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Golden opportunity for M'sian firm in US
Publication Date : 11-01-2013
Genting Malaysia Bhd may enjoy spillover benefits from New York governor Andrew Cuomo's plan to expand the state's gambling to private casinos.
Given Genting Malaysia's strong financial strength and good track record as the operator of the Aqueduct racino in Queens, New York, it is well-positioned to benefit from the potential gaming liberalisation in the state of New York.
According to Alliance Research analyst Cheah King Yoong, the New York state regulators' willingness to liberalise the gaming sector will offer Genting Malaysia a golden opportunity to expand its gaming operations in the United States.
On Wednesday, Cuomo unveiled New York's plans to increase revenue and boost tourism in upstate New York. Phase One of the plan includes three private casinos in upstate New York.
According to him, no casinos will be located in New York City, as the plan is to bring downstate New Yorkers and other visitors to upstate New York.
Upstate New York is the region north of New York City and is less densely populated compared to New York City and Long Island.
Cuomo's plan is an amendment to the state legislature's constitutional amendment last year, which had allowed as many as seven commercial casinos in New York.
While the constitutional amendment would still be valid, the number of casinos has been restricted to only three. The Phase One casino gaming plan will have to be resubmitted and approved by the Legislature this year.
Last year, Cuomo named Genting Malaysia as the state's partner to build a US$4 billion (12.16 billion ringgit) convention centre at Aqueduct Racetrack in Queens, New York, as an extension of its existing project - Resort World New York.
“Despite the toned-down proposal announced by Governor Cuomo, we remain optimistic that the willingness of the New York state regulators to liberalise the gaming sector will offer Genting Malaysia a golden opportunity to expand its gaming operations in the US,” Cheah said.
Meanwhile, PublicInvest Research was unexcited about the latest plan.
“After spending $700 million in New York, it would have been a boon to be able to use the existing facilities for a full-scale casino, rather than spending more somewhere upstate,” said the research house.
Additionally, Genting Malaysia's existing Aqueduct racino is in Queens, which is downstate.
“If they were to bid for a casino licence in Phase One, and if they were to win it, it would mean another hefty investment,” the research house noted.
PublicInvest Research said the location was definitely less attractive compared to the existing Aqueduct location, given that it is less densely populated.
However, there are many uncertainties, as the constitutional amendment would still need to go through another round of legislative approval and voter referendum.