Casino group Genting Malaysia Bhd is “virtually assured” of winning a downstate New York casino licence in the United States, suggested Maybank Investment Bank Bhd in a Tuesday note.
“We believe that all three remaining bidders, including Genting Malaysia’s Resorts World New York City, are virtually assured of a licence each,” wrote analyst Samuel Yin Shao Yang, referring to a bidding contest where the results are expected in December.
The latter Genting property in Queens, New York City, is currently an electronic gaming venue. It would be upgraded and expanded as a full-scale casino resort (pictured in a rendering) in a move the Genting group has previously said would be a US$5.6-billion project.
“We gather that it [New York state] will award all three [available licences] in order to raise as much revenue as possible for the state.”
Mr Yin added: “If all three are awarded, New York would collect an amount greater than or equal to US$1.5 billion in casino licence fees immediately.”
Maybank said that industry consultancy Spectrum Gaming Group estimated that the region’s gross gaming revenue (GGR) would reach US$6.5 billion by 2031, “positioning it as the second-largest gaming market in the United States, trailing only Las Vegas (US$8.6 billion in 2024) and surpassing Singapore (US$5.8 billion in 2024)”.
The bank said it was revising its forecasts for Genting Malaysia’s earnings and equity value relative to an upgraded Resorts World New York City with a full-service casino.
“We estimate that net profit generated by Resorts World New York City’s expansion will peak at a whopping US$455 million (MYR1.93 billion) in 2030,” versus US$145 million previously, “and accrete MYR0.47 per share to our Genting Malaysia sum-of-the-parts target price”.
Mr Yin suggested there would be “more upside if Resorts World New York City’s actual gaming tax rate comes in lower than what it proposed, and Resorts World Catskill’s non-gaming assets are sold to Sullivan County Resort Facilities Local Development Corp”.
That was a reference first, to proposed downstate New York tax rates of circa 56 percent on slot machine GGR and circa 30 percent on other GGR. The second reference was to a proposal by Genting Malaysia unit Empire Resorts Inc to sell non-gaming assets of Resorts World Catskills, in upstate New York, to Sullivan County Resort Facilities Local Development Corp, for US$525.0-million in cash.
Genting Malaysia’s parent Genting Bhd recently made a circa US$1.59 billion bid for a conditional voluntary takeover of Genting Malaysia.
The parent, led by the Lim family, has offered MYR2.35 per share to public investors. Maybank suggested in a recent note it should offer more, due to the target’s earnings potential.
Currently, Genting Malaysia’s flagship business is its Malaysian casino monopoly Resorts World Genting, at Genting Highlands outside the capital, Kuala Lumpur.
