Three to roll dice for Singapore’s second casino licence

Yahoo October 8, 2006

Three to roll dice for Singapore’s second casino licence

Three groups are expected to roll the dice and submit bids Tuesday for Singapore’s second casino licence after the last-minute pullout of the world’s biggest gaming operator, Harrah’s Entertainment.

The lead-up to the bidding process for the smaller second project on Sentosa island has been relatively subdued compared with a high-profile public tussle for the first licence to build at the waterfront Marina Bay site.

Analysts see Malaysia’s Genting International-Star Cruises team, part of the casino operator Genting Group, as having an edge when bids close at 4:00 pm (0800 GMT) on Tuesday.

A winner for the billion-dollar project will be announced by the end of the year.

On Monday contenders are to deliver models of their proposed developments to the Singapore Tourism Board on Sentosa, a small island already home to beaches, luxury residential development and an entertainment complex.

“Genting’s bid appears to be meeting what the government wants for that project,” said Winston Liew, of OCBC Investment Research, who said he made his assessment on the little information publicly released about the bids.

CIMB-GK Research said another contender, the team of Kerzner International and CapitaLand, also stands a decent chance.

“While Genting International/Star Cruises remains our house pick to win the bid to develop the Sentosa IR, we believe the proposal from Kerzner/CapLand will be very competitive,” CIMB-GK said in a report.

Genting has tied up with Universal Parks and Resorts of the United States for its bid and plans to build a Universal Studios theme park if it wins.

The park would draw more than five million visitors a year and feature 16 new or updated rides, Singapore’s The Business Times reported last month from Orlando, Florida, where local reporters met Universal executives.

Renowned American architect Michael Graves would design the casino, the newspaper also said.

Graves is the second big-name architect recruited by a bidder for the Sentosa project. Bahamas-based Kerzner International announced American Frank Gehry, designer of the Guggenheim Museum in Bilbao, Spain, would be part of their team.

Local developer CapitaLand, Southeast Asia’s biggest property group, has also joined with Kerzner for the project. Kerzner is developer, owner and operator of Atlantis, Paradise Island, a 2,317-room island resort and casino complex in the Bahamas.

“We turned around occupancy rates, we brought tourists to the Bahamas and that’s what we (would) like to try and do for Singapore as well,” the firm’s executive development director, Ian Douglas, has said.

CIMB-GK said Kerzner has relatively more experience in building island resorts with casinos, and said the Singapore government cited Paradise Island as an example of an “integrated resort” where gaming makes up only 26 percent of total revenue.

The Sentosa bids will be judged largely according to their tourism appeal, followed by architectural design, level of investment and the strength of the bidders, the tourism board said.

It fixed the land price at 605 million Singapore dollars (383 million US) for the project which will occupy 49 hectares (121 acres).

The third expected bidder is privately held Las Vegas-based firm Eighth Wonder, which has released few details of its plans.

“What we will be unveiling to the world is not just something that is going to be a local or a regional destination,” the firm’s chairman Mark Advent said earlier. “It will be in my prediction the most talked about resort destination in the history of the world.”

Jonathan Galaviz, a partner with Las Vegas-based consulting and research firm Globalysis Ltd, said all three bidders have a chance of prevailing “due to the enormous amount of time, effort and strategic thinking each bidder has been putting into the development of their proposals.”

Genting and Star cruises were unsuccessful contenders for Singapore’s first casino licence. CapitaLand, now teamed with Kerzner, was part of a failed bid with US gaming giant MGM Mirage for the earlier project.

Harrah’s Entertainment and its local partner, developer Keppel Land, waged a high-profile campaign for the Marina Bay licence but also lost. They vowed to develop a proposal for Sentosa but waged a low-key campaign before announcing on Friday their withdrawal.

Singapore last year ended a ban on casino gambling in a bid to spruce up its staid image and attract more tourists. It announced plans for the two casino “resorts” and in May awarded Las Vegas Sands a licence to build at Marina Bay.

Sands says it will invest more than five billion Singapore dollars in that project, which is to open in 2009.