Inside Asian Gaming

inside asian gaming August 2014 16 Cover Story Florida The Virtues of Patience and Deep Pockets Genting made a big splash when it came to Florida in 2011, but it has foundered in its efforts to convince state lawmakers of the economic wisdom of resort-scale casinos. At the time, the economy in and around Miami was reeling from one of the worst collapses of the nationwide housing crisis. Nobody was investing. So when Genting shelled out $236 million to buy the former headquarters of the Miami Herald on 14 acres on the city’s famed Biscayne Bay, a grateful Mayor Tomas Regalado presented Genting Chairman Lim Kok Thay with a ceremonial key to the city. The company doubled down six months later with the purchase of a neighboring retail and office complex called the Omni for $185 million. What remained was to clear a legislative path to make Resorts World Miami a reality—a $3.8 billion mega-complex of 5,000 hotel rooms rising above the bay in swirling towers, an array of attractions including 50 restaurants and bars and the world’s largest casino and 750,000 square feet of MICE space for waging serious battle for the massive Florida convention market centered on the Disney resorts in and around Orlando in the central part of the state. But 480 miles away in far-off Tallahassee it’s been a tough sell. Not only for Genting. Las Vegas Sands has been pushing a South Florida resort plan similar in size and scope to no avail. Bringing Sin City to the Sunshine State has been a dream of some of the biggest names in the industry and their advocates for decades, and they’ve come away empty-handed every time, undone by a conservative electorate and a phalanx of competing interests whose voices resound statewide and cannot be ignored: Disney and the Florida Chamber of Commerce among them, along with the wealthy and powerful Seminole Indian Tribe, the state’s largest casino operator, and a pari-mutuel industry that is the largest in the country and long past its prime. Genting has spent millions lobbying the Republican- controlled Legislature, $4 million in 2011 alone, with big promises attached—15,000 construction jobs, 30,000 direct and indirect jobs on opening—and has succeeded in having itself cast as a foreign interloper bent on co-opting the political process, wiping out competition and destroying the state’s family-friendly image—a “bully,” in the words of one prominent gaming analyst, that “missed the mark in how they viewed the government’s needs and what the people want”. Thay. But it wasn’t until a GENM subsidiary won the license for the racino at New York City’s famed Aqueduct Racetrack in the borough of Queens that the company burst onto the US scene, seemingly out of nowhere. Aqueduct established Genting in America. It was a notorious political football, years in coming together, and it took a prodigious combination of patience, finesse and financial muscle on Genting’s part to secure it. It would cost more than $800 million when all was said and done, and that’s without the table games the company had sought or the convention center that was to be the centerpiece and which disappeared in a hail of political infighting and controversy. But Resorts World New York City is the largest and most successful machine gaming operation in the country, good for $785 million in revenue last year. Genting New York retains only 38% of the win after tax (plus 8% for marketing). It’s more about the symbolic value, and that cannot be overstated. When New York City’s only casino opened in October 2011, the US had its first Asian operator, and one to be reckoned with. It speaks volumes, in Mr Klebanow’s view. “They’re willing to wait,” he says. “They’re not beholden to shareholders for the next quarter’s performance of their stock. They’re patient. They wait for their opportunities. No US gaming company has that luxury.” Genting Chairman Lim Kok Thay says Resorts World Las Vegas “will cater to the high-end visitor as well as the budget- minded tourist. We will give first-time guests a new reason to visit Las Vegas and other tourists a great reason to return”. Local government has cooled to Genting’s $3.8 billion plan for Resorts World Miami. >>