How casinos drive economic growth across Asia

How casinos drive economic growth across Asia
The casino business is booming in Asia, with destinations such as Macau and Singapore generating more gambling revenues than all the casinos on the Las Vegas Strip combined.
 
Casinos are a boon for many economies, with a report by Macau’s Statistics and Census Service showing that the casino-heavy region closed 2018 with a GDP of US$54.46 billion, a 4.7 percent year-on-year increase, and also the second consecutive year of growth. Its GDP per capita ranks within the global top three.

Distinguishing between proliferation and success

But while revenues are on the rise, it is useful to distinguish between casino proliferation and success.
 
 
David Green,
Principal,
Newpage Consulting
According to David Green, Principal of Newpage Consulting, which advises governments on gambling legislation and liberalization, casino proliferation has gained traction in jurisdictions with limited or nonexistent regulation, such as Cambodia, Korea, Nepal and Sri Lanka. Such markets are generally characterized by low barriers to entry, low investment, minimal contribution through taxes to host governments, and questionable operating practices.

 Successful casino developments, on the other hand, are those “with significant investment in destination casino resort facilities,” Green noted, some of which have been established in the Philippines, Macau, Singapore and Vietnam over the past decade. Green added that for successful casinos, “Operators are paying substantial taxes and license fees to host governments, are often publicly listed corporations, and place genuine importance on their compliance with the requirements of the respective regulatory frameworks governing casino gaming.”

Success stories across Asia

Examples of such success stories include Nagacorp in Phnom Penh, which enjoys a 200 kilometer radius of exclusivity, and Kangwon Land in South Korea, which is the only casino in the country that locals are legally allowed to enter.
 
Green said Cambodia’s casino industry was also on track to experience significant growth, a result of it being perhaps China’s closest ally in ASEAN “The comparative absence of regulation [in Cambodia] allows licenses to be granted to practically anyone. However, as noted previously, its environment only assures proliferation, not success or scale.”
 
The Philippines has good prospects too. Its casino market is projected to grow 15.4 percent per annum to 2022, according to the “Philippines Casino and Gambling Market Outlook to 2022” report.
 
But it is Macau that still gets the most attention from gamblers in Asia. Green said “Macau is, and will remain for the foreseeable future the dominant gaming and investment destination in Asia, given its proximity to the People’s Republic of China market.”
 
Many of Asia’s biggest under-development casinos are located in Macau, such as the Galaxy Macau Phase 3 and Phase 4 in Macau Coati; the Wynn Diamond – phase 2 of Wynn Palace; Jumeirah Macau Hotel; and the Grand Lisboa Palace, the construction of which is expected to be finished in the first half of 2019.

Casinos in Japan

Casino development is gaining traction in Japan. According to GGRAsia, officials in Osaka are likely to make a decision on development partners for a casino in the city by early 2020. Jim Murren, Chairman of casino firm MGM Resorts International, said “We made the decision to focus all our energy on Osaka … We believe Osaka is going to be the first integrated resort location” in Japan.
 
“We would expect casinos in Osaka Japan would be one of the higher growth potential given the culture, population and the accessibility from other north Asian countries,” said Kok Tin Gan, a partner in PwC’s Cyber Security & Privacy practice.
 
Newpage Consulting’s Green said “It is expected that Japan will further the progress made in 2018 and approve at least three sites for the construction of so-called ‘integrated resorts,’ which will be substantial mixed-use developments, including casinos, conference facilities, food and beverage, hotels and entertainment offerings.”

Vietnam: an emerging gambling destination

Vietnam is another country with immediate growth prospects, according to Green. One major project underway is the Hoiana development on the coast of Central Vietnam. Although the country currently bans locals from most casinos, “that position might change once the results of a pilot scheme to allow Vietnamese nationals to enter a handful of casinos have been assessed,” Green said.

Elsewhere in APAC

Besides Japan and Vietnam, there are billion-dollar developments underway in Brisbane and Sydney, Australia, as well as the NagaWorld casino resort expansion in Phnom Penh, Cambodia, and resort construction near Seoul, Korea, Green said.


Share to:
Comments ( 0 )