Despite the downturn, industry growth for Australia’s casino industry should remain relatively stable in the next few years. But as IBISWorld general manager ROBERT BRYANT explains, the threat of competition from overseas and online will remain a challeng
By Robert Bryant
Despite the downturn, industry growth for Australia’s casino industry should remain relatively stable in the next few years. But the threat of competition from overseas and online will remain a challenge.
With the economy slowing, you would think that a casino is the last place struggling Australian households would want to spend their money.
But don’t bet on it. While entertainment and eating out are among the first expenses to be cut during a downturn, gambling spending is amazingly robust and should hold up well over the next few years.
IBISWorld estimates that this industry will grow at an average annual rate of 2.4% over the five year period to 2008-09, although growth in the last 12 months has been somewhat curtailed by the deepening of the sub-prime crisis.
The industry has faced a number of challenges in the last few years, not least of which is rising competition from other gambling forms such as wagering. An explosion of the number of gaming machines in clubs and pubs in the last decade has also had an impact on industry revenue growth.
These challenges have led to significant consolidation over the past five years, which has led to the sector’s biggest player, the James Packer-backed Crown, to expand internationally.
Competition from casinos opening in China and other countries will lead to further restructuring for the domestic industry. The boom in online casino sites – particularly those offering online poker – will also continue to have an impact, although increasing interest in poker has also helped drag punters back into casinos in recent years.
IBISWorld forecasts that this industry will grow at an average annual rate of 3.1% during the five year period to 2013-14, although growth is set to slow from 2.6% in 2008 to 2.2% in 2009 and down to 1.8% in 2010. While these are not stunning growth figures by any means, they are quite satisfactory when compared with long-term industry trends.
Over the outlook period, industry revenue will be influenced by the mature stage of industry development and general industry saturation. Continuing competition from wagering, particularly sports gambling, and from gaming machines in clubs and pubs will also affect the success of this industry over the next five years.
Slow or declining growth in table gambling is forecast, however much stronger growth is expected for gaming machines over the short term. Significant global competition is also anticipated from booming casino markets such as Macau as well as internet casino sites.
Major operators are expected to continue searching for international joint venture prospects over the next five years, particularly in Britain and Asia, although larger global casino operators will stand in their way.
Domestic operators will have to be successful in their ventures internationally in order to boost revenue and profits and to maintain their global market.
IBISWorld supplies business information databases, including industry reports, company reports and business indicator reports. www.ibisworld.com.au
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