The market for gambling by Chinese is likely to grow in the Philippines, fuelled by junket-based proxy betting and the prospect of visa-free access for Chinese tourists, says a Thursday note from banking group Morgan Stanley.
The bank said the new generation of high-quality casino resorts in Manila were best positioned to capture such business from overseas and also domestically.
Gambling by Chinese customers contributed 30 percent of gross gaming revenue (GGR) at Manila’s Solaire Resort and Casino in the first half this year, suggested Morgan Stanley.
“Macau junkets (with proxy betting) and strong Chinese visitor arrivals (first half 2017: +33 percent year-on-year) are the key drivers,” said analysts Alex Poon and Praveen Choudhary, citing data from Solaire’s promoter Bloomberry Resorts Corp and the bank’s proprietary research.
“Comparing the gross gaming revenue mix that is contributed by Chinese across Asian gaming jurisdictions, we see ample room for growth in the Philippines, compared to Macau (90 percent); Paradise [Co Ltd] in South Korea (55 percent VIP drop in 2016); and Australia (50 to 70 percent of VIP),” wrote the analysts.
“On August 17, the Philippines government granted visas on arrival to Chinese visitors (tour groups/businessmen, etc), and this might eventually expand to visa free,” said Mr Poon and Mr Choudhary.
They added: “Bloomberry has started capturing more local mass customers from cities away from Manila after the completion of the NAIA Expressway in December 2016.” That was a reference to an elevated section of high-speed carriageway linking Ninoy Aquino International Airport – Manila’s main air hub – to the rest of the capital, a metropolis notorious for its traffic jams.
In a separate development, the Philippine Star newspaper reported on Wednesday that Macau casino operator Galaxy Entertainment Group Ltd was eyeing a possible Philippine venture with a local partner, at a yet to be decided location.
The media outlet suggested that Galaxy Entertainment was eyeing a partnership with Philippine businessman Alfredo Benitez, founder of Leisure and Resorts World Corp, a local company that has several interests in the land-based and online gambling sectors.
In response to an emailed enquiry from GGRAsia, Galaxy Entertainment neither confirmed nor denied the report.
The firm said only: “Galaxy Entertainment Group has been actively exploring opportunities beyond Macau where we consider each one on a case by case basis. We look forward to updating you on our progress at the appropriate time.”
On August 18, it was reported that China’s State Council, the chief administrative body of the People’s Republic of China, had indicated there would be a ban on “overseas” gambling investments by Chinese firms. But the announcement did not define what companies or businesses might be covered by the requirement.
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”We have not had discussions about the concession renewal with the [Macau] government. We have taken the view that if we continue to deliver on what we expect is the expectations from operators, then we will be treated fairly”
Chairman and chief executive of MGM Resorts, the parent of Macau casino operator MGM China