http://www.businesstimes.com.sg/sub/...40740,00.html?

Published June 17, 2011

MBS plans private gaming area for casino whales

By GRACE LEONG


(SINGAPORE) An upscale gaming area exclusively for casino whales is being planned for the 55th floor of Marina Bay Sands, Las Vegas Sands president and chief operating officer Michael Leven has disclosed.

'We're in the process of designing a very upscale (55th) floor private gaming area with about eight luxury suites for very high-end play,' Mr Leven said at a conference in Las Vegas.

'The Asian players at that end like to be above with large views and what have you. And that will probably go under construction by the end of this year, we'll open that sometime next year. And we think that will help attract more of the very high-end players.'

But the project, to be located in Tower 3 beside the Banyan Tree Spa, is only in design phase, and MBS hasn't yet sought the Singapore government's approval, Mr Leven said.

'First and foremost, any proposed plans need to be vetted and ultimately approved by the government. Thus, since we are still in the design stages, we are not in a position to publicly provide any additional information at this time.'

An MBS spokesman declined to specify the integrated resort's current gross gaming floor area or provide details on the proposed new gaming area. But MBS has not exceeded its maximum allotted 15,000 square metres gross gaming floor area, the spokesman said.

Resorts World Sentosa, which also has not used up its allotted 15,000 sq m of gaming floor area, has no plans to add gaming space in its second phase, Lee Sin Yee, RWS spokesman, said. Phase two is expected to open by year-end.

LVS is planning to invest 'a couple hundred million' dollars in capital expenditure this year to complete the glass and steel Crystal Pavilion structures, parts of the promenade along Marina Bay, a portion of the mall as well as MICE space, Mr Leven said.

If the proposed new gaming area gets government approval, he said that there would be additional investment in Tower 3.

Meanwhile, Mr Leven estimates that the two Singapore casinos have a combined total of about US$1 billion in receivables, but he said that MBS was 'adequately reserved' for its share - about US$360 million at the end of its first fiscal quarter.

Genting Singapore reported S$656.2 million in trade and other receivables for the first quarter. Around S$24 million is reported as impairment losses on trade receivables, and about S$487,000 is net bad debt that's written off, the company said in its first-quarter results.

'Right now, we don't see any major problem. You can look at the receivable, it's pretty good sized. Between us and (Genting) there's nearly US$1 billion of receivables out there,' he told investors at the Sanford Bernstein conference in Las Vegas earlier this month.

'But so far, we've had no - we've had one small problem that we're collecting on now which is not really enormously significant and we watch it. We watch it every month. We literally watch it almost on a daily basis. And so, we don't expect to have a major problem,' he said. 'But when you're in the credit business, you can have, and we want to be prepared for it and I think we're adequately reserved for it.'

Local gaming analyst Carey Wong of OCBC Investment Research said that the two casinos' receivables represent about 20 per cent of Singapore's gaming market size.

'We're not too concerned for now because the IRs' revenue growth is still very strong,' he said. 'We expect that (receivables) number to drop if junket operators are able to get licensed and bring more high-rollers in.'

MBS's mass market daily win has now doubled to around US$4 million, compared with US$2 million of win a day when the casino first opened a year ago, Mr Leven said.

'In the VIP, our roll continues to improve. We have 110 people in the field now finding customers at the high-end level. That's US$10,000 to US$1 million of play per hand going up in large credit customers.'

MBS has not sponsored any junket licence application to date in Singapore, Mr Leven said. 'We've always said from the very beginning that if junkets get licensed, we will do business with the junkets.'

But we have not been in the position to promote anybody in terms of filing their application at this time. There will be plenty of time to do that if in fact the Singapore government begins to allow either Macau-style junkets or another iteration of the junket business, he said.

But he doesn't believe that many Macau junket operators will undertake the extensive licensing process set up by the Singapore government to operate here.