PREVIEW-Sand’s puts $5.5 bln bet on Singapore and Asia

* Marina Bay Sands: World’s No.2 most expensive casino

* To generate $1 bln annual profit for Las Vegas Sands

* Seen taking over U.S. revenues by next year

* Features 7,000-ton, 200-metre cantilevered sky garden

* Could steal business from Macau, Malaysia, Australia

By Kevin Lim

SINGAPORE, April 26 (BestGrowthStock) – Las Vegas Sands (LVS.N: ),
the world’s most valuable gaming company, will open the doors
to its multi-billion-dollar Singapore casino on Tuesday, the
latest entrant in the fight for Asia’s gambling dollar.

The $5.5 billion Marina Bay Sands, the world’s No.2 most
expensive casino after MGM Mirage’s (MGM.N: ) CityCenter in Las
Vegas, is expected to generate as much $1 billion in annual
profit and surpass its U.S. counterparts in churning out
revenue for Las Vegas Sands by next year.

“Gaming penetration in Southeast Asia is extremely low, and
local population demographics support an extremely high
propensity to game,” said Morgan Stanley analyst Mark Strawn.

Singapore legalised casino gaming in 2005 but not all
Singaporeans were happy with the decision, fearing the casinos
would attract crime and lead to problem gambling among it
citizens.

The city state’s gaming rival, the former Portuguese
enclave of Macau, crammed with over 30 casinos and the only
place in China where casino gambling is legal, has already
eclipsed gambling revenues seen in casino capital Las Vegas.

Asia’s emergence as global casino centre comes as gaming
revenues in Las Vegas, Atlantic City and other U.S. centres
decline or show little growth, hit by the poor economic
climate.

Last week, U.S. gaming tycoon Steve Wynn said, after the
opening of the $600 million Encore in Macau, that he might
shift Wynn Resorts’ headquarters from Las Vegas to Macau. He
said Wynn Macau (1128.HK: ) was planning its first mega casino
resort in Macau’s Cotai strip. [ID:nTOE63K03Y]

Singapore, with its two mega casinos, is unlikely to
overtake Macau but may steal some “high-rollers” from China as
operators shift premium business to the city-state where they
face an effective tax rate of 12 percent compared with about 39
percent in the Chinese territory. [ID:nSP474941]

Genting Singapore (GENS.SI: ) opened the other casino in the
city state’s Sentosa island in February this year.

Neighbouring Malaysia’s sole casino, run by Genting
Singapore’s parent Genting Bhd (GENT.KL: ), may also lose
business to Singapore’s newer and swankier casinos.

Marina Bay Sands has teamed up with coach operators to
offer 130 daily trips from various Malaysian cities to its
doorsteps.

“There is going to a negative impact,” said Neo Teng Hwee,
head of portfolio management at Bank Julius Baer in Singapore.
“Malaysians residing in the southern parts and the more
well-heeled will be attracted to the better infrastructure in
Singapore.”
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^ For a FACTBOX listing the world’s most expensive casinos,
please click on: [ID:nSGE63M0F8]
Graphic on Macau casinos: http://link.reuters.com/gux68j
Graphic on gambling revenues: http://link.reuters.com/hux68j
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^

NECESSARY EVIL

Marina Bay Sands opening, by billionaire CEO and main
shareholder, Sheldon Adelson, could also hurt Genting
Singapore’s S$6.6 billion ($4.82 billion) Resorts World at
Sentosa.

“When you walk through Marina Bay Sands, you’ll notice a
significant quality difference from the finishing right down to
the air quality,” said Sean Monaghan, managing director of AG
Leisure Partners.

“Everyone prefers better quality over less quality. There
will be a shift of people and it will be noticeable,” said
Monaghan, a former casino analyst at Merrill Lynch.

Marina Bay Sands, when completed, will have 2,600 hotel
rooms, convention facilities for up to 45,000 delegates,
restaurants run by celebrity chefs and an eye-catching
cantilevered, 200-metre-high floating garden perched on top of
three hotel towers.

Las Vegas Sands originally planned to opened the Singapore
casino before Christmas 2009, and needs the facility to be up
and running before an international convention of lawyers next
week.

Singapore legalised casino gaming in 2005 and said it will
grant licenses for two giant casinos to diversify its economy.

Economists said the Sands and Genting casinos will create
tens of thousands of jobs in the city-state of 5 million people
and boost the GDP growth rate by up to 1 percentage point.

But not all Singaporeans are happy with the advent of
casinos, fearing they would attract criminal activity such as
money-lending and prostitution.

Eugene Tan, an assistant professor of law at Singapore
Management University, said while the government had introduced
measures to address problem gambling and combat casino-related
crime, the problems could not be eliminated entirely.

“If Singaporeans become conditioned to gambling as a
necessary evil, then we may well be on the slippery slope.”

Stock Basics

(Editing by Valerie Lee)

PREVIEW-Sand’s puts $5.5 bln bet on Singapore and Asia