Genting Singapore Already Flexing Muscles in Yokohama

Posted on: June 6, 2021, 01:30h. 

Last updated on: June 6, 2021, 02:03h.

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

In what’s now a two-competitor race to bring an integrated resort to Yokohama, Genting Singapore is making clear it means business.

Genting Singapore
The monorail at Resorts World Sentosa. Owner Genting Singapore is making a big push in Yokohama. (Image: Pinterest)

At the gaming company’s recent annual meeting, it was revealed a portion of Executive Chairman Tan Sri Lim’s compensation will be tethered to a successful bid for Japanese gaming license. The operator is competing with Melco Resorts & Entertainment (NASDAQ:MLCO) to bring a high-end casino-resort to Japan’s second-largest city.

A document containing meeting minutes and an investor presentation indicates Tan would be eligible for a contingent bonus assuming Genting Singapore defeats Melco. The bonus will not be paid if Genting isn’t successful in its quest to open an integrated resort in the Land of the Rising Sun.

President and COO Tan Hee Teck said the compensation plan was put together “based on the group’s commendable track record in developing and successfully operating Resorts World Sentosa in Singapore.”

He might be onto something, because although it’s been just a few days since Genting and Melco were officially revealed as the two contenders in Yokohama’s request for proposal (RFP) process, some market observers believe it’s Genting’s race to lose.

Genting Has Strong Hand

When it comes to the initial three gaming permits the country will award, it’s long been known that Japanese authorities prefer those licenses go to companies with Asia-Pacific operating experience – something both Genting and Melco have. Genting Singapore runs Resorts World Sentosa, which is one of two gaming properties in the city-state.

Resorts World Sentosa operates in an environment where the operational and regulatory regime was of the highest standards, and such experience would be of significant value to the city of Yokohama and Japan,” said Tan in the presentation.

While it’s widely known Japanese officials want to partner with operators with regional experience, there’s speculation that they prefer Singapore’s gaming model to that of Macau. That could be one reason analysts believe Genting is leading the way in Yokohama.

Other Genting Advantages

The Singapore arm of Genting Berhard may also have more advantages in the Yokohama competition. For example, it carries an “A3” credit rating from Moody’s Investors Service. That’s likely a plus with Japanese policymakers believed to be prioritizing the financial sturdiness of potential operator partners.

“Management had also considered the group’s strong financial position, the competition, and the potential joint venture partners in determining that the group would submit a compelling bid for an IR in Yokohama city,” said Tan.

Genting is partnering with local firms Sega Sammy and Kajima, the former of which has a minority interest in a South Korea casino-resort. Kajima was a major contractor in the construction of Resorts World Sentosa.

Melco is working with Japan-based Taisei Corporation on its Yokohama proposal. The Hong Kong-based company has integrated resorts in Macau and the Philippines, among other locations.