SOUTH EAST ASIA 14
MALAYSIA
Resorts World Genting threatened by regional competition Resorts World Genting is one of Asia’s oldest casino resorts, opening its first hotel in 1971, though analysts say the property is now at risk of losing its dominant position to upcoming jurisdictions in the region.
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enting’s founder Tan Sri Lim Goh Tong conceived the idea of a mountain resort in 1963 when he was working on a hydro-electric project in the Cameron Highlands. The company still enjoys a monopoly license in Malaysia and was one of the only true resorts offering legal gambling in South East Asia. Now, after the opening of two integrated resorts in Singapore and the rapid pace of growth in Cambodia and the Philippines, analysts at JP Morgan estimate it will lose its position as the third-largest gaming market in the region to Cambodia.
Asia Gaming Briefings | August 2019
“We think this shift accelerates with regional property ramp-up at a time when Genting Malaysia looks to cut promotional spending, driving visitation away from its property. Reiterate ‘Underweight’ on Genting Malaysia,” it said. The Malaysian operator has been cutting back on marketing and other costs to offset the impact of greater-than-expected tax hikes in last year’s budget. Analysts have warned the cuts may harm its ability to woo VIPs. Mainland Chinese visitors to Cambodia have increased over a third over the last two years.
“We think a large part of these visitors are gamblers, given the correlated growth of gross gaming revenue (GGR) with tourism in Cambodia and our channel checks. We believe Malaysians may be the second-largest contributors of GGR in some of the larger casinos in Cambodia,” JPMorgan stated. “In Malaysia, only 39 percent of the population is allowed entry into casinos in a highly penetrated market and major capacity expansion are ‘once-in-a-decade’ events entailing large investments,” the firm said, referring to the fact that Malaysia’s predominantly Muslim population is banned from entering casinos.
