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Shades of Macau?

Singapore risks getting too dependent on casino resorts, says a local MP

Tuesday, 01 March 2011 16:38
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A Singapore MP has called for a tripling in the levy imposed on Singapore nationals for entry to the city’s two casinos.

Such a move would push fees up to S$300 (US$235) for 24-hour access, and to S$6,000 (US$4,716) for a yearly pass. The MP also called for a formal cap on the number of casino resorts allowed in the city-state at the current two. The chances of any of these things becoming formal government policy any time soon seem slim, given that it’s the view of a single MP.

What was interesting about lawmaker Denise Phua’s statement on 28th February, however, was how and where it was made. It wasn’t the usual town hall tub-thumping about the need to protect the poor and vulnerable in society. That’s normally the tack of the anti-gaming politicians in Singapore and neighbouring Malaysia.

Instead, Ms Phua’s point was a subtler political and economic one. It was that over-reliance on gaming revenue would risk narrowing the scope and ambitions of the local economy and would hurt Singapore over time. This, in effect, is a mirror image of the Chinese government’s concerns about the current state of the Macau economy and its reliance on income from casino gambling—but coming from the other end of the curve.

And she chose to reinforce the point by raising the issue during a parliamentary debate on the city-state’s 2011 budget. The government should take “the more difficult journey of honing our own expertise in building quality tourism products” she said. Where have Macau-watchers heard that before?

In support of her point about overreliance on gaming, Ms Phua cited an analysts’ report suggesting the Singapore gaming market would hit US$5 billion in gross revenue in 2011. That’s only US$776.5 million shy of the gross gaming revenues (GGR) for the whole of the Las Vegas Strip in 2010, and equivalent to 56% of the entire GGR for the whole of Clark County in 2010, according to data from the Las Vegas Convention and Visitors’ Authority.

Ms Phua’s comments come at a time of national debate about the numbers of Singapore citizens gambling in the two integrated resorts (IRs)—Genting’s Resorts World Sentosa and Las Vegas Sands Corp’s Marina Bay Sands. The government disclosed in January that the IRs collected S$130 million in casino entry levies between April and November last year. Assuming for a moment that every transaction in that total was for a 24-hour pass at S$100 per time, that’s the equivalent of 1,300,000 individual casino visits by Singapore citizens in just eight months. Expressed another way, it amounts to 5,416 Singaporeans per day visiting the casinos during that period.

In reality, some of the S$130 million entry levy revenue will have come from yearly passes issued at S$2,000 per time, thus in likelihood pushing down somewhat the daily average number of Singaporeans visiting the casinos. But those purchasing a yearly permit must still make at least 20 casino visits per year to make it more cost effective than buying a daily pass.

There is also some anecdotal evidence from industry insiders that the 24-hour pass system may actually be creating incentives to gamble more intensively than might be the case if access were free to Singaporeans at all times.

An industry source told Inside Asian Gaming: “Because the day pass is for a 24-hour period from the time of purchase, what a lot of local players seem to be doing is buying an entry ticket in the evening, playing until maybe one or two in the morning, sleeping for a few hours, going to work and then going back to the casino the next day.”

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