkable as Macau continues to mature around Cotai’s more expansive integrated resort.

As in the case of Singapore casinos, its regulatory regime has become even tougher for growing of both VIP and mass market pie. The recent casino rules review is pointing towards a “very slow and moderated” growth path for the two casinos and its overall gaming market expansion.  Its domestic market has been given further restrictions. 
Any chance for a 3rd casino?  Pray harder. 



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