MACAU BUSINESS
nothing to see and do. But now that there is a major tourist attraction, they want to go. But the theme park and casino may not create
synergy: “Linkage of theme parks and casinos hasn’t had a great track record,” University of Nevada, Reno Institute for the Study of Gambling and Commercial Gaming Director William Eadington observed. But David G. Schwartz, Director of the Centre for
Gambling Research at University of Nevada, Las Vegas believes there is some synergy between the theme park and the casino, “Since the casinos are supposed to be luring
destination travellers, it’s possible that part of the family will go to the theme park, and the other part will gamble.”
Missing the bus Many RWS visitors are tour bus passengers from
Malaysia. A veteran gaming industry executive in Singapore
requesting anonymity contended that, rather than a compliment to the casino, “the theme park is a distraction that competes for the limited time of visitors”. Genting’s Malaysian roots figure prominently in
another strand of criticisms about RWS. IGamiX’s Ben Lee observed the resort evoked a “typical Singaporean reaction to a Malaysian effort: not good enough for Singapore. “The press, analysts and commentators have all
given RWS a hiding – and for good reasons. From charging for the cloakroom to poor signage, to non- existent customer service in the casino, the management has introduced a definitely Malaysian standard resort to what was supposed to be a world class IR.” The core issue isn’t national origin, according to
Lee, but “management that is unused to free market competition and the well-known Singaporean finickiness”” Many observers including Lee expect that Marina Bay Sands, seasoned in competitive Macau and Las
Vegas, will outperform RWS. But finding qualified hospitality personnel for a
combined 20,000 new positions presents challenges for both IRs.
Gaming key The key factor for RWS is gaming revenue. A leak,
presumably from RWS, reported casino revenue of S$20 million for the first two days of operations. Singapore elder statesman Lee Kuan Yew announced the true two-day figure was S$7 million. Since the opening, most analysts have cut their
estimates for RWS revenue and Genting’s share price has been beaten down. Last month, Genting reported first quarter
earnings before interest, tax, depreciation and amortization (EBITDA) of S$109 million for RWS. “They had a monopoly from February 14 to April
27,” AG Leisure Partners Managing Director Sean Monaghan noted. “They should have earned a lot during that period.” He adds that since the opening of Marina Bay Sands, “high value players are moving”. (See box: [casino comparison]) “There is a small gaming market here,” the veteran
local gaming industry executive sayd. “Propensity for casino gambling is very low.” Many Singaporeans remain reluctant to pay the
S$100 entrance fee. The Lion City’s restrictions on junket operators also limits VIP business, despite a low 12 percent tax rate on high roller play. The opening of Marina Bay Sands means cannibalization of the market, not expansion, the executive addd. “As the world economy continues to strengthen I
believe that the numbers at both IRs will exceed analysts’ expectations,” UNLV Singapore’s Nazarechuk said. “There is nothing in the region close to the level of
quality and entertainment value that these two projects offer to customers.” Resorts World Sentosa and Singapore are betting
on it.
Numbers, please Months after the opening of Singapore’s casinos, basic gaming statistics – routinely made available in
Macau and other jurisdictions – remain under wraps. The Lion City’s Casino Regulatory Agency (CRA) has ignored repeated inquiries about the numbers. Filling the official silence, experts’ theories range from preserving commercial confidentiality to
overwhelmed regulators assigning public information a low priority. The most colourful scenario suggests that authorities want to reassure VIPs that the government can
keep secrets. Regulations require advance reporting of junket customers’ arrivals in Singapore and disclosure of benefits they receive; keeping casino numbers under wraps shows that Singapore doesn’t always tell all it knows. Data on casino revenue, gaming preferences, and local versus foreign players, provide raw material for
Singapore businesses to share in the growth from integrated resorts. The IRs aren’t only about attracting tourists, but creating new opportunities for Singaporeans,
particularly the city-state’s best and brightest who are now often tempted to move overseas. “Data and statistics enable people to figure out what kind of product they should do and what businesses
they can create,” Singapore’s leading nightclub impresario, Saint James Holdings CEO Dennis Foo, says. “That’s why I believe those numbers will come out over time.”
24 JULY/AUGUST 2010
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