The prediction that Singapore’s casino market will soon be bigger than Las Vegas’ isn’t exactly going out on a long limb. Most gaming analysts see this as a ‘when’ rather than ‘if’ proposition.
But the fact that it is now considered likely doesn’t make it any less remarkable.
Consider this. Las Vegas is the gambling epicenter of the world’s richest nation and has been operating as a casino town since the 1930’s. It has taken around 80 years for total gaming revenue on the Vegas Strip to reach around $6 billion annually ($544 million in August 2010).
In 2009 Singapore didn’t have a single casino. In the space of 6 months, from the opening of Resorts World Sentosa and the Marina Bay sands, Singapore all of a sudden has a casino market worth an annualized $4.5 million… and growing.
Runs on the board:
Given the startling success of these casinos in their first six months, you can see why few analysts think Vegas will remain the world’s number 2 casino town for long. Indeed conservative revenue estimates from the Sands and Genting corporations put expected revenues from both casinos for the next 12 months at $6 billion. This figure could surpass the Strip depending on whether Vegas’ growth woes continue.
Morgan Stanley expects Singapore’s casino market to be worth $7 to $12 billion by 2012 – arguably conservative considering growth to date as well as growth rates in nearby Macau which is already running at over $20 billion annually.
Unsatisfied propensity to gamble:
What is pretty clear is that there is very large and very under-serviced propensity to play casino games in Asia. While many Asian nations are re-thinking their policies on legal casinos, most are still casino free zones.
In the US there is a slot machine or gaming table for every 250 residents. In South East Asia (not including India) the number is closer to 15,000. Include India and the number approaches 50,000. Trimming this number to account for per capita income differences and you still end up with the US looking many times more saturated…or Asia looking many times more under-serviced.
Even with casinos expected in Japan and Taiwan in the future, operators don’t seem worried about a saturated Asian playing market. According to Sheldon Adelson,
“You don’t need more than a couple of million people for a market, particularly at the high-roller end. These people will come again and again…. They’re already here. Asia is far from saturated. It will never be satisfied in my lifetime. It will probably not be satisfied in yours.”
The high rollers:
Adelson’s mention of the high roller factor is worthy of note, because they have been good to Marina Bay and Resorts World so far. A few of the region’s bigger players have already made sizable contributions to house – including a recently reported $76.5 million loss by one of Singapore’s 40 wealthiest individuals.
Of course the casino’s good fortune with high rollers to date could easily change. But what won’t change is the fact that the average Asian player gambles (as a percentage of total income) around two times more than the average US player. For players in Macau this equates to around 1% of total income. If a similar rate of spend is experienced in Singapore, which would seem likely, that market will be worth around $10 billion annually.
From a service offering point of view Macau and Singapore have Vegas covered in most respects. Wow factor…tick, facilities…tick, game range…tick, limit range…tick. With impressive new gambling options sprouting up all over Asia, Las Vegas must be losing players who are choosing to play locally now that they can.