Singapore’s two integrated resorts (IRs) are staring down a stiff tax increase.
With the passage of the new Gambling Duties Bill, which amends the existing Casino Control Act, a new tiered tax system will take effect. Marina Bay Sands and Resorts World Sentosa will be taxed at 18 percent on mass-market revenues up to SG$2.2 billion (US$1.6 billion), an increase of 20 percent. Any revenues over that will be taxed at 22 percent—a whopping 47 percent increase.
Premium or VIP gaming, now taxed at 5 percent, will soon be taxed at 8 percent for the first SG$2.4 billion and 12 percent above that benchmark. According to Inside Asian Gaming, premium revenue is that of customers with at least SG$100,000 in their casino accounts.
In good news for the two casino resorts, the legislation will also extend their exclusivity period by 10 years, until 2030; previously, that duopoly was set to expire at the end of the year. Moreover, tax rates will not increase again until 2032 at the earliest.
In exchange for the extension of their exclusivity, the operators have agreed to major upgrades of their properties. But the Las Vegas Sands Corp., which operates Marina Bay Sands, and Genting, which operates Resorts World, say they will need more time to complete those expansions.
They blame the financial impact of Covid-19 for the slowdowns; last summer, Las Vegas Sands President and COO Patrick Dumont said he doubted the company could meet its 2025 deadline to add a fourth hotel tower, a 15,000-seat entertainment arena and other amenities, which carry a SG$4.5 billion (US$3.3 billion) price tag.
“A lot of the early parts of this project require us to work with certain government agencies, to seek their approval and work with them collaboratively, to ensure that we fulfill our obligations and their desires as part of this project,” Dumont said. “There is a fair amount of uncertainty around the timing and availability of when we can actually get things done.”
Resorts World Sentosa also had an initial deadline of 2025 to expand several of its non-gaming offerings.
The government has agreed to be flexible about the timelines, said Minister of State for Trade and Industry Alvin Tan. According to the Straits Times, Tan said the delays are “not altogether surprising, nor unique to this project or this industry. Covid-19 has affected construction timelines, both locally and globally.”
But he said the operators must proceed with the expansion plans to the best of their ability. “Most of the offerings are catered towards tourism and towards developing this capability for when tourism and travel resume,” Tan said. “We must be prepared to take that uplift and to carry that wind when it comes.”
Tan said both operators remain committed to their expansion plans. According to GGRAsia, under normal operating conditions, the expansions would add around SGD500 million (US$369 million) annually to Singapore’s gross domestic product, and create up to 5,000 new jobs.
Neither firm has announced a revised timetable for their planned expansions.
