Tabcorp tipped for $5bn casino tango - Tuesday 12th of April 2005
TABCORP is expected to team up with Village Roadshow for the next round of proposals for Singapore's two casino and resort projects which could be valued at more than $5 billion.
The Melbourne-based gambling and casino operator is seen as one of the front-runners for a family-friendly concept for at least one of the casino projects which will include hotels and theme parks like Village Roadshow's Sea World on the Gold Coast, a popular destination for Singapore tourists.
Tabcorp and Kerry Packer's Publishing & Broadcasting Ltd were among some 14 groups that submitted a total of 19 different concept proposals earlier this year for integrated casino and leisure developments in Singapore.
Prime Minister Lee Hsien Loong this week surprised Singaporeans by announcing the city state would push ahead with not one casino, but two -- one on Sentosa Island and one in the Marina district -- ending a 40-year ban on the gambling venues.
Tabcorp submitted concepts for the two sites and the Singapore media this week named the company as one of three leading contenders for a $3 billion casino/resort on Sentosa which has been developed as a resort and water-sport area.
The Government is now expected to invite a number of those who have submitted concept proposals to go through to the next round over the next few months.
A final decision on the successful bidders will be made by the end of the year with work set to start early in 2006 for a 2009 opening.
The future of the PBL proposal, which was made in conjunction with Melco, a company connected with long-time Macau gambling tycoon Stanley Ho, is less clear.
The Packer proposal is believed to have included a design by architect I.M. Pei, famous for the Bank of China building in Hong Kong.
PBL chairman James Packer told the Singapore media this week that its joint venture proposal with Melco would be "a benchmark in Asia and the world for business and leisure tourism".
But local analysts have rated Tabcorp's chances much higher, privately questioning the Packer decision to submit a concept proposal in squeaky clean Singapore in connection with the colourful Ho family who have been running casinos in free-wheeling Macau for 30 years.
A Tabcorp spokesman said yesterday that the company was waiting to hear whether it would be invited into the next round of bidding by the Singapore Government. He would not comment on reports in Singapore that it would be teaming up with Village Roadshow for its proposals.
But expectations are that it will announce a deal with the leisure company in coming months if it is invited to submit a more detailed proposal.
The Singapore Government has been concerned to minimise the impact the social fallout from introducing casinos, stressing that the developments are "integrated resorts" which will attract more tourists and business travellers to the country and provide it with some high-profile, world-class signature attractions. Local citizens will have to pay around $100 a day or $2000 a year to be allowed to gamble at the casinos which cannot advertise locally. The casinos cannot occupy more than 5 per cent of the floor space of the two resorts.
Tabcorp owns and operates casinos in Sydney, Brisbane, the Gold Coast and Townsville. Teaming up with a proven leisure and theme park operator such as Village Roadshow would give its proposal a family-friendly appeal.
Tabcorp chief executive Matthew Slatter said this week's announcements was "an exciting step forward to develop Singapore as the entertainment capital of Asia and a leading global destination".
Reflecting the local concern about the introduction of casinos, he said the company was "confident that Singapore will develop a world-class system of regulation and support to ensure the casino operates within a strict regulatory framework".
With the Government this week finally giving the go-ahead for the introduction of casinos, the two projects are expected to be hotly contested by the world's casino operators, including most of the major players in Las Vegas.
While details of each concept proposal are still confidential, information about some has appeared in the Singapore media.
Malaysia's Genting International has submitted a proposal with Universal Parks & Resorts which is also listed as a hot contender for the Sentosa site. Kerzner International, which operates the Atlantis casino in the Bahamas, is also tipped for a good showing, having teamed up with Singapore's powerful CapitaLand.
CapitaLand has teamed up with MGM Mirage, which operates the Bellagio casino in Las Vegas, for its proposal for the Marina project while Harrah's has joined with Singapore's Keppel Land.
Other bidders include Wynn Resorts, which is building a new casino in Macau, and Las Vegas Sands which runs The Venetian.
Announcing the decision to go ahead with two casino developments this week, Mr Lee said Singapore could not afford to stand still and "become a backwater" against strong competition for the tourism and leisure market among its Asian neighbours.
Macau is pushing ahead with several major new casinos and set to cream in money from mainland Chinese while Hong Kong's Disneyland is set to open later this year.
Other Asian capitals such as Bangkok are believed to be looking at casino projects.
But there is still extreme sensitivity about the issue in Singapore with concerns expressed about the potential for problem gambling and casinos attracting criminal elements such as loan sharks.
Former prime minister Goh Chok Tong, an opponent of casinos, was overseas for the announcement, as were several other leading government members believed to have reservations about the decision.
Mr Lee said the Government had decided to go ahead with two proposals as they would complement each other and provide competition and critical mass to attract more tourist and business travellers.
Mr Lee's father, elder statesman Lee Kwan Yew, paved the way for the decision last week when he conceded that he should have been more open to the idea of a casino in Singapore in the past.
He also hinted that Singapore could be interested in hosting a Formula One racing event, saying he regretted the country had forgone the opportunity some years ago.
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