Inside Asian Gaming

May 2010 | INSIDE ASIAN GAMING 17 Cover Story I think over a five year period, there’ll be a flattening out of that [table] return. I think one of the things that most of the financial people seem to be missing is how great this facility will be in its totality. They’re focusing primarily on the gaming based upon Macau-type numbers. I think over time what will be proven is that there will be an equalisation of gaming revenue to hotel, MICE [meetings, incentives, conferences andexhibitions], entertainment and shopping revenue. Shopping is going to be a big area here in Singapore. Actually, I’m referring to an equalisation of income, rather than revenue. The revenue from gaming is much higher and the margin of profit is less. I think the equalisation on income [gaming to non-gaming] will come maybe by the time we reach year three [of MBS operation]. What do you think the size of the gaming market is going to be in Singapore? Your chairman, Sheldon Adelson, said he thought a figure quoted recently for ResortsWorld Sentosa of US$3 million per day gaming revenue for RWS was incorrect. How far out do you think that figure is? The numbers we are getting out of Genting’s operation [RWS] so far are pure observation numbers. One of the frightening things for me is that people have talked about win per [slot] unit per day in the area of US$1,000 to US$1,100 dollars per slot machine. That’s significantly higher than anything that anyone’s ever seen in the gaming business—and win per unit on the tables estimated at US$5,000 to US$6,000 per unit per day. Nobody’s estimating the VIP, because we don’t know what’s going on in there. Tom [Arasi, President and CEO of Marina Bay Sands] mentioned to me the other day that the estimate on slots has come down to about US$800. That’s still an unbelievable size number, and no one knows the sustainability and how deep the market is of that kind of play. It’s really too early to tell. Analysts have estimated the total [annual] gaming market for both us and Genting at anywhere from three to five billion US dollars—I’ve maybe seen a low of US$2.5 billion. But it’s such a hypothetical; I don’t know where they get numbers from, because it’s never happened here before. When I ask them the question where they’re getting their estimates, it seems they talk to some of our gaming people. The people that deal in the VIP market, they’re excited, but they’re sales people. In general they exaggerate everything—and sometimes they’re right! Even when the gaming revenue [statistics from the Casino Regulatory Authority] comes out in May for the first quarter, it’s going to be inflated by Chinese New Year dramatically. That sends the numbers way up both here and in Macau. We really won’t know until Genting is open about six months and then we’re open for six months. Genting doesn’t have all the tables open. We’re going to have a significant amount of our tables, but not quite all of them. But we’ll have a higher percentage of our tables open [in the first six months] than them. The question is a very good question, but it’s really too early to answer with certainty. Why did you decide to have your soft opening on 27th April?Were there any covenants on an opening date from lenders or was there any pressure from the markets? We decided a couple of months ago that April 27th was the date, in order to provide a target for everybody to shoot at as a soft opening. We knew that if we made the April 27th date, we would be able to have a hard opening on 23rd of June. But part of the [MBS] product—for example the Louis Vuitton Crystal Pavilion—will not be finished until February [2011]. But if you don’t start, and you don’t set a date, you really never get going. If you waited to finish everything [before opening] you wouldn’t get there. The Louis Vuitton Crystal Pavillion will open in early 2011