A slowing of the domestic mass market and continuing uncertainty in VIP will see Singapore’s casino market remain challenging in 2020, according to a note from Affin Hwang Capital.
The assessment follows what the investment bank described as a “relatively weak set of numbers” for Genting Singapore, operator of Resorts World Sentosa, through the first nine months of 2019, with revenue down 9.3% year-on-year and profit after tax down 14% year-on-year to SG$529 million (US$389 million).
On the specific topic of Genting Singapore, Affin Hwang Capital analysts said that, aside from the impact of the 50% increase in gaming taxes that came into effect in April – with mass market GGR estimated to have fallen by 10% year-on-year to SG$334 million (US$245 million) – a greater concern was revealed by the normalizing of the mass market win rate to 2.6%, from a high of 3.7% in the previous quarter.
“We believe that the high win rate in 2Q … had helped mask the weakness of Genting Singapore’s profitability,” the note stated.
From a broader perspective, however, Affin Hwang Capital said short-term prospects were far from encouraging both for RWS and its Singapore rival, Marina Bay Sands.
“We believe that the outlook for the Singapore gaming market is likely to remain challenging, due to a slower local mass market and uncertainty in the VIP segment,” it said.
“With the challenging economic outlook both locally and regionally, the overall gaming volume is likely to remain weak for both the mass and VIP segments, in our view.”