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Even the players face disclosure requirements.

While not unexpected, Singapore’s newly released gaming regulations included fairly high hurdles for prospective junket operators.  What may be a surprise is that high rollers will also face disclosure requirements. 

We’ve long maintained that that the Singapore ramp may be slower than anticipated.  Junket operations already have a clientele.  The casinos themselves need to time to build a database.  From our conversations with junket operators over the last year it was pretty clear that given the likely regulations in Singapore, they wouldn’t even apply for licenses. 

Now, even the prospective high rollers will have to provide personal disclosures.  This is likely to negatively impact the VIP business as well.  Are the new regulations enough to kill the long-term viability of the market?  Probably not.  Over time, the operators will establish a strong high end business and benefit from an extremely low relative tax rate.  Moreover, if the regulations prove too onerous, the Singapore Government could make changes.  We believe the government desperately wants the projects to succeed.  After all, legalizing gaming in this conservative country was controversial from the start.  Success is now imperative.

However, our concern remains the speed of the ramp relative to expectations.  Indeed, we are projecting only $650 million in EBITDAR at LVS’s Marina Bay Sands in the first year of operations, below Street expectations and certainly company “guidance”.