Asia’s Casino Boom

June 12, 2006

Forbes.com

International

Oxford Analytica 06.09.06, 6:00 AM ETFollowing a competitive bidding process, on May 26 Singapore awarded a license to the Las Vegas Sands to build the first casino in the city-state.

The $3.2 billion project in the Marina Bay district is expected to be the world's most expensive casino complex and will include a conference center, hotel and shops. The casino will have a significant economic influence when it opens in 2009, boosting tourism, jobs and gross domestic product, and stimulating Singapore's transition to a service economy.

The Las Vegas Sands beat bids from MGM Mirage and Southeast Asia's biggest property group, CapitaLand; Harrah's Entertainment and prominent Singapore developer Keppel Land; and Star Cruises and Genting International, which operates the Genting Highlands casino complex in Malaysia.

The selection of the Las Vegas Sands positions it as one of the leading developers of casino gambling in East and Southeast Asia, where the market is expanding. The choice also highlights the importance of Las Vegas-based capital investment and know-how in establishing or reshaping casino gambling as part of a wider range of activities, from conference halls and theaters to shopping centers and restaurants.

Although gambling is illegal in many East and Southeast Asian countries, and in spite of lingering opposition on religious, moral and ethical grounds, governments throughout the region have been re-assessing the case for casinos.

Countries planning to expand existing facilities include South Korea, the Philippines and Vietnam, while Japan, Taiwan and Thailand have been considering legalizing casino gambling. Arguments in favor include:

–the desirability of competing for a share of the fast-growing regional gambling and tourism market, which is being boosted by rising prosperity in China;

–the potential economic benefits from tax revenues and new jobs;

–the gradual integration or re-packaging of casino gambling within leisure and entertainment; and

–a belief that the legalization of casinos will serve to displace illicit forms of gaming and gambling, and to facilitate government control over these activities.

Strategies aimed at appeasing opponents include:

–the social and/or geographical separation of casino gambling from the mainstream population;

–restrictions qualifying who may gamble, including banning or imposing surcharges on local citizens; and

–the gradual merging of casino gaming with other leisure and entertainment pursuits.

Regional competition for a share of the tourism and casino market has been triggered by the massive growth in casino revenue and visitor numbers in Macao.

U.S. casino interests and capital have increased the special administrative region's capacity for tourists, shifting Macao's focus from high rollers to the mass consumer.

Macao will expand further:

–MGM plans a $1 billion casino.

–Las Vegas Sands intends a second, $3 billion casino resort.

Melco International and Australia's Publishing & Broadcasting Ltd. (PBL) want to build a Hyatt Park Hotel as well as an underwater casino along the newly developed Cotai Strip.

Under Prime Minister Lee Hsien Loong, Singapore has adopted a more tolerant attitude than under his father, Lee Kuan Yew. Last year, the city-state lifted a four-decade-old ban on casino gambling. Approved after divisive public and parliamentary debate, the decision paved the way for the construction of two casino facilities.

Genting Highlands is Malaysia's sole casino operation. In 2004, it received more than 17 million visitors. Responding to developments in Macao and Singapore, Genting has undergone a major overhaul and re-branding of its facilities.

Until recently, gambling had been illegal in Thailand, with the exception of the national lottery and two horse racing tracks in Bangkok. In March 2004, Thailand's parliament voted 216 to 23 in favor of legalizing casinos. Although most Thais were opposed to the reform, economic arguments prevailed over concerns about gambling dependency and increased crime and violence.

Gambling is illegal in Japan under 1908 legislation. However, the introduction of casinos has been under discussion for several years. Legalization is supported mainly by local, municipal and prefectural governments, which would benefit from tax revenues generated.

Casino gambling in East and Southeast Asia continues to expand, in spite of legal, religious and moral opposition. Investor interest, evidenced by recent bidding for Singapore's first casino license, suggests it will expand further, providing a major fillip for local economies across the region.

To read an extended version of this article, log on to Oxford Analytica's Web site.

Oxford Analytica is an independent strategic-consulting firm drawing on a network of more than 1,000 scholar experts at Oxford and other leading universities and research institutions around the world. For more information, please visit www.oxan.com. To find out how to subscribe to the firm's Daily Brief Service, click here.

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One Response to “Asia’s Casino Boom”

  1. Faye Says:

    About the other hand, if you have a busywork and private life,
    it could be a touch too much to take care of.


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