Singapore Backtracks on Genting Casino Partners

Plans for staid old Singapore to join the club of gaming destinations in East Asia proceed apace after the government dropped objections to the involvement of Stanley Ho in the Genting Highlands consortium that is constructing the property on Sentosa island-resort.

In April 2005, the city-state had announced the winning bidders for two casinos. The other victorious consortium was that led by the Las Vegas Sands. Both casinos are slated to open in 2010.

Two years to the date after the successful tender, Genting International Plc held the ground-breaking ceremony for the US$3.4 billion Resorts World Sentosa casino project. It was then that Minister for Trade and Industry Lim Hong Kiang announced the government had completed extensive "probity checks" and gave the consortium formal approval to commence construction. In admitting that the city-state had jurisdiction solely over who the partners and shareholders of the Genting consortium were (and could not validly be concerned with dealings in Macao decades ago), the government backtracked on an earlier demand for Genting to sever its ties with Mr. Ho.

At stake for the otherwise autocratic government is a continuing place on the Asian tourism map and a share of substantial gaming revenue in the region. The island-state has consistently pitched tourism, which accounts for some 5% of gross national product. In 2005, however, tourism arrivals grew by a relatively anemic 7% pace to reach 8.94 million visitors. Arrivals from mainland China, where casinos are banned, shrank by 2.5%.

Analysts assess gross gaming take in East Asia at perhaps $17 billion, counting illegal gambling and cruise ship casinos. Many Chinese, Taiwanese and Filipinos include gaming in their foreign trip itineraries. For such tourists, therefore, Singapore has to date been merely a lackluster stopover on the way to Genting, Macao or the Philippines. For there are no really compelling attractions in the city, except for a zoo.

Since 1959, when he became the city-state's first prime minister, Lee Kuan Yew clamped down on all forms of gambling. It seems that the Prime-Minister-for-life grew up cowed by a father who flew into rages whenever he lost at blackjack or mahjong. Twice during his long stay at the helm, he refused requests for casino permits.

Singapore ministers and parliament in general have always toed the party line, which was whatever Lee wanted it to be. The government can be draconian but also pragmatic, however. For instance, the authorities now sponsor socials among young singles and urge them to marry and have children as early as possible after having pitched contraception since the 1960s.

Similarly, the government relented and launched a state lottery in 1968 mainly because card-type gambling had simply gone underground and persisted in homes and "social clubs". In 1999, the authorities also threw up their hands and accommodated Singaporeans by accepting bets for soccer matches.

Lee Kuan Yew's son, Lee Hsien Loong, is prime minister now. On canvassing his advisers for ways to hasten recovery from recession, suggestions for resort casino complexes kept coming up. By 2005, the government was ready to hold tenders for casinos that had to have some other tourist come-on unrelated to gaming.

Some of the conditions proved a bit much. Tabcorp of Australia, for instance, refused to take on the cost of a resort complex where the casino building could occupy no more than 5.5 percent of the total land area. Wynn's gave up early so numerous were the conditions springing from Singapore's desire to somehow become as attractive as Paris or Rome.

In three years' time, if everything goes well, it is obviously hoped that the casinos will attract new visitors, give repeat tourists more things to do, stay a bit longer and of course leave behind more dollars. For the prospect of doubling tourist traffic by 2015 and taking in around $19 billion, the previously-puritanical government has apparently decided it is alright to partner with the likes of Stanley Ho.