Management at casino operator Genting Singapore Ltd is doubtful its VIP casino segment will return to pre-pandemic levels of business, due to factors including mainland China’s crackdown on what the authorities there term “cross-border gambling” by its citizens.
The information was given in guidance to investment analysts, following the release of the group’s full-year results.
The casino firm 2020 results showed profit slashed 90 percent year-on-year amid disruption to tourism and gaming business because of the Covid-19 pandemic. It was the worst annual performance since its Resorts World Sentosa property opened in the Lion City in 2010.
“Genting Singapore… does not expect the VIP market to recover to pre-Covid-19 levels due to China cracking down on anyone enticing mainland Chinese to gamble overseas,” observed analyst Samuel Yin Shao Yang of Maybank IB Research, in a Wednesday note following the operating results issued to the Singapore Exchange.
Resorts World Sentosa’s gaming revenue for full-year 2020 fell by 56.7 percent from the previous year, to SGD700.8 million (US$528.5 million), with most of that coming in the second half of the year, coinciding with an easing of Singapore’s lockdown measures.
Genting Singapore was the only operator within the city-state’s casino duopoly to have applied from the outset to run third-party junkets via government-licensed international market agents, as they are known in Singapore.
But VIPs can also be directly managed and provided with credit by the house, according to industry experts consulted by GGRAsia.
Brokerage Sanford C. Bernstein Ltd also said in its Wednesday note on Genting Singapore that “2021 outlook is lacklustre as management does not expect any significant increase in foreign visitation into Singapore for most of the year”.
Analysts Vitaly Umansky and Tianjiao Yu added that management had given further guidance that without a return of tourists from overseas, 2021 would see “minimal improvement from second-half 2020”.
They further noted: “With the increasing restrictions the Chinese government is putting on overseas gambling, management expects a shift away from Chinese ‘super VIPs’ towards more mass/premium mass” customers.
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