Genting Malaysia’s US casino plans face uncertainty

PETALING JAYA: Genting Malaysia’s proposed First Light Resort and Casino (FLRC) project located on native American land may face more obstacles despite the native American tribe withdrawing a request for a review of the land.

Maybank Investment Bank Research (Maybank IB) said the Mashpee Wampanoag (MW) tribe unexpectedly withdrew a request for a category one review of the land.

The research house believed that the MW tribe would appeal for a category two review instead.

“We are now uncertain if construction of the FLRC can proceed. Recall that Genting Malaysia invested US$274mil in MW promissory notes.

“Our current target price of RM5.40 assumes that they will not be written off yet,” Maybank IB said.

“If construction of the FLRC is not allowed to proceed, then our target price could be trimmed by up to 20 sen a share.

“If construction of the FLRC is allowed to proceed, then our target price may get a 14-sen-a-share lift,” it said.

The US Department of Interior (DoI) was supposed to issue a new record-of-decisions (RoD) on whether it could hold MW reservation land in trust under category one, it said.

“The tribe did not elaborate on the options, but we gather that it would appeal the July 28, 2016 ruling by federal district court judge William G. Young that favoured a group of Taunton residents who challenged the initial RoD to hold MW reservation land in trust under category two of the Indian reorganisation Act – tribe living continuously on an existing reservation,” the research house pointed out.

Maybank IB said it understood that, save for a Congressional hearing, category one and category two are the only ways for the DoI to hold reservation land in trust for a native American tribe.

It said given that the MW tribe withdrew its request for a category one review and the Taunton residents had challenged the category two review, “we gather that the MW tribe will have to wage long-drawn legal battles to determine if construction of the FLRC can proceed.”

Genting Malaysia closed lower by one sen to RM5.58, with some 4.15 million shares changing hands yesterday.

Several dealers said the project had likely not been priced into investors’ forecasts because of it was currently under early stages of planning.