Gaming

Asia Pacific considered as an emerging gaming market

Thursday 09 de May 2019 / 13:17

⏱ 2 min read

(Macau).- The gambling industry could see more mergers and acquisitions, particularly in the Asia Pacific region, according to one wealth manager. "I think some of the big U.S. players will probably try growth by acquisition," said Adam Dawes, a senior investment advisor at financial services company, Shaw and Partners.

Asia Pacific considered as an emerging gaming market

Dawes predicted that consolidation will happen because gambling companies have few other options now. In popular gambling cities like Las Vegas and Macau, organic growth is not as strong as before, he said.


Gross revenues from Macau's gaming industry fell 8.3% in April, compared to a year ago. Total "gaming win" for casinos on the Las Vegas Strip fell 3.83% in March this year, compared to a year ago.


"Macau was the growth engine — that has slowed down. You've got Vegas, which is the old world, but that's not all so fiery," Dawes told CNBC in a phone interview last month.


In other parts of the world, it's "harder and harder" to find sites that gamblers will visit, he added. "To find growth for these companies, they either, one, have to buy somebody out, or consolidate with each other - so like a merger, or an aggressive takeover - to generate the sales and to generate the growth going forward," he said.


Harry Curtis, a managing director at Nomura Instinet, suggested that there's "more noise" around consolidation because bankers have a "mandate" to look for buyers. He noted that billionaire investor Carl Icahn is looking to sell Caesars Entertainment, but said there aren't many buyers for the whole company.


"However, there is appetite for individual assets, both on the Las Vegas Strip and in regional markets," Curtis told CNBC in an email. The Nomura Group owns stocks of Caesars and has an investment relationship with the company.


Deep pockets and growth areas


Gambling companies in the U.S. have "deep pockets" and could be "hunting around" for assets, said Dawes from Shaw and Partners. "I think Australia's ripe for that picking," he said, adding that Asia Pacific is "definitely" in their sights.


Two casino operators Down Under, Tabcorp and Tatts Group, merged nearly two years ago. That merger "worked very well" and it gave the company the ability to compete on a "global scale," Dawes said.


Just last month, Wynn Resorts and Crown Resorts announced a possible deal that later fell through, which could also affect consolidation in the sector. "I think that might accelerate some of the companies starting to look at different areas, but I don't have a timeline on it," Dawes said.


Nomura's Curtis said privately held casinos in regional markets outside the U.S. could be targets for acquisition, but that there aren't many left that could be sold at an accretive price. An acquisition is considered accretive if it increases the acquiring company's earnings per share.


Still, Dawes is confident that gambling companies could find growth in Asia Pacific. While the U.S. population is slowing, "Asia Pacific is definitely firmly in that emerging market slash growth area," he said.

Categoría:Gaming

Tags: Sin tags

País: Macao

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