Sands plans extravagant casino in Singapore

Sands Casino Resort Bethlehem may be the largest development project in the Lehigh Valley, but compared to the company’s new casino in Singapore, it looks more like the pool house behind the Playboy mansion.

The Marina Bay Sands in Singapore — with its $5.5 billion price tag and its three 55-story hotel towers connected by a skypark suspended 200 yards above the ground — is a monument to extravagance.

It is, in almost every way, the anti-Bethlehem.

It’s also projected by some to become the world’s most lucrative casino resort, thanks largely to a very friendly — very un-Pennsylvania — tax rate.

While Sands pays a 55 percent tax on what have been disappointing revenues in Bethlehem, it will pay 5 percent to 15 percent on revenues that could approach $1 billion a year in Singapore.

“Even the naysayers are predicting this to bring in big, big revenues,” said Larry Klatzkin, a 25-year Wall Street gaming expert who is managing director of Chapdelaine Credit Partners, Manhattan. “The tax rate is favorable and it’s one of only two casinos in a part of the world where the population, in general, likes to gamble.”

That might explain why Sands’ outspoken CEO, Sheldon Adelson, last month expressed regret over building a casino in Bethlehem, and said Sands won’t build anymore relatively small, regional casinos like it again.

Instead, it has turned to Asia. That’s where it is building giant resorts where hotel rooms go for top dollar and gamblers prefer high-stakes card tables, rather than the penny slots that dominate Pennsylvania.

In Singapore, where Marina Bay will begin a six-month phased opening Tuesday, Adelson has invested billions on that new focus. While the $743 million in Bethlehem is similar to the other eight casinos built around the state, the Marina Bay Sands, designed by world-famous architect Moshe Safdie, is like no other structure in the world.

It includes three hotel towers with 2,500 hotel rooms marketed at $479 a night. Across the top of the towers — some 650 feet above the ground — is what Sands calls SkyPark. It includes a 150-meter swimming pool, sculpture garden, restaurants, bars, and one of the world’s largest cantilevered observation decks, extending 75 yards out over the Singapore skyline.

In all, the 1,115-foot park is large enough to tip the Eiffel Tower on its side and still have room for a basketball court.

At the foot of the hotel is a convention center capable of handling 45,000 people, a casino with hundreds of high roller tables, a shopping mall the size of Lehigh Valley Mall, six restaurants operated by world-renowned chefs, an arts and science museum and all sorts of touches that show why the cost of the resort ballooned from the original $3.2 billion projection.

Two crystal pavilions containing a restaurant and a night club sit outside the casino, in the bay of the South China Sea,accessible only by underwater tunnels.

The Events Plaza, which serves as a flat observation deck for the bay, converts into a 10,000-seat outdoor concert venue with the help of a massive hydraulics system that lifts the seats out of the ground to form an amphitheater.And this display of extreme extravagance comes not only in the midst of a global recession, but even as part of the Sands’ project in Bethlehem remains mothballed.

Bethlehem officials say they don’t feel slighted.

“We take no offense at all,” said Tony Hanna,

Bethlehem’s director of community and economic development. “Marina Bay was conceived in a different time, and that is a very, very different market. Honestly, I’d be a lot more worried if they weren’t finishing it.”

So how can Adelson make such a hefty bet in Singapore? Because he’s convinced the deck is stacked in his favor.

Unlike his Pennsylvania casino, which is one of nine in the state and is within a 130-mile drive of 11 more in Atlantic City, Marina Bay is one of only two casinos approved for Singapore. It’s no more than a five-hour flight for more than 1 billion people, and in a region known for having an unusually high population of high-stakes gamblers.

While the Pennsylvania gambling market is dominated by low-stakes slot machines, Marina Bay is expected to get 90 percent of its revenues from table games.

Consider that last year during a deep recession, tables-dominated Macau, China, casinos brought in $14 billion in revenues — three times that of the Las Vegas strip.

“In Asia, slot machines matter very little,” said Grant Govertsen, co-founder of Las Vegas-based Union Gaming Group, Wall Street analysts for the worldwide gaming industry. “It’s all about tables games and high rollers.”

Perhaps just as important is the tax rate. The tax in Singapore is 5 percent on the high roller tables and 15 percent on the rest.

“The difference is Pennsylvania’s gaming law is designed to bring the state revenues, while Sing-apore’s is designed to boost tourism,” said Sands spokesman Ron Reese. “Marina Bay is projected to increase Sing-apore’s tourism by 30 [percent] to 40 percent.”

It’s already boosted Sands’ bottom line. In March 2009, Sands’ stock price — once at an overheated $148 a share — plunged below $1.40 a share as the recession took hold, Singapore’s costs ballooned and investors feared bankruptcy. But as the Singapore opening drew closer, and it became clear that it would in fact open, Las Vegas Sands stock price rose above $24 a share – a more than 400 percent increase in the past year.

But what does all this have to do with Bethlehem? Not much. Sands officials say Singapore’s revenues will not be used to restart the mall and events center project in Bethlehem. Hotel construction will resume next month, but only a market improvement in Bethlehem will get the mall and events center built, Reese said.

Still, a prosperous Las Vegas Sands is good for Bethlehem, Govertsen said.

“If Sands is healthy, it will be more inclined to spend the money needed to renew the product in

Bethlehem every once in a while,” Govertsen said. “They’ll be less inclined to pinch pennies.”

Thank To :  tradingmarkets

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