The race for first-mover advantage in Singapore is not quite overTuesday, 26 January 2010
Singapore's onerous casino entry fee for locals—a policy tool to limit the social ills of gambling—will confer a significant firstmover advantage on the first of the two integrated resorts (IRs) set to open in the city-state.
Locals wishing to visit the casino at either Resorts World at Sentosa, operated by Genting Singapore Plc (a 54% subsidiary of Malaysia's Genting Bhd), or Las Vegas Sands Corp's Marina Bay Sands will need to stump up either S$100 (US$71) per day or S$2,000 (US$1,434) per year for the privilege at each property.
Regulars would likely opt for the yearly fee, and retain their patronage for the year with the casino that gets them through the door first. If that casino is able to build player loyalty within that year, the advantage derived from opening first could continue through to subsequent years. IRs in Singapore will have considerable flexibility in building player loyalty because they face significantly lower gaming tax rates than casinos in other neighbouring jurisdictions, allowing them to effectively reimburse the entry fee with comps and commissions.
|Tax Rates Faced by Regional Casinos|
|Max Gaming Tax||15||39*||25||19-27.5||15|
|VIP/Junket Gaming Tax||5||39*||25||10-12||25|
*incl. 3-4% mandatory social and welfare contributions
On 5th January, Genting Singapore announced that the phased opening of Resorts World at Sentosa (RWS) would start on 20th January. The opening will kick off with the unveiling of four of the resort's six hotels: Festive Hotel, Hard Rock Hotel Singapore, Crockfords Tower and Hotel Michael, offering a combined 1,350 rooms and 10 restaurants. The other two hotels, Equarius Hotel and Spa Villas, will add another 500 rooms when launched after 2010, according to Genting Singapore.
Meanwhile, Las Vegas Sands Corp (LVS) chairman and chief executive Sheldon Adelson announced last month that the Marina Bay Sands (MBS) opening would be pushed back from the previous target of the first quarter of this year to April. Mr Adelson blamed the construction delay on monsoon rains and financial problems facing some subcontractors. Some industry insiders suggest, however, that even an April opening is optimistic.
It's still too early to claim victory for RWS in clinching first-mover casino advantage, since its casino has yet to be licensed. Genting Singapore refuses to hazard a guess as to when it expects to receive a license from Singapore's finicky Casino Regulatory Authority (CRA). All the CRA have thus far offered is that Genting made an initial submission for a casino licence in October 2009, but the completed application package was only received in December (while MBS managed to submit its complete application in November).
Inside Asian Gaming took a straw poll of insiders as to when they expect RWS to receive its license. Predictions ranged from one or two days prior to the opening on 20th January, to two to three months after the opening.
On the one hand, the CRA is simply overwhelmed. It is faced with processing a mountain of licence applications over the coming weeks and months, as only a minority of casino equipment, games and suppliers have been licensed so far, and the CRA has notoriously stringent requirements. Furthermore, the CRA only spelled out its guidelines for licensing and regulating junkets on 31st December, with all the licensing work now ahead of it. Not forgetting, of course, that everything is new to it.
Singapore is famously efficient, however, and even though the CRA faces a daunting workload, it appears to be working at fever pitch and could well release a slew of approvals and licenses towards the end of this month. One well placed source suggests RWS will likely be issued a conditional license subject to certain conditions being fulfilled. If the CRA does manage to license RWS by the end of January or early February, it will prove that although gaming regulation in Singapore is perhaps even overly stringent, it is at least efficient and pragmatic.
Genting Singapore also declined to comment on when the Universal Studios theme park—the region's first—at RWS is expected
to open, though a spokesman said testing and commissioning of the various rides had started in early November.
With a price tag of US$4.4 billion, RWS will take the title of world's most extensive and expensive integrated resort when it opens— until Marina Bay Sands arrives, with a price tag of about US$5.5 billion. In its first phase set to open this year, RWS will also contain a ballroom, 26 function rooms, a 1,600-seat Festive Grand theatre and, of course, a luxurious casino. Phase two will see the unveiling of the world's largest Marine Life Park, the Maritime Experiential Museum, a destination spa and two remaining hotels.
MBS will also boast an impressive casino, a 2,600 room hotel, two 4,000-seat theatres, an exposition and convention centre that can support 45,000 delegates, and a luxury shopping and dining complex.