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An ace to trump
Macau's
By Lam Leng Kuan
HONG KONG - In the month since
the government in Singapore announced that it
had invited some 12 casino operators to tender for
the construction of a Las Vegas-style casino
and entertainment resort in the city-state,
neighbors such as Malaysia, Nepal and Indonesia, as well
as both South and North Korea, have jumped on the
gaming bandwagon, pushing Macau, Asia's current
casino haven, to the frontline against mounting
competition.
The Singaporean
government's decision to give the green light to casino
bidders came on December 29 in an attempt to
compete with the lucrative gambling market in
Macau and other regions considering gambling in
Southeast Asia. The city-state is considering its
first-ever legalized casino as part of an
integrated resort complex that could include
hotels, a convention center, retail outlets,
dining, entertainment and theme attractions.
Investors have been invited to submit development
concepts by the end of February.
Aside
from Singapore, many other Asian countries -
including Malaysia, Indonesia, Nepal and South
Korea - are following in Macau's footsteps. Some
of them have already set up casinos or plan to.
That means Macau could soon face challenges in its
neighborhood. To cap it all, Beijing has pledged
to penalize those gambling party cadres and
governmental officials who contribute the most to
Macau's casino boom.
After Macau, in late 2001,
began to auction casino licenses to operators
from around the world eager for a share of
the only legal casino business within China's borders,
current Singaporean Prime Minister Lee Hsien
Loong, who was serving then as deputy prime minister
and minister or finance, also implied a possibility
of decriminalizing gambling. "The world
has changed, and we should consider opening casinos
to beckon more visitors. There're millions of
tourists outside," Lee said, expecting gambling to
spur tourism, create jobs, raise fiscal revenue and
bring new life to the island nation.
The
push to legalize gambling in Singapore has
continued over the past two years, when SARS
(severe acute respiratory syndrome) and bird flu
swept across most parts of Asia, and Singapore,
like many of its neighbors in the region, suffered
an economic slump, with tourism and related
service sectors bearing the brunt.
According to earlier reports, the
Singaporean government had singled out northern
Santosa Island for the pilot resort project that
would feature casino gaming, but said that no
proposal from bidders would be sanctioned unless
it was proved to promise substantial economic
benefits. To attract foreign investors to the
project, however, the government also said it
would offer a "low" tax rate of 15% on casino
revenue. Meanwhile, the authorities suggested
charging casino visitors from Singapore a
membership fee of US$61 per day or US$1,225 per
year, worrying that the ban removal might
encourage Singaporeans to become gambling addicts.
Included among the 12 casino magnates
invited to tender are Caesar's Entertainment Inc,
Las Vegas Sands Corp, MGM Mirage (also
headquartered in Las Vegas), and Sociedade de
Jogos de Macao (SJM). Singapore's plan to undo
the gaming ban has received a warm welcome among
them, despite sparking public debate in many
quarters in Singapore. Stanley Ho, Macau casino
tycoon and SJM chairman, immediately showed
interest in extending his business to Singapore.
His son Lawrence Ho is joining his Melco
International Development Ltd in cooperation with
Publishing and Broadcasting Ltd, Australia's
largest media group, to offer the Singapore
government a development proposal costing more
than US$192 million.
On January 13, Greek
Mythology Entertainment Group took the lead over
all Macau casinos when it unveiled its plan to bid
for the casino resort in Singapore. The proposal
outlined the company's preliminary development
ideas for the project, which includes a casino,
hotels, convention halls, shopping malls and other
leisure facilities, with total investments
estimated at about US$600 million to US$700 million,
according to Ng Man Sun, president of Greek
Mythology Casino. While the casino will be one of
the major attractions of the resort project, Sun
said the entire project will be a recreational and
business cluster. The casino president also
indicated the possibility of pumping investments
into American gambling centers in Las Vegas,
Nevada, and Atlantic City, New Jersey, in the
future.
The
Greek Mythology Casino, located inside Macau's
New Century Hotel, cost a gross investment of
more than $73 million and operates under a
concession arrangement with SJM. Since its inception
on December 23, it has recorded average traffic
of some 30,000 visitors per day. Sun
controls 80% of the shares of Greek Mythology, and the
company reaps 40% of the casino's revenue; another
40% of which goes to the government and the
remaining 20% to SJM chairman Ho. In anticipation
of increasing visitors, the second phase of
the Greek Mythology Casino, with added space of
140,000 square feet (13,000 square meters), is to open its
doors before February 9, the Chinese Lunar New
Year. The extension will increase the total number
of gaming tables to 500, and will include six VIP
rooms and 100 slot machines.
On November 30, Greek Mythology entered into
an agreement with Hong Kong-listed A-Max
Holdings Limited, pursuant to which A-Max paid a whopping
US$78 million for a 7.4% stake in the second phase
of the former, with a maximum equity interest of
approximately 14%. But recently the A-Max shares
have recorded a sharp decline, and Greek Mythology
president Sun responded that individual stock
buyers should realize the risk and have a better
knowledge of listed companies.
Meanwhile,
the gaming ban put in place by former Singaporean
prime minister Lee Kuan Yew, the father of Lee
Hsien Loong, has kindled a boiling controversy.
Some oppose the ban, arguing that casinos create
colossal gambling revenue and increase employment.
Others favor it, citing the probable social
problems - such as mafia crimes, money laundering
and so on - that could arise from legalized
gambling. But despite the government's decision to
open tender, gambling, in effect, has long
prevailed in the city-state, in the form of
lottery tickets and slot machines offered by some
VIP clubs. Singaporeans also have not been immune
to gambling, with many flocking to Malaysia on
holidays to wallow in the Casino de Genting.
(Copyright 2005 Asia Times Online Ltd. All
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