VEGAS INC Coverage
Ever since Singapore overturned a casino ban and opened the nation to Las Vegas-style casino resorts in 2005, financial analysts have predicted its eventual dominance as one of the world’s biggest gaming markets.
Singapore, already a major financial and tourism hub in Asia, would quickly overtake the Strip in two to three years, they said.
That may be happening faster than expected.
According to an estimate this month from Royal Bank of Scotland, Singapore’s two casino resorts are on track to generate gambling revenue of $6.4 billion this year, higher than the Las Vegas Strip’s anticipated $6.2 billion. Both Las Vegas Sands-owned Marina Bay Sands and Genting-owned Resorts World Sentosa opened last year.
The estimates put Singapore in second place behind Macau, which years ago eclipsed the Strip’s gambling revenue. Macau is expected to dominate the global casino business because it’s the only place in China -- a nation of growing wealth, with a proclivity for gambling -- where casinos are legal.
UBS stock analyst Robin Farley last week said Macau gambling revenue is expected to grow 33 percent this year, up from a previous estimate of 28 percent. Macau is on track to generate $31.5 billion in gambling revenue, Farley said in a research note to investors.
Dropping to third place, the 42 casinos on the Las Vegas Strip reported $5.8 billion in gambling revenue last year. That’s a 15 percent decline from the market peak in 2007, when there were 38 casinos on and around the Strip.
Some analysts question Singapore’s early dominance over the Strip. Singapore’s gambling revenue has outperformed initial projections from 2005, Las Vegas-based gaming consultant Jonathan Galaviz said. Still, he called the Royal Bank of Scotland estimate “aggressive.”
“Singapore’s casino revenues should begin to level off in 2011, but a figure of over $5 billion in revenues is certainly within reach,” said Galaviz, chief economist of Galaviz & Co. and an adjunct professor at UNLV’s satellite campus in Singapore.
The strong Singapore dollar, which has risen more than 20 percent in value against the U.S. dollar in recent years, could help the region eclipse the Strip, he added.
Singapore’s two casino resorts are supersized versions of their Las Vegas counterparts, each one the size of two or three of Strip megaresorts. Beside all of the trappings of a Vegas resort, like theaters, shopping centers and convention facilities, Singapore’s resorts feature large, all-ages attractions like theme parks, marine attractions and museums.
“What exists in Singapore is really the Las Vegas model of integrated entertainment,” Galaviz said.
The Singapore government legalized casino resorts not to overtake Nevada as a gambling destination but to double tourism traffic and spending -- a goal that’s well within reach, said Fredric Gushin, managing director of Spectrum Gaming Group, which did consulting work for the Singapore government.
Singapore was already a cultural and tourism attraction in Asia before the arrival of casino resorts, Gushin said. The resorts cater to well-to-do visitors, including those with second homes in Singapore, who appreciate the region’s reputation for law and order, he said.