Global casino operator Genting Malaysia Bhd “will try to monetise non-core assets” as part of its bid for a commercial casino licence in downstate New York, in the United States, stated Maybank Investment Bank Bhd in a Friday memo.
Genting Malaysia is among some large gaming operators with Asia venues – including Las Vegas Sands Corp, MGM Resorts International, and Wynn Resorts Ltd – that have been linked to a bid for a New York licence.
“Other bidders have guided investments amounts ranging up to US$5 billion,” noted Maybank’s analyst Samuel Yin Shao Yang.
He added: “Genting Malaysia did not state how much it plans to invest [in New York] but did state that it will try to monetise non-core assets like its Miami properties which are valued at US$1 billion (we assumed US$500 million) before resorting to a rights issue.”
The information was provided by the management of Genting Malaysia in a private conference call with investment analysts following the firm’s release of its fourth quarter results.
Genting Malaysia operates Resorts World Genting, Malaysia’s only licensed casino property. The group also runs casinos in the United States – via associated businesses – and in the Bahamas, the United Kingdom, and Egypt.
The New York State Gaming Commission in January launched a request for applications (RFA) process for three downstate New York gaming licences.
The RFA launched by the New York authorities outlined a US$1 billion minimum requirement for the licence fee and capital investment, with US$500 million payable within 30 days as the licence fee. The relevant casino permits will be for a period of between 10 years and up to 30 years, depending on the size of investment pledged.
A number of investment analysts has suggested that Genting group could be a front runner for a downstate New York licence. The group already runs an electronic games facility called Resorts World Casino New York City; and has investment in Empire Resorts Inc, which runs the full-service casino Resorts World Catskills (pictured), in upstate New York.
In Friday’s note, Maybank lowered its estimates for Genting Malaysia’s core net profit for 2023 and 2024 by, respectively, 11 percent and 7 percent.
The bank now expects the casino firm to record revenues of MYR10.14 billion (US$2.29 billion) this year, up 17.9 percent from full-year 2022. The group’s earnings before interest, taxation, depreciation and amortisation (EBITDA) might increase by 37.1 percent year-on-year, to MYR3.26 billion in 2023, suggested the institution.
Moody’s Investors Service Inc flagged a fortnight ago some “risks” from Genting group’s “strong appetite for expanding its gaming franchise in the United States,” given that “such a project could consume significant operating and financial resources”.
