S&P Global Ratings Inc says that despite the number of Chinese visitors to Malaysia, Macau and Singapore being “largely back to pre-pandemic levels,” an issue for the Macau and also the Cambodia casino sector is that “the elimination of junkets will probably prevent the gaming market” in those two jurisdictions “from reaching pre-pandemic levels” in the near term.
The report authors observe: “In markets such as Macau and Cambodia, GGR [gross gaming revenue] recovery will take longer.
“This is not surprising given their past reliance on junkets. It was not a point-in-time change but a crackdown over the past few years.”
The ratings house described the Chinese consumer segment as a “key customer group” in Asia-Pacific gaming, due to “its spending power, frequency of play, and higher propensity to gamble”.
For 2025, S&P thinks Macau GGR will grow by “3 percent to 6 percent” year-on-year, and be at “about 80 percent” of pre-pandemic levels.
Macau’s mass GGR – which the institution said was “roughly 75 percent of total GGR” – would drive the growth, having “surpassed pre-pandemic levels in 2024”.
Though S&P suggested: “Its expansion cannot fully make up for losses in VIP GGR.”
The institution said that for Macau operators, improvements in earnings before interest, taxation, depreciation, and amortisation (EBITDA) “amid economic obstacles and market competition” regionally, “will be a focus”.
S&P added: “The pace of deleveraging may slow as operators balance investment plans and shareholder returns.”
Earlier this month brokerage CLSA Ltd suggested the opening of “certain new premium properties”, mostly at resorts in Macau’s Cotai casino district, might support 7.6 percent year-on-year growth in the city’s GGR for 2025, to HKD234.8 billion (circa US$30 billion).
Though CLSA suggested that in terms of Macau industry-wide EBITDA margins, there was “minimal scope for margin expansion”.
S&P’s view of Cambodia – a market led by the NagaWorld resort of Hong Kong-listed NagaCorp Ltd, located in the capital Phnom Penh – was that “GGR will be unable to reach pre-pandemic levels”.
This was “due to the elimination of Chinese junket operators, who accounted for about 70 percent of GGR in 2019,” noted the institution.
S&P said that for NagaCorp, “funding requirements are a watchpoint”. The rating agency added: “Naga[Corp] is reviewing the scale of its Naga 3 casino to factor in the business conditions.
“More information about its growth plans and shareholder return levels will help clarify how the company intends to manage its debt. Its operational recovery has lagged that of regional peers.”
In April NagaCorp reported a 17.7-percent year-on-year rise in GGR for the first quarter, reaching nearly US$171.2 million, according to a non-statutory filing made to the Hong Kong bourse.
In Australia, dominated by two big operators – the privately-held Crown Resorts Ltd and Australia Securities Exchange-listed The Star Entertainment Group Ltd – the market has traditionally drawn high-value players from Asia.
But in that country, “tighter anti-money laundering and know-your-customer rules for casino operators will continue to weigh on GGR, particularly for VIP play,” suggested S&P.
The institution noted that for the Singapore casino duopoly market, “Marina Bay Sands and Resorts World Sentosa have embarked on multibillion-dollar investment plans to refresh and expand their offerings. They expect to complete their upgrades by 2031.”
