Investment bank Morgan Stanley says it does not expect the opening of casinos in Japan and potentially in Thailand to undermine the business profile of Singapore’s casino duopoly.
“While we expect Japanese and Thai gaming casinos to be competitive and large, they may not be ready before 2030,” the institution noted in a Tuesday report.
It added: “We also expect a large portion of their business to be local and mainland [China] business… Singapore could remain relevant even after Thailand and Japan are fully operational.”
Morgan Stanley, however, cautioned that it saw a “bigger risk” from Thailand compared to Japan, due to the former’s geographical proximity to Singapore.
To date, only one Japanese casino resort – the JPY1.27-trillion (US$8.75 billion, currently) MGM Osaka, at Yumeshima in Osaka – has been approved by Japan’s national authorities. Its main promoters, MGM Resorts International – parent of Macau casino operator MGM China Holdings Ltd – and Japan’s Orix Corp, are targeting a 2030 launch. Japan’s legal framework allows for up to three IR licences to be issued.
The plan to allow casinos in Thailand is facing growing opposition, but the government has defended it, pledging the implementation of strict regulations to oversee gambling activities.
The Morgan Stanley comments were part of a 100-page-plus comprehensive report on Singapore’s main industries, issued on Tuesday, as the city-state gears up to celebrate its 60th anniversary in August.
The document estimated that Singapore’s two casinos contribute “around 1.5 percent” of the city-state’s gross domestic product. They “have created approximately 22,000 direct jobs within the resorts and supported 40,000 jobs in related sectors,” according to Morgan Stanley.
Singapore’s casino sector is a duopoly shared between Resorts World Sentosa, operated by Genting Singapore Ltd; and Marina Bay Sands, operated by a unit of Las Vegas Sands Corp.
Looking ahead, the report stated that Singapore “remains a safe destination for business and leisure travellers”.
It added: “We expect high-net-worth individuals to continue to make Singapore their home, and in turn help the leisure and tourism market. We expect Genting Singapore and Marina Bay Sands to continue to invest in the next phase [of property development] and see higher revenue and profit from those investments.”
In 2019, the Singaporean government agreed to the expansion of the city-state’s two casino resorts. In return for their investment – an aggregate of SGD9 billion (US$7.03 billion currently) – the respective operators would continue to hold a duopoly on casino gambling in Singapore through to 2030.
Due to the Covid-19 pandemic, the implementation of each operator’s investment plan suffered significant delays. They have since announced increases in their pledged investments.
Genting Singapore has stated that it will launch new attractions at Resorts World Sentosa in the second half of this year, as part of an expansion project known as RWS 2.0. The company’s board has approved a total investment of approximately SGD6.80 billion to upgrade and expand the casino complex.
Singapore Oceanarium – an expansion and rebranding of the former S.E.A. Aquarium at Resorts World Sentosa – is scheduled to open to the public on July 23.
A revamped retail area, dubbed “WEAVE”, is also due to open in the second half, according to the company. The 183-room The Laurus hotel, part of The Luxury Collection Hotels & Resorts portfolio, is to open at Resorts World Sentosa in the third quarter of this year.
In mid-May, the promoter of Marina Bay Sands announced that hotel room renovations at the complex had been completed, marking the “most significant milestone” in its US$1.75-billion multi-year refurbishment programme. Parent firm Las Vegas Sands stated in October last year that it planned to invest US$8.0 billion in developing the second phase of the Marina Bay Sands complex, which is expected to be completed only by June 2030, with an anticipated opening date in January 2031.
Morgan Stanley said in Tuesday’s report that despite the fact that the new round of investment by the two casino firms in Singapore was “hurting near-term return on invested capital”, it “remains high” by international standards, with property earnings before interest, taxation, depreciation, and amortisation reaching an aggregate US$2.79 billion in full-year 2024.
