Inside Asian Gaming

September 2015 inside asian gaming 11 LimKokThay Executive Chairman and CEO Genting Berhad Genting Berhad is the hub of the only truly global gaming company, and Lim Kok Thay sits at its center. Fifty years after his father, Lim Goh Tong, began building a road through the jungle to what would become Genting Highlands resort, the group can celebrate a truly golden anniversary. From that single monopoly casino in Malaysia—and a vast web of non-gaming companies from power generation to palm oil plantations—Genting Group has woven together gaming operations across Asia, North America and Europe, increasingly under the Resorts World brand, plus a 6.6% stake in Australia’s Echo Entertainment and a fleet of cruise ships circling the globe. Lim Kok Thay joined the company in 1976 and succeeded his father in 2007, just as Genting’s international expansion shifted into high gear. The one hole in Genting’s net is Macau, not such a costly omission at the moment. At year end exchange rates, Genting Group’s 2014 revenue was $5.8 billion, EBITDA was $1.9 billion from operation in seven countries, stock market capitalization exceeded $30 billion and Genting Berhad’s cash hoard stood at $4.68 billion. Those numbers are derived from assets that include the original resort, now Resorts World Genting; Singapore’s Resorts World Sentosa, one of the most profitable integrated resorts in the world; Genting Casinos UK, among Britain’s largest operators with its 42nd casino to open this year; Resorts World New York City, the highest revenue electronic gaming parlor in the US Northeast; and Resorts World Manila, which doubled the Philippine gaming market and opened the way for more privately owned casinos. Malaysia-based Genting Berhad holds stakes of 49% to 52% in the various subsidiaries that control its operating entities, except for Genting Hong Kong—Genting Malaysia is selling its 17.81% stake— which is a 50% partner in Resorts World Manila owner Travellers International Hotel Group and runs Star Cruises and newly acquired Crystal Cruises after selling off Norwegian Cruise Lines for a $1.57 billion gain. Mr Lim chairs each entity, and the Lim family holds substantial stakes through various private vehicles, most notably Kien Huat Realty. The structure isn’t made for transparency, and it can get confusing, as in South Korea, where Genting Singapore and Genting Hong Kong each had the same partner on different gaming projects, and in upstate New York, where Genting Malaysia bid unsuccessfully for a gaming license while Kien Huat was a winner. What’s clear is that Mr Lim sits at the top of the group. It’s equally clear that for all its global breadth, Genting Group still leans heavily on Malaysia and Singapore. Last year, 70% of revenue and 88% of EBITDA came from those two markets. More importantly, neither market looks poised for explosive growth. For the first half of this year, revenue from leisure and hospitality rose 2% in Malaysia and fell 20% in Singapore. Genting is working to shore up those businesses while driving fiercely to widen its net. In Singapore, it opened a hotel in Jurong to bring more guests to RW Sentosa, 15 minutes away, a creative solution to its inability to expand the IR. At RW Genting, it’s in the midst of a 5-billion-ringgit ($1.2 billion) revamp that includes more hotel rooms and a new theme park. In January, Genting Singapore broke ground on the $1.8 billion Resorts World Jeju, on the island known as Korea’s Hawaii that offers visa free access to mainland Chinese, while Genting Hong Kong sold its share of a local casino to RW Jeju partner Landing International. In the Philippines, RW Manila is completing a $650 million expansion, a prelude to developing Resorts World Bayshore City in the Entertainment City casino cluster, both under its Travellers International Hotel Group joint venture with Philippine billionaire Andrew Tan’s Alliance Global Group. In the UK, Genting expects to open Resorts World Birmingham in the fourth quarter of this year. The group remains in the hunt for a Japan license, if casino legalization comes to pass. The biggest target is North America. In May, Genting broke ground on the $4 billion Resorts World Las Vegas. It bought the 87-acre site on the north end of the Strip in 2013 for $350 million from Boyd Gaming, which abandoned construction of its Echelon Resort in 2008. Genting says it has repurposed 85% of Boyd’s structural work for its project, expected to open in 2018. The Chinese-themed resort will include a replica of the Great Wall of China, 3,500 guest rooms in three hotels, a 175,000 square foot (16,275 square meter) casino, water park, aquarium, nightclub, 4,000-seat theater, and perhaps even pandas. Resorts World Bimini in the Bahamas opened the first phase of what will be a 300-room hotel to supplement its casino, all supporting Genting’s cruise business out of Miami, just 50 miles away. But that’s just a prelude to what Genting hopes will be Resorts World Miami on 30 acres of prime waterfront real estate purchased in 2011 for