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The Business Times, 31 Mar 04

A Singapore casino may create 1,000 jobs
By Tang Weng Fai

Operators may also hit annual jackpot of US$235m to US$335m

A casino opening here could trigger an annual jackpot of anything from US$235 million to US$335 million in spin-offs for the operators alone - as well as help create up to 1,000 jobs.

This is based on the US experience. "The 249 casinos in Nevada contributed US$9.4b in revenues in 2002 and paid US$718.7m in taxes to the state government." - American Gaming Association The possibility of Singapore having a casino was broached early this month by Trade and Industry Minister George Yeo.

Since then, the project - to be located at Sentosa - has been the focus of much industry interest, especially within the leisure and gaming industry. All agree that it is a big business here although many differ on how big it is.

As a proportion of gross domestic product, America's US$28.2 billion to US$40 billion legalised casino industry would translate to an equivalent US$235 million to US$335 million in Singapore. A February research report by the Federal Reserve Bank of St Louis on the economic impact of the casino industry in the US estimates that the US gaming industry exceeded US$40 billion in revenues for 2001. This figure includes revenues from the so-called Indian casinos, located on Indian reservation land and which traditionally pay no state taxes, that chalked up nearly US$13 billion in 2001. Private corporate casinos generated another US$27 billion for that year. The American Gaming Association (AGA) - the US gambling industry's self-regulation body - estimates that casino revenues exceeded US$28.1 billion in 2002, the latest year for which figures were available from the AGA. Its estimate was corroborated by a similar study published last October on US corporate casino revenues by industry analysts The Innovation Group, that placed revenues at about US$28.2 billion for 2002.

The economic impact of the industry is not limited to the immediate revenues from operating the casinos. For example, the famous 'Strip' area of Las Vegas in Nevada houses 47 casinos with another 14 in downtown Las Vegas. More than 3,300 gaming tables and 75,000 electronic slot machines take up 3.3 million sq ft of prime commercial space, generating millions in annual rental yields for owners of the prime commercial property that houses the casinos. An AGA study published last year said that at the state level, the 249 casinos in Nevada (which includes Las Vegas) contributed US$9.4 billion in revenues in 2002 and paid US$718.7 million in taxes to the state government. This is based on a minimum rate of 6.25 per cent tax on gross gaming revenues with additional levies imposed by municipal authorities in the state.

The casino industry also paid out more than US$6 billion in wages to the almost 192,000 employees that it employs in the state. In the Singapore context, this could work out to almost a thousand jobs. The spillover effects on other sectors like hotels and hospitality are also considerable. Over 35 million visitors are attracted by the casinos and other associated attractions at Las Vegas each year, enough to fill more than 100,000 hotel rooms.

In Singapore, the size of the overall gambling-related sector is significant. Song Seng Wun, an economist at GK Goh Research, had previously estimated that taxes from lotteries make up a tenth of the government's $16.5 billion tax revenue. The legalised gambling industry here is big business with other unexpected benefits. Singapore Pools and the Totalisator Board financed about two-thirds of the more than $600 million-plus cost of the Esplanade, better known here as The Durian.

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