Singapore Likely To OK Casino, May Issue 2 Licenses - Tuesday 12th of April 2005
Singapore will likely lift a decades-old ban on casinos next week, arguing that economic benefits outweigh the social costs of expanding legalized gambling in Southeast Asia's most prosperous country.
A divided cabinet has already made a decision, which will be announced in Parliament Monday, local media Wednesday quoted Senior Minister Goh Chok Tong as saying. If approved, a casino could rise from the ground in less than three years. Nineteen of the world's top gaming companies have made proposals to build, own and operate a casino resort in Singapore.
It's not only the cabinet that appears divided on what for months has been the most hotly debated policy decision in recent memory.
Opinion polls, hundreds of letters to local newspapers, Web site discussion groups and "Casi-NO" bumper stickers show Singaporeans are split down the middle, with many concerned that more organized gambling may increase crime and other social problems in one of Asia's safest cities.
While the cabinet made the final decision, the public debate underscores a new openness in decision-making that Prime Minister Lee Hsien Loong promised last year when he became the country's third leader.
But the casino could be a hot political issue when Lee seeks a fresh mandate - it could happen in the next few months - giving a small political opposition some ammunition against the People's Action Party, which has ruled Singapore uninterrupted since 1959.
In the end, the decision on a casino will be a choice between the economic pragmatism that has been key to Singapore's success, and the social consequences of such a business. Even the opponents to the casino acknowledge they may be on the losing side.
"I think the government will go ahead with the casino. We have to live with it but we have made our stance clear," said Arthur Tan, a founding member of Families Against the Casino Threat, or FACT, which organized an online petition signed by more than 30,000 Singaporeans opposed to more gambling here.
On its web site, FACT says it wants Singaporeans to "raise our families without the temptations and threats presented by a casino operation. When the fundamental values of growing a family are affected by economic expediency, we as a society, must have the maturity and the courage to say 'No.'"
Government To Give Green Light
UBS AG economist Sanjay Mathur is one of many economists who expect Singapore to give a green light to at least one casino.
"We think the Singapore government will approve the casino and may even allow for two casinos, near the business district," he said.
Tricia Song, a property analyst at G.K. Goh Securities, says a second casino would introduce competition and provide officials with benchmarks to regulate the industry.
Until Malaysia's Genting Bhd.'s (3182.KU) unveiled its proposal this week to include a Universal Studios theme park on Singapore's Sentosa island, the consensus was that the casino license would go to an established Las Vegas operator, in light of those companies' experience building and operating iconic structures with large, non-casino components.
Partnership with a large government-linked company like CapitaLand Ltd. (C31.SG) or Keppel Land Ltd. (K17.SG) is also deemed to be an advantage, as that would give authorities a bigger say in the running of the casino resort.
For example, Merrill Lynch & Co. has named as front-runners a joint bid by Harrah's Entertainment Inc. (HET) and KepLand; a joint effort by MGM Mirage (MGG) and CapitaLand; and bids by Las Vegas Sands Corp. (LVS) and Wynn Resorts Ltd. (WYNN).
UBS AG says CapitaLand stands a "good chance" of getting a license either through its tie-up with MGM or its partnership with Kerzner International Ltd. (KZL). Kerzner operates the Atlantis resort in the Bahamas.
All About The Economy
Singapore hopes that billions spent on casinos with theme parks and hotels will grow its S$184 billion (US$112 billion) domestic economy, attract high-spending tourists and create hundreds of jobs, particularly for workers lacking the high-tech skills sought elsewhere around the island.
Nomura Singapore Ltd. economist Tomo Kinoshita says a casino would likely boost Singapore's economy by 0.6% a year and create 13,000 jobs, a large number in a city-state the size of Austin, Texas, with just 4 million residents.
Casino operators promise that their creative ideas will help Singapore shed its less-than-dynamic image.
"Despite enjoying good quality hard amenities and cultural diversity, Singapore has historically been known to lack 'urban buzz,' Deutsche Bank economist Sanjeev Sanyal said in a recent report. "It is in this context that one must view the current debate over the proposal to build a casino in the city."
Not only that, but a casino at home will attract more than half of the S$1.2 billion Singaporeans now spend each year gambling in Las Vegas, Macau, Melbourne and Malaysia, Merrill Lynch & Co. (MER) analysts Sean Monaghan and Tony Raza wrote in a report.
Also, when fully operational, casinos could bring in more than S$1.5 billion in revenue, the same amount generated annually from lotteries, horse racing, soccer betting, slot machines and other gaming options already legally available here.
Proponents also say a casino-resort will attract some S$3 billion in investment. It could also help Singapore achieve its goal of doubling visitor arrivals to 17 million and tripling tourism spending to S$30 billion a year by 2015.
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