April 18 (Bloomberg) -- Singapore scrapped a four-decade ban on casinos to boost tourism, clearing the way for companies including Las Vegas Sands Corp. and MGM Mirage to compete for the right to build an entertainment complex in the city.
The government may allow two casinos, in downtown Singapore and on the island of Sentosa, Prime Minister Lee Hsien Loong said in Parliament today. It will seek detailed plans from developers, having received 19 proposals already, he said.
``Singapore is seen as unexciting,'' Lee, 53, said. The city needs ``crowd pullers'' to avoid losing ground in tourism.
Lee said two casino resorts may create as many as 35,000 jobs. They may also lure tourists to a city where the economy is forecast to expand this year at half the 8.4 percent pace of 2004. The Chinese city of Macau, where 17 casinos operate, had three times the economic growth and twice as many visitors as Singapore in 2004.
``It's great for Singapore,'' Ron Sim, 46, chief executive of OSIM International Ltd., a Singapore-based maker of massage chairs and health products, said today in an interview. ``If you want to be a globalized city, you've got to have more buzz.''
The island nation, which already allows betting on horseracing, soccer matches and lotteries, was considering whether to have gaming within an ``integrated resort'' that would include a convention center, retail outlets and restaurants.
Las Vegas
Harrah's Entertainment Inc., Wynn Resorts Ltd. and Melbourne- based Tabcorp Holdings Ltd. are among companies that submitted proposals for casino complexes.
Other bidders include Hong Kong-based Melco International Development Ltd., controlled by Macau casino tycoon Stanley Ho, and Malaysia's Genting Bhd., which is teaming with its Star Cruises Ltd. unit and the theme-park unit of Universal Studios.
The two casino resorts may cost S$5 billion ($3 billion) to develop, and provide direct employment for 10,000 people, Lim Hng Kiang, minister for trade and industry, told Parliament. The government will award mandates to develop the resorts by the end of 2005, and the casinos will be operational by 2009, he said.
Singapore had 8.3 million visitors last year. Tourists spent S$9.6 billion, accounting for 5.5 percent of gross domestic product. The city wants to triple tourism revenue to S$30 billion by 2015 as manufacturers move to lower-cost countries including China and India.
``The whole region is on the move,'' Lee said. ``The question we have to consider is: `Will Singapore be part of this new world or will we be bypassed and left behind?'''
Singapore expects economic growth of as little as 3 percent this year, compared with 8.4 percent in 2004.
Addict
Lee's father said the city may suffer economically should it keep the ban, the Straits Times reported on April 16. ``The world could pass us by,'' Lee Kuan Yew told an audience of business people in Singapore on April 15, the newspaper said.
The elder Lee, prime minister for 31 years, wrote in his memoirs ``From Third World to First'' that he rejected a proposal made after independence in 1965 to build a casino on Sentosa, which means ``tranquility'' in the Malay language.
Lee Kuan Yew said he opposed gambling because his father was an addict who pawned his wife's jewelry to bet at blackjack, the Straits Times report said. The gambling and financial consequences led to ``awful fights'' at home, the report said.
Opposition
The project faces opposition in a nation where films are censored and drug dealers are executed. Religious and social groups such as Focus on the Family say casinos may lead to more loan sharking and prostitution, and lure people into debt.
To alleviate concern, the government proposed a S$100 daily levy on citizens and permanent residents entering the casino, and the prime minister today said the government ``seriously considered'' banning Singaporeans from casinos.
``We aim to be a decent and wholesome society, but not a puritanical or hypocritical one,'' Lee said.
Removing the casino ban may benefit companies including Singapore Airlines Ltd. and Raffles Holdings Ltd., owner of the 117-year-old Raffles Hotel. The hotel is named for Sir Stamford Raffles, who founded Singapore in 1819 and criticized the settlement's first administrators for legalizing gambling to boost government income.
``It will be good for the economy, and the impact will be much bigger with the entertainment and convention centers,'' said Teng Ngiek Lian, who helps manage $650 million as chief investment officer at Target Asset Management in Singapore.
Singapore's benchmark Straits Times Index has risen 17 percent since the proposal for a casino was announced March 12, 2004, and is at its highest in more than four years.
`Tourist Draw'
Macau, a former Portuguese colony returned to Chinese rule in 1999, had a record 16.7 million visitors last year as Las Vegas Sands and other companies opened casinos. The economy expanded a record 28 percent, boosted by gambling revenue.
Las Vegas Sands has offered to build a Guggenheim-themed museum as part of its Singapore bid. Harrah's, which is buying Caesars Entertainment Inc. to become the largest U.S. casino company, hired Daniel Libeskind, planner of the Freedom Tower at Ground Zero in New York City, as architect for its proposal.
A casino resort in Singapore would generate annual revenue of S$3.4 billion, Merrill Lynch & Co. forecast in a March 16 report. Nomura Singapore Ltd. said in a December report that a casino may create 13,000 jobs in the city.
A casino would be ``a tourist draw,'' said Jannie Tay, president of the Singapore Retailers Association, whose members rely on tourists for about 20 percent of their sales. ``If we were to look at that draw from the casino, then you really would have a lot of tourists, families coming in.''
