Malaysia, a neighbor, may present competition for Singapore's casino duopoly, Marina Bay Sands and Resorts World Sentosa, for the first time.
According to Bloomberg, global casino mogul Lim Kok Thay, chairman and CEO of Genting Group, and lottery gaming magnate Vincent Tan met with Malaysian Prime Minister Anwar Ibrahim last week. The prime minister reportedly discussed a casino resort construction in Forest City, which is situated on the southern tip of the Malay Peninsula, with the wealthiest Malaysian businesspeople.
The Johor Strait divides Forest City from Singapore, but the Second Link Bridge makes it simple to travel there. A gaming establishment there would probably hurt Sands and Resorts World's gaming revenue.
"We think the Singapore casinos would be net losers should Malaysia eventually allow a second land-based casino in Forest City due to their geographical proximity,” Nomura global gaming analysts Tushar Mohata and Alpa Aggarwal wrote.
Resorts World Sentosa is owned and managed by Genting, through Genting Singapore, a subsidiary. Additionally, the company owns the only casino license in Malaysia, which it employs in Resorts World Genting, located some 200 air miles northwest of Forest City in the isolated Pahang highlands.
Mild Effect
The Genting Group is a multinational company with interests in real estate, agribusiness, and biotechnology in addition to casino resorts in Malaysia, Singapore, the Philippines, the United Kingdom, the Bahamas, and the United States. The casino division of Genting is divided among multiple companies, with Genting Highlands being a part of Genting Malaysia.
The Nomura analysts think the group's total impact would be minimized if Genting Malaysia were to receive a second casino license in Malaysia and establish a resort in Forest City, a move that would be anticipated to reinvigorate the projected $100 billion affluent town.
"In a scenario that Malaysia allows a Forest City casino and awards the license to Genting, while Genting Singapore will be still negatively impacted, the net impact on Genting Malaysia and Genting Group will depend on which entity builds the casino, but the eventual impact on the group should be less negative, in our view,” the Nomura note reasoned.
The Bloomberg claim that Anwar met with Kim and Tan to discuss a casino in Forest City was refuted by Anwar. Talks for gaming expansion have long been unpopular with the predominantly Muslim population, who have called the narrative "not true" and "a lie."
The IR Gold Standard
Being an all-inclusive destination where visitors don't need to leave the property's grounds during their stay, Marina Bay Sands has long been regarded as the "gold standard" of the integrated resort business. MBS is regarded as the richest casino in the world and is Sands' most valuable asset.
Sands and RW Sentosa won S$5.25 billion (US$3.7 billion) from gamblers last year. The COVID-19 pandemic has left Singapore's gambling industry still recovering, even though the city-state finally completely relaxed its coronavirus measures in early 2023.
Just 67% of the $5.9 billion the two casinos made in prepandemic 2019 is represented by the $3.7 billion in gross gaming revenue (GGR).
