Echo Clear Winner in Asian Gaming Wars
Echo Entertainment is all set to be a clear winner in the battle to get a slice of Asian gaming pie. The company will leave behind Crown Resorts in market dominance. According to analysts at Macquarie, the Australian gaming operators will continue their winning run in Asian VIP market. This will give a noticeable boost in revenues to their VIP gaming and domestic mass revenues. Analysts have calculated that the biggest beneficiary of the rise of VIP market share will The Star resort. The latter is based out of Sydney.
Boom times ahead
According to the analyst team working at Macquarie, a 4.6 percent up in full year estimates of EBITDA is possible if Australia becomes successful in pushing up its share in the $22 billion VIP gaming market of Asia by one percent and if Echo continues to hold on to its current share. Macquarie raised the price target of Echo from $5.10 to $5.75. In contrast, shares of Crown stuck to $13.70. The Echo shares were presently hovering below the $5 mark. To put in perspective, the Crown shares were in the region below $10. Analysts have ventured their opinion that the regional gaming destinations are in all probability will continue to see a rise in popularity among Chinese players. These players are those who wants a change from the gambling hub of Macau.
The lesser tax rate among domestic VIPs have given the advantage to Australia when it comes to lifting the country’s share of gamblers. The reduced rate also improves competitive setting to attract short trips from Chinese nationals. Macquarie stated that tourists from China accounted for about 32 percent share of the Gross Gaming Revenue (GGR). The analysts said that they model the domestic GGR to lift more than approximate 4.43 percent in 2016. This equals 5.1 percent of the total share of Asian VIP market.