Last spring, the Singapore government ruled that locals and Singapore permanent residents (PRs) must pay an increased casino entry fee, raising the levy from $75 to $150 to enter Marina Bay Sands and Resorts World Sentosa. The higher fees, designed to reduce problem gambling, have led to a 4 percent drop in gross gaming revenue (GGR) at the Sands property, a decrease that could accelerate.
According to local news reports, the increase for Singaporeans has had a notable impact on MBS’ mass market results, with some citizens unlikely to renew their annual passes when they expire, according to Maybank analysts. For Q3, Marina Bay Sands saw a 19 percent gain in VIP GGR, while mass gaming was down 4 percent.
“We gather that the 50 percent hike in casino entry levy for Singaporean citizens and permanent residents (SCPR) continues to weigh on mass market GGR,” analyst Samuel Yin wrote. “With such a steep hike, we gather that some SCPRs will not renew their annual passes when they expire, exerting downside pressure on mass market GGR.”
According to Asia Gaming Brief, mass is more important to the operator with a margin of about 60 percent, which is two to three times higher than that of VIP.
The government in April announced the first major expansion of its IR industry since the resorts opened, allowing extra gaming space in return for $9 billion in long-term non-gaming investments. However, it also came with tax increases. In February 2022, a higher tax structure will take effect that includes more tiers. For premium gaming the rate will rise to 8 percent from 5 percent on the first $2.4 billion in GGR and will rise to 12 percent thereafter. For mass gaming, the tax rate also gains by three percentage points to 18 percent for the first $3.1 billion in GGR and then 22 percent thereafter.
According to Channel News Asia, the entry levy is a “social safeguard to deter casual and impulse gambling by locals” devised by the Ministry of Home Affairs and the Ministry of Social and Family Development.
“Although problem gambling has not worsened since the introduction of the IRs, we are nevertheless wary of the dangers posed by gambling, in particular online gambling, which has become an increasingly serious threat,” said Chan Chun Sing, minister for trade and industry, in comments made last April. “In order to further limit the social impact of problem gambling on our local population, MBS and RWS have agreed to work with MSF to study how to help casino patrons make more informed decisions on their level of play.”
