PETALING JAYA: Genting Singapore stands a good chance of winning a gaming licence in Japan following the legalisation of casino gambling in the country last week, says Maybank Kim Eng Research.
It said this was based on the group’s responsible gaming experience and solid net cash position.
“With its huge net cash pile of S$3bil as at end-1Q18, Genting Singapore’s financial position is better than many of the debt-laden American gaming operators and is therefore, better financed to see the construction of any integrated resorts through,” it said in a report.
The research house noted that pundits estimated that Japanese gross gaming revenue (GGR) could be between US$6bil and US$40bil per annum.
Last Friday, Japan legalised casino gambling in the country with the passing of its casino legalisation bill.
The House of Councillors of the Japanese Diet passed the Integrated Resorts (IRs) Implementation Bill, the last of three bills needed to legalise the Japanese casino industry.
Among salient points of the bill are the cap of three IRs during the first stage of liberalisation, the casino floor area is capped at 3% of total floor area and the gaming tax rate is set at 30% of GGR.
Japanese citizens will be subject to a 6,000 yen entry fee every 24 hours and their number of visits limited to three weekly and 10 monthly, due to concerns about gambling addiction and other social issues.
Maybank Kim Eng Research maintained its “buy” call, estimates and S$1.46 target price on the counter.
Genting Singapore owns and operates Resorts World Sentosa, one of two integrated resorts in the country and has Genting Group Bhd as its largest shareholder with a 52.5% stake.
Moving forward, the research house noted that Japan will set up a casino control commission and set about 300 additional regulations as well as a request for proposal (RFP) process for gaming operators and prefectures that are expected to submit joint bids.
It said an NGO similar to the National Council on Problem Gambling in Singapore will also be set up to handle responsible gaming issues.
It added that the RFP process was expected to begin in mid-2019, and licences to be issued in 2020, with the first IR to open in 2025.
“Throughout the legislative process, we note that Japanese lawmakers made repeated references to the social safeguards installed in Singapore IRs.
“Therefore, we gather that gaming operators that operate in Singapore like Genting Singapore will have an advantage over others that do not,” the research house said.
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