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Genting Malaysia Looking For Optimal, Substantial Casino Investment In U.S.

Posted on June 14th, 2010

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A Malaysian company is actively searching for opportunities to become a major player in the gambling industry in the United States. Genting Malaysia Bhd., owns casino resorts in Kuala Lumpur, Singapore, Manila and the United Kingdom. Now it is setting its sights on investing in large U.S. Casinos. In an interview in New York, 32-year old Justin Leong, head of strategic investments and corporate affairs at parent company Genting Bhd., said, “Genting Malaysia is aggressively searching for opportunities to invest in the U.S. casino gaming market. Our strategy is building a U.S. presence.” Leong said the company is not planning on acquiring just one property, but is focusing on acquiring a group of investments or a large investment share.

Leong said Genting Malaysia is carefully devising its plan of obtaining assets in the United States, developing new markets and fostering a sound business partnership in the United States. Genting Malaysia has no debts and is financially strong, with $1.7 billion in cash. It can very well handle substantial projects. The company bought New York Stock Exchange-listed MGM Mirage Inc’s bonds in May 2009 when MGM was on the brink of bankruptcy and was trying to raise funds. Leong said, since then, the company has invested in every capital issue by MGM. Genting Malaysia considers the MGM bonds a good investment in terms of value because the company had recorded returns of more than 10 percent from the payment.

Leong said MGM was Genting Malaysia’s initial venture into the U.S. gaming market, and “that strategic relationship” continues. He said Genting Malaysia is now taking steps to bid for a slots casino at Aqueduct Racetrack in New York City. A project to renovate Aqueduct Racetrack in Queens and turn it into a racino with 4,500 video lottery terminals, calling for a $300 million upfront, has 6 developers joining the bidding process, and one of them is Genting Malaysia. Deadline for submission of the latest set of proposals is June 29. Leong disclosed that since December 2008, Genting has been in negotiations with a number of large American casino companies, but he refused to name them. Leong had bemoaned the fact that it took him time to act and accomplish things.

Currently, there are several offers in Las Vegas after the city’s casinos were severely hit by the devastating recession. Hedge fund operator John Paulson is getting hold of a 9.9 percent share in Harrah’s Entertainment. Last May, his company reported ownership of 9.1 percent shares of MGM Mirage and 4.6 percent of Boyd Gaming Corp. The Genting Bhd. was developed through profits derived from the company’s first casino venture in Malaysia that controlled the gambling activity in the Asian country for forty years. Genting Bhd. currently owns hotels, power generators, palm oil plantations, Star Cruises and Norwegian Cruise Lines. Lim Kok Thay is the chairman and chief executive officer of Genting Bhd. He is the son of founder Lim Goh Tong. Leong, nephew of the chairman and grandson of the founder, first worked at Goldman Sachs Group Inc. before joining his family’s business organization in September 2004.

An affiliate of Genting, Resorts World, opened Singapore’s first casino, the Resort World Sentosa in February, a $4.7 billion family-themed resort. The Singapore government decided to lift its ban on gambling and issued gambling licenses for only two gambling facilities. The other casino, Marina Bay Sands is owned by Las Vegas Sands Corp. Genting’s Resorts World has also a casino in Malaysia and the Philippines. Genting also owns the Circus, Maxims and Mint casinos in the UK. One of the Lim family’s companies, Kien Huat Realty, recently entered into a partnership with the Mashpee Wampanoag Tribe of Massachusetts to fund the construction of a planned casino complex in the state.

Last August, Kien Huat also bought 50 percent of Empire Resorts Inc. at $55 million, which was used by Empire to reorganize its debt. Empire owns the Montecillo Casino and Raceway in Montecillo, New York. In the 90’s Kien Huat bankrolled the Foxwoods Resort and Casino in Connecticut and the Seneca Niagara Casino in New York.