Take Stock of Singapore Casinos Revenue

Posted: February 23, 2011 in Uncategorized

Can the size of casino market grow to USD6b? By 2012.

 

23rd Feb 2011

By editorial team

Thin margin, huge problem ahead...

 

Upon release of genting RWS 4th quarter results, the industry is able to take a closer look at the two Integrated Resorts Casinos performances.

The first question come to mind for analysts and media industry would be, are the reported results of Marina Bay Sands and Genting RWS meet analysts’ expectation?

Yes and no. The 4th qaurter results of the two IRs can be considered as best as “on track” only. Taking a closer look of their main stream casino revenue, one would realize that the floor alone (Mass gaming) is not capable of generating a bigger piece (i.e. market size) for the two resorts. VIP business (gaming) based on direct premium patrons has become too volatile (they called it Luck factor) to count on it most of the time.

That is to say, while the mass market casino revenue is coming in by volume especially from the local contribution (watch out, the authority is keeping watch over that); it may reach a stagnated point by mid of 2012. Therefore, it is envisaged that overall mass market revenue will grow by another 30% from the current level. Malaysian market also seems to slow down as reported previously in this blog.

Going forward, to grow the total revenue of targeted USD6b level for the two Integrated Resorts, main stream casino revenue must be improved by leaps & bounds. The only area that is still “under developed” remains the VIP market. Without licensed Junkets coming into the picture, this is a crucial missing part of the whole game. At the moment, the authority does not seem to be hurrying on this, as the Junket system of casino players channel will inevitably bring about risks of money laundering and other associated crimes. Sands is also more confident of not having Junkets a hand in the MBS arena but same cannot be said for Genting RWS.

As at this juncture, to reach the target of total revenue of USD6b for the IRs, the operators must work harder and, count on their luck. Singapore is not the only place having new tourism attractions. By 2014 the world largest theme park will open in South Korea. Ferrari World has just opened in Abu Dhabi. Shanghai is building a huge Disney Land… Casinos might add the crucial glitz on any tourism new destinations, but it will fade away after some length of time. Macau is largely surviving on VIP junket room operators mercy (at 72% of total casino revenue). Let’s not be carried away…

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