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Southeast Asia's Gaming Rise: Challenging Macau's Dominance

In the ever-evolving landscape of the Asian casino industry, the spotlight is now firmly on Southeast Asia. The ASEAN bloc, consisting of Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand, and Vietnam, is emerging as a gaming powerhouse, set to reshape the dynamics of the Asian gaming galaxy. With growing economies, world-class resorts, enticing tourist destinations, and a burgeoning local player base, Southeast Asia represents not only a significant opportunity but also a formidable challenge to established casino destinations, notably Macau.

Southeast Asia's Gaming Rise: Challenging Macau's Dominance

Economic Powerhouse: ASEAN's Economic Might

Daniel Cheng, an industry veteran, predicts a monumental shift in global economic rankings, with the ASEAN bloc poised to overtake Japan within this decade. The economic strength of this region cannot be understated. The collective GDP of ASEAN, currently exceeding $3.3 trillion, ranks as the fifth-largest in the world, trailing closely behind India and surpassing countries like Canada and Brazil by a substantial margin. The bloc's economies exhibited robust growth of 5.2% last year, with projections indicating a further expansion of 4.7% this year and 5% in 2024, according to ASEAN's annual report.

Indonesia, the fourth most populous country globally, is highlighted by Cheng as a key player in the region's economic ascent. Boasting a GDP nearly three times that of Singapore, Indonesia is not only a significant economic force but also an outbound travel juggernaut. The comparison between Indonesia and China in terms of visitor receipts and tourism arrivals to Singapore underscores the country's impact on the tourism landscape.

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Thriving Markets: Philippines Leading the Way

The Philippines, with its dynamic gaming market, is positioned to overtake Singapore in gross gaming revenue. The Gaming Advisory Services of the Gaming Corporation Group estimates that the Philippines' gross gaming revenue could reach an impressive $5.9 billion in 2023, with two-thirds of it derived from Manila's Entertainment City integrated resorts (IRs).

The Philippines stands out in the ASEAN region by allowing its citizens unrestricted access to casino gaming, a unique approach that fuels the local gaming industry. Additionally, the presence of Philippine offshore gaming operators (POGOs) has propelled the country into the spotlight as the only regulated online gaming market in Asia. The POGO sector, along with a growing domestic online gaming market, contributes to the resilience and strength of the Philippine gaming landscape.

The expansion is not limited to the capital city, Manila. Bloomberry's Solaire North in Quezon City and developments in Cebu City, such as NuStar and Hann Resorts, exemplify the industry's growth across the Philippine archipelago. Clark, a weekend getaway destination north of Manila, is experiencing a casino boom with several new or upgraded casinos, reflecting the region's commitment to gaming tourism.

Vietnam and Thailand: Rising Stars in the Gaming Galaxy

Vietnam, with its Corona and Hoiana resorts, showcases the nation's dedication to gaming tourism. Despite challenges posed by the pandemic, these developments underscore Vietnam's commitment to positioning itself as a key player in the gaming industry. The opening of Corona on Phu Quoc Island, accessible without a foreign passport, and the launch of Hoiana's $1 billion first phase along Vietnam's coastline highlight the nation's ambition.

Thailand, while facing legal hurdles, has become a focal point for international casino operators. Hard Rock and Las Vegas Sands are actively engaging with Thai officials, indicating a renewed interest in the potential of the Thai gaming market. Although some remain cautious about the legal landscape, the influx of tens of thousands of Thais crossing borders to Cambodia and Laos for gambling activities suggests a latent demand that could drive the industry forward.

Regional Powerhouses: Malaysia and Singapore

Malaysia, home to Resorts World Genting, the region's first integrated resort, has completed a $2 billion upgrade. As Southeast Asia's most affluent full-size nation, Malaysia continues to invest in its gaming and hospitality offerings, solidifying its position as a regional gaming hub.

Singapore, among the world's richest nations per capita, hosts two of the planet's most attractive and profitable integrated resorts – Marina Bay Sands and Resorts World Sentosa. Both resorts are undergoing significant expansions, with a combined investment of $3.5 billion. The resilience of Singapore's gaming market is evident in its ability to surpass pre-Covid gaming revenue levels, showcasing the country's dominance in the region.

Macau's Response: Diversification and Challenges

As Southeast Asia gains prominence, Macau, a longstanding gaming giant, is faced with the challenge of diversifying its visitor base beyond greater China. The city's Big Six casino concessionaires are collaborating with various Macau government departments to attract more foreign tourists. Sporting events, including the recent SJM Open golf tournament and the upcoming MGM Macau Tennis Masters, are seen as catalysts to draw international attention and curiosity.

Mary Mendoza, Managing Director of gaming-hospitality consultancy The Platinum, emphasizes the need for holistic market planning to accommodate the needs of Southeast Asian visitors in Macau. However, opinions on the potential success of this initiative differ. While some believe that Southeast Asia could impact Macau on the margins, others remain skeptical, stating that turning Macau into an international destination is a complex task.

The Macau vs. Southeast Asia Debate: Competing Realities

Daniel Cheng argues that Macau, under the post-2022 regulatory regime, lacks the necessary infrastructure to compete evenly with ASEAN jurisdictions. The region's reliance on mainland China's outbound travel and its inherent demographic and market differences pose challenges in aligning with the diverse offerings of Southeast Asian destinations.

Contrary to expectations, Southeast Asia has not demonstrated a significant ability to challenge Macau's dominance. Andy Choy, a longtime Macau gaming executive, dismisses the idea of Thailand as a game-changer, asserting that if mainland gamblers desired Thailand, they would already be going to Singapore. The scale of the Macau gaming market, its critical mass of properties, and the ease of access for mainland Chinese patrons make it a compelling destination compared to standalone properties in other countries.

Unintended Consequences: China's Influence on Macau and Southeast Asia

China's stringent policies against overseas gambling, coupled with economic challenges and slow resumption of overseas flights, have impacted mainland tourism across Asia. The unintended consequences of these policies also affect Macau, where gaming volumes have not yet surpassed pre-Covid levels, even with mainland Chinese visitors able to travel since September 2020.

The arrest of Suncity boss Alvin Chau in December 2021 and subsequent measures to shut down Macau's junket business have significantly impacted Macau's VIP sector, representing 46% of 2019's gross gaming revenue (GGR). The lack of liquidity for many VIP players, previously provided by junkets, poses risks to the house, as there is no legal means to collect gambling debts in mainland China.

The Road Ahead: Southeast Asia's Ascendancy and Macau's Recovery

Despite the challenges faced by Macau, Southeast Asia's gaming market continues to strengthen, with major markets surpassing pre-Covid benchmarks. The bottom line, as David Leppo, president and CEO of, emphasizes, is that the Southeast Asia market is robust and only getting stronger, even without mainland China travelers.

Morgan Stanley's Praveen Choudhary estimates that Macau's full-year GGR is projected to improve to 62% of 2019 levels, with mass gaming approaching 100%. The region's investment in reshaping Macau as a tourist destination aims to achieve a plateau of around 80% through 2025. The industry's focus on expanded higher-margin mass play reflects a strategic shift to adapt to changing dynamics.

Conclusion: The Shifting Tides of the Asian Gaming Landscape

In conclusion, Southeast Asia's gaming renaissance is underway, fueled by economic prosperity, vibrant tourist destinations, and a growing base of local players. While Macau remains a formidable force in the gaming industry, the rise of Southeast Asia signals a significant shift in the dynamics of the Asian gaming galaxy.

The competitive landscape is evolving, with established destinations like Macau facing formidable challenges from the dynamic and resilient markets of Southeast Asia. The road ahead will likely see a continued clash of titans, as both regions strive to solidify their positions in the ever-expanding and competitive Asian gaming landscape.



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