Tourism revival to strengthen gaming industry

International Published 11 months ago on 30 March 2023 | Author TIN Media
MALAYSIA:

The gaming business, in particular the casino and number forecast operators, will benefit from the revival in the travel and tourist industries (NFOs).

By the end of 2023, it is anticipated that NFO ticket sales will, in large part due to domestic factors, return to 90% of their pre-pandemic levels. As a result, their earnings will be less directly vulnerable to external headwinds.

The top options for the industry according to Kenanga Research are Sports Toto Bhd for its double-digit dividend yields and Genting Bhd because it is a proxy for the rebound in Malaysian and Singaporean tourism.

Following the emergence of a "unity" administration, there is less chance that casino and NFO licenses will be canceled in Malaysia, the research firm noted. The sector remains "overweight" according to Kenanga Research.

16.1 million tourists are expected to visit Malaysia in 2023, up from 10.1 million in 2022, according to Tourism Malaysia.

Since 80% of guests at the Genting Highlands resort were locals before the Covid-19 outbreak, the research firm thinks Genting Malaysia Bhd will profit from the resurgence and regeneration of domestic leisure tourism.

Despite this, there are concerns about NFO operations in Selangor, Penang, and Negri Sembilan in the case of a change in the state government during the anticipated June state elections.

Yet according to Kenanga Research, Sports Toto will experience a faster recovery, with ticket sales expected to reach 90% by FY24 and 87% of pre-pandemic levels by the end of the fiscal year 2023, which ends in June. This is predicated on the possible increase in lottery game ticket sales if their jackpots balloon.