Modest growth prediction for global casino industry in 2018

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A new report from Fitch Ratings Incorporated has predicted that gaming markets across the globe are likely to experience moderate growth next year thanks to relatively strong economies and a comparatively kind supply environment.

The forecast released by Alex Bumazhny, Gaming, Lodging and Leisure Senior Director for Fitch Ratings Incorporated, on Monday explained that most major casino operators hold healthy balance sheets although some could see their growth dampened in certain jurisdictions next year by regulatory and leverage risks.

“While many gaming companies will ramp up returns to shareholders, we expect these returns to be balanced with preserving and in some instances improving balance sheet strengths,” wrote Bumazhny. “More broadly, the regulatory and new supply risks are relatively benign in the mature gaming industry.”

The report also pointed to several potential headwinds including the possibility of a crackdown in the United Kingdom on fixed-odds betting terminals (FOBT) alongside concerns that the casino market in the northeastern United States in close to reaching saturation point. It detailed that the MGM National Harbor integrated casino resort from MGM Resorts International had already negatively impacted revenues at the five other gambling venues in Maryland since opening a year ago at a cost of $1.4 billion including to the tune of some $100 million for the nearby Maryland Live! Casino.

With 2018 due to see MGM Springfield begin operations in Massachusetts followed closely by the Wynn Boston Harbor development from Wynn Resorts Limited, Bumazhny predicted that this pattern could well be repeated throughout the northeastern United States, especially if a planned aboriginal casino subsequently opens in the northern Connecticut community of East Windsor.

Bumazhny’s report moreover highlighted uncertainties over the license renewal process in Macau as a potential hurdle while explaining that Pennsylvania’s recent move to license up to ten satellite casinos offering a maximum of 750 slots alongside some 30 gaming tables could negatively impact the region’s other gaming operators.

However, the study stated that these oversaturation concerns could be soothed by more robust markets including Macau, which has experienced a 19% rise year-on-year in annual casino win through October, and a fast-recovering Las Vegas that is due to add almost 7,000 hotel rooms following the opening of the coming Fontainebleau Resort Las Vegas and Resorts World Las Vegas developments.

“That said, tailwinds remain including considerable convention capacity being added, limited new hotel supply for at least three more years and, in Fitch’s opinion, Las Vegas’ favorability as a leisure and convention destination,” wrote Bumazhny.

Modest growth prediction for global casino industry in 2018 was last modified: November 29th, 2017 by Adam Morgan