When Singapore’s Marina Bay Sands (MBS) integrated resort went almost completely dark during the 2020 COVID-19 lockdown, the absence of guests in the three gleaming towers, with their casinos, hotels, malls and event spaces, symbolized the country’s tourism industry grinding to a halt.

The pandemic also put on hold the grand expansion plans of both MBS, owned by Las Vegas Sands (LVS), and its casino rival in the city-state, Resorts World Sentosa, owned by Malaysia’s Genting.

Now, with Singapore’s economy nearly fully recovered from the pandemic, and nearly 15 years on from the opening of the so-called integrated resorts, the duopoly is not only reviving their developments but doubling down on their bets that the country will remain a key global gambling hub.

Together the two companies intend to spend $13 billion on their expansion plans, almost twice their pre-pandemic estimates.

“This is going to be the most important gaming and hospitality building in the world,” LVS President and Chief Operating Officer Patrick Dumont said of the planned fourth MBS tower during an earnings call in October.

However, like most wagers, success is far from guaranteed. This is partly because Singapore’s neighbors, notably Thailand and the Philippines, are adopting the integrated resort model as a blueprint with plans to, respectively, build and expand their own versions to lure gamblers.

On Monday, Thailand’s cabinet approved a draft bill to legalize gambling in designated “entertainment complexes,” which would include theme parks, hotels and shopping malls. A government spokesperson said the bill would be submitted to parliament for the first of three readings by April.

“Tourists are very discerning,” said Joshua Loh, course chair for the diploma in tourism and resort management at Singapore’s Ngee Ann Polytechnic. “If they feel they’ve seen it all, they will just hop onto a different destination with a newer product.”

With a gambling-mad population, a developed tourism infrastructure and a government looking to broaden its stuttering economy, Citigroup analysts estimate that Thailand could become the world’s third-largest gaming hub after Macao and Las Vegas. 

LVS CEO Rob Goldstein said of Thailand on an earnings call last year: “It’s a very, very exciting market on a lot of levels, and just the sheer size of population, the accessibility, and the willingness of people to travel to Thailand. It’s obviously, I think, the No. 1 resort destination… in Asia. 

“So we’re interested. We’re listening. We’re doing the work to find out what makes sense for us there.”

Industry watchers still expect Singapore to dominate the region over the next five years. But the city-state faces its own challenges due to a shrinking pool of high rollers from China as Beijing ramps up its crackdown on gambling money. 

Daniel Cheng, an integrated resort consultant and former Hard Rock International and Genting executive, said a big proportion of Chinese VIPs are now “cut off” due to the government’s anti-corruption push. Resort operators “will have to try harder to look for more legitimate high net worth individuals — real businessmen and multimillionaires,” he said. 

Since their openings in 2010, Singapore’s IRs have become their operators’ crown jewels. For LVS, which sold its American properties in 2022, MBS has become its largest facility by revenue at $3.8 billion in 2023, of which $2.6 billion came from the casino. The Singaporean resort accounted for 37% of the group’s total sales.

In addition to attracting high rollers, LVS said the upgrade, dubbed IR2, is focused on those who prefer a higher-end gaming experience but do not qualify as VIPs — people who open a deposit account with the operator with a minimum balance of 100,000 Singapore dollars ($73,500). A key segment for casino operators in recent years, these higher-end gamblers are drawn to posh amenities and high-quality entertainment, boosting nongaming revenue. 

Dan Wasiolek, senior equity analyst at Morningstar, said he expects MBS’s new tower to deliver annual “about low-teen returns on investment capital.”

Meanwhile, Genting’s Resorts World Sentosa, known as a more family-oriented resort with Universal Studios, is expanding its focus on high-end offerings and broke ground on a waterfront project that includes two new premium hotels. The entire expansion of the resort will see the floor space of its attractions increase by 50%. 

The success of these resorts helps explain why other countries are keen to roll the dice and invest in the sector. By 2019, Singapore’s answer to Macao and Las Vegas had helped nearly double its foreign visitors to 19.1 million from 9.7 million in 2009. While last year’s arrivals are estimated at around 85% of pre-COVID levels, tourism receipts are expected to hit SG$27.5 billion to SG$29 billion, potentially setting a record.

The casino resorts “will continue to anchor Singapore’s tourism offerings,” said Terence Ho, associate professor in practice at Singapore University of Social Sciences.  

Thailand’s casino resort development, a flagship policy under Prime Minister Paetongtarn Shinawatra, aims to legitimize previously underground gambling, in addition to muscling in on neighboring countries’ gaming industries. Casino legalization does not enjoy wide support from the Thai population, which is largely Buddhist with a Muslim minority. A majority of respondents in a June survey said they would not patronize legal casinos.

“The objectives are to increase revenue, support investment in Thailand and solve illegal gambling,” Paetongtarn told reporters on Monday. The location for the proposed complexes, and the timetable for their construction, have not been announced.

Citigroup forecasts Thailand’s gaming revenue could reach $9.1 billion in 2031, surpassing Singapore’s $8.3 billion, assuming it is operating at full scale, and with the allocation of two licenses in Bangkok and one each in Pattaya, Phuket, and Chiang Mai.

The plan, which has attracted interest from local and foreign players, including LVS, could raise tourist numbers by 17% annually, according to Krungsri Securities. From January to November, Thailand welcomed 32 million visitors, nearing the 2019 full year-record of 39 million.

Thailand’s proposed 17% gaming tax rate would be among the lowest in Asia. Macao’s is set at 40% and Japan’s at 30%. Singapore’s mass gaming rates stand at 18% and 22%, depending on the operator’s annual revenue, while earnings from VIP players are taxed at 8% and 12%, depending on the amount taken.

“In our view, the Thai government has shown its determination in creating a major boost to the tourism industry via gaming legalization,” Citigroup said in the November report, “and the speedy legalization progress thus far is a testament to that.” 

In the Philippines gambling is already well established. The first integrated resort opened there in 2009 and the nation’s gross gaming revenues were about 280 billion pesos ($4.82 billion) in 2023, according to the government-owned Philippine Amusement and Gaming Corp. (PAGCOR), the regulator. But as regional competition mounts, President Ferdinand Marcos Jr. is also considering allowing more casino resorts to open to attract tourists. PAGCOR plans to issue at least two more licenses to build resorts in the coming years, a representative told Nikkei Asia, and expects investments in the sector of about $6 billion over the next five years. 

Such brick-and-mortar establishments should be helped by a government crackdown on online gambling, much of which is illegal. 

Thailand’s entry into the casino market poses a real risk to Cambodia’s border casinos, which rely on Thai gamblers for customers. Ben Lee, managing partner of gambling consultancy iGamix, suggests Cambodia may also need to break the monopoly held by Nagaworld, the Hong Kong-listed Malaysian company that has an exclusive license for Phnom Penh, or offer more competitive rates to survive.

“When Thailand comes online, and most people believe it’s when, not if, it will impact Cambodia greatly,” he said, citing the 30 to 40 casinos just across the Thai-Cambodia border. “When Thai casinos spread out [to] the provinces, Thais will not go out of the country to Cambodia.”

Vietnam allows a limited number of casinos to operate, mostly for foreigners, in seaside towns from northern Haiphong to Vung Tau outside Ho Chi Minh City. The communist country is considering how to expand the sector to capture spending from foreign visitors and locals who gamble abroad. 

The Finance Ministry commissioned industry research, stating in March that Macao and Singapore should be studied, as Vietnamese casinos are small and “much weaker than those in the region, even compared to Cambodia.”

In Thailand, critics highlight political instability and regulatory risks as major challenges for foreign operators. “Thailand is politically unstable,” said integrated resort insider Cheng. “An unclear licensing process could lead to revocations by future governments, posing a big risk for operators.” 

Cheng also noted that U.S. operators require approval from their home states to venture abroad, and any destination with money-laundering risks or exposure to criminal activities could jeopardize their licenses back home. “That is why no major American operators are in the Philippines,” he said. 

Casinos have become the focus of increased scrutiny from the Financial Action Task Force, a Paris-based global watchdog. Singapore, which faced a massive money laundering case in 2023, passed several bills last year to lower the threshold for due diligence checks on cash transactions and allowed its two operators to share information about risky patrons. 

In the long term, uncertainty remains around the business model of traditional casinos. In Las Vegas, noncasino revenue has become the main source of income for major operators. For MGM Resorts International, the world’s largest casino operator, gaming revenue from the Las Vegas Strip Resorts — which includes casinos like Bellagio and MGM Grand Las Vegas — totaled $2.1 billion in 2023, accounting for just 24% of its total revenue in the U.S. hub.

“We always say the substance is in the software,” Cheng said, referring to broader entertainment offerings like theater and live performances at resorts. “Your hardware might be good, but without good software, people will just visit once to take some photos.” 

“We still haven’t found the right formula in Asia,” he added.