Dec 28, 2023 Newsdesk Features, Industry Talk, Latest News, Top of the deck  
The year 2023 saw many green shoots in the Asia-Pacific licensed casino sector after the long winter of Covid-19 restrictions.
There was at least one bit of blight, after Japan’s Nagasaki prefecture received on December 27 the unwanted post-Christmas gift of being turned down on its application to host an integrated resort (IR) with casino, with the national authorities citing concern about its funding plan.
Japan’s Osaka metropolis, which like Nagasaki had submitted its IR plan in April 2022, got a better result, being approved in April this year – with a 66 percent score on the government’s checklist – and with the completion date on MGM Osaka currently estimated as 2030.
A key story this year was what analysts often referred to as the “reopening” of mainland China and Macau as pandemic-related travel restrictions were lifted. Strictly speaking, complete shutdowns of movement were rare during the three years of Covid-19 disruptions, but cross-border movement – especially beyond mainland China-Macau – was complicated and often involved a quarantine stay in a hotel.
The re-entry of China consumers into regional markets beyond Macau and to global travel markets was though slow during 2023, noted a number of investment analysts. The Chinese authorities showed during the year little sign of letting up on their campaign against “cross-border” gambling crimes, including even the act of soliciting mainlanders to gamble within the legal jurisdiction of Macau.
A number of commentators wondered aloud what – if anything – that might mean for regional casino projects already open or in development, that just a few years ago would have eagerly anticipated serving a large number of Chinese players.
Motherland love, junket biz down
In 2023, Macau regained its crown as the world’s largest-single casino jurisdiction as measured by gross gaming revenue (GGR).
January brought into effect new concession contracts for the city’s six operators. In return, the firms were contracted to commit in aggregate 10 times as much to “exploring overseas customer markets and developing non-gaming projects”, i.e. MOP108.7 billion (US$13.60 billion), compared to gaming-related investment. The latter input will be MOP10.1 billion over the decade of the new concessions.
If Macau’s annual GGR reaches or exceeds MOP180 billion – likely already within 2023, according to the local government – the casino firms will have to increase their collective non-gaming and overseas-marketing spending pledges by up to 20 percent.
Analysts have recently debated the cost to Macau operators of doing business in the post-pandemic recovery period. Nonetheless Macau, as the only place in China where casino play is legal, was a beneficiary during the year, of a strong and sustained flow of tourists from the mainland. Many mainlanders chose to take their first post-pandemic foray close to home in that special administrative region. That helped to bolster the earnings of Macau’s six operators, and also coincided with a number of them opening fresh facilities at their Cotai resorts, including at Phase 3 of Galaxy Macau.
But Macau’s previous focus on junket-generated VIP play is – in the words of a senior executive in a November speech – “never returning” it seems. In mid-December it was announced the city’s government had plans – for those licensed junkets that remain – to bar them from issuing credit directly to players, as had been the long-standing permitted practice in Macau.
The Philippines was one regional casino market that had a strong start to 2023. Major industry news in 2023 was the announcement by the national gambling regulator, the Philippine Amusement and Gaming Corp (Pagcor), that it planned to sell its network of state-owned casinos.
South Korea, Cambodia, Thailand in the news
In late November, South Korea saw the opening of a new property at Incheon – Mohegan Inspire Entertainment Resort – though sans its foreigner-only casino, at least until the first quarter next year.
Thailand remained on the industry’s radar during 2023 as a target for casino legalisation, but domestic political events in other spheres served still to fog when or even if it will happen. In neighbouring Cambodia, an industry headline for 2023 was the death of Chen Lip Keong, founder and senior chief executive officer of NagaCorp Ltd, the monopoly casino operator in the Cambodian capital Phnom Penh, via its NagaWorld complex.
The standout event of 2023 in Asia was the recovery of the Macau gaming market following consecutive quarters of negative earnings before interest, taxation, depreciation and amortisation (EBITDA). Ben Lee, managing partner of IGamiX Management and Consulting Ltd, told GGRAsia: “2023 was the year of the ‘Great Recovery.’
“We went from structural zero” revenue-wise “at the beginning of the year, and are likely to end the year at approximately 62 percent of 2019” level for GGR, he added.
Mr Lee also noted: “The year was highlighted by an almost full recovery of mass gaming revenue, with the mainlanders flocking to Macau instead of elsewhere, a surprising return of VIP/premium players… and corresponding rise in fierce competition amongst the concessionaires for the premium” gamblers.
Daniel Cheng is a former senior executive with the Hard Rock and Genting casino brands, and author of the book “Japan Casino Uprising”, about that country’s complicated path to casino liberalisation.
He told GGRAsia that 2023 “wasn’t a standout year” for existing Southeast Asian casinos, though he added that “the recovery towards pre-Covid levels continued steadily, particularly at the two Singapore IRs thanks to the government’s well-calibrated approach to border reopening”.
Philippines surges, then moderates
Joe Pisano, founder and chief executive of Philippines-based casino equipment and gaming services supplier Jade Entertainment and Gaming Technologies Inc, told GGRAsia that 2023 had marked the Philippines taking “a leadership role in the Asian gaming industry” with the country’s regulator paving the way by encouraging innovation, including ambitious plans for the online segment.
Mr Pisano noted the Philippines’ effort had already encompassed allowing the expansion of product categories such as sports betting in the land-based casinos, and rolling out the PIGO (Philippine Inshore Gaming Operator) licensing for bricks and mortar casinos, a process that had begun during the pandemic.
Mr Cheng also considered that for the Philippines casino sector, the “market’s rapid rebound initially cast it as the year’s star,” but added that “this momentum has petered out in the last quarter”. A consultancy said in late November that Philippine 2023 GGR including non-casino gambling was still likely to exceed the pre-pandemic 2019 performance.
Mr Cheng stated, referring first to Emerald Bay, a stalled casino scheme in the holiday destination of Cebu, promoted by units of Philippines-listed PH Resorts Group Holdings Inc, and second to Alejandro Tengco, chairman of the country’s casino regulator, Pagcor: “PH Resorts’ [initial] struggle to find investors for Cebu’s development raises concerns that contradict chairman Tengco’s optimistic outlook for Pagcor.” The latter was a reference to Pagcor’s intention to sell its network of casinos at what some analysts believe are high valuations.
The former casino executive also suggested that what he termed “the long arm of Beijing” was having an impact on the junket sector in the Philippines casino market and elsewhere in the region.
He indicated that the 18-year Macau jail sentence imposed in mid-January on former Suncity Group junket boss Alvin Chau Cheok Wa – with the length of sentence upheld in an October ruling – was part of the “back story” on junkets that had affected the wider regional market, and continued to do so.
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