GGRAsia – GEN Singapore edge on Melco in Yokohama: Maybank

GEN Singapore edge on Melco in Yokohama: Maybank

Jun 03, 2021 Newsdesk Japan, Latest News, Top of the deck

Casino firm Genting Singapore Ltd can beat out rival global operator Melco Resorts and Entertainment Ltd, the other qualified bidder in the race to be Yokohama’s partner on a casino complex, suggests a Wednesday note from Maybank Investment Bank Bhd.

A Monday note from banking group Nomura had been more cautious, saying it “would ascribe at least a 50 percent probability of Genting Singapore being selected as a winning bidder” to be Yokohama’s partner in the latter’s tilt for a casino scheme or integrated resort (IR) as they are known in Japan.

Maybank said factors in Genting Singapore’s favour included its decision to link with Japan-based entertainment and gaming conglomerate Sega Sammy Holdings Inc for a Yokohama project. The latter already has experience of such cooperation via the Paradise City gaming resort alongside Paradise Co Ltd, in Incheon, South Korea.

Genting Singapore runs the Resorts World Sentosa casino resort, part of Singapore’s duopoly.

“If Genting Singapore owns 50 percent of the joint venture” proposed for Yokohama, “we estimate that a Yokohama IR will add SGD1.8 billion [US$1.36 billion] to earnings,” wrote Maybank analyst Samuel Yin Shao Yang.

A May 19 note from Maybank had estimated that in the year 2028 – assuming that would be the first 12 months of operation of the casino scheme in Yokohama – it could generate annually US$6.5 billion in gaming revenue, and an additional US$1.9 billion in non-gaming revenue.

Mr Yin acknowledged in his latest note on the Yokohama race, recent commentary from Sega Sammy’s management, that it would prefer to be a minority partner in a Japan IR.

“In our view, Genting Singapore scores better in promoting tourism, management and financial ability and responsible gambling initiatives relative to Melco,” stated the Maybank analyst.

He also noted that the Genting-Sega Sammy choice of construction partner for any scheme in Yokohama (city, pictured) – Japan-based Kajima Corp – “was the main contractor that constructed Genting Singapore’s Resorts World Sentosa”.

Local authorities interested in hosting a casino resort must first select a commercial partner, and then apply to the national government for the right to host such a facility. Up to three resorts will be permitted in Japan under the relevant legislation framework.