Just three markets – China, Japan and South Korea – will comprise 80 percent of all Asian gaming revenues in the coming years, according to Goldman Sachs Managing Director, Simon Cheung.
Speaking at the Japan IR Forum, Cheung foretold that while casino spending as a percentage of disposable income is far higher in countries like Malaysia and Singapore, a combination of cultural and regulatory shifts will see activity move towards these more developed, but currently more restrictive markets.
In Japan, regulated gambling is largely restricted to pachinko, while in South Korea, only foreigners are allowed to bet in the country’s various casinos. In China, casino gaming is only legal in Macau.
“This is why structurally, for the last ten years, Singapore and Malaysia have been growing much slower than Macau or the Philippines,” said Cheung.
Domestic growth in these markets is likely to rebound far quicker than elsewhere from the impact of the coronavirus, he added, driven in the main by pent-up demand from mass-market gamblers. However, mirroring the consensus view of other gaming analysts, this is not expected to fruition until 2022. Cambodia, Macau, and Malaysia are likely to see the sharpest resumption to pre-pandemic levels of play.
Speaking to the prospects of Japan’s IR sector in isolation, he was less confident that the policy would see a surge in overall domestic game-play. Instead, the casinos, which have recently been told that a full plethora of gaming options will be available to them (baccarat, blackjack, craps, pai gow, and various forms of poker) will benefit from a cannibalisation of the truly massive pachinko market.
“Once IRs are allowed to open in Japan, it may not drive a significant amount of Japanese gaming spending but perhaps more of a dilution of market share from pachinko business,” he said.