Malaysia had previously benefited as one of the few countries in the region that have a legal large-scale casino. However, more countries are starting to embrace gaming as another source of revenue. — Reuters photo
KUCHING: The biggest competition threat for Genting Malaysia Bhd’s (Genting Malaysia) mass and premium-mass segment is projected to come from the casinos in Cambodia, the Philippines and Vietnam.
Affin Hwang Capital believed that faced with stiff competition across the board, the grouop’s Malaysia property (Genting Highland) might not be as attractive to visitors as compared to the newer regional casinos.
“Local players (premium mass and VIPs) might also be tempted to try out the new regional casinos offering better complimentary perks or rebates and accessible in under four hours by flight,” the research firm said.
However, Affin Hwang Capital believed that the local mass market segment might not be as badly impacted, as minor changes in the complimentary perks are still acceptable, such as higher rolling volume for rooms and meals, and others.
It noted that the mass market volume was around 50 per cent of overall volume in 2018.
“We believe that the biggest competition threat for Genting Malaysia for its mass and premium-mass segment are from the casinos in Cambodia, the Philippines and Vietnam, which are expanding their capacity significantly.
“Myanmar has also passed a new law in May to legalise gaming, leaving Thailand and Brunei as the only two countries within Asean in which casinos are still illegal.
“Malaysia had previously benefited as one of the few countries in the region that have a legal large-scale casino. However, more countries are starting to embrace gaming as another source of revenue.”
The research firm also believed that it would be challenging for Genting Malaysia to match the rebates and complimentary perks offered by regional casinos in lower tax rate jurisdictions, as it would need to sacrifice a significant margin to do so, given that gaming taxes are charged on the gross gaming revenue.
“Minor tweaks on the complimentary perks are still largely acceptable to the mass and premium-mass players. However, the reduction in such rebates is unlikely to well accepted by the VIP players, as the rebates are based on a predetermined percentage of the overall bet of the player.”