Genting and Sands pledge US$6.7 bil for Singapore casinos

Singapore’s Marina Bay. (Bloomberg pic)

SINGAPORE: Las Vegas Sands and Genting Singapore pledged to invest S$9 billion (US$6.7 billion) in tourist attractions in Singapore, which extended their exclusive licenses to operate casinos until 2030.

The moves come with Singapore attracting record tourist numbers even as its pace of hotel expansion slows.

In part boosted by the hit movie “Crazy Rich Asians” and the hosting of a summit between US President Donald Trump and North Korean leader Kim Jong Un, visitor arrivals in the city-state last year jumped 6.2% to 18.5 million, data from the Singapore Tourism Board show. Receipts increased 1% to S$27.1 billion.

Las Vegas Sands’ Singapore venture will build a fourth tower to its Marina Bay Sands resort and construct a new entertainment arena, while Genting’s Resorts World Sentosa will build two new theme zones and enlarge its aquarium, according to a statement from the Ministry of Trade and Industry and other government agencies.

The additional investments by both are almost two-thirds of their initial investment in 2006 of about S$15 billion, the ministry said.

Genting Singapore said in a separate statement it will commit to spend S$4.5 billion to expand Resorts World Sentosa over five years.

The company’s shares fell as much as 7.5%, the most since August, in early Singapore trading Thursday.

Genting was downgraded by analysts including JPMorgan Chase DS Kim, who said the expansion plans come with “a hefty price tag” and any meaningful earnings boost is “probably too far off even for long-term investors.”

Singapore also said it plans to increase tax rates on gross gaming revenue at the end of the current moratorium in February 2022 by introducing a tiered casino tax structure.

The city-state will also boost casino entry prices for Singapore citizens and permanent residents to S$150 a visit from S$100.

Despite Singapore’s rise in tourism, an average of only 764 extra rooms a year will be completed from 2018 to 2022, down from 3,357 annually between 2014 and 2017, according to Cushman & Wakefield.

Las Vegas Sands recently settled a dispute elsewhere in Asia, reaching a confidential pact with a Hong Kong businessman who claimed he was entitled to as much as $328 million for helping the casino operator secure a license in Macau.

The company is contending with health woes for billionaire founder Sheldon Adelson, whose work schedule has been curtailed by cancer treatments.