Genting Singapore, the operator of Resorts World Sentosa, stands as the potential front-runner for an integrated resort (IR) license in Thailand if the government opts to deregulate the industry, analysts say.
Owned by Malaysian billionaire Lim Kok Thay, Genting is among the top global casino operators eyeing the Thai market due to the surge in Chinese tourists, the New Straits Times reported. MGM Resorts International, Galaxy Entertainment Group Ltd., and Las Vegas Sands are also reportedly considering ventures in Thailand.
“After all, Genting currently operates in Singapore and Malaysia, with them being the pioneers since the 1965s. They have the operational know-how, local market knowledge, and familiarity of the geographical and business networks. Their integrated resort, theme park, and entertainment model is a compelling proposal to the Thai government,” Tradeview Capital Sdn Bhd Chief Executive Officer, Ng Zhu Hann, was quoted as saying in the report.
The analyst underscores that numerous major players are eyeing the Thai market due to the substantial influx of foreign visitors annually. Thailand, a highly popular destination, attracted over 27 million foreign visitors in 2023.
“Tourism is the third largest gross development product contributor for the country, hence, if there is a casino, it will likely further spur tourism numbers,” Hann said.
Maybank Investment Bank Research (Maybank IB) analyst Samuel Yin Shao Yang suggests that Genting Singapore may submit a joint bid for the Thai IR license.
“While we acknowledge that Thai IRs are more likely to be a threat to Genting Singapore than to Genting Malaysia, we note from history that Genting Singapore is not averse to expanding overseas to partially stave off competition,” Hann said, as per the report.
“Recall that Genting Singapore tried to expand into Jeju, South Korea, until November 2016 and Yokohama, Japan, until September 2021 in order to partially stave off competition from them. Thus, we do not discount the possibility that Genting Singapore may form a joint venture to bid for the Thai IR license.”
Despite recent tax increases, Maybank IB anticipates Genting Singapore’s earnings to return to pre-Covid levels in 2024, thanks to the resurgence of Chinese tourists. The 2023 third quarter VIP volume marked a significant uptick, reaching SG$11.3 billion ($8.41), the highest since 2Q2015, according to Maybank IB.
Genting Singapore reported a 59% increase in net profit to SG$216.3 million ($161 million) for the third quarter ending September 30, 2023, compared to SG$135.8 million ($101 million) in the corresponding period the previous year. Revenue rose by 33% to SG$689.9 million ($514 million), with gaming segment revenue increasing by 20% to SG$459.6 million ($342.3 million) and non-gaming revenue surging by 68% to SG$230.1 million ($171.4 million).
Maybank IB anticipates the growth to solidify and continue in FY2024 as seat capacity for flights from China to Singapore recovers.