The casino industry in Asia is experiencing growth opportunities, particularly in Southeast Asia, which poses a significant competitive threat to established markets like Macau. With Covid restrictions largely lifted, Southeast Asia is positioned to lead the growth in Asian gaming, supported by robust economies, world-class gaming resorts, and appealing tourist destinations. Daniel Cheng, an industry veteran, notes that the ASEAN bloc is projected to surpass Japan in economic power within this decade, becoming only smaller than the US, China, and the European Union.
The Association of Southeast Asian Nations (ASEAN) comprises Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand, and Vietnam, with a total population exceeding 660 million and a combined GDP of over US$3.3 trillion, making it the fifth largest economy globally. In 2022, the bloc's economies grew by 5.2% and are forecasted to expand by 4.7% in 2023 and 5% in 2024, according to ASEAN's annual report from July.
Cheng emphasizes Indonesia's potential, being the fourth most populous country with a GDP nearly triple that of Singapore, as well as the importance of Thailand and Vietnam, which are also poised to contribute significantly to the region's gaming landscape. Malaysia is noted as the region's most affluent nation, home to the first integrated resort, Resorts World Genting, which has undergone significant upgrades. Singapore's integrated resorts are also performing well, with gaming revenues surpassing pre-Covid figures.
The Philippines is recognized for having the most dynamic gaming market in the region, with projections indicating it may outpace Singapore in gross gaming revenue (GGR) this year. Estimates from GCG Gaming Advisory Services suggest that Philippine GGR could reach US$5.9 billion in 2023, significantly influenced by the three Entertainment City integrated resorts.
Expansion is prevalent in the Philippines, with Bloomberry developing Solaire North in Quezon City and further plans for resorts in Cavite and Cebu. Clark, a popular weekend destination, is seeing investments in new and upgraded casinos, enhancing its appeal.
The Philippines is unique in allowing locals to engage in casino gaming without restrictions, helping to drive growth along with international travelers from Korea and Japan. David Leppo, president and CEO of FootballBet.com, highlights the Philippines as the only fully regulated online market in Asia, with the internet gaming sector gaining strength since Covid.
In Thailand, discussions on the legalization of casinos are picking up momentum, with companies like Hard Rock engaging officials. The gaming market’s potential is evidenced by the high volume of Thais traveling abroad to gamble.
Regional gaming giants are adapting as well. Resorts World Genting has recently completed a US$2 billion upgrade. Singapore's major casinos are undergoing expansions, with reports indicating that both VIP and mass gaming revenues have returned to 2019 levels as of the second quarter of 2023.
Macau, which has historically been a dominant player in the gaming market, is facing pressure to diversify its visitor base. Mary Mendoza from The Platinum mentions that Macau's operators are collaborating with local government to attract international visitors. Despite these efforts, industry experts express skepticism regarding Macau’s ability to shift its focus away from Chinese tourists.
As Macau struggles with a recovery that has not yet reached pre-Covid levels, the discrepancies between it and thriving Southeast Asian markets are stark. Despite challenges, Macau remains a leading competitor due to its extensive offerings and familiarity for Chinese visitors. While growth in Southeast Asia includes emerging competition, its impact on Macau's dominance is projected to be minimal at this stage. Notably, challenges such as recent Chinese regulatory actions concerning overseas gambling and the return of tourism are complicating Macau's recovery process.
Morgan Stanley and JP Morgan's forecasts indicate that while Macau continues to face difficulties, Southeast Asian markets are already showing signs of surpassing their previous benchmarks. The overall sentiment, as observed by Leppo, reflects a strengthening of the Southeast Asia market beyond its reliance on Chinese travelers. Future reports will provide deeper insights into critical Southeast Asian destinations in the gaming industry.
