Singapore is an island city-state located in the southeastern part of Asia. Its territory is comprised of a main island (the Singapore Island) and over 60 much smaller islets. Although the city-state spreads over a little less than 720 square kilometers of land, it is one of the world’s major transportation, commercial, and financial hubs.
For instance, Singapore has been ranked the “Easiest place to do business” by the World Bank since 2006. It has also been considered a top meeting and convention destination and one of the world’s largest exchange and financial centers for quite some time. The city-state has long been ranking quite high on key factors that determine the social progress of the countries around the globe. Health care, education, quality of life, and life expectancy are only several of those factors.
Last but not least and for the purposes of the article, it is important to mention that Singapore could boast of thriving casino industry with its two integrated resorts, which are among the most expensive gambling, hotel, and entertainment complexes in the world, if not the most expensive ones.
Generally speaking, the integrated resorts were first introduced by casino giant Las Vegas Sands back in the 1990s. The company used the term as a means to distinguish its gambling properties from the other located in Las Vegas, which was back then the largest and most profitable gambling hub. Gradually, the integrated resorts concept left the borders of the United States and such properties opened doors in Macau and later on in Singapore.
Although the Lion City, as it is often referred to, was not the first to host complexes of this kind, it changed the way they were perceived by tourists, gambling customers, industry experts, etc. It also could be said that the success Singapore’s two integrated resorts had was instrumental for the global popularization of those properties and resulted in other countries opting for them. Following the city-state’s lead, the Philippines launched three integrated resorts and two more are to open doors by the decade’s end. South Korea, Vietnam, and Japan are also among the Asian countries with particular interest in the properties.
Outside Asia, the United States and Australia have recently announced plans for the construction of multi-million-dollar complexes. Last but not least, the United Kingdom is about to have its first such property by the end of the year. But how and when did the integrated resorts boom start?
Singapore’s Casino Industry Legalization
Singapore legalized its casino industry in 2006, after a prolonged and unexpectedly contentious public discussions. Back then, lawmakers decided that the Lion City could support two gambling venues that also feature numerous accommodation, entertainment, dining, leisure, and other options that could allure both domestic and international customers.
It is also important to mention that Singapore’s government chose to refer to those complexes as integrated resorts in order to put an emphasize on the fact that the services offered at those would not be limited only to gambling.
Officials pointed out that that they had opted for the establishment of such properties as a means to draw the attention of more tourists and thus increase the number of visitor arrivals. In addition, Primer Minister Lee Hsien Loong said that they would like to turn Singapore in a lively and attractive place to reside and work in or just go to while on a vacation. In other words, lawmakers sought means to “have the X factor” in the Lion City, that thing that makes cities like New York, London, and Paris the vibrant places they have long been.
The legalization of casino gambling was only the first step in a long and painstaking process of establishing the two approved integrated resorts. Choosing their locations as well as the most suitable operators to build and run them were only two of the many aspects Singapore’s government had to take into consideration in order to create a well-functioning and profitable gambling industry and to prevent it form falling victim to illegal activities.
Licensing Process
It took more than four years for the Lion City to launch its integrated resorts. Those were subject to comprehensive preliminary research, strict bidding process, and detailed planning of the two projects before being materialized. It could be said that Singapore took a somewhat different approach to the way it selected the companies that would run the two expensive properties than it usually did. Instead of opting for operators that are in some ways linked to the government, officials chose ones with experience in the field that had proposed fresh and innovative ideas about the design and the operation of the future casino resorts.
Back then, gambling operators Harrah’s Entertainment and MGM Mirage were among the bidders for one of the gaming licenses and the site where Marina Bay Sands was built afterwards. Both companies, which were then among the biggest players on the Las Vegas’ casino scene, were to work in collaboration with companies linked to Singapore’s government. Kerzner International, which too proposed a joint project with government-linked business entity, was among the competitors for the Sentosa site.
Before the Singapore lawmakers distributed the two casino licenses to their eventual holders, analysts from government-linked DBS Bank predicted that at least one of the licensees would be related in any way to the city-state’s administration. And officials proved them wrong.
Gambling and hospitality giant Las Vegas Sands, headed by businessman Sheldon Adelson, won the first casino license and was given the green light to build what turned out to be the world’s most expensive casino resort at that time. The developer invested about $5.7 billion in the construction of the property.
During the selection process, Singapore’s officials pointed out that they would look for offers that include convention centers in order for the city-state to further establish itself as a perfect place for holding large conferences and other official public gatherings. Being among the leaders in the convention business at that time, Las Vegas Sands was considered the best candidate for that purpose.
Malaysian conglomerate Genting Group was the preferred applicant for the Sentosa site, which has long been considered to be among Singapore’s top tourist destinations. Officials sought an operator that would offer unique attractions and atmosphere that no other property of this kind has ever done. Genting had partnered with Universal Studios for a one-of-a-kind theme park that was to be featured at the integrated resort, provided that the operator had been granted the necessary license. Many believe that the partnership was instrumental in lawmakers’ choice to approve the whole project. The construction of Resorts World Sentosa, as Singapore’s other integrated resort was called, cost just a little less than $5 billion.
Important Requirements
All applicants for the two casino licenses had to meet a number of requirements in order to be approved by the Singapore government. The city-state’s officials were particularly strict about what each of the two integrated resorts should and should not feature, how they would look, and how they would be managed once operational.
As mentioned above, the Marina Bay venue was required to offer visitors a top-class convention facility and the Sentosa one was expected to feature a unique theme park. Here it is important to note that the locations of the two integrated resorts were selected by the government and they were not to be subjected to further negotiations. Their sizes too were predetermined and the winning operators were expected to follow the requirements introduced by officials.
What is more, the two luxury complexes were to focus not only on their gambling customers but also on other types of visitors. This is why they were to feature a wide range of entertainment, leisure, hospitality, food and beverage, and other services that would attract the attention of both wealthy and mass market customers.
Taxation and Restrictions
Both Singapore’s integrated resorts were launched in 2010. Once operational, they had to follow certain regulations imposed by the government regarding taxation and other important matters. For instance, officials introduced a two-tier tax on revenue from gambling operations. They imposed a 12% one on proceeds from high rollers and a 22% one on winnings from mass market players as a means to encourage operators to make their complexes more alluring to well-to-do gambling customers, particularly ones from the Asia-Pacific region.
When a given jurisdiction legalizes its casino industry, there are imminently concerns that this might have a particularly negative effect on its residents and more people might show symptoms of problem gambling behavior. Singapore regulators paid special attention to this matter as well. In order to discourage local players from frequenting the two casinos, the government introduced a casino entry fee for residents of the city-state. Locals were to pay S$100 ($79) per each visit to any of the two venues or an annual fee of S$2,000 (once again per each of the two venues).
Last but not least, there were certain restrictions related to the operation of junket promoters within Singapore’s borders. Generally speaking, junket companies aim at attracting Asian high rollers at the integrated resorts by granting them exclusive offers. For instance, Macau, which is currently the world’s biggest gambling hub, relies heavily on promoters of this kind. However, Singapore decided not to opt for such services or at least not as much as Macau.
The Lion City approved the operations of two Malaysian junket operators. Gaming experts considered this a bit of a contradiction. Singapore pointed out that it wanted to allure more high rollers, yet it banned the companies that would most certainly bring such customers from operating on its territory. In addition, analysts claimed this in a way slowed down the growth of the city-state’s casino industry.
Singapore’s two casinos posted increase in their gaming revenue for the first two years of operations. However, over the next two years, proceeds from gambling services dropped and analysts expect the downtrend to continue due to competition coming from new integrated resorts in the Asia-Pacific region.
Despite this negative prognosis, it could be said that the luxury properties proved to be a success or at least at the very beginning of their operations. Singapore had its first integrated resort – Resorts World Sentosa – launched in the beginning of 2010. A few months later, Marina Bay Sands, the world’s most expensive casino resort at that time, also debuted. Here is a bit more information about the two venues and what they offer.
Resorts World Sentosa
The $4.6-billion integrated resort spreads over 49 hectares of land. As already mentioned, the property was developed and is now operated by Malaysian conglomerate Genting Group. As for its design, it was done by popular American architect Michael Graves.
The resort features five hotels, with a Hard Rock, Crockfords, Equarius ones being among those. In addition, there is the more recently launched Genting Hotel Jurong, located not far from Resorts World Sentosa itself. All six hotels offer six different teams and a total of 1,500 luxury rooms that are designed to suit the taste of both leisure and business visitors.
As for the casino, it occupies a 161,500-square-foot site and features over 500 gaming tables, with roulette, baccarat, progressive Texas Hold’em poker, Tai Sai, etc. being among the games offered, as well as more than 2,400 electronic table games and slot machines.
The integrated resort also offers its visitors a wide range of dining options, with traditional Asian as well as Western cuisine being included in the menus. Convention facilities, retail space, and a number of entertainment options are also among those featured at the multi-purpose complex managed by Genting.
Last but not least, Resorts Genting Sentosa accommodates Asia’s first Universal Studios theme park offering a variety of attractions based on popular television series and movies produced by the popular film studio.
Marina Bay Sands
Since its launch, Marina Bay Sands turned into Singapore’s most popular landmark due to its unique design. Popular architecture firm Safdie Architecture was in charge of the resort’s “appearance.” It features three 57-story towers connected at their tops by a large SkyPark, which itself is among the most fascinating attractions at the property.
Here it is important to mention that the complex was the most expensive on of its kind at the time. Its construction cost a total of $5.7 billion. What is more, Marina Bay Sands features the most expensive standalone casino in the world. The gambling venue spreads over 161,459 square feet and offers more than 2,300 slot machines and electronic table games. It also has a number of gaming tables, with popular table games such as baccarat and roulette as well as less traditional ones being offered.
Marina Bay Sands also features a 2,560-room luxury hotel, numerous food and beverage options, a 800,000-square-foot shopping mall, known as The Shoppes at Marina Bay Sands, as well as a number of other entertainment and leisure options.
Last but not least, the 1,300,000-square-foot convention and exhibition center is among the most important features at the expensive casino resort. It can accommodate up to 45,000 people and allows for a number of different public events to be held.
The integrated resort has gradually turned into an epitome of luxury, style, and wide variety of options for its visitors and guests. Not to mention that it is among the world’s most profitable venues of this kind, if not the most profitable one.
Conclusion
One thing could be said for sure, Singapore changed the way the integrated resorts are perceived and contributed to their popularization more than any other jurisdiction has ever done. What is more, officials clearly managed to create a well-functioning and strictly regulated industry and to minimize the risks of arising social ills as much as possible. Not to mention that the candidates for the two casino licenses had to go through a thorough bidding process in order for the government to choose the ones that had proposed the best possible projects.
To sum up, it could be said that it is Singapore’s maturity in the selection process and its determination to offer visitors the most innovative gambling and entertainment complexes that other countries in the region are now trying to emulate and convert into their winning formula for a profitable casino industry.
