Recap of IR Casino Scenarios

Posted: May 21, 2010 in Uncategorized

21 May 2010

Contributed by Professional Ground experts panel

Now that the Integrated Resorts are opened and both the casinos in operations, coupled with the release of local casino entry levy collection figures over the first 85 days period, the panel feels that it is right time to recap on the previously posted “Unique Challenges of IR Casinos” (March, 2010). 

Most recently, a group of Wall Street investment analysts came to Singapore to verify their claims of highly positive outcome for the IR casinos.  It was mentioned that these analysts were confident of IR casinos contribution to be as high as in the range of USD4.5b in 12 months operations. 

To recap, the following scenarios chart was posted in March this year, by Professional Ground:

Two most likely outcomes - A small star or No-go symbol?

Based on current development so far, we would assess the situation of IR casinos to be as follows,

*  That the two casinos are mainly relying on locals participation, i.e. mass domestic grind market contribution. 

*  However, while the Singapore parliament is already questioning on whether “too many” Singaporeans (& permanent residents) are involved in casino betting as reflected in the $70m levy collection, but from the economics of business perspective the two casinos are far from securing their ground firmly on demestic market.  The locals participation rate is only 33% at best if based on daily casino pax of 25,000 averaged.  This is considered a low domestic market demand. 

*  Therefore, tourism gamblers must fill up the casino floors if this situation persists.  (Lower than expected locals participation).  On the other hand, this clearly demonstrates that the Singapore unique Casino Levy policy works well to cap its social-problems.  Therefore, the Levy is here to stay.

*  It is getting clear that at both ends of the stick (i.e. VIP business and Mass market), the two IR casinos will find it tough to gorw the markets.  Singapore’s casino junket control measures are not in favour of junket players.

* We projected that total gross revenue for IR casinos to be in the range of SGD2.8b – SGD3.5b for 12 months operations.

*  It is therefore reasonable to assume at this juncture, the plausible scenarios for the IR casinos remain as it was projected previously, are likely the outsome of either a “Small Star” or a “No-go” state of affair (see the above chart).


Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s