Now another Asian powerhouse is set to push Sin City down to third on the list of global gambling hotspots.
We're talking about Singapore - the Southeast Asian city-state that has a red-hot economy and a new reputation as a tourist mecca.
Singapore, with just two casinos, is set to pass Las Vegas as the world's No. 2 gambling hub, according to Frank Fahrenkopf, president of the American Gaming Association.
"Now more than a year old, the two integrated resorts in Singapore have exceeded all expectations and turned the nation into Asia's second global gaming superpower," Fahrenkopf told the AFP on the sidelines of a recent gaming conference in Macau. "The country's gaming market will likely overtake Las Vegas as the world's second-largest gaming center as early as this year."
Singapore's Resorts World Sentosa and Marina Bay Sands casinos will rake in $6.4 billion of combined revenue this year, Fahrenkopf predicted. That would be a sizeable increase over 2010's $5.1 billion take.
Las Vegas brought in $5.8 billion last year, after stumbling in the wake of the financial crisis and housing collapse. A report citing research by the Royal Bank of Scotland Group PLC (NYSE ADR: RBS) indicated that Las Vegas would earn $6.2 billion this year, according to Agence France-Presse.
Still, Singapore, which is relatively new to the gambling scene, seems to have the hot hand right now.
"I'm dying to get into Singapore," Wynn Resorts Ltd. (NYSE: WYNN) CEO and casino tycoon Steve Wynn said in an interview with Singapore's Business Times. "That's my next goal in life - to build a hotel in Singapore."
Wynn no doubt has been needled by the success of his chief competitor, Las Vegas Sands Corp. (NYSE: LVS), which developed the Marina Bay Sands.
The sprawling casino complex, which opened in April of last year, reported first-quarter revenue of $719.4 million. That's a big reason why Standard and Poor's last week raised its corporate credit rating for Las Vegas Sands.
S&P bumped the company's credit rating to "BB" from "BB-," citing strong profits in the Asia-Pacific region. S&P expects the Marina Bay Sands to generate about $1.1 billion in EBITDA (earnings before interest, taxes, depreciation, and amoritization).
The rating agency said net revenue in Macau would grow 10% this year, followed by a 2.5% decline in 2012, and 3% growth in 2013. Las Vegas Sands Macau properties generated $1.2 billion of revenue in the first quarter.
In fact, Asia now accounts for 80% of the company's revenue.
Las Vegas Sands carries a heavy debt burden of $10.1 billion, but expects to recoup at least some of its expansion expenditures through the sale of one of its Singapore assets. The company is looking to unload the shopping mall at Marina Bay for about $4 billion. However, the Singapore tourism authority says it won't be able to do so until 2017.
Just as Singapore's new casino row has boosted Las Vegas Sands' bottom line, it's also given a shot to the economy of the Asian city-state.
Money from tourism in Singapore rose to a record high level of $4.98 billion in the first quarter. And the entertainment sector, which includes gambling, showed the strongest growth - 321%.
That helped the city-state's economy, which was already thriving, expand 8.3% year-over-year in the three months through March. After growing 14.5% in 2010, Singapore's economy may grow 6.2% this year, according to the median estimate of 21 economists in a survey by the Monetary Authority of Singapore, Bloomberg News reported.
If you're looking for a way to invest in this new Asian powerhouse, but don't feel like gambling on Las Vegas Sands, you may take a look at the iShares MSCI Singapore Fund (NYSE: EWS).
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