SOUTH EAST ASIA 26
SINGAPORE
Singapore allows $9 billion IR expansion, but raises taxes, entry fees Singapore has potentially breathed new life into its gaming market, allowing S$9 billion ($6.65 billion) of investment into non-gaming amenities and an increase in gaming space and machine numbers.
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t’s the first major expansion since Las Vegas Sands’ Marina Bay Sands and Genting Singapore’s Resorts World Sentosa opened in 2010. The market swiftly grew to generate gross gaming revenue of about $4 billion a year, but has shown little signs of topline growth in recent years, with a lack of junket operators and no additional capacity to drive growth. The Ministry of Trade and Industry and the Ministry of Finance said the latest round of investment from Las Vegas Sands and Genting Singapore would create 5,000 new jobs and bring in an extra half a million visitors a year. The two IRs initially invested about S$15 billion and in light of the further financial commitment, the government agreed to extend
Asia Gaming Briefings | May 2019
the exclusivity period of the two licensees to the end of 2030. It also allowed each of the two IRs to increase their total allowed gaming space and the number of gaming machines they can operate. MBS will be able to dedicate a further 2000 sqm to gaming and will be able to up its total number of gaming machines from 2,500 to 3,500. RWS will have an extra 500 sqm of gaming space and a further 800 machines. However, the government points out that as non-gaming areas will expand by a much larger amount, the allowed gaming area as a proportion of total floor area will reduce from the existing 3.1 percent to 2.3 percent. The IRs have indicated that the additional gaming provisions will be targeted at highertier non-mass market players, who are mainly
tourists, the government said. The new allowances come with a sting in the tail. The government plans to up the local entry fee from April 4 by 50 percent to $150. At the end of a current tax moratorium in February 2022, it will also introduce a higher tax structure, which will also include more tiers. For premium gaming the rate will rise to 8 percent from 5 percent on the first $2.4 billion in GGR and will rise to 12 percent thereafter. For mass gaming, the tax rate also gains by three percentage points to 18 percent for the first $3.1 billion in GGR and then 22 percent thereafter. “The long-term positives of the capacity expansion outweigh the tax increases and further limits on locals,” Bernstein Research analyst Vitaly Umansky said in a note.
