Singapore's decision to bet in a big way on the casino industry despite robust domestic opposition underscores the irresistible economic potential of gaming in Asia, analysts say.
The city-state that cultivated a wholesome image and even banned the sale of chewing gum to keep its streets clean has given the go-ahead for two massive casino resorts.
Investors are expected to pour more than US$3 billion into the "integrated resorts" that will blend hotel, convention, entertainment and gambling facilities into what Singapore hopes will become tourist magnets.
PHOTO: AFP
Singapore's elder statesman Lee Kuan Yew (
The 81-year-old Lee, now a Cabinet adviser, admitted the social price of having casinos may be high but "the price of not doing so is even higher" because investors would only go to other countries.
"The global gaming industry sees Asia as a very strong strategic market development opportunity," said Jonathan Galaviz, a Las Vegas-based analyst whose firm also advises casino industry players.
Across the region, from Sydney to Sihanoukville, the Cambodian border town where Thais slip in to gamble, millions of dollars are wagered daily on everything from slot machines and cards to the savage sport of cock fighting.
Galaviz estimated that the gross gaming revenue in Asia could be worth US$100 billion a year -- of which only 20 percent is legal.
"The gap that exists between legal gross gaming revenue and illegal gross gaming revenue provides governments in Asia the opportunity to convert illegal gambling activity into legal gambling, while at the same time further developing their tourism sectors," he added.
As disposable incomes increase in Asia and travel intensifies with the mushrooming of budget airlines, demand for casino resorts is expected to rise accordingly.
Chinese tourists are already making their presence felt in Asia's casinos, and not only in Macau, the former Portuguese enclave that opened up its gaming industry to foreign investors after it reverted to Beijing's control.
In Macau, dubbed Asia's Las Vegas, the casino industry is providing public finances and jobs for a tiny city of 450,000 people that 40 years ago relied on textiles and fishing.
A 100,000m2 land reclamation project will eventually hold 20 casino-hotels employing some 120,000 people and providing 60,000 high-class hotel rooms. Casino income reached almost US$5 billion last year.
In the Philippines, casinos controlled by the state-owned Philippine Amusement and Gaming Corp are the third largest source of government income, just behind taxes and customs collections.
The firm posted a gross income of US$365 million in 2003, of which almost half was net profit. A portion of the money goes to support charities and sports programs.
Malaysia's sole casino operator Genting is a key blue chip on the Kuala Lumpur Stock Exchange and has diversified into plantations, paper, oil and gas and power. The group also runs the world's fourth largest cruise line, Star Cruises, which naturally has casinos on board.
Australia has 13 casinos which contributed US$4.5 billion to the economy in the 2002-2003 financial year, or 0.8 percent of total gross domestic product, according to the Australian Casino Association.
Even before deciding to build casinos, Singapore was already a gambling-mad society. Punters bet an estimated US$3.6 billion a year on lottery, sports betting and horse racing operations controlled by the state.
Singapore says the casino resorts will help sustain its tourism industry in the long term by helping dispel its "unexciting" image.
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