SiGMA Asia Insight: the rise of Marina Bay Sands and an overview of gaming in Singapore
In Singapore the general approach of the government is to prohibit gambling unless it is licensed or exempted, whether in physical or online form. Social gambling conducted in person within an individual’s home is the only exception to this ban as well as activity in an integrated resort of which there are two in Singapore. To qualify as social gambling, the activity must meet specific criteria, including being non-commercial and involving participants who know each other personally. Gambling in public places and online social gambling are illegal in Singapore, as they do not comply with the conditions for legal social gambling.
Integrated resorts have taken off with Marina Bay Sands leading the way
Marina Bay Sands (MBS), the iconic integrated resort in Singapore, has achieved yet another milestone in the second quarter of 2023, with its mass gaming revenue reaching a record high. According to the parent company Las Vegas Sands (LVS), MBS has not only surpassed pre-Covid-19 levels but also reported a remarkable 24 percent increase in adjusted property earnings before interest, taxes, depreciation, and amortization (EBITDA) for the three months ended 30 June, amounting to US$432 million. This notable achievement is 35.4 percent higher than the EBITDA reported in the same period of 2019, which stood at US$319 million.
Marina Bay Sands Singapore is the business to beat in Asia, The chart details net revenue breakdown of Sands properties in .Quarter 2. (Source: SiGMA)
The surge in net revenue is equally impressive, soaring by 36.2 percent to US$925 million compared to the same period in 2022, where it amounted to US$679 million. Undoubtedly, the primary driver behind this revenue growth remains the flourishing casino operations, which experienced a remarkable 29 percent increase and generated US$649 million.
Robert Goldstein, the chairman and chief executive of LVS, praised Marina Bay Sands’ outstanding performance for excelling across all segments, with the mass gaming revenue achieving unprecedented levels.
Further analyzing the revenue sources, room revenue witnessed a substantial surge of 85.7 percent amounting to US$104 million, while food and beverage revenue contributed significantly with an impressive 75 percent increase, reaching US$84 million. Additionally, conventions, retail and other revenue enjoyed a boost of 55 percent totaling US$31 million. The mall revenue remained relatively stable at US$57 million.
Marina Sands Singapore: Comparison of net revenue QoQ. (Source: SiGMA)
However, amidst these remarkable achievements, the Singapore integrated resort faced a number of challenges. Renovation disruptions impacted the margins and air travel from China has yet to recover to pre-pandemic levels, affecting the overall performance. Marina Sands Singapore completed the renovation of over 850 hotel rooms in April, as part of its substantial US$1 billion upgrading plan to meet the growing demand for luxury travel. The resort is now focusing on the next phase of renovations, which will concentrate on ultra-luxe suites.
Looking ahead, Marina Bay Sands Singapore has an ambitious expansion plan in the pipeline. In April 2024, the resort is set to begin work on a $4.5 billion project, including the addition of a 1,000-room hotel tower and a live entertainment arena with a seating capacity of 15,000, along with other state-of-the-art integrated casino facilities.
For the first six months of 2023, net revenue impressively surged by 64.5 percent compared to the previous year, amounting to US$1.8 billion from US$1.1 billion. Additionally, adjusted property Ebitda also exhibited remarkable growth, soaring by 87.7 percent YoY to US$826 million, up from US$440 million.
Despite the challenges faced, Marina Bay Sands has proven its resilience and continues to shine as a global icon in the gaming industry. Its remarkable growth and commitment to excellence signify a promising future for a growth in integrated resorts in Singapore.
Singapore’s game-changing laws
The Singapore Parliament passed the Gambling Control Act 2022 and the Gambling Regulatory Authority of Singapore Act 2022, effective from 1 August 2022,. The key changes included expanding the definitions of ‘gambling’ and ‘betting’ to cover new gambling products and introduce framework to include new regulation and observe social safeguards for responsible gaming. The Gambling Control Act (GCA) updated the definition of gambling terms to encompass emerging products. The last update of this Act was made in 1960. For instance, one example is the definition of ‘betting’ that now includes e-sports and sportsbetting, ensuring coverage of both existing and emerging gambling activities under the legislation.
Singapore has stringent casino safeguards in place. (Source: SiGMA)
Rapidly evolving gaming landscape in Singapore
A number of regimes were revised. The licence replaced previous gambling permits and exemption rules. It covers gambling products such as fruit machines in recreational clubs, Singapore Pools’ products and gambling among members at private establishments like recreational clubs and societies. Previously, private establishments could allow gambling without a licence as long as they met certain conditions, but now they must apply for a license and undergo thorough screening to qualify as a gambling operator in Singapore. The class-licensing regime was introduced to regulate lower-risk gambling products. It he covera products including various forms of games of chance and lotteries fundraiser lotteries, remote games of chance and incidental games of chance and lotteries. The GCA also allows for social gambling activities where participants play without any profit motive and where the winnings are distributed among the players without any form of commission or profit for the organizer.
Online gaming in Singapore
Online gambling is illegal in Singapore unless it is licensed or exempted, and the government takes strict measures to regulate this space. To combat illegal online gambling, the authorities block unauthorized websites, advertisements for such websites, and payment services linked to them. Singapore Pools is the only licensed provider allowed to offer legal online gambling services, making it the sole legal option for online betting in the country. Placing bets on third-party gambling websites is considered illegal and subject to enforcement action. As technology advances and connectivity increases, online casinos are gaining popularity in Singapore and are expected to continue growing in the future. Licensed and regulated operators offer a wide range of games with secure encryption technology. The industry’s expansion will likely be driven by factors like improved internet access and mobile device usage. While challenges such as regulation and addiction concerns exist, the bright future of online casino gaming is anticipated, offering players immersive experiences and convenience for their gambling activities.
