Inside Asian Gaming

Marina Bay Sands Everybody goes up and down together.” That may be true, but it’s likely that in strict gross revenue terms, gaming’s contribution to MBS will be proportionately smaller than gaming’s contribution to the LVS operation in high- roller focused Macau. “In Las Vegas, the casino contributes 30% to the bottom line,”Mr Adelson told the assembled media on MBS’s opening day. “In Macau, it contributes between 70% and 75% to the bottom line. Here in Singapore, it should be somewhere in the middle. It’s too early to tell exactly”. Forecasts Nonetheless, the annual revenue from Singapore’s two casino resorts forecast by analysts (anywhere from US$2.5 billion to US$5 billion per year, from most recent estimates) is what created the leverage to raise the cash (US$3.6 billion of it in loans and US$2.1 in equity) to build such an ambitious project in the first place. Revenue from the casino is what will decide the rate of return on investment on Marina Bay Sands, and ultimately the business success of the whole scheme and of Singapore’s IR experiment. That’s why most of the MBS casino opened on 27thApril, but some of the shops, themuseum and some of the conference facilities did not. Elsewhere in this edition, Michael Leven, Mr Adelson’s right hand man as President and Chief Operating Officer of LVS, makes the point explicitly to Inside Asian Gaming that the sort of infrastructure provided by the company’s resorts simply cannot be sustained without casino gambling being in the mix. W hat has Marina Bay Sands brought to Singapore, Asia and the rest of the world? The business aim of the property may be very similar to that of The Venetian Macao—a one stop shop for every conceivable kind of legal entertainment— but the execution is quite different. The first thing to say is that in look and atmosphere—inside as well as out—MBS is very different to The Venetian. Some may say hallelujah for that, though IAG did notice that in the heart of the MBS property, beneath the tiered walkways of shops, there is a (currently waterless) canal. It seems some ideas are just too precious to be let go of easily. From a purely real estate perspective, we have a property that is significantly different from not only other casino resorts that have been built around the world, but also to anything that’s been built in Singapore so far. Yet it’s also a property that has been clearly moulded in Singapore’s image of itself as a sophisticated world city, inhabited by people who are generally well educated and know the difference between Berlin Dada and Lady Gaga. Making a statement The number of iconic buildings in Hong Kong canprobably be countedon the fingers of both hands, if not one hand. Most of the skyscrapers in Hong Kong are fairly dreary up-and-down rent-generating machines. Singapore has plenty of those, but it also has some really memorable historic buildings and some impressive modern structures including Esplanade – Theatres on the Bay, the roofs of which resemble giant fruit laying on their sides, hence the local nickname‘The Durian’ or ‘Big Durian’. Marina Bay Sands believes it is competing in that territory, and it is hard to argue against its aspirations. Mr Adelson says his architect, Moshe Safdie, has given him three iconic buildings in one project—the hotel towers and SkyPark; the upturned, Buddha-like ‘hand’ or lotus design of the still-under-construction museum, and the towering atrium space of the Shoppes at Marina Bay Sands. The LVS Chairman added, as a joke, that he hoped his comments wouldn’t lead Mr Safdie to push his price up threefold. Watching Mr Adelson perform his opening act before the assembled world media, his sense of personal pride in MBS and his aspiration to be taken seriously as an all round resort developer certainly came across. Why else would LVS go to the trouble and expense of installing awork by the iconic British sculptor Anthony Gormley in full view of the main city side entrance to MBS? This is Mr Adelson’s post modern answer to Steve Wynn hanging the odd Renoir or two in the entrance to his properties. But Mr Adelson’s set dressing gesture feels less like showboating, given that Mr Gormley’s work is integrated into the property rather than placed as an afterthought. MICE work For analysts of the so-called MICE (meetings, incentives, conferences and exhibitions) market, LVS has produced a list of events it says have already been signed up for MBS’s Sands Expo and Convention Center. Given the so far patchy performance of the MICE business at The Venetian Macao, sector commentators will be interested to find out if the ‘Build it and they will come’ approach applied to Singapore will inject fresh energy into the city-state’s conference market and create sustainable fresh demand for its services as a regional destination for big meetings. “We’ve put together our development programme and operation with the belief that we will get in excess of 70,000 to 80,000 people coming per day to Marina Bay Sands,” stated Tom Arasi, President and Chief Executive Officer of MBS, ahead of the opening ceremony. Esplanade – Theatres on the Bay New Package Marina Bay Sands offers a very different perspective on an existing integrated resort idea Artist’s impression of Sands Expo and Convention Center 9