KUALA LUMPUR: Like a good poker player, perhaps Asia’s brightest casino magnate Tan Sri Lim Kok Thay isn’t about to give away his hand but he’s certainly playing to win.
“I hope to make Genting the No 1 and the most recognisable global corporation in Asia and in the world,” Lim had told The Edge in July, within weeks of Genting’s purchase of its Miami bayfront land.
“Genting should always make a big and meaningful impact, whether locally or globally,” he said in a brief emailed response.
“In 10 years’ time, I would like to see Genting as the premier global corporation that makes bigger things happen.”
At that time, Lim also said he was “happy with what Genting is doing right now” and that he “wouldn’t have done [anything] differently”.
Six months down though, the Genting group’s very public approach in Miami seems to be gathering more flak than getting it any closer to that desired casino licence that could help create a new global gaming destination and possibly strip Vegas of its dominance. And with opposition from Florida’s Orlando-based Walt Disney Co weighing on its odds, even fans have begun to wonder if Genting had painted itself into a corner in Miami as it seeks to convince Florida lawmakers to allow resort-styled gaming.
In fact, Christian Goode, president of Resorts World Miami (RWM), earlier this month insisted that RWM “is not even close to being [the world’s] largest [casino]”, a month after its architect-project manager said it would be, the Miami Herald reported on Dec 12.
Is the pressure on Genting to justify what detractors deem “over-the-top” numbers getting to them?
That’s not all, on Dec 19, the local Miami press reported that a preservation group intends to ask that The Miami Herald 1963 bayfront structure — where Genting’s planned US$3.8 billion (RM12.1 billion) RWM is to stand — be designated as a protected architectural and historical landmark.
In response, Goode told The Miami Herald that “any impact derived from preserving the Herald building are far outweighed by the benefits that a new master-planned development will bring to the Omni neighbourhood, including activating the downtown waterfront, employing tens of thousands of Floridians, generating meaningful tax revenue and adding value to a depressed area”.
It remains to be seen if Genting and other proponents of the casino bill would get a break with Florida’s next legislative sitting set to kick off Jan 12, 2012. On Dec 22, governor
Rick Scott told The South Florida Sun Sentinel that he thinks “it’s going to be tough to get a gaming bill passed” in 2012, considering the money the state gets from an agreement signed with the Seminole Indian tribe in 2010, which gives them exclusive rights to operate casinos on tribal land.
Politicians are also expected to play it safe given that 2012 is election year, market watchers say.
Genting declined to comment when contacted by The Edge Financial Daily for this story.
Whatever the case, Melvyn Boey, who heads research (Southeast Asia) for Bank of America-Merrill Lynch (BoA-ML) in Singapore, pointed out that the Lim family isn’t new to the US market.
“They’ve been there for a long time. It’s the public-listed entity, Genting, that’s relatively new,” Boey, who’s tracked Genting since the 1990s, told The Edge in a recent interview. Moreover, at US$4.7 billion and counting, Resorts World Singapore is still Genting’s biggest investment thus far, not Miami.
While not much is known on the extent of the family’s reach in the US market, seasoned market watchers like Boey wouldn’t underestimate their deep ties with some Indian tribal gaming groups in the US, including the Mashantucket Pequot in Connecticut, some of whom reportedly flew halfway across the world for Tan Sri Lim Goh Tong’s funeral in October 2007.
In Massachusetts, where a casino bill had just been approved last month, for instance, the Lim family’s private vehicle Kien Huat Realty Sdn Bhd reportedly has a tie-up with another Native American tribe, the Mashpee Wampanoag, to build a casino-resort.
That’s partly why Boey still reckons Genting will prove to be a good long-term bet. “My view is that Genting has taken the approach they believe would best get them what they want. I’d give them the benefit of doubt. They’ve delivered in Singapore. The UK had disappointed, but is improving. New York just started and is still enjoying some novelty.”
He isn’t alone. Most analysts polled on Bloomberg have a “buy” on Genting Malaysia Bhd, its parent Genting Bhd, as well as Singapore-listed Genting Singapore Ltd.
In Boey’s view, Genting is minting a lot of cash and is merely moving quickly to seize the opportunities that have propped up in different parts of the world as governments begin to view gaming as a catalyst for economic boom rather than a vice-filled industry linked to thug-like debt-collectors, prostitution and money laundering.
“Singapore hasn’t become Asia’s new sin city, has it? If anything, it’s become Asia’s new playground for the rich and famous,” another observer noted.
To be sure, Genting’s Lim wants his group to be a household name. “When we invest in gaming, we want that extra element [of family entertainment] because we think that will offer the maximum benefit to the local community and to the country as a whole,” Lim told the Wall Street Journal in an interview published on Dec 12.
In Malaysia, when launching Genting’s Johor Premium Outlets (JPO) in Kulaijaya, Johor on Dec 11, Prime Minister Datuk Seri Najib Razak said apart from the RM100 million to expand JPO, Genting will invest at least RM1 billion on more attractions including a new water theme park, a convention centre and a 2,000-room hotel.
In doing so, Lim had earlier told The Edge he would like to see Genting’s efforts help “build a better tomorrow for our future generations” and go toward bringing about change for Malaysia as the country seeks to transform itself into a high-income nation.
Already, JPO — reportedly a 30 -minute drive from Singapore’s Tuas checkpoint — expects to attract three million visitors in its first year of operations, including those from Singapore, the rest of Southeast Asia and the Middle East.
Across the Causeway, travel agencies like Chan Brothers and CTC Travel told Singapore media they expect tour groups to JPO to be booked out by January next year, filled by shoppers looking to buy branded goods at up to 65% off usual retail prices.
Plans are already underway to enhance accessibility from Singapore with a direct shuttle to JPO from the Dhoby Ghaut MRT station, near Plaza Singapura, ChannelNewsAsia reported on Dec 11.
To be sure, Lim’s statement that he doesn’t overly concern himself with short-term numbers may spook some investors, but BoA-ML’s Boey said Genting has both the experience and financial strength for what they’re looking to do.
“Genting Highlands generates easily RM1 billion free cash flow (FCF) a year, with very little capital expenditure requirement. We see Genting Singapore generating steadily about S$1.5 billion (RM3.66 billion) FCF a year from FY2013. In FY12, the number is already S$1.3 billion and that will grow as capex tapers off,” he said.
“I’m not overly concerned on [Genting’s] expansion moves as long as their balance sheet can support the debt. I’d only worry if net gearing goes above 50% and stays at that level.”
While the headline US$3.8 billion investment in Miami looks big, Boey said Genting would only accelerate spending if it has the casino licence. That could come to a boil if legislators in Florida shoot down the casino bill in January 2012 and choose to take more time weighing their options to create more jobs and shore up economic activity.
What’s certain, though, is that today Genting Malaysia’s balance sheet is stronger and Lim can go all out in Miami because he has nothing to lose in Vegas. The latter may be why Lim is this bold in his promises.
“I hope to make Genting the No 1 and the most recognisable global corporation in Asia and in the world,” Lim had told The Edge in July, within weeks of Genting’s purchase of its Miami bayfront land.
“Genting should always make a big and meaningful impact, whether locally or globally,” he said in a brief emailed response.
“In 10 years’ time, I would like to see Genting as the premier global corporation that makes bigger things happen.”
At that time, Lim also said he was “happy with what Genting is doing right now” and that he “wouldn’t have done [anything] differently”.
Six months down though, the Genting group’s very public approach in Miami seems to be gathering more flak than getting it any closer to that desired casino licence that could help create a new global gaming destination and possibly strip Vegas of its dominance. And with opposition from Florida’s Orlando-based Walt Disney Co weighing on its odds, even fans have begun to wonder if Genting had painted itself into a corner in Miami as it seeks to convince Florida lawmakers to allow resort-styled gaming.
Lim syas he would like to see Genting as the premier global corporation that makes bigger things happen.
In fact, Christian Goode, president of Resorts World Miami (RWM), earlier this month insisted that RWM “is not even close to being [the world’s] largest [casino]”, a month after its architect-project manager said it would be, the Miami Herald reported on Dec 12.
Is the pressure on Genting to justify what detractors deem “over-the-top” numbers getting to them?
That’s not all, on Dec 19, the local Miami press reported that a preservation group intends to ask that The Miami Herald 1963 bayfront structure — where Genting’s planned US$3.8 billion (RM12.1 billion) RWM is to stand — be designated as a protected architectural and historical landmark.
In response, Goode told The Miami Herald that “any impact derived from preserving the Herald building are far outweighed by the benefits that a new master-planned development will bring to the Omni neighbourhood, including activating the downtown waterfront, employing tens of thousands of Floridians, generating meaningful tax revenue and adding value to a depressed area”.
It remains to be seen if Genting and other proponents of the casino bill would get a break with Florida’s next legislative sitting set to kick off Jan 12, 2012. On Dec 22, governor
Rick Scott told The South Florida Sun Sentinel that he thinks “it’s going to be tough to get a gaming bill passed” in 2012, considering the money the state gets from an agreement signed with the Seminole Indian tribe in 2010, which gives them exclusive rights to operate casinos on tribal land.
Politicians are also expected to play it safe given that 2012 is election year, market watchers say.
Genting declined to comment when contacted by The Edge Financial Daily for this story.
Whatever the case, Melvyn Boey, who heads research (Southeast Asia) for Bank of America-Merrill Lynch (BoA-ML) in Singapore, pointed out that the Lim family isn’t new to the US market.
“They’ve been there for a long time. It’s the public-listed entity, Genting, that’s relatively new,” Boey, who’s tracked Genting since the 1990s, told The Edge in a recent interview. Moreover, at US$4.7 billion and counting, Resorts World Singapore is still Genting’s biggest investment thus far, not Miami.
While not much is known on the extent of the family’s reach in the US market, seasoned market watchers like Boey wouldn’t underestimate their deep ties with some Indian tribal gaming groups in the US, including the Mashantucket Pequot in Connecticut, some of whom reportedly flew halfway across the world for Tan Sri Lim Goh Tong’s funeral in October 2007.
In Massachusetts, where a casino bill had just been approved last month, for instance, the Lim family’s private vehicle Kien Huat Realty Sdn Bhd reportedly has a tie-up with another Native American tribe, the Mashpee Wampanoag, to build a casino-resort.
That’s partly why Boey still reckons Genting will prove to be a good long-term bet. “My view is that Genting has taken the approach they believe would best get them what they want. I’d give them the benefit of doubt. They’ve delivered in Singapore. The UK had disappointed, but is improving. New York just started and is still enjoying some novelty.”
He isn’t alone. Most analysts polled on Bloomberg have a “buy” on Genting Malaysia Bhd, its parent Genting Bhd, as well as Singapore-listed Genting Singapore Ltd.
In Boey’s view, Genting is minting a lot of cash and is merely moving quickly to seize the opportunities that have propped up in different parts of the world as governments begin to view gaming as a catalyst for economic boom rather than a vice-filled industry linked to thug-like debt-collectors, prostitution and money laundering.
“Singapore hasn’t become Asia’s new sin city, has it? If anything, it’s become Asia’s new playground for the rich and famous,” another observer noted.
To be sure, Genting’s Lim wants his group to be a household name. “When we invest in gaming, we want that extra element [of family entertainment] because we think that will offer the maximum benefit to the local community and to the country as a whole,” Lim told the Wall Street Journal in an interview published on Dec 12.
In Malaysia, when launching Genting’s Johor Premium Outlets (JPO) in Kulaijaya, Johor on Dec 11, Prime Minister Datuk Seri Najib Razak said apart from the RM100 million to expand JPO, Genting will invest at least RM1 billion on more attractions including a new water theme park, a convention centre and a 2,000-room hotel.
In doing so, Lim had earlier told The Edge he would like to see Genting’s efforts help “build a better tomorrow for our future generations” and go toward bringing about change for Malaysia as the country seeks to transform itself into a high-income nation.
Already, JPO — reportedly a 30 -minute drive from Singapore’s Tuas checkpoint — expects to attract three million visitors in its first year of operations, including those from Singapore, the rest of Southeast Asia and the Middle East.
Across the Causeway, travel agencies like Chan Brothers and CTC Travel told Singapore media they expect tour groups to JPO to be booked out by January next year, filled by shoppers looking to buy branded goods at up to 65% off usual retail prices.
Plans are already underway to enhance accessibility from Singapore with a direct shuttle to JPO from the Dhoby Ghaut MRT station, near Plaza Singapura, ChannelNewsAsia reported on Dec 11.
To be sure, Lim’s statement that he doesn’t overly concern himself with short-term numbers may spook some investors, but BoA-ML’s Boey said Genting has both the experience and financial strength for what they’re looking to do.
“Genting Highlands generates easily RM1 billion free cash flow (FCF) a year, with very little capital expenditure requirement. We see Genting Singapore generating steadily about S$1.5 billion (RM3.66 billion) FCF a year from FY2013. In FY12, the number is already S$1.3 billion and that will grow as capex tapers off,” he said.
“I’m not overly concerned on [Genting’s] expansion moves as long as their balance sheet can support the debt. I’d only worry if net gearing goes above 50% and stays at that level.”
While the headline US$3.8 billion investment in Miami looks big, Boey said Genting would only accelerate spending if it has the casino licence. That could come to a boil if legislators in Florida shoot down the casino bill in January 2012 and choose to take more time weighing their options to create more jobs and shore up economic activity.
What’s certain, though, is that today Genting Malaysia’s balance sheet is stronger and Lim can go all out in Miami because he has nothing to lose in Vegas. The latter may be why Lim is this bold in his promises.
