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Singapore casinos brace for Wuhan coronavirus fallout

City-state's gaming tables face declining visitor numbers amid epidemic fears

Genting Singapore, which runs the Resorts World casino in Sentosa, Singapore, is set to take a hit in its gaming business as visitors stay away amid the coronavirus outbreak (Photo by Dylan Loh).

SINGAPORE -- Gaming operators Genting Singapore and Las Vegas Sands, which run Singapore's two casinos, are set to take a hit in their gambling businesses amid scares related to the coronavirus epidemic originating from Wuhan, China.

Genting runs gaming tables at its Resorts World operation on Sentosa island in southern Singapore, while Las Vegas Sands' casino is on its Marina Bay Sands property in the country's downtown precinct.

In the city-state this past week, the number of cases of coronavirus infection crept into double-digit territory. So far, most have been Chinese nationals, two of whom stayed at hotels in the vicinity of the casinos.

The two operators declined to detail recent visitor numbers to the Nikkei Asian Review, but said they had stepped up health and safety precautions for guests at their entertainment facilities, which are popular tourist spots in Singapore.

"Thermal scanners to carry out temperature screening have been deployed at the entry points of our casino and attractions," a Resorts World spokesperson told Nikkei. "Marina Bay Sands has progressively implemented several precautionary measures. These include intensifying the cleaning and disinfection of public areas," a Sands spokesperson said.

Resorts World has added thermal scanners to screen for elevated body temperature at the entry points of its Sentosa Island casino and attractions (Photo by Dylan Loh).

The Nikkei Asian Review visited the casinos this week, and saw queue lines set up to channel gamblers toward thermal scanning points for body temperature checks before they hit the gaming tables. During the evening, the lines were thin, with visitors not needing to wait long before entering.

A Resorts World employee at the casino estimated they were seeing a 50% drop in visitors during the current Lunar New Year period, compared with previous years. "Last time, you had to queue for the jackpot machines, now there's very little queue," the employee said. Staff at Marina Bay Sands also said they had noticed fewer visitors.

The Lunar New Year holidays are typically peak season for casinos in the city-state, with scores of Chinese tourists usually thronging around gaming tables at both Resorts World and Marina Bay Sands. China's recent ban on group tours in an attempt to contain the virus will likely dent the revenue prospects of both resorts.

This blow has come just as both operators received the nod from Singapore authorities to expand their resorts in the country. Genting and Sands' exclusive rights to operate casinos in the city-state had lapsed, but were extended last year to end-2030.

Analysts have likened the present coronavirus situation to the 2003 outbreak of severe acute respiratory syndrome (SARS), in Singapore. Back then, Genting and Sands' casinos in the country did not exist, as they only opened in 2010, making the Wuhan outbreak a real test for the gaming operators in facing down a damaging epidemic.

Marina Bay Sands resort in Singapore has implemented precautionary measures to prevent the spread of coronavirus, including intensifying the cleaning and disinfection of public areas (Photo by Dylan Loh).

Selena Ling, head of research at Singapore's OCBC Bank, noted that China was the city-state's top source of visitor arrivals in the first half of last year, accounting for 11.8 million inbound travelers and $1.46 billion in spending -- 20% of the country's total visitor arrivals and tourism receipts.

"Therefore, travel bans and visitor disruptions, if prolonged, will likely have a greater impact today compared to back in 2003 during the SARS period," Ling said in a report.

According to the most recent statistics from the Singapore Tourism Board, sightseeing, entertainment and gaming accounted for $1.06 billion, or 22%, of tourism receipts in the second quarter of last year.

"China is the key driver of Asian growth so [the virus] will have some impact. Will it be as extreme as SARS? Only if everybody stays indoors," Song Seng Wun, director at CIMB Private Banking, told Nikkei, adding that first quarter earnings this year for the gaming operators could take a hit assuming the coronavirus epidemic does not clear up quickly.

Maybank Kim Eng Research Analyst Samuel Yin noted in a report that previous cases of viral transmissions after SARS, including the H1N1 swine flu between April 2009 and August 2010, and Middle East respiratory syndrome (MERS), between May and July 2015, did not weigh too heavily on the gaming industry.

But he said the Wuhan coronavirus, with its rapid spread, could have a "materially negative impact" on the casinos, given that the current outbreak more closely resembled that of SARS in its ability to inflict potential damage on tourism-dependent sectors.

Yin estimated that the Chinese account for 30%-40% of Singapore's gross gaming revenues. A potential lifeline for gaming operators would be if the Singapore authorities helped them cushion the fallout from the Wuhan outbreak by relaxing casino entry levies which are meant to deter Singaporeans from gambling.

"International and domestic tourism trends are similar during pandemics in that no rational tourist, international or domestic, wants to venture into enclosed areas (e.g. planes or casinos) during pandemics lest they be infected," Yin said.

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