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Genting HK preparing for Macau

KUALA LUMPUR: Genting Hong Kong Ltd is stepping up the groundwork for a foothold in the world’s largest casino market with plans for a “Resorts World Macau”. Just months ago, Macau officials signalled the possibility of accepting new players, with existing Macau gaming concessions up for review in about seven years.

“Twenty-fifteen would be a proper time for us to discuss with gaming operators [the formation of] new gaming concessions,” Macau’s Secretary for Economy and Finance Francis Tam Pak Yuen reportedly said last July. He was commenting on the renewal of the existing three gaming concessions and three sub-concessions that end in 2020 and 2022.

Resorts World Macau is the working name of the project by Genting HK subsidiary Treasure Island Entertainment Complex Ltd (TIECL), the Macau Business Daily reported yesterday.

The Lim family controls 76% of Genting HK, including 18.7% held through flagship Genting Bhd. Genting HK, which is listed on the Hong Kong Exchange, owns Norwegian Cruise Line and operates casinos in the Philippines.

The company’s plans for a boutique hotel, on a reclaimed parcel of land opposite billionaire Stanley Ho’s old Casino Lisboa, submitted for approval last August, did not include gaming facilities, the report quoted TIECL chairman Yany Kwan as saying. According to Kwan, the project — at Praça de Ferreira do Amaral by Nam Van Lake — would see a low-rise boutique hotel “providing hundreds of rooms”.

Kwan is a director and an indirect substantial shareholder of TIECL, which is indirectly 75% owned by Genting HK through its stake in Macau Land Investment Corp (MLIC), according to notes accompanying Genting HK’s 2013 interim report.

Kwan spoke to the Macau daily on the sidelines of a meeting to review investment bids for the Guangdong-Macau Cooperation Industrial Park on Hengqin Island near Macau.

Citing unnamed sources, the Macau Business Daily report yesterday stated that gaming had not been ruled out for Resorts World Macau, which would also have “shopping facilities, venues for shows and even conventions and exhibitions”.

The report said the most likely route for Genting HK to get the go-ahead for gaming in Macau before the review of the current gaming concessions would be through so-called “service agreements” with one of the six existing concessionaires and sub-concessionaires, the report read.

Those familiar with the Genting group would remember that Genting HK (then known as Star Cruises Ltd) acquired MLIC in 2007 and wanted to build Resorts World Macau casino resort on the plot of land MLIC has in downtown Macau, riding on the casino licence of Ho’s Sociedade de Jogos de Macau SA (SJM). Ho was to personally take a stake in Genting HK, which was then known as Star Cruises Ltd.

However, Genting International Ltd (changed name to Genting Singapore plc), which was also supposed to invest in the Macau project, pulled out of the venture reportedly due to concerns in Singapore, where it had just won one of two casino licences. Ho was then reportedly deemed an “unsuitable” partner by gaming regulators in Nevada, US, for alleged links to triads in the Macau casino junket operations.

It is understood that the Genting group already serves some VIP customers in Macau through operating VIP rooms in one of the major casinos under profit-sharing service agreements.

Genting Hong Kong’s spokesman declined to comment to The Edge Financial Daily, but analysts are not surprised about the report as Genting Malaysia Bhd, for example, is going ahead with the building of Resorts World Miami in Florida, even as it is still in the process of lobbying for a casino resort licence.

Moreover, Genting chairman Tan Sri Lim Kok Thay has always been keen on Macau, which raked in US$45 billion (RM148 billion) in gaming revenue in 2013, up 18.6% year-on-year, and seven times that of the Las Vegas strip. A foothold in Macau would take the Genting Group a step further in completing its footprint in the world’s leading casino markets. Genting reportedly failed in its bid for a casino licence in Macau in 2001.

In any case, TIECL is also reportedly interested in investing in a theme park resort that Kwan said could cost some 30 billion yuan (RM16.29 billion) to 40 billion yuan, with Phase 1 costing 15 billion yuan to build over some 30 months.

The project’s Chinese name translates to “Resorts World Hengqin, China”, the Macau Business Daily said in a separate report.

Other than its maiden casino resort in Genting Highlands, Malaysia, Resorts World Sentosa in Singapore and smaller casinos in the UK, the Genting Group’s casino resorts also include Resorts World New York (under Genting Malaysia Bhd) and Resorts World Manila (under Genting HK). Genting Bhd owns Resorts World Las Vegas that is being developed in Nevada.

Genting is currently serving the Miami market through Resorts World Bimini Bahamas, which is reportedly about 2½ hours away from south Florida by superfast ferry. Genting HK also controls and operates Star Cruises as well as the Norwegian Cruise Lines (NCL) casino cruise ships.


This article first appeared in The Edge Financial Daily, on January 08, 2014.

 

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