Inside Asian Gaming

48 Not only did Singapore’s ethical RFP process build confidence with the bidders, it also built confidence with financial markets, reducing the cost of capital for the project, and thus allowing bidders to incorporate even bigger tourism entertain- ment components into their proposals increases in incremental mass-market tour- ism to Singapore. Ultimately, it was deter- mined that the ‘Las Vegas Model’ of tourism generation was strategically in line with eco- socio-political objectives of the Singapore government. The second component of the research consisted of understanding what problem gambling was and to understand its poten- tial sociological impact on Singapore. Gam- ing activity had existed in Singapore for many years in the forms of lotteries, sports betting, and horse track betting, but the casino form of gambling was something new. Generally speaking, there was no substantial problem gambling strategy as it related to the other forms of gambling, and so, the legalization of casino gaming in Singapore became a new catalyst for addressing a problem which had existed for decades. This culminated in the creation of Singapore’s new National Council on Problem Gambling. Strong Regulatory Approach Singapore made it clear that a strong regula- tory environment was going to be the rule, not the exception, in the development of integrated resorts with casino gaming ven- ues. In fact, it became clear that the US based casino gaming industry requested – some parties demanded – a strong regulatory ap- proach from Singapore. As those in the industry know, having a strong and ethical regulatory system of casino gaming is critical to building confi- dence with both players and financial mar- kets. Singapore embarked on understanding the regulatory systems of the top tier global gaming jurisdictions and began the process of creating what would become the Casino Regulatory Authority (CRA). Granted, Singapore’s new regulatory au- thority will only oversee the operations of two casino facilities located in two large-scale integrated resorts, but Singapore’s strong capability in this area will bode well for the nation should casino gaming activity ever be liberalized there over the coming decades. Free Market Competition The key factor in achieving a superior pro- posal that would meet the objectives of the government was to establish a free market mechanism of competition. The Singapore government created a Request for Proposals (RFP) process that is often used in defense and military projects; the process is formal- ized and ensures that evaluations are con- ducted fairly and ethically. The Singapore government has always been respected as a government of high eth- ical standards and transparent operations. In developing its RFP approach, it ensured that the commercial marketplace of prospective bidders knew all conditions, rules, and regu- lations before they went through the process of spending money to make a bid. Ultimately, through free market competi- tion, Singapore was able to achieve its objec- tive of ensuring that MICE (meetings, incen- tives conventions and exhibitions) would be themajor component of a successful bidder’s proposal. Not only did Singapore’s ethical RFP pro- cess build confidence with the bidders, it also built confidence with financial markets, re- ducing the cost of capital for the project, and thus allowing bidders to incorporate even bigger tourism entertainment components into their proposals. The Marina Bay Sands will be the most expensive integrated resort in the world,and LVS promises delivery of the entire project by 2009. Moving Forward Many other countries in Asia will likely use the Singapore model of integrated resort de- velopment to drive tourism. A convergence will continue to occur in Asia where the ca- sino gaming, hotel lodging, airline, and MICE industries continue to be tightly integrated in countries that consider the use of casino gaming activity to boost capital investment and create tourism value propositions. As governments globally – especially in Asia – continue to look to enhance their posi- tion in the tourismmarketplace,the path that the Singapore government took is one to not only admire, but to seriously consider. Singapore’s successful interaction with the global casino gaming industry will likely be used as an example and case study for many years to come. Perhaps it will indeed become a Harvard Business School case study in the not so distant future. Jonathan Galaviz is a Partner at Globalysis Ltd and is a highly respected tourism sector analyst focused on the development and performance of the casino gaming, airline and hotel lodging industries in Asia. Globalysis Ltd. is a Las Vegas, Nevada based boutique researchandadvisory practice;clients of the firm include some of the largest names in the Fortune 500. Visit www.globalysis.com for further information. WWW.ESCADA.COM Av. da Praia Grande, No.874, Floor GF, Flat K, Macau Tel:711826