Yesterday Moody’s Investors Service announced that it has a negative rating outlook for Asia Pacific's gaming sector during the next 12 to 18 months.
In a new report, Moody's says the gaming industry in Asia Pacific, which includes casinos and resorts in Australia, Malaysia, and Macau, is facing increasing operating pressures. Entitled “Asia Pacific's Gaming Sector: Negative Outlook on Economic Uncertainty,” the report says these pressures vary by company and country and have been caused by slowing macro-economies, resulting in cutbacks in optional spending, regulatory changes affecting visitations and intense local competition.
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“Besides these immediate concerns, rated gaming firms face the challenge of managing large acquisitions or capital expenditure in uncertain regulatory, credit, and economic environments,” said Kaven Tsang, Moody’s assistant vice president and the report’s lead author.
Mr. Tsang says that operators in Macau face the dimmest prospects as incremental regulatory tightening on visits from the Chinese Mainland and intensifying local competition have already put pressure on some issuers' profit margins and cash flows.