Las Vegas giants, Malaysian firm duel for Singapore casino
Source: Agence France Presse
January 15th, 2006
SINGAPORE: Las Vegas giants and a Malaysian gaming firm are left in a high-stakes battle to build Singapore's first casino after rivals from Australia, South Africa, and Hong Kong pulled out.
Although other companies abandoned their bids, industry analysts said competition remains intense because the surviving contenders are among the world's biggest gaming firms.
"Several high-quality bidders remain in the race for the Marina Bay integrated resort," said Jonathan Galaviz, an analyst with Globalysis, a Las Vegas-based research and advisory firm tracking Asia's casino gaming sector.
"The competition will continue to be intense all the way until the award of the project," he told AFP.
"There is no doubt that Singapore will ultimately be successful in receiving a bid that provides a world-class globally recognised integrated resort at Marina Bay that the country will be proud of."
The "integrated resort" concept refers to convention facilities, hotels, theatres, museums and theme parks that will be included in addition to casino gambling.
Fourteen foreign investors were invited after Singapore lifted a ban on casino gambling in April last year, but some withdrew their bids as they evaluated their prospects.
Bidding for the first casino project on Marina Bay, adjacent to the central business district, will close on March 29. The casino is scheduled to start operations in 2009.
Bidding for the second casino project on Sentosa island, a former British artillery outpost turned tourism site, will open in the first quarter and close four months after the Marina Bay winner is announced.
Tiny Singapore, which lacks the natural or cultural wonders offered by its Southeast Asian neighbours, is betting on the casino projects to help attract more tourists, including Asia's high-rollers.
Sean Monaghan, a Merrill Lynch analyst who monitors the gaming industry, believes the Singapore integrated resorts, which include the casinos, would be among the most expensive built anywhere.
Marina Bay could cost more than three billion US dollars to construct and Sentosa about two billion dollars, he told AFP.
"Despite the high development cost, we believe the two casinos will be profitable and will create value for the successful companies involved," Monaghan said in a research note for clients.
Most of the companies that withdrew their bids said the development cost had become too high and there were risks in recovering the investment.
There were also concerns over government restrictions including a 100 Singapore-dollar (61.30 US) entry fee for Singaporeans in an effort to address problem gambling.
Among those that have pulled out are Australian gaming stalwart Tabcorp, a consortium involving Australia's Publishing and Broadcasting Ltd and Hong Kong's Melco International Development, and South African firm Peermont Global.
Las Vegas-based Wynn Resorts, whose owner Steve Wynn complained there was too much direction and control by Singapore officials involved in the bidding process, folded up its bid.
Still in contention are Harrah's Entertainment, Las Vegas Sands and MGM Mirage -- all US gaming behemoths which have partnered with entrenched Singapore-based property developers -- and Malaysia's Genting International.
Kerzner International of The Bahamas is bidding only for the second site on Sentosa Island.
Harrah's has allied with Keppel Land, MGM Mirage with CapitaLand and Sands with City Developments Ltd. for the Marina Bay project.
Keppel Land and CapitaLand are under the stable of state-linked Singapore investment company Temasek Holdings, while City Developments is a major commercial landlord in the city-state.
To design its development, Harrah's hired Daniel Libeskind, the master planner of Freedom Tower at the Ground Zero site of the September 11, 2001 attacks in New York City. Sands' plans include a version of the Guggenheim museum.
MGM Mirage, one of the favourites to win the Marina Bay project, said it remained optimistic about Singapore's prospects
as a gaming centre despite the reservations voiced by former bidders. But it remained coy about its plans.
"I would say that the finances of an integrated resort in Singapore will still pencil out well for us," said MGM Mirage vice
president for public affairs Gordon Absher.
"This is a very dynamic part of the world. Macau has seen great success," he told a media briefing on Friday, referring to
southern China's casino capital.
"If you look at the numbers in Macau, it reflects an untapped market. Integrated resorts in this part of the world are in
"Singapore, with its location and with the appeal the city already naturally has -- we feel it's an ideal location."
Copyright © 2006 Agence France Presse. All rights reserved.
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