The battle for Singapore’s High Rollers is on

Today marks the opening of Singapore’s (and the world’s) most expensive casino development – the Marina Bay Sands.

The $5.5 billion project will see a staged opening over the coming months, and today’s first stage  sees the doors open to 963 of the 2,500 hotel rooms, selected shops and restaurants and the casino floor itself.

It’s an exciting day for Las Vegas Sands CEO Sheldon Adelson.  He rightly declared it a project that would “define the future of our company” and one that would change the face of Asia’s casino industry significantly.

It’s a far less exciting day for fellow casino tycoon James Packer.

Targeting the high rollers

Packer has worked hard to convert the media empire he inherited from father Kerry into a casino empire, including a string of failed ventures in Las Vegas, the new and moderately successful City of Dreams in Macau, and the cornerstone of his business – Crown Casino in Melbourne, Australia.  Crown Casino is heavily marketed to the southeast Asian high roller market, and custom from these players is critical to the casino’s success (it is widely known that Crown’s 2 biggest players are Singaporean), and this is where the Marina Bay throws a spanner into the works.

There can be no doubt that the newest, shiniest, most spectacular casino on the block would have attracted the attention of high rollers in the region anyway. Just in case it hasn’t, Adelson has hired Andrew McDonald to run Marina Bay Sands.  McDonald is a former Crown executive with an intimate knowledge of Crown’s prized customer list and direct relationships with players at the top of this list.  Now they may be courted directly.

Crown have been aware of this threat for some time and are taking measures to mitigate it, including spending $212 million upgrading VIP facilities.  The upgrades will include an expansion to casino’s Mahogany Room and introduction of  new private suite gambling club.

Will it be enough?  Seems a little like taking a knife to a gun fight to me.  Particularly when it is considered that only a couple of months ago Resorts World Sentosa opened its casino which can only compound Crown’s woes.  But I guess only time will tell.

What’s a high roller worth to a casino?

According to Ramachandar Siva, who runs a Singapore based casino consultancy, the typical high roller is male, 40 to 65 years of age, prefers playing baccarat and bets somewhere in the vicinity of S$5,000 to S$200,000 a game – but sometimes substantially more.  Siva estimates there are around 200 to 300 these players in Singapore and while they represent less than 1% of a casino’s customers they can account for up to 20% of total revenue.