BestCraps.com

Singapore casino resorts poised to become the new Vegas

Posted on August 19th, 2010

News Sponsored by Online Vegas Casino

Rated 5 Stars by BestCraps.com

Read Review

Visit Casino

Download Software

————————————————

The booming casino industry in Singapore is set to be Asia’s version of the Las Vegas strip. Growth in the next two years is seen as casino goers in Asia would now rather go to nearer facilities rather than go to the gambling Mecca. Casino industry forecasters are poised to have their forecasts for Singapore’s promising business increased, especially after reports of positive results posted by Genting Singapore’s Resorts World Sentosa in the second quarter, which were better than expected. Two casino resorts have been opened in Singapore in the early months of this year, the Genting resort one of them. The city state welcomes gamblers from all over the world as its government implemented measures to make income sources more diversified.

A report by Genting Singapore, a unit of Genting Bhd. of Malaysia, claimed that the Resorts World Sentosa complex, which costs $4.4 billion, posted 860.8 million (US $633 million) in second quarter earnings. The 2nd quarter was the first full quarter of the resort’s operations. Analysts estimate that about 70 to 90 percent of the declared income of Genting came from gambling operations, as the company did not include this in their statement. The market expected the resort to generate about S$620 million, which is considerably lower than the Genting figures. Although still early in the game, analysts now expect the gambling market there to increase in size, as facilities in the casino resort continue to expand.

It was in mid-February of this year when the casino was opened by Genting Singapore in its resort complex. In April, another casino complex, the Marina Bay Sands resort, was opened by competitor Las Vegas Sands Corp. Figures for the second quarter point out that winnings for the two casinos combined is at $4 billion yearly. Andy Nazarechuck, Dean of the Singapore campus of the University of Nevada Las Vegas, said “It’s just proof that if you build it they will come and in Singapore they built two products that are worthy of that title.” He adds that instead of the three trips to Las Vegas an Asian gambler does every year, those trips may be cut down to one as the other two may be done in a regional casino which is closer to home.

Galaviz and Company, a gambling consultancy firm based in Las Vegas, projects a more conservative estimate for the Singaporean gaming industry. The firm expects Singapore casinos to earn $3.5 billion in the year 2011, while earnings for the same year in Las Vegas are seen by the firm to increase to $5.8 billion from its expected $5.1 billion in 2010. Some investment community speculators are more bullish about the Singapore market though, as the believe that figures in Singapore will eventually reach or equal the ones that Galaviz estimates for Las Vegas by 2012. The Strip in Las Vegas contributes close to half of the income from gaming of the state of Nevada. Aaron Fischer of CLSA has even more positive forecasts for the Singaporean market, as he expects that the gaming revenue in 2011 of the Singapore resorts, if combined, will come to $5.1 billion. This estimate has increased from his previous $3.9 billion estimate. High expectations are also projected by Goldman Sachs, which pegs Singapore casino earnings in 2011 to reach $5 billion.

CLSA has also increased the target stock price of Genting Singapore from $1.30 to S$2.00, and projects the price to even go up at $3.00 as 2011 will see more facilities open in the resort such as retail outlets, hotel rooms and more tables, allowing for more tourists to enjoy the resort. On other Asian casino markets, Macau will continue to reign supreme, with projected earnings in 2011 to reach $27.5 billion, according to CLSA estimates. Gambling income in Macau has overtaken that of the Las Vegas Strips’ as early as 2006. This early, though, CLSA’s Fischer already warns of some concerns in the gaming industry in Singapore, with repercussions to be felt in two to three years. Fisher points out that the government may realize soon that the industry may become too big and may bring a number of social issues related to gambling.