Genting wins coveted NY casino licence as bid to privatise Genting Malaysia fails

KUALA LUMPUR - Genting Group won a coveted New York City casino licence that will allow the Malaysian conglomerate to transform its Queens slot machines-only facility into a Las Vegas-style US$5.5 billion (S$7 billion) casino resort.

Genting, along with New York Mets owner Steve Cohen and Bally’s, was awarded gambling permits – expected to be issued by Dec 31 – by the state of New York on Dec 1. 

Genting’s Resorts World plans to expand its existing electronic games parlour into the US city’s largest casino with a 500,000-square-foot gambling floor featuring 800 table games. 

The group, helmed by billionaire Lim Kok Thay, is doubling down on its overseas expansion as a resurgence of religious conservatism in the company’s Muslim-majority home market threatens its local casino business and growing gaming competition spreads across Asia.

Prime Minister Anwar Ibrahim has ruled out approving a second casino in Malaysia. The opposition Islamic party, meanwhile, has vowed to shut down Genting’s casino operations entirely if it wins a key state by early 2028. 

“Rising religious conservatism has shrunk the political space for gaming in Malaysia,” said Mr Asrul Hadi Abdullah Sani, a partner at ADA South-east Asia, a public affairs consultancy. The New York licence gives the company “a long-term hedge against Malaysia’s shifting political landscape”.

The conglomerate also operates Resorts World Sentosa and other resorts and casinos in Britain, the Bahamas and Egypt.

A major New York City casino is expected to generate billions of dollars of new revenue for Genting. Analysts have in recent weeks raised earnings forecasts for Genting Malaysia, whose Resorts World unit will oversee the New York complex.

Malayan Banking expects the listed company’s net profit to reach RM1.93 billion (S$607 million) in 2030. That would be a fourfold jump from 2024.

Genting Malaysia’s stock rose as much as 1.7 per cent in early trading on Dec 2, before paring its gain to 0.4 per cent.

On Dec 1, Genting Malaysia announced that it will remain listed after Genting secured less than a 75 per cent stake in the company following its privatisation bid.

Genting had offered RM2.35 per share for the remaining 50.64 per cent interest in Genting Malaysia that it did not already own. The offer represented a 9.8 per cent premium to the Malaysian unit’s price before the takeover bid. 

But Genting Malaysia’s independent adviser, Kenanga Investment Bank, had urged shareholders to reject the offer, citing a discount to the company’s valuation.

New York licence

Starting with a single casino built on a jungle hilltop in 1971 by Genting founder Lim Goh Tong, the Malaysian company is now poised to tap into one of the world’s most lucrative gaming markets.

A 2013 New York voter referendum permitted as many as seven non-tribal casinos in New York. Four upstate casinos opened years ago. Three remaining licenses were held for the New York City area.

Mr Cohen, a hedge fund mogul, submitted an US$8 billion casino proposal with partner Hard Rock International. Mr Cohen, who purchased the Mets in 2020, plans to build his Metropolitan Park complex on what is currently a carpark next to the team’s baseball stadium in Flushing, Queens.

Bally’s plans to operate a gaming facility at the site of a Bronx golf course previously developed by US President Donald Trump.

Resorts World expects to quickly convert its facility next to the Queens Aqueduct racetrack into an integrated resort offering almost 2,000 hotel rooms, a 7,000-seat entertainment venue, a conference centre, restaurants and a spa.

It plans to open a gambling hall within six months – giving it a fast-mover advantage over competitors. The two competing gaming projects could take years to be built from scratch. 

The group’s “speed to market” will give Resorts World uncontested growth in the next two years, CGS International analysts Lew Cheng Wei and Prem Jearajasingam wrote in a note at the end of last week.

A US casino will also help Genting counter expanding competition in Asia. New gaming strips are emerging across the region, including the Philippines’ Okada Manila and City of Dreams Manila, Vietnam’s Hoiana, South Korea’s Paradise City and Japan’s planned MGM Osaka. The new complexes add to Asia’s major gambling centres in Macau and Singapore.

The region’s casino and gambling market is expected to surpass US$185 billion by 2033, a doubling from last year, according to a report from analyst firm Research and Markets. 

Genting is reducing its “geographical concentration risk in Asia and capitalising on the lucrative international markets”, especially in the US, said Mr Jonathan Tan, an analyst at CreditSights.

Genting Malaysia’s stock has risen almost 60 per cent since hitting a 23-year low on April 9. Its other businesses include plantations, energy, oil and gas, property development and biotechnology. BLOOMBERG