Singapore’s move to legalise gambling in 2010 in its attempt to become an Asian tourist mecca did not pay off so far. Casino revenues dropped significantly in the third quarter of 2012 as the city state is facing a slowdown of Chinese tourists – who make up the lion’s share of gamblers – on the back of a weaker Chinese economy. Newly released tighter restrictions on the number of low-income Singaporeans allowed to gamble haven’t supported the business either.
Recent earnings from Singapore’s two casino operators Las Vegas Sands, which runs the Marina Bay resort and is owned by US billionaire Sheldon Adelson, and Genting Singapore, a subsidiary of Malaysian conglomerate Genting Group, which operates Resorts World Sentosa, were disappointing.
Revenues of the Las Vegas Sands fell almost 28 per cent in the third quarter of 2012 from a year earlier, and Genting Singapore saw gaming revenue drop 20 per cent in the same period. Both casinos are yet to publish full-year figures, though.
In 2011, Singapore came close to US gambling mecca Las Vegas when revenues hit $5.9 billion, compared to $6.1 billion for its American counterpart, according to Citigroup. But for 2012, Citi predicts that Singapore’s revenues will have fallen back to $5.4 billion while Las Vegas is expected to report a slight upturn.
The prospects for Singapore’s casino industry are also clouded by the emergence of competition from elsewhere in the region. Vietnam, Cambodia, Laos and the Philippines are considering to set up new gaming venues or expand existing casinos.
However, none are likely to reach the success of Macao, the casino town in southern China. Macau, the world’s largest casino market, raked in $38 billion in annual gambling revenues in 2012. However, even in Macao gambling revenue growth for 2012 has fallen to 13.5 per cent versus 2011 when revenues rose 42.2 per cent.