Singapore Casinos Face Competition
Singapore’s gaming proceeds from its two casinos might outpace the Las Vegas Strip casinos in terms of revenue within the next two years. However, experts believe that these newcomers might face some stern competition from other major players within the region.
Gaming proceeds from Singapore increased to approximately US$4 billion (S$5.07 billion) in 2010 and will in all likelihood hit the US$5 billion in the next year or two, according to analysts. A total of US$6 billion in revenue by casinos situated on the Las Vegas was yielded last year.
One of the main reasons why Asian casinos are experiencing such a surge in its profits is because of the budding wealth of the Asian middle-class. Some market analysts even predict a top-line growth of 25 per cent in Singapore before this year is out. On the opposite of end of the spectrum are the U.S casinos where growth is anticipated to be much slower.
As a result of the successful opening of Singapore’s casinos, developers are now focusing on other Asian markets such as Vietnam, Japan and Taiwan.
“For the time being, Singapore is hailed as the new kid on the block, because of its meteoric rise it might face severe competition from neighbouring countries. However, Asia is large enough and in all probability will be able to accommodate additional casino complexes shared by many players,” said Irvin Seah, economist at DBS Group Research.
Seah also mentioned the potential for this industry in this area is “remarkable” since the middle class is now becoming richer and a large portion of their extra cash is now being spent at casinos.
Credit rating agency Fitch reported, Singapore and possibly further down the line Vietnam may catch the attention of Macau operators’ in order to further grow their business market mix. Fitch was specifically referring to the bustling mega casino complexes such as The Venetian and the Galaxy Macau which has been targeting the mass market.
As of 2003, Vietnam permitted small-scale gambling at selective luxury resorts, however it is also aiming to expand is gambling market by means of developing new Las Vegas-style casino resorts as part of its economic development initiative.
The casino resort presently is still in its infancy stages will be MGM Grand-branded and will open in 2013. Genting Malaysia and a capital partner plans to develop another resort with a casino component in Vietnam.
Fitch sees these Vietnamese resorts as an added advantage in attracting Chinese patrons; due to their closer proximity relative to Singapore.
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