Casino hopefuls spend millions just to bid - Saturday 12th of March 2005
EVEN before the first dice are thrown, the bidders for the proposed Singapore casino could have spent about $20 million on their proposals
One local bidder is said to have spent more than US$1 million (about $1.63 million) on his proposal, say sources.
This includes not only his time, but those of architects, draughtsmen and the scale models that were submitted with the bid.
'Being serious bidders, we have to hire architects, draughtsmen, experts and others to stand out from the crowd. These things don't come cheap. Just the scale model will set you back a couple of hundred thousand grand,' said a local bidder.
Other bidders are also likely to have spent around that amount each, added the sources.
With 19 bids said to have been submitted at the end of last month, the money spent so far could add up to $20 million.
'And this is money that has to be spent regardless of whether we win or not. If we are unsuccessful, the money just goes,' added the local bidder.
Among the bidders are some of the world's biggest casino and resort operators.
The Government will decide on 18 Apr whether to allow an integrated resort that includes a casino on either Marina Bay or Sentosa Island.
There is some speculation that it might even approve casinos on both sites.
Most operators appear to prefer the Marina site as its mainland location makes access much easier.
Among those believed to have submitted proposals are:
There is also talk that Malaysian tycoon Quek Leng Chan has put in a bid for the Marina parcel and that Metro Holdings chief Jopie Ong submitted a bid with hotelier Ong Beng Seng.
The two unrelated Ongs once jointly owned a casino in Queensland.
The Metro boss also used to run casino cruise ships through the Metro subsidiary, Sun Cruises, from Singapore. The cruise ship venture ceased after its flagship, Sun Vista, sank in the Malacca Straits, 50 nautical miles south of Penang, in 1999.
Each of the bids is said to involve an investment of at least US$500 million with several bidders said to be willing to splurge up to US$2 billion for an integrated resort facility including hotels and conference halls.
This despite various restrictions, including an entry fee of $100 each time or $2,000 a year for Singaporeans. The casinos also have to ensure that at least half their income are derived from non-gaming operations.
Harrah's, now completing the purchase of Caesars Entertainment, has said that if it wins the bid, its Singapore venture will be its largest ever investment.
Its buyout of Caesars will make it the world's largest casino operator.
Its Singapore proposal is said to be worth some US$2 billion.
The Business Times reported that South Africa-based hotel and gaming company Peermont Global also submitted a bid and that it was looking at investing more than US$2 billion if its proposed plan is accepted.
That amount will be spent solely on the Marina site, which Peermont is looking at.
That these contenders are willing to spend such huge amounts points to the enormous returns that casino operators hope to realise.
American investment banking giant Merrill Lynch has estimated that a mega resort here will bring in $3.4 billion a year in revenue, add $1.4 billion to the Government's coffers in taxes annually, and provide an immediate stimulus for the construction and tourism sectors.
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