Queens Casino's US$400mil expansion fuels Genting

HONG KONG: New York’s Resorts World Casino, the top-grossing slots parlor in the U.S., broke ground on a new 400-room hotel, part of the Malaysian group Genting’s renewed multistate effort to broaden its appeal to American gamblers.

The hotel marks a $400 million expansion at the Aqueduct Racetrack in Queens that will include additional casino space, along with new retail, dining and entertainment, Resorts World and its parent announced Thursday in a statement.

After a lull in its U.S. activity, Genting is stepping up. 

The company recently began work on the first major new casino on the Las Vegas Strip in a decade, after letting the project idle for four years.

 Genting is trying to gain approval for a project near Boston, and its 88-percent owned Empire Resorts Inc. plans to open a $1.2 billion casino resort in the Catskill mountains outside New York in March.

“We want to diversify the portfolio, spread out the risk and be able to leverage international travel by having the right assets in the right cities,” Edward Farrell, president of Genting Americas, said in an interview.

The centerpiece of that expansion will be the 3,000-room Resorts World Las Vegas, scheduled to open in 2020 on the northern end of the Las Vegas Strip. Construction on the $4 billion project just recently started, Farrell said. 

Genting, which also owns the Star Cruises and Crystal Cruises lines, bought the property in early 2013 and said it’s spent the intervening years working on the design.

The Strip hasn’t seen a major hotel open since 2009, and Genting’s timing could be opportunistic, according to Brent Pirosch, director of gaming consulting at real estate brokerage CBRE Group Inc. in Las Vegas. 

The city is expanding its convention center and preparing to build a $1.7 billion stadium for the National Football League’s Raiders.

Big Proceeds

Genting’s Resorts World New York City generates plenty of proceeds. Last year it had gaming revenue of $826.5 million, according to Bloomberg Intelligence, 13 percent more than Atlantic City’s biggest casino, MGM Resorts International’s Borgata Hotel Casino & Spa, and 26 percent more than the casino revenue of Wynn Resorts Ltd.’s flagship Las Vegas property.

Resorts World pays 70 percent of the casino’s gross to New York State, according to the company, or a total of more than $1.9 billion to New York’s Lottery Education Fund since opening in 2011. The casino offers electronic slots and other games but isn’t allowed to have live table games.

Like other casino operators, Genting is trying to develop properties in densely populated areas and sees its frequent-player program ultimately sending players to the new Las Vegas resort, said Michael Pollock, managing director of Spectrum Gaming Group, a New Jersey-based consulting firm that has done work for the company.

Earning Points

“You encourage your higher spending, most profitable customers to stick with you,” Pollock said. “People in Queens will play more often if they can earn points redeemed in Las Vegas.”

Resorts World Catskills is the next leg in that effort. The property will feature 2,150 slot machines and 130 table games in a 100,000-square-foot casino when it opens early next year. The non-gaming amenities will include a 332 all-suite hotel, an entertainment venue seating 2,000, as well as bars, restaurants, pools and a spa.

Genting’s other U.S. projects are farther off and face some daunting hurdles. A $1 billion project with the Mashpee Wampanoag tribe for a resort with three hotels and a casino, about 40 miles (60 kilometers) south of Boston, is being delayed by a legal challenge.

Genting has invested $347.4 million in promissory notes issued by the tribe, the company said in a filing with the Malaysian stock exchange on July 7, noting that recovery depends on the case’s resolution.

A plan for a casino at the site of the former Miami Herald building, which Genting purchased for $236 million in 2011, is also in limbo, with state lawmakers balking at proposals to expand gaming in the city.

Farrell said there’s little reason to expect the company will be able to move ahead. The downtown Miami site has attracted interest from would-be buyers, according to Farrell, but the company isn’t ready to sell yet.

“We have had several opportunities to sell that we have not accepted,” he said. “We are going to hold on to our property and see what happens.” - Bloomberg