9. Singapore’s New Lesson for Dubai: Family-Friendly Casinos Work

Dubai, which has long drafted Singapore, should note Singapore’s recent launch of the Marina Bay Sands casino. It’s an important lesson in how a city-state can build family-friendly casinos and jump start tourism.

Singapore’s recent opening of the Marina Bay Sands appears to be a glowing success. The $5.5 billion resort has logged approximately 5 million visits since its opening in April 2010. And even this is while it is still in a state of partial, phased opening. According to a recent Wall Street Journal article, they are expecting over 70,000 visitors per day when it is fully completed by the end of the year.

But Singapore’s entrance into the casino business was after a long and agonizing decision by the government. There were concerns that gaming would invite crime. That it would be incompatible with the family-friendly environment of the city and the local sensibilities. That it would change the reputation of the city. They did not want clean, law-and-order, family friendly Singapore to become a casino town like Las Vegas or Macau. These are likely the same concerns that Singapore’s city-state cousin Dubai would have, given their cultural sensitivities.

But Singapore’s casino initiative has now proven four things that Dubai should seriously note:

Lesson #1: Casinos are not incompatible with law-and-order, clean, family-friendly cities. With the right government oversight, they can be introduced in a controlled and limited fashion. You can contain all the gambling within the casinos themselves. You can contain the casinos within specific real estate developments. And you can control entrance to the casinos through fees and other mechanisms.

And Dubai is already comfortable creating such controlled environments. They already limit alcohol, clubs and bars to within specific hotel resorts only. Note the Sands serves coffee and tea, not alcohol, in the casinos. In short, you can get all the benefits without the risks to the city’s reputation or sensibilities.

Lesson #2: The benefits are massive. The most powerful benefit is that gaming drives tourism, which happens to be Dubai’s lifeline. Casinos are a powerful mechanism to draw in tourism and it is a particularly stable type of tourism.

Attracting such inbound tourism has always been the strategic objective of Dubai and its industries; feeding the real estate, hotel and retail businesses of the city. But it has always been unstable, depending on warm weather or real estate purchases or retail shopping trips. Casinos create stable inbound tourism. Gaming has supported Las Vegas’ isolated existence in the desert for decades.

And you also get a multiplier effect as people already visiting stay longer on trips. It moves the destination beyond “stop-over” or “weekend-visit” status. So not only do you increase inbound tourism from Russia, Europe, and Middle East; but you also add extra days to all the existing tourism. Dubailand, the still developing theme park, was envisioned with just this objective of increasing the average length of stay.

Lesson #3: In Dubai such a tourism impact could be even larger than in Singapore. The US has Las Vegas. And China and Asia already have Macau. But Europe and the Middle East have no such gaming destination within easy flying distance. Certainly not one capable of combining gaming with mega-real estate and a scenic location. Dubai could be the family-friendly casino town for Europe.

Lesson #4: Casinos directly drive real estate, Dubai’s other growth engine. Dubai has already excelled at real estate but suffers from fluctuating foreign demand. Casinos could re-build and re-invigorate the real estate market likely faster than any other move Dubai could make at this point. Singapore is already reporting an increase in the residential, retail and office demand all around the bay where the Sands is located.

The long and the short is that Singapore has just shown Dubai, its long-time emulator, a potential silver bullet for its current situation. Since its collapse, Dubai has become a well-driven car with a great structure but without much of an engine. A family-friendly casino initiative could provide a powerful engine and could re-launch Dubai. It would be a similarly agonizing decision for Dubai but the lessons from Singapore are worth considering.

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