Asian Casino Industry: A Good Bet?

Posted by: on Jun 30, 2012 | No Comments

Despite most countries across the globe struggling to emerge from depression and financial crisis, the Asian casino industry has something to cheer about and celebrate. The gambling industry is severely impacted by any slump in the economy. The reason is that gambling revenues are totally driven by consumer spending behaviours, which in turn is dependent heavily on disposable income. While the casino industry has been hit by the economic downturn, the projections for Asia are far from dismal.

According to a research report by Berwyn, Pennsylvania-based Turner Investments, casinos in Asia are likely to generate double-digit growth in earnings in 2012-2015.

Before going onto projecting the future of the Asian casino industry, let’s begin by looking at 2011. Las Vegas completed the year with revenues of $6 billion. That was a figure that Macau had surpassed way back in 2006. Macau recorded more than five times in revenues in 2011… a whopping $33.5 billion.

The analysts at Turner Investments identified three reasons for Macau’s success:

  • Asia’s massive population
  • Asia’s growing affluence
  • A cultural affinity for gaming

These reasons have led to the recent spur in the gambling industry in Singapore and could result in the industry’s growth in nations like Cambodia, Vietnam, Japan and the Philippines.

A report by PwC (PricewaterhouseCoopers) on the Global Gaming Outlook says that Asia Pacific is likely to emerge as the leading casino gaming region. Revenues from casino gaming in the Asia Pacific region are expected to grow from $34.3 billion in 2010 to $79.3 billion in 2015. This represents a CAGR (compound annual growth rate) 18.3%.

The growth of the casino industry translates to increased prosperity. While most of the western world is grappling with unemployment, Macau is witnessing labour shortage! According to data published by the Statistics and Census Service, Macau witnessed an unemployment rate of 2.0% in February-April 2012. This low unemployment rate has resulted in a rise in wages in the region. This is what happens when any industry grows in a region. There are increased job opportunities and growth in prosperity.

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