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Economics/Business Singapore Singapore's Gaming Gamble
Economics/Business Singapore Singapore's Gaming Gamble | Singapore's Gaming Gamble |
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| Written by Ben Bland | |
| Monday, 29 March 2010 | |
 Super-casinos open in the island republic
Anxious to boost revenues in a time of economic uncertainty, the Singapore government legalized gambling. It sold lucrative gaming licenses and levied a tax on winnings. But the advent of state-sanctioned gambling brought a rise in social problems such as addiction and crime and within three years, the government closed the gaming houses. That was in 1823, four years after Sir Stamford Raffles first unfurled the British flag on the island of Singapore. Some 187 years later, Singapore is hoping that its latest experiment with legalized gambling turns out rather better. The first of Singapore's two super-casinos, the US$4.5 billion Resorts World Sentosa, flung open its doors on the auspicious first day of the lunar New Year, February 14. The US$5.5 billion Marina Bay Sands will follow on April 27. Setting aside its deep-seated puritanical instincts, the ruling People's Action Party has made a big double bet. Firstly, that the casinos will attract enough punters to allow the operators, Malaysia's Genting and America's Las Vegas Sands, to recoup their massive investments and boost the wider Singapore economy. And secondly, that the casinos can thrive without leading to an increase in prostitution, addiction and organized crime, the sort of problems that tend to proliferate around gaming houses in Asia. At stake is Singapore's carefully-cultivated international image as a safe and orderly commercial hub and the domestic credibility of a government that clams legitimacy from always knowing best. The government's decision to legalize casino gambling in 2005 sparked a rare public debate, with tens of thousands signing a petition against the move. The government's rationale was economic, with Prime Minister Lee Hsien Loong saying in 2005 that he wanted to give Singapore the "buzz" that you get in London, Paris or New York to ensure that tourists and expatriate workers keep coming to the city-state. In particular, the government was said to be counting on cash-rich mainland Chinese who are looking for places to lay bets far from prying eyes in Macau, which is much closer to China but which has operatives on the watch for officials seeking to gamble away government funds. The two casinos are thus crucial to the government's target to attract 17 million visitors by 2015, up from the 9.7 million tourists last year who spent S$12.4 billion (US$8.9 billion), according to the Singapore Tourist Board. The government, which has warned that the economy must be radically retooled if it is to achieve solid growth, hopes the revenue from the tax on casino winnings as well as other spending by casino visitors will provide a much-needed lift to its coffers. Having euphemistically dubbed the casinos "integrated resorts", the government hopes that, in time, the attached hotels, restaurants and theme parks will generate the bulk of the revenue, reducing Singapore's dependence on the pure gambling take. But Michael Leven, the chief operating officer of Las Vegas Sands, has said that he expects 75 percent of revenue to come from the gaming tables in Marina Bay Sands' first year of operation. Just over a month after the soft opening of the first casino and weeks before the second opens, it is too early to say whether Lee can succeed where the British failed. So far the signs are mixed. On the social front, the government has banned more than 29,000 bankrupts and those receiving state benefits from entering the casinos and has tried to convince families of gambling addicts to have them excluded. It has also insisted that Singaporeans pay a hefty entry fee of S$100 (US$71.28) per day or S$2,000 per annum to make them think twice before heading to the baccarat tables or slot machines. But there have already been a number of casino-related problems, with several people charged with trying to cheat the house and some petty crimes like mobile phone theft and Singaporeans attempting to evade the entry fee. On the financial front, the challenge is perhaps even tougher. The government in January took the crucial decision to severely restrict the operation of Macau-style junkets, the middlemen who bring in high-rollers in exchange for commission from the casinos. In Macau, junket-assisted VIP gamblers are believed to account for about 60 percent of gaming revenue. The junkets also provide mainland Chinese gamblers with the lines of credit that are vital given China's currency export restrictions. This approach makes it less likely that Singapore would suffer the vice, violence and illegal side-betting that sometimes accompanies the junket business in Macau. But it will make it much harder for the casinos to bring in the crucial VIP gamblers. With junkets largely out of the picture, the casinos will have to run their own lending operations, which bring with them the risk of bad debts and messy disputes. Anecdotal reports suggest that Resorts World, which is on the entertainment-focused island of Sentosa just off the southern coast of Singapore, has been reasonably busy since it opened. But the company has remained tight-lipped. Resorts World is reported to have received 35,000 punters in its first two days, compared to the 114,000 that passed through the doors of the Venetian in Macau when it opened in 2007. A report in Singapore's Today newspaper claimed that the casino generated gaming revenue of S$40 million (US$28.5 million) during those first two days, though industry analysts believe that figure is far too high. Las Vegas-based Union Gaming Research has suggested that US$7-8 million per day is a more likely ballpark figure. A research note released by Credit Suisse last week suggested that the S$100 levy may be putting off many Singaporeans, depriving Singapore of the casual gamblers who are able to pop into Genting's Malaysian casino, for example. "We are surprised that not a single taxi driver we questioned has been into the casino yet, due to a casino levy of S$100 imposed by the government," analyst Loke Foong Wai wrote in the note. "Only few of our overpaid Singapore colleagues have ventured into the casino, for the same reason." Credit Suisse is among the bears on Singapore's casino industry. While market expectations for 2010 casino revenue range from US$3 billion to US$6 billion, Credit Suisse is projecting US$2.6 billion. By contrast, Las Vegas' 37 casinos generated US$6.1 billion in 2008, while Macau's 31 casinos generated US$13.5 billion. If Singapore were to overtake Las Vegas in its first few years, it would be some achievement. But the danger is that, in the rush to recoup the huge outlay by Las Vegas Sands and Genting, the casinos and the government will be forced to put caution to one side. "My concern is they overspent on the two integrated resorts," said Ronald Tan, a Singaporean gaming consultant, in a recent interview with the government-controlled Straits Times newspaper. "Instead of allowing both casinos to open in a more relaxed way during the first few years, the IRs are now under tremendous pressure." The government will have to pull off a delicate balancing act to ensure that success on the gaming tables does not prove to be, in Raffles' words, "highly destructive to the morals and happiness of the people". Ben Bland is a freelance journalist in Jakarta. He was formerly based in Singapore. He blogs at http://www.asiancorrespondent.com/the-asia-file. Comments (10)
  written by emeot, March 30, 2010
This article's author seems to have the nail hit on the head...
written by Temasek, March 30, 2010
CB, u think Malaysia so great? Singapore has limited resources, u have limited brains punk!
written by lee kuanyew, March 30, 2010
Temasek, you are a real retarded........ Malaysia is not great..... Malaysia is very lucky to have plenty of resources.... unlike singapore.....
bcoz god loves malaysia more than singapore...... why love malaysia more? bcoz god knows that malaysians are much nicer and better people than singaporeans who are so kiasi, kiasu and selfish....
written by 1 Isreal Malaysia, March 31, 2010
Malaysia is over 30 years ahead of Singapore.....
in the seventies, malaysia had issued gambling license to develop casino, create employment and to develop tourism. As a result, malaysian created the great Genting where Singapore does not have..... Now only the Singaporeans woke up and realised that they had overlooked and been sleeping for over 30years of the gambling industry
written by P, March 31, 2010
As usual, we have people airing their shallow views on Singapore without first looking into their own countries.
To return to Malaysia would prove no bigger issue than Hong Kong being returned to China. As of now, they still maintain their own governance and armed forces. I am sure a mutually beneficial agreement would be reached. To conclude that Singapore would be 'ruled' by Malaysia just because you assume that Singapore cannot innovate, speaks volumes of failed education system. To say that Malaysia is 30 years ahead of Singapore just because she allowed gambling 30 years ago? Then why is the ringgit smaller than the dollar? Why must Malaysians go to Singapore to work? You have no arguments for anything just writing rubbish without any substantial facts. Please go and do your homework before the world leaves you behind.
written by casino dick, April 02, 2010
LKY banned Stanley Ho from singapore casino scene because of his "triad" connections! Wow, but what about the biggest triad in Asean? The trtriad of Lee,Marcos and Suharto beats them all. All are supported by the US of A. That's why they have each amassed huge wealth and each used the iron fist to maintain power and wealth. Each have their hands stained with blood too. Politicians are worse than gangsters because there is no one to police them. The whole thing stinks to high heaven. All must look East - life is cleaner there.
written by Irene Puah Siew Hoon, April 03, 2010
I am surprised the Singapore pools haven't started taking bets on how many zillion $$ the Lee caln will coerce out of the world media every month LOL
written by Lee Kuan Yew - nothing left, April 05, 2010
No doubt that Singaporeans are known as kiasu and kiasi like Pee, for him everything big is good....
There is no such thing as ‘Must’ go to Singapore.......Pee is the typical singlish, product of the so called good education system of Singapore....... Singaporeans are too big headed, unskilled and lack of rational and capable workers. The Government of Singapore has no other choices but to import more talented, skilled, professional, capable and reasonable workers from Malaysia. Malaysia government is helping Singapore to allow its people to help and work in Singapore and they know very well that 50 years from now, Singapore has to go back to Malaysia. Most Malaysians have landed properties, nice landed house with private garden, courtyard and driveway and drive owned car to work...... unlike most Singaporeans have to stay in cubicle (HDB flat) and take MRT to work. A very basic and fundamental comparison, Malaysia’s population is only more by about 7 to 8 times of the Singapore’s population But Malaysia has more than hundreds or thousands times in term or lands, sands, trees and other resources compared to Singapore..... That explained that sooner or later, Singapore will have nothing left for pee.... Pee, you better stop writing rubbish here.................don’t just look around MRT station and don’t just see things that are near to you only ......please ask your visionary Lee and to learn how to look beyond Singapore and look into future before the world leaves you with nothing.
written by nawawi, April 20, 2010
Lee Kuan Yew is only concerned about his family, his cronies an his generation. He doesn't care what will happen in the future because he will die anyway. Present Singaporeans have to start making their own choices which are going to be self-centred anyway. That is, since most of them are in the comfort zone (it is just in their mind because they have been brainwashed), they won't care a bit about what is happening and what is going to happen. Fortunate are those Singaporeans who have found and are lookin for greener pastures eleswhere.
Singapore is desperate in every sense of the word.
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Singapore has limited resources, lands and even fresh water......... singapore was developed from the revenues of port and airport...... in the 50's and 60's, where ships and planes can't travel that far so, singapore can relied on its strategic geographical location to make money...... but with the advancement of technology, bigger and more advanced ships and planes were built and these ships and planes can travel longer and further non-stop. The advantage of strategic location diminished over time and the advancement of technologies....
Therefore, Lee and his government has no other choice to save Singapore but to legalise gambling..... casino is the second last card for singapore government..... they still have one last card with them if over time, its casino lose out to other caisno in the region such as china, vietnam, indonesia, malaysia, thailand or taiwan......
that's to legalise prositution...... to survive for another 25 years, after that, singapore will hv nothing left to generate revenue...... by that time (is about 50 to 60 years from now), Singapore have no other choice anymore but to return back to Malaysia...... to be ruled by Malaysia .................