It looks like bad news for two of the biggest casinos in the world right now, as Singapore revenues drop to their lowest amount in at least eighteen months for both the Las Vegas Sands Corp and Genting Singapore PLC. This comes right on the heels of a wave of factors, such as the slowing down of economic growth, tighter rules being held in the region, and a lesser amount of high rollers coming in from areas such as China as Macau continues to grow in popularity. It looks like the honeymoon period may finally be over for this region of the world.
“We have been waiting for the novelty factor of Singapore’s casinos to finally wear off, and that time may have finally come,” said Jonathan Galaviz, a Las Vegas-based tourism industry analyst who serves as the managing director of Galaviz & Co. “Gaming revenues are sometimes a leading indicator of overall macroeconomic activity in a region. This may be a sign of things to come economically for Southeast Asia.” Indeed, the government in Singapore are predicting a cooling off of the economy in general, with only a 1.5 per cent increase this year as oppose to 4.9 per cent last year. Casinos have been trying to bring in more customers to play slot machine games through discounts and free gifts, but unfortunately the industry regulator insists that visitors must pay $82 every single time they enter a casino, which is stifling the growth particularly amongst casual gamers or those who would not consider themselves to be high rollers.
“Singapore is strict on regulations, and recently they have been stricter on the local mass market,” said Hoe Lee Leng, a Kuala Lumpur-based analyst at RHB Capital Bhd. “As long as the economy is uncertain, that could affect your general VIP volumes.” It is clear that this is a Singaporean problem more than a global one, as the Marina Bay Sands was the only one of the seven Las Vegas Sands Corp properties to post a decline in the third quarter this year, a cause for much concern.