Inside Asian Gaming

INSIDE ASIAN GAMING | April 2012 16 Market Outlook Way to go—Resorts World Manila is to be joined by three new integrated resorts in Manila The Phillippines: Gaming tables / slots Source: CLSA Asia-Pacific Markets Tables 02 03 04 05 06 07 08 09 10 11 15CL 11-15CL Cagr (%) VIP 231 231 231 239 250 253 253 303 376 431 861 19 Mass 428 428 428 443 457 470 470 515 594 641 1,161 16 Slots 7,129 7,129 7,129 7,432 7,779 7,876 7,876 8,476 9,181 9,781 13,581 9 Win per table / slot (US$ per day) VIP 3,061 2,810 3,282 3,532 3,543 3,723 3,950 3,526 3,991 4,625 5,425 4 Mass 610 560 654 704 706 742 787 772 958 1,188 1,577 7 Slots 17 15 18 19 19 20 22 25 50 72 120 14 P hilippines casino revenue could rise 130% in the next four years once three new integrated resorts (IRs) open in Manila, says CLSA Asia-Pacific Markets. The independent bank and brokerage’s report titled “Many happy returns—Integrated resorts draw interest” takes a look at the prognosis for the casino industry in the Philippines in the remainder of the decade and beyond. It states: “We expect gaming revenue to grow from US$1.3 billion in 2011 to US$3 billion in 2015 once three new IRs in Pagcor City [Philippine Amusement and Gaming Corporation’s Manila Bay project] are completed, representing a 24% Cagr [compound annual growth rate]. They are: Belle Corp’s Belle Grande Manila Bay; Bloomberry Resorts and Hotel’s Solaire Manila; and Universal Entertainment’s Manila Bay Resorts. “We estimate the three new integrated resorts to generate US$1.6 billion of gaming revenue in 2015, implying that each integrated resort generates US$0.53 billion gaming revenue per year (versus US$0.63 billion gaming revenue from Resorts World Manila in 2011),” say authors Aaron Fischer, CLSA’s Head of Gaming Research; Richard Huang and Raf Mercado. CLSA says the four main drivers for this major jump in gaming revenue are: “….more gaming capacity, foreign and domestic revenue growth and better infrastructure. We expect gaming tables to increase from1,072 in 2011 to 2,022 in 2015, which is the key driver to our US$3 billion forecast. We are also positive on the local market given improving gaming penetration, the rise in domestic tourism, an emerging middle class and favourable demographics.” The report authors acknowledge that there are challenges for investors in the Philippines, including relatively underdeveloped infrastructure compared to some neighbouring jurisdictions and The New Breed CLSA’s latest report on Philippines gaming finds lots for investors to like in the new generation of integrated casino resorts The Philippines: Gross gaming revenue Source: CLSA Asia-Pacific Markets (%) VIP Mass Slots 3.5 3.0 2.5 2.0 1.5 1.0 0.5 0.0 2008 2009 2010 2011 15CL 0.4 0.4 0.5 0.7 1.7 0.1 0.1 0.2 0.3 0.7 11-15 Cagr 0.1 0.1 0.2 0.3 0.6 24% 25% 24%