The Truth Of Singapore Casinos… Facing Big Odds

Posted: March 17, 2010 in Uncategorized

Finally. Someone Who Knows About Casino Equation Speaks Up Loud

Commented by: Professional Ground Gaming Panel

17th March 2010

The subject of whether Singapore Integrated Resorts (Resorts World Sentosa and Marina Bay Sands) will be a sound investment has been debated over and over again by investment analysts, gaming professionals and travel trades for the past two years.

Over time, our Professional Ground panelists posted many solid reports and commentaries on this Blog, to serve the good of many interest parties, with regard to understanding the myth as well as the hard reality of casino operations and essentially what makes it tick.

Recently, one of our professional panelists (from Platform Asia Consulting) has just conducted a session of Asean investors’ brief about Singapore IR’s potential earning from casino operations. Many of them still having the hope of may be the good stuff has yet to come, when Marina Bay Sands (MBS) opens, even though the Resorts World Sentosa posted very disappointing tell-tale sign results on the opening of its casino. In fact, when MBS opens, the purposeful casino patrons pool will not suddenly expand by 2 or 3 folds. It is still about the same market size here.

There is always this tendency of casinos should make money as it is a betting business, and the whole world’s human beings are gamblers. Many have forgotten that casino is like any business especially most similar to financial sector is that at the core of casino’s management decisions remains this key topic of Risk Management – financial risk, operational risk and ultimately risk-reward model at play.

We congratulate Mr. Ronald Tan, a gaming consultant who comes forward to express his WORRIES with his very open assessment of Singapore IR’s dire situation in The Straits Times. Indeed, our panelists had earlier posted related articles “Why Macau Casinos Could That RWS Can’t”, “Unique Challenge for The IR Casinos” and, “The 60-60 Rule for Singapore IR” on Professional Ground’s Home Page for reference.

Readers who are interested to know more may refer to other professional articles posted on this blog.

However, we slightly defer from Mr. Tan’s view that a “Perfect Casino” can be established, in Singapore or in Asia per se. Technologies are definitely smart tools that could be used to shape business processes and to gain competitive advantage; but not in all cases and environment. Asian gaming per se, the culture of betting in physical casino by and large is very different from lottery betting businesses. In Macau, many casinos have been trying out electronic table game devices and also, semi-automated table baccarat betting etc. but has not gain any ground. Asian casino patrons who can afford to bet higher amount on table games, still deep down in their heart want to “beat” the house with a real dealer in front of them. It’s just more human. This is Asia.

For Singapore casinos to turn towards overwhelming use of technologies to try saving the day may result in another “Waterloo” scenario. The two IR casinos are left with not much choice, but to keep up a highly efficient floor management that yields greater Hold % for mass gaming market segment with sustainable high volume, coupled with excellent capacity in (affluent) customer acquisition. The VIP? At this moment it is still a touch-n-go situation. The reason is very obvious – policy & control.

Professional Ground: Technologies may not save the day... for Singapore Casinos

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