As you’ll see by reading the Dateline Asia department on page 8, the opening of the Singapore casinos has turned into something of a horse race. Even though Las Vegas Sands won its license almost a year before the government granted the second license to Genting’s Resorts World, the race to the start has tightened up substantially.
While initially LV Sands was expected to open its spectacular Marina Bay Sands by the end of this year, shortages of supplies and labor have forced it to revise the opening date to early 2010. That happens to be the same quarter that Genting has estimated Resorts World on Sentosa Island will open.
Why does this matter? After all, a difference of a few weeks or even a few months would be rather insignificant in the grand scheme of things, particularly if you use that time to fine-tune operations and the overall facility.
But it matters in Asia and to those companies for a few very important reasons:
For Las Vegas Sands, there’s a sense that the Marina Bay Sands is a make-or-break moment for the company. When LV Sands was teetering on the edge of insolvency earlier this year, Sheldon Adelson and his executives continually pointed to MBS and its potential impact on the company.
At $5 billion-plus, it’s one of the most expensive casino complexes (or integrated resorts, as they prefer to call it in Asia) ever built. So the return will have to be very good to justify that expense.
For Adelson, it’s a matter of demonstrating that he still has the “Midas touch.” After jettisoning much of the executive team that directed the growth of his company over the past 10 years, Adelson is clearly running the show. More than ever, it’s his reputation, and more importantly to him, his legacy, that is on the line. A successful opening and operation for MBS would be the crowning achievement to an incredible career, and would set the company up for even more growth in Asia.
While the stakes aren’t as high for Genting, Resorts World is still an important development for the company, coming in at more than $4
billion. Its Genting Highlands in Malaysia is a legend in the gaming industry, but aside from its Star Cruises operation in Asia, Genting hasn’t often ventured outside its home country operationally.
The Sentosa Island project is designed to be much more than simply a casino. While MBS is focused on business with its MICE (meetings, incentives, conventions and exhibitions) space, Resorts World is a full-on resort, with Asia’s first Universal Studio theme park, an “oceanarium” that will be the largest in the world, and a variety of other entertainment options.
So if Genting wants to be seen as a major player in the gaming industry, it is crucial that it open before MBS.
Another reason it’s important to both parties is the local market. One of the strangely Singaporean stipulations placed on the two casinos is that locals cannot visit them without first paying a S$100 (US$70) daily fee or a S$2,000 annual fee. Since these fees are specific to the individual casinos, the one that opens first may be the one that gets the lion’s share of the local customers, who are quite affluent.
And of course, the integrated resorts are important to the Singapore government. With legendary strict laws (no chewing gum!), Singapore expanded its morals to allow gaming in order to attract more tourism, both business and leisure. While it assuredly desires the tax revenues and jobs being created by the casino, the government wants gaming to work—but under its rules and guidelines. Whether that is reasonable to expect, given the sometimes-excessive “harm minimization” strictures, is yet to be seen.
But the most important reason these properties want to be the first to open is one that is purely Asian. They want the “face” that makes them appear to be the luckiest and the most desirable casino in Singapore. Westerners don’t really understand this trait, but I’ve been assured that it is one of the key drivers behind that rapidly intensifying race to be the first casino to open in Singapore.