Thursday, May 6, 2010

Some worrying early signs for Singapore's casinos

Singapore's two casinos have succeeded in attracting a lot of publicity and hundreds of thousands of punters in their first few weeks.

But there appear to be some worrying early signs.

I set out previously how the Singapore government was taking a "double bet" by legalising casino gambling, wagering that:

1. The Marina Bay Sands and Resorts World Sentosa casinos will be able recoup their massive investments (over $10bn in total) AND

2. The casinos can thrive financially without leading to untoward social consequences (prostitution, organised crime, addiction, etc)

Well, according to initial soundings by some analysts and a report in today's government-controlled Straits Times, they may have a problem on both counts.

Citing a number of analysts, the Straits Times claims that the bulk of the gamblers at the two casinos are Singaporean citizens and permanent residents, who have to pay a S$100 ($72) daily or S$2,000 ($1,435) annual levy to play the tables.

This represents a potential financial concern because analysts believe the local players are mostly gambling relatively small amounts. The casinos need to attract the likes of the big betting Chinese officials and businessmen who flock to Macau, even if strict Singapore regulations have made it difficult for them to bring in these high rollers.

It also points to a possible increase in social problems down the line. The government vision for the casions was that they would service mostly foreign players in order to limit the damage on Singaporean society - hence the rather high entry levies for locals.

That does not appear to be happening yet and if the predominance of local players persists, it will be harder for the government to justify its decision to legalise casinos that are effectively transferring Singaporeans' hard-earned savings into the hands of a Las Vegas casino magnate (MBS' ultimate owner Sheldon Adelson) and a Malaysian gambling group (Resorts World owner Genting).

Having said all that, it is still early days. The locals' fascination with the casinos may wear off and it may take time for the casinos' VIP marketing efforts to take effect.

1 comment:

  1. Thanks Aidil.

    Just to add, according to LVS chief Sheldon Adelson, the Marina Bay Sands casino has got off to an "extremely promising" start.

    He says one third of initial visitors have been Singaporeans.