Maybank Securities Inc says it retains a “positive view” on the Philippine gaming sector following first-quarter results, which showed sustained industry gross gaming revenue (GGR) growth.
The Philippine casino sector produced GGR of PHP59.26 billion (US$1.06 billion) in the three months to March 31, up by 80.9 percent from the prior-year period, showed official data. The tally – excluding revenue from bingo operations and electronic games parlours – rose by 5.8 percent sequentially.
Casino GGR at Entertainment City, a casino resort cluster in the capital Manila (pictured), and GGR at the Clark casino cluster, also on the country’s main island, Luzon, were “trending significantly above first-quarter 2019 levels”, and “outpacing the growth of state-run casinos,” wrote Maybank analyst Miguel Sevidal in a Tuesday memo.
“Mass tables and slot machines in Entertainment City generated PHP87.1 billion in financial year 2022 GGR and PHP26.0 billion in first-quarter 2023 GGR,” said Mr Sevidal. “This accounted for 62 percent of financial year 2022 GGR and 59 percent of first-quarter 2023 GGR and is up from 55 percent/56 percent in first-quarter 2018/financial year 2018.”
He added: “This observation supports our running view that domestic demand will be main driver of industry growth.”
According to the note, apart from having domestic demand as the main growth driver, mass-market table play and slots “benefit from less hold rate-driven volatility for GGR, and better margins,” stated the Maybank analyst.
The institution also said that the VIP segment would be a “source of upside” for Philippine casino operators.
“The VIP segment presents substantial upside to the current domestic demand-driven market,” noted Mr Sevidal.
First-quarter 2023 VIP GGR in Entertainment City “has already recovered to 101 percent of the first-quarter 2019 level, likely benefitting from an upbeat Korean fly-in base and local Chinese patrons,” he added.
