S&P Flags Policy Risk As Key Factor In Asia-Pacific Casino Credit Quality

S&P Global Ratings has placed Cambodia and the Philippines in the lower half of its 8-jurisdiction ranking for Asia-Pacific gaming industry business resilience and appeal to credit issuers. The agency said abrupt policy changes remain a structural risk across the region and could widen gaps in issuer credit quality.

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Regulatory Risk Seen As Structural

According to the findings of a 12-page report released on Tuesday by S&P Global, regulatory risks are inherent in the Asia-Pacific gambling industry. The company added that the political motivations involved usually result in social safety being prioritized above economic stability, causing rapid changes in policies. It added that cultural stigma and political rifts also contribute to that volatility.

The report carried the title Asia-Pacific Gaming: Policy Risks Could Widen Credit Quality Gaps. S&P Global indicated that even though gaming income in the area is estimated to increase by 3%-5% per year in the next two to three years, increased demand will not have any impact on credit quality. It noted that changes in regulation in some countries may limit growth relative to regional GDP.

Although the report did not discuss South Korea’s possible casino-regulation reform in detail, it referred to a 2025 Pew Research Center survey showing that roughly 70% of adults in Indonesia, India, and South Korea view gambling as immoral. S&P Global said that these countries rank among the top 5 nations worldwide when measured against that standard. In comparison, S&P Global noted that only some 30 percent of the adults in the U.S. or Australia held similar perceptions.

Macau And Singapore At The Top

S&P Global said Macau and Singapore are the most attractive markets in the region for credit issuers. Macau ranked 1st for business resilience, with high scores for market size, resilience to online gambling, regulatory oversight, and license length. It scored medium for a number of licenses, with 6 concessionaires, and a low tax rate. The effective tax rate in Macau is 40% of gross gaming revenue.

Singapore ranked 2nd and scored medium for tax rate. According to the city-state’s Inland Revenue Authority, premium players pay 8% on the first SGD2.4 billion of gross gaming revenue in a calendar year and 12% above that. Other players pay 18% on the first SGD3.1 billion of gross gaming revenue in a calendar year and 22% above that.

Singapore was also measured as high for attractiveness in terms of resilience to online gambling, regulatory oversight, and a number of licenses. S&P Global noted that Singapore remains a casino duopoly.

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Japan, Malaysia, And Cambodia

Japan was ranked 3rd, even though it has yet to launch its first casino resort. MGM Osaka is due to open at the end of 2030, and S&P Global said Japan scored high for market size, regulatory oversight, and number of licenses. Only MGM Osaka has been approved so far, although a 2nd round of applications is due to open next year.

Both countries, Malaysia and Cambodia, were rated mid-market countries. Malaysia was ranked at number four, whereas Cambodia came in sixth place. According to S&P Global, the reason behind this is that these countries are not as attractive to foreigners as Singapore or Macau, for instance.

The ratings house said public policy in Malaysia and Cambodia is supportive of the casino sector, but lower attractiveness limits market size and operator numbers. It noted that a unit of Genting Bhd holds a casino monopoly in Malaysia, while NagaCorp Ltd has a monopoly centred on Phnom Penh.

Philippines And Regional Headwinds

The Philippines ranked 7th in S&P Global’s list. The agency said that the market size was medium for attractiveness, while resilience to online gambling and the number of licensees were both low.

S&P Global also grouped Australia, ranked 5th, and New Zealand, ranked 8th, with the Philippines as a headwind market. It said more lenient attitudes toward online gambling in the Philippines and New Zealand may reduce the returns and feasibility of large-scale physical casino investments.

The report suggests the region’s credit outlook will continue to depend not just on demand, but on how each market balances regulation, taxation, and investor stability.

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Source: GGR Asia