The government of Singapore has approved billions of dollars in expansions at the city-state’s two casino resorts, Marina Bay Sands and Resorts World Sentosa. But some industry observers say the planned growth—with a total price tag of GD9 billion (US$6.65 billion)—may not be in line with market expectations.
According to the Beijing Business Times, some casino visitors say the nine-year-old IRs are showing their age, but with revenues flattening and tourism expected to take a dip, the time may not be right for such major investments. That said, the operators, the U.S.-based Las Vegas Sands Corp. and Malaysian gaming giant Genting, will get one big concession out of the deal—the extension of their duopoly through 2030.
“Many other countries are stepping up their airport infrastructure and tourist attractions. Japan is currently requesting bids and proposals for three IRs across different cities. The Philippines and Macau are still building more casinos to cater to the high-end VIP market,” said Chua Hak Bin, senior economist at Maybank Kim Eng Research.
“One of the lessons we have learnt in our overall economic strategy is to make sure that we are never held ransom by one particular sector, or to be overly dependent on one particular sector,” he said. “Otherwise the economy will be quite volatile: When one sector gets hit, we’ll take a very big blow. One of the reasons why the Singapore economy has grown steadily is because we are able to diversify our risks, so that we can have a balance.”
With or without IRs, he said, “the whole economy must constantly refresh itself, create new opportunities and new jobs.”
According to a joint statement from the Ministry of Trade and Industry, the Ministry of Finance, the Ministry of Home Affairs and Ministry of Social and Family Development, the IRs will concentrate on “non-gaming investments to build new world-class tourism and MICE facilities and attractions, many of which will be first-in-Singapore. The integrated resorts’ investments will enhance the vibrancy and tourism appeal of their offerings to remain competitive with other destinations in the region, and bring in more than half a million additional visitors annually.”
The operators also be able to expand their gaming floors, GGRAsia reports. Marina Bay Sands can build out its gaming area by 13.3 percent up to 17,000 square meters (183,000 square feet). Resorts World was granted an increase of 3.3 percent, to a maximum of 15,500 square meters.
“You can deduce that IRs in Singapore are quite different from the IRs elsewhere,” said Chan Chun Sing, Singapore trade minister, who adds that gaming “cannot be the centerpiece” of the economy. “That gives us quiet confidence that we are on the right track, and unlike other people, we are not overly dependent on the gaming part.”
