Wynn, MGM Mirage bid for Singapore casino franchise

Chan Sue Ling and Linus Chua

Monday, Feb. 28, 2005 | 10:56 a.m.

Wynn Resorts Ltd., a Las Vegas-based casino company led by Steve Wynn, and Kirk Kerkorian's MGM Mirage submitted bids to develop a Singapore resort that may include the city's first casino.

The bids, announced in e-mailed statements, may compete with proposals from Las Vegas-based Harrah's Entertainment Inc. and Las Vegas Sands Inc., which have said they would bid by today's noon deadline for initial proposals. Tabcorp Holdings Ltd. spokesman Bruce Tobin said his company will also make an offer.

Singapore's plans for a resort are aimed at helping it meet a target to double annual visitor arrivals to 17 million within a decade and triple tourist spending. It may scrap a long-standing ban on casinos to attract visitors to the island, which is within six hours of flying time for more than 2.5 billion people.

"A casino will generate a substantial contribution to the service and tourism-related sectors and it will be positive for the economy," said Pang Shun Pen, who helps manage $400 million in Asia, excluding Japan, at HSZ Singapore Pte. "There's also the spillover effect to airlines, hotels and other segments. The only thing is you have to balance that with the social ills."

The Singapore government, which in April will make a final decision on whether to allow a casino, has said it will introduce safeguards to reduce the risk of a rise in problem gambling among its citizens. Citizens and permanent residents would be charged membership fees of S$100 ($62) a day or S$2,000 a year to visit the casino, while tourists would enter free.

Hotels, Shops

The government is considering building the resort on a downtown waterfront site or on the island of Sentosa, though it may also allow development at both sites. The resort may also include hotels, a convention center, retail outlets and restaurants, the government has said.

MGM Mirage, which owns the MGM Grand, Bellagio and other properties, is bidding for the downtown site with CapitaLand Ltd., Singapore's biggest developer. CapitaLand is also partnering Kerzner International Ltd., owner of the Atlantis resort in the Bahamas, in Kerzner's bid for the Sentosa site.

Keppel Land Ltd., Singapore's third-largest developer by assets, will submit its plan at noon, the company said in an e-mailed reply to enquiries today. Keppel and Harrah's, the second-largest U.S. casino operator, said last week they would jointly seek the mandate to run a casino in the city, with Las Vegas- based Harrah's owning at least 70 percent of the project.

Genting Bhd., Asia's biggest publicly traded casino operator, told analysts on Saturday it plans to bid for the franchise, said Edward Ong, an analyst at Macquarie Research who attended the briefing in Kuala Lumpur.

"It's a sensible move, gaming in Asia is undersupplied," said Ong, who has an "outperform" rating for the stock. "It's a new market, you can make money out of it."

Genting spokeswoman Corrinne Ling confirmed the company held an analyst briefing, declining further comment. Genting operates a hilltop casino complex about an hour outside of Malaysia's capital city.

Tabcorp is bidding for the two sites, Tobin said in a telephone interview today.

New Century Group Hong Kong Ltd., a Hong Kong-based hotel and cruise ship operator, also submitted a proposal, the company said in a filing with the Hong Kong stock exchange on Friday.

Any casino would be the island-state's first legal gambling house since Singapore's independence four decades ago. Singapore, which allows betting on horse races and lotteries, will announce its decision on gaming after the concept bids are turned in. The license would be awarded after another round of bidding.

Singapore faces growing competition from Malaysia, Thailand and Hong Kong in retaining its 6 percent share of Asia Pacific's tourism revenue, Trade Minister Lim Hng Kiang said on Jan. 11.

The success of casinos in Macau, a Chinese city close to Hong Kong, and talk of expanded gaming in Asian countries, including Hong Kong, China, Japan and Thailand, prompted Singapore to invite bids, Harrah's Chief Executive Gary Loveman said last year.

"The region's competition for the leisure dollar is likely to intensify in the coming years and the Singapore government is preparing to bring up the big guns for its tourism sector," said Song Seng Wun, an economist at G.K. Goh Research Pte. "You're talking about Singapore, where there are lots of tourist dollars. It will be a very competitive process."

Shun Tak Holdings Ltd., a property developer and ferry operator controlled by Macau gambling tycoon Stanley Ho's family, didn't bid for the Singapore casino project, said Sanny Chiang, a spokeswoman.