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MANILA, Philippines - The booming Asian casino business may have enough room to accommodate new players like the Philippines because of huge demand, according to analysts.
The income levels of Asians have reached a point where they start enjoying the luxury of spending for travel and entertainment, something unimaginable 10 years ago, Gabriel Chan, Credit Suisse regional head of gaming and lodging research, said on the sidelines of the 45th Annual Meeting of the Asian Development Bank Board of Governors.
"This increasing income level prompted them to visit places that provide them the easiest access and lowest cost. They go to Macau, they may try Singapore and they may try other destinations as well so it's a gradual process," he said.
Credit Suisse listed the Philippines, along with Japan, Korea, Thailand and Vietnam, as potential new entrants to the Asian gaming market.
Haj Narvaez, research analyst at Credit Suisse Securities (Philippines) Inc., noted that wealth per capita in the country grew 9.5 percent a year from 2000 to 2010 despite limited foreign direct investments and the lag effects of the Asian crisis.
"The contributions of remittances and the [business process outsourcing sector] to the economy, inconsequential pre-Asian crisis, have now reached critical mass," Narvaez said.
What also bodes well for the Philippines is a young population with relatively high literacy rates that anchors a consumer base with significant long-term growth potential, he added.
While Macau and Singapore have dominated the Asian gaming world, other countries in the region like Cambodia have also enjoyed profitable casino ventures as huge demand enabled them to cater to a wide spectrum of players.
"In Macau, you may talk about people that may play HK$2 million per hand and in Singapore it may be slightly lower. Cambodia may be targeting lower end VIPs," said Chan.
But the next big player in Asian gaming may be determined by “who can start first.”
“Singapore is a small city and it doesn’t have much of a local market but it opened first so it attracted big international operators. It's a matter of where the next opening [will be] that will create another market,” said Chan.
That can very well be the Philippines, if Cristino Naguiat, chairman of state-run Philippine Amusement and Gaming Corp. (Pagcor), could have his way.
Pagcor's Entertainment City could generate $10 billion by 2016 when all four casinos become operational, giving Las Vegas and Singapore a run for their money.
One of the four players, Travellers International Hotel Group Inc., which is a joint venture between Alliance Global Group Inc. and Genting Hong Kong Ltd., is working to bring second- and third-tier players from China to Resorts World Manila.
"They're running after whales, while we're running after dolphins," said Tina Garcia, Travellers head for investor relations.
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