Eight in Singapore casino race? - Tuesday 12th of April 2005

Singapore's announcement that it will build two casino resorts worth about US 3 billion combined has the city aflutter with talk of which gaming companies will come up with the most dazzling plans.

The 19 proposals from the world's top casino operators will be whittled down to a shortlist ahead of the December decision on the two to develop the projects at the city-state's downtown Marina Bay and its Sentosa resort island.

Eight of the bidders are widely seen to have the best odds to build what American investment bank Merrill Lynch says could be the world's most expensive casinos.

Las Vegas Sands, Wynn Resorts, MGM Mirage, Harrah's Entertainment, Kerzner International, Eight Wonder, TabCorp and Genting have emerged as top contenders to develop the projects.

The government's insistence that the two resorts offer wholesome family entertainment may favour bidders that can come up with popular attractions, said analysts.

Malaysia's Genting and partner Star Cruises have roped in Universal Studios, the theme parks and entertainment giant.

``This certainly tips the odds in their favour,'' said Christopher Khoo, managing director of tourism consultancy Master consult Services.

Analysts also said that two American gaming operators working with Singapore state-linked bidders - Harrah's with Keppel Land and MGM with CapitaLand - also stand a higher chance of being picked by a government keen to ensure control over the casinos.

``The government will most likely not give away a very profitable license without local beneficiaries,'' wrote DBS Vickers Securities analysts Timothy Wong and Kok Ken-ji in a recent research note.

Keppel Land and Harrah's, which is vying with MGM to be the world's largest casino operator, have secured architect Daniel Libeskind, who designed the ``Freedom Tower'' at New York's Ground Zero.

Meanwhile, 62 percent government-owned CapitaLand is working separately with MGM and Kerzner to bid for the projects, which are expected to open in 2009.

MGM runs top Las Vegas casinos such as the Bellagio and Luxor while Kerzner operates the world's most expensive hotel rooms at the Atlantis resort in the Bahamas.

They are up against formidable competition from the likes of Las Vegas Sands and industry visionary Steve Wynn.

Besides theme parks and museums, bidders are also drawing up plans for shopping plazas, convention halls and luxury hotels to meet government regulations that limit gaming revenues to 50 percent of turnover.

``I can't think of another gaming jurisdiction in the world with such a rule,'' said Harrah's senior vice president for business development Richard Mirman. ``The winning groups have to be creative enough to come up with other sources of revenues, and I think the Las Vegas players have a good sense of that.''

While most Las Vegas casinos generate about half of their earnings from gambling, Kerzner's Atlantis resort earns three-quarters of its revenues from non-gaming sources such as its restaurants and hotel rooms.

Keen to placate concerns that the casinos will lead to higher rates of crime and gambling addiction, each bidder's record of corporate integrity and social responsibility will also be deciding factors, said Jonathan Galaviz, a casino gaming and airlines consultant.

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