Australia’s gaming venues may have to wait as long as two years for gaming revenue, demand, and turnover to return to “normal levels," according to gaming analysts.
The analysts were speaking as part of the three-day Australasian Gaming Seminars, organized by the Gaming Technologies Association in partnership with Asia Gaming Brief, held from 3-5 pm from 11-13 August 2020.
“When you look at post-Covid consumer behavior, you’re going to see subdued behavior. When you look at casinos, around 70-85% of earnings are domestic, but you have reasonable earnings from international visitors. With borders closed, you’ll not likely see FY19 earnings until around FY2023,” said Don Carducci, a gaming analyst at JP Morgan Australia.
Vicky Melbourne of Fitch Ratings, who focuses on Asia Pacific gaming said that her expectations for Asia’s operators are not too dissimilar to that of Australia.
“We found that our forecast from April to August is starting to shift. We said earlier in April that between Las Vegas, Macau, and Singapore, we expect EBITDA to fall 45, 50, and 38 percent respectively compared to 2019.”
Fitch Ratings now sees Las Vegas, Macau, and Singapore to fall 60, 70, and 65 percent respectively.
Melbourne said besides economic impacts, the three markets will also suffer from continued travel restrictions and border closures - which is potentially less of an issue than a market such as Australia, which is geared more towards the domestic market.
“What we have seen domestically is a resilient set of players. As venues have reopened, people have come back faster and stronger than initially expected,” said Matt Ryan of UBS.
“Perhaps the fear of going back to these places was overdone.”
Ryan said he expects that the recovery of Australia’s gaming industry will be reliant mainly on the restrictions set by the government, rather than players’ appetite to spend again.
Whilst the economy will have an impact on gaming spend - this is currently hard to judge due to government economic packages that have “propped” up consumer spending, added Ryan.
“Job keeper will and has artificially buoyed an amount of turnover in the industry, and we’ve seen this across the lottery industry since March, along with an overall 26 percent rise in gaming expenditure.”
In the 2011 Queensland floods, the related government injections saw racing grow around 5 percent whilst lottery grew in the teens, explained Carducci.
“Where we remain cautious is around consumer sentiment when job keeper comes off in step changes, as well as the fear of traveling and social distancing rules,” he added.
For more information about the Australasian Gaming Seminars, or to register, go to www.austgamingexpo.com.
Asia Gaming Brief is a news and intelligence service providing up to date market information for worldwide executives on relevant gaming issues in Asia.
ASIA GAMING BRIEF
PO Box 1139, Macau SAR
Tel: +853 2871 7267
Fax: +853 2871 7264