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Genting Planning to Make a Big Splash in the US

Posted on August 24th, 2010

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After what looks like a successful campaign in securing approval for what would be the city of New York’s first gambling facility in the Queens’ Aqueduct racetrack, Genting Berhad, a growing player in the casino gaming industry based in Malaysia, is now eyeing further developments in the rest of the United States. The final approval is already on its way and once the license is approved, Genting will be handling 4,500 slot machines and electronic table games in the Aqueduct. That may still be a very minor investment compared to the major Las Vegas players Harrah’s, the Sands, and even Trump, but the steady growth of Genting in key markets that are currently trending upward is a sign that it is poised in joining the big leagues soon. Future plans of Genting for the Queens facility include a full-scale resort which will mean classy and trendy hotels which will attract local and foreign travelers.

Currently, Genting owns and operates casinos in Malaysia and Singapore, which are earning very well despite the general casino industry downturn in American hotspots Las Vegas and Atlantic City. Other Genting businesses include plantations of oil palm and the tourist cruise company, Norwegian Cruise Lines. The realization of the Aqueduct project is hoped by Genting to be the start of more casino investment opportunities for the firm in the rest of the country. Genting stands on a yearly revenue total of $5 billion, plus $27.6 billion combined market capitalization, which it hopes to invest in markets such as California, Las Vegas and Massachusetts. The company also has plans to make its operations in the United States as a separate entity in the future.

The president of Genting New York, Mike speller, stressed the importance of making the Aqueduct plan successful as it will be the company’s showcase event which could lead the way for more opportunities in the US market. Despite the fighting stance of Genting, it would also need to face the same challenges Las vegas industry bigwigs are currently facing. The gambling arena in the US as of the moment is struggling, with the recession causing numerous jobs to be slashed, which in turn lessens expendable income for things like gambling. Thus, a lot of gambling tables in both Las Vegas and Atlantic City as of the moment are empty, which cycles to additional unemployment to people working for the industry. Moreover, Aqueduct would have to face competition from neighboring facilities in the Shore of Atlantic City, Pennsylvania and Connecticut, places that host facilities with table games and slot machines.

Another challenge Genting faces is a possible conflict of interest. The controlling shareholder of Genting, KT Lin, is already involved in some investments in US gambling operations with Native American tribes. It is said that Kien Huat Realty, the private investment company of Lim’s family, is already an investor of an Indian casino. Moreover, the company is already involved in some conflict that one of Kien Huat’s investments is embroiled in. Kien Huat allegedly has a controlling stake in Empire Resorts, Inc., which is the owner of the Monticello Casinos and Raceway in New York state. Joseph Bernstein, former chief executive and large shareholder of Empire, has declared a public battle with Kien Huat over some matters for months already. Some board members of Empire and Bernstein have accused Genting as well, of not permitting Empire to be a participant in the bidding process for the Aqueduct.

These allegations were denied by Genting, stating that Genting or Kien Huat is not involved in any plan to keep Empire out of the Aqueduct bidding, stating further that it was Empire’s shaky financial standing that did not allow it to join the bidding. Moreover, Genting claims that Kien Huat’s other standing investments should not be in conflict within Genting’s expansion plans, because Genting will be prioritized, as it is a public company, compared to private firm Kien Huat.

Genting Berhad was founded by Lim’s father who opened a casino and resort in Malaysia in 1971. Currently, 19 million visitors make it a point to visit Genting Highlands when in Malaysia. Meanwhile, Kien Huat is an investor in a number of tribal casinos such as Connecticut’s Foxwoods Resort Casino and the Niagara Falls, NY’s Seneca Niagara Casino.