Since its 4Q results Genting’s share price have fallen to Covid-19 levels or close to a 10-year low.
PETALING JAYA: Genting Bhd
’s fully owned subsidiary Resorts World Las Vegas’s (RWLV) operations are expected to recover with the return of gamblers to the casino, after having reached a settlement with the Nevada Gaming Control Board (NGCB).
Maybank Investment Bank Research (Maybank IB) said without admitting wrongdoing, RWLV would be paying a fine of US$10.5mil (RM46.4mil) to the Nevada Gaming Commission (NGC) to settle the complaint brought against it by the NGCB on Aug 15, 2024, and would not lose its licence.
“The fine will not have a material impact on Genting’s earnings as it accounts for less than 5% of our financial year 2025 estimated earnings.,” the research house said in a report.
Last August, the Nevada gaming regulator filed a slew of complaints against Genting, which included allegations that the company had failed to ban criminals from RWLV.
Failure to establish the source of suspected bookmakers’ funds and to address suspected illegal bookmakers were also among the complaints.
The operator of RWLV was accused of allowing gaming employees to refer prospective customers to suspected illegal bookmakers, and of using a suspected bookmaker’s spouse as an independent agent. It also allegedly failed to bar or restrict a convicted illegal gambling operator and a convicted transmitter of wagering information.
RWLV’s fourth quarter ended Dec 31, 2024 earnings before interest, taxes, depreciation, and amortisation (Ebitda) plunged to about US$1.5mil (FY23 quarterly average Ebitda: US$48.8mil).
Maybank IB said it believes that some gamblers avoided RMLV while it was being investigated by the NGCB.
“Our experience tells us that gamblers, whether guilty of wrongdoing or not, tend to avoid casinos under investigation for fear of being investigated themselves.
“With the settlement, we hope that these gamblers will return and drive quarter average Ebitda up to US$37.5mil or US$150mil per annum going forward,” the research house said.
Maybank IB has a “buy” call on Genting with a target price of RM3.98.
Meanwhile, CIMB Research said apart from paying a US$10.5mil fine to the NGC, the settlement also includes RMLV maintaining its enhanced anti-money laundering (AML) programme, which shall be reviewed and updated at least annually; and RWLV’s independent internal audit team evaluating its compliance with the AML programme upon the two-year anniversary of the NGC accepting the settlement, and reporting this to the NGCB.
“NGC will decide on whether to accept this settlement at a hearing soon,” the research house said.
CIMB Research deemed the final settlement between RMLV and NGCB as “reasonable” and “manageable”, with no onerous conditions imposed on RWLV’s gaming licence.
“We think this is a reasonably positive outcome for RWLV, pending NGC’s final decision. Notwithstanding that the fine is the second-highest assessed by the Nevada state, the sum is manageable and at the lower end of our initial expectations of US$7.5mil to US$75mil.
“The conditions imposed (that is maintaining and complying with its AML programme) is also not too onerous and does not limit/suspend/revoke RWLV’s non-restricted gaming licence.
“We understand that the NGC rarely rejects a settlement, but has, on some occasions, sent the case back to the NGCB and the Attorney General’s Office, in want of stiffer penalties,” the research house said.
CIMB Research said the settlement may help to restore RMLV’s reputation and prevent jeopardy to Resorts World New York City’s bid to secure a Downstate New York full casino licence.
CIMB Research has a “buy” call on Genting with a target price of RM5.25.
