Brokerage Union Gaming Securities Asia Ltd says it expects the growth in electronic table games (ETGs) seats in Asia to slow dramatically until the end of 2018, as the pace of new casino resort openings in the region begins to slow.
“With the bulk of Macau’s new development wave now in the rear-view, and some of the more meaningful developments more than a few years away (e.g. Japan), our forecast of new ETG seats is rather modest through the end of 2018 at only 1,150 new seats,” said analyst Grant Govertsen in the brokerage’s annual report on ETGs in Asia, published on Friday.
“Of these 1,150 new seats, about 65 percent come from just three properties: MGM Cotai, Jeju Shinhwa World (the former Resorts World Jeju), and Grand Lisboa Palace,” he added.
MGM Cotai, developed by Macau-based MGM China Holdings Ltd, is scheduled for a fourth quarter 2017 opening; Grand Lisboa Palace, promoted by Macau gaming licensee SJM Holdings Ltd, is to open in the second half of 2018. The casino planned for Jeju Shinhwa World is likely to open in late 2017, according to previous information from its promoter, Hong Kong-listed Landing International Development Ltd.
The additional seats expected to be installed until the end of 2018 could represent a potential revenue of around US$24 million for the various ETG manufacturers, according to Union Gaming.
“In the out years (2019+) we see a fair amount of demand driven by new properties in Vietnam, Vladivostok, Manila, Incheon, and Jeju. In addition, we would expect Japan to be a significant ETG market although that is likely five years away at this point,” said the brokerage.
Union Gaming’s latest update on ETGs in Asia expanded this year to include the entirety of Vietnam, as well as the first casino resort in South Korea – Paradise City, a property developed by local casino operator Paradise Co Ltd in partnership with Sega Sammy Group. The initial phase of the scheme – at Incheon, South Korea – was launched on April 20.
“All-in we have tallied more than 12,700 ETG seats but estimate the total installed base of ETGs in Asia is likely in excess of 14,000 when including other geographies not in our survey,” said Union Gaming’s Mr Govertsen.
“Over the last 12 months we noted an increase of [about] 1,200 seats on a same-market basis as compared to last year. Most of the growth in ETG seats derived from new large-scale property openings, namely Wynn Palace and Parisian [Macao] in Macau, and Okada Manila in the Philippines,” he added.
According to Union Gaming, the installed base of ETGs in Asia is led by stadium-style multi-games, with a 49 percent share of seats, due in large part to the installed base in Macau. “Roulette, with a 28 percent share of seats, is very popular outside of Macau, both in stadium-style and standalone installations,” added the brokerage.
Excluding Macau, there is a “fairly even distribution” of market share between ETG manufacturers, with the top five having a combined market share of more than 80 percent, according to Friday’s report.
“Across the seven markets surveyed we found that five manufacturers have a double-digit market share, with Macau’s LT Game [Ltd] at a 36 percent share given their dominant position in Macau,” said Mr Govertsen. “The rest of the Big 5, Alfastreet, Aruze, Interblock, and Scientific Games, are within a fairly tight market share band between 10 percent and 14 percent.”
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"The stronger mass growth [in Macau in the second quarter] should be viewed positively vis- à-vis [the] government’s stated priority”
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