Singapore Casinos Forecast to Generate $4BN in 2017February 3, 2017 12:23 pm
The wealthy island state of Singapore launched its casino industry back in 2010, but after an initial period in which revenues skyrocketed to US$6.077 billion in 2013, business has fallen steadily over the past few years. In 2015, revenues then dropped to $4.8 billion, followed to around $4 billion in 2016, but according to Fitch Ratings, Singapore’s gambling market appears to have stabilized, with the credit rating agency now predicting flat revenues of $4 billion in 2017.
Singapore’s two casino resorts, the Marina Bay Sands and Resorts World Sentosa, rely heavily on tourism for their profits as unlike their overseas visitors, the country’s laws require locals to pay a daily entrance fee of around US$70, or as high as $1,381 for a year’s pass.
The biggest source of the casinos’ revenues then comes from the lucrative VIP segment, but in recent times the sector has experienced a sharp contraction due to a range of factors, including China’s anti-corruption campaign, an ailing Chinese economy, in addition to increased competition from other casino markets. On the latter point, Fitch explained that this year Singapore will experience extra competition from Macau, the Philippines, and Australia, although the agency stated that “the probability of the Singapore government awarding additional gaming licences to be low, but acknowledge that it is a risk.”
Nevertheless, Fitch highlights in its forecast that the ‘Lion City’ has a number of positive factors that will help offset the concerns mentioned, including “a low gaming tax rate and a duopoly structure through 2017 and a well-developed transportation infrastructure with a central location in South-east Asia.”
As well as the gambling revenues they produce, Singapore’s two intergrated casinos resorts also help attract extra tourist to the country, and between 2009 and 2015 tourist receipts rose from US$8.8 billion to $15.16 billion. For the first half of 2016, tourism revenue subsequently reached $8.2 billion, an improvement of 12% compared to the same period of time last year.