Marina Bay Sands Probe Could Ultimately Help Resorts World Sentosa
The iconic Marina Bay Sands (MBS) casino resort in Singapore is facing an investigation over potential anti-money laundering violations. Maybank analyst Samuel Yin Shao Yang believes that the MBS investigation will benefit the only other casino in Singapore which is Resorts World Sentosa (RWS). RWS may find itself benefiting from the influx of MBS’ fleeing VIP customers.
According to a Bloomberg report, the US Department of the Interior (DOI) has handed out a grand jury subpoena to the former compliance chief for MBS, in search of information related to the abuse of internal financial controls.
The former compliance chief was also prompted to provide records that could show violations committed by MBS, primarily through casino junket operators, where third-parties lend money for casino credit. The DOI is also looking into allegations that MBS retaliated against whistleblowers.
Las Vegas Sands Corp, the parent company of MBS, faced a similar investigation from the US Department of Justice in 2010, after Steven Jacobs, the former CEO of Sands China which is Las Vegas Sands’ Macau-facing operation filed a lawsuit.
Jacobs’ lawsuit resulted in the significant growth of RWS’ market share of the VIP market. RWS found itself garnering a record 67% of the VIP market share in Singapore during the 3rd quarter of 2010 and held the number to at least 50% for the following two quarters. RWS had previously just held onto 47% of the local VIPs since its opening in January 2010.
RWS is one of the only two integrated resorts operating in Singapore and is owned by the Malaysian gaming behemoth Genting Group.
VIPs Steer Clear of Investigated Casinos
According to Yang, while he does not presume the guilt or innocence of any of the firms involved in the charges, he knows from experience that VIPs tend to steer clear of casinos that are being investigated, specifically by a federal US agency.
Yang further added that RWS does not need to do anything but capitalize on the influx of local VIPs migrating from MBS. As soon as RWS is allowed to reopen, Yang expects them to benefit immensely from the increased VIP market share, as they did back in 2010.
Both MBS and RWS suspended operations on April 7. As of now, no word has yet been released as to when either property will be allowed to resume. Almost 40 industry sectors have been allowed to reopen last June 2, but the Singapore Casino Regulatory Authority has kept silent on when casinos can reopen.