Where is the Casino Industry Headed?

Posted by: on Feb 26, 2013 | No Comments

Asia-Pacific is the future of global casino gaming, according to the Global Gaming Outlook report by PricewaterhouseCoopers (PwC). This region is poised to surpass the US as the region with the largest casino industry in the world this year. A large part of this can be attributed to robust economic growth, driven by major emerging markets in the region. Not to mention, the constantly growing interest in recreational gambling in the increasing number of economically liberated populations in this part of the world.

Casino Industry Numbers in Asia

The PwC study suggests that by 2015, Asia could be generating revenues of over $79 billion from its brick and mortar casino industry. This would be a five-year compound annual growth of 18.3% from the 2010 figure of $34.3 billion. The emergence of Macau and Singapore as massive casino gaming capitals has been pivotal to such surging growth figures in the Asia-Pacific, which already stood at an astounding 49.7% in 2010.

PwC claims that the region’s share in the global gaming market will rise from 29.2% in 2010, to 43.4% in 2015. This will establish a globally dominant marketplace in the region, as the source of worldwide revenues from the casino industry will witness a geographic paradigm shift. Such predictions are also indicative of the fact that the demand for casinos and gaming services is fast outdoing its supply in Asia. This augurs well for any nation in the region with aspirations of encouraging and creating revenues through the casino industry.


Forecast for the Rest of the World

Although the global rise of Asia-Pacific in the gaming arena affects traditional stakeholders directly, other major markets will still see growth in their respective gaming industries – albeit slower and lower as compared to Asia. According to PwC projections, global casino industry revenues, including those from the United States, Europe, the Middle East, Africa, Asia Pacific, Latin America, and Canada, will grow at about 9.2% CAGR till mid decade, rising from $117.6 billion in 2010, to $182.8 billion by end 2015.

Individually, the US will see a rise of 5% – from $57.5 billion to $73.3 billion – in gaming revenues between 2011 and 2015. EMEA countries on the other hand, will experience an average growth of 2.4% per annum, crawling to $18.3 billion from $16.3 billion during the same period. Growth in these regions will be affected by faltering economic conditions and adverse regulatory decisions. Smaller markets like Latin America though, will grow by about 8% in the five year period. Revenues here would rise from $3.8 billion in 2010, to $5.6 billion in 2015. Canada, however, is pegged to grow at only about 1.8%, with a rise in revenue inflows suggested at $6.2 billion in 2015 from the 2011 figure of $5.7 billion.

What is Driving The Exponential Growth in Asia?

The growth of the casino industry in the Asia-Pacific region is being fuelled broadly by:

  • The continuing economic growth and subsequent increment in disposable incomes of the working classes.
  • The rise of a large and well-to-do middle-class.
  • A long-standing cultural attachment to various forms of gambling.
  • The ballooning number of new gaming venues, and fresh urban centers encouraging the casino industry.

The Fallout for Erstwhile Market Leaders

The aforementioned report also outlines the way the Asian gambling and casino industry is affecting established and developed markets, such as the US and Europe. The largest resort casinos in Macau for instance are owned by US-based operators themselves. These are sure to pull a sizeable chunk of the foreign clientele out of the Nevada market, including quite a few high-value customers. Singapore’s recent emergence as a gaming destination could also become irksome for the US and European markets. Revenues here climbed to $4.4 billion in 2011, when a casino industry did not even exist till 2009. The improvements in infrastructure and increased ease of travel to Asian gaming locations can also become contributors towards an exodus from western gaming markets.

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