Philippine Casino Industry Not to Get Affected by Cannibalization

PhilippinesBrokerage firm Morgan Stanley has speculated a positive outlook for the casino market in Philippine in spite of the development of additional gaming facilities and convention venue space in the country.

Some quarters expressed their concerns that additional gaming facilities that are being approved lately will have an adverse effect. It might lead to substantial losses because of cannibalization in the casino industry.

Okada Manila is the most recent casino resort that has been opened. Lately, The brokerage firm made a proper review of the market and submitted its report where it is mentioned that the new casino would not pose any threats to the industry. It will be of no concern of cannibalisation as demand strips supply.

The report from Morgan Stanley mentioned that the market of Philippines is growing at a breakneck pace in Asia. It is likely to have a growth rate of approximately 25% between 2017 and 2018 for the entire casino gross gaming revenue.

Okada Manila

Morgan Stanley made the following statement;

We are not concerned about cannibalization, which is not visible in the second quarter. Strong tourist arrivals and the NAIA Expressway have brought in more Chinese and Filipino mass customers from cities outside of Manila respectively.

The NAIA Expressway is an approximately 8-kilometre road that connects Ninoy Aquino International Airport (NAIA) terminals with Cavitex, Skyway and Entertainment City that hosts the casinos. The NAIA Expressway opened on 3rd June 2017, and it has boosted the Philippines casino industry and contributed to the growth of the economy as well.

Okada Manila casino was opened in December last year and has recently started offering the VIP gaming as construction process is still going on. The analysts at Morgan Stanley said that Okada Manila would have full game operations in the 1st quarter of 2018. The first delay is because of construction disruption and previous offering of the VIP gaming facilities. The casino resort began its hotel operations in March this year with just 100 of the 993 hotel rooms ready.

The delay in the construction work has affected almost 30% of the mass market tables of Okada Manila casino. It is speculated that 500 hotel rooms and 20 restaurants will be opened by 2018 first quarter.

As per analysts Praveen Choudhary and Alex Poon, the casino resort would generate revenue worth $1.2 billion by the end of 2019. This would give a 32% market share to the casino thereby beating the established rivals like Resorts World Manila, Bloomberry and Melco Resorts Philippines.

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