Inside Asian Gaming

INSIDE ASIAN GAMING | February 2011 26 Machines in the mix One of the major mistakes Las Vegas Sands Corp (LVS) made when setting up the Marina Bay Sands (MBS) casino was to replicate the games mix at its Macau properties. Unlike Macau, where baccarat is preeminent, in Malaysia and Singapore, roulette reigns supreme, and the MBS main floor had initially devoted too much precious floor space to the former game and too little to the latter. Since the casino areas at the Inegrated Resorts (IRs) are limited to a maximum 5% of the properties’ total floor space, determining the optimal mix of games on the floor is particularly important. Upon realising it had not provided sufficient roulette tables, though, LVS swiftly rectified the shortfall by installing expansive additional roulette capacity via automated and semi- automated multi-terminal installations. The casinos at both MBS and Resorts World Sentosa (RWS) feature a high proportion of multi-terminals—namely, electronic versions of popular table games—in their gaming machine mix. These multi-terminals generally offer higher yields than slot machines, driving up the average win per machine per day at the two IRs. Whereas gamingmachines accounted for less than 5% of total casino revenue in Macau last year, they accounted for almost 20% of casino revenue at MBS in the third quarter of 2010 (the first full quarter of the property’s operation), and probably a similarly high proportion of total casino revenue at RWS—which does not provide detailed breakdowns of its gaming and non-gaming revenue. The Singapore IRs have some of the highest earning gaming machines in the world. The 1,798 gaming machines at MBS recorded an average daily win per unit of US$481 in the third quarter of 2010, versus the US$286 earned by the machines at Venetian Macao. The machines at RWS are widely acknowledged to outperform those at MBS, despite the lack of official figures. During IAG ’s visit last month to Singapore, we noticed the RWS slot machines were generally of higher denomination than those at MBS and were enjoying equal or greater player occupancy. Cover Story Most analysts had originally predicted the swankier MBS would quickly snatch the market share lead from RWS, despite the latter’s two and a half month head start. It didn’t take long for the consensus view to switch, however, and the smart money is now on RWS holding onto the lead for some time to come. In a report on Genting Singapore—the Singapore-listed unit that holds Genting’s interest in RWS—published by Goldman Sachs in June 2011, the investment bank commented: “While we think Marina Bay Sands is undoubtedly a far more spectacular property, we believe the US operator has shownitselftobearelativelyunderwhelming competitor so far.” Genting gained considerable competitive insights and advantages from operating a monopoly casino property in Malaysia since 1970, including an intimate familiarity with the wants and needs of players from Malaysia and Singapore and an extensive base of customers—many of whom belong to its loyalty card programme—in the region. There is also the matter of the casinos’ interiors, which were also influenced by the respective operators’ familiarly with local players’ preferences. As Goldman put it: “we think Genting may have a more appealing casino product to Asian gamblers.” The cosy RWS casino allows gamblers to feel a much greater sense of anonymity than the MBS main-floor, which takes the popular stadium-style layout of Sands Macao to dizzying new heights. It will “take longer” for gamblers to “embrace the different casino experience” at MBS, according to Goldman Sachs. Junket allegations The dark cloud on the horizon for Singapore’s gaming industry in the Year of the Rabbit is the recent claim of unlicensed junket activity at MBS, revealed in court documents filed last month by a high roller being sued by MBS over a S$250,000 gambling debt. According to a report in Singapore’s Business Times , Lester Ong Boon Lin alleged in an affidavit that he had owed money to junkets he assumed were operating legally at MBS at the time he accepted the casino’s credit line. Mr Ong claimed the way the alleged junkets operated at MBS was similar to legal junkets he had seen operating in overseas casinos. To date, no junkets have been officially High visibility—the casino at Marina Bay Sands