Singapore counts winnings as casinos boost tourism
Monday 30 August 2010
Singapore's massive bet on two casino resorts is already paying off after the number of arrivals in a single month crossed the one million mark for the first time in July, analysts said.
Six months after opening its first casino in February, followed by the second in April, Singapore is already counting its winnings despite lingering concern about gambling-linked social problems among the local population.
"Let there be no mistake about it, the legalisation of casino gaming in Singapore was always intended to be a part of an enhanced tourism strategy for the country," said Jonathan Galaviz, a Las Vegas-based expert on Asian gaming.
"The development of multi-billion dollar integrated resorts in Singapore is clearly paying off for the country, and they will continue to do so for at least the next decade," said the managing director of Galaviz & Company.
DBS Group, Southeast Asia's biggest bank, said the casino resorts are expected to contribute about 1.5 billion US dollars to the economy this year.
Church and civic groups had opposed the legalisation of casinos but the government went ahead in 2005 and allowed US-based Las Vegas Sands and Malaysia's Genting group to build two complexes at a combined cost of 10 billion dollars.
As a safeguard, the casinos were told to charge an entry fee equivalent to 74 dollars from Singaporean citizens and permanent residents, and a campaign against "problem gambling" was launched by the government.
Singapore's tourism board said the city-state, which has a population of just five million, welcomed one million visitors in July, thanks in large part to the pull of its new man-made tourist attractions.
Tourism officials hope to see between 11.5 million and 12.5 million visitors this year - a figure well above the numbers visiting neighbouring countries blessed with white-sand beaches, towering mountains and other natural wonders.
As well as the casinos, Singapore's euphemistically named "integrated resorts" also offer theme parks, high-end shopping, hotels and convention halls.
Analysts say Singapore understood the importance of casinos in a broader context - not just as a means to lure the high-rollers but as part of a strategy to stay competitive as a travel destination and a "global city".
Founding father Lee Kuan Yew said the government had been "against casinos for decades" and "refused offers of seedy casinos from Macau."
But officials changed their position after seeing how the casino industry developed in Las Vegas, which offers Broadway hits and fine-dining restaurants featuring some of the world's famous chefs.
The 4.4 billion dollar Resorts World Sentosa, built by Malaysia's Genting Group, opened in February. It boasts Southeast Asia's only Universal Studios theme park, among other attractions.
The 5.5 billion dollar Marina Bay Sands, owned by Las Vegas Sands, started operations in April.
Its iconic building, consisting of a boat-shaped "skypark" perched atop three 55-story hotel towers, is the newest jewel on the city's glittering skyline.
Revenue figures from the two Singapore casinos paint an upbeat picture.
Resorts World Sentosa said it generated revenues of 636.5 million dollars in the three months to June. Net profit came in at almost 300 million dollars for the quarter.
The Universal Studios theme park has attracted about 8,000 visitors a day and hotel occupancy rates are an estimated 70 percent.
Marina Bay Sands declared net revenues of 216 million dollars in just its first 65 days of operation, with the casino accounting for 191 million dollars.
Las Vegas Sands chief executive Sheldon Adelson said he was "gratified by the overwhelming reception the property has received".
Galaviz, the gaming consultant, said Singapore's total gross gaming revenue should reach 2.7 billion dollars this year, rising to 3.0 billion dollars in 2011.
But he said this is unlikely to reach the levels in Las Vegas and Macau "if Singapore's market just remains at two casinos at their current size".
Macau took in 14.5 billion dollars from gamblers in 2009, while casinos at the Las Vegas strip earned about 5.5 billion dollars.
Hong Kong-based brokerage and investment group CLSA was more upbeat on the Singapore casino market.
Aaron Fischer, head of Asia consumer gaming at CLSA, estimates Singapore gaming revenues will rise to 5.1 billion dollars in 2011 and 6.5 billion dollars in 2012 from 3.0 billion dollars this year.
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