S&P Global Says Australian Operators Shouldn’t Count on Chinese Tourists for Revenue

Australia’s casino gaming market has long depended on rich Chinese tourists for some extra income. With gambling prohibited in most of China, Australia has long been a preferred destination for gambling tourism.

However, China’s recent hurdles with COVID forced this revenue stream to shut down for a while. While the zero-COVID policy is no more and direct flights between the two countries have been resumed, it will likely take a while before Australia’s casino operators can again count on Chinese tourists.

According to business analytics specialist S&P Global, the influx of Chinese customers is unlikely to return to pre-pandemic levels earlier than 12-18 months from now. According to the firm, this slow recovery is due to China’s stagnating economy and the Chinese people’s trend to prefer shorter journeys.

S&P analysts Aras Poon, Shawn Park and Tristan Ong said expect that Chinese customers will eventually start to return, although this is likely to take over a year.

The experts also warned that recovery will not be homogeneous across businesses in the Asia-Pacific region, with most companies set to return to pre-pandemic levels in a year or two.

Australian Companies Breached Laws to Capitalize on Chinese Tourists

Australia’s gambling market used to depend on rich Chinese customers for some extra income. However, local operators eventually cut their ties to Chinese junked operators.

Eventually, local regulators probed into the businesses of companies, such as Star Entertainment and Crown Resorts, which formerly partnered with such companies. The two Australian casino & hospitality giants were found guilty of multiple breaches of their states’ gambling regulations, prompting a long period of investigations.

One of the two companies even sported an unregulated gambling cage where VIP customers, including affluent Chinese nationals, could gamble. Both companies also allowed Chinese customers to gamble using UnionPay debit cards, which is a stark violation of China’s laws. This fraud was made possible by Star and Crown’s rigging of paper trails.

Some have suggested that the shutdown of such illegal activities may also be responsible for the slowdown of tourism from China.

At the same time, China seeks to prevent its citizens from gambling as a whole, which may mean bad news for Australian companies holding out for an influx of Chinese tourists.

In any case, as S&P analysts have suggested, Australian operators will have to secure additional revenue streams if they are to face the increasing regulatory headwinds in the country.