Robert Goldstein, president and chief operating officer of U.S.-based casino operator Las Vegas Sands Corp, says Singapore is currently “underserved”, and that the expansion of the existing properties in the city-state will allow the market to capture a growing premium segment in Asia.
Mr Goldstein (pictured) said the enlargement of the firm’s property in Singapore – Marina Bay Sands – would target a premium-mass segment that “is similar to that of Macau”.
“We’re looking at [customers from] the entire region. We’re looking at premium mass in Asia, I think this product will be for a very high-end tourist and highly-sophisticated gamblers,” stated the executive. He was speaking on Wednesday in New York during an investment-sector event, “Bernstein’s 35th Annual Strategic Decisions Conference”.
Singapore currently operates a duopoly casino market shared between the Marina Bay Sands resort; and the Resorts World Sentosa casino complex operated by Genting Singapore Ltd.
The Singapore government said in early April that it had agreed to the expansion of the city’s two integrated casino resorts; and in return for their aggregate investment – SGD9 billion (US$6.6 billion) – the respective operators will continue to hold a duopoly on casino resorts in the country through to the year 2030.
As part of the agreement with the Singaporean government, Marina Bay Sands will build a fourth tower adjacent to its existing complex. The project also includes a 15,000-seat arena and a new all-suite hotel with approximately 1,000 rooms, topped with what the firm calls the Sands SkyPark; an observation deck including restaurant facilities and a swimming pool.
The group’s commitment in Singapore was “to create the same kind of lifestyle approach we did in Macau and give it [Singapore]… great entertainment, a world-class arena, and large-scale suites that will attract that premium mass segment from China, Japan, [South] Korea,” said Mr Goldstein.
The executive said he expected Singapore’s growth to “mimic” that of the Macau market and to be able to “compete with Macau”. He didn’t define how growth should be measured. But he added: “I think all of these [offerings] will drive lots of traffic into Singapore.”
Mr Goldstein said additionally that Las Vegas Sands was targeting a 20-percent-plus return on total invested capital in its Singapore expansion, although didn’t clarify if that was on a per annum basis.
The changes to Singapore’s legal casino framework also included an increase to casino entry levies for locals, effective from last month. Mr Goldstein said the increase had a “small impact thus far on visitation” to Marina Bay Sands. “That always happens wherever you do something different in the market … But I’m not concerned long term about the impact of the levy,” he added.
The revision to the gaming framework included also the introduction of a tiered casino tax structure with higher tax rates than currently in place. The changes to the tax structure were “very fairly worked out”, said the Las Vegas Sands executive.
“I think we negotiated a very fine deal, that enables us to grow, contributes to Singapore … and gave us the duopoly until 2030,” he stated.
Commenting on Mr Goldstein’s remarks, brokerage Sanford C. Bernstein Ltd in Hong Kong noted that the “overarching theme of the discussion” was that Las Vegas Sands wants to focus on large-scale investments, particularly in Asia.
“Despite of all the capex spending coming up in Macau and Singapore over the next few years, Las Vegas Sands doesn’t see any change in continuing to return capital to shareholders,” said analysts Vitaly Umansky, Kelsey Zhu and Eunice Lee in a note on Wednesday.
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Credit rating agency Fitch Ratings