Singapore counts on casino resorts to draw tourists

Stale cigarette smoke wafts through the air as Singaporeans cluster around card tables in an exclusive residents-only gambling parlor. The parlor, called the Orchid Room, was opened by Resorts World Sentosa to accommodate Singaporeans who couldn't find a spot to gamble in the packed casino. It's a visible sign of this island nation's enormous appetite for gambling.

Yet, industry watchers say if this trend continues, it could create social problems and mitigate Singapore's expected economic gains from the new Resorts World Sentosa and its sophisticated competitor, Marina Bay Sands.

"Everyone's been asking the same question: Will Singapore (casinos) be successful?" says Aaron Fischer, head of consumer and gaming research at CLSA Asia-Pacific Markets. But the more relevant question appears to be, "What happens if they're too successful?"

"Without natural resources, tourism is as important to Singapore as the financial sector," says Jonathan Galaviz, an independent leisure and tourism analyst in Las Vegas. "Casinos represent the largest private-sector investment Singapore has had in its history."

The city state — which has long struggled with its reputation as a pit stop for long-haul flights rather than as the ultimate vacation destination — is betting on the international tourism and revenue that resort-goers can bring to Singapore. Experts expect the newly created gaming and resorts industry to eventually boost Singapore's GDP by at least half a percentage point annually because of millions of new visitors.