by Roberto Coloma, April 24, 2005
SINGAPORE (AFP) - Singapore's decision to bet in a big way on the casino industry despite robust domestic opposition underscores the irresistible economic potential of gaming in Asia, analysts say.
The city-state that cultivated a wholesome image and even banned the sale of chewing gum to keep its streets clean has given the go-ahead for two massive casino resorts.
Investors are expected to pour more than 3.0 billion US dollars into the "integrated resorts" that will blend hotel, convention, entertainment and gambling facilities into what Singapore hopes will become tourist magnets.
Singapore's elder statesman Lee Kuan Yew, who had banned casinos during his long rule and whose son Lee Hsien Loong is now prime minister, said he changed his mind after seeing the elaborate proposals of foreign casino giants.
The 81-year-old Lee, now a cabinet adviser, admitted that the social price of having casinos may be high but "the price of not doing so is even higher" because investors would only go to other countries.
"The global gaming industry sees Asia as a very strong strategic market development opportunity," Jonathan Galaviz, a Las Vegas-based analyst whose firm also advises casino industry players, told AFP.
Across the region, from Sydney to Sihanoukville, the Cambodian border town where Thais slip in to gamble, millions of dollars are wagered daily on everything from slot machines and cards to the savage sport of cock fighting.
Galaviz estimated that the gross gaming revenue in Asia could be worth 100 billion dollars a year -- of which only 20 percent is legal.
"The gap that exists between legal gross gaming revenue and illegal gross gaming revenue provides governments in Asia the opportunity to convert illegal gambling activity into legal gambling, while at the same time further developing their tourism sectors," he added.
As disposable incomes increase in Asia and travel intensifies with the mushrooming of budget airlines, demand for casino resorts is expected to rise accordingly.
Chinese tourists are already making their presence felt in Asia's casinos, and not only in Macau, the former Portuguese enclave that opened up its gaming industry to foreign investors after it reverted to Beijing's control.
In Macau, dubbed Asia's Las Vegas, the casino industry is providing public finances and jobs for a tiny city of 450,000 people that 40 years ago relied on textiles and fishing.
A 100,000-square-meter (about 1.1 million-square-foot) land reclamation project will eventually hold 20 casino-hotels employing some 120,000 people and providing 60,000 high-class hotel rooms.
Casino income reached almost 5.0 billion dollars last year. In 2004, some 16.6 million visitors flocked to Macau, 95 percent of them from China, Hong Kong and Taiwan, boosted by a relaxation of travel restrictions.
In the Philippines, casinos controlled by the state-owned Philippine Amusement and Gaming Corp. are the third largest source of government income, just behind taxes and customs collections.
The firm posted a gross income of 365 million dollars in 2003, of which almost half was net profit. A portion of the money goes to support charities and sports programs.
High rollers from South Korea, Japan, Taiwan and China play in Philippine casinos, mostly located in tourist areas.
Malaysia's sole casino operator Genting is a key blue chip on the Kuala Lumpur Stock Exchange and has diversified into plantations, paper, oil and gas and power. The group also runs the world's fourth largest cruise line, Star Cruises, which naturally has casinos on board.
Its crown jewel is a hilltop casino resort in central Pahang state, which attracted 17.4 million visitors last year. Of the total, 53 percent were Malaysians, 21 percent Singaporeans and 11 percent Chinese.
Last year, analysts said the casino was estimated to have contributed more than half of Genting's total turnover of 1.22 billion dollars.
Australia has 13 casinos which contributed 4.5 billion dollars to the economy in the 2002-03 financial year, or 0.8 percent of total gross domestic product, according to the Australian Casino Association.
It said the casinos attract about 41 million visitors a year, some 1.5 million of them overseas tourists. Sydney's Star City Casino said most of its overseas gamblers came from Hong Kong, China and Singapore.
Thailand has no legal casinos, although lotteries, cock fights, and underground gambling are popular.
Thailand has debated whether to legalize gambling, but so far has not taken any concrete steps in that direction.
In military-ruled Myanmar, casinos are illegal although gambling is popular and illegal casinos have reportedly sprung up in the border areas over which Yangon has little direct control.
Even before deciding to build casinos, Singapore was already a gambling-mad society. Punters bet an estimated 3.6 billion dollars a year on lottery, sports betting and horse racing operations controlled by the state.
Critics protested that unlike current forms of punting, 24-hour casinos would create more gambling addicts and foster prostitution, loan-sharking and other shady activities, which the government vows to curb.
Singapore says the casino resorts will help sustain its tourism industry in the long term by helping dispel its "unexciting" image.
A record 8.3 million people visited Singapore in 2004 -- almost double the local population -- and generated receipts of 5.8 billion dollars. It is hoping to attract 17 million arrivals and receipts of 18 billion dollars annually within a decade.