Fitch Ratings Inc expects gaming revenue in Singapore’s duopoly casino market to expand by 10 percent year-on-year in U.S. dollar terms in 2024, “following a return to over 15 percent higher than pre-pandemic levels in 2023”.

The report, covering the global outlook for the gaming sector, and issued on Thursday, added regarding Singapore casinos: “We expect revenue to be driven by increasing foreign visitors in 2024, as in October 2023 arrivals were at around 25 percent below 2019.”

The ratings house observed: “Singapore continues to perform above expectations as customer growth diversifies outside of China.”

Though it acknowledged: “In particular, arrivals from mainland China are still well below pre-pandemic levels, despite improvements since the reopening.”

Singapore’s two-resort casino market consists of Resorts World Sentosa, run by Genting Singapore Ltd, and Marina Bay Sands, run by a unit of Las Vegas Sands Corp.

“Market leader Marina Bay Sands Pte Ltd (BB+/Positive) has opened around 1,200 renovated rooms in the first nine months of 2023 and Genting Singapore Ltd, has extended credit to customers over 2023,” said the Fitch analyst team, led by John Kempf, senior director.

The update also had commentary on Malaysia’s single-resort casino business, Resorts World Genting, run by Genting Malaysia Bhd, and the recovering Macau market.

Fitch thought recovery in Malaysia would “continue to lag”, but expected revenue to grow by 9 percent year-on-year in 2024.

Though the institution noted: “Revenue remains well below pre-pandemic levels, mainly due to weather-related events since 2022.

“Nonetheless, growth over 2024 should be driven by a steady increase in domestic traffic and foreign tourists, and supported by the likely repair of.. [an] access road by first-half 2024.”

A deadly landslide in December 2022 affected a road serving the general Genting Highlands region. A recent Malaysia media report said the Batang Kali-Genting Highlands road is due to be reopened to the public by May 2024.

Fitch stated in its Thursday commentary that “all eyes” would be on Macau in 2024, as visitor volume was expected to grow, despite “a backdrop of a weakening China economy”.

On Wednesday, Moody’s Investors Service Inc had changed its outlook on Macau, a special administrative region of China, to ‘negative’ from ‘stable’, while keeping the region’s foreign currency issuer ratings at “Aa3”, indicating a very low credit risk of default.

The announcement followed Moody’s outlook change on the government of China’s “A1” rating to ‘negative’ from ‘stable’.

Nonetheless, Fitch observed in its Thursday memo commenting on Macau gaming, that Covid-19 measures relaxed in January this year and continued growth of airline travel had brought mass-market baccarat revenue to “97 percent of 2019 levels during third-quarter 2023 versus 11 percent in third-quarter 2022”.

Fitch now expects total gaming revenue, including from the VIP segment, to be 79 percent of 2019 levels “despite concerns of growing economic weakness in China”.

The institution added: “Early 2024 comparisons will be favourable, while increasing visitation due to the return of air capacity to the Hong Kong and Macau airports should further drive growth.”

The institution did flag “concerns by North American investors regarding regulatory and political changes”. These included “the revamping of VIP regulations that has caused a material, and potentially, permanent change in the level of gaming revenue from that segment” in the Macau market.

Citigroup said in a recent note that it expected Macau’s gross gaming revenue (GGR) in 2024 to grow 19 percent year-on-year, to about “MOP216 billion or circa US$27.1 billion”.

The Macau government estimates the city’s casino GGR next year will be MOP216.0 billion, according to its fiscal year budget proposal for 2024.