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Business @ AsiaOne
Wed, Oct 06, 2010
High rollers could cushion revenue dip
Opening of the less-profitable segments of IRs by the end of next year could impact revenues.
By Kenny Chee
THE two integrated resorts could be rolling in the dough right now, but to cushion a possible dip in revenues as economic growth slows down, the IRs could look to attracting more high rollers, said an industry observer yesterday.
And this could result in the proportion of revenues from high-rolling casino players increasing from about 50 per cent at both IRs in their initial months of operation to 70 per cent or more next year, estimated Dr Derek da Cunha.
Dr da Cunha is author of a book about the two IRs, Singapore Places Its Bets, and a former political scientist with the Institute of South-east Asian Studies.
He was addressing more than 60 delegates on the first day of the third annual Asian Casino & Gaming Congress held at Marina Bay Sands yesterday.
He said that the two IRs here - Marina Bay Sands and Resorts World Sentosa - have generated substantial revenues so far.
It was previously reported that Resorts World's revenue for the second quarter of this year was $861 million, while Sands earned pre-tax profits of US$94 million (S$123 million) the first 65 days of its operations.
Dr da Cunha said that this is because casino performance follows the economic cycle, which is at a peak now.
"It may well be that gaming revenues over the next six months could reach peak levels before slowing down, in line with the economic cycle," he said, adding that economic growth next year is unlikely to be as high as this year's.
He also said that the opening of the less-profitable segments of the IRs by the end of next year, like museums, could also impact revenues.
In the light of this, Dr da Cunha foresees that the IRs will want to bring in more VIP players to bolster revenues.
The IRs could pay junket operators more commission to bring these players to Singapore, he said. This could then increase the proportion of revenues from high rollers, compared to that from mass-market players who are less well-off.
Currently, Dr da Cunha estimated that the bulk of the VIPs would likely to be made up of foreigners.
However, he did not think that the IRs would look to the Singapore market to cushion the impact of softening revenues.
Regarding social safeguards to address problem-gambling concerns here, some industry observers said that more could be done.
Currently, Singaporeans and permanent residents have to pay a $100 levy a day to enter the casino of either IR, or foot a $2,000 fee for a year's entry.
Mr Hossein Asadi, director at Taiwan Gaming & Management, said that the $100 levy did not appear to be stopping many Singaporeans from entering casinos here.
"I do see a social danger here. I was concerned to see so many Singaporeans gambling (in a casino). You can tell that some cannot afford it and it's beyond their means," he said.
Mr Asadi said that for the levy to be more effective, it should be raised to $1,000 a day so that only serious players would enter the casino, though he admitted that this would be a hard sell for the casino operators.
He also suggested that the frequency of visits to the casino by Singaporeans and permanent residents could be limited.
This could be done by allowing them to visit the casino only a certain number of times a year.
Dr da Cunha also supported such a proposal and added that a temporary self-exclusion could be implemented, with periods ranging from a month to half a year. He believed this would not be difficult to put in place since an existing self-exclusion system is already in place.
At present, a member of the public can voluntarily bar himself from the casinos under a self-exclusion.
Dr da Cunha said some players could just need a cooling-off period after losing a large sum of money to overcome any impulses to gamble more to recoup their losses.
So the temporary exclusion could make sense for these players, he said, Some insights into possible social safeguards could be gleaned from Australia.
Mr David Green, chairman of gaming consultancy Newpage Consultadoria, said that the Australian government was considering the possibility of barring a player from gambling if his losses hit a certain amount, as well as restricting the amount of money that could be withdrawn from automated teller machines in casinos.
[email protected]
Wed, Oct 06, 2010
High rollers could cushion revenue dip
Opening of the less-profitable segments of IRs by the end of next year could impact revenues.
By Kenny Chee
THE two integrated resorts could be rolling in the dough right now, but to cushion a possible dip in revenues as economic growth slows down, the IRs could look to attracting more high rollers, said an industry observer yesterday.
And this could result in the proportion of revenues from high-rolling casino players increasing from about 50 per cent at both IRs in their initial months of operation to 70 per cent or more next year, estimated Dr Derek da Cunha.
Dr da Cunha is author of a book about the two IRs, Singapore Places Its Bets, and a former political scientist with the Institute of South-east Asian Studies.
He was addressing more than 60 delegates on the first day of the third annual Asian Casino & Gaming Congress held at Marina Bay Sands yesterday.
He said that the two IRs here - Marina Bay Sands and Resorts World Sentosa - have generated substantial revenues so far.
It was previously reported that Resorts World's revenue for the second quarter of this year was $861 million, while Sands earned pre-tax profits of US$94 million (S$123 million) the first 65 days of its operations.
Dr da Cunha said that this is because casino performance follows the economic cycle, which is at a peak now.
"It may well be that gaming revenues over the next six months could reach peak levels before slowing down, in line with the economic cycle," he said, adding that economic growth next year is unlikely to be as high as this year's.
He also said that the opening of the less-profitable segments of the IRs by the end of next year, like museums, could also impact revenues.
In the light of this, Dr da Cunha foresees that the IRs will want to bring in more VIP players to bolster revenues.
The IRs could pay junket operators more commission to bring these players to Singapore, he said. This could then increase the proportion of revenues from high rollers, compared to that from mass-market players who are less well-off.
Currently, Dr da Cunha estimated that the bulk of the VIPs would likely to be made up of foreigners.
However, he did not think that the IRs would look to the Singapore market to cushion the impact of softening revenues.
Regarding social safeguards to address problem-gambling concerns here, some industry observers said that more could be done.
Currently, Singaporeans and permanent residents have to pay a $100 levy a day to enter the casino of either IR, or foot a $2,000 fee for a year's entry.
Mr Hossein Asadi, director at Taiwan Gaming & Management, said that the $100 levy did not appear to be stopping many Singaporeans from entering casinos here.
"I do see a social danger here. I was concerned to see so many Singaporeans gambling (in a casino). You can tell that some cannot afford it and it's beyond their means," he said.
Mr Asadi said that for the levy to be more effective, it should be raised to $1,000 a day so that only serious players would enter the casino, though he admitted that this would be a hard sell for the casino operators.
He also suggested that the frequency of visits to the casino by Singaporeans and permanent residents could be limited.
This could be done by allowing them to visit the casino only a certain number of times a year.
Dr da Cunha also supported such a proposal and added that a temporary self-exclusion could be implemented, with periods ranging from a month to half a year. He believed this would not be difficult to put in place since an existing self-exclusion system is already in place.
At present, a member of the public can voluntarily bar himself from the casinos under a self-exclusion.
Dr da Cunha said some players could just need a cooling-off period after losing a large sum of money to overcome any impulses to gamble more to recoup their losses.
So the temporary exclusion could make sense for these players, he said, Some insights into possible social safeguards could be gleaned from Australia.
Mr David Green, chairman of gaming consultancy Newpage Consultadoria, said that the Australian government was considering the possibility of barring a player from gambling if his losses hit a certain amount, as well as restricting the amount of money that could be withdrawn from automated teller machines in casinos.
[email protected]
