Singapore’s two casinos generated more than US billion in combined gaming revenue in 2013 but failed to overtake Las Vegas and finished the year seemingly stalled at No. 3 among the world’s gaming markets.
The total take for Marina Bay Sands and Resorts World Sentosa was up 3.8 percent for the year, which found them about $430 million shy of the Strip’s $6.5 billion. MBS, owned by Las Vegas Sands, collected $3.13 billion, a 6.6 percent increase over 2012. The total at RWS, which is owned by Genting Singapore, a listed subsidiary of Malaysian resort giant Genting Group, was up only 1 percent at $2.94 billion.
Strip gaming revenues grew 4.8 percent in 2013, the fourth straight annual increase for a market that appears to be climbing out of the recession that hit the city hard in 2008 and 2009. Last year’s total was just 5.3 percent behind the Strip’s single-year all-time high, recorded in 2007, of $6.8 billion.
Analysts and observers predicted Singapore, which launched casino gambling in 2010, would swiftly pass the Strip, but the belief now, at least for some, is that that might not happen, meaning the market could slide to No. 4 once Japan comes on line sometime at the end of the decade.
“Generally speaking, the mass-market story in Singapore has now entered into a flattish period at best,” said Grant Govertsen, who heads the Macau branch of Las Vegas-based investment brokers Union Gaming Research. “The VIP story is a bit rosier, although we don’t think VIP in Singapore is likely to be as robust as it is in Macau.”
The reason is the government’s stringent limits on junket operations, the lifeblood of Macau’s massive VIP market, which have held down the supply of Chinese high rollers and resulted in a market that is less competitive in the sector in terms of credit issuance and collection and more vulnerable to swings in luck.
At the same time, regulators have enacted a steady series of measures to curtail gambling by Singaporeans, a market the government wants capped at no more than a de facto 30 percent of revenues. Resorts World Sentosa, which has invested heavily to create a family-friendly destination, has been most affected by the reduced mass-market action that has resulted.
“We think growth is likely to remain anemic in a best-case scenario going forward given that the Singapore local’s market is fully penetrated and the government continues to tighten the reins on this segment,” Govertsen said.
Genting has told investors in addition that it expects softness in the Chinese economy to further impact the business.
“Management is cautiously optimistic on the VIP market,” Wells Fargo Securities gaming analyst Cameron McKnight said in a recent note to investors. “While low hold percentages in Singapore has been a consistent theme, we continue to believe it should normalize over time.”
