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Dizzy new world of Singapore high rollersThey show up with US$30m in hand, play for stakes never seen beforeBy GRACE LEONG22 October 2011When whales come to Singapore, they make a big splash.Arriving mostly from the Asian region, they are surfacing at Marina Bay Sands with up to US$30 million in hand, ready to roll.That’s the kind of action even Las Vegas - the byword for gambling up until recent years - has rarely seen. Small wonder that bets are on Singapore’s gaming duopoly, barely 20 months old, to surpass gaming revenues from the Las Vegas Strip as early as this year.‘There are people who show up with US$10 million, US$20 million, US$30 million, and no one knows who they are until they say: ‘I have US$20 million. Can you help me get started on gambling?’’ said Rob Goldstein, LVS’s president of global gaming operations at a recent gaming investment forum in Las Vegas. ‘That’s the market in Singapore. We’re unearthing opportunities that hitherto we never saw.’Even with the absence of licensed junket operators, the size and volume of direct VIP play in Singapore has far exceeded industry expectations - including Mr. Goldstein’s, a gaming business veteran with experience in the Caribbean, Atlantic City and Las Vegas.‘On credit issuance, it’s a whole new world out there,’ he said. ‘I don’t have that much experience with direct credit (funds from VIP players to the casino) of US$10 million to US$20 million a day. It’s new to all of us.’Under existing gaming laws, there are no restrictions on how much funds gamblers can bring into the casinos in Singapore and how they bring it into the casinos.Typically, many VIP high rollers don’t physically bring in such massive sums to the casino, preferring instead to wire a smaller amount to their account at the casino, and getting casino credit.‘We have days on our numbers in Singapore where we have 10-20 people winning or losing US$1 million a day. It’s a pretty extraordinary business,’ Mr. Goldstein said.Compared with Singapore, Las Vegas doesn’t see that level of frequency and size of direct VIP play as there just aren’t many people gambling US$1 million a day in Las Vegas.In Macau, the volume of direct play is dwarfed by the scale of funding brought by junket operators.Analysts cite Singapore’s low gaming tax rate compared with Macau’s, which enables Singapore casinos to pay higher commissions to attract direct VIP players.‘The tax structure is designed to bring in foreign money. The tax on VIP business is about 11.5 per cent compared with a 22 per cent tax on mass gaming,’ HSBC analyst Sean Monaghan said.Singapore is also unique in that it has the ability to attract a broader array of high net worth people, many of whom are permanent residents (PRs) with means and who help fuel a good chunk of the local VIP business growth, he said.‘A disproportionate number of high net worth people like visiting Singapore because it’s a safe place, family-friendly and business-friendly. In Macau, over 90 per cent of the wealth comes from China and North Asia. But in Singapore, most of the wealth comes from Southeast Asia, and some from North and South Asia. It’s far more diversified,’ Mr. Monaghan said.Case in point, Mr. Goldstein said he recently met a ‘very, very big businessman’ from Vietnam who attracted attention at the MBS casino because he was betting house limits. ‘I asked him: ‘How did you find us?’ He said he has a vacation home in Singapore and wants to try out gambling here. I asked him why he doesn’t go to Macau. He said he feels comfortable in Singapore.’Cannibalisation of business between the Macau and Singapore gaming markets hasn’t been an issue so far, Mr. Goldstein said.
‘Singapore is a spectacular market at all levels. The mainland Chinese, Japanese, Singaporeans, Indonesians and Malaysians are all our customers here . . .One reason credit here has been a good experience for us is that we’re dealing with people who are very wealthy, and very liquid, and money is available to them in terms of the banks here,’ he said.‘The private wealth business is wildly positive for us as is the desirability of this property (MBS). There are people who just won’t go to Macau. They prefer Singapore because of the easy access, great airport, retail, tourism market. It’s a privileged place to do business,’ he said.
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