Even on a Wednesday afternoon, the casino inside Singapore's Marina Bay Sands resort is buzzing.
While it may not be as bustling as a Friday night, when lines to enter the casino are only beaten by the queues outside to get a taxi, there's definitely energy in the air.
In my first sweep of the main casino floor, I notice that gaming tables in the "high limit" corner are more than half full at midday. This wasn't what I was expecting to see on a week day.
Recent earnings from the city state's two casino operators Las Vegas Sands (LVS), which runs the Marina Bay resort, and Genting Singapore (Singapore Exchange: GENS-SG), a subsidiary of Malaysian conglomerate Genting Group, which operates Resorts World Sentosa, paint a different picture -- one of slowing business in the once super-hot gaming center.
As Asia's second largest gaming hub, Singapore has challenged the Las Vegas strip for the title of the world's second biggest gaming center, when revenues hit $5.9 billion in 2011, compared to $6.1 billion for its American counterpart, according to Citigroup.
But now, analysts tell CNBC that Singapore's casinos will see "moderate" growth in 2013 on increasing government regulation against locals visiting casinos, and the slowing numbers of foreign visitors as the novelty effect of the two properties begins to wear off.
Las Vegas Sands, owned by U.S. billionaire Sheldon Adelson, posted third quarter earnings below expectations, citing challenges at its Singapore property where casino revenues fell almost 28 percent from a year earlier. Genting Singapore, meanwhile, saw gaming revenue fall 20 percent in the third quarter from 2011, according to Reuters.
Analysts are forecasting that Singapore's casino revenues will grow anywhere from 5 to 10 percent in 2013 from the previous year. That compares to an over 45 percent growth in revenues in 2011. Companies are yet to release fourth quarter and full year 2012 figures.
"I think that Singapore, in general, not just this year, but over the medium and longer term will likely be a more modest growth market than Macau or other potential regional markets," Grant Govertsen, principal analyst at Union Gaming Group said.
Macau, a Chinese territory, is the world's No 1 gambling destination in revenue terms. In December, gaming revenues in Macau hit a record $3.54 billion, bringing the full year 2012 total to $38 billion.
(Read more: Macau Gambling Revenue Hits Record in December)
Both Marina Bay Sands and Resorts World Sentosa, currently contribute between 1.5 percent and 2 percent to Singapore's gross domestic product (GDP), according to the Ministry of Trade and Industry. The resorts also account for 1.8 percent of employment in the country, according to brokerage CLSA.
A pullback in gaming revenue comes at a time when Singapore's economy is struggling. It managed to eke out a 1.2 percent year on year growth on revised government forecasts in 2012 and this year economic growth is expected to come in around 1 to 3 percent.
(Read More: Singapore Economy Grew 1.2% in 2012: PM)
So, what does a slowing gaming sector mean for Singapore's economy?
Economists tell CNBC that while the casinos, which opened in 2010, have given a boost to Singapore during a period of global economic downturn, slowing gaming revenue in 2013 is unlikely to be a huge drag.
The casino sector is slowing from a very high base and "phenomenal" growth in the past, according to Vishnu Varathan, market economist at Mizuho Corporate Bank.
"The rate of growth is going to slow - but even then the rate of growth will surpass what perhaps Singapore's manufacturing sector can deliver," Varathan said. "So overall, the impact will still be a boost to overall growth, albeit at a much slower pace."
Wai Ho Leong, director and senior regional economist at Barclays Capital, said that in the unlikely event that Singapore's gaming market does shrink, it won't matter quite as much for Singapore's economy as it would for a place like Macau, because most of the visitors to Singapore's casino properties are not motivated by gambling alone.
"They are mostly family, leisure visitors (from the region), business travelers, or conference attendees who are staying at these resorts and stop at the casino for a flutter," Leong said. "The economic impact will be limited, given general tourism spending on retail, transport, dining and accommodation remain intact."
Other than the casinos, the two multi-billion dollar integrated resorts also house attractions like theme parks, hotels, convention centers, theatres and luxury retail shops. Genting Singapore's non-gaming revenue in 2011 rose 48 percent from the previous year.
Jonathan Galaviz, managing director and chief economist at Galaviz & Company added that as long as overall tourism growth continues, "even if there is a slight drop off or slowdown in casino revenues only - the impact on the Singapore economy would not be significant."
Tourism accounted for more than 4 percent of Singapore's GDP in 2011, up from 3.6 percent in 2010 and nearly double the figure from 2009, according to government statistics.
Despite the Singapore economy benefitting from the boom in casino revenues, the government has introduced strict measures in the past year to minimize the social costs from the casinos success, which could limit its local market growth.
On top of an entry fee of $82 (S$100) a day or over $1,600 (S$2,000) for an annual pass for citizens and permanent residents, other safeguards include a monthly limit on casino visits for low income earners. Also, about 100,000 locals have been banned from visiting casinos, because of problem gambling, Reuters reported.
Locals account for nearly 25 to 30 percent of casino visitors and analysts expect the government to introduce more measures this year to curb their participation, which will impact gaming revenues.
(Read more: Singapore Ups Ante for Casinos With New Rules)
Casinos operators are, however, now looking beyond attracting the local population, anticipating a drop off in the market.
"With the Resort fully open, we are in a good position to fully capitalize on our marketing efforts overseas...the Resort will now be able to target a wider base of affluent travelers and new markets such as Russia and the Middle East," a Genting Singapore spokesperson told CNBC.
Resorts World Sentosa has been opening its resort in phases since 2010, with the latest addition being a marine park that is said to have the world's largest oceanarium, opening almost two months ago.
Overall, Singapore's casinos were not looking to grow their business at "stellar" rates based on domestic patronage alone, according to Varathan of Mizuho, who says the country's gaming sector has to evolve and prepare for the intense competition it will face from other regional players.
"Thailand, Japan, perhaps the Philippines is also going to seriously consider entering into this space, so within the ASEAN (Association of Southeast Asian Nations) region itself I think competition will get more intense," Varathan said. "More intense competition is something that Singapore's gaming sector cannot run away from."
- By CNBC.com's Rajeshni Naidu-Ghelani; Follow her on Twitter @RajeshniNaidu
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