Genting Malaysia en route towards first full-service casino in New York City

KUCHING (Dec 4): Genting Malaysia Bhd (Genting Malaysia) has struck gold in New York City (NYC) following the New York Gaming Facility Location Board’s (GFLB) decision to recommend all three finalists, including Genting Malaysia’s Resorts World New York City, for downstate commercial casino licences.

While GFLP had recommend all three finalists, Genting Malaysia’s Resorts World New York City is expected to become the first full-service casino in NYC as the other two winning bidders, Hard Rock Metropolitan Park and Bally’s Bronx, are greenfield projects and not expected to open until around 2030.

MGM Resorts’s (MGM) Yonker Empite City Casino was previously also a strong contender but they dropped out of the race on Oct 15 and is expected to continue offering only Video Lottery Terminals (VLT).

The New York State Gaming Commission (NYSGC) is now expected to carry out background and character reviews on RWNYC’s key stakeholders, assess its compliance requirements, and examine its regulatory fit and oversight plans.

Genting Malaysia must then pay NYSGC a US$600 million license fee to secure the license by 31, Dec 2025.

Overall, the news came as no surprise as industry analysts have been anticipating that Genting Malaysia would be successful in its bid to obtain a downstate commercial casino license for RWNYC, especially following MGM’s unexpected exit.

Nevertheless, analysts from Kenanga Investment Bank Bhd (Kenanga Research) and Maybank Investment Bank Bhd (Maybank Research) were still positive on the news as they see huge potential from the RWNYC expansion.

According to Maybank Research, RWNYC plans to open a new permanent casino featuring 4,000 slot machines, 250 table games by June 2026, and an additional 150 tables to be added by Jan 2027.

“The final casino should allow for 6,000 slots and 800 tables by Jan 2029. We estimate that net profit generated by its expansion to peak at a whopping RM1.93 billion in 2030 and accrete RM0.47 to our sum-of-parts (SOP) derived target price (TP),” said Maybank Research.

Further supporting this view, Kenanga Research pointed out that New York State’s annual GDP of US$2.3 trillion is the third highest in the country, yet its gross gaming revenue (GGR) is below its neighbouring Pennsylvania and New Jersey states which have both have physical casinos.

“Interestingly, the combined GDP of New York, Pennsylvania and New Jersey states are comparable (96 per cent) to the aggregated GDP of California and Nevada but the GGR of California and Nevada is over 30 per cent higher which suggests that NYS gaming market has potential to expand further,” the research arm explained.

And while RWNYC currently only offers VLTS, Kenanga Research notes that it ranks among the most successful commercial casinos in US outside of Nevada state.

The research arm believes that NYC gamers who travel to Philadelphia, New Jersey or Connecticut for live table games will be RWNYC first targets while travellers will be next given that RWNYC sits on 73 acres adjacent to John F. Kennedy International Airport.

With RWNYC hoping to bring in 11 to 15 million visitors annually, hotel rooms are expected to expand. From 400 to 2,000 while more dining options and entertainment venues will be added.

Kenanga Research previously estimated a funding gap of US$2 to US$3 billion for this expansion project but given that RWNYC is set to become NYC”s only full-service casino until 2030, they estimate that the gap should now narrow down to around US$1 to US$2 billion, or smaller.

While this is still substantial, Kenanga Research reckons that this won’t be too high of a hurdle for Genting Malaysia as the group also owns 15 acres of Miami. Land it nearly sold for US$1.2 billion, and 270 million treasury shares worth US$100 million to US$200 million.

“GenM can also issue up to 10 per cent of new shares without triggering a rights issue to raise another US$300 million to US$400 million,” the research arm added.

Note that Genting current holds a 73 per cent stake in Genting Malaysia after the closure of its Mandatory General Offer on Dec 1. This is short of the 75 per cent required to delist GenM and 95 per cent required to compulsorily acquire minority shares.