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Sonia Kolesnikov-Jessop
 

Singapore gaming: Island dreams

14 November 2006

By Sonia Kolesnikov-Jessop

SINGAPORE -- Mark Advent, the man behind the New York-New York megaresort on the Strip that helped change the face of Las Vegas, is hoping to bring some of his creativity to Singapore.

Advent is chairman of Las Vegas-based Eighth Wonder, one of three bidders for a tropical casino-resort site on Sentosa Island, just off the main coast of Singapore. This will be the second casino-resort in the small city-state that has turned to gambling in its bid to reinvent itself as a fun tourism destination. With the opening of these world-class integrated resorts in 2009-2010 the authorities are hoping to double visitor arrivals to 17 million by 2015 and triple tourism spending to $19.2 billion.

The first site, a 51-acre piece of prime waterfront real estate in the Marina Bay financial district, was awarded in May to Las Vegas Sands Corp, to develop a $3.2 billion resort with a strong convention and entertainment component. By contrast, the Singapore government stipulated in the bidding guidelines that the 122-acre site on Sentosa Island should have a strong tourism focus. The winning bidder for the Sentosa site will be picked in December.

Advent's privately held Eighth Wonder has teamed up with Mississippi-based Isle of Capri Casinos and Hong Kong-based Melco PBL Entertainment, a joint venture between Publishing and Broadcasting that is run by James Packer, son of the late media tycoon Kerry Packer; and Melco International Development, run by Lawrence Ho, who is the son of Macau casino tycoon Stanley Ho. Melco PBL will have a 24.5 percent stake in the $3.5 billion project, Capri Casinos will have 13.8 percent, with the rest in the hands of Eighth Wonder.

The creative entrepreneur has lined up a string of celebrities to work with him in developing his dream resort: Franco Dragone will conceive a new Asia-inspired show for a 1,400-seat theater in a crystallike dome floating over water, Brazilian soccer legend Pele will set up a football academy and stadium-cum-hotel, wedding high priestess Vera Wang will run the first Vera Wang Hotel and Wedding Pavilions, Indian motivational guru Deepak Chopra will run his first well-being and retreat center, and French chef Alain Ducasse will set up an institute for the culinary arts and conceive a new restaurant on a man-made island. Starwood Hotels & Resorts Worldwide has been lined up to manage four hotels, while Singapore-based resort operator Banyan Tree Holdings will operate what will be its first resort and spa facility in the country.

The centerpiece of the resort will be a man-made, semicircular caldera, with a saltwater lake and a 10-story waterfall. A 7,500-seat theater will be located behind the waterfall, and the "water curtain" will open every night to reveal a free show by Marco Balich, the man who created the opening and closing ceremonies for the 2006 Turin Winter Olympic Games.

Integrated into the faux volcanic crater will be roller-coaster rides and a ride-restaurant with a "flying roof," all conceived by Advent and the co-founder of Universal Resorts & Theme Parks, Robert Ward, now president of Strategic Insights & Creative Imagination.

The overall concept for this "adventure zone" in the resort is based on a character dreamed up by Advent. Named "Hurricane Harry," he is a mix between James Bond, Indiana Jones and Ernest Hemingway.

Advent said that plans are afoot, if he wins the bid, for a "major Hollywood" feature length film based on the project's namesake adventurer, which would create "the biggest and most dynamic pre-opening marketing campaign for a resort ever."

"New York-New York created a trend that was soon copied by other developers in Vegas. It was the first true large-scale project that totally integrated a theme, which was carried throughout the project in an inclusive manner. It changed the face of Las Vegas because, on the heels of it, and because of it, Sheldon Adelson created The Venetian Resort and Casino while the late Arthur Goldberg also spoke to me before New York-New York opened and told me he wanted to build Paris," Advent said.

"Harry's Island is the next generation of creativity and leisure development," he added. "Just like New York-New York changed the face of Las Vegas, Harry's Island will have the same impact and will push Singapore into the spotlight as a leisure innovator."

But if Advent has submitted the most expensive project among the three bids, he is facing tough competition against a $3.3 billion bid by Malaysia's Genting International and a $3.4 billion proposal submitted by Bahamas-based Kerzner International.

Genting has teamed up with Universal Studios and is proposing to include Universal's latest rides, the world's largest oceanarium allowing visitors to snorkel and dive with whale sharks, a "swim with the dolphin experience" designed and operated by Dolphin Quest of Honolulu, a maritime museum and a water park.

Kerzner has teamed with Singaporean property developer Capitaland Ltd. and proposes to build a futuristic water-themed park designed by legendary American architect Frank Gehry which incorporates distinctive, billowing, glass-encased sails embedded with fiber optics that will allow for imagery projections. There will be robotic creatures designed by the artificial intelligence laboratory of Massachusetts Institute of Technology mixing with real animals. The Atlantis Sentosa, which Sol Kerzner described as "an Atlantis for the year 3000," will have the world's largest jellyfish enclosure, the world's largest man-made living coral reef, major scale sculptures on display throughout the park and a string of fine dining restaurants run by world famous chefs like Gordon Ramsay, Santi Santamaria and Joel Robuchon.

Gaming operators are increasingly seeing gaming revenue in Asia as a plump cherry. According to a recent report by PricewaterhouseCoopers, global revenue from gambling is expected to rise 8.8 percent annually from $82.2 billion in 2005 to $125 billion in 2010. At $23 billion, Asia Pacific will account for about a fifth of the global turnover, and will be the fastest growing market with annual growth at 14 percent.

Some observers say Macau is poised to pass the Strip as the world's largest gambling destination. Gambling revenue in the city rose by 37 percent to $576 million in September with the opening of the $1.2 billion Wynn Macau, and the trend will only continue as more casinos open up there. Two weeks ago, Macau opened its 23rd casino, Star World, and another operator is expected to open the Babylon casino by the end of the year.

Sean Monaghan, gaming analyst at Merrill Lynch, explains the fierce competition in Singapore by two critical issues of scarcity and value: "Sentosa is one of the last real opportunities, within the next two years, for major new casinos in emerging markets. The country has excellent regulation, great security and infrastructure, and great taxation, which is why bidders have pitched the largest ever financial commitments for such projects."

Bidders anticipate the ratio of casino revenue to non-gaming revenues at Sentosa to be much higher than in Las Vegas. Kerzner has predicted that gaming revenue will make up at least 50 percent of the resort's receipts, significantly more than the 33 percent its flagship Atlantis in the Bahamas brings in. Advent predicts gaming could make up about 70 percent of revenue, a bit under par with Macau.

"The reason that gaming numbers will be higher in Singapore versus what you see in Las Vegas is because we have billions of people who reside within a close radius of Singapore who have a very high propensity to gamble. These specific demographics make it very different in terms of the clientele that you would get in Las Vegas today. Also, in Singapore I am projecting that approximately 85 percent of our customers will come from Asia," Advent noted.

So far, Genting's bid has been widely touted in the local press as the front runner, with Eight Wonder portrayed as an unknown entity that could have trouble executing its plans.

But Advent is unfazed.

"Several people seem to have formed an opinion early on, as they did with the Marina Bay bid and made a sport out of forecasting who was going to be awarded the Marina integrated resort bid.

"Few thought the Las Vegas Sands had a chance because of their business in Macau and because they did not have a local partner. The Las Vegas Sands was the dark horse in that race as well and they won," he quipped.

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