As with any beauty pageant, the fighting behind the scenes has been fierce and at times catty. Contestants have implied that rival designs are pedestrian, dished unflattering spin about each other to the media and bickered over which plan boasts the bigger aquarium or best protects animal rights. Eighth Wonder boss Mark Advent even accused Merrill Lynch of bias after it issued a report that tipped Genting to win the contract, suggesting a conflict of interest because the brokerage once helped the Malaysian company go public. “If Eighth Wonder wins,” the Merrill Lynch analyst shot back, “they don’t have to invite us to their party.”
The prize is a 49-hectare waterfront site on Singapore’s lush Sentosa Island, set aside by the government for what will be Asia’s most lavish casino resort when it opens for business in 2010. The size of the bids–each exceeds $3 billion–illustrates the city-state’s huge potential for luring tourists. And it underscores a new struggle that pits the Las Vegas heavyweights who pioneered the transformation of casinos into family destination resorts against an old-school Asian gaming establishment that for decades has made fortunes off punters by offering plenty of baccarat tables and slot machines, but little in the way of amenities. “Given what’s at stake, I feel it’s natural to be slightly competitive with the other players,” says Advent. “Sentosa will be a crown jewel in the gaming, entertainment and leisure world.”
Indeed, stellar economic growth in Asia, the rise of budget airlines and easing travel restrictions bespeak a tourism boom of global dimensions. According to media-intelligence company Mintel, residents of the Pacific Rim currently spend roughly $800 billion a year on travel, a figure that should rise to $1.8 trillion over the next decade. Likewise, gambling revenues in Asia are projected to shoot up 14 percent a year thru 2010, calculates PricewaterhouseCoopers–well ahead of the global annual growth of 8.8 percent. Already, Singapore has emerged as the most popular travel destination for outbound Chinese after Hong Kong and Macau (both reachable by land). All this makes the Lion City the newest front in a war that began in Macau four years ago, when the Sands became the first international player to challenge billionaire Stanley Ho’s 40-year monopoly on gaming in the former Portuguese enclave.
The Malaysian contestant, Genting, has the most at stake in the fight for Sentosa. Its Genting Highlands Resort, 58 kilometers away from Kuala Lumpur, has enjoyed monopoly status since opening in 1971, an advantage the company leveraged into Asia’s leading cruise-ship company, Star Cruises, which operates some of the largest floating casinos in the world. In Singapore it has partnered with Universal Studios and drawn up plans for a casino cum theme park. “There’s no magic to being a Las Vegas player,” says Lim Kok Thay, chairman of Genting International. “The important thing is to be in tune with what your customers want.”
Genting’s problem is that its design looks like that of a standard theme park, and has been criticized as uninspired–a sure negative if judges are looking for an iconic facility; the casino itself is largely concealed underground.
In contrast, Kerzner’s Atlantis is a futuristic abstract sculpture in glass with advanced robotics. Eighth Wonder’s volcano crater–complete with a Pelé football academy, a Deepak Chopra retreat center, an Alain Ducasse cooking school and a wedding pavilion and hotel by Vera Wang–is the opposite of bland. “In terms of architecture, the Genting bid would lose out,” notes Winston Liew, analyst at OCBC Investment Research. “But we believe this is outweighed by the Universal tie-up, which is the most proven scheme in terms of attendance.” Most analysts think Genting will win.
In the long run Singapore, not Macau, could be better positioned to become Asia’s Las Vegas, although it will never achieve the same pure gaming numbers.
Already famed as a shopping and transport hub replete with verdant gardens and a burgeoning art scene, Singapore attracts couples and families, who stay on average 3.4 days. Macau, in contrast, is smaller, grittier and much less family-friendly; it’s a hive of predominantly Chinese male day-trippers who “are in Macau to make money gambling,” says Morgan Stanley gaming analyst Rob Hart. So far, he argues, the Las Vegas newcomers have not softened the hard-core gambling vibe with their five-star restaurants and multi-light-fountain shows. “People are hoping Macau will develop the way Vegas has, but that has not been the case yet,” he says. “What Las Vegas players have done is shown that the Chinese do like a better product. They prefer a nice table near the toilet, rather than a creepy table next to the toilet, but they still want to sit next to the toilet, and I don’t think that’s going to change.”
Stanley Ho’s empire is nevertheless under attack. More than half of all gaming revenues in Macau come from so-called VIP halls, where high rollers bet upwards of $10,000 per hand or die roll. Getting such players to show up has traditionally fallen to outside agents, well-connected private fixers whom the newcomers have lured away with higher commissions. Over the summer Ho lamented the “vicious competition” and warned that some VIP halls could be shut down. “If the heat’s too strong, get out of the kitchen,” replied Sands’ CEO Sheldon Adelson. Ho’s answer is a $380 million Grand Lisboa that will open in January, though it is expected to lack Las Vegas-style glitz, which Ho believes Chinese gamblers care little about.
He may be right. Yet most experts view Singapore as more fertile ground than Macau for the amalgam of gaming, dining, stage shows, shopping and luxury accommodations Las Vegas pioneered. “Macau is much more of a mainstream gambling location, Singapore a family tourism destination,” contends Tobin Prior, president of Kerzner’s international division. And he’s willing to bet $3.4 billion on it.
