Inside Asian Gaming

INSIDE ASIAN GAMING | June 2013 14 COVER STORY Singapore Quarterly VIP Revenue and Growth Source: Company data and J.P. Morgan estimates 1,200 20% 30% 40% VIP rolling chip volume (LHS) yoy growth (RHS) 10% 0% -10% -20% -30% -40% -50% (S$ m) 1,000 800 600 400 200 0 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 led to the IRs being saddled with relatively high impairment charges and provisions for bad debts. The Singapore government has not given any indication that it will loosen restrictions on junket operators, and if anything is scheduled to impose stricter regulations covering VIP gaming this year, such as requiring players to draw down their entire qualifying deposit of S$100,000 before credit can be extended to them and imposing higher fines on international marketing agents for regulatory violations. Despite these challenges, the outlook for the VIP sector appears decidedly more robust than that of the mass market. “The mass market story continues to be soft, and The outlook for the VIP sector appears decidedly more robust than that of the mass market. “The mass market story continues to be soft, and we believe will remain so for the foreseeable future,” says analyst Grant Govertsen at Union Gaming Research Macau. Whereas Macau is acknowledged to have only served the tip of the iceberg of available gaming demand from mainland China, given the constraints placed on gaming growth in Singapore by government policy and directives, the latter market has already achieved a fair degree of penetration. Singapore Quarterly Rolling Chips Volume and Growth Source: Company data and J.P. Morgan estimates 50,000 40% 50% 60% VIP rolling chip volume (LHS) yoy growth (RHS) 30% 20% 10% 0% -10% -20% -30% (S$ m) 25,000 30,000 35,000 40,000 45,000 20,000 15,000 10,000 5,000 0 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13