New York casino may add $145m in net profit to Genting Malaysia

Resorts World New York

Genting Malaysia would likely see a $145 million boost to net profit per annum should it be granted a casino license for New York State, Maybank Research said.

The New York State Gaming Commission has launched a request for information for three downstate casino licenses. The RFI is looking for interest from parties on the appropriate size and scope of casino developments in the area, the value of the gaming license and the process that should be used in any award consideration.

The deadline for responses to the RFI is Dec. 10, 2021. The regulator will prepare a report for the New York governor and state legislature within the following six months.

Maybank argues that Genting is in a good position to win a license, which will be the “ultimate prize” for the company.

At present, Genting’s Resorts World New York is only able to offer slot machines.

“We opine that RWNYC will have an edge as it can deploy table games and generate additional tax revenue for New York State quickly as opposed to a greenfield casino,” it said.

In addition to the boost to net profit, Maybank said a full casino license may add MYR0.53 to its discounted cash flow-based target price for Genting Malaysia. This would take its best-case scenario target prices to MYR3.93, compared with its share price of MYR3.17 on Monday.

Genting has seen a strong rebound in its North American operations since Covid, with revenue helping to offset the impact of the slow recovery seen in Asian operations.

At Resorts World New York City, three-month gross gambling revenue as of the end of August was $229 million, flat on the prior three months, but higher than pre-Covid levels, according to calculations from Nomura.

The resort increased its video gaming machines to 6,444, just under a maximum capacity of 6,500. 

Resorts World Catskills, which is 49 percent owned by Genting, has GGR of $60.9 million, up 30 percent from the prior three months, but 4 percent lower than the same period of 2019. 

Data is not yet available for Gentings’ $4 billion Resorts World Las Vegas, which opened in mid-June. However, Nomura points to strong state and city-wide data as a proxy. In Las Vegas, GGR for the period was $2.03 billion, up 24 percent sequentially and 21 percent higher than pre-Covid.