Singapore nationals and permanent residents might choose to steer away from the city-state’s two casinos due to the steep hike in the entry fee they are required to pay in order to be allowed access to the gaming facilities, according to a Thursday note from Maybank Investment Bank Bhd.
The government of Singapore approved this past April a 50% increase in the casino entry levy for nationals and permanent residents in a bid to discourage people showing patterns of problem gambling behavior from spending money at the city’s two casinos and as part of a policy to minimize “the social impact of problem gambling.”
Residents of the city were previously required to pay S$100 for a daily casino pass or a S$2,000 annual entry fee. The Singaporean government this spring introduced a 50% hike in both levies, thus raising them to S$150 and S$3,000, respectively. International casino visitors are not required to pay any entry fees in order to be able to gamble at the city’s two casinos.
Singapore legalized casino gambling in the mid-2000s and opened its two casino resorts – Marina Bay Sands and Resorts World Sentosa in 2010. The two properties are the only places where legal casino gambling can be conducted on the territory of the city.
Negative Impact on Mass Market
According to Maybank analyst Samuel Yin Shao Yang, the steep hike in the casino entry fees could prompt many nationals and permanent residents to “not renew their annual passes when they expire, exerting downside pressure on mass market gross gaming revenue.”
In a Thursday note, the analyst elaborated that “the mass market, in our view, is more important than the VIP one as its earnings before interest, taxation, depreciation and amortization margin is approximately 60% or two to three times that of VIP.”
Singapore is set to retain its casino duopoly system until at least 2030 after it extended the licenses of its two gaming properties earlier this year. In exchange, the operators of the two casino resorts agreed to each invest at least S$4.5 billion into expanding their existing operations.
Both Las Vegas Sands, operator of Marina Bay Sands, and Genting Group, operator of Resorts World Sentosa, have revealed plans for the addition of more attractions, more accommodation options, and other non-gambling amenities.
It emerged earlier this month that Singapore’s casino regulator – the Casino Regulatory Authority – slapped record fines on the city’s two casinos in the period between April 2018 and March 2019. The two properties received a collective S$746,700 in fines, with Resorts World Sentosa accounting for the bulk of the penalties.
The property was imposed a S$400,000 fine for failing to implement required internal controls. Another penalty of S$250,000 was slapped on the casino resort for failing to “comply with a direction that relates to the conduct, supervision or control of casino operations.” A third, final fine was imposed for failure to prevent five underage visitors from gambling on Resorts World Sentosa’s casino floor.
The Singapore casino watchdog fined Marina Bay Sands S$10,000 for failing to prevent one underage patron from gaining access to its casino floor and S$5,000 for failing to prevent one permanent resident from entering its gaming floor without paying the required entry levy.
Source: Singapore casino levy hike affects GGR outlook: analyst, GGRAsia.com
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