Genting Singapore May Have Casino Aspirations in Thailand

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Genting Singapore, the operator of Resorts World Sentosa, is reportedly considering bidding for an integrated resort (IR) and casino license in Thailand, potentially expanding its presence in the Southeast Asian market. However, such a move hinges on the Thai government's decision to loosen restrictions on the casino industry.

Southeast Asia Remains Attractive

Investment bank Maybank has released an analysis indicating that Genting Singapore could pursue a joint venture approach to secure a Thai casino license, leveraging its successful track record in overseas expansion, particularly in Japan and Korea. Maybank analyst Samuel Yin Shao Yang pointed out that Thai IRs would pose a greater threat to Genting Singapore's Singapore operations than to Genting Malaysia's, as the latter primarily caters to domestic tourists.

Genting Singapore's past attempts to expand into Jeju, South Korea, and Yokohama, Japan, highlight its willingness to seek opportunities outside its home market to mitigate competitive pressures. If Thailand were to liberalize its casino industry, Genting Singapore could form a partnership with a local entity to enhance its chances of winning a license.

Despite the potential challenges posed by increased competition from Thai IRs, Yin remains optimistic about Genting Singapore's prospects, projecting that the company's revenue will return to pre-COVID levels in 2024. He attributes this growth to the anticipated recovery in Chinese tourist arrivals, which have been steadily increasing since 2023.

Genting Singapore's potential expansion into Thailand would mark a significant step in its regional diversification strategy, offering the company the opportunity to capitalize on the growing demand for integrated resorts in Southeast Asia. However, the success of such a venture will depend on the Thai government's willingness to embrace a more liberalized casino industry.

Resorts World Sentosa Recovers Quickly

In the third quarter of 2023, the return of Chinese tourists significantly boosted Resorts World Sentosa's gross gaming revenue (GGR). Mass market GGR reached 8% above the average for the first half of 2019 and VIP volume surged 36% above the same period.

This momentum is expected to continue as air travel capacity between China and Singapore recovers, with seat capacity now at 87% of pre-pandemic levels. Additionally, Singapore has extended visa-free entry for Chinese tourists for 30 days, further facilitating their travel to the country.

Yin anticipates that in the long term, Resorts World Sentosa's VIP volume and mass market GGR will surpass 2019 levels by around 20%. This growth, coupled with declining tax liabilities, is projected to drive Genting Singapore's revenue to SGD2.66 billion (approximately US$2.0 billion) in 2024, with adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) rising to SGD1.25 billion (approximately US$941 million).

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