Las Vegas
Companies Lead Singapore Short List
An Asian casino expert
says the four Las Vegas-based resort companies
looking to build an integrated resort at Singapore's
Marina Bay area have the inside track among
12 companies that have made the "short
list" of developers under consideration.
Kelvin Tan, executive director of
Surrey Development Ltd., one of the leading
consultants for the gaming industry in Southeast
Asia, said proposals from MGM Mirage, Las Vegas
Sands Inc., Wynn Resorts Ltd. and Harrah's Entertainment
Inc., have the best chance of winning the right
to build in Singapore.
Tan said the companies' track record for development
and favorable relationship with Wall Street
to secure financing make them the favorites
to secure the first of two bids from the government
of the Southeast Asian city.
Tan made the prediction in a panel on the development
of the Singapore gaming market at the four-day
Global Gaming Expo at the Las Vegas Convention
Center. Casino industry executives, vendors
and analysts from around the world are attending
the show, which closes today.
In a later panel, several other Asian gaming
experts gave a progress report on the industry
in Macau.
In Singapore, two iconic integrated resorts
have been approved by the government, which
has spent much of 2005 establishing ground rules
for the submission of proposals.
Tan said a request for proposals on the two
properties is expected to be issued by the government
by the end of this month. The submission of
bids for the Marina Bay site -- the more urban
setting of the two locations -- would have a
December deadline, Tan said, and is expected
to be awarded by the end of February.
Bids then could be submitted for the second
site, on Sentosa Island just off the coast of
Singapore, by the end of March, with the awarding
of that project expected by May.
Tan said the favorites to secure the Sentosa
Island bid are a partnership by the owners of
Casino de Genting, a Malaysian operation, and
Universal Studios; Sol Kerzner's Sun International
group; and a partnership comprised of Tabcorp
Holdings Ltd. of Australia and a cruise ship
company.
The Singapore market is attractive to the 12
companies planning to submit proposals because
of the city is centrally located between several
Southeast Asian countries, densely populated
and untapped India and Australia.
The city already has an established tourism
infrastructure and the government voted last
year to allow casinos to further enhance its
tourism offerings.
The government also plans a relatively low
tax rate -- 10 percent on premium players and
20 percent from the mass market. Panelist John
Malott, managing director for the Asia Pacific
region of Washington-based ManattJones Global
Strategies, said Singapore also is appealing
because of its "squeaky-clean image"
and that the government has established a means
to address problem gambling issues.
Malott, a former U.S. ambassador to Malaysia,
said the casinos would assess a fee of $100
in Singaporean currency -- about $60 U.S. --
for local residents to use the casino. Locals
also could buy a $1,200 (U.S.) annual pass,
with most of the admission charge going toward
treatment of compulsive gamblers.
Tan said the winners in Singapore will be the
government, the winning bidders and the citizens
of the nation, while the losers would be Genting
Resorts, the company with a casino nearest to
Singapore, cruise ships operating in the Straits
of Malacca and casino operations in Cambodia,
the Philippines, Australia and Sri Lanka.
The panelists don't expect the new Singapore
properties to impact casinos in Macau because
it is so far away -- about three hours by plane.
The panel updating operations in Macau indicated
that the city on the southern tip of China continues
to be on track toward overtaking Las Vegas by
gross gaming revenue.
Casinos in Macau reported 16.7 million visitors
in 2004 -- a 40 percent increase over the previous
year -- with revenue of about $5 billion. Revenue
for 2005 is expected to hit $6 billion.
Macau has awarded three concessions and two
subconcessions, to five companies, including
Las Vegas Sands, Wynn Resorts Ltd. and MGM Mirage.
Las Vegas Sands already has a casino open and
is building a second property in an area known
as the Cotai Strip on an island off Macau. Wynn
and MGM Mirage are building properties that
are expected to open next year.
Panelists on the Macau session said the biggest
differences in the area this year are the growing
importance of the mass market, a slowing growth
rate in visitation and a potential increase
in slot machine revenue.
Macau is a market built on table game play
as high-rolling Chinese gamblers wager primarily
on high-stakes baccarat.
But the arrival of Las Vegas Sands to the market
resulted in an interest in the mass market and
efforts to increase slot machine play, said
panelist Larry Woolf of the Navegante Group,
Las Vegas, an industry consultant.
Slot play has a long way to go to catch up
to table game play, he said, with slots generating
about $200 a day in revenue compared with $10,000
a day per table on those games.
Panelist Scott Fisher of The Innovation Group,
New Orleans, an industry consultant, said visitor
growth is up 10 percent in 2005, a healthy increase
but considerably lower than the 40 percent rate
previously experienced.
Fisher noted that visitation could spike again
later in the year with the opening of a new
Disneyland theme park in Hong Kong, which opened
its doors last week.05
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