Sands At The Crossroad Again

Posted: June 10, 2010 in Uncategorized

Extracts of Singapore local press & blog

10 June 2010 Thur



–  The Temasek Review blog           10 June 2010

Barely a month since its official opening, Singapore’s Integrated Resort Marina Bay Sands (MBS) is hit by a damaging lawsuit.

The Inter-Pacific Bar Association (IPBA) has sued MBS for unspecified damages, the Straits Times reports today.

It has filed a counter-claim with the High Court claiming that its conference held at MBS from May 2 – 5 was a “complete disaster” during which many things went “wrong” such as intermittent power failure and water leakage in the hotel rooms.

The delegates had also expressed “extreme disappointment” about the event which has caused great embarrassment to the organizers.

MBS has earlier sued the group for $300,000 in payments owed.

The case has attracted widespread public attention both in Singapore and overseas, dealing a blow to Singapore’s reputation as MICE venue.

The Marina Bay Sands IR was scheduled to be opened last year, but its construction was repeatedly delayed due to financial problems faced by its parent company Las Vegas Sands.

While some analysts have expressed doubts at its profitability in the long run, its CEO Mr Sheldon Adelson is optimistic that he will be able to recoup his investment within 5 years.

Lion City State's MICE reputation being challenged

MBS has to show investors their EBITDA ultimately

A "Floating Boat" hanging High & Dry... Not a great fengshui sign


*  It has been observed that after the departure of ex-president & COO Bill Weidner and the “best executor” Brad Stone, Las Vegas Sands has yet to recover from its “loosely managed” project syndrome.   Venetian Macau remains the company’s “Last Piece” of well executed property.

*  Recently, analysts and investors have been questioning MBS’ hopeful EBITDA projection of USD1.2b in 12 months operation.  In our view the attainable EBITDA will be in the range of USD500m – USD700m at best.  A worse case scenario may happen in that, MBS may achieve EBITDA of lower than USD500m!  Analysts should go back to carefully recalculate MBS’ win per table/unit, mass market contributors, limitation of VIP (high-roller) leverage from mainland China etc. 

*  Recent observation also points to the fact that, Resorts World Sentosa (RWS) has been aggressively rallying up larger share of mass market patrons from Malaysia, besides local participation.  In contrast MBS is struggling along.

*  To date, MBS has yet to show any sign of its capability to overwhelm the mass market casino patrons.  This is not a good indication because Singapore gaming/casino market is mainly supported by lower mass (grind) segment.  It is envisaged that VIP gaming revenue contribution is at best up to 35% of total market size.

*  Another critical factor is for MBS to be able to re-establish MICE (meeting, incentive conference, convention & exhibition) reputation in this part of the world, after its opening fiasco on one of the key events as reported.  Failure to do that, MBS loses both ends of this market – MICE and Gaming.  Should this happen, Genting will be the one who’s laughing to the bank.

*  Can MBS recoup its investment within 5 years?  At this juncture, based on the luke warm casino floor scene and some experts’ calculations from various angles & dynamics, we think that this remains an empty slogan… let’s wait for MBS’ next two quarters result.


  1. A thousand thanks for exalting me to go look up my own research.
    Yours was way more comprehensive than mine.

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