July 18, 2010--It's been five months since gaming analyst Robert LaFleur was unexpectedly bounced by Susquehanna Financial Group.

Last week, he issued his first research notes for Connecticut-based Hudson Securities.

LaFleur still maintains a cautious outlook toward Las Vegas. Signs of stabilization are beginning to appear, he said. However, a full-blown market recovery is still a ways off.

His view of Singapore, however, has changed dramatically.

LaFleur told investors that the island nation, which has just two casinos, could become the most profitable gaming market in the world.

Singapore, LaFleur said, has the capability to surpass both the Strip and booming Macau, where gaming revenues have increased some 70 percent in the first six months of 2010.

"As good as Macau is, Singapore could be better," LaFleur said. "Demand characteristics mirror Macau, it's a duopoly, gaming taxes are lower and VIP commissions are lower."

Malaysia-based Genting Group opened Resorts World Sentosa in February. In April, Las Vegas Sands Corp. opened the initial phases of the $5.7 billion Marina Bay Sands. A grand opening for the Sands' project was celebrated last month.

"The jury is still out on gaming's newest major market," LaFleur said. "Early returns are positive."

Gaming has flourished despite government-imposed casino-entry fees for Singapore residents of $70 at Sentosa and $100 at the Sands.

The Singapore government wanted to increase tourism, but didn't want to replicate the Strip, when it legalized gaming in 2005. Only two casinos were allowed and gambling was confined to a small percentage of the overall resort complex.

Genting won the Sentosa site by partnering with Universal Studios for a family-style theme park.

Las Vegas Sands stuck to its business model of tying the conventions and meetings industry with nongaming amenities, such as dining and shopping. The Marina Bay Sands retail complex will include 350 stores and the resort has a lineup of celebrity chefs. A production of Disney's "The Lion King" opens in the fall.

Las Vegas-based gaming consultant Jonathan Galaviz echoed LaFleur's view. He believes Singapore will attract 11 million tourists in 2010, a significant increase over previous years.

Galaviz said Singapore adopted Nevada's gaming regulatory structure.

"The stronger regulatory and ethical framework that Singapore maintains for this new industry, the more likely both Resorts World Sentosa and Marina Bay Sands will be able to attract a new kind of customer in Asia," Galaviz said.

Howard Stutz's Inside Gaming column appears Sundays. He can be reached at [email protected] or 702-477-3871. He blogs at lvrj.com/blogs/stutz.

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