Singapore’s Casinos Shift Focus To Mass Market Gamblers
Casinos in Singapore have revamped their strategy due to the fact that China’s economy has continued to slow down and Beijing’s crackdown on money laundering and corruption has impacted their VIP gaming revenue.
Macau’s casino industry was forced to discard its focus on VIP gamblers and focus on mass market gamblers.
Singapore’s casinos are now adopting a similar strategy as they have begun to increase their focus on mass market gamblers to counter dropping revenues. The Resorts World Sentosa casino in Singapore recently announced a reduction in the workforce on its gaming floor and has introduced innovative non-gaming attractions.
Resorts World Sentosa
In a statement, Jessalyn Chen CIMB analyst said,
They have been redeploying [staff] who used to work in the VIP business, to the mass-market segment. They’re also trying to bring in new customers with promotions such as bringing in Michelin-starred chefs
Genting Singapore the company that runs Resorts World Sentosa has witnessed a 70 percent drop in its net revenue in 2015. The profit for the year was S$193 million (US$143.99 million) which was the lowest ever since the casino was opened in 2010. The non-gaming revenue of the casino has however remained strong. In 2015, the revenue dropped slightly to S$650 million (US$ 484.96 million) from S$653 million (US$ 487.2 million) in 2014.
Sentosa offers a wide range of non-gaming amenities including an aquarium, hotels, restaurants and a Universal Studios theme park.
The world’s largest gaming hub Macau has similarly shifted away from VIP gamblers and diversified its offerings. Macau casinos are now offering amenities like theatres, themed attractions and restaurants to attract family tourists and mass gamblers. Analysts believe that the mass gambling segment has not been affected as much as VIP gambling in the current downturn. The biggest negative factor was the weakening of regional currencies against the Singaporean dollar, making travel expensive for those in the Southeast-Asian region.
Brokerage firm Nomura however believes that the casino industry in Singapore has already hit its lowest point and will start its recovery soon. An analyst from Nomura, Tushar Mohata has highlighted that VIP gaming at Genting was stabilizing with revenue being posted in the range of S$8.5 billion (US$6.34 billion) per quarter after experiencing a declining trend in the previous months due to the anti-corruption clampdown initiated in China in 2014.
However Grant Govertsen, head of Asia equity research at Union Gaming has stated that Singapore’s casino industry will continue to struggle due to the growing competition in the region.
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