PETALING JAYA: The earnings recovery trajectory remains intact for casino operators, underpinned by the rebound of travel demand and the visa-free travel pact between China and both Malaysia and Singapore, according to Hong Leong Investment Bank (HLIB) Research.
This recovery would be further fuelled by Malaysia’s official assumption of the Asean chairmanship in 2025, it noted.
“During this period, Malaysia will host key Asean meetings with delegations from prominent nations, including the United States, China, South Korea, Japan, Europe, India, Australia and New Zealand. This momentum will continue into Visit Malaysia Year 2026,” it added.
The research house said a notable development to monitor in 2025 could be the bidding for the full casino licence in downtown New York City by Resorts World New York City (RWNYC).
Currently, RWNYC is a casino operating with slot-like video lottery terminals and electronic table games.
For RWNYC to operate with Las Vegas-style slot machines, table games and sports betting, the casino must win one of the three full-scale downstate casino concessions.
“A successful bid would result in a major expansion and renovation of the casino, with an investment of US$5bil.
“The request for applications process is expected to open in mid-2025, with licences awarded by the New York Gaming Facility Board in late 2025.
“However, the ongoing complaint by the Nevada Gaming Control Board against its parent company, Genting Bhd
, and the lawsuit by RAV Bahamas against Genting Malaysia Bhd’s US unit could pose challenges to RWNYC’s chances of securing a full casino license,” it noted.
Another key event to monitor this year would be the participation of Genting Malaysia in the bidding for the Thailand Entertainment Complex.
On Jan 13 this year, Thailand’s Cabinet approved a draft law, the “Entertainment Complex Business Act”, which seeks to legalise gambling and casinos. According to news reports, Thailand could launch its first casino as early as 2029.
During Genting Malaysia’s AGM in June last year, the brokerage said the group expressed interest in pursuing the Thailand’s Entertainment Complex project if the terms and conditions are favourable, as part of its geographical expansion strategy.
On the number forecast operators (NFOs) side, HLIB Research said going into financial year 2025 (FY25), it believes Sports Toto Bhd’s NFO segment revenue would continue to recover to pre-Covid-19 pandemic levels.
Notably, FY24 NFO segmental revenue accounted for about 90% to 95% of pre-pandemic figures.
“Nevertheless, we forecast the NFO’s earnings before interest and tax (Ebit) to decrease about 6% year-on-year (y-o-y) after considering the normalisation of the prize payout ratio (luck factor) in FY25.
“For HR Owen, car sales volume will be boosted by deliveries of various newly launched iconic models (i.e. Lamborghini Revuelto, Rolls Royce Spectre, Ferrari Purosangue (SUV) and Daytona SP3).
“However, we foresee a flattish y-o-y revenue growth, factoring in the strength of the ringgit against the pound, as well as about 50% deterioration in Ebit after accounting for first quarter of FY25 losses,” it said.
HR Owen is Sports Toto’s luxury car distribution unit.
HLIB Research kept its “overweight” stance on the gaming sector, as it anticipates continued earnings recovery for Genting Singapore Plc and Genting Malaysia – and thus benefitting parent Genting.
