SG Gaming: IIFL has sector report. House note that Junkets accounted for 40%-50% of the gaming revenue in Macau. Although junkets are less relevant in Vegas, Australia and Europe, they are expected to play an important role in SG, and may well provide the next leg up for the 2 local casinos.
SG’s licensing norms for junkets, more stringent than Macau, are already in place but no one has been licensed yet. The junkets, when allowed, would help the casinos bring in VIP players from around the world, provide them credit and ensure recovery of gambling debt.
Genting Spore (BUY) is attractively valued at 11x 2011 EV/EBITDA, after declining by 30%YTD.
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