To date, Singapore has only permitted two mega casino resorts to operate within the country; namely, Marina Bay Sands and Genting’s Resort World Sentosa. Both have already generated massive tax incomes for the country.
The authorities granted them an extension and renewal of their license in April, but both casinos will be forced to pay a heavy price
Las Vegas Sands secures US$2.7 Billion loan for Marina Bay extension
The expansion of Las Vegas Sands’ Singapore casino, Marina Bay Sands is quickly becoming an expensive project. Having initially sought a US$6 billion loan in June, Sheldon Adelson’s company have now agreed to borrow US$2.7 billion to aid in the completion of their expansion project for Marina Bay Sands.
Notice of the loan was filed with the Securities and Exchange Commission, with the money earmarked for “finance project costs associated with the expansion project at Marina Bay Sands”.
Las Vegas Sands and the Singapore Tourism Board agreed the details of the expansion in April, with the final completion date set as January 1st, 2024. The company had no trouble securing the loan, with existing credit lines already in place with DBS Bank. It appears Las Vegas Sands have been financially stretched by the expansion, and with heavy casino taxation in operation in Singapore, it may be a while before they see returns on the investment.
Singapore’s Integrated resorts to pay high price for extension
While the Marina Bay Sands and its hefty cash injection have already been mentioned, the two integrated resorts are in fact facing financial strain moving forward.
Both have received approval to expand their resorts, but Genting’s resort has not requested any loans. Despite this, both companies have pledged US$6.7 billion to build non-gambling tourist attractions as part of a deal with the Singaporean government to keep their gaming licenses.
This pledge of extra funding was announced earlier this year and resulted in an immediate drop of 9.4% in the value of Genting on the stock market. This represents the sharpest drop in Genting’s value in a decade and comes amid news that gambling taxes will be raised by the government in 2022.
What is planned
Las Vegas Sands resort will be improved with a fourth tower, which will bring another 1,000 or more rooms to the hotel’s capacity. VIP gamblers will be welcomed and treated to an entertainment area filled with 15,000 seats and a more expansive space for meetings, incentives, conferences and exhibitions. Sands has calculated the total cost of this expansion as being in the region of S$4.5 billion (US$3.26 billion) but not completion date has yet been publicised.
As for Genting’s expansion, the project will also cost S$4.5b and will include two new ‘destination’ hotels. These new builds will bring around 1,100 rooms into the establishment, along with new attractions. Two of those have already been named as Minion Park and Super Nintendo World, both of which will be based at Universal Studios Singapore theme park. Genting says the expansion should take in the vicinity of five years to complete.
Given that the two resorts cost a combined total of $15 billion to build, both have had to invest heavily in tourist attractions and expansions and the government are planning a tax hike in 2022, it seems clear that both resorts will be waiting years to reap and profits from their Singapore ventures.
Article by Craig Bradshaw
