Gaming giants set sights on Singapore

Jun 1, 2004 4:33 AM

Two Nevada-based gaming giants, MGM Mirage and Las Vegas Sands (parent of The Venetian), have expressed a keen interest in building a billion dollar casino in Singapore, whose officials have declared an intent to legalize gaming in the very near future.

"When we read about Singapore opening up (to the casino business), we sent letters to the appropriate people in government ”¦ saying we would be most interested in participating," Terry Lanni, chairman and CEO of MGM Mirage, said in an interview with the Singapore Press last month. "Singapore is a perfect location for our industry because of the fact that there are high levels of integrity in government. A highly-regulated situation is important to us."

Another key factor in evaluating any potential casino investment in Singapore would be the tax rate, Lanni said.

"If you really want foreign investments, you would let the number of (casino) licensees be determined by the market, then you could also have a lower tax rate because you’ll have multiple licenses and multiple facilities," Lanni said.

Casino analysts have said a moderate level of gaming tax — say, below 10 percent — would enable companies like MGM Mirage to build a $1 billion resort in Singapore.

MGM Mirage would appear to be poised to make such a move, especially in the wake of its recent withdrawal of a half billion dollar commitment to purchase Wembley PLC, a British gaming company that is expected to build multiple casinos, once the gaming industry in the United Kingdom is deregulated (that process is expected to take from two to four years).

MGM Mirage currently has marketing offices in the Far East, but has yet to make an investment there (it submitted an unsuccessful bid for a Macau license). The company is reportedly in negotiations with an Asian company to joint venture casinos in Macau, but a company spokesmen said no deal has yet been struck.

Las Vegas Sands, on the other hand, has already "gotten its feet wet" in the Asian market with last month’s opening of its new casino resort in Macau, the former Portuguese enclave in southern China.

"Given the wealth of Singaporeans, the diversified business base and the value of the country’s tourism assets, Singapore would be a natural place for a casino," said Bill Weidner, Las Vegas Sands’ president and chief operating officer, in an online interview in May.

The size of the casino, which could cost a minimum of $1 billion, would depend on the Singapore government, Weidner said.

"We’ll build whatever the authorities feel they’re comfortable with," Weidner said.

Las Vegas Sands, the parent company of The Venetian in Las Vegas, recently opened a casino to standing-room-only crowds in Macau.

The Sands Macau cost about $240 million to build and features Las Vegas-like amenities: massive casino, restaurants and entertainment.

Insiders say Las Vegas Sands officials have been in talks with the Singapore government for the past two months.

Singapore is an independent city-state located off the southern tip of the Malay Penninsula. Its government said it was considering allowing casinos to be built on Sentosa, a resort island adjacent to the city.

Already a major tourist attraction for mainland Chinese, the addition of casinos to Singapore’s attractions of sun, sand, sex, shopping and nightlife would be a powerful magnet.

Nevada gaming companies’ foray into the Asian gaming market may just be in its infancy. Analysts predict Asia could represent a $13 billion a year casino industry.

In addition to Macau and possibly Singapore, other countries such as Thailand, the Philippines, Taiwan, Cambodia and Japan, to name a few, have expressed an interest in bringing Western-style casinos to their countries.