Singapore casinos brace for battle as VIP volumes fall

Sun Nov 9, 2014 4:30pm EST
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By Rachel Armstrong and Anshuman Daga

SINGAPORE (Reuters) - Singapore's two glitzy casinos are fighting for a shrinking pool of high rolling players as China's corruption crackdown and economic slowdown reduce the number of VIPs at their tables, and the battle is starting to turn ugly.

Gaming mogul Sheldon Adelson, whose Las Vegas Sands (LVS.N: Quote) runs the Marina Bay Sands resort, has accused rival Genting Singapore's (GENS.SI: Quote) Resorts World Sentosa of relying on overly generous incentives and credit to entice big money players.

"Maybe one day, they will get used to competing on the basis of a quality product, if they ever build one, and they won't have to buy the business," he said during his company's earnings call last month.

A Genting spokeswoman declined to comment on questions sent by Reuters, citing the company's quarterly results due on Tuesday, but President Tan Hee Teck had acknowledged the headwinds facing Singapore's casinos during its last earnings call in August.

"I suppose some operators may not want to admit it, but at least from our side, we believe that the situation will continue to be quite challenging at least for the next 6 to 12 months," Tan said.

Behind the spat is a fall in the number of the high rollers who have been crucial to the billions of dollars the two casinos have earned since opening in 2010, making up around 50 percent of their combined S$6 billion in annual gaming revenues.

Around half of that VIP business comes from customers from China, which is in the midst of an economic slowdown, while a crackdown on graft now in its second year is making it harder for wealthy Chinese to take money out of the country and discouraging conspicuous consumption.

Visitors from China were down 30 percent to 871,000 in the first half of 2014, according to Singapore's tourism board.   Continued...

People walk past a logo of Genting Singapore's Resorts World Sentosa in Singapore, April 29, 2013.   REUTERS/Edgar Su