How Singapore’s casino gamble is paying offBY DAN RICHARDSON
Singapore’s two new casino resorts are no strangers to controversy. But with tourist numbers and GDP having seen significant increases since they opened for business, it’s also clear they’ve had a positive economic impact on Singapore. And with Asia’s casino sector currently standing up well in the face of growing economic uncertainty, things are looking positive for the future, too.
Early days, but positive signs
Given that the first of Singapore’s two ‘mega-casinos’, the Resort World Sentosa, only opened back in January 2010 – followed by the Marina Bay Sands in 2011 – it’s fair to say that Singapore’s casino industry is still in its infancy. But although it will take a while for its full economic impact to be felt, a positive picture is already emerging.
Tourism is one area to have profited. According to figures from the Singapore Tourism Board, year-on-year foreign visitor numbers actually declined by 1.6% in 2008, and 4.3% and 2009. Yet in 2010 and 2011, increases of 20.2% and 13.1% were observed respectively. While for the first quarter of this year alone, a 14.6% increase was recorded over Q1 2011.
Likewise, the launch of these casinos has also coincided with similarly big gains in GDP. And while Singapore’s economy is considerably more diverse than that of Asia’s other big casino hub, Macau, it’s clear that both of Singapore’s casinos are well on their way to making their economic presence felt.
Creating a new market
Another positive for Singapore is the way its casinos have essentially carved out their own market in the region, as opposed to taking customers away from the likes of Macau. Although visitor numbers from China and Hong Kong have seen modest increases since 2009, it’s Singapore’s fellow ASEAN member states that continue to dominate its visitor statistics.
Not only are these countries Singapore’s biggest source of tourists, they’ve also seen the biggest percentage gains in 2010 and 2011. As such, the evidence suggests that it’s gamblers from Singapore’s nearest neighbours who are flocking its new casinos.
Perhaps the most welcome sign of all is that this has occurred in spite of the well-documented economic uncertainty in Asia and around the globe. And Singapore isn’t alone in feeling its benefits.
Macau, regarded as the home of Asian casino gambling since the Sixties, has experienced massive growth in recent times. Given that the vast majority of Macau’s visitors come from the Chinese mainland and Hong Kong, it’s perhaps not surprising that growth in tourist numbers has slowed significantly over the last 12 months. But even still, the territory still saw gross gambling revenue for May 2012 increase by more than 7% compared to May 2011.
The success of Macau and Singapore has also prompted other Asian countries to look at casinos as a means of driving tourism. A new casino building project is underway in Vietnam in conjunction with operator MGM, while Australia, Japan and eastern Russia have all been mooted as locations for future ventures.
A bright future
Ultimately, there’s no guarantee that the wider economic issues afflicting Asia’s big economies won’t impact its casino sector at some point. But even if this results in those casinos performing slightly below their forecasts in the short term, it seems Singapore and its casinos are well position for the future.