Major U.S. casino operators are turning to Asia in a bid to boost business. Interest in the region has increased after Singapore announced it will open two massive Las Vegas-style resorts -- one of which will be completed by 2009. It is the first time the conservative city-state has allowed gambling, and the American gambling industry believes it offers an important investment opportunity.
Las Vegas has traditionally been the gambling capital of the world, but these days the casino industry is changing. Asian destinations like Macau and Singapore are taking a chance on the Vegas model of combining gambling and entertainment -- in hopes of attracting high-rollers looking to spend big.
David Schwartz heads the Center for Gaming Research at the University of Nevada in Las Vegas. He says, "Slot machines are no longer a novelty, blackjack isn't a novelty anymore. People aren't going to fly 2,000 miles just to play nickel [five cent] slots. What they will do though is they will fly 2,000 miles to have this great experience."
In Las Vegas, gambling now accounts for as little as 30 percent of revenues at the major hotels, as people splash out on other forms of entertainment.
And Gordon Absher of MGM Mirage -- a casino operator -- says countries like Singapore hope the trend helps them hit the jackpot. "Singaporeans really hit it on the head when they shunned the term casino or 'casino resort' and embraced the term 'integrated resort' because that's truly what we are. We're integrating what you would find in many different places in other cities into one destination resort here in Las Vegas".
Lee Kuan Yew, the man who founded modern Singapore, has been instrumental in bringing integrated resorts to his country. Holding the title of ‘minister mentor’ in the prime minister's office, Lee has been touring Las Vegas to meet executives such as the Sands owner, Sheldon Adelson. He has been surprised by the reception. "Every move like this is a bet on the future. We decided to make the bet. We didn't expect the operators to make such large bets on us."
But for Adelson and other Las Vegas tycoons, Singapore is less of a bet than a cold, hard business decision. The Sands plans to spend $3 billion building Singapore's first integrated resort, modeled after the Las Vegas Venetian.
Lee says Adelson and his team do not believe Singapore will draw away visitors from Las Vegas. "He expects an overwhelming majority to come from the region -- China, India and the rest of Asia. He believes there's a large, already existing, demand that will fill up his convention halls and the entertainment that he has on offer."
The Singapore government is to award a contract later this year to build a second resort. But hopeful Las Vegas operators have to give guarantees, including providing funds for social programs to help addicted gamblers, to get the contract.
Meanwhile, Vegas continues to put its chips on the table, pouring billions of dollars into Asia as U.S. casino owners eagerly anticipate more contracts from Singapore.