Las Vegas luxury casino opens in Singapore

[Bookmaker]

The 200-meter-tall, US$5.7 billion Marina Bay Sands, with its rooftop sky garden overlooking the glittering Singapore waterfront, is a breathtaking architectural work and a vision for the future of Asia's gaming industry. A big gamble.

Project developer Las Vegas Sands Corp. and its chairman Sheldon Adelson have created grand casino resorts in the past, but none of them can compete with Marina Bay Sands. By comparison, industry watchers and Adelson himself have compared it to iconic regional buildings such as the Sydney Opera House and Kuala Lumpur's Petronas Towers. Analysts say Marina Bay Sands, which opens on Tuesday, is expected to be the most profitable casino in the world.

The optimism underscores Asia's growing prominence in gaming at a time when prospects are limited in Las Vegas, Atlantic City and other U.S. markets. Marina Bay Sands is set to open on Tuesday and rival Steve Wynn's Encore at Wynn Macau opened last week, and both of the gaming industry's biggest rivals now rely on Asia for most of their revenue . Another company, MGM Mirage, decided last month to sell a stake in a casino in Atlantic City, New Jersey, in order to maintain its position in Macau. MGM Resorts has the smallest market share in Macau, but is desperately looking to expand.

After a string of delays, Marina Bay Sands will open only partially on Tuesday, with a larger official opening in June.

Still, Tuesday's opening marked a return to optimism about the global gaming industry after two years of pain. The opening of MGM Grand's new $8.5 billion CityCenter project in Las Vegas in December was less enthusiastic due to concerns it could steal business from other casinos. After Sands narrowly avoided filing for bankruptcy in 2008 and 2009, financing problems forced the company to suspend progress on many of its other projects and instead focus on Singapore.

While Las Vegas remains weak, the future looks bright for Macau -- the world's largest gaming market by revenue. In 2009, Macau gaming revenue was approximately US$14.9 billion, an increase of 9.6% from US$13.6 billion in 2008. Las Vegas gaming revenue was US$5.6 billion in 2009, a decrease of 9.4% from US$6.1 billion in 2008 .

Industry watchers and industry insiders are predicting a new golden age of gaming in the Asian market after Macau announced that January and March were the two highest-grossing months so far. "Asia is going to overwhelm other markets, and we're just getting started," said Bill Lerner, a gaming consultant with Las Vegas-based Union Gaming Group.

Ederson, who had earlier forecasted that Marina Bay Sands was on track to generate $1 billion in annual revenue, raised his forecast last week. "It's not just our hopes that have been adjusted, we think we're on track to exceed our own expectations," he said.

Singapore's success is not certain. The government, which has banned the gaming industry for decades, is still only cautiously allowing casinos to operate -- imposing hefty extra fees on Singaporeans and introducing mechanisms that allow Singaporeans to blacklist their own family members and even themselves. Dennis Farrell, a bond analyst at broker-dealer Wells Fargo Securities, said Singapore's income potential remains a big question for investors, and it's an untested market.

Under a government-mandated duopoly, Sands will share the Singapore market with Malaysia's Genting Group. Genting Group's Resorts World Sentosa opened on February 14 ahead of Marina Bay Sands.

The advantage of Marina Bay Sands is its prime location on the central coast of Singapore, and it is an engineering marvel: atop the project's three 55-storey towers, there is a 7,000-ton cantilevered sky garden "Sky Park".

Genting Group has not released official operating figures for Resorts World Sentosa for the first 10 weeks. However, on a recent Sunday, the blackjack, balaga and roulette games at Resorts World Sentosa were packed with gamblers, making it difficult to find empty seats. It is also difficult to find free slot machines.