Fitch Ratings Inc said it expects combined gaming revenues at Singapore’s two casino resorts to be roughly flat at US$4 billion in 2017 compared to last year, on continuing “weak” VIP play.
Singapore’s casino market is currently a duopoly between Marina Bay Sands resort – developed and run by Las Vegas Sands Corp – and Resorts World Sentosa, built and promoted by Genting Singapore Plc. In its latest report, Fitch said: “Gaming revenues continued a downward trajectory in 2016 largely due to a steep contraction in the VIP segment, despite a 12.5 percent gain in Chinese visitors (the biggest source of VIP revenue) in first-half 2016.”
The ratings house noted: “Most revenue comes from foreigners, as local residents are required to pay a SGD100 [US$71] entrance fee [for 24-hour access] and marketing to locals is heavily restricted.”
“Locals are more drawn to state-owned lottery games: Singapore Pools; which also operates sports betting. There are also gambling cruises and small-scale slot parlours,” Fitch added. The institution stated: “Moreover, Singapore will face added competitive pressure from Macau and the Philippines. We think the probability of the Singapore government awarding additional gaming licences to be low, but acknowledge that it is a risk.”
Fitch noted that the current exclusive rights of the two Singapore operators are due to end in 2017, after which new permits can be awarded.
The two resorts have 30-year concession agreements: due to end in, respectively, 2036 for Marina Bay Sands and 2037 for Resorts World Sentosa, added the ratings house.
U.S.-based Las Vegas Sands Corp reported in its fourth-quarter group earnings on January 25 that adjusted property earning before interest, taxation, depreciation and amortisation (EBITDA) at Marina Bay Sands rose 8 percent year-on-year, while net revenue rose 2.8 percent to US$723 million.
The firm’s chairman Sheldon Adelson said during the group’s quarterly earnings call that it hoped to sell a 49-percent stake in the shopping mall at Marina Bay Sands for up to US$3.5 billion.
In Macau, Fitch said it expects “mid-to-high single-digit growth” in gaming revenues for 2017. Macau’s accumulated casino gross gaming revenue (GGR) for full-year 2016 was MOP223.21 billion (US$27.93 billion), down 3.3 percent compared to the tally for 2015, according to official data.
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”We do not believe that reopening the advance notice nomination deadline [for board directors] is appropriate or justified”
Daniel Boone Wayson
Chairman of the Wynn Resorts board of directors