Asian Gambling Companies Dominate GBGC 50 Index
Since GBGC started compiling our indices in January 2005, good times have alternated with bad times, with the Interactive companies generally doing better than the predominantly land-based ones.

But the picture has changed in 2011. Since January 2011, when GBGC last published the GBGC 50 and iGBGC indices, the mostly land-based GBGC 50 has gained 10 points, reaching a level of almost 131 on 5 August 2011, while the interactive index iGBGC has lost as much as 70 points, closing at 199 at the beginning of August 2011.
iGBGC had already started falling in January 2011 and was falling until “Black Friday”, when it gained 15 points overnight due to the fact that listed companies do not do business in the USA. After that brief rise, the index continued its downward trajectory.
Shares in the newly merged Bwin.Party Digital Entertainment have lost 45% of their value since the IPO at the beginning of April 2011, while the gaming market cap (market cap adjusted for the percent of revenues the company receives from gaming) of the new company was in July only 68% of their joint market cap back in January 2011. Shares of the second largest iGBGC company Playtech, have fared much better, losing only 2.8% of their value since April 2011. Betfair’ shares have also not fared well since the IPO and have lost 42% of their value in the last four months.

The GBGC 50, on the other hand, is doing well due to the introduction of many Asian companies that were either newly listed or for which we now have access to data that we previously did not have. The top 10 in the GBGC 50 are dominated by Asian-facing companies. The most recent additions to our GBGC 50 index were newly listed MGM China and the demerged Tabcorp, consisting of Echo Entertainment and Tabcorp. Their demerger so far seems to be a success with their joint gaming market cap in July 2011 roughly equal to Tabcorp’ in January 2011. Adelson’ Las Vegas Sands remains the leader of the GBGC 50 index, while the magnate’ other company, Sands China, has overtaken Genting Singapore to gain the second position. Wynn Macau and SJM Holdings complete the top five. The newly added MGM China takes sixth place, while Wynn Resorts takes seventh place, followed by Melco Crown, Galaxy Entertainment and Genting Malaysia.
It seems that the indices are confirming everyone’ opinion that Asia is the place to be. At the same time, it seems that the Internet has become a tougher environment in which to succeed. Despite the success of the Asia-facing companies, gaming is obviously not out of the recession just yet, in line with the wider economy.