Singapore to permit casinos

Singapore ends casino ban
By Wayne Arnold The New York Times

Tuesday, April 19, 2005

City-state aims to lure more Chinese tourists

Singapore said Monday that it would legalize casinos to allow the construction of two Las
Vegas-style resorts, overruling public opposition in an effort to promote tourism.

Prime Minister Lee Hsien Loong told Parliament that the cabinet had decided to lift the city-state's
ban on casino gambling, ending a year of uncharacteristically vigorous public debate in a country
that has been governed by the same party since 1965.

Singapore plans to award licenses this year to build the two casinos. It estimates that this will
translate into roughly $3 billion in investment.

The hope is that introducing casinos will let Singapore fend off increasing competition for tourists
from mainland China. China is one of the largest and fastest-growing sources of tourist arrivals in
Singapore, but competition is mounting, particularly from Thailand.

More broadly, however, the casinos are part of a longstanding effort to reorient the economy in
Singapore toward higher "value-added" service industries like tourism and biosciences as it loses
manufacturing competitiveness to China.

There is no shortage of investors willing to share in the new wager by Singapore. Nineteen gaming
consortia, including Harrah's Entertainment, MGM Mirage and Las Vegas Sands, responded to a
government request for plans.

International casino operators are eager to expand in Asia, where rising incomes are letting
billions of people spend more than ever on wagering. Harrah's, owner of Caesars, has enlisted the
architect Daniel Libeskind, who designed the Freedom Tower that is to stand on the site of the World
Trade Center in New York City, to design one of its proposed resorts.

Singapore business leaders praised the move to lift the ban.

"The government is prepared to give these folks the ability to invest their money and create tourism
attractions that will get Singapore tourism back on track," said Philip Overmyer, executive director
of the Singapore International Chamber of Commerce.

Tourism accounts for at least 5 percent of the economy in Singapore, a number that economists say
understates the importance of the industry to the part of its economy that is not involved with
foreign trade.

Despite its long and colorful history as a regional trading center, Singapore is short on
conventional tourist sites like ancient temples or historic quarters.

Singapore has succeeded in turning itself into a regional hub for air travel, but tourists are
spending less time on average in Singapore, using it instead as a staging ground for forays around
Southeast Asia.

The government plans to have two separate casino resorts, one on an underused theme park island off
the southern coast.

The second resort will be near the main convention center, an area bristling with business hotels
and near the distinctive Esplanade performing arts center that Singapore built in 2002 in an effort
to become a cultural hub.

Harrah's is bidding to build both sites as part of a venture with a local government-controlled
company, Keppel. Other bidders are Kerzner International, Wynn Resorts and the Australian casino
operator Tabcorp Holdings.

Economists said the casino was likely to bring direct, tangible results. A report by Merrill Lynch
estimated that a single casino would cost roughly $2 billion to build and would generate about $2.1
billion a year in revenue, about a third of it from foreign visitors. The project would help the
construction and tourism industries, it predicted, including shops and hotels. It would contribute
$865,000 a year to government tax revenue.

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