Consumer outlook key for APAC gaming in 2025: experts

Dec 31, 2024 Newsdesk Features, Latest News, Top of the deck  

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The performance of China’s economy is likely to loom large over the Asia-Pacific (APAC) casino market during 2025, say several commentators in remarks to GGRAsia.

Thailand’s casino-legalisation process – possibly to pass an important hurdle in the autumn regarding a basic enabling law – still raises more questions than are currently being answered, said additionally one of the experts.

The observers say that – while they view Macau as effectively being in a privileged position in terms of the Chinese government’s tolerance of its casino industry – the same cannot be said for other places. In addition, the ease or otherwise with which Chinese people can generate wealth during 2025, is also likely to affect their appetite for overseas travel, including to places that have legal casinos, they say.

“I think the biggest issue is what happens with the China economy,” said Vitaly Umansky, senior analyst at Seaport Research Partners.

He added: ‘That’s going to drive a lot of what happens in the Asian gaming markets, especially in Macau, somewhat in Singapore, and even in the Philippines.”

So, for Asia-Pacific gaming, it’s “really” about the “Chinese macro environment… consumer confidence,” suggested Mr Umansky.

Angela HanLee, Asia-Pacific gaming and leisure analyst at Bloomberg Intelligence, told GGRAsia that, notwithstanding China’s long-running campaign on “overseas gambling”, a question for 2025 would be the Asia-Pacific industry’s ability to access high net worth clients generally.

“We are talking about those people who are rich enough and who want to fly to gamble” in a particular location, she noted.

“It’s not really about people who just fly” to a place “and then happen to gamble” while they are there, she observed.

Ms HanLee added that demand for “gambling, especially the VIP segment,” was influenced by “how easily” potential casino clients “can make their money” in the first place. “If you make money easily, then you can gamble easily,” she observed.

Seaport’s Mr Umansky stated: “The ability to travel, the desire to travel, the desire to spend money is going to drive what happens on the economic front for the gaming and hospitality industry,” adding that in that context, “China is such an important customer base everywhere”.

Macau’s rise to continue

Ben Lee, managing partner of casino industry adviser IGamiX Management and Consulting Ltd, told GGRAsia: “Macau gaming will continue its resilience into 2025, backstopped by the seemingly insatiable China market, constrained only by measures placed by the mainland authorities.”

Bloomberg’s Ms HanLee cited projections suggesting the Macau market’s casino gross gaming revenue (GGR) could “grow 7 percent” year-on-year in 2025, while property earnings before interest, taxation, depreciation and amortisation (EBITDA) “could grow by 14 percent”.

She also held some hope that profitability in the Macau industry could improve this year, with the sector seeing the casino operators’ player reinvestment levels “coming down a bit”.

Ms HanLee recalled that Macau’s casino regulator, the Gaming Inspection and Coordination Bureau, had already in 2024 flagged to the local industry that some “aggressive” activities linked to gaming promotion “should not” be tolerated.

That was understood to be a reference to a July statement from the gaming bureau, about an investigation against unlicensed individuals on casino premises, acting akin to a Macau VIP gaming promoter, or junket.

Online crackdown

For Mr Umansky, while “China views gaming as a risk factor in society,” it was not the only regional jurisdiction to take that view.

“Indonesia’s had a massive campaign to get rid of online gaming,” he noted. The Seaport analyst stated it would be “interesting to see what happens in Asia over the next year” regarding online gaming, “because the crackdowns have gotten more extreme” not only in China, but elsewhere.

He added rhetorically: “Does that benefit bricks-and-mortar casino jurisdictions? Some of them probably in the longer run, if you don’t have the proliferation of that online gaming.”

Mr Lee has noted that South Koreans have – notwithstanding the country’s current political turmoil – been an important market for gambling in other Asian jurisdictions.

South Korea has 17 casinos, but only one – Kangwon Land, in a remote upland area outside the capital Seoul – is allowed to serve local players.

He stated it is “a very strong country for gaming,” though added that the client base was “very different” from the international Chinese customers.

The South Korean players travelling abroad to gamble were “not the top [earners], not the bottom, but the middle professional class,” said Mr Lee.

While there is no timetable yet for casino resorts to open in Thailand, the prospect of enabling legislation being gazette in the autumn will in likelihood mean that country will remain a focus for casino groups and investors during 2025.

Mr Lee stated: “Thailand will continue to dominate global attention, and any gaming licence tender will likely draw a parade of who’s who in the gaming world.”

The consultant thinks Malaysians could eventually be an important customer segment for Thailand. While Malaysia has a single casino complex, Malaysians are already frequenting the two gaming resorts in Singapore. The island city-state lies immediately to the south of peninsular Malaysia, connected by bridges and a causeway across the Johor Strait.

Thailand on the horizon

“There are hundreds of thousands of Malaysians who cross the border to the south every weekend, not counting the numbers who are flying to Bangkok” in Thailand to the north,” or to China, he stated. Malaysia “could potentially be the second-largest feeder market” after China, for an eventual Thailand casino industry, Mr Lee suggested.

For Mr Umansky, there was a concern regarding Thailand, that people in the wider gaming industry were “talking about things they can’t really fully comprehend” at this stage, given the limited amount of detail regarding the economics and regulatory environment for a Thai casino sector.

He told GGRAsia: “I think there will be gaming in Thailand. I just don’t really know what it’s going to look like. I think this notion that we’re going to have [in aggregate] US$32 billion of investment, is completely unrealistic.”

He added: “If you asked any operator right now to put together a proposal, they wouldn’t even know where to start.”

One milestone that is to be reached in 2025, is an April start for construction of the area for the main building at the JPY1.27-trillion (US$8.04-billion currently) MGM Osaka casino complex in Osaka, Japan. The property is due to open towards the end of 2030.

Some commentators are bullish that Thailand – which only started talking in detail in 2023 about casino legalisation – could have resorts built by then.

IGamiX’s Mr Lee thought there was a risk a Japan casino market – possibly shorn of the chance to cater to Chinese VIPs amid China’s overseas-gambling crackdown – could “slowly fade into the background” along with some other Asia-Pacific jurisdictions outside Macau, “once the Thais get started” with a casino sector with a very broad consumer appeal across the region.

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