Genting NY Casino Bid Could Be Hindered by Las Vegas Controversy, Says CIMB

Posted on: August 22, 2024, 04:24h. 

Last updated on: August 23, 2024, 09:13h.

Todd Shriber @etfgodfather Read More
Expertise: Financial, Gaming Business, Mergers and Acquisitions.

Genting Bhd’s effort to procure one of the three downstate casino licenses in New York could be damaged by potential regulatory discipline the operator faces in Nevada, according to CIMB Securities.

Selwyn Balkissoon
Resorts World New York in Queens. Operator Genting’s hopes of converting the venue to a traditional casino could be harmed by Las Vegas controversies, says a research firm. (Image: NYT)

Last week, the Nevada Gaming Control Board (NGCB) said it is examining financial penalties against Resorts World Las Vegas (RWLV) — Genting’s lone Nevada property — over that venue’s role in allowing known illegal bookmakers to wager there. Nevada regulators alleged that Resorts World Las Vegas not only knowingly allowed those bookies to bet there, but also didn’t scrutinize the source of their cash. That could call into question the veracity of the integrated resort’s anti-money laundering protocols.

We think another risk is that a negative review by the commission could jeopardize Resorts World New York City’s bid,” wrote CIMB analysts in a recent report to clients.

Genting-owned Resorts World New York is a slots-only venue in Queens. The venue has been operational for about 13 years, and over that time, it’s delivered more than $4 billion in taxes for the state. That coupled with its status as one of the highest-grossing regional casinos in the country, despite having no table games, has led to speculation that Resorts World New York is almost a lock to win one of the three downstate permits.

Genting Could Face Hefty Fine in Nevada

CIMB Securities observed that Resorts World Las Vegas could have to answer for as many as 300 separate violations, which could result in fines totaling $75 million.

It’s also possible that if Nevada regulators want to take a hard line against Genting, RWLV’s nonrestricted gaming license could be suspended or even revoked, though the research firm acknowledges that both a fine of that size and revocation of the gaming permit would be unusually harsh punishments.

“Some industry experts say that this is rare and the commission is unlikely to go that far, due to the uncertain long-term impact from taking such a drastic measure,” noted the brokerage firm.

Scott Sibella, the former MGM Resorts International and RWLV executive at the heart of the scandal, pleaded guilty in January to violating the federal Bank Secrecy Act, and in May, was tagged with a $9,500 fine and a $100 special levy. In Nevada, he could face loss of his gaming license and up to $750K in fines.

Genting NY Casino Bid Could Withstand Controversy

To date, no New York regulators have commented on whether or not the goings on at Resorts World Las Vegas could endanger Genting’s Empire State ambitions. In New York, the current emphasis is on finding some way to expedite the start of the bidding process for the three downstate casino licenses — something that appears unlikely over the near term.

About a year ago, rumors surfaced that MGM’s Empire City Casino could also be hampered in its efforts to land one of those permits because of Sibella’s ties to that operator. He served as president of MGM Grand on the Las Vegas Strip for a decade.

However, that’s just speculation and no New York regulator has publicly said the Genting and MGM bids there are in jeopardy due to controversies in Nevada. With both operators already established and known to New York policymakers, and with both pledging billions of dollars in enhancements to their existing venues and the creation of thousands of new jobs should they win traditional casino licenses, it’s possible their New York ambitions can withstand the Sibella-related imbroglio in Las Vegas.