Singapore’s casinos losing luster as profits decline


Thu, Nov 15, 2012 - Page 15

Genting Singapore PLC and Las Vegas Sands Corp reported the lowest gaming revenue in at least 18 months at their Singapore casinos, signaling slower economic growth and tighter rules are restricting spending by gamblers.

“We have been waiting for the novelty factor of Singapore’s casinos to finally wear off, and that time may have finally come,” said Jonathan Galaviz, managing director of Galaviz & Co, a Las Vegas-based tourism industry analyst. “Gaming revenues are sometimes a leading indicator of overall macroeconomic activity in a region. This may be a sign of things to come economically for Southeast Asia.”

The decline in revenue from gaming coincides with a slowdown in the city-state’s economy, which the government forecasts will expand as little as 1.5 percent this year, from 4.9 percent last year.

Efforts to lure gamblers with discounts and giveaways, including free concert tickets, have been stifled by the industry’s regulator, which charges local residents S$100 (US$82) each time they enter one of the casinos.

Genting Singapore’s gaming revenue dropped 20 percent to S$528.4 million in the third quarter and profit slid 47 percent, the company said on Monday.

Billionaire Sheldon Adelson’s Las Vegas Sands said on Nov. 1 that gaming revenue in Singapore slumped 28 percent to US$470.8 million. Its Marina Bay Sands resort was the only one of its seven locations to post a decline in the period.

Genting Singapore’s Resorts World was fined S$600,000 in September for illegally reimbursing entry fees through promotions, including free concert tickets and passes to its Universal Studios theme park, according to the Casino Regulatory Authority of Singapore.

A month earlier, Marina Bay Sands was fined S$357,500 for offenses including waiving the levy for local gamblers, and Resorts World paid S$140,000 for “breaching social safeguard requirements,” according to the regulator.

Genting Singapore, which opened its casino resort in the city-state at the start of 2010, said in response to queries that it is focusing on building its gaming customer database during the first two years of operations.

“On a backdrop of a softer Singapore gaming market and increased regional capacity, growing our gaming revenue remained challenging,” Tan Hee Teck, president of Genting Singapore and chief executive officer of Resorts World, said in an e-mailed statement on Monday. “As we enter year three of our operations, our initiatives will focus on customer loyalty and increasing our foreign visitation.”

For Las Vegas Sands, the drop in Singapore revenue led to a larger-than-expected 18 percent slide in third-quarter profit.