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Are Singapore’s casinos back in the game?

Behind the 25% rise in Las Vegas Sands Q4 profit

Singapore's casinos haven't lived up to their opening day fanfare, but the latest Marina Bay Sands results suggest analysts who wrote off growth hopes may need to write them back on.

"The outlook does look more favorable for this year," Jessalyn Chen, an analyst at CIMB, said. "The VIP segment is really coming back."

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Las Vegas Sands reported after market hours in the U.S. Wednesday that its fourth-quarter net profit rose 25 percent on-year to $721.3 million, topping expectations, as its Singapore property earnings before interest, taxes, depreciation and amortization (Ebitda) more than doubled to a record $518.5 million and the property's gross gaming revenue rose 17 percent on-year to $803 million.

Sea change

In a conference call with investors, company president Rob Goldstein called Singapore's Marina Bay Sands (MBS) "the most profitable building in the world," according to a Bloomberg report.

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That may mark a sea change from late last year, when analysts said they believed Singapore's gaming market had stalled out at best. Macquarie said it didn't believe the city-state's gaming market could grow, citing declining tourist arrivals and competition from other, newer Asian casinos.

Singapore's casinos are economically sensitive, with 2013's gross gaming revenue coming in at around 1.6 percent of its gross domestic product that year.

But CIMB's Chen sees new drivers for Singapore's two casinos, including Genting Singapore's plan to open a new hotel in Jurong in the second quarter, adding 557 rooms to its current 1,500 at its Resorts World Sentosa (RWS) property.

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That hotel, as well as plans for a high-speed rail connection between Malaysia's capital Kuala Lumpur and Singapore, will likely bring more Malaysians into the city-state's casinos, she said. She expects the hotel will add around 5-7 percent to mass gaming visitation at RWS.

Investment worthy?

Some of MBS' improved results may just be shifting funds from one pocket to another, as Las Vegas Sands' Macau unit, Sands China, faced a tough quarter, with its net profit down 18 percent on year at $535.3 million.

"As mainland China's central government pushes and continues their anti-corruption campaign in Macau and mainland China overall, I think what you're seeing is some bubbling effect and some spillover effect," Jonathan Galaviz, a partner at Global Market Advisors, told CNBC.

Las Vegas Sands' profits were 'deceiving': Fitch

"Maybe not government folks, but certainly high-end customers, premium players are looking at other destinations in Asia to engage in casino gaming and leisure tourism activities," he said. "This is a big indicator that it may be bubbling over into Singapore."

To be sure, not everyone thinks the MBS results represent a big change in growth.

"If you normalize for luck and you normalize for the tax benefits, the growth in Singapore is really more like 9 percent, a bit more reasonable," Michael Paladino, senior director of gaming, lodging and leisure at Fitch Ratings, told CNBC.

MBS received a $90.1 million property tax reassessment in the fourth quarter.

Macquarie is also sticking with its negative call on Singapore's gaming market as a whole.

"What really happened is they got lucky in the quarter," said Somesh Agarwal, a gaming analyst at Macquarie. While VIP gaming volumes declined 27 percent in the quarter, revenue was up because of an abnormally high win rate, he said.

In other words, MBS came up on the right side of a roll of the dice -- something that bodes ill for when Singapore's only other casino, RWS, reports results in February, he said.

—By CNBC.Com's Leslie Shaffer; Follow her on Twitter