Wuhan virus may persuade Singapore, Malaysia to ease casino policies,
Wednesday 29th January 2020
CASINOS in Singapore and Malaysia could gain relief from their duties and levies if the Wuhan virus takes a heavy toll on the gaming sector, one analyst has suggested, in what he dubbed the upside of a potential public bail-out.
While past outbreaks of H1N1 swine flu and the Middle East respiratory syndrome (Mers) "did not have a materially negative impact on the casino industries", Maybank Kim Eng analyst Samuel Yin argued that the ongoing Wuhan virus pandemic will more closely resemble severe acute respiratory syndrome (Sars) in its devastation of tourism-related industries.
Mr Yin cited the 45 per cent year-on-year drop in H1 2003 earnings at Resorts World Genting as proof of Sars' "materially negative impact" on the casino segment. But he also noted that governments could move to support hard-hit industry players, as was done with a review of Resorts World Genting casino duty rates in Malaysia during the Sars pandemic.
If the Wuhan virus proves to be just as severe as its Sars predecessor, Malaysia could ease part of the 10-point casino duty rate hike that took effect in January 2019, while Singapore may roll back its casino entry levies, which were raised by 50 per cent in April 2019, Mr Yin said.
For instance, with Malaysian casino duties standing at 35 per cent, he estimated that each one-point reduction would boost Genting Malaysia earnings by 3 per cent to 4 per cent.
"Therefore, we implore investors not to be averse to the casino industries of Malaysia and Singapore during this seemingly uncertain time," the analyst concluded in his report.