Asia's gaming industry to see double digit growth in five years

First, Genting Singapore announced its entry into the Korean gaming market via a US$2.1 billion investment in Jeju together with a Chinese property developer.Then came property developer OUE and its project for an integrated entertainment resort in South Korea. As land space in the two biggest gaming destinations, Macau and Singapore, reach capacity, casino operators are turning their attention elsewhere.

"There's a lot of focus in Japan about entering and opening new resorts and granting new licenses,” said Greg Unsworth, Singapore media and entertainment leader at PwC.

“The integrated resort concept is one that is particularly appealing. It's seen as a new successful model, built on what's been done in Singapore and its success here.

“There is a lot of interest… but there is a time frame involved in the roll out of these facilities. Even in Japan, they are not expected to roll out any plans till 2015, so Korea is the next target for international gaming players."

But that does not mean the high rollers will give Singapore a miss.In fact, industry watchers say it is the combination of gaming and non-gaming activities that has given tourism a boost.

Adam Weissenberg, vice chairman of travel, hospitality and leisure at Deloitte, said: "If you look at the integrated resorts here, it's not only gaming but you also have shopping, the restaurants and shows. So there's a whole bunch of visitors coming to Singapore and everyone's seeing this and saying, ‘oh my god, this is something nice to replicate’.

“I do think that's why you would look at somewhere like Japan that doesn't have that type of gaming right now and say if we opened some integrated resorts, that would add to the Japanese tourism."

The pie for the gaming industry is growing and the success of integrated resorts such as Resorts World Sentosa and Marina Bay Sands have created more demand for such services.

And analysts do not think that the introduction of an integrated resort in Korea will divert much traffic from Singapore, as the markets in North Asia are largely still not penetrated in terms of gaming services.

“With the Olympics coming in 2020, there seems to be more and more momentum to have one or two integrated resorts,” said Mr Weissenberg.
“If that happens, the demand in Japan can be very significant, with some estimates upwards of US$15 billion if you had two casinos."

Terence Wong, head of research at DMG & Partners Research, said: "Singapore is actually in a good position. A lot of Chinese I believe, now with the clamping down of excessive spending as well as exorbitance,… are actually thinking about not going to Macau so often because the authorities can really check on them, and some of them have taken flight or are coming to Singapore.

“Singapore sells itself as a business city. There are lots of things to do so it's multifaceted and I think that if we sell ourselves right, there will be more opportunities for us."

Unsworth said: "As new destinations open up, it will grow the total market. It does put pressure on existing integrated resorts to up their game and keep relevant and competitive, and make sure the whales continue to visit."

Weissenberg said: “Singapore has the two casinos. Their growth slowed down a little bit in the past year but it's just from the fact that you're reaching capacity. Hotels are running at full occupancy, the casinos are incredibly busy, the stakes are relatively high and… the numbers they're doing are much higher than initially expected.”