Could VIP business be a winning card for Genting Singapore?

VIP rolling chip volumes could bottom out this year.

Over the past couple of years, VIP players across Asia have gotten casinos out of their system as Chinese government began embarking on an anti-corruption and austerity drive.

According to DBS Group Research, with these players trying to avoid government scrutiny, VIP gross gaming revenue (GGR) in Macau and Singapore fell 40% and 34% in CY15 and 7% and 27% in CY16, respectively.

For Genting Singapore (GENS), its market share has declined from mid-50% in 2014 to mid-30% by end 2016.

However, everything is about to change now, DBS Group Research noted.

"Nevertheless, with Macau’s GGR on an upward trend since August 2016, we are potentially at the start of a recovery. Assuming Singapore follows the trends in Macau and with management now focused on growing its top line, these bode well for GENS' business," the brokerage firm said.

With this, VIP rolling chip volumes could start bottoming out this year, leading to a 3% bounce in 2018. This would follow the around 35% slump in 2016.

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