Singapore has been one of the most preferred destinations for gamblers. The five-star accommodations and the casinos make it a perfect combination for the gamblers. But is the successful run of the casinos have a guaranteed run in the future? Well, it certainly does not feel like it. The VIP accommodations in the VIP segment look uncertain and that makes the future bleak for Singapore.
Genting Singapore, one of the most popular operator has reported weak numbers for the first nine months of 2019 ending on September 30. As per the recent filing by the company, it is observed that the net profit of the company fell by 24% in the third quarter. The comparison was made against the data of the third quarter of 2018. Now, what’s interesting is that the gambling business is the major contributor to the lack of net profit.
The company has posted some very poor results. The company reported a 7% decline in the total revenue for Q3 on a year on year basis. The gaming revenue has taken an even bigger drop by 11%. The gaming revenue has been reported as $360.7m. However, non-gaming revenue has been increased by 1%. Well, that has worried the analysts and that depicts a clear picture. Customers are visiting the properties and using the facilities as per the above figures. However, the same customers are not using the casinos. However, if the trend continues in the company’s gaming revenue then the trouble is bigger for the Genting Singapore and overall Singapore Gaming Industry.
Genting Singapore has however distanced itself from all the concerning reports. The company said that they are doing well in Singapore. The company also confirmed that the success in Singapore is encouraging them to expand in the region. The company reported that there are customers from all segments. Genting Singapore is also opening its new resorts in Japan. They have selected Yokohama and Osaka for the resorts reported Calvinayre.
Now if we go by the Affin Hwang Capital report, a leading investment firm of Singapore, then the picture of the Singapore Gambling Business becomes a bit clearer. There are basically multiple factors as per Affin Hwang Capital. From April this year, there is an increase of 50% in gambling tax in Singapore. In more sad news for the gambling industry, the mass market GGR of Singapore has decreased by 10% on year on year basis to SG $334m or US $245m. The investment firm reported that the win ratio was 3.7% in Q2 of 2019. This is the highest win ration ever for Singapore. However, the momentum failed to live for long and the win ratio fell down to 2.6% in Q3. The analysts believe that the Q2 win ratio helped the Singapore Gambling market recover a bit in terms of profitability.
However, despite Genting Singapore rejecting the concerns of revenue and customer, the analysts are not very convinced. They (analysts) term Singapore market as quite stable now and predict that the companies are not looking to quit the market at this point in time. But if it is seen from the future investment point of view then there is hardly any chance that new investors would agree to invest now in Singapore.