IR jackpot could be bigger than predicted (Singapore)
(source: News Today September 6, 2006)
IR jackpot could be bigger than predicted
Val Chua
Deputy News Editor
val@newstoday.com.sg
THE casino windfall could be bigger than anything anybody projected.
Despite the fact that casinos look set to pop up all over Asia, the tycoon who bagged the Marina Bay integrated resort has made a bold prediction: It could rake in up to US$2 billion ($3.1 billion) a year in gaming revenue alone.
This aggressive estimate by Las Vegas Sands’ chairman Sheldon Adelson surpasses earlier projections by analysts — that it would take both the Marina Bay and Sentosa resorts to bring that kind of money into Singapore.
And who will bring in that moolah?
Tourists from Asian markets — such as India, Malaysia, Thailand and Indonesia — that are within five hours of Singapore by air, said Mr Adelson in a Bloomberg interview.
“Just 1 per cent or less of the population within three to five hours by air is what we need to be successful. I haven’t even mentioned Japan, Korea, China,” said the feisty 73-year-old.
He added that he needs only half of the additional 8 million tourists that Singapore is wooing by 2015 to make Sands’ US$3.6-billion investment worthwhile. “We’ll break even or make money after half of that number,” he said.
Mr Adelson’s ambitious projection comes amid a growing gambling market in Asia as governments in Japan, Thailand, South Korea and Indonesia look set to either break their gambling bans or issue more casino licences.
Sands is openly eyeing a casino in Japan, should the government decide to follow Singapore’s footsteps in allowing one. Nearer home, there has been talk that Indonesian islands Batam and Bintan may also see a licence or two. Macau, where Sands is expanding in, remains the world’s fastest-growing gambling market.
Given all the competition that Singapore is facing, is Mr Adelson overly optimistic of his potential cash cow in Marina Bay?
Mr James Tan, an analyst at DBS Vickers Securities, doesn’t think so. Predicting greater differentiation in the types of gamblers, he told Today: “Macau will always be Macau. Singapore will attract a different class of tourists — the more conscientious gambler and the family-oriented ones.”
Compared to its Sentosa cousin, the Marina Bay site is likely to command $55 of every $100 in combined gaming revenue in Singapore, by virtue of its prime location and accessibility, said analysts.
There is also potential for the gaming revenue in Asia — estimated to be US$13.4 billion this year by investment bank Merrill Lynch — to grow.
“If you look at the three-to-five hour flying radius, you already have close to half the world’s population at your arms’ reach,” Mr Tan told Bloomberg.
Added Merrill Lynch’s research analyst Sean Monaghan, speaking to Today: “Given Sands’ footprint in Macau, Mr Adelson probably knows better how the ground is performing. And don’t forget, Sands has a good track record of surprising people.”
Date Posted: 05-Sep-2006
