Resorts World GentingMarket analysts expect Malaysia’s casino operator Genting Malaysia Bhd to significantly benefit from the proposed investments under the Genting Integrated Tourism Plan (GITP).

Genting had announced last month that it would be doubling its investment under the GITP for adding and expanding facilities in its Resorts World Genting casino resort. The capital investment is expected to rise to approx. MYR10.38 billion (US$2.46 billion) from its investment of MYR5 billion in 2013. The GITP was launched by the company to renovate the casino resort in a number of phases over a period of 10 years.

Genting Malaysia is part of the conglomerate Genting Bhd and operates Resorts World Genting, the country’s only casino. The company also runs casinos in United States, U.K and the Bahamas.

Analysts have said that the proposed expansion of gaming facilities in the podium or Sky Plaza of Resorts World Genting will play a key role in boosting revenue significantly. The company is also in the process of creating additional gaming space depending on demand and plans to open the first phase of this project during the second half of 2016. According to analysts, the casino has been doing well despite the region-wide slump in the gaming industry.

Resorts World Genting

In a statement Lim Tee Yang, analyst at Affin Hwang Investment Bank Bhd said,

Resorts World Genting has bucked regional gaming trends which have continued to be soft. In 2015, Resorts World Genting recorded double-digit volume growth in both its mass and VIP segments. Underpinning the gaming-volume growth in Malaysia is the favourable mass/VIP revenue split of 60:40, which has been a boon for Genting Malaysia.

Lim stated that the company was planning to shift its mass vs. VIP revenue split to a 50:50 ratio. In order achieve this, the company will focus on expanding gaming facilities for premium mass market and develop a new luxury hotel in the phase 2 of the GITP.

Tee Yang stated that the resort has managed to retain its margins despite the recent levy of Goods and Services Tax (GST) of 6 percent. He further added that the additional expenses expected in 2017 from the proposed 20th Century Fox World theme park would be covered by revenues from the new gaming facilities.

Genting Malaysia anticipates that Resorts World Genting will receive 30 million visitors every year by 2020, which indicates a compound annual growth rate of 9.2 percent over five years from 2015.

The company expects its Bahamas operations to break even this year even as its UK property struggles due to declining VIP volumes. Genting’s new venture in U.S, a tribal gaming resort in Massachusetts is projected to bring in a substantial management fee.

Categories: Casino News

Posted on: 7th April 2016 by: Gary Beachley