PHILIPPINES GGR - 2019 to 2023

2019:

A record GGR of US$4,843,643,981 led by the Entertainment City big four casinos. Clark has its best revenue on record with the opening of D'Heights, the addition of the Marriott Hotel at Widus and record numbers of international visitation. Widus is the star performer. 

2020:

COVID hit gaming in February 2020. Revenues started their slide with international borders closed in late March, and Q1 decreased 5% year on year. Q2 saw most casinos fully closed and a 96% decrease in revenue. In Q3 there was some minor recovery with a smaller 69% year on year decline. Q4 saw a greater recovery with Entertainment City (55% decline year on year) and Clark (34% decline year on year) having a good recovery. Key points to 2020 was that Clark suffered the least decline due to it having a large expat Korean and Chinese community and only having limited capacity restrictions rather than the more thorough restrictions in Manila. Overall the gaming market was down 57% at US$2,601,734,670.

2021:

Q1 saw a 43% decrease year on year reflective of the very poor operating conditions. Unfortunately Q2 saw extra restrictions placed on the Manila casinos. Casinos stayed closed for most of Q2 and suffered a 35% decline quarter on quarter. During Q3 the Manila casinos were closed from 6th Aug. to 30th Sept. however GGR improved 36% due to the introduction of eSabong. Entertainment City was up 28.80% and Clark was up 22.25% due to strong locals play and expatriate community. Q4 sees a rebound and is the best performing month since Q1 2020 however still down by 39%.

Overall H1 2021 was a very difficult trading environment. Year on year H1 revenues were down by 11%, which was not expected prior coming into 2021. The second half of 2021 sees Manila casinos fully closed for most of July to Sept. opening to higher capacity on 18th October. H2 2021 manages to generate a 33.20% increase over H2 2020. Overall 2021 is only a 6.50% improvement over 2020. Another very tough year for operators in general. H2 2021 achieved the highest level of GGR since the pandemic, however still 49.20% below H2 2019.

 

There are many growth signals for 2022 including the opening up of international travel in March, the first full year of the newly opened HANN casino and Swissotel Hotel in Clark, steadily improving infrastructure, and the pent up demand of the key markets of locals, expatriate Koreans, Chinese, Japanese and Taiwanese. The opening of NuStar, Cebu in March 2022 will see the revival of the Cebu market. Clark will see the opening of Royce Casino in Q3. 

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2022:

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Q1 starts the year off with a small 3% increase in GGR quarter on quarter and a 10% increase year on year. The major markets of Entertainment City, Manila, up 15%, and Clark, up 60%, see good growth compared to Q1 2021. From May Clark benefits greatly from the opening of HANN Casino and the Swissotel Hotel. Clark Q2 sees GGR reach $86.3 million its best quarter on record exceeding the $76.9 million in Q4 2019. Q2 continues to be very strong with a year on year growth of 128% and quarter on quarter growth of 34%. Overall H1 sees $1.667 billion GGR. Q3 increases to $1.004 billion, a record result since the previous highest level of $1.3 billion in Q4 2019. H2 closes at US$2.22 billion for a total GGR of US$3.89 billion. Highlights include the performance of Solaire Casino and HANN Casino, both being world-class properties. NuStar, Cebu also out performs and is a major development for Cebu to compliment the new airport.

 

2023:

 

Q1 reaches US$1.24 billion, just short of the record of US$1.26 billion in Q4 2019. Q1 2023 improved by 72.80% over Q1 2022, which was still having entry restrictions. Entertainment City has had a very strong rebound with 66% of the overall Philippines gaming revenue and Clark at 12%. Both have a tremendous upside with current and future infrastructure projects. 

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Q2 figures have flattened out a bit with decreases led by Clark with 5.1%, Entertainment City 4.3% and PAGCOR 3.8%. The locals market, which has been keeping earnings robust, are likely reaching tap out stage, the Koreans market still building and the Chinese are to return. We see Q3 being very strong with a potential US$1.5 billion GGR with the junket market slowing re-establishing itself. Q2 was 26% higher quarter on quarter and the fourth highest quarter in the 2019 to 2023 period. 

 

PAGCOR properties continue to underperform as PAGCOR reduces its investments in renovations and gaming equipment preparing for a possible sale as early as 2024/2025 or not at all. 

 

For 2023 we estimate GGR to be in the US$5.2 to US$5.8 billion range, exceeding 2019. (US$4.84 billion). The growth will be led by the four casinos in Entertainment City, which should fall within a range of US$3.6 to US$4.2 billion compared to $3.23 billion in 2019.

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With the growth of Proxy, and a strong locals market representing approximately 55% of the total GGR in Q1, the remainder of the year should see all previous records exceeded. Another important note is that the Chinese market has has barely recovered at all, with the South Koreans the only international market of any significance. We should see the return of the Chinese in the later part of 2023. 

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Gross Gaming Revenue (GGR):

 

              2019                     

H1:   $2,340,057,110       
H2:   $2,503,586,871        

Total $4,843,643,981        

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              2020  

H1:   $1,200,599,678

H2:   $1,401,134,992

Total $2,601,734,670

 

              2021                  

H1:   $1,076,373,916

H2:   $1,246,995,937

Total $2,323,369,853

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              2022

H1:   $1,679,239,139

H2:   $2,244,940,640

Total $3,924,179,779

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              2023

H1:   $2,450,692,079

H2:   $ - ---  --- --- -

Total $2,450,692,079

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2024 and Beyond:

 

Casino openings include Waterfront Pavilion, Manila (Q2 2024). Westside City, in Manila Entertainment City, is having some funding delays with its construction, but should open by mid-2024 placing some initial pressure on Solaire, Okada and COD. No other major openings are planned at this stage.

 

MARKETS

 

CEBU:

 

With NuStar, Cebu having opened in May 2022 it will remain to be seen if they will be able to generate enough revenue to be successful in the short term with its US$300 million minimum investment. NuStar is the lone integrated resort and may not be enough for Manila and international customers to make the trip. We estimate GGR in the US$70 to US$90 million range in full year 2023 after the introduction of junket rooms from May.  The Emerald remains for sale and will not open until at least 2025 if a buyer is found. NuStar will make up less than 2% of the overall market in 2024. 

 

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CLARK:

 

Clark will remain the stronger of the two secondary markets with 2022 finishing at US$377 million GGR, taking it much higher than 2019 levels. (2019: US$235 million). Royce Casino will expand its new integrated resort throughout 2023. There are several expansions planned for the 2023-2024 period including HANN, Midori, D'Heights and Casino Plus. We estimate Clark to reach gaming revenue of US$680 to US$720 million in 2023, and with several large-scale projects in the planning stages we estimate the total GGR to be in the range of US$$1.2 to US$1.4 billion in 2027.

 

GGR PROJECTIONS

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Our projection for a US$10 billion Philippines market remains at full year 2027 exceeding all SE Asian markets other than Singapore and Macau. 

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