The Asian Gambling Market Recovers From The Massive Lockdown

Image by Victor He
Article by : Helen Nov 25, 2020

Not only the gaming operator but the world economy, in general, has suffered from the Covid-19 consequences. Perhaps, it is too early to talk about the firm conclusion of the world’s gambling industry, but the positive changes can be seen in any case. Considering that the number of Covid-19 cases is increasing from time to time, the gaming market’s recovery is forecast to take at least three years. Despite these predictions, there is a chance of speedy restoration, and the Asian gambling market might be one of the first which will face improvements.

Galaxy Entertainment has recently provided its Q3 financial figures, and as far as the results are positive, other casino operators have received little hope for their recovery too. The Chairman of Galaxy Entertainment Group said in his letter: “Given the subdued revenue and ongoing staff costs, the Group’s Adjusted EBITDA was negative $943 million for the third quarter. This represents a 31% improvement compared to the EBITDA loss reported in Q2, which was largely driven by a greater emphasis on cost control.” The Galaxy’s balance sheet has $43.2 billion in cash and $39.7 billion of net cash, allowing the company to manage operations and develop new initiatives. As far as the casino operator received positive EBITDA in October, it is expecting the same results in November.

Galaxy is in the best liquidity position to weather the pandemic storm and should see solid recovery driven by its premium customer base.

Bernstein Research analysts

Another financial services company is talking about the casinos’ recovery in Asia. However, the restrictions placed on Macau have to be eased, and in case China’s Individual Visit Scheme was relaxed in the near future, it would become a visible improvement in the current situation. Fortunately, the process of easing travel limitations has started, and there could be a certain result in several weeks.

There is one more instance that allows analysts to express their views on an improvement in the Asian gambling industry. Bloomberry Resorts has a significant potential for recovery in the Philippines, and it is going to reach the breakeven point with regard to EBITDA dimensions. The situation with Covid-19 in the Philippines was pretty tense, so the government was forced to take stricter rules according to its health measures. The casinos were closed for a more extended period than their partners in other countries. Despite this, it has been reported about positive net revenue in the Q3 of 2020, meaning Bloomberry is showing very promising results in a long-term perspective.

For most of the current year, South Korean casinos were closed because of the massive lockdowns. However, things will get better, and such casino operators as Paradise Co. and Kangwon Land are showing positive growth. According to the financial report in October, Paradise’s revenue increased by 9% compared to September. In October, the table game revenue was around KRW20.41 billion, while the machine games brought KRW1.95 billion only. Despite Q3 brought in KRW40.9 billion ($36.6 million) loss for Kangwon Land, compared to Q2 when the losses were KRW 45.56 billion, it is an improvement. The operator was forced to close its properties in August and was allowed to reopen in mid-October.

As the above-mentioned figures show companies are trying to make amends, and as the recent results reveal, they are on the right track.

Helen

Chief Editor

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