LEAD: Singapore gives green light for 2 casinos to boost tourism

Asian Economic News, April 18, 2005

SINGAPORE, April 18 Kyodo

(EDS: UPDATING WITH LEE'S COMMENTS, ADDITIONAL INFO)

Prime Minister Lee Hsien Loong announced Monday that Singapore will scrap its longstanding ban on casino gambling and will allow the construction of two casinos to woo tourists and keep Singapore ahead of fierce economic competition in the region.

Addressing parliament, Lee said, ''After studying the bids and considering all the views expressed, the Cabinet has decided to proceed with the project.''

He said the government would call for firm proposals to develop two integrated resorts including ''gaming components,'' one at Marina Bay near the country's southern waterfront and the other at Sentosa Island.

The two casinos will be operational by 2009, he said.

So far, the world's gaming moguls have submitted 19 proposals to the government by the end of February, indicating that they are prepared to pump S$5 billion (US$3 billion) to develop the two sites, Lee said.

The casino proposal has roused heated debate in the past year. Proponents argue that having casinos will boost tourism. Critics, including Catholic and Muslim religious groups, fear it will bring social ills, especially among the country's majority ethnic Chinese population, with their propensity to gamble.

The decision was not surprising as many people had expected the government to place priority on the country's economic survival.

One of Asia's most advanced economies, Singapore has seen its manufacturing industry threatened in recent years by the emergence of lower-cost countries such as China and India.

Attempts to expand Singapore's service industry also face challenges from its Southeast Asian neighbors, which are also making inroads in tourism, transport, medical and educational services.

''We cannot stand still. The whole region is on the move. If we do not change, where will we be in 20 years' time?'' Lee said.

He said the resorts ''will make Singapore a center for tourism, business and conventions, and attract hundreds of thousands more tourists each year'' with spin-offs to the rest of the economy and could create about 35,000 jobs.

Although it permits lotteries and horserace betting, Singapore had banned casinos because of the strong resistance of Singapore's senior politician Lee Kuan Yew, who governed the country as prime minister for more than 30 years until 1990.

Recently, Lee, the current prime minister's father, conceded that Singapore would have to adapt to changing times. He mentioned in particular last week that Thai Prime Minister Thaksin Shinawatra, being a business-minded leader, is likely to build Thailand's first casino to attract tourists.

After months of public debates, the government announced in December it was seriously considering the possibility of allowing a casino to be set up and invited casino operators from around the world to submit concept plans to build a glitzy integrated resort, which could include a casino, convention centers, hotels and theme parks.

The government has rejected calls by a ruling party politician for a referendum to let the citizens decide on the issue or for a free vote in parliament to allow legislators to decide.

Singapore is keen to capture some of the estimated US$1.5 billion that Singaporeans spend at overseas casinos and tap into the growing wealth of Asian tourists and their penchant for gambling, particularly the new rich from India and China.

Analysts say the project would help Singapore achieve its declared goal of attracting 17 million tourists and S$30 billion worth of tourist revenues by 2015.

Investment banker Morgan Stanley estimated in a recent report the integrated resort project as a whole would have spillover effects on the broader tourism sector and generate about 1.5 percent in economic growth.

Singapore's move comes at a time when other Asian countries and regions, including Macao, South Korea and Thailand, are racing to expand or build new casinos.

A recent government survey showed 58 percent of people in Singapore gamble, but only 2.1 percent of people are vulnerable to gambling addiction.

To address concerns about social ills caused by gambling, Lee said the government will introduce deterrents such as exorbitant entry fees, barring credit from being extended to locals for gambling at casinos, and will not allow casinos to advertise in the local media.