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Today,
24 Mar 04
Gaming giants eye Singapore
By Kevin Tan kevin@newstoday.com.sg
Analysts: S'pore casino may exceed Genting in revenue
WHILE debate rages over the Government's new-found interest in the
benefits of allowing a casino in Singapore, the world's gaming giants
are said to be keeping a close eye on what would be a very attractive
market. Analysts Today spoke to said there would be no shortage of
applicants should the Government decide to include a casino in the
massive resort development project planned for Sentosa and the southern
islands.
"Market talk is that every casino company on the planet would
be interested in participating in such a development," said Mr Sean
Monaghan, director of gaming and wagering research at ABN Amro in
Australia. He noted that several players in Australia and the US have
been actively looking for new casino development opportunities. These
include Australia's Publishing & Broadcasting, which operates Melbourne's
Crown Entertainment complex, and US casinos such as MGM-Mirage, Venetian
Casino Resort and Hurrah's Entertainment. Another strong contender
is Malaysia's Genting Group, which operates the Genting Highlands
casino and regional cruise ship operator Star Cruises, which operates
in Singapore.
"Singapore may pick Genting, which already knows the (Singapore) market
quite well through Star Cruises," said a Malaysian gaming stock analyst.
"The Genting group has been on the prowl for overseas investment opportunities
after it failed to clinch a casino licence from the Macau government
three years ago," the analyst added.
What interests international gaming players are Singapore's "great
reputation", its anti-corruption record and the Government's strong
focus on achieving its policy goals, said Mr Monaghan. "Singapore
would also be a very attractive market to investors and for a listed
casino investment. Investors look to regions with excellent government,
stable policy and growth prospects. Singapore has all of this and
much more."
Singapore casino's revenue base could potentially be larger than that
of Malaysia's Genting casino or Melbourne's Crown casino, Mr Monaghan
said. Genting's Resort World unit, the group's gaming and hotel unit,
raked in earnings of RM$642 million ($286.3 million) on RM$2.78 billion
in revenue last year; while Crown turned in earnings of A$238 million
($300 million) on sales of A$1.15 billion. ABN Amro estimates the
size of Asia's gaming and casino industry at about US$9 billion ($15.2
billion) annually. About US$1.5 billion of that amount is chalked
up by a pool of some 500 regional high-rollers. . In 2001, the Far
Eastern Economic Review reported that Asian punters are expected to
spend about US$23 billion in casinos worldwide by 2010, compared to
US$8 billion in 2000.
But some market watchers are less optimistic about the project's chances
of attracting world-class players. One Malaysian gaming analyst told
Today that the Singapore Government's strategy to target only high-rollers
would limit its revenue potential. Minister of Trade and Industry
George Yeo, who revealed the plans for the resort and the possible
casino in Parliament earlier this month, said last week that Singaporean
gamblers "not of a certain economic class" should stick to 4D, Toto
or horse racing.
High travelling costs to Singapore and competition from casinos in
Malaysia and Thailand may further dampen punters' interest in Singapore,
the analyst added. One observer argued it would make greater sense
for the Government to award the casino license to a local operator
than to a foreign company.
In a column in The Edge Singapore, Ben Paul wrote that if the Government
intends to control how the operator runs its business and whom it
admits to its premises, "it would probably make more sense for the
government to select an operator from among Singapore's own property
development and hotel groups – like CapitaLand or City Developments".
When asked about their interest in the proposed casino, gaming operators
predictably held their cards close to their chest. Burswood International
Resort Casino in Perth said Burswood will "closely monitor this situation
as things progress", while New Zealand's SKYCITY Entertainment Group
– which operates a casino in Auckland - said it was "always open to
acquisition opportunities that meet our strategic criteria", without
elaborating. Malaysia's Genting Group and Australia's Publishing &
Broadcasting both declined to comment.
In reply to queries from TODAY, the Ministry of Trade and Industry
said it may "meet up with potential casino operators at a later stage".
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