Re: Update Here, 19Sep10 : Shares Prices Of Genting Singapore (GEN SP) and Genting HK
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Business Times - 17 Sep 2010
Casinos find their El Dorado in S'pore
Adelson raves about buoyant market but says casino's revenue from locals is small
By GRACE LEONG
(SINGAPORE) It's not hard to see why casino operators love the Singapore market. Not only are they raking in big bucks per slot here, but the Singapore market could overtake the Las Vegas strip in a couple of years' time.
These insights came from US billionaire Sheldon Adelson, who said he was 'exceptionally happy' with Marina Bay Sands' record-setting performance. He was speaking at the CLSA Investors Forum in Hong Kong earlier this week.
Mr Adelson noted that the win per slot in the Singapore market is probably 'record setting for around the world'. This refers to the total daily slot revenue that the casinos win, divided by the number of units.
The amount of money spent on electronic table games (roulette and baccarat) and slot machines is 'probably gonna set a record on a consistent basis throughout the world' said Mr Adelson. In its first quarter of operations, Marina Bay Sands generated a slot win per unit per day of $364, compared with the parent company's slot win per unit per day of $213, according to Las Vegas Sands' Q2 earnings statement. For the overall Las Vegas Strip, the slot win per unit per day is $150.
Electronic table games performed extremely well in Singapore, earning as high as US$600-$1,000 a day, well above the standard slot machine average of US$150-$200 a day in other jurisdictions, said Mark Strawn, vice-president of Morgan Stanley Research in New York.
Another positive is what Mr Adelson described as a 'negligible' default rate in Singapore because he believes there are few players who will 'risk the loss of face or the possibility of not being able to come in(to) Singapore if they defaulted on debts.'
He sees the Singapore gaming market surpassing the gross income of the Las Vegas Strip, which he estimates to be about $6.5 billion currently, by 2012.
Mr Adelson downplayed industry concerns the government would intervene to control the growth of the local gaming market to head off problem gambling in Singapore.
He maintained that the percentage of gaming revenue from Singaporeans, which he believes isn't sizeable enough to warrant significant intervention, will eventually diminish as more contributions come from highrollers and the 'tour and travel' market.
Downplaying the size of contributions from Singapore gamblers, Mr Adelson cited an internal list compiled daily by Marina Bay Sands that found less than half of the casino's 10 biggest winners and 10 biggest losers come from Singapore.
'I've always felt that Singapore has its own radius of market and that we would pick up little bits of the high rollers, the VIP players from many countries around Asia, and that's exactly what's happening,' he said.
'A lot of people have a lot of money sitting in Singapore and the depositors come to Singapore to visit their money and they feel so good about it, they pick their money up from the bank, they come over to us and make a deposit in our bank (casino cage),' Mr Adelson said. A cage is an area within the casino that deals with all cash transactions.
When asked about how big the VIP market in Singapore could get without the use of junket operators, Mr Adelson said he believes Marina Bay Sands might hit or exceed $1 billion Ebitda by next year. Junket operators source players to the casino and sometimes provide them with credit to gamble.
'There's just an incredible amount of money at the high end. People come in and play 5 or 10 million dollars on one stay,' he said.
Mr Adelson said he would consider doing business with junket operators if they are able to pass the Singapore government's probity checks, which he believes the junket operators aren't likely to voluntarily undergo because of the stringent disclosure requirements.
He believes Singapore would eventually achieve what Macau has - a 70/30 high-end to mass market ratio.
And of the 30, approximately one-third are Singaporeans. 'That means 10 per cent of all income will come from Singaporean men and women in the street; what we call the mass market. I don't think it's enough to have the government make any significant changes,' Mr Adelson said.
Addressing the negative publicity over violations of Singapore casino laws, Mr Adelson said: 'We know that the government doesn't want us to beat up on the local Singaporeans who come in and gamble and I think that it's inappropriate for us to send buses out to their housing estates, 90 per cent of which are government-sponsored housing estates.'
He added the Singapore government was 'very upset' after discovering that Resorts World was 'very aggressive' and 'ran buses out to the housing estates.'
'They called us in, and from a moral and a principle viewpoint, we don't wanna do that,' Mr Adelson said. 'So RWS has its own way of doing things, but we didn't send buses.'
Marina Bay Sands, which said it never offered free shuttle buses to housing estates in the heartlands, last week terminated its licensed paid bus routes serving Orchard Road and the CBD/Chinatown area as well as free shuttles that serviced certain hotels. But its free shuttle service for hotel guests heading to and from Changi Airport remains in service.
A spokesperson for the Ministry of Community Development, Youth and Sports said they have been monitoring Resorts World's free shuttle services as well as its casino rewards advertising programme at the heartland malls and at Hungry Ghost festival events since they began in July.
'It was the overall pattern of behaviour that led to the adverse inference on the shuttle bus services,' said Minister for Community Development, Youth and Sports Vivian Balakrish- nan.
An RWS spokesperson declined yesterday to provide numbers on current Genting rewards membership or the number of new members it snagged through the marketing campaigns.
She also said the provision of free shuttle services play a big part in the resort's traffic management plan to bring visitors to Sentosa without adding to congestion at the Telok Blangah junction.
The CRA and MCYS are determining whether penalties will be assessed against Resorts World, and will 'take the appropriate action as necessary,' according to a joint statement.
'We also made it clear that the casinos were primarily to attract additional tourists from abroad,' Dr Balakrishnan said. 'Our aim was to minimise the impact of the casinos on locals, to protect vulnerable groups like young persons and dependants, and to prevent the casinos from targeting locals as their principal market.'
Copyright © 2010 Singapore Press Holdings Ltd. All rights reserved.
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