Casino operator Genting Malaysia Bhd, which has its flagship gaming venue near the Malaysian capital Kuala Lumpur, said in a Wednesday filing it was “assessing the full implications” of additional taxes announced on Friday by the federal government.
The statement to Bursa Malaysia added the firm would take “the appropriate next course of action,” which included “a review of its marketing expenditure and cost structure to mitigate the impact of the tax increases”.
Samuel Yin Shao Yang, an analyst at Maybank Investment Bank Bhd, had said in an Monday email that Hong Kong-listed Cambodian casino operator NagaCorp Ltd – and Genting Malaysia’s sibling Genting Singapore Ltd, which runs Resorts World Sentosa casino venue in Singapore – could benefit from the 10 percentage point tax rise imposed on Genting Malaysia’s domestic gross gaming revenue.
The rivals might poach business if Genting Malaysia cuts commissions – paid to junkets – or rebates paid to its directly-managed VIP players, at its domestic flagship Resorts World Genting (pictured) in order to offset the effects of the tax rise, said Mr Yin.
Commissions and rebates paid by casinos in the Asia-Pacific region are a significant area of competition as operators vie for the spending dollars of rich Chinese and other east Asians, a number of investment analysts have said.
As well as the GGR tax hike from 25 percent to 35 percent announced on Friday, the Malaysian government also said the annual casino licence fee for Resorts World Genting would rise from MYR120 million (US$28.9 million) to MYR150 million.
“The new casino duty rate of 35 percent, effective sales and service tax of 3.7 percent and corporate tax rate of 24 percent, ‘crowns’ Resorts World Genting as the heaviest-taxed casino in Asia,” Mr Yin had stated in a Sunday note on the matter.
“Macau casinos are also taxed at 39 percent of gross gaming revenue but they are exempted from corporate tax,” Mr Yin had added.
Genting Malaysia is currently engaged in a multi-year, multibillion-U.S.-dollar revamp of its Genting Highlands property. The firm also runs casinos in the United States, the Bahamas, the United Kingdom and Egypt.
Genting Malaysia had suffered its biggest fall in a single trading day on Monday following Friday’s tax announcement, with its stock down by as much as 30 percent, before recovering slightly in Tuesday and Wednesday trading, according to Bursa Malaysia data.
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Jul 09, 2020
”[The NagaWorld casino resort in Phnom Penh] had a very good opening and [we] anticipate increased visitation"
Chairman of Cambodian casino operator NagaCorp