The Myth of the Integrated Resort 1 – Casino Urbanisms

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“In summary, a reasonable working definition of an Integrated Resort is: A multi-dimensional resort that includes a casino that takes up, say, no more than ten percent of the resort’s public floor space, but where the casino generates at least US$300 million in gaming revenues.”

Macdonald A and Eadington W, 2008

“[Gaming] allows us to invest in things like a museum or some aspects of entertainment that have a lower rate of return, and maybe wouldn’t make sense on a standalone basis.”

Tanasijevich G., CEO of Marina Bay Sands, in Cohen M, 2020

The “working definition” of an Integrated Resort, as presented by two eminent scholars of gaming in the first quotation above, appears to be have measurable attributes and discrete components. It is defined around the casino which is small in terms of area but large in terms of revenue contribution. The CEO of Marina Bay Sands, one of the world’s most profitable IR that opened in Singapore in 2007, maintains this inverse relationship by pushing the casino further into the background – his statement uses museums to sell casinos, as if the latter is a means to an end. This discursive manoeuvre has become the accepted doctrine, repeated unproblematically by the casino industry, financial analysts, governments, gaming regulatory bodies and various pro-casino lobbies. It is replayed in 2019 when the Singapore government renewed the 10-year exclusivity period for both casino concessionaires and allowed them to expand their properties. The official statement stressed that though the gaming area would increase for both properties, it would actually decrease as a percentage to the total floor area of the expanded development – “from the existing 3.1% to 2.3%” (Ministry of Home Affairs, 2019). The overall message reinforces a pastoral image of the IR as a provider of employment, tax dollars and world-class tourism attractions. The ratio of gaming area to total area has become a political scale where the expansion of the former is contingent on the latter expanding at an equal or higher rate.

How have we come to accept the casino in exchange for museums as a fair trade, or even, the only trade possible? There is perhaps nothing new about this – scholars have long pointed out that the casino industry rode on the coattails of tourism to enter major urban markets in Australasia and the US in the 80s and 90s. Eadington, one of the scholars who offered the definition of the IR in the opening quotation, was much more critical in his earlier scholarship. Looking at the rise of non-gaming entertainment in Las Vegas in the 80s, he argues that these are merely “excuses” to induce visitations to the casino (Eadington, 1984).

Indeed, when the IR is legitimized by framing the casino in terms of “X percent” of the total floor area of the property, it detracts attention from how much the casino actually earns and whether this proportion between space and revenue is meaningful at all. What happens when we direct our attention back to the casino? Two points become obvious:

First, since their opening, annual gaming revenue in both IRs in Singapore has generally maintained at about 70-80% of the total revenue of the properties. This is lower than other Asian jurisdictions in Manila and Macau, which hovers in the 90% range. Still, Marina Bay Sands was the most profitable casino in the world between 2011 and 2019, slipping to second place momentarily in 2013. In public, the casino industry is careful to point the camera at celebrity chefs, theatres and convention centres. In private, company directors are much more straightforward about what the IR is all about to their shareholders:

“And I would like to make another point that seems to get lost in the shuffle of figures and that is our original business plan. Our business model was to build core and non-core assets, sell off the non-core assets at the right time and pay down or pay off all financing related to building the core assets.”
Las Vegas Sands Corp Q2 2009 Transcript Call, 2009

Second, Marina Bay Sands has the densest casino among the Las Vegas Sands properties. Here it is necessary to get into some technicalities. The Casino Control Act of Singapore makes a distinction between “casino premises”, “ancillary area” and “gaming area”. Put simply, “casino premises” is the sum of the “ancillary area” and “gaming area”, and it is the latter that is regulated. Ancillary areas include the major aisles, information counters, back-of-house facilities and performance areas within the “casino premises”, and these are excluded from the calculation. Such distinctions are not made elsewhere. In the state of Nevada, for example, gaming tax is calculated based on the number of tables and machines, while in Macau, the government controls the total number of tables each casino concessionaire can have. What the numerical cap on gaming area obscures is that the casino in Marina Bay Sands is the densest amongst other comparable Las Vegas Sands properties (Table 1). It has more tables and machines in an area that is less than half of the casino in Venetian Macao, widely known as the largest in the world. This is so even if the casino floor area of Marina Bay Sands is inflated by 20% to account for the subtracted “ancillary areas”.

TABLE 1: Comparison of floor area to tables and machines in Las Vegas Sands properties

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Source: Las Vegas Sands Corp, US Security and Exchange Commission Form 10-K, 2016.

[Author’s Note: This is an excerpt of a paper to be published in Critical Gambling Studies]

References

Cohen, M., (2020, March 8). Integrated Icon. Inside Asian Gaming. Accessed on May 2020. https://www.asgam.com/index.php/2020/03/08/integrated-icon/.

Eadington, W. (1984). The Casino Gaming Industry: A Study of Political Economy. The Annals of the American Academy of Political and Social Science, 474(1), 23-35.

Macdonald, A. & Eadington, W. (2008, Nov). The Case for Integrated Resorts. Inside Asia Gaming, 37-42.

Ministry of Home Affairs, (2019, April 3). Integrated Resorts to Invest $9 Billion in New World Class Attractions and Experiences. Accessed on 2 July 2020. https://www.mha.gov.sg/newsroom/press-release/news/integrated-resorts-to-invest-9-billion-in-new-world-class-attractions-and-experiences

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Author: Jennifer Martin