Lower Growth for Singapore Casinos

Posted: July 16, 2012 in Uncategorized

Media report extracts

With new casino ruling review to strengthen casino control regulatory regime, Singapore’s two casinos (MBS & RWS) will face uphill task in revenue growth.

Those the two casinos refuse to disclose the percentage (%) of domestic market contribution in gaming business, it is obvious that local patrons contribute a larger portion of total gaming revenue.

To compensate the potential limitations imposed by the new control measures, the two IR casinos would have to aggressively expand the VIP gaming business. Otherwise, the casino pie is fixed at current level.

However, if Singapore authority imposed restriction of junket commission, the casinos will have to swift emphasis to Direct Premium VIP customers in order to grow VIP business significantly to be more profitable.

The intention of Singapore govt. on casino control Act review is thus,

(1) To limit casino penetration into domestic market, hence to minimise social impact.

(2) To limit the exploitation of junket players market as in the case of Macau and hence, to maintain a “clean VIP business” environment.

(3) To “push” the two IR resorts to rely not solely on casino revenues. But, to also expand into other hospitality and entertainment offering, as in the case of Las Vegas.

The above key considerations form the core strategy of Singapore long-term tourism development, without weakening its social protection effort.

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