Fitch: Stable Outlook for Australia Gaming; Slower GDP Growth & Expansion Risks

(The following statement was released by the rating agency)Link to Fitch Ratings' Report: 2016 Outlook: Australia Gaminghttps://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=874315SINGAPORE/SYDNEY, December 06 (Fitch) Fitch Ratings says in a new report that the outlook for Australia's gaming operators is stable despite a slowdown in Australia's GDP growth and the two largest listed gaming issuers - Crown Resorts Limited (Crown, BBB/Stable) and The Star Entertainment Group (previously Echo Entertainment Group) - embarking on debt-funded projects.The credit profiles of Crown and Star benefit from operating in well-regulated markets and owning portfolios of properties that generate strong operating cash flows. The Australian gaming market is driven by domestic customers, which has resulted in a more stable - albeit lower - growth in casino expenditure than Asia-Pacific's largest gaming centre, Macao. Crown is expanding and refurbishing its Melbourne and Perth properties. Crown is also likely to incur debt-funded capex to fund the construction of the Crown Sydney and Las Vegas projects. Star is incurring substantial capex on its Gold Coast property, and has won the Queens Wharf Brisbane bid. Financial leverage is likely to rise as the two companies execute large projects against the backdrop of weak revenue momentum.Australia's per capita GDP growth slowed to 0.2% in 2Q15 (1Q15: 0.3%, 2Q14: 0.3%) due to reduced mining and construction activity and lower exports. However, the impact of this slowdown was not uniform across all states. New South Wales and Victoria, where Star and Crown have their flagship properties, remained resilient in 2Q15. However, the slower economic activity was more evident in Western Australia and Queensland where the two issuers' other properties are located.Contact:Nandini Vijayaraghavan, CFADirector+65 6796 7216Fitch Ratings Singapore Pte Ltd6 Temasek Boulevard#35-05 Suntec Tower FourSingapore 038986Kelly AmatoAssociate Director+61 2 8256 0348Vicky MelbourneSenior Director+61 2 8256 0325Media Relations: Leni Vu, Sydney, Tel: +61 2 8256 0304, Email: leni.vu@fitchratings.com.Additional information is available on www.fitchratings.comALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: HTTP://FITCHRATINGS.COM/UNDERSTANDINGCREDITRATINGS. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S FREE WEB SITE AT WWW.FITCHRATINGS.COM. PUBLISHED RATINGS, CRITERIA, AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH'S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE, AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE CODE OF CONDUCT SECTION OF THIS SITE. FITCH MAY HAVE PROVIDED ANOTHER PERMISSIBLE SERVICE TO THE RATED ENTITY OR ITS RELATED THIRD PARTIES. DETAILS OF THIS SERVICE FOR RATINGS FOR WHICH THE LEAD ANALYST IS BASED IN AN EU-REGISTERED ENTITY CAN BE FOUND ON THE ENTITY SUMMARY PAGE FOR THIS ISSUER ON THE FITCH WEBSITE. Fitch Australia Pty Ltd holds an Australian financial services licence (AFS licence no. 337123) which authorises it to provide credit ratings to wholesale clients only. Credit ratings information published by Fitch is not intended to be used by persons who are retail clients within the meaning of the Corporations Act 2001.