The Asian casino market is currently facing a potential supply glut, with several major resorts struggling to generate returns. Industry analysts note that investment levels have not matched the required earnings growth across the region.
Market Performance and Investment Analysis
Distressed integrated resorts are appearing across the region, from Incheon to Australia, challenging the previous "build it and they will come" approach. In the Philippines, gaming revenue dropped 16% in the first quarter of this year. Meanwhile, in Macau, five of the six concessionaires reported revenue and EBITDA figures below 2019 levels, despite the region's gross gaming revenue being triple that of Las Vegas last year.Las Vegas Sands founder Sheldon Adelson previously stated in 2007 that "there is probably room for 10 Las Vegases throughout Asia." However, a May 2019 report by Union Gaming, now part of CBRE Capital Advisors, projected a supply issue. The report identified $65 billion in gaming projects scheduled for debut by 2025. Analysts calculated that regional EBITDA would need to reach $27.7 billion to justify this pipeline, more than double the 2018 figure of $13.6 billion.
The pandemic delayed some project launches, alleviating immediate supply risk. In 2022, Japan saw only one qualified bidder for three integrated resort licenses. Since 2019, approximately $21 billion has been invested in Asian land-based gaming, which is about half of the $42.9 billion originally projected.
Estimates place the 2025 regional EBITDA at $13.7 billion.