Only 20% Genting’s GGR comes from foreigners

Genting Malaysia poised for minimal impact from opening of legal casinos in Thailand

Reading time 1:45 min

Genting Malaysia Bhd's Resorts World Genting is expected to experience minimal impact from the introduction of legal casinos in Thailand, with less than 20 percent of its gross gaming revenue (GGR) originating from foreign patrons, according to research by Maybank Investment Bank Bhd (Maybank IB).

Maybank IB's analysis, outlined in a recent note on the gaming sector, anticipates that Thailand could see its first economic corridors hosting legal casino gaming as early as 2029. Up to eight potential integrated casino resorts may be developed pending final approval by the cabinet, following a study passed last Thursday by the House of Representatives.

The research firm suggests that the most probable location for these legal Thai casinos is the Eastern Economic Corridor, with an estimated development period of approximately five years, should one or more integrated resort bids gain approval within the current year.

Maybank IB underscores the significant impact the opening of legal Thai casinos could have on the regional gaming landscape, with Singapore’s integrated resorts and Cambodia’s NagaWorld being particularly susceptible, as over 60 percent of their GGR is derived from foreign sources, New Straits Times reported.

Resorts World Sentosa (RWS), operated by Genting Singapore, generates over 60 percent of its GGR from foreign patrons, while NagaCorp's Naga 1 and 2 predominantly rely on foreign gamblers .

“We are more concerned for Genting Singapore’s Resorts World Sentosa (RWS), where we estimate that around 60% of GGR is derived from foreigners, and NagaCorp’s Naga 1 and 2, where almost all their GGR is derived from foreigners (only Cambodians who hold foreign passports can gamble in Cambodia). Yet, recall that many who had believed that Malaysian GGR would fall after the Singaporean integrated resorts opened in 2010 were proven wrong,” the research house said in its report.

Despite the potential impact, Maybank IB suggests that Genting Singapore and NagaCorp have time to strategize, with the first casino in Thailand not slated to open until 2029.

Both companies are actively investing significant amounts, with Genting Singapore and NagaCorp earmarking SG$6.8 billion ($5 billion) for property upgrades and expansions.
Expressing interest in bidding for a Thai EC license, Genting Singapore may face a less dire fate according to Maybank IB, given potential opportunities for adaptation.

Thailand's recent move towards legalizing entertainment complexes (ECs) that will accommodate casinos marks an initial step, with proposed gaming tax rates set at 17 percent and social safeguards similar to those implemented in Singapore. A maximum of eight ECs are planned for construction in the near future.

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