Every year, I forecast key trends and events for the next 12 months then grade those predictions at the end of year. Here are forecasts for 2019.

Reports of Macau’s demise are greatly exaggerated: Like mediocre military strategists, Macau casino investors are determined not to lose the last war. The 2014-16 gaming revenue meltdown took analysts by surprise, and they will not let that happen again. But the 2014 crash is far different from the closing months of 2018 showing slow, steady growth, led by mass gaming, a pattern likely to continue in 2019.

Typical of Macau gaming, public policy drove the 2014 collapse. Macau may have been collateral damage in President Xi Jinping’s anti-corruption campaign, but the damage was real. Rebuilding the top end of the market has left Macau with a much healthier and thoroughly rationalized junket sector, albeit dominated by Suncity Group and a handful of others. Beijing also appears to have realized it’s far better for mainland VIPs to play in Macau under the umbrella of Chinese authorities than in other destinations where China has less visibility and control.

Beijing’s current guiding policy directive calls for making Macau a world center for travel and leisure, and Macau casino operators are all-in on that. Adding 8,100 hotel rooms in Cotai since mid-2015 has enabled Macau to extend its reach beyond high rollers and make accommodations available for holiday makers and conventions.

A more economically diverse visitor base – geographically, Macau visitors remain overwhelmingly from mainland China, followed by Hong Kong and Taiwan – has led to greater variety of retail and dining price points and more room for creativity. Cha Bei (Mandarin for tea cup) in the Galaxy Macau shopping mall is a tea room and gift shop with a show kitchen crafting light meals and desserts with artisanal touches. It’s designed for the Instagram generation by one of its own, Joanna Lui, daughter of Galaxy vice chairman Francis Lui. Three years ago, that space would have undoubtedly been filled by a luxury brand with an unpronounceable name.

The move to mass market succeeds at multiple levels. Sustainable gaming revenue growth that roughly tracks mainland China’s GDP growth, rather than the gaudy, volatile numbers that characterize VIP play, will not invite Beijing’s unwelcome attention. While China’s GDP growth is shrinking below return rates Macau investors demand, mass visitors carry far higher profit margins across the board than VIPs, so Ebitda growth can outstrip gaming revenue expansion.

Macau’s transition will keep it in the pole position in the race for the gathering annual wave of 200 million Chinese overseas travelers and moving toward the 50% margins and 30% non-gaming revenue of Singapore’s Marina Bay Sands, albeit slowly, and investors should be leading the applause. The key concern shouldn’t be the market’s capacity for growth – less than 5% of mainland Chinese have ever visited Macau – but the ability of Macau operators to execute in this new, more competitive environment. Don’t hate the game, hate the inept players.

Tokyo Mon Amour: In 2018, Japan completed the integrated resort legalization process. In 2019, it’s supposed to pass the enabling legislation for its Casino Control Commission.

The real action, though, will be among the various IR bidders trying to convince Tokyo enter the competition for potential IR sites. Already, gaming machine maker and Paradise City partner Sega Sammy has declared it prefers the Tokyo area as an IR location.

So far, Tokyo authorities have been reluctant to enter the fray, citing preoccupation with the 2020 Summer Olympics. That excuse won’t hold much longer. Tokyo’s Kanto region neighbors Yokohama and Kawasaki are touted as potential alternatives, but they won’t pull the same crowds as Tokyo proper.

To get Tokyo into the game, developers may suggest an IR investment level beyond the stunning US$10 billion Las Vegas Sands chairman Sheldon Adelson proposed. In the end, it’s hard to believe Japan’s three IR sites won’t include Tokyo; in fact, two IRs in Kanto are more likely than none. Playing hard to get may yield the best deal(s) for the region.

Online gaming faces static: Last year I predicted Asia’s online gaming sector would prepare to enter the legalized U.S. sports betting market by seeking internationally recognized regulation. I was wrong. For 2019, Spectrum Gaming suggests online gaming in Asia will face greater scrutiny. The research and professional services specialist expects live streaming of casino games to China from Cambodia and the Philippines to attract attention from Chinese and international authorities.

Bilateral relations may play into online gaming oversight. Upon taking office, Philippine President Rodrigo Duterte sought to repair ties with China frayed by disputes over South China Sea sovereignty. But recent evidence suggests the thaw has limits. Additionally, Duterte’s administration nationalized online gaming licensing through regulator Pagcor, and it may contend that’s solved any issues.

Cambodia has close ties with China and would likely try to implement any restrictions China seeks. However, how much control Cambodian authorities can assert over border casino operations in Poipet or Bavet is questionable. Breakneck development currently underway in Sihanoukville, Cambodia’s main port, once a backpacker beach haven, is mainly fueled by Chinese investors, so there’s scope for China and Cambodia to work jointly on the issue, or to blame each other and get nothing done.

Korea comes back: Landing International’s earnings report for the casino opening of Jeju Shinhwa World illustrates Korea’s untapped gaming potential. In 2019, with Chinese travel restrictions over the THAAD missile defense system easing, Paradise City scheduled to unveil its Wonder Box theme park and Jeju Dream Tower due to open in October, Korea looks set to regain lost ground and possibly overtake the Philippines as Asia’s number three market.

Vietnam’s moment(s) of truth: I incorrectly expected at least one of Vietnam’s casinos authorized to admit Vietnamese gamblers would open in 2018. Corona Resort on holiday island Phu Quoc is expected to debut in early2019, giving a first read on whether local play will move the needle in Vietnam.

As in Korea, international operators, including Las Vegas Sands and Wynn Resorts (at least during Steve Wynn’s reign), have said they’ll invest heavily in Vietnam if local play is allowed. Regardless of Corona’s initial results, Sands Ho Chi Minh City is still a long way off. In central Vietnam, Hoiana, a partnership of Henry Cheng’s family vehicle Chow Tai Fook Enterprises, Suncity and a local investor, is expected to open phase one late this year. Its success attracting overseas players will likely impact Vietnam’s gaming future as decisively as local play.