What Lies in Store for the Global Casino Industry in 2019?

Posted by: on Jan 18, 2019 | No Comments

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Revenues of the global casino market is predicted to rise to more than $525 billion by 2023, growing at a CAGR of about 4% during 2017-2023, according to the Gambling Market – Global Outlook and Forecast 2018-2023 report by Research And Markets. The report attributes this growth to rising per capita income, growing number of dual income households, increasing interest and high adoption across the world.

Another key driver of this growth is likely to be the rapidly rising popularity and number of live casinos at various locations. Of course, the online video gaming competitions, which are growing to becoming professional e-sports, will also spur growth. An interesting development that has occurred over the past couple of years is the adoption of cryptocurrencies and blockchain platforms for gambling.

Here’s a look at some predictions for the global casino industry for 2019.

End of PASPA

In May 2018, the US Supreme Court struck down the Professional and Amateur Sports Protection Act (PASPA) of 1992. PASPA had limited sports betting in the United States to only one state in the entire nation, Nevada. With PASPA coming to an end, the doors have been opened for better legal frameworks for sports betting in particular. Since the act was overturned, at least six states have joined Nevada in allowing sports betting. In 2019, we are likely to see the Congress mulling a regulatory framework, while the gambling industry is likely to push back against federal intervention.

Consolidation and Expansion to Continue

Casino owners continue to look for avenues of expansion beyond the US. Given that the regional markets appear to be increasingly saturated, casino operators seem to be attempting to make up for lost revenues through sheer volume of properties. One of the largest casino resorts is expected to be opened in June 2019 by Wynn Resorts in Massachusetts. However, the fate of this whopping $2.6 billion resort hangs in the balance as the Massachusetts gaming commission works through whether the knowledge of Steve Wynn’s years of alleged sexual misconduct was deliberately withheld by the company while bidding for a casino gaming license.

A tribal casino, said to be worth $405 million, is under construction in Wisconsin. This will be the seventh and largest tribal casino, named Ho-Chunk Nation, and will house 2,200 slot machines. In addition, five satellite casinos are scheduled for rural Pennsylvania in 2019, each housing 30 game tables and up to 750 slot machines.

In terms of consolidation, Penn National is a frontrunner, having completed the $2.8 billion deal to acquire Pinnacle Entertainment. Caesar’s has also been in merger talks and rumour has it that MGM Resorts might be the latest to show interest in the acquisition.

Single Digit Growth in Asia

Fitch expects the Asian gambling industry to grow in the mid-single digits through 2019, driven by the recent casino openings in Macau, as well as the stability of the mass market in the region. The growing middle class in China offers positive growth opportunities, since it is still underpenetrated.

The opening of the Grand Lisboa Palace by SJM, along with the ramping up of Morpheus Tower and MGM Cotai are also likely to drive growth in Asia. New infrastructure projects, including the Hong Kong-Zhuhai-Macau Bridge will on help this trend. On the other hand, Fitch expects the VIP sector to continue to slowdown in 2019, with growth been driven primarily by the mass market.

With the Japanese parliament approving the Integrated Resorts Implementation Bill in 2018, the path has been cleared for three multi-billion dollar casino resorts to be built in Japan. MGM Resorts and Las Vegas Sands have already applied for licensing. Wynn Resorts, Caesar’s, Melco Resorts, Galaxy Entertainment, Genting and Hard Rock are also expected to apply for licensing in Japan.

Both China and India hold promise for the expansion of the casino industry in Asia. Now all we have to do is wait and see how the legal framework is modified to support such growth.

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