S&P warns Asia-Pacific casinos to brace for slower growth
Asia-Pacific casino operators are expected to face a more challenging operating environment over the next 12 months as softer consumer demand, higher operating costs and continued regulatory pressures weigh on earnings, according to S&P Global Ratings.
Asia Gaming Brief reported that S&P said gaming markets across the region are entering a period of moderate demand amid global economic uncertainty, elevated oil prices, and rising capital expenditure.
The ratings agency expects Macau’s gross gaming revenue (GGR) growth to slow in the coming quarters as comparisons become tougher, and consumer demand eases. Despite this moderation, the market is still forecast to expand between 5 percent and 7 percent, supported by healthy visitor arrivals and resilient premium mass gaming demand.
Fuel prices remain a key risk
Higher fuel prices remain a key risk for the industry. S&P said rising oil costs could discourage leisure travel as consumers reduce discretionary spending, with price-sensitive mass-market players expected to be more affected than premium customers and VIP patrons.
Elsewhere in Asia, Singapore and Malaysia are expected to record modest growth in gaming revenue. Strong tourism, ongoing property upgrades and Malaysia’s tourism promotion efforts are expected to support visitation and spending.
The Philippines is also projected to return to GGR growth, supported by favourable visa policies and continued recovery in the online gaming segment.
Australia and New Zealand present a different outlook. S&P expects casino revenue in both markets to remain under pressure as stricter regulatory measures continue to reshape the industry. Mandatory carded play, cash transaction limits and increased anti-money laundering compliance costs are expected to weigh on revenue and profitability.
Operating expenses are also forecast to increase across the region. Casino operators, particularly in Macau, are expected to spend more on marketing and customer acquisition as competition intensifies for premium mass players.
PAGCOR links Middle East tensions to industry pressure
The concerns outlined by S&P reflect warnings already raised by the Philippine gaming regulator earlier this year. In April, Philippine Amusement and Gaming Corporation (PAGCOR) Chairman and CEO Alejandro Tengco said the industry was already beginning to experience the effects of geopolitical tensions in the Middle East as higher fuel prices increased operating costs and weakened consumer spending.
Tengco said the oil crisis was affecting gaming jurisdictions worldwide, including established casino destinations such as Singapore, Macau, and the U.S. He added that the impact extended beyond casino operators to businesses supporting the wider gaming ecosystem.
His comments came as conflict in the Middle East fuelled concerns over global energy supplies and shipping routes, particularly around the Strait of Hormuz. The resulting increase in fuel prices raised costs for airlines, integrated resorts, and logistics providers while reducing discretionary travel expenditure.
The PAGCOR chief also stressed the importance of maintaining close cooperation across the industry amid economic uncertainty. He said continued dialogue between operators, suppliers and business partners would help the sector respond more effectively to changing market conditions.
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