Casino operators have their fingers crossed that Singapore will soon authorize large, Las Vegas-style casino gambling -- a potential mecca for Southeast Asian gamblers and vacationers.

Although the government of the island city-state made a decision on the issue last Saturday, it won't announce it until Monday, a senior minister said this week.

Last December, Singapore invited casino operators and developers to submit proposals for an "integrated resort" that would combine a casino with shopping, entertainment venues and hotels. The Cabinet has been reviewing the proposals, weighing the potential economic benefits against social costs.

A "yes" decision would set off a high-stakes battle between big casino companies to win the right to develop the single resort, which experts say would be perfectly situated to tap a huge market.

"It should be a great place to put a casino," says Donald McGhie, president of McGhie Consulting, a Reno, Nev., gaming consultancy. "There's a lot of money in Singapore. You have casinos in Macao, but Singapore is a lot closer to Indonesia, Thailand and Malaysia. Singapore has a big airport, which makes it a perfect spot. They have a lot of nice hotels there, too, so they could easily support a casino."

Currently, Singapore has small private gambling clubs with slot machines and horse racing at the venerable Turf Club, but no large casinos.

Merrill Lynch analysts Sean Monaghan and Tony Raza estimate a Singapore mega-casino would receive about $328 million annually from gamblers in neighboring countries. It would also recapture 50% to 60% of the $735 million that Singaporeans spend abroad in casinos each year. Merrill Lynch does and seeks to do business with companies covered in its research reports.

Singapore Senior Minister Goh Chok Tong, who announced that the government had reached a decision, said cabinet members had been divided on a large casino. Some members sided with social groups who fear it will stoke gambling addiction.

The Merrill analysts believe the government will greenlight the development, though. They note that Singapore's market share of regional tourist arrivals has declined over the past decade. A flashy large resort could reverse that trend.

Still, casino companies may be cautious about getting their hopes too high, given what has happened elsewhere. The U.K. government, which had originally proposed dozens of Las Vegas-style casinos as part of broad gambling legislation, last week was forced to reduce the number to one in order to win the approval of the Conservative Party, which was concerned about the social impact.

Should the Singapore government decide to go ahead with its casino project, it will seek additional, more-detailed proposals from candidates. The Merrill Lynch analysts predict a July deadline, with the government choosing a winner in December.

Big U.S. casino operators are in the running.

MGM Mirage

( MGG) which is in the process of acquiring former rival

Mandalay Resort Group


, has teamed up with

CapitaLand Ltd.

, one of the largest property companies in Singapore, on a proposal. MGM will own 60% stake of the venture.

Kerzner International

( KZL), which is based in the Bahamas but whose shares trade on the

New York Stock Exchange

, also has joined forces with CapitaLand for a separate project.


Harrah's Entertainment

( HET), which soon will become the world's largest casino company when it closes its acquisition of

Caesars Entertainment

(CZR) - Get Report

, also has submitted a proposal. Singapore's

Keppel Land Ltd.

has said it paired off with Harrah's.

Las Vegas Sands

(LVS) - Get Report

-- already operating in Asia at its Sands Macao casino -- and industry legend Steve Wynn's

Wynn Resorts

(WYNN) - Get Report

have submitted proposals, though neither company has announced a Singapore partner.

These big resort operators will also face competition from rivals outside North America. For example, the

Genting Group

of Malaysia, which owns and operates that country's only casino, last week said that it had teamed with

General Electric

(GE) - Get Report

subsidiary Universal Parks and Resorts to build a theme resort.

In a research note, the Merrill Lynch analysts say Singapore's government will likely favor large casino operators that have already developed top-tier landmark resorts. That should put the big U.S. companies among the top contenders.

If the government goes ahead with a casino, the winning candidate would likely find itself sitting in the catbird seat.

"Overall, Asia remains one of the most significant growth opportunities in gaming throughout the world ... buoyed by a large population, increasing wealth, and with a huge propensity to gamble," writes Deutsche Bank analyst Marc Falcone, whose firm does and seeks to do business with companies covered in its research reports.