Harrah’s to use access to capital in Singapore pitch

Linus Chua and Bernard Lo

Monday, Nov. 1, 2004 | 11:13 a.m.

Harrah's Entertainment Inc., the No. 2 U.S. casino operator by market value, will use its ability to raise funds and draw tourists as part of its pitch to the Singapore government for a casino plan.

The Las Vegas-based company, which started talks with the government in June, will also meet with Singapore Prime Minister Lee Hsien Loong and other government officials as part of a group of a dozen U.S. companies in the U.S.-ASEAN Business Council meeting this week.

"We believe that with our strong access to capital and ability to build large tourist-oriented casinos, we can build something that Singapore would be very proud of," Richard Mirman, senior vice president at Harrah's Entertainment, said in an interview. He said he's able to build a temporary casino in Singapore in nine months, and a larger operation in two to three years, if he gets a license.

Singapore is considering a casino amid competition for tourists in Asia. The city-state's tourist arrivals fell to a two-decade low last year during the severe acute respiratory syndrome outbreak, and is expected to rebound to match 2002's 7.6 million visitors, which was a record.

Mirman plans to ask the Singapore government for its stand on issues ranging from the timing for the casino legislation to taxes on gaming revenue, he said.

Harrah's may compete with operators from Las Vegas Sands Inc. to Macanese tycoon Stanley Ho's Sociedade de Jogos de Macau, which have expressed interest in a Singapore casino. They may be asked by the government to submit proposals within the next two to three months, said Jonathan Galaviz, a partner at Galaviz Ong & Co. in Las Vegas, which tracks the global gaming market.

MGM Mirage and Caesars Entertainment Inc. also have expressed interest in Singapore, while delegations from Singapore have visited regulators and operators in Las Vegas to learn more about the casino business.

The city-state's approach to legalizing casinos is also different from other countries or U.S. states, which usually amend their laws before getting proposals from operators, Galaviz said, as the government's not using casinos just to boost revenue. Singapore's foreign reserves exceed $100 billion.

"With Singapore's financial position, the gaming industry knows Singapore is not in dire straits to have to legalize casinos," he said in an interview in Singapore. "What Singapore is saying is let's legalize only if we get the right proposal to enhance our position in the tourism industry."

He said Harrah's pitch on access to capital may help because the government could turn Singapore into a hub for Asian gaming companies where they can raise funds through stocks and bonds. Singapore's stock exchange has been trying to attract overseas companies from markets such as China and India to sell shares.

Singapore said it wants a so-called integrated casino development that may include a hotel and convention halls to boost its share of business travelers.

Last year, Singapore was ranked as the world's third top convention city by the International Congress & Convention Association, a trade organization for global conventions. The city hosted more than 500 conventions, which created S$615 million ($370 million) in business deals, the country's tourism board said.

Singapore's Trade Ministry said in an e-mailed statement it's still studying the possibility of a casino and hasn't set a date for the proposals yet.

"We are consulting widely to get views and feedback," it said. "A decision will only be made after carefully evaluating the various economic, social and security issues."