The Philippines is poised to ride out in front of a rising wave of gaming revenue growth across Asia.
J.P. Morgan in a new research report forecasts revenues across the region to grow by 50 percent over the next three years to a cumulative US$85 billion, with the Philippines growing the fastest among the five jurisdictions covered in the report: a rate of demand expected to increase at an annual rate of 15 percent, followed by South Korea at 14 percent, Macau at a “subdued” 10 percent, Malaysia at 6 percent, the Korean domestic market at 4 percent, and Singapore at 3 percent.
“We expect a total 14 major properties to open in Asia by 2018, which would be 4 [times] more than the three new openings we saw since 2011,” the report said. The pace of new openings “will sharply accelerate, which in our view will work as a key impetus to stimulate gaming demand in the region,” the investment bank said, and growing in tandem with positive economic, demographic and infrastructure developments in the region, “should remain the key driver behind the secular growth in gaming penetration for many years to come”.
Which is what makes the Philippines a particularly attractive proposition, especially as the government-sponsored Entertainment City resort zone in Manila approaches full build-out with four megaresorts.
The bank expects the pending opening of the second of those resorts, Melco Crown Entertainment’s City of Dreams Manila to be “a game changer” for the market, enhancing its ability to penetrate the Chinese VIP market and attract a local gambling clientele.
“Locally, its diverse non-gaming offering with well-branded hotels (Hyatt, Crown, Nobu) as well as clustering effect with Solaire would finally help Entertainment City to build the critical mass,” the report states.
“Melco group’s long-standing relationship with Macau junkets should open the door for them to participate in the market, which, underpinned by higher commissions and rebates, should help operators tap into the Chinese VIPs,” the report adds.
“We expect Philippines gaming revenues can double to US$4.5 billion by 2018 from US$2.2 billion in 2013.”
