Fitch Ratings expects casino markets that rely on local visitation to recover quicker from the COVID-19 pandemic than tourism-reliant regions such as Las Vegas and Singapore.
In a note issued this week by Alex Bumazhny, the Fitch gaming analyst believes destination gaming markets will lag behind regional gaming in their coronavirus recoveries.
“Gaming markets globally that are more reliant on local visitation will continue to recover faster relative to destination markets,” Bumazhny predicts.
Regional gaming markets predominantly rely on gamblers located within driving distance. US gaming operators that specialize in regional jurisdictions include Penn National Gaming, Boyd Gaming, and the newly formed Caesars Entertainment — which expanded its regional portfolio through its merger with Eldorado Resorts.
Though MGM Resorts is heavily focused on Las Vegas and Macau, the casino operator has properties in Atlantic City, Michigan, Maryland, Ohio, Massachusetts, and New York.
Regional gaming operators, Bumazhny says, are still threatened by the reimplementation of coronavirus restrictions, as cases spike in the US. “Targeted measures such as temporary closures and heightened operating restrictions are possible amid higher levels of reported COVID-19 cases,” Bumazhny explains.
Vaccine Vital
Las Vegas isn’t Las Vegas without domestic and international travel. More than 42.1 million visitors arrived in Las Vegas last year. That number will be greatly reduced when 2020 is said and done. Around 20 percent of all Las Vegas visitors are foreigners in a non-pandemic year.
Visitor volume year to date is down 54.2 percent, or 19.2 million fewer people traveling to Las Vegas January through October. Gross gaming revenue (GGR) in Las Vegas is down 38 percent through October.
Singapore — home to the integrated resort casinos Marina Bay Sands and Resorts World Sentosa — has experienced a similar decline in visitor volume. The two IRs rely predominantly on foreign guests, and the city-state reports that international visitor arrivals are down over 43 percent this year.
The potential vaccine availability will allow destination markets like Singapore and Las Vegas to begin recovering more in earnest in the second half of 2021,” Bumazhny rationalized. Fitch forecasts Singapore’s 2021 GGR at its two casinos to reach “only 45 percent” of 2019’s levels.
This week, Centers for Disease Control and Prevention (CDC) Director Robert Redfield said a COVID-19 vaccine will be available in the US in the coming weeks, and made widely available to the general public “hopefully by March.”
Japan IR Odds Lengthening
Viewed as the largest market opportunity to hit the global gaming industry since Macau welcomed in new commercial casino operators nearly two decades ago, Japan continues to move forward with legalizing gambling. However, enthusiasm for the Land of the Rising Sun is waning.
“Japan’s IR plans appear increasingly uncertain as the pandemic exacerbates existing challenges, such as a high gaming tax rate, bureaucratic and regulatory hurdles, and a bribery scandal,” Bumazhny commented.
Las Vegas Sands has already withdrawn its consideration for Japan, and Wynn Resorts earlier this year closed its Yokohama office. MGM Resorts, the frontrunner for licensure in Osaka, also recently announced its decision to assume a substantially reduced role in investing in Japan.
The post Fitch Forecasts Quicker Recovery for Regional Casino Markets Than Las Vegas, Singapore appeared first on Casino.org.
Via Casino.org https://www.casino.org/news