Inside Asian Gaming

mainly on junket operators from Southern China for their VIP business, LVS and Wynn primarily work with junket operators from the rest of Southeast Asia—including Ma- laysia, Thailand and Indonesia—rather than mainland China, where gambling debts are not legally enforceable. MGM MIRAGE will be similarly restricted,as will the Melco-PBL joint venture, given PBL’s U.S. interests. Southeast Asian junkets may in future favor Singapore both for proximity and higher commissions enabled by the lower tax rate. Green said Singapore’s effect on Macau might be great because of its lower gaming tax rate. Singapore also holds an appeal to mainland Chinese—it is the thirdmost popu- lar outbound destination for Chinese tourists after Hong Kong and Macau – the latter two are special administrative regions of main- land China and are accessible by land from major mainland population centers. Still, Green echoed the consensus view that Macau will remain Asia’s pre-eminent gaming destination. He also added that he did not believe Singapore would allow profit share between casinos and VIP room/junket operators, as allowed in Macau. Green also pointed out that Singapore could, however, give Macau a run for its MICE money. While Macau currently suffers from limited air connectivity, Singapore is a global-crossroads for air traffic, and is also an appealing MICE destination because of its stable, crime-free environment. A major MICE business needs visitors from beyond China, observed Green. “The conventions business in China is very under- developed.I would doubt verymuch that you could make a lot of money running a MICE business just based on China,” he explained. And in any case,“by the time people are afflu- ent enough to be operating conventions like that, they’ll start to look further afield.” “Conventions may move to the biggest and greatest for a while, but there’s a finite group of conventioneers and a finite market for conventions,” Green added. “The other place that’s doing it is Dubai. I wouldn’t dis- count Dubai either as a potential source of competition for the MICE business here.” Macau’s edge over Singapore is that it will have a lot more critical mass,with a string of casinos and resorts present or under de- velopment on the Macau peninsula along Friendship Avenue and on the Cotai Strip (of reclaimed land between Taipa and Coloane islands).“A whole strip will have more attrac- tion than two isolated resorts,” said Green. “In Vegas, people tend to walk the strip. They might have a drink somewhere, eat some- where else, and play somewhere else. Go to a show.There’s no doubt that a strip of proper- ties is going to be a lot more attractive than standalone properties.” What Singapore lacks is “stickability.” Green explained.“People are either in transit, or stay for a short time. There’s not a whole lot to do.” Singapore’s share of the Asia pacif- ic travel market is declining. Tourists coming into Singapore stay an average of three days, from four days in 1991, and compared to four days in Hong Kong, five days in London and almost a week in New York. Still, Singapore has more stickability, for the moment at least, than Macau. Only around 20 percent of visi- tors to Macau stay overnight, and they aver- age just 1.2 nights in the city. Casinos are part of the Singapore gov- ernment’s plan to increase the city-state’s stickability and double visitor arrivals to 17 million and triple annual tourism revenue to S$30 billion (US$18 billion) over the ten years. If Singapore doesn’t achieve those goals, perhaps it will look at awarding more casino licenses once the ten-year morato- rium on further licenses lapses. Singapore’s initial two IRs will be impres- sive, but at least three or four locations are needed before critical mass emerges, and Macau has a big head start in this regard. This article, by Kareem Jalal, editor and publisher of Inside Asian Gaming , originally appeared in International Gaming and Wa- gering Business (IGWB) magazine. Reprinted with permission from IGWB . Rendering of the Marina Bay Sands Rendering of Genting’s Resorts World at Sentosa 31