Inside Asian Gaming

INSIDE ASIAN GAMING | August 2009 Singapore and looking down will be a huge mass-market floor,” states the analysts’ report. “The Mass Rapid Transit (MRT or subway) will connect to this lower mass market floor. This is an important point because MBS will have two major entrance points into two mass-market casino floors—we know that in Macau, if there is only one entrance from the street, it becomes much harder to drive the traffic to the upper casino floor. “This means that the utilisation for both floors should be fairly high or at least even. But note that the MRT station will not be operational until 2012. “MBS expects that within [the] VIP [accommodation] there will be more rooms to account for the different player segmentation/ demographics. In Macau, nearly all the VIP players are from the mainland or Hong Kong (and for the record, I have never seen a Caucasian player in the VIP rooms in Macau in the past five years),” asserts Mr Fischer in the report. “Singapore will attract a wider variety of nationalities and MBS will have to cater for cultural differences and ensure each player is as comfortable as possible. Even in the mass market, the players will be more diverse. Ultimately the game of choice in Asia is baccarat and this game will dominate. But, with more customers from the Middle East, Indonesia, India, Eastern Europe, Australia, the UK etc, MBS will offer 19 types of games to start with (this compares to 11 in Macau). But the product mix will be adjusted as play dictates. “The entrance fee for locals is S$100 per 24-hour visit or an annual fee of S$2,000. We understand that both the one annual fee as well as [the] 24-hour visit fee only entitles the patron to [visit] property specific IRs and not to [sic] both. We understand that there will be two entrances, one for locals and one for foreigners. “Locals will be required to supply state-issued identification. We understand that all foreigners will not be asked for identification but be spot confirmed. One investor asked if IR management could offset entrance fees with comps (complimentary goods and services such as food vouchers) but management said this would not be possible because it conflicts with the intention of the regulations,” reports CLSA. “In Macau, the VIP business (which is around 70% of total gaming revenue) is divided between 75% junket and 25% direct (with player). MBS expects the split to be more like 50/50 or 40/60, as Singapore has an established banking system. “In Macau, one of the primary roles of junkets is facilitation, as there are limits in the amount of renminbi [Chinese currency] that can be brought into Macau (Rmb20,000 and US$5,000 per visit [from Mainland China]—which is less than the average bet in a [Macau] VIP room). “MBS expects Indonesia, Malaysia and Thailand will be a rich source of VIP players for Singapore given the close proximity [of those countries to Singapore]. Russia, Middle East and India will also be a new source of players for the Asian gaming markets, which previously have not found [sic] Macau to be a popular destination. “The higher mix of direct players bodes well for margins. (But please note that cash rebates are also provided to direct players). MBS expects that a reasonable junket commission rate is 1.25%, this is the rate which operators are seeking in Macau (rates currently vary from 1.25% to 1.4%). With only two players in the market, we believe a junket-commission battle is less likely, as seen in Macau recently which had a significant negative impact on margins,” says the report. SkyPark to become a major Singapore icon “The SkyPark will be longer than the Eiffel Tower and the cantilever (the part that sticks out over the edge) will be 60m. On top of the SkyPark, there will be two areas: one public and another private. We understand the majority of the space will be for private use, ie, for use by hotel guests. We believe one of the highlights will be the 150m infinity pool running along the front and looking over Marina Bay. The model and artist’s impression look impressive and we can’t wait to see the finished product. The public area will feature restaurants and bars. We believe the SkyPark will become a key attraction for tourists and locals.” Hotels: Three blocks, two styles “There are three hotel blocks with two styles of rooms. One looks back over the gardens and will have a balcony with garden planters. The other room will overlook the bay and Singapore city. We imagine that the former style will be more popular with tourists and the latter for business visitors,” say the survey authors. “The hotel atrium (looked very high but not sure of height in metres) runs between the three hotel blocks, being the widest at the hotel entrance at tower one and narrowing to tower two and then three. We understand there will be a major piece of artwork and also be 3-4m high pot plants, which are being specifically crafted overseas.” MICE focused “The MICE area is huge and will be a dominant feature of the IR. There are two other convention facilities in Singapore, but this will be larger and also directly connected to hotels, other facilities and entertainment options. There is capacity on the 4th floor ballroom for 6,000 persons for dinner. Levels two and three contain meeting facilities, with the exhibition space on the ground floor. The design and capacity is similar to Macau and Las Vegas. We believe Singapore might be able to attract more meetings versus product exhibitions. Singapore has missed the rotation of events in the past and will now be able to capture As in Macau and Las Vegas, MICE will be an important part of the equation for the Singapore resorts 14