A Malaysia-based analyst and his colleague at Japanese bank Nomura suggest that Genting Malaysia Bhd’s bids for two casino licences in upstate New York in the U.S. are “the most aggressive and [in] many ways superior to that of the competition”.
Genting Malaysia – which runs Resorts World Genting, Malaysia’s only casino resort –, already operates Resorts World Casino New York City, which opened in 2011.
The firm has now submitted bids for two casino licences in upstate New York – one in Tuxedo and the other in Montgomery, both in Orange County district. In Tuxedo, it plans to build a US$1.5 billion property to be called Sterling Forest Resort (pictured in a rendering). The second bid is for Resorts World Hudson Valley in Montgomery, with a price tag of US$1 billion, according to the summary of the proposal.
The firm spent a total of US$2.48 million on lobbying for casino licences in New York State between 2012 and 2013, according to a report by the New York Public Interest Research Group.
Nomura analysts Tushar Mohata and Alpa Aggarwal think Genting Malaysia stands a good chance of winning at least one of the new licences for which it has applied. But they counsel that the potential return on invested capital (ROIC) could be lower than at the New York City venue, which offers 5,000 electronic games according to the resort’s website, but no traditional live dealer tables.
The analysts wrote on Friday: “We think the potential ROIC from the [upstate] projects will be lower because of high capex, and concerns on market size in upstate New York. Being able to bring in additional gamblers will be a key component of success for these casinos.”
They also indicated that environmental concerns and a short exclusivity period could weigh on the value of the upstate licences.
“In our opinion, other factors Genting Malaysia needs to keep in mind are protests by environmentalists at Sterling Forest, and the risk from downtown casinos after a seven-year exclusivity period,” they stated.
On June 30, Caesars Entertainment Corp confirmed it had applied to build Caesars New York, a US$880 million casino resort it wants to develop in Woodbury, upstate New York. A subsidiary of Caesars applied for a gaming licence in the state the same day, it said in a statement.
Genting Malaysia on Monday said it had received regulatory approval back home to raise up to MYR5 billion (US$1.58 billion) via medium-term notes.
Funds will go towards operating expenses, capital expenses, investments and property development, it said in an announcement to its home market’s stock exchange, the Bursa Malaysia.
Jul 20, 2018Japan’s Integrated Resorts (IR) Implementation Bill passed into law on Friday evening after a plenary session of the upper house of the country’s parliament. The passage of the second of two...
Jul 20, 2018
Jul 20, 2018
"The [Macau] government has a lead in this subject in regards to what should be done after the [gaming] concessions expire. We will be first listening to what the government will say”
Ambrose So Shu Fai
Vice-chairman and chief executive at Macau casino operator SJM Holdings