Singapore casinos threatened by rumored gaming resorts in southern Malaysia
Singapore's casino duopoly - Marina Bay Sands and Resorts World Sentosa - is facing possible competition from neighboring Malaysia for the first time.
Bloomberg reported that Malaysian Prime Minister Anwar Ibrahim met with global casino tycoon Lim Kok Thay, chairman and CEO of Genting Group, and lottery tycoon Vincent Tan last week. The Malaysian billionaire is reportedly in discussions with the prime minister to develop a casino resort in Forest City, on the southern tip of peninsular Malaysia.
Such a gambling property in Forest City, across the Straits of Johor from Singapore but easily connected to the sovereign city-state via the Second Link Bridge, is likely to curb the gambling operations of Sands and Resorts World.
We believe Singaporean casinos will be net losers if Malaysia eventually allows a second brick-and-mortar casino in Forest City,” Nomura global gaming analysts Tushar Mohata and Alpa Aggarwal wrote.
Genting owns and operates Resorts World Sentosa through its subsidiary Genting Singapore. The company also holds Malaysia's only casino license, operating at Resorts World Genting in the remote highlands region of Pahang state, nearly 200 miles northwest of Forest City.
Genting Impact
Genting Group is a multinational company with casino resorts in Malaysia, Singapore, the Philippines, the United Kingdom, the Bahamas and the United States, as well as interests in real estate, agriculture and biotechnology. Genting's casino portfolio is spread across multiple subsidiaries, of which Genting Highlands is a division of Genting Malaysia.
If Genting Malaysia secures a second casino license in Malaysia and opens a resort in Forest City, a move expected to revitalize the planned $100 billion affluent community, analysts at Nomura expect the impact on the group as a whole to be minimal.
If Malaysia approves Forest City Casino and issues a license to Genting and Genting Singapore continues to be negatively impacted, the net impact on Genting Malaysia and Genting Group will depend on which company builds the casino, but ultimately the impact on "Genting Singapore" we believe , the group should reduce negative sentiment," Nomura Securities' report said.
Anwar denied a Bloomberg report that he met with Kim and Tan about the Forest City casino. Discussions of expanding the gaming business have long been unpopular among the predominantly Muslim population as the story has been described as "untrue" and a "lie".
IR Gold Standard
Marina Bay Sands has long been known as the "gold standard" in the integrated resort industry because of the concept of an all-inclusive destination where guests do not need to venture outside the hotel grounds during their stay. MBS is Sands' most valuable property and is considered the richest casino in the world.
Last year, Sands and RW Sentosa combined won S$5.25 billion (US$3.7 billion) from players. Singapore's casino industry continues to recover from the COVID-19 pandemic, with the city-state not fully lifting its coronavirus protocols until early 2023.
The $3.7 billion in gross gaming revenue (GGR) represents just 67% of the $5.9 billion in combined revenue the two casinos had in 2019 before the pandemic.
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Source: www.casino.org
