The paper provides a statistical prediction model applied to project a new casinos revenue potential based on visitor count, patronage, operating patterns, game mix , table limits, actual wagering pattern etc. Live data collection on key parameters were conducted and a revenue prediction model was designed to apply theoretical assumptions.
Casino Revenue Potential Study Model By Ramachandar Siva
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ram achand ar si va for D eutsc he Bank R ese arch
25 april 2010
2. Casino Reve nue Potenti al Stu dy – Re sor ts Worl d Sento sa
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CONTENT
Section Page
1. P urp o se o f St ud y 2
2. Exec utive S umma r y 3
3. Sco pe of St ud y 5
3.1 Overview of RWS casino operations 5
3.2 RWS casino visitor pattern 5
3.3 RWS casino revenue projection 5
3.4 RWS casino table games performance 6
4. Metho do lo g y 7
4.1 Estimated Theoretical win model 7
4.2 Setting House Edge % for the study 8
4.3 The Statistical approach 11
i. Casino Operations survey 12
ii. Casino visitor arrival survey 13
iii. Table Games live action survey 13
5. Fi ndi ngs 15
5.1 About RWS Casino Operations 15
5.1.1 General overview of casino 15
5.1.2 Operating hours and pattern 16
5.1.3 Types of Games 18
5.1.4 Physical table count 19
5.1.5 Electronic Gaming Tables & Slot Machines 20
5.1.6 RWS Common Room – operational capacity April 2010 22
5.2 RWS Casino visitor arrival study 24
5.2.1 Casino visitor arrival projection 24
5.2.2 Daily pattern of visitor arrival 26
5.3 RWS casino revenue projection – common gaming 27
5.3.1 Monthly and Annualised statistical theoretical win 27
5.3.2 Revenue contribution by game sector 27
5.3.3 Considerations for projection of annualized casino revenue 28
5.4 RWS Game Performance Study 30
5.4.1 Game efficiency 30
5.4.2 Game Handle ( Turnover ) 32
5.4.3 Game margins and profitability 34
6. Co ncl usi on and Dis cussi o n 36
6.1 RWS Casino Operations Review 36
6.2 Casino Visitors 37
6.3 Revenue Performance 38
6.4 Study Limitations 41
7. S ug gesti o ns t o e nhanc e the TW Projecti o n M od el 42
End Notes 45
Appendix 1a Gaming Capacity – Game Distribution
Appendix 1b Gaming Capacity – Table Spread
Appendix 2 Casino Visitor Analysis
Appendix 3a RWS Statistical Revenue Projection
Appendix 3b RWS Revenue Projection 2010 & 2Q10-1Q11
Appendix 4 RWS Key Revenue Performance Indicators
Appendix 5 Visitor Survey Plan
Appendix 6 Table games live action survey plan
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1. Purpose of Study
Resorts World Sentosa casino, (RWS), opened on the 14th February 2010. In the two months
since, the success and revenue potential of the casino has been open to speculations, as
gaming statistics are not publicly available yet.
The purpose of this study is to project the estimated revenue potential of casino gaming
operations at Resorts World Sentosa (RWS) for the first year of operations. A survey of the
casino operations is undertaken to gather information required to estimate the key performance
indicators, which will be used to tabulate and provide revenue projections. This will form the
basis to evaluate the casino’s revenue potential. This paper includes a preliminary study to
define operational capacity and visitor arrivals to provide a broader perspective of the RWS
casino operations at its infancy.
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2. Executive Summary
The Casino Revenue Potential study of Resorts World Sentosa casino was completed in the month of April
2010, approximately 2 months after its opening. Floor survey and live games data collection was
th th
conducted between the 5 and 10 of April. This study is restricted to RWS’s mass gaming operations,
where public access allowed the survey to be conducted. Findings and projections of revenue are solely
reflecting the common gaming capacity of RWS. The following are summary of findings.
1. Overview of RWS casino
The RWS casino offers approximately 365 gaming tables and 1200 gaming machines. The varieties of
games offered are similar to Genting. All the table games and electronic table games in operation are
well received. Study confirms that RWS is running at less than 50% of its full operational capacity in
common gaming division. The lowest table opening count was observed at 69 tables and 197 at the
highest. Observations suggest that demand exceeds supply of gaming at RWS during peak and high-
peak periods. In general, the main games of Baccarat and Roulette are affected by operating hours
offered causing overcrowding and heavy chip action. Improvements to match supply to demand will
be a key concern for RWS over the next 3 months. Overall the casino operations and product is
deemed exceptional and world-class in presentation.
2. Casino Visitors
The study shows that the casino patronage is above average. Visitor rate is estimated at 22,000 for a
typical weekday and 42,000 on Saturday; which translate to approximately 780,000 per month and
10.1 million per annum of visitors. (Factoring of repeat entry of visitor (on survey day) probabilities for a
degree of correction in our analysis provides an estimate of 480,000 per month and 6.2 million per
annum.) These estimates are conservative, as it does not take into account growth of visitor arrivals
and positive fluctuations due to holiday periods. Apart from consideration of an adjustment expected
when Marina Bay Sands opens in late April 2010, it can be concluded that to date the RWS casino
operations in Singapore is successful in attracting both local (45% overall) and foreigners (55% overall).
3. Casino Revenue Projection
The statistical theoretical win projection model, which uses the estimate of handle, offers the best
approximation of revenue potential for an active casino. The propriety method developed for this study
is comprehensive as it takes into consideration a variety of operating factors that impact the handle.
The study concludes that the casino capable of generating a daily win of SGD $ 3 million and with an
annualized revenue potential of SGD $ 1.1 billion for the mass gaming division. Estimate is based on
statistical outcomes of the study for the month of April 2010. The projection does not take into
consideration future positive or negative factors that would impact the revenue of the casino.
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4. Game Performance
The study of RWS’s game operations performance provides an insight to the efficiency and related
impact on its present revenue generating capacity. This is an extremely rare independent study of the
nuts and bolts of an active casino where the technical capabilities are examined. The propriety
methodology designed for this study focuses on establishing the statistical values of table games Key
Revenue-Performance Indicators that are crucial game efficiency descriptors.
The findings conclude that RWS casino is at approximately 40-45% of technical efficiency. The key
area of concern is the game pace of major games where overall the operations if at best about 40% of
commonly acceptable Games per Hour expectation. The main issue would be inadequate tables to
cater for players during peak and high peak periods. The game pace suffers due to overcrowding
which increases chip action, further compounded by dealers lacking experience. Other factors that
would require fine-tuning are the table limits, the offers of side bets and game procedures. The
revenue of Baccarat, Roulette and Tai Sai are the most affected by game pace. These games receive
above high-level wagers (Baccarat - $3800 per game and Roulette $2500 per game) thus the game
pace is crucial to increase the handle per hour by increasing the game pace. Tai Sai (wager per game
$3000) and 3 Pictures (wager per game $2100) are the 2 other games affected by the low win
extracting capability caused by low game pace.
Overall, it can be concluded that the RWS casino operation has pent-up potential in terms technical
revenue generating capabilities. Large increments in game efficiency are expected in the short-term as
the casino management fine tunes its operations. There is confidence to suggest that revenue
projections have an upside merely due to significant impact from game operation improvements.
This report provides detailed analysis and discussions on game performance of RWS casino.
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3. Scope of Study
The following describes the scope of the study and report which is in 4 parts:
3.1 RW S casi no o pe ratio n patte r n st ud y.
To define the operational parameters of the RWS casino.
Design and deploy a survey.
Organise information from the survey to present the following:
i. Description for the common gaming facility - floor separation and allocation of
gaming tables and machines by area.
ii. Casino operations demographic – statistics of game types and available tables
and gaming machines.
iii. Define the current operations capacity against the possible full operating capacity
in terms of total operation hours of gaming offered per day by game type.
iv. Define tables operating pattern employed by the casino to match fluctuating
demand throughout an operational day of 24 hours differentiated by weekday and
weekend pattern.
3.2 RW S casi no visit or patter n stud y.
To estimate daily visitor volume for weekday and weekend.
Design and deploy a survey, data collection and analysis method.
To analyse data, tabulate and present estimates of:
i. Daily visitor arrival pattern for weekday and weekend.
ii. The variance between local and international visitors.
iii. Projection of weekly, monthly and annual visitors to the casino.
3.3 RW S casi no r eve nue p r ojecti on.
To project the common gaming revenue generating capability of the RWS casino in
terms of theoretical win derived from estimated handle.
Design a statistical model to project RWS casino’s common gaming revenue.
Design and deploy a sampling and data collection method. Data collected from live
gaming activity include game pace (hands/hour), total wager per game, number of
players per game and table limits.
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To analyse data, estimate the key variables and tabulate the following:
i. Total Operating hours for each periods (low-peak) of operation for each game type
by weekday, Friday, Saturday and Sunday.
ii. Order the data collected for games per hour, wager per game and players per
game by game type and calculate the average values for 6 low-peak periods within
24 hours for weekday, Friday, Saturday and Sunday.
iii. Use the averages for the variables of operating hours, hands per hour and wager
per game to tabulate the Theoretical Win for each game type for 6 periods of each
varying operational pattern days defined as Weekdays, Friday, Saturday and
Sunday.
iv. Complete projection of the casino’s common gaming total revenue capacity
(weekly, monthly and yearly) based on theoretical wins tabulated of each period of
the operational pattern days.
3.4 RW S casi no table game s pe rf orm anc e st ud y.
Provide a basis for Comparative Performance Analysis of table games
Isolate tabulated values into averages of all periods and days (weekly) and define the
following:
i. Games per hour comparison by game type – to describe efficiency.
ii. Average Wager (Handle) per hour by game type – to describe sales volume.
iii. Average Wager per player per game by game type – to describe purchasing power
or gambling intensity.
iv. Theoretical win per game by game type – to describe comparative revenue margin
between games.
v. Theoretical win per hour by game type – to describe profitability between games.
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4. Methodology
4.1 E stimated T he oretica l Wi n M odel
The usual methods to project potential casino revenue are based on the application of detailed
“gravity models” that relate actual (and, for proposed facilities, potential) gaming-facility revenues
to the demographics of the areas surrounding them. These models are based upon a well-
established principle of economics known as “Reilly’s Law,” which describes how consumers
tend to visit alternative retail centers (roughly) in direction proportion to the size of each center
(such as casino square footage, or number of slot machines) and inversely proportional to the
square of the distance to each -- hence the parallel with Newton’s law of gravitation. This
method is usually used for studies undertaken before a decision to open the casino is made or if
there are plans to redevelop or add casinos to a locality.
In the case of an active casino, this study employs an unusual method of estimating the revenue
potential of the casino. A statistical model is designed to estimate the weekly handle (total
wagers) of the major table games. The total handle is a variable in the tabulation of Theoretical
Win. The following formula forms the basis of the statistical model used in this study:
Theoretical Win = Handle x House Edge %
where,
Handle = Average Wager per Game x Average Games/Hour x Total Operating Hour
Thus the statistical model requires measurement of the variables at live table games. Survey is
conducted on randomly selected live table games and data is collected for wager per game and
games per hour. Total tables opened throughout the day are tracked and recorded to tabulate
the Total Operating Hours for each game studied.
The table games surveyed are:
• Roulette ( RL)
• Baccarat (non-commission and commission) (BB or MB )
• Blackjack and Pontoon (not differentiated) (BJ and PO)
• Progressive Caribbean Stud Poker (CSP)
• Progressive Texas Hold ‘Em (TX)
• 3 Card Poker (CP)
• 3 Pictures (TP)
• Tai Sai (TS)
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4.2 Setti ng t he Ho use Ed ge % f or purp os e of st ud y
Ho use Ed ge (HE%) is the mathematical advantage the casino has over players for each of its
games. Casino games are based on prediction of the outcome of a random event and wagering
on the success of the predicted outcome. Based on the success probability of an outcome, the
‘True Odds’ are defined. By setting the ‘Payout Odds’ lower than the ‘True Odds’, the casino
creates for itself a mathematical advantage for all the possible outcomes in a game of chance.
House Edge is a statistic value that has a corresponding parameter in all casino games. The
calculation and the stating of HE% for games can be as straight forward (as in Roulette) or
extremely complicated (as in Texas Hold ‘Em Poker). The variety of game rules and side bets
offered by casinos further create complications in establishing the Empirical House Edge (EHE).
In certain games with multiple betting options, the probabilities differ for each bet type thus a
game shall have varying house edge percentages. In such cases the industry uses Blended
House Edge (BHE) figures or settles for the house edge value of the most common or probable
wager or wagers, i.e. in Tai Sai, the commonly accepted practice is to use the HE% of Big or
Small bets which attract the bulk of wagers, as the various other bet options attract far lesser
bet volume relatively.
For the purpose of this study the House Edge % values described in Tabl e 4. 1 are used to
tabulate the theoretical win.
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Table 4. 1: H o us e Ed ge % sta nda rds fo r RW S ga mes i n the st ud y.
Game Ho use Ed ge % Descri ptio n
Roulette 2.703% Empirical value for single zero roulette.
Baccarat 1.265% Blended house edge, based on resolved decisions
(Tie not included) for game of eight-decks.
Banker +1.17%
Player +1.36%
“These are known as the relative win rates”
Aggreg ate Ho use E dge = (1 .17+1 .36)/2 =
+1.265%
The RWS Baccarat HE would also be affected by
offer of side bets such as “Pair”, “Super Six’,
“Insurance” and variation for No Commission games.
The ‘‘Pair”(+10.7% HE) and ‘Super Six’, side bets
increases the overall house edge to a certain degree
but little evidence is available if the “Insurance” side
bet improves or decreases the house edge. The No
Commission Baccarat is quoted to have House
Edge of +1.46%. These elements are left out of the
HE% assumption for the purpose of the study.
Blackjack & Pontoon 1.10% Blackjack/Pontoon house edge is subject to number
of decks, rules applied by the casino and player skill.
RWS game rules and assumption that players use
optimal strategy (basic strategy) will provide:
Blackjack +0.513 %
Pontoon +0.490%
The HE on consideration of players using non-
optimal strategy or no strategy which will give HE
varying from +1% to +14%.
Although a good estimate would be +3.00%, in this
study H E of +1.10% mimics the standard HE
adopted by major regional casinos.
continue …
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The following describes stages of survey, data collection, tabulation and analysis method.
i. Ca si no Ope ratio ns S urvey
1. Survey is conducted for types of games offered by RWS in the common gaming
area.
2. Survey is conducted to count the number of table games, electronic game stations
and slot machines.
The operational areas of the casino are identified and allocation of tables
surveyed.
A count for physical tables available and actual tables in operations.
3. Survey is conducted to record table opening patterns.
Table opening pattern impacts the operating hours, a key component of the
revenue projection model.
A casino-day (24 hours) is divided into 6 periods that define the ‘low-peak’
operation system employed by casinos. Number of tables opened for each
period is recorded by game type, table limit and location (sub-section within the
common gaming area)). This captures the fluctuation of operational capacity to
match changing demand throughout the day.
A 7-day week operation is divided to Weekday and Weekend operating pattern.
Starting Friday evening (period 4, 2000-2400 hrs) the casino is expected to
increase its capacity for each day period running through Saturday and Sunday
evening. This is to cater for the weekend visitor demand caused by additional
arrivals and extended stay of players.
To capture the fluctuation of periodic table opening pattern, table count data is
collected on a Weekday day (Wednesday and Thursday) and a Weekend day
(Saturday). The pattern for Friday and Sunday are derived by estimating
demand and manpower capacity of the casino that dictate table opening. The
manpower capacity by shift is predicted from data and observation completed
on a Weekday and Saturday. Hence survey was not conducted on Friday and
Sunday.
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ii. Ca si no Visit or A rri val S urve y
1. Daily visitor study provides an estimate of demand and patterns of arrivals.
Periodical (monthly or quarterly) tracking will provide an indication of growth of
customer base and success of casino marketing. Visitors are classified as Local and
International. This allows an understanding of volume and visit patterns of
Singaporeans and foreigners.
2. Data is collected for Weekday (Wednesday/Thursday) and Weekend (Saturday) for
both Local and International visitor.
RWS has one entrance with separate entry points for locals and foreigners.
Visitor headcount for local and international is recorded for 1 5 mi nute s at
intervals of approximately 2 hours throughout the 24-hour day.
Weekday visitor count is assumed for Monday-Friday.
Weekend visitor count assumed for Saturday and Sunday.
To take into count the effect of repeat entry of visitors, weightage of 1/1.5
(Weekday) and 1/1.8 (Weekend) is factored for acceptable head count
estimate.
Refer Appendix 5 – Visitor Survey Plan
iii. Ta ble Gam es Li ve Actio n S urve y
1. This survey provides the required information for projection of revenue and
analysis of table games performance factors.
2. Survey of casino floor completed for 1 Weekday and 1 Weekend.
An operational day of 24 hours is divided into 6 periods of 4 hours to reflect the
casino’s ‘low-peak’ table opening plan, which in turn matches the patronage
fluctuation between the low-peak periods.
A set of data is collected for the defined periods on a Weekday and Weekend.
In total 12 data sets representing all periods are recorded for all the games
selected for the study.
Sample size was set at 5% of the total tables for each game type or a minimum
of 2 tables. Sample tables are selected using simple method of selecting the
nth odd numbered table and the even numbered table next to it for each
observation.
Each observation is fixed at 15 minutes. All games falling (starting) within the
observation period are included in the data collection.
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3. Data collected – Table limit, Estimated wager per game, Number of Players and
Number of games conducted.
4. The major games surveyed are Roulette, Baccarat, Blackjack and Pontoon. The
data collection and eventual classification assumes Blackjack and Pontoon as same
samples due to technical similarities.
5. Fun games included in the study are those deemed to have significant contribution
to bottom-line. These would be Tai Sai, Caribbean Stud Poker, 3 Pictures, 3 Card
Poker and Texas Hold ‘Em. From the set of games available at RWS, Craps, Mini
Dice, Pai Gow Tiles and Money Wheel are not included in the survey.
6. Experienced casino games supervisors were used to survey the tables. The average
related experience of a surveyor is 15 years. The accuracy of wagers per game
estimation depends much on the skills and experience of the surveyor.
Refer Appendix 6 – Table Games Live Action Survey Plan
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5. Findings
5.1 Ab o ut RW S Casi no O perati o ns.
5.1. 1 Ge ne ral O ve r view of Ca si no
RWS casino is a Large Destination Casino (LDC) similar to the Genting Group’s flag-ship
casino in Genting Highlands, Malaysia. The approved casino floor space is 15,000 sq
metres.
The casino operates on 2 floors, the ground floor, which is the Common Gaming area
and the mezzanine floor where the Maxim’s Club and Crockford’s gaming rooms are
located. Maxim’s caters to RWS’s club players holding at least a Silver membership
card.
The clubrooms that cater to the medium and high value players are kept out of view and
have controlled access located within the main gaming floor.
The common gaming floor is subdivided to the Main Gaming Hall (non-smoking)
(COMNS), Singapore Citizen & Permanent Resident Room (COMSIN) and the Smoking
Section (COMS).
The exclusive Singaporean room has controlled access. Smoking is permitted in this
room and a small area is demarked as non-smoking section.
The casino has one entry point for all visitors. Entry is restricted to persons of 21 years
and above of age. Local visitors who are required to pay a levy of $100 a day use
dedicated entry and exit points. Foreign visitors are required to produce their passports
for verification when entering and exiting the casino.
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5.1. 3 Types of Games
The major games in the casino based on physical count are,
Baccarat (24%),
Roulette (21%),
Blackjack (8.5%) and
Pontoon (9.6%).
The Casino Regulatory Authority (CRA) website lists 19 variations of games approved for
RWS casino. There are six variations for Baccarat based on commission or non-
commission with or without Super Six or Insurance side bets.
For the purpose of study, table count for Baccarat specifies only commission or non-
commission count. For the estimation of revenue, the variations are not specified.
Craps is not included in the list of approved Game Rules by the (CRA). A physical Craps
table was seen in the common gaming area but not in operation.
Refer Table 5.2a for list of CRA approved games.
Refer Table 5.2b for breakdown of tables by game type as per survey.
Table 5. 2a: A pp ro ve d Game T ype – RW S Comm on Gami ng Se cto r
(listed as approved game rules on CRA Website)
1 Blackjack (with Over and Under 13)
2 Caribbean Stud Poker
3 Casino War
4 Mini Dice
5 Money Wheel
6 Pai Gow
7 Pontoon
8 Progressive Texas Hold 'Em
9 Roulette
10 Tai Sai
11 Three Card Poker
12 Non-Commission Three Pictures
13 Poker
14 Commission Baccarat
15 Commission Baccarat with Insurance
16 Commission Baccarat with Super Six
17 Non-Commission Baccarat
18 Non-Commission Baccarat with Insurance
19 Non-Commission Baccarat with Super Six
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5.1. 4 P hysical Tab le C o unt ( Co mmo n Gami ng )
The casino offers typical casino table games (as approved by CRA) that are popular in
the Asia-Pacific region.
In total 36 5 p hys ical table s were found on the common gaming floor as of 2nd week
April 2010.
The tables are distributed across sections as following:
Main Hall (Non-smoking) 57 %
Singapore /PR Room 6%
Smoking Area 27%
Table 5.2b: Breakdown of Physical Table Count by Game Type (April 2010)
(Baccarat games are clustered as Commission or Non-Commission only)
RWS Physical Table Sector
GAME Sector Total %
Roulette 76 20.8%
Commission Baccarat 86 23.6%
Non-Commission Baccarat 26 7.1%
Blackjack 31 8.5%
Pontoon 35 9.6%
Caribbean Stud Poker 18 4.9%
Progressive 3 Cards Poker 12 3.3%
3 Pictures 18 4.9%
Progressive Texas Hold' Em 19 5.2%
Pai Gow Tiles 10 2.7%
Tai Sai 16 4.4%
Mini Dice 6 1.6%
Money Wheel 3 0.8%
Casino War 8 2.2%
Craps 1 0.3%
Total Tables 365 100.0%
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5.2 RW S Ca si no Vi sit or Ar riva l St udy
5.2. 1 Cas ino Vi sito r Ar ri val Projecti o n
Study of visitor arrival provides a good indication of RWS casino’s success. Periodical
tracking of visitors to casino will enable estimation of increasing demand, growth and
success of marketing activities.
This study covers typical Weekday and Weekend visitor patterns only. Various other
visitor patterns that can cause positive fluctuations such as public holidays, school
holidays and special events (such as Singapore Formula One Race week) are not
considered in the estimates.
The following are the key findings of the Casino Visitor Survey:
1.Single Weekday Visitors
Locals 11,400 (51.2 %)
International: 10,800 (48.8 %)
Typical Weekday Total: 22,200
2. Saturday Visitors
Locals: 15,400 (37.1 %)
International: 26,200 (62.9 %)
Typical Weekend Day Total: 41,600
3. Estimated Weekly Visitor arrivals: 194,000
4. Estimated Monthly Visitor arrivals: 776,000
5. Annualised Visitor Arrival Estimate: 10. 1 mil lio n
* Estimates are not adjusted for repeat visitor (on days of study) and Visitor estimates are exclusively
for casino only and do not reflect the RWS overall resort-hotel visitor arrival.
On Weekday, Local visitors slightly lead Foreigners 51.2% against 48.8 %.
On Saturday, Foreigners take an overwhelming lead of 63 %.
Overall the casino can expect 55 % of its total patronage to be foreigners.
As the survey does not include various other positive fluctuation periods, the estimates
are deemed very conservative.
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29. Casino Reve nue Potenti al Stu dy – Re sor ts Worl d Sento sa
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Table 5. 6: RW S Co mmo n G ami ng Statistic al T heoretica l Wi n (Mo nt h & A nnual )
Sector Monthly T. Win Annual T. Win Sector
Casino Total Casino Total %
Roulette $15,600,000 $202,800,000 19%
Baccarat $19,300,000 $250,600,000 24%
Blackjack/Pontoon $10,350,000 $134,500,000 13%
Caribbean Stud $2,600,000 $33,400,000 3%
Texas Hold Em $1,450,000 $18,900,000 2%
3 Card Poker $936,000 $12,000,000 1%
3 Pictures $3,800,000 $49,000,000 5%
Tai Sai $7,100,000 $92,600,000 9%
Total T abl e Gam es TW $61,099,000 $794,300,000 71.9%
ETG Roulette $6,440,000 $83,723,000 8.0%
ETG Baccarat $2,260,000 $29,300,000 2.8%
Slot Machines $10,880,000 $141,400,000 13.5%
Total Annual Revenue (TW) SGD $1,048,800,000 100%
Casino Theoretical Win Average Per Day $2,873,000
Ramachandar Siva 2010
5.3. 3 Co nside rati ons Fo r Projecti o n o f A nnuali s ed Ca si no Re venue
Generally the statistical revenue projection stated above does not take into
consideration various factors that will have impact on RWS’s common gaming revenue
over the next 12 months.
The following factors are to be considered for approximation of Annual Revenue
projection based on results of this study:
The casino operations will increase its operating hours capacity over the next 3
months and may achieve optimum capacity 9-12 months from now. This will
provide direct increase in Operating Hours thus increasing games and handle.
The opening of Marina Bay Sands (MBS) will have a significant impact on
patronage for a period that is uncertain. Reduced patronage would affect the
handle per game, which in turn will directly affect the Theoretical Win.
Apart from cannibalization of patronage, if the MBS casino is a superior
product, RWS may also see an impact on quality of players. The Average
Wager per Player may be reduced if MBS succeeds in attracting and keeping
the higher value players.
On the positive side, overall the RWS table games operation is yet to achieve
typical productivity levels expected in large Asian casinos. The Games per Hour
or game pace is just at 40% at best against expected levels. The experienced
casino management team at RWS is expected to ramp-up the productivity to
optimum levels successfully over the next 6 months.
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30. Casino Reve nue Potenti al Stu dy – Re sor ts Worl d Sento sa
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Tabl e 5.7 pro vid es com pariso n RW S g am e pa ce again st t ypi ca l A sian
casi no ex pe ct ations .
Impact of general marketing initiatives – The grind market is sensitive to the
success of general marketing initiatives, specifically the tourist distribution
channel. RWS being a resort-casino, it can be assumed that extensive
marketing plans are in place with results kicking-in in monthly increments of
visitors on an on-going basis. Upon adjustment for lost of patronage to the 2nd
casino in May 2010, fresh visitor arrival is expected from the tourist class.
Though such growth is expected, the net value of players from this class is
expected to be low. Low cost and efficient volume management will be a key
success factor for RWS.
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37. Casino Reve nue Potenti al Stu dy – Re sor ts Worl d Sento sa
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6. Conclusions and Discussion
The core purpose of this report is to provide an evaluation of the RWS casino operations in
terms of operational capacity, patronage levels and to estimate the revenue potential.
6.1 RW S Ca si no Ope rati ons Re vie w
Conclusion
On the average less than 50% of the 365 physical tables are opened in the common
gaming area. Tables provided are inadequate to meet demand on peak to high peak
periods. The congestion is affecting revenue efficiency of the games. The variety of
games offered for a new casino is exceptional, 14 distinct table games were seen on
the floor (including Mini Dice and Craps which are yet to be opened). The major games
are Baccarat, Roulette and Pontoon. Heavy action is seen in the Singapore /PR room
on all games during mid to peak periods. Overall RWS must overcome its manpower
woes to increase its operating capacity as soon as possible to capture the revenue
opportunities.
Points of Discussion
The RWS casino is yet to achieve its optimum operating capability.
Demand in the early morning of weekdays is very thin.
Peak periods show demand to be higher than available gaming tables. Players
are seen 2-3 layers deep around the gaming tables.
Immediate increase in table opening is required for peak and high-peak periods
to capitalize on present demand.
Electronic Gaming Tables are extremely popular and have very high take-up
rates.
Slot Operations is average in terms of take-up but is expected to pick-up with
the development of the Slots Players club and increase in tourist class visitors
over the next 3-6 months.
Dealers lack skills to handle heavy action and do not demonstrate game pace
management. Similarly floor supervisors are not seen to be prompting for game
pace.
Operational policies such as using $5 wheel checks for $10 minimum Roulette
tables are self-defeating as the $10 min tables have very high chip action to
literally bring down the game to a standstill.
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The nine-box baccarat (Bean Table) operating face-down game and having
various side bets such as Insurance, Pairs and Super Six is inefficient for the
common gaming crowd. Among slowest common gaming baccarat ever seen
in any casino.
Various operational improvements are required to get the casino into optimum
revenue generating capacity in the common gaming area where technical
efficiency is key to maximizing revenue.
6.2 Ca si no Visit or s
Conclusion
The casino is well received by both local and foreigners. Assumption that Singaporean
players will leave early on weekdays (before midnight) is unfounded. The casino is seen to
have peak periods between 8.00 pm to 4.00 am on weekdays. Singaporeans are seen to be
streaming into the casino as late as 11.00 pm on weekdays. As expected foreign visitor
numbers are significantly higher on weekend. An adjustment is expected when Marina Bay
Sands opens on the 27th of April 2010.
Points of Discussion
There is equal support from locals and foreigners on weekdays.
On weekends as expected the numbers increase and foreigners overtake the locals
by almost 2 times. It is to be noted that RWS is a city casino comparable with
casinos in Melbourne and Sydney for time being before it develops the tourist
market and fulfill its positioning as an international resort-casino. Thus the foreign
visitor patronage is expected to outnumber local support by a large degree.
Current patronage is within expectations and is expected to grow week by week if
not for the opening of the 2nd casino. The adjustment is to be seen in May 2010.
Foreigners are made of Indonesians, Main-land Chinese, Malaysians, Thais and
Vietnamese.
Indian and European visitors are insignificant.
Main-land Chinese players are major punters at Baccarat, Tai Sai and 3 Pictures in
the Main Gaming Hall. Heavy action was observed at these games.
The local, Singaporean, support is significant and is higher than expected. There
are indications that RWS sets higher table limits in the SIN/PR Room and action is
heavy. Observations made in this study show that the Average Wager per game is
significantly higher in the exclusive Singaporean gaming room.
This suggests the support from Singaporeans, key to the casino’s short-term
stability, is well secured. It will be imperative for RWS to focus on the Singaporean
market with increased efforts to sustain when the 2nd casino opens.
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39. Casino Reve nue Potenti al Stu dy – Re sor ts Worl d Sento sa
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6.3 Reve nue per fo rma nce
Conclusion:
It’s a likely case of demand exceeding supply in the case of RWS. The weekday crowds
are manageable, but from Friday evening to late Sunday, the operation is clearly
overwhelmed. Games come down to snail’s pace at Roulette and Tai Sai where chip
action is heavy and dealers are inexperienced to pace the games. Generally the action
in the Singapore/PR area is higher and intense, suggesting the grind locals are high
value players. Although an adjustment is expected when Marina Bay Sands opens,
RWS is expected to pick-up with efficiency improvements and efforts of marketing
kicking-in to bring the tourist class visitors. Information gathered, confirms that the VIP
gaming division is also enjoying a bumper crowd as the premium program commissions
are higher than regional casinos. For time being ( 3-6 months from date of report), RWS
is expected to hold its own against MBS. The two months earlier opening is a big
advantage in terms of stabilization of the operations and services and will keep ahead of
MBS in retaining a larger share of Grind and VIP players.
Points of Discussion:
The annualized revenue projection of SGD $1.05 billion in the common gaming
division is deemed conservative.
The projected SGD $ 2.9 million per day in the common gaming division is
considerable for a new casino and is expected to increase with improvement in
efficiency.
Based on Handle estimates, it can be said RWS casino is enjoying above
average sales.
It can be concluded that a casino based in Singapore receives significantly
higher wager per player in the common gaming sector (or non-commission
play) compared to Malaysia, Macau or Australia. Probably the highest in the
world.
The grind gaming shows very high quality punters (it may be having the highest
wager per game of any casino in the world).
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