4 risks that are on the cards for Singapore's gaming industry this year

There is a steep contraction in the VIP segment.

Singapore's gaming market is could be playing the Russian roulette this year as it faces notable risks, which could lead to a flat growth in revenues.

According to Fitch Ratings, these risks and constraints include the possibility of additional competition through new licenses and/or increased gaming taxes starting in 2017 and 2022, respectively.

Fitch also noted that there is a limited ability to expand in gaming floor size and position restrictions. There is also greater restrictions on local residents' participation. More so, gaming market may also have the high reliance on a concentrated database of VIP players, with an increased regional competition for VIP players particularly from the Philippines and Australia.

"We expect gaming revenues in Singapore to remain at about USD4 billion in 2017, as VIP remains weak. Gaming revenues continued a downward trajectory in 2016 largely due to a steep contraction in the VIP segment, despite a 12.5% gain in Chinese visitors (the biggest source of VIP revenue) in first-half 2016. Moreover, Singapore will face added competitive pressure from Macau and the Philippines. We think the probability of the Singapore government awarding additional gaming licenses to be low, but acknowledge that it is a risk," Fitch said.