Inside Asian Gaming

INSIDE ASIAN GAMING | March 2010 source. These figures follow initial revenues in the US$3 million a day range. The opening-day crush of mass-market curiosity seekers—with crowds exacerbated by the Chinese New Year holiday—must have kept serious gamblers away during the first few days of operation. Furthermore, as explained in “Claw Back” in the last issue of Inside Asian Gaming , Chinese New Year in Macau is characterised by increased mass market casino visitation, while VIPs action is down, presumably because high rollers are either home with their families or off to Las Vegas. The same should hold true for Singapore. Union Gaming Research noted the figures for end-February were split fairly evenly between VIP and mass market, whereas the initial figures were in likelihood dominated by the mass market. Though the RWS casino is still very much basking in its new property glow, the US$7-8 million a day revenue figure is impressive. Union Gaming Research observed: “To say these numbers are encouraging is a monumental understatement, especially without the influence of junket operators,” but warned that such numbers for RWS are not sustainable, given the upcoming Marina Bay Sands (MBS) opening. Thank you CRA RWS owes Singapore’s finicky Casino Regulatory Authority (CRA) a debt of gratitude for processing the licence application in time for the casino to open on the biggest holiday in the Chinese-speaking world—which this year coincided with St. Valentine’s Day. The phased opening of RWS had kicked off on 20th January with the unveiling of four of the resort’s six hotels, but with the casino still waiting to be licensed—largely owing to the late filing of the complete licence application according togovernment sources. Many industry watchers speculated that RWS couldbe left standingwith its finger on the casino trigger until March or April, losing much of the first-mover advantage it hoped to gain over MBS, which is scheduled to open on 27th April—though contractors involved with the project warn one more delay could still be on the cards. MBS, owned by Las Vegas Sands Corp (LVS), is the only other property licensed to operate casino gaming in the Lion City, and the Singapore government has vowed not to issue any further licences until at least 2015. In January, a sea of pending licence applications swamped the CRA, extending beyond the casinos themselves to the licences for the games and equipment inside them. Squeaky-clean Singapore will vigilantly maintain a wall of red tape around itscasinosinordertodetermoneylaundering and to safeguard its position as a world-class financial centre. Given the need to adhere to regulatory standards more stringent than those of any major gaming jurisdiction, the CRA must have worked around the clock to process all the necessary licence applications in time for the mid-February opening. Regulating away the junkets Although the fastidious CRA has disproved cynics who claimed bureaucracy would reign and rob the RWS casino of its first-mover advantage, it appears Singapore’s casino regulator has robbed the two properties under its purview of any substantial junket business by effectively regulating away the junkets. The CRA released its much-anticipated details on the licensing and regulation of junket operators on 31st December (the details are discussed in both the January and February issues of Inside Asian Gaming ). While Macau’s junket operators could be lured to jump through the regulatory hurdles to get licensed in Singapore, the nail in the coffin of Singapore’s junket courting ambitions is the requirement that junket players identify themselves in advance of entering the casinos, which runs counter to the players’ strong preference for anonymity when going on gambling jaunts. This has allayed fears that Singapore’s low 12% preferential tax on junket and ‘premium’ play (including the 5% levy on ‘premium play’—as opposed to the 15% levy on mass market revenuea—and the 7% goods and services tax) would enable its casinos to offer higher commissions to lure junkets from Macau, where all gaming revenue is taxed at 39% (including 35% as direct tax and 3-4% as mandatory social and welfare contributions). Fine, young, but no cannibal The consensus view from analysts now is that Macau will see very little fallout from Singapore’s casino openings. The following table highlights investment bank Merrill Lynch’s estimates for how much of a new casino gaming market will be created by the new Singapore casinos, and how much revenue will be cannibalised from major competing casino jurisdictions in the region. Singapore’s junket regulations run counter to the players’ strong preference for anonymity Cover Story 8