| SINGAPORE, Sept 24
SINGAPORE, Sept 24 Casino operators and
regulators around Asia are watching Singapore's two
multi-billion-dollar gaming resorts as they focus on tourists
and trade shows to boost revenue in response to restrictions on
gambling and a sluggish broader market.
The city-state has become a playground for Asia's rich and
famous, with attractions ranging from fancy clubs and
restaurants helmed by Michelin-starred chefs to the world's only
night-time Formula One race.
Las Vegas Sands Corp, which owns the Marina Bay
Sands (MBS) casino in downtown Singapore, says its 2,500-room
hotel is packed and it is eager to expand its holiday
accommodation and convention facilities near its three iconic
"Obviously at 99 percent occupancy in the hotel, we think we
can sell a few more hotel rooms. So we'd love to increase our
inventory of rooms," MBS CEO George Tanasijevich said in an
Genting Singapore Ltd, which runs Resorts World at
Singapore's Sentosa island, is building a mid-tier business and
leisure hotel in the suburbs to house guests that it will ferry
to its Universal Studios theme park, aquarium and other
attractions, in the hope some will also patronise the casino.
The Singapore casinos' strategy of burying gambling floors
inside family-friendly resorts is catching the attention of
governments from Japan to Vietnam, which are attracted to the
income casinos provide but wary about becoming too dependent on
gaming revenue and the social impact of casino liberalisation.
Non-gaming revenue accounted for about a quarter of the two
resorts' total combined revenue of about $1.3 billion in the
quarter ended June, a high proportion compared with regional
casino capital Macau where non-gaming is only about 10 percent
of total revenue.
Genting said its Marine Life Park and Universal Studios had
more than 1.7 million visitors in the second quarter of this
year, mostly families on vacation including many from regional
countries such as Malaysia, Indonesia, China and India.
Sentosa and Sands' Skypark, a huge observation deck and
recreational area with an infinity pool on the 57th floor, are
among the most-visited paid attractions for foreign tourists to
the city state, according to a Singapore Tourism Board survey
Visitor arrivals in Singapore have jumped by nearly 50
percent to an estimated 14.4 million in 2012 compared with the
end of 2009. The first casino opened in February 2010.
BETTING ON TOURISM
Bollywood shows, musicals including Broadway's
longest-running show "Phantom of the Opera", and fashion events
are some of the non-gaming attractions Singaore's resorts have
hosted to boost their visitor numbers.
"They are focusing on non-gaming. That's how they get
captive customers for their gaming business, especially Genting
Singapore. If a family checks in, usually one or both parents
would go to the casino and the kids would end up at the
attractions," said Nandini Vijayaraghavan, Fitch Ratings'
primary rating analyst on Genting Singapore.
"If they have to get repeat customers, they would
necessarily have to offer a lot more than just gaming in their
premises. We do believe that the hotel and attractions give an
element of stability to earnings."
The drive for diversification will be familiar for Las
Vegas-based operators like Sands. The U.S. gaming city largely
failed in a similar expansion in the 1990s, when casinos began
offering family-friendly attractions as competition grew from
riverboat gambling and other local markets.
Billionaire Kirk Kerkorian's MGM Grand casino, themed after
the "Wizard of Oz" movie, opened a theme park featuring a
riverboat cruise and a journey to the center of the earth. It
was largely replaced in 2002 with a high-rise luxury condominium
and hotel complex.
Vegas impresario Steve Wynn, a major player in Macau through
Asian offshoot Wynn Macau Ltd, spent $450 million to
open the Treasure Island resort and casino in 1993 with
whimsical pirate features. By 2003, Treasure Island had largely
abandoned its pirate theme, replacing the arcade and
family-friendly pool area with a hot tub and night club.
The experiment with Vegas as a family destination was all
but over by the time the city adopted its "What Happens in
Vegas, Stays in Vegas" advertising slogan in 2001.
CONCERNS GROW IN MACAU
In Asia, Genting and MBS's profitable non-gaming attractions
differentiate Singapore from Asia's casino capital of Macau,
which sets the pace in terms of gambling revenue but not as a
family tourism destination.
Casino space accounts for less than 5 percent of the gross
floor area at MBS and Resorts World, compared with Macau where
it can consume more than 20 percent at some resorts.
While this formula works for Chinese high-rollers and the
junket operators who bring them in from the mainland, it has
raised concerns in Macau about the government's over-reliance on
gambling revenue and the lack of alternative employment options
for Macau residents.
Aware of this, Macau now demands new casinos devote most of
their property to non-gaming segments such as restaurants,
hotels, retail and event space. The number of new gaming tables
will be allocated according to the properties' non-gaming
More than three years after Singapore allowed casinos to
open, revoking a decades-old ban, the two casino-complexes have
emerged as the showpiece of the city-state.
But to deter problem gambling, citizens and permanent
residents have to pay a casino entry levy of S$100 ($80) a day
or S$2,000 for an annual pass. New regulations include a fine of
up to 10 percent of the operators' gaming revenue for
The Singapore government has made it clear that the two
operators will not be allowed to expand their gaming floor area,
leaving executives like Tanasijevich with little option but to
turn to tourism and conventions for growth.
Tanasijevich, who played a key role in Sands' bid to develop
the second integrated resort in Singapore, said the Singapore
model could be replicated in other Asian countries such as
Vietnam and Japan.
"Our intent, if we had the opportunity to go into these new
markets, is to design and develop and programme something that
is similar to a Marina Bay Sands-style property that has this
great mix of gaming and non-gaming elements. The non-gaming
piece of it is extremely important," he said.
MBS expects to clock 70-plus trade shows or exhibitions this
year, up from 51 last year. Its rooms and conventions posted
higher revenue growth than the casino in the quarter ended June.
Gaming revenue at Genting Singapore fell 2 percent, while
non-gaming revenue jumped 19 percent.
"The gaming component in Singapore is not growing due to a
combination of increasing pressure to inhibit local play, plus
the lack of the volume multiplier which are the junket operators
in Macau," said Ben Lee, Asian gaming consultant at Macau-based
"Is that a bad thing? Not necessarily, as the Singapore
government's objective was to increase tourism, not gambling.
Gaming was merely the tool for them to achieve their objective."
($1 = 1.2511 Singapore dollars)
(Additional reporting by Farah Master in HONG KONG and Ronald
Grover in LOS ANGELES; Editing by Stephen Coates)