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Singapore Lures Gaming Groups

21 Jan 2005

By Chris Jones

SINGAPORE -- Less than a month after casting its lines across the Pacific, the Singapore Tourism Board has hooked two of the sea's largest fish in its quest to lure world-class casinos to the Southeast Asian city-state. Southern Nevada gaming giants Las Vegas Sands and MGM Mirage each said Thursday they will submit plans to independently develop casino-hotel complexes in Singapore.

Bill Weidner, president and chief operating officer of Las Vegas Sands Corp., said his company is looking forward to meeting with government officials in Singapore.

"Sands Macau has enabled us to build a strong brand name in Asia, and we're in a unique position to work with the people of Singapore to build a world-class entertainment facility," he said.

In the coming weeks, the company will unveil a proposal Weidner said would be "unmatched." Plans call for a "culturally significant landmark" that will draw tourists from around the world and anchor the luxury resort casino complex.

A Wall Street source said the Las Vegas Sands project could be developed in conjunction with Singapore's Hotel Properties, already a partner in the company's ventures in nearby Macau. However, a Las Vegas Sands spokesman on Thursday declined comment on potential partners in Singapore, or its preferred resort location within the city-state.

MGM Mirage said its project would be at the Marina Bayfront near Singapore's central business district. It would be a joint venture with Singapore-based CapitaLand, one of Asia's largest property companies.

CapitaLand on Thursday also submitted a separate bid to develop a similar casino resort at Singapore's Sentosa Island; that project would be built in conjunction with Kerzner International, a Caribbean gaming power.

All three proposals will be submitted by the end of February to meet a deadline set by the Singapore Tourism Board. Singapore's government has not decided to approve the resorts, but a decision will occur after bids from interested casino operators have been reviewed.

In a research note issued Thursday, Deutsche Bank analyst Marc Falcone said, if approved, MGM Mirage and/or Kerzner would hold 60 percent stakes in their respective developments. CapitaLand would own the remaining 40 percent.

Falcone said the Marina Bayfront project would target convention and business travelers, an MGM Mirage strength in Las Vegas. The Sentosa Island plan calls for an oceanfront luxury resort similar to Kerzner's popular Atlantis getaway on the Bahamas' Paradise Island.

Despite those qualifications, Falcone said both MGM Mirage and Kerzner could face tough competition in their bids to enter the potentially lucrative Singapore market, which he said could someday generate casino revenue of $1.5 billion per year.

"This marks the first announced proposal(s) for a resort in Singapore, but we would expect more to follow in the next few weeks considering significant interest in gaming in Singapore," said Falcone, whose comments came before news of Las Vegas Sands' upcoming bid.

Las Vegas-based Harrah's Entertainment has not determined if it will pursue a project near the Marina Bayfront or on Sentosa Island, but spokesman David Strow said Thursday the company will likely submit a bid before February's deadline. Such a bid could come in partnership with Keppel Land, a government-controlled property developer in Singapore, Falcone added.

Other potential bidders, Falcone said, include Malaysia's Genting Bhd; as well as Star Cruises and Melco International Development, which is partly owned by Macau-based casino tycoon Stanley Ho.

In a statement, MGM Mirage Chairman and Chief Executive Officer Terry Lanni said a project in Singapore fits his company's business model and growth strategy.

Singapore last year welcomed a record 8.3 million visitors, up 36 percent from the prior year. Last week, Minister for Trade and Industry Lim Hng Kiang unveiled a plan to increase that count to 17 million per year by 2015. One key to that government-financed effort, the board said, is "attracting world-class travel and tourism businesses and organizations to set up in Singapore."

The potentially lucrative Asian gaming market is attracting even smaller casino companies.

Barrick Gaming Corp. President Stephen Crystal on Thursday said he met this week with government leaders in Singapore and Malaysia to discuss potential gaming partnerships. Barrick recently bought several older properties in downtown Las Vegas and is completing a deal to purchase the Golden Nugget in Laughlin.

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