Cable cars pass over Resorts World Sentosa, operated by Genting Singapore
Las Vegas will be getting its first new casino on the Strip in a decade. And the only casino currently operating in New York City, at the Aqueduct Racetrack in Queens, is being upgraded to include a 400-room hotel with a celebrity-chef restaurant.
They’re both part of the huge U.S. expansion plans of the Genting Group, a Malaysian conglomerate that’s seeking to move beyond its Asian roots – not just in New York and Las Vegas, but in Miami and suburban Massachusetts as well. Genting announced Thursday it was breaking ground on the USD400 million project near New York’s John F. Kennedy International Airport. Genting’s affiliate, Empire Resorts Inc., also plans to open a USD1.2 billion casino resort in the Catskill mountains outside New York City early next year.
“We want to diversify the portfolio, spread out the risk and be able to leverage international travel by having the right assets in the right cities,” said Edward Farrell, president of Genting Americas.
The centerpiece of Genting’s U.S. expansion is the 3,000-room Resorts World Las Vegas, scheduled to open in 2020 on the northern end of the Las Vegas Strip. Construction on the $4 billion project just recently started, Farrell said. Genting, which also owns the Star Cruises and Crystal Cruises lines, bought the property in early 2013 and said it spent the intervening years working on the design.
The Strip hasn’t seen a major hotel open since 2009, and Genting’s timing could position it well, according to Brent Pirosch, director of gaming consulting at real estate brokerage CBRE Group Inc. in Las Vegas. The city is expanding its convention center and preparing to build a $1.7 billion stadium for the National Football League’s Raiders, who will be moving from Oakland.
Genting’s Resorts World New York City generates plenty of proceeds. Last year it had gaming revenue of $826.5 million, according to Bloomberg Intelligence, 13 percent more than Atlantic City’s biggest casino, MGM Resorts International’s Borgata Hotel Casino & Spa, and 26 percent more than the casino revenue of Wynn Resorts Ltd.’s flagship Las Vegas property.
Resorts World pays 70 percent of the casino’s gross to New York State, according to the company, or a total of more than $1.9 billion to New York’s Lottery Education Fund since opening in 2011. The casino offers electronic slots and other games but isn’t allowed to have live table games.
Like other casino operators, Genting is trying to develop properties in densely populated areas and sees its frequent-
player program ultimately sending players to the new Las Vegas resort, said Michael Pollock, managing director of Spectrum Gaming Group, a New Jersey-based consulting firm that has done work for the company.
“You encourage your higher spending, most profitable customers to stick with you,” Pollock said. “People in Queens will play more often if they can earn points redeemed in Las Vegas.”
Resorts World Catskills is the next leg in that effort. The property will feature 2,150 slot machines and 130 table games in a 100,000-square-foot casino after its scheduled opening in March. It will include a hotel with 332 suites, an entertainment venue with 2,000 seats, as well as bars, restaurants, pools and a spa.
Genting’s other U.S. projects face some daunting hurdles. A $1 billion project with the Mashpee Wampanoag tribe for a resort with three hotels and a casino, about 60 kilometers south of Boston, is being delayed by a legal challenge. Genting has invested $347.4 million in promissory notes issued by the tribe, the company said in a filing with the Malaysian stock exchange on July 7, noting that recovery depends on the case’s resolution.
A plan for a casino at the site of the former Miami Herald building, which Genting purchased for $236 million in 2011, is also in limbo, with state lawmakers balking at proposals to expand gaming in the city.
Farrell said there’s little reason to expect the company will be able to move ahead. The downtown Miami site has attracted interest from would-be buyers, according to Farrell, but the company isn’t ready to sell yet.
“We have had several opportunities to sell that we have not accepted,” he said. “We are going to hold on to our property and see what happens.”
Genting’s U.S. expansion plans come at a time of uncertainty for its casinos closer to home. Resorts World Manila, a joint venture with Philippine-based Alliance Global Group Inc., has the challenge of winning back customers after the casino was the site of an arson attack in June.
In Singapore, the group’s Resorts World Sentosa has long lagged behind rival Las Vegas Sands Corp.’s Marina Bay Sands in revenue. The resort, which slumped along with Macau as high-stakes players stayed away amid China’s corruption crackdown, is focusing on attracting casual gamblers and families instead.
“They’re trying to improve some of the theme parks and attractions that they have, enhancing their product in order to drive more of the masses,” said Margaret Huang, an analyst at Bloomberg Intelligence.
In Malaysia, the group has spent three years upgrading its flagship Genting Highlands resort, adding additional gambling capacity, shopping malls, upscale eateries and a revamped theme park. The resulting upswing in visitors will likely contribute to higher revenue this year, said Kristine Wong, an analyst at CIMB Group Holdings Bhd. in Singapore. Shares of Genting Malaysia Bhd. rose almost 1 percent Friday in Kuala Lumpur, and more than 25 percent so far this year.
“The prospects are good in the long term,” said Wong. Bruce Einhorn, Christopher Palmeri and Sterling Wong, Bloomberg
