Singapore's first legal casino gets licence (News Feature)

By Kai Portmann Feb 6, 2010, 11:40 GMT

Singapore - The Singapore government on Saturday has granted the licence for the city-state's first legal casino, giving gamblers the opportunity to chance their luck after lifting a 40-year-old ban on gaming.

The Casino Regulatory Authority said in a brief statement posted on its website that it 'has issued a casino licence to Resorts World Sentosa,' one of Singapore's two multibillion-dollar casino resorts.

Resort spokesman Robin Goh said that the casino was 'on track for its opening.'

However, he declined to comment on whether the casino would start operation before the lucrative Chinese New Year holiday in mid-February.

Its rival, the Marina Bay Sands, three 55-storey towers located close to the financial district, is still under construction and slated to open not earlier than in mid-April.

The government had outlawed gambling ever since Singapore gained independence in 1965.

But the tiny city-state lacks natural resources and is under constant pressure to create other streams of revenue.

In a controversial u-turn from its long condemnation of gambling the government in April 2005 eventually announced that Singapore would have not only one, but two casinos.

State founder Lee Kuan Yew said in a recent media interview that he first rejected the idea, arguing that casinos would bring the mafia, money laundering and all kinds of crime to the city-state which takes pride in its reputation for cleanliness.

But finally, he gave in, said Lee, adding that 'If I don't change, we'll be out of business.'

Singapore and the casino developers, Malaysia's Genting Group and US company Las Vegas Sands, hope to tap into Asia's growing economies, bringing in wealthy clients from as far as 7 flight hours away.

In 2008, Singapore attracted 10.1 million tourists spending 14.8 billion Singapore dollars (10.4 billion US dollars).

Banking on the two casinos, the government aims to raise the numbers to 17 million visitors spending 30 billion Singapore dollars in 2015.

'For Singapore, the casinos are a means to an end,' said Gabriel Chan, Asian gambling expert at Credit Suisse in Hong Kong.

Singapore's casinos would generate 2.6 billion US dollars gaming revenues in 2010, he said, giving 'an estimate at the low end.'

Analysts play down concerns that two casino resorts might be too much for Singapore with its 4.9 million residents.

The resorts were different and complimentary, said a recent report by Hong-Kong-based CLSA Asia-Pacific Markets.

'The same person will visit both,' said the report, 'Marina Bay Sands on business and for shopping; Resorts World Sentosa with the family and for shopping activities.'

The Sands offers a casino, a convention complex including 2,500 hotel rooms and a retail promenade with global luxury brands.

Major drawcards of Resorts World Sentosa, which covers 49 hectares and includes six hotels, are the casino and South-East Asia's first Universal Studio theme park.

The CLSA report projected that 'the casinos will generate around 80 per cent of earnings for both projects.'

Costs for the two resorts ballooned, with the final bill reaching 4.4 billion US dollars for Resorts World Sentosa and 5.5 billion US dollars for Marina Bay Sands.

Las Vegas Sands chairman Sheldon Adelson estimated that the resort at Marina Bay could earn 1 billion US dollars a year and could return its investment in five years.

For Resorts World Sentosa, Genting chairman Lim Kok Thay just said he expected 12 to 13 million visitors in its first year.

In a highly competitive market, Singapore's casinos have to attract wealthy gamblers from all over South-East Asia and Mainland China, said Chan of Credit Suisse.

But mainland China would be difficult, he said, as Chinese gamblers preferred one-day trips to Macau.

'It's hard to imagine that they will go an extra mile to Singapore,' said Chan.

Singapore's strict regulations on independent junket operators, who bring in high-rolling customers, might also pose a problem for the casinos, warned Chan.

'But if the casinos don't bring enough money in, the authorities will have to relax the restrictions,' he added.