Tuesday, May 11, 2010

Singapore's Gamble

Over the last month, Singapore has gone from having no casinos to being home to two of the most expensive casinos ever built - Resorts World Sentosa and Marina Bay Sands. While both casinos have anecdotally been successes since they opened, attracting thousands of visitors, it will be months, if not years, before it can be determined whether they have indeed been successful. Of course, the casinos are not only gambles for their owners but also for the Singapore government that has bet that they will go a long way to increasing Singapore's reputation as a tourism destination.

It has widely been documented that Las Vegas Sands, the owners of the Marina Bay Sands expect to recover their investment in about 5 years, in spite of having gone more than $2 USD billion over budget. Las Vegas Sands' expectations, coupled with Asia's seemingly insatiable appetite for gambling (in terms of revenue, Macau has overtaken Las Vegas as the world's premier gambling destination and industry analysts state that there is room for the equivalent of 5 Las Vegas' in Asia) surely means that both casinos should stand every chance of proving to be financial successes.

While the casinos will surely help to increase Singapore's tourist numbers, what is less clear is how Singaporean society at large will cope the with the presence of the two massive Casinos. Singapore's traditionally conservative society and government has long made its anti-gambling posture clear. In an effort to consolidate its traditional posture with its recent pro-gambling actions, the Singapore government has established a few precautionary social policies: a $100 SGD entrance fee for locals, a ban on bankrupts gambling and the establishment of a free telephone line for families to call to get their relatives (that may presumably be addicted to gambling) banned from the casinos' premises. It is obvious that the government is treading a fine line and what the future holds in terms of how the citizenry will react to world-class gambling facilities on its doorstep is far from certain. Furthermore, the demand for thousands of low-skilled workers to man the casino floors and clean guest rooms will surely translate into the arrival of thousands of foreign workers in a country in which immigration is a touchy issue.

With the social impact of the presence of the casinos in mind, it seems like their eventual success rests squarely on the government's ability to grapple with these issues and ensuring that social costs do not undermine the benefits of the surge of tourism that is expected.

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