5 billion reasons to like Singapore

Analysts believe Singapore's two casinos will produce gaming revenues of more than $5 billion in the island nation's first full year of legalized gambling.

That would exceed the combined annual take of the 41 casinos on the Strip.

That reason alone has investors embracing Las Vegas Sands Corp., which opened the Marina Bay Sands in April. The company and Malaysia-based Genting hold the only two gaming concessions in Singapore, with exclusivity expiring in 2019.

Singapore, which has more than 4.6 million residents, legalized gaming as way to boost tourism. The idea worked. Visitation is up more than 18 percent this year.

But the country's leaders didn't expect the popularity of gambling. The two casinos are attracting customers from throughout the region, including Indonesia, Malaysia, Australia, India and China.

Singapore is already drawing comparisons to Macau, where gaming revenues are more than $20 billion through November,
50 percent higher than a year ago.

Analysts say they wouldn't be surprised if after the two casinos top $5 billion in revenue, they reach $6 billion by 2012.

"Singapore is a deeper market than we had recently thought," said Macquarie Securities gaming analyst Chad Beynon, who recently spent a week traveling through Singapore and Macau.

"While we don't believe the market will ever evolve to a similar Macau junket model, we believe the properties will have the opportunity to tap into more direct high-end play in Southeast Asia," he said.

Gambling wasn't supposed to be the overwhelming focus of Singapore's two properties.

Genting's Resorts World Sentosa features a Universal Studios theme park. Marina Bay Sands has a 1.3 million-square-foot convention center, 1 million square feet of retail and the three-acre Sands SkyPark atop the hotel towers.

The government instituted a $100 casino entry fee on Singapore residents, but that hasn't slowed interest.

"We have become increasingly worried that the government could take further action to curb mass visitation, principally from Singapore and potentially even Malaysia," Beynon said.

Marina Bay Sands has slowly opened amenities over the year, including celebrity-chef-operated restaurants, an art museum and a theater for the Disney's "The Lion King."

Las Vegas Sands officials believe the nongaming offerings will be just as attractive as the 165,000 square-foot-casino, which covers less than 1 percent of building's total square footage.

Howard Stutz's Inside Gaming column appears Sundays. He can be reached at hstutz@reviewjournal.com or 702-477-3871. He blogs at lvrj.com/blogs/stutz.