Las Vegas Sands (LVS) is moving forward with a $1 billion renovation of its Marina Bay Sands (MBS) property in Singapore, undeterred by the multibillion-dollar legal challenges it faces in Macau.
The investment, announced by LVS Chairman and CEO Robert Goldstein during a recent earnings call, will focus on enhancing the hotel accommodations at the iconic integrated resort. The upgrade is expected to introduce new “luxurious suite products,” designed to elevate MBS’s appeal to high-end clientele. Goldstein emphasized that the improvements would “significantly enhance” the property’s positioning among premium customers.
Singapore’s Growing Casino Potential
Although Singapore has long been viewed as a rising force in global gaming, it has yet to fully realize its potential as a top-tier casino destination. However, shifts in Macau’s regulatory environment could provide new momentum for Singapore’s growth. Sands’ combined investment of over $4.4 billion in MBS signals its confidence in the market’s future trajectory.
Expansion Timeline and Delays
LVS’s latest $1 billion injection is in addition to the $3.3 billion previously committed as part of its agreement to extend exclusivity in Singapore. That earlier commitment, however, has faced delays due to the impact of COVID-19 on the construction sector.
Despite these setbacks, Sands reported that the broader expansion of Marina Bay Sands remains on track for completion by 2026. This marks a slight shift from the earlier 2025 target outlined in last year’s third-quarter earnings report.
Singapore’s Minister of State for Trade and Industry, Alvin Tan Sheng Hui, acknowledged earlier this month that potential delays to integrated resort developments remain possible due to ongoing industry disruptions caused by the pandemic.
According to brokerage Sanford C. Bernstein, the new $1 billion commitment is entirely separate from the previously announced $3.3 billion. Analyst Vitaly Umansky expressed confidence in the returns from the latest investment, describing it as “yielding good returns” once realized.
Rising Casino Taxes in Singapore
The financial backdrop for Singapore’s casinos is also shifting. Beginning in March, the government will implement higher tax rates on gross gaming revenue (GGR). Mass market GGR up to SGD3.1 billion (US$2.29 billion) will be taxed at 18%, up from the current 15%. Revenue beyond that will incur a 22% tax.
For premium or VIP gaming, the flat 5% tax will be replaced with a tiered structure: 8% on the first SGD2.4 billion (US$1.77 billion) and 12% on any revenue beyond that.
Additional Capital from U.S. Asset Sale
To help fund its investments, Sands is expecting to receive proceeds from its $6.25 billion sale of Las Vegas assets, including The Venetian and Sands Expo. The company expects the transaction to close by the end of the first quarter.
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