SINGAPORE

Marina Bay Sands continues to be one of the world’s most profitable IRs, accounting for 34 percent of Las Vegas Sands’ group adjusted property EBITDA in Q3, though it continues to grapple with stagnant topline growth.

Casino revenue in the most recently reporting quarter was up just 2.8 percent, with food and beverage revenue far outstripping gaming with a gain of 15.1 percent.

At rival Genting Singapore, revenue fell 7 percent to $596.1 million, while adjusted EBITDA was $278 million, down 13 percent. Net profit declined 24 percent to$158.8 million. Gaming revenue was down 11 percent to $360.7 million, while non-gaming revenue rose 1 percent to $234 million.

Fitch Ratings said it expects Singapore’s gaming revenues to be flat in 2020, “with a weak VIP segment amid economic uncertainty and growing competition from the Philippines and other Southeast Asian casino destinations.”

The agency does however note that the mass market is likely to remain stable and will be a bigger contributorto cash flow.

In 2018, the Singapore government announced the first expansion of its gaming industry since its inception, allowing each IR to invest $3.3 billion to expand their facilities in return for additional gaming capacity.

Las Vegas Sands has said this will include a new 1,000-suite hotel tower, a sky-roof swimming pool and a state-of-the-art facility designed for live music with a 15,000-strong capacity.

Although the rollout of new attractions has helped boost revenue at resorts in Macau and elsewhere in Asia, Fitch says it’s neutral on the expansion of the two IRs.

“The benefit from incremental non-gaming (hotels, entertainment) will mostly be offset by an increased tax rate and entrance levy,” it said.

The government, in return for a combined S$9 billion ($6.65 billion) investment, allowed MBS and Resorts World Sentosa to increase their total allowed gaming space and the number of gaming machines. MBS will be able to dedicate a further 2000 sqm to gaming and will be able to up its total number of gaming machines from 2,500 to 3,500. RWS will have an extra 500 sqm of gaming space and a further 800 machines.

However, in return, the government upped the local entry fee from April 4 by 50 percent to $150.

At the end of a current tax moratorium in February 2022, it will also introduce a higher tax structure, which will also include more tiers. For premium gaming the rate will rise to 8 percent from 5 percent on the first $2.4 billion in GGR and will rise to 12 percent thereafter.

For mass gaming, the tax rate also gains by three percentage points to 18 percent for the first $3.1 billion in GGR and then 22 percent thereafter.

Both operators have already noted an impact from the hike in the local entrance fee, with analysts predicting many would be deterred from renewing their resident passes.

Morgan Stanley has noted that Resorts World Sentosa gets about 25 percent of its business from Singaporeans and that at least 10 percent of those would be put off by the higher entry levy.

The double whammy of slowing domestic revenue and uncertainty around regional VIP play has left analysts cautious.

“We believe that the outlook for the Singapore gaming market is likely to remain challenging, due to a slower local mass market and uncertainty in the VIP segment,” research house Affin Hwang said in a recent note.

“With the challenging economic outlook both locally and regionally, the overall gaming volume is likely to remain weak for both the mass and VIP segments, in our view.”

The Singaporean High Court has dismissed a petition filed by Bloomberry Resorts against Global Gaming Philippines, which accused the company of committing fraud and misrepresentation leading to its termination as the management firm for Solaire in 2013.

The latest court decision upholds a ruling from the arbitration tribunal in Singapore in 2016, which ruled that the termination of GGAM’s management services contract for Solaire was unlawful.

At the time, Bloomberry alleged that there were concealment and misrepresentations in light of investigations into violations of the Foreign Corrupt Practices Act which involved two out of four of GGAM’s executives during their time at Las Vegas Sands.

However, in a recent disclosure to the stock exchange, Bloomberry said the court found that the findings presented to the court “do not constitute strong and cogent evidence of any species of fraud.”

Singapore’s Meetings, Incentives, Conferences and Exhibitions (MICE) market hit $2.52 billion in 2018 and is likely to grow by a compound average rate of 8.4 percent to $5.21 billion by the end of 2027.

According to a report from Research and Markets, the business is likely to be driven by easy access to the island state from international visitors. Additionally, an increasing number of business activities, including client meetings, brand promotions, and employee training activities are likely to foster market growth in the near future.

“Rapid infrastructural development in the country and technological advancements in MICE tourism is projected to fuel market growth over the forecast period.

Furthermore, rising globalization of businesses and a growing number of small and medium-sized enterprises is also expected to boost the growth of MICE in the country,” it said.