As construction crews hoisted the massive pieces of the signature “sky park” to the top of Marina Bay Sands, the questions continued to linger about how the owner of the casino, Las Vegas Sands, will earn enough money to pay off the .6 billion property. And the same could be said about the other casino, Resorts World on Sentosa Island, owned by Malaysia’s Genting Berhad.
Michael Leven, president and COO of Las Vegas Sands, said in August that gaming revenue will account for 75 percent of the total revenue generated by the project. But for that prediction to come true, Marina Bay Sands must attract a huge number of VIPs who are also main customers in Macau.
Regulations have yet to be finalized governing the VIP market, although the junket operators are required to be licensed, something some believe few operators will attempt. The application process is difficult and onerous, so there’s a good chance that the recognized junket operators may simply avoid Singapore.
Then there’s still a question of whether Singapore will employ the Macau procedures that pay the junket operators a percentage of the money deposited by the junket players, or the Las Vegas model that rewards the junket operators with a percentage of the players’ losses.
Leven says he doesn’t care which model they use in Singapore, just that the decision be made quickly.
“We have to prepare for these groups,” he told GGB News, “and we can’t do it unless we know how we’re going to operate.”
He says Genting would have the advantage if the Macau formula is used, while his company might do better with a Las Vegas formula. But in the end, he just wants the decision made so they can move forward.
But an already-low VIP gaming tax (especially when compared to Macau) may give the Singapore casinos a better financial structure when it comes to the VIP market.
Gaming analyst Edward Ong of Macquarie in Singapore estimated the gaming market in the city conservatively at between S$4.5 billion and S$4.9 billion, which would give each casino a share of more than S$2 billion.