Staff & Wire Reports | The global gaming market is ripe for growth, both this year and beyond, depending on how deep and how long the credit crunch affects expansion, according to a report released Friday by Ernst & Young.
The report – Reviewing the Market: The 2008 Global Gaming Bulletin – concludes that a repeat of last year’s growth in worldwide gaming hinges on affordable sources of capital.
"Given the opening of many jurisdictions, the increasing acceptance of destination gaming and emerging technological advances, the industry is ripe for growth," the report states. "Operators will need strong capital markets, however, to fuel that growth. The climate that exists in the global markets today makes for an uncertain conclusion regarding the abilities of gaming companies to keep up with the momentum."
The report points to other challenges faced by the global gaming market. In 2007, for example, several jurisdictions imposed smoking bans in casinos. These bans have resulted in lower gaming revenues, but overall Ernst & Young sees more positives than negatives for the market.
"With new destination centers opening around the globe and technological advances such as electronic table games and wireless betting enhancing consumers’ casino experiences, we see potential for future revenue growth," said Tom Roche, global gaming services leader at Ernst & Young. "However, the sector’s long-term outlook very much depends upon the industry’s continued access to affordable capital to finance the building of the mega casino, entertainment and retail projects that consumers seem to crave."
On a worldwide scale, the report identified Macau as the emerging "gaming capital of the world" based on the $10 billion in revenues generated last year.
"The Macau market has evolved from a local gambling market to a destination market with Las Vegas-style resorts complete with entertainment attractions," the report states. "Other operators are planning to adopt this model."
Development is expected to continue in other countries, both in Asia and South America.
"Singapore has granted two casino licenses, and Taiwan, Japan and Thailand are also considering gaming options," the report states.