The arrests of Crown Resorts staff in China underscores the risk associated with global casino operators’ Chinese VIP business, said Fitch Ratings in a note on Wednesday.
“The detainment is a sign to Fitch that high roller gambling by the Chinese nationals outside of China remains top of mind for Chinese authorities,” said the ratings agency.
But Fitch says the risks related to the arrests, namely reduced VIP volume is more applicable to Asia Pacific casino operators outside of Macau.
“Outside of Macau, Fitch rated casino operators with significant Chinese VIP business include Genting Singapore, Marina Bay Sands, Crown Resorts and Imperial Pacific.”
However, Genting Singapore and Marina Bay Sands have solid stand-alone financial profiles, strong market positions in duopoly Singapore market and thus would be more sheltered to these risks, says Fitch.
Crown and Imperial Pacific on the other hand, are more at risk.
However, “while Crown could see volatility in its VIP program play over the next 24 months, the strength of its locals mass markets continues to support its financial profile,” said the ratings agency.
“Imperial Pacific’s business model is Chinese VIP focused and a tightened operating environment in China could potentially have serious credit implications.”