Moody's: Malaysian gaming sector to maintain resilience

Written by Moody's Investors Service
Monday, 16 November 2009 14:02

KUALA LUMPUR: Moody's Investors Service expects the Malaysian gaming sector to maintain its resilience, as the economy is set to recover from the current downturn. The sector has also weathered through various economic cycles over the past decade.

In a report issued on Monday, Nov 16, it said that it did not expect the planned opening of two integrated gaming resorts in Singapore, nor the recent start of another in the Philippines, to materially affect the operations of rated operators in the region.

"The bulk of customers at Genting's long-standing monopoly at its Highlands Resort in Malaysia, for instance, are day-trippers and local Malaysian gamblers," it said.

The international ratings agency said it doubted that the new Singaporean resorts will draw away customers from Crown's PROPERTIES [] in Australia, which focus on the domestic and mass markets.

"Similarly, we do not see an adverse impact on Macau from developments in Singapore. Chinese visitors and day-tripping high rollers from neighboring Guangdong are the lifeblood to the enclave's gaming sector, but represent only a small proportion of travelers to Singapore," it said.

Moreover, Macau's VIP customers have longstanding business relationships with local junket operators, many of whom may not have a presence or ability to operate in Singapore.

On the other hand, Genting, which has no operating experience in Macau, will first have to establish connections with junket operators in Macau and with Chinese high rollers before attracting VIP business to its new Singapore resort