"We Chinese are gamblers," he told club historians before his death in 1997. "If two lizards scale up a wall, someone would bet on them!"

Lee's son, Kuan Yew, later recalled how after a losing night, his father would come home in a violent rage demanding his wife give him jewelry to pawn. So when Lee Kuan Yew became the first prime minister of independent Singapore in 1959, he hammered on the vice, transforming this once-squalid seaport into a tidy industrial park.

Cigarettes and alcohol are heavily taxed. Drugs traffickers are hanged. Casinos, naturally, were banned.

But Lee Kuan Yew's son, Lee Hsien Loong, is now prime minister. He is striving to shake Singapore's reputation as Asia's nanny state for one that is more tolerant and fun-loving. And one of his signature projects harks back more to his grandfather's Chinese Swimming Club than his father's profit-perfect industrial landscape: the world's most expensive casino complex.

Last year, the government lifted its ban against casinos. Next month it is due to choose from a list that includes some of the biggest names in Las Vegas - Harrah's, Las Vegas Sands and MGM Mirage - to build the first of two planned gambling resorts, a $3 billion extravaganza that will include a casino, entertainment, convention center and hotels.

"What we're really after is to create a compelling, critical mass of attractions and services," said Vivian Balakrishnan, a former eye surgeon who as minister for community development, youth and sports oversees the effort to enliven Singapore.

Singapore's bet is that in return for letting casino operators in, it can lure a world-class tourist attraction that will not only anchor an ambitious new property development but help give Singapore what Prime Minister Lee refers to as the "X-factor" that makes London, Paris and New York such urban magnets.

In many ways, the casino project is a test of Singapore's ability to transform itself once again. It is also a chance for the casino executives to prove their mettle in a new dimension. The question among many casino executives and analysts, however, is whether Singapore has attached so many strings that the projects won't be profitable.

Four of the biggest casino companies are betting big that it has not.

Las Vegas Sands is pitching a $3.6 billion project that would include a partnership to build a Guggenheim museum. The Malaysian company Genting has indicated a tie-up with Universal Studios. Harrah's, which has teamed up with a government-owned company, has enlisted the director of "Titanic," James Cameron, to design an indoor theme park. And MGM-Mirage, which has also partnered with a state-owned company, is including Cirque du Soleil as part of its biggest-ever bid. "It's more money than we have ever proposed for any other hotel casino integrated resort," the MGM chief executive, J.Terrence Lanni, said.

Most European nations now have casinos, as do 39 US states. Las Vegas has gone highbrow with luxury hotels and big-name performers such as Elton John.

After a series of mergers - Harrah's with Caesar's, MGM with Mandalay - the industry's giants are looking to expand and Asia, with its turbo-charged economic growth and fervor for gambling, is hot. Analysts estimate that casino revenue in the region will grow 20 percent this year to $13 billion, not including the roughly $4 billion Asians spend each year on illegal gambling or cruise ship casinos.

Perhaps no one takes gambling more seriously than the Chinese. In China, casinos are illegal, so most package tours abroad include a visit to casinos in places like Macao, the former Portuguese enclave. The brokerage firm CLSA Emerging Markets estimates that China's tourists lose $72 billion a year gambling overseas.

Since ending a monopoly on gambling two years ago, Macao has attracted billions of dollars of investment. MGM is investing more than $1 billion to build a casino there. Sands is building its second after its first pulled in more than $900 million within three months of opening.

Other Asian governments are taking notice. "The success that Macao has seen," said Joseph Greff, a gambling analyst at Bear Stearns in New York, "is putting pressure on other Asian economies to look at gaming as a source of income." South Korea, the Philippines and Vietnam are expanding their casinos, while Japan, Taiwan and Thailand are considering legalizing them.

Most of the Chinese tourists arriving in Singapore are just stopping through on their way to or from Macao or Genting's casino resort in neighboring Malaysia. Apart from foregone gambling revenues, the growth of casino tourism posed a challenge to Singapore's own tourism goals. Tourism accounts for 5 percent of Singapore's economy, and authorities aim to double annual tourist arrivals to 17 million and triple the amount they spend to S$30 billion, or US$19 billion, by 2015.

The problem is that Singapore has no natural tourist attractions and, aside from a world-class zoo, few manmade ones. Efforts to create a theme park have largely centered on Sentosa, a small island off Singapore's coast. Lee Kuan Yew rejected a proposal in 1965 to put a casino there and again in the 1980s.

As Singapore struggled to emerge from recession in 2002, Lee Hsien Loong, then finance minister, convened a committee of business and economic experts to devise ways to bolster Singapore's competitiveness. One of their recommendations: build a casino.

The answer was no again, but the wheels had evidently begun turning. There were other indications that officials were ready to let the good times roll. In 2003, Singapore lifted a ban on bar-top dancing and signaled an end to a crackdown on gay bars. The next year, it lifted a 20-year ban on Cosmopolitan magazine. Last year, a government minister presided at the opening of a Singapore branch of the Parisian topless revue Crazy Horse.

Officials want to make sure the casino resort is not an eyesore, so design ranks second only to tourism appeal in the selection criteria. "This is the face of Singapore," said Cheng Hsing Yao, head of planning for the area at the Urban Redevelopment Authority. "We don't want kitsch."

To make sure bidders focused on appeal rather than price, the government took the unusual step of fixing the price of the land at 1.2 billion Singapore dollars. To ensure a balance of activities, it decreed that the casino can occupy no more than 5.5 percent of the resort's overall area. The operator must build an equally large attraction such as a museum, gallery or theater nearby.

Despite the long ban on casinos, Singaporeans are no strangers to gambling. Illegal gambling prompted the government to create a state lottery in 1968. Widespread illegal betting on soccer matches prompted the government in 1999 to get into that business as well.

Big casino operators have long known about Singapore's appetite for gambling. Sands, Mandalay and Caesar's all had marketing offices in Singapore at one point or another to lure high-rollers to Las Vegas.

Given the prevalence of gambling, the government decided banning its residents from the casinos would be pointless. Instead, the government will require residents to pay a 100 dollar daily entry or pay 2,000 dollars annually.

But some analysts said that the fees could hurt the casinos' most important source of revenue. With the exception of Las Vegas, with its myriad of casinos and attractions, "the experience of casinos all over the world is that the locals are the primary market," said William Eadington, director of the Institute for the Study of Gambling and Commercial Gaming at the University of Nevada. Singapore is no exception, said Greff at Bear Stearns. "The Singapore properties are going to be more focused on Singapore," he said.

The controls proved too much for some bidders. Tabcorp of Australia dropped out, citing the costs of building so much besides the casino. For another Australian company, PBL Gaming, it was Singapore's limit on the number of slot machines. "In Macao there's no limit on the number of slots," said PBL Gaming's chief executive, Rowen Craigie.

The most scathing criticism came from Steve Wynn, chairman and chief executive of Wynn Resorts, who before dropping out accused local officials of issuing high-handed "thunderbolts from Mt Olympus."

The government is unfazed. "The proof of the pudding is: Were there bidders who were prepared to come in despite these restrictions?" Balakrishnan said.

The remaining bidders say the odds in Singapore still make sense to them. Singapore's 15 percent tax on their revenue is low by international standards, they say. Singapore has also assured them that it will not introduce any other casinos for at least 10 years.

"Would we prefer that some of those precautions weren't there? Yes," said Lanni at MGM. "But we believe anyone who wins here will do well no matter who they select out of this group of four."

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