Inside Asian Gaming

INSIDE ASIAN GAMING | March 2013 18 A lthough Genting is a seasoned casino operator with clout and intercontinental scale, obvious questions pop up about the future of its sprawling S$6.59 billion (US$5.3 billion) Singapore property, Resorts World Sentosa. The main tasks for RWS as it enters its fourth year are to ensure continued growth and differentiation. The casino will need to capitalizeonthequalitiesthatsetitapartfrom its arguably more iconic and internationally recognized market rival, Marina Bay Sands. It will need to find a way to position itself more clearly to the international VIP market, leverage its brand in other gaming cities, and mitigate factors beyond its control, such as Singapore’s limiting tourism infrastructure and tough regulatory environment. RWS suffered declining revenue over much of 2012, though the latest results point to a recovery as the year drew to a close. ParentcompanyGentingSingaporereported net revenue increased 0.7% year on year and 18% quarter on quarter to S$792 million in Q4 2012, driven by a notable increase in VIP play, though the company’s mass-market segment remained largely flat. The surge in VIP volume was underpinned by aggressive extension of credit as the business became increasingly top-heavy. “Rising costs, falling margins and stagnant industry mass market are some of the concerns looming in the background,” warned a 21st February research note from J.P. Morgan. “While the market may be excited by the robust top-line growth in the short run, deteriorating earnings quality and cash-flow-generation ability could weigh on the stock price in the longer term.” The prospects for the high- end segment are unclear— the Singapore government has not given any indication that it will loosen restrictions on junket operators, and if anything is scheduled to impose stricter regulation covering VIP gaming this year. J.P Morgan also highlighted concern about the reliance of Genting Singapore (as well as market rival Marina Bay Sands) on a handful of whales: “We caution that the Singapore VIP market is very concentrated in a small group of high rollers which could Selling Sentosa The challenges are many for Resorts World Sentosa as it enters its fourth year of operation. Singapore correspondent Alex Lobov outlines its positioning and prospects FEATURES Bedroom in one of the recently opened Ocean Suites at Resorts World Sentosa