GGRAsia – Singapore resorts expand, duopoly extended until 2030: govt

Singapore resorts expand, duopoly extended until 2030: govt

Apr 04, 2019 Newsdesk Latest News, Singapore, Top of the deck

The Singaporean government said on Wednesday it had agreed to the expansion of the city’s two integrated casino resorts. In return for their investment – an aggregate of SGD9 billion (US$6.65 billion) – the respective operators will continue to hold a duopoly on casino resorts in the city-state through 2030, it was announced.

“The two integrated resorts have committed around SGD9 billion in non-gaming investments to build new world-class tourism and MICE [meetings, incentives, conferences and exhibitions] facilities and attractions, many of which will be first-in-Singapore,” the Ministry of Trade and Industry, Ministry of Finance, Ministry of Home Affairs and Ministry of Social and Family Development said in a joint statement.

The statement added: “The integrated resorts’ investments will enhance the vibrancy and tourism appeal of their offerings to remain competitive with other destinations in the region, and bring in more than half a million additional visitors annually.”

The two casino resorts were also authorised to expand their respective casino areas, with the caps on the number of casinos and slot machines revised upward: Marina Bay Sands (pictured), run by a subsidiary of U.S.-based gaming operator Las Vegas Sands Corp, has been allowed to increase its gaming area by 13.3 percent to a limit of 17,000 square metres (183,000 sq feet); while Resorts World Sentosa, owned and operated by Genting Singapore Ltd, was granted an increase of 3.3 percent, to a maximum of 15,500 sq metres.

“However, as non-gaming areas will expand by a much larger amount, approved gaming area as a proportion of total floor area will reduce from the existing 3.1 percent to 2.3 percent,” noted the government. “The integrated resorts have indicated that the additional gaming provisions (both approved gaming area and gaming machines) will be targeted at higher-tier non-mass market players, who are mainly tourists,” the government release pointed out.

The changes to Singapore’s legal casino framework also include the introduction of a tiered casino tax structure with higher tax rates than currently in place. According to the new system, to become effective on March 2022, the annual tax rate on mass gross gaming revenue (GGR) will go from a flat rate of 15 percent to a rate of 18 percent for the first SGD3.1 billion of GGR collected by the casino operator. Mass GGR in excess of SGD3.1 billion will be taxed at a rate of 22 percent, the government announced.

Premium – or VIP – GGR is currently taxed at a flat rate of 5 percent in Singapore. According to the new tiered model, the first SGD2.4 billion of GGR will be taxed at a rate of 8 percent; premium GGR over that figure will be taxed at 12 percent.

The government said the new tax structure would be fixed for a 10-year period, starting in March 2022.

The Singaporean authorities also announced on Wednesday an increase to casino entry levies for locals, as part of its policies to “minimising the social impact of problem gambling”. Local citizens and permanent residents of the city-state will face a 50 percent hike on the daily entrance tax, to SGD150, starting today (Thursday). The annual levy was increased to SGD3,000 from SGD2,000.

Expansion details

As part of the agreement, casino resort Marina Bay Sands will build a fourth tower adjacent to its existing complex. Plans also include a 15,000-seat arena and a new a luxury all-suite hotel with approximately 1,000 rooms, topped with a sky roof.

Casino resort Resorts World Sentosa will have two additional hotels, adding up to 1,100 rooms to the property; its Universal Studios Singapore theme park will also be expanded with two new areas – Minion Park and Super Nintendo World. Resorts World Sentosa will revamp its S.E.A. Aquarium, taking over the adjacent Maritime Experiential Museum to create a new Singapore Oceanarium.

Each of the operators has pledged to invest SGD4.5 billion into their respective expansion projects, under the agreement reached with the local government. This is it first major expansion of Singapore’s casino industry since Marina Bay Sands and Resorts World Sentosa opened doors in 2010.

“The additional investment by the integrated resorts is almost two-thirds their initial investment in 2006 (of about SGD15 billion),” noted the statement issued by Singapore’s government.

It added: “In view of the substantial investment and to provide business certainty, the government has agreed to extend the exclusivity period for the two casinos to end-2030. No other casinos will be introduced during this period.”

The resort expansions are expected to “create up to 5,000 new jobs directly and benefit local businesses, including small and medium enterprises,” according to the government.

In a statement issued on Wednesday, Las Vegas Sands stated it planned to “quickly begin work” on the Marina Bay Sands expansion. However, it added a timeline for its completion was not yet available.

“The expansion of our Singapore integrated resort is a key component of our company’s strategic growth plan and also reflects the strong tourism and business potential in Singapore,” Rob Goldstein, the company’s president and chief operating officer, said in prepared comments included in the release. “The additional hotel rooms are extremely important to us in addressing the demand created by our leisure and business tourists and our premium gaming customers,” he added.

In a press release also on Wednesday, Genting Singapore said that “Resorts World Sentosa 2.0 will see an expansion of about 50 percent new gross floor area, adding over 164,000 square metres of new and exciting attractions, entertainment and lifestyle offerings.” The statement added that the expansion would be “delivered in phases with new experiences opening every year from 2020 to a projected completion around 2025.”

“This major re-investment and expansion here in Singapore underlines our belief in the business model and the future opportunities that lie ahead when we complete the development,” Tan Hee Teck, chief executive of Resorts World Sentosa, said in a prepared statement included in the release.