Genting Singapore has become the latest Asia-Pacific casino outfit to fall prey to the economic slowdown in China. The Resorts World Sentosa operator’s second quarter profit fell 32% to S$165.5m (US$133m), despite both hotel occupancy and average room rates hitting record highs of 92% and S$432 respectively. Group revenue was off 3.6% to S$702.2m, while gaming revenue was down 3.7% to S$562.3m and earnings fell 17% to S$311m. The company issued a statement saying that it expects to “continue to see similar narrower EBITDA margins as in the current quarter.” Regardless, RWS appears to be weathering the tightening of Chinese VIP belts better than its crosstown rival, Las Vegas Sands’ Marina Bay Sands, which last month reported a 7.5% fall in gaming revenue.
Genting Singapore stock has fallen 15% this year, but the company is sitting on a mountain of cash after raising S$2.3b through the issue of perpetual securities. All that scratch has convinced analysts that Genting is planning an acquisition binge – as evidenced by the company boosting its stake in Australian casino operator Echo Entertainment to just under 10% in June and applying to further boost that stake to 25%. Genting Singapore is reportedly also considering opportunities in Mongolia, Japan and South Korea.
The broader Genting Group is also looking beyond Asia. The new Resorts World operation at New York’s Aqueduct racetrack just had its best month ever in July, and Resorts World Bimini Bay is on track to open in the Bahamas this year. Meanwhile, the company still hasn’t given up hope of adding a casino to the 14 acres of downtown Miami real estate it purchased in 2011. While Florida legislators have proved skittish about passing the necessary legislation, Genting appears to be attempting an end-around. Campaign finance records viewed by the Tampa Bay Times show Genting-related companies contributing $605k between April 11 and May 16 to New Jobs and Revenue for Florida – the political action committee behind a voter petition drive to amend the state constitution to permit resort casino construction. If Genting can get 8% of Florida’s voters to sign a petition, the casino question would go on the 2014 election ballot.
Then again, Genting isn’t the only casino outfit throwing money around in Florida. On Friday, the Palm Beach Post reported that Las Vegas Sands chairman and GOP sugar daddy Sheldon Adelson – yes, the man behind Genting’s Singapore competitor also craves a Florida casino – gave the state Republican party $250k on June 4. The day after that check was issued, Adelson sent an additional $250k to Gov. Rick Scott’s ‘Let’s Get To Work’ political action committee. It must be rough being a politician, trying to gauge just how long you can string donors along in order to keep the campaign contributions flowing before they give up – or start giving to your opponents.
