Global gaming growth is expected to decelerate with the slowdown of the Chinese economy, stiffening European regulations and the tapering of recovery in Las Vegas, according to a report from Fitch Ratings on Tuesday.
Looking into Macau, Fitch said it forecasts mid-single growth for the gaming industry in 2019, however, it notes that it still retains a long-term positive outlook given China’s growing middle class, which is underpenetrated.
Contributors to GGR growth in Macau include the opening of Grand Lisboa Palace, the ramp-up of MGM Cotai and Morpheus tower at the City of Dreams, and new infrastructure projects such as the bridge to Hong Kong and Zhuhai.
This will, however, be tempered by tougher year-on-year comparisons and the risk of a weakening Chinese economy.
The rating agency also said it expects mass to continue to drive growth in 2019, as VIP is more sensitive to the economic and credit conditions on mainland China.
“We expect VIP weakness to carry into early 2019 and the full-year 2019 to be about flat, offset by a stable mass market.”
“We expect Chinese-related VIP weakness to spill over into other markets including Singapore and Las Vegas Strip,” it added.
Fundamentals for the Malaysian gaming market remain stable, underpinned by a domestic mass-market focus at Resorts World Genting, while Australian operators will continue to benefit from resilient underlying domestic demand and a favorable regulatory environment - supporting Fitch’s expectation of stable cash and EBITDA generation in 2019.
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