Singapore’s Casinos ready to Surpass Las Vegas Revenues

Singapore's Casinos Just Opened But They're Already Set To Knock Out Las Vegas

As reported in the Singapore Business Advisor by Vincent Fernando, CFA  on August 18th 2010

It's been barely five years since Singapore announced that it would
develop integrated casino resorts, yet already the island nation has
become a serious rival to Las Vegas, with just two major casinos.

Second quarter 2010 winnings put Singapore on track to have a $4
billion casino market on an annualized basis according to the Wall
Street Journal. That's just 20% shy of what Las Vegas is expected to do
this year, and even Las Vegas is impressed:

"It's just proof that if you build it they will come and in Singapore
they built two products that are worthy of that title," says Andy
Nazarechuk, Dean of University of Nevada Las Vegas' Singapore campus.

"Las Vegas will continue to attract (Asian visitors) but instead of the
player making two or three trips to Las Vegas in the year they may make
only one trip and the other two trips may be more closer regionally."

Even the bears expect a substantial market size for Singapore:

Las Vegas-based gambling consultancy Galaviz & Company has
relatively conservative forecasts for actual earnings in Singapore of
$3.5 billion in 2011 and projects the Las Vegas strip will earn $5.8
billion, a modest improvement on the $5.1 billion expected in 2010.

And the bulls think Singapore could torpedo Las Vegas's market position within just the next few years:

However, some among the investment community believe the Singapore
market will approach the sorts of numbers Galaviz expects for the Las
Vegas strip, which accounts for about half of the state of Nevada's
gaming revenue, by 2012.

Aaron Fischer of CLSA has some of the more bullish forecasts, expecting
the combined gaming revenues of both Singapore resorts to generate $5.1
billion in 2011, up from his previous estimate of $3.9 billion. Goldman
Sachs also expects the sector could bring in $5 billion in 2011.

Combined with the development
of Macau, it seems like Las Vegas's leadership position could be toast
over the next decade, even should the U.S. economy rebound well past its
past peak. Las Vegas probably needs to roll out some heavy branding
initiatives in Asia.

Note however that Steve Wynn, the founder of Wynn Casinos (WYNN), isn't
waiting for any magic from the Nevada government. He's planting himself
in Asia quite often, even if he's backed off from plans to move his HQ
to Asia, realizing that Wynn's long-term success revolves around being a
global company, like Hilton. It's not about being stuck in Las Vegas
alone.

Thus it's not the U.S. casinos that need to be worried about the rise
of Asian casino hubs per se, but more Nevada state. Nevada better move
fast, given the ambition and well organized
government efforts in Singapore and Macau. Heck, I've never been to
Vegas, but I'm already dying to jump into Singapore's new infinity
pool…
 

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