SINGAPORE — When Lawrence Wong took over leadership of Singapore last month in the first such change in 20 years, one of the legacies of former Prime Minister Lee Hsien Loong has come into focus — casino resorts.
Under Lee’s leadership, the tiny city-state opened up to two integrated casino resorts in 2010, boosting tourism. The economic impact has been significant. The two resorts “contributed 1% to 2%” of annual gross domestic product, the Ministry of Trade and Industry said in 2019. Tourist arrivals doubled to 19.1 million over a decade through 2019.
Now, the second phase of the resorts’ development is about to begin, with the two developments planning massive expansions with a combined investment value of over 10 billion Singapore dollars ($7.4 billion).
Genting Singapore, the Malaysian-owned company that operates one of the two facilities, Resorts World Sentosa, announced in May that it will tender out construction contracts for the new hotels by September, with building expected to begin by the end of the year. Two hotels with a total of 700 rooms will be added to the popular tourist destination of Sentosa.
The other resort, Marina Bay Sands — famous for its ship-like rooftop garden spanning three skyscrapers — will add a fourth hotel tower. Parent company Las Vegas Sands announced in April that construction would begin in July 2025, with a new 15,000-seat arena and other facilities expected to be completed in July 2029.
The casino portion of the two resorts, a major source of revenue, will also be expanded. Marina Bay Sands was granted 2,000 sq. meters of additional floor space, and Genting was granted 500 sq. meters.
The Singapore government approved the expansion plans in 2019, but implementation was delayed due to the COVID-19 pandemic.
The investment cost for the expansion surged from the initially stated amount in 2019 — SG$4.5 billion each — due to recent inflation. Genting’s investment increased about 50% to SG$6.8 billion. Sands also said in a filing this year that it expects the total project cost will “materially exceed” the amounts it previously referenced, citing “inflation, higher material and labor costs and other factors.”
Still, the two operators are going ahead with their ambitious plans as the city-state becomes more significant in their business portfolios.
Sands has been concentrating on Asia, having sold its Las Vegas casinos by 2021. In the January-March quarter, Singapore generated nearly 50% of the company’s adjusted EBITDA (earnings before interest, taxes, depreciation and amortization). Genting’s Singapore business has exceeded those in its home country, Malaysia.
The two operators had been trying to expand into other countries, but have found it hard going. For example, Sands had planned to expand into Japan as the government moved to legalize casinos, but abandoned the plan in 2020 amid the pandemic. In 2021, Yokohama City, a candidate to host a casino resort at that time, withdrew its plan. Genting also canceled its Japan bid that year.
In April, several media reported on a potential integrated resort development in the southern Malaysian state of Johor, near the Singapore border. But Prime Minister Anwar Ibrahim immediately and strongly denied this. In a country where Muslims make up more than 60% of the population, the establishment of a new casino is highly risky politically, as Islamic law prohibits gambling.
Thailand is also considering legalizing casinos, but operators appear to be cautious. Asked about interest in Thailand and other markets during a shareholders’ meeting in April, Genting Chairman Lim Kok Thay said the bidding process is “a very long one,” adding that the company’s decision not to proceed with the Japan project was the right one.