The Casino Regulatory Authority of Singapore has granted Genting Singapore an early license this month to open the country’s first legal casino in Resorts World Sentosa (RWS). Marina Bay Sands, owned by Las Vegas Sands, is to follow in April.
Macau emerged as a truly international gambling centre in 2002, after regulators granted two new gaming licenses that ended the monopolisation of the industry under Stanley Ho. Overseas players Wynn Resorts and Las Vegas Sands entered the territory shortly afterwards, injecting US$12 billion into the hotel and casino sector.
But after several years of massive growth, indicators suggest Macau is finally seeing deceleration in revenue. The Gaming Inspection and Coordination Bureau of Macau said recently that revenue growth in the industry for 2009 stood at 3.6 per cent, compared with 31 per cent for 2008 and 46.6 per cent for 2007.
This demonstrates that the recession, together with the Chinese Government’s tightening of visas for mainland Chinese travellers, conspired to halt casinos’ growth.
Things could, however, be looking up. According to Reuters, gaming in Macau recorded a 63 per cent year-on-year growth in revenue ($1.8 billion) in January, an all-time high. Mainland Chinese tourists are expected to spend more money during Chinese New Year. Even so, relying on Chinese tourists could yet prove risky given the inconsistency of government regulations.
Meanwhile, CLSA Asia-Pacific Markets predicts the casino industry in Singapore will project $3 billion revenue this year and $6 billion by 2013. The Singaporean casino scene is said to be targeting a different audience, comprising locals and tourists from Indonesia and Malaysia. Singapore Tourism is ambitiously aiming to draw in 17 million visitors from the opening of both RWS and Sands during 2010.
In the long-term, Macau will be hoping its new gaming competitor will only be successful in splitting Asia down the middle.
> Sheldon Adelson, developer and CEO of Las Vegas Sands, is spending US$5.5 billion to build a 50-acre casino in Singapore. RWS will cost $4.4 billion.
David Ko, SVP and MD Asia-Pacific at Waggener Edstrom:
“Macau and Singapore are very different markets, but it is their similarities that are intriguing. Both are controlled by governments that maintain a tight grip on many matters influencing the local gaming industry, from gaming taxes to visa restrictions.
With the highest spending per gambler, China’s “high roller” VIP market is a key revenue segment for any casino operation in Asia, yet it is doubtful that China would make it easier for mainland Chinese high rollers to bolster Singapore’s gaming revenue at the expense of Macau. Whether Singapore can rely on inbound South Asian traffic remains questionable. Singapore also imposes stringent disclosure requirements on junket operators that bring in high-end gamblers, while Macau has had relatively free rein.
Looking at the Singapore brand versus Macau, conventional wisdom predicts that Singapore's squeaky clean image and its government’s rigorous policies will mute the success of its resorts, while Macau’s more relaxed attitude may offer tourists more. Still, the story of Las Vegas’ successful transformation into a family-friendly destination in recent times, if replicated in Singapore, could cast doubt on that assumption.”
Liang Tan, senior design director Asia-Pacific at Landor Associates:
“The recent visa restrictions imposed by China on its citizens’ travel to Macau highlight the unpredictability of government policy. They also affect return on investment for Macau’s developing gaming industry and betray Macau’s complete dependence on China’s gaming citizens. In the short term, given the reversal of visa restrictions, Macau should expect another wave of sharp growth. However, to sustain growth, Macau needs to conduct comprehensive studies and have a clearer understanding of its target consumers’ needs and interests, then adapt their products and services.
In contrast, Singapore’s clearly stated rules may result in more security in the development of this industry. With its convenient location in Southeast Asia and proximity to South Asia, it could rely on its surrounding neighbours to provide it with a sustainable, youthful market with increasing disposable income. From a branding perspective, whilst Macau with its established casino background makes it perfect for the development of this industry, Singapore needs to overcome the challenge presented by its perceived dichotomy of an exciting and vice indulgent casino, situated in a ‘safe’ country with strict law and punishment.”
Got a view?
Email [email protected]
This article was originally published in the 25 February 2010 issue of Media.
Macau emerged as a truly international gambling centre in 2002, after regulators granted two new gaming licenses that ended the monopolisation of the industry under Stanley Ho. Overseas players Wynn Resorts and Las Vegas Sands entered the territory shortly afterwards, injecting US$12 billion into the hotel and casino sector.
But after several years of massive growth, indicators suggest Macau is finally seeing deceleration in revenue. The Gaming Inspection and Coordination Bureau of Macau said recently that revenue growth in the industry for 2009 stood at 3.6 per cent, compared with 31 per cent for 2008 and 46.6 per cent for 2007.
This demonstrates that the recession, together with the Chinese Government’s tightening of visas for mainland Chinese travellers, conspired to halt casinos’ growth.
Things could, however, be looking up. According to Reuters, gaming in Macau recorded a 63 per cent year-on-year growth in revenue ($1.8 billion) in January, an all-time high. Mainland Chinese tourists are expected to spend more money during Chinese New Year. Even so, relying on Chinese tourists could yet prove risky given the inconsistency of government regulations.
Meanwhile, CLSA Asia-Pacific Markets predicts the casino industry in Singapore will project $3 billion revenue this year and $6 billion by 2013. The Singaporean casino scene is said to be targeting a different audience, comprising locals and tourists from Indonesia and Malaysia. Singapore Tourism is ambitiously aiming to draw in 17 million visitors from the opening of both RWS and Sands during 2010.
In the long-term, Macau will be hoping its new gaming competitor will only be successful in splitting Asia down the middle.
The facts
> Macau currently has six casino operators. SJM Holdings holds 30 per cent of the market share, while Sands ranks second with 22 per cent. Others include Galaxy, Melco Crown and MGM Mirage.> Sheldon Adelson, developer and CEO of Las Vegas Sands, is spending US$5.5 billion to build a 50-acre casino in Singapore. RWS will cost $4.4 billion.
Brand health diagnoses
David Ko, SVP and MD Asia-Pacific at Waggener Edstrom:“Macau and Singapore are very different markets, but it is their similarities that are intriguing. Both are controlled by governments that maintain a tight grip on many matters influencing the local gaming industry, from gaming taxes to visa restrictions.
With the highest spending per gambler, China’s “high roller” VIP market is a key revenue segment for any casino operation in Asia, yet it is doubtful that China would make it easier for mainland Chinese high rollers to bolster Singapore’s gaming revenue at the expense of Macau. Whether Singapore can rely on inbound South Asian traffic remains questionable. Singapore also imposes stringent disclosure requirements on junket operators that bring in high-end gamblers, while Macau has had relatively free rein.
Looking at the Singapore brand versus Macau, conventional wisdom predicts that Singapore's squeaky clean image and its government’s rigorous policies will mute the success of its resorts, while Macau’s more relaxed attitude may offer tourists more. Still, the story of Las Vegas’ successful transformation into a family-friendly destination in recent times, if replicated in Singapore, could cast doubt on that assumption.”
Liang Tan, senior design director Asia-Pacific at Landor Associates:“The recent visa restrictions imposed by China on its citizens’ travel to Macau highlight the unpredictability of government policy. They also affect return on investment for Macau’s developing gaming industry and betray Macau’s complete dependence on China’s gaming citizens. In the short term, given the reversal of visa restrictions, Macau should expect another wave of sharp growth. However, to sustain growth, Macau needs to conduct comprehensive studies and have a clearer understanding of its target consumers’ needs and interests, then adapt their products and services.
In contrast, Singapore’s clearly stated rules may result in more security in the development of this industry. With its convenient location in Southeast Asia and proximity to South Asia, it could rely on its surrounding neighbours to provide it with a sustainable, youthful market with increasing disposable income. From a branding perspective, whilst Macau with its established casino background makes it perfect for the development of this industry, Singapore needs to overcome the challenge presented by its perceived dichotomy of an exciting and vice indulgent casino, situated in a ‘safe’ country with strict law and punishment.”
Got a view?
Email [email protected]
This article was originally published in the 25 February 2010 issue of Media.
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