Genting waits to be dealt a good hand for US ambitions

Tuesday 20 Oct 2026

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This article first appeared in The Edge Malaysia Weekly on September 15, 2025 - September 21, 2025

IN a shift away from the norm, Genting Bhd (KL:GENTING) did not declare an interim dividend when it announced its half-yearly results for the January-June period this year.

Clearly, the company is conserving cash to pare down its debt, which has ballooned to RM38.9 billion versus its total equity of RM52.8 billion as at end-June this year. This is relatively high given that the conglomerate is known for its strong cash flow from its gaming business.

The lack of an interim dividend saw Genting’s share price slide down to levels last seen in August 2020, when the Covid-19 pandemic crippled the group’s operations.

What is perplexing is that the global business community has long shaken off the effects of the pandemic, and valuations and business dynamics have since improved tremendously.

But not for Genting. Its valuation is still stuck at the pandemic level due to more than business reasons.

Sentiment on the group as a whole, whose core operation is gaming, family entertainment and hospitality, has taken a hit due to its continued expansion in the US and related-party transactions involving the Lim family and, in particular, Genting Malaysia Bhd (KL:GENM).

The group’s latest plan for expansion in New York was announced by GENM, a 49.3% subsidiary of Genting. GENM, through Genting New York LLC, has submitted a bid for a commercial casino licence in downtown New York. If the bid is successful, GENM plans to spend US$5.5 billion, or more than RM20 billion, on building an integrated casino and resort in New York.

Meanwhile, GENM subsidiary Empire Resorts LLC is disposing of non-core gaming assets worth US$550 million and the sales proceeds are to be used to pare down debt and acquire land.

Some research firms see the development at GENM as a possible rerating catalyst for Genting.

“Key positive catalysts are GENM’s Empire Resorts selling its non-gaming assets and GENM winning a full casino licence in New York,” Maybank Research states in its report.

Like all the other research firms, Maybank notes that Genting missed its earnings target for the first half of this year and the lack of a dividend. However, the research house expects the company to pay a full dividend at the end of the financial year.

While some may be optimistic about GENM’s prospects of a getting a casino licence in New York, Genting’s track record in the US suggests that the prospects are far from bright.

“GENM has been losing money at Empire Resorts while Resorts World Las Vegas (RWLV) did not perform up to expectations in the first half of this year. In fact, RWLV, on which Genting has spent some US$4.5 billion, continues to perform poorly and is a drag on Genting’s share price.

“Considering Genting’s performance in the US, it’s not surprising that the market is not euphoric about its planned expansion in New York if it gets a licence,” says a fund manager.

GENM has been operating in New York for the last 15 years, largely through Resorts World New York (RWNYC) and Resorts World Catskills, which is owned by Empire Resorts Inc — an asset that GENM bought from the Lim family’s vehicle Kien Huat Realty. While RWNYC is in the black, Resorts World Catskills has been in the red for several years now.

In fact, the returns from the New York operations are far lower than GENM’s returns from its operations in Malaysia.

Since 2019, GENM has owned 49% of Empire Resorts while the rest has been held by its majority shareholder Kien Huat Realty.

Since then, GENM has subscribed for convertible preferred stock in Empire Resorts, which has not gone down well with GENM’s minority shareholders. At the latest estimate, GENM has probably invested about US$740 million in Empire Resorts’ preferred shares.

In May, Kien Huat Realty sold its 51% stake in Empire Resorts to GENM, a corporate exercise that was frowned upon. In fact, the proposal invited extensive queries from Bursa Malaysia.

Analysts point out governance issues at the group, particularly those related to GENM. But they still prefer Genting to other gaming companies because of its geographical diversification.

Credit Suisse in a note describes Genting as a company that has stronger credit metrics and which enjoys a better geographical and business diversification of gaming compared with competitors such as Las Vegas Sands.

“While it enjoys a better geographical diversification, it faces lingering corporate governance concerns arising from extensive related-party transactions (especially at GENM) and a history of default at sister entity (even if many years ago),” the research house states in the note.

Compared with other casino and resort operators in the world, Genting is the most diversified in terms of geographical locations. The architect behind the global push is Tan Sri Lim Kok Thay, who is the major shareholder and executive chairman of Genting.

He started with Singapore in 2006 and went on to Las Vegas. RWLV was completed at a cost of about US$4.5 billion and opened to the public in June 2021. By then, Genting’s debt had risen to a staggering RM40.7 billion. The next target is New York.

The outcome of Genting spending billions overseas has been patchy.

The Singapore operation has been a major contributor to the bottom line except in the latest quarter. Genting’s expansion elsewhere has not produced the desired results, especially from RWLV. The poor performance of RWLV was particularly telling in the first half of this year.

According to CGS International, Genting’s results were below expectations due to higher-than-expected tax expenses and lower-than-expected earnings from RWLV.

“Genting Singapore Ltd (GENS) saw its gaming revenue decline, bucking the trend of growth in gaming revenue observed by its peer, Marina Bay Sands.

“However, management said footfall at RWS from both locals and tourists was encouraging in the initial phase of the opening of the Singapore Oceanarium and the Weave in July 2025,” states CGS International.

Lim relinquished his position as chief executive of Genting group on March 1. It was a position he had held since July 2007. His position was filled by Datuk Seri Tan Kong Han.

Tan’s task is to reduce debt and regain market confidence. On this score, he has already sent the market the message that reducing debt is a priority for the company, not declaring a dividend. Whether governance issues will be resolved under Tan’s leadership remains to be seen, given that Lim remains the executive chairman of the board.

Genting Singapore a diamond that’s hard to cut

Genting Singapore Ltd (GENS) was the first major overseas venture of Genting Bhd (KL:GENTING). It was spearheaded in 2006 by Tan Sri Lim Kok Thay, whose vision was to replicate the success of the integrated resort at Genting Highlands in other parts of the world.

It was also partly to diversify Genting’s operational concentration risk out of Malaysia.

The investments in GENS have paid off handsomely. Genting’s 52.6% stake in GENS is more than Genting’s entire market capitalisation on Bursa Malaysia. GENS contributes to more than 35% of Genting’s earnings before interest, taxes, depreciation and amortisation (Ebitda) and is crucial in enhancing the earnings stream of Genting itself.

When GENS’s profits are down, as in the latest quarter, it drags Genting down. To top it all, GENS is cash rich, sitting on S$3.3 billion (RM10.8 billion), without any debt.

Unfortunately, GENS cannot tap the cash to expand its operations outside Singapore or pay out more dividends to shareholders, a move that would benefit Genting more than any other party.

The cash is to be used for the expansion of the integrated resort, Resorts World Sentosa (RWS), under the RWS 2.0 project, which is to be carried out until 2030.

There were plans for GENS to bid for the building of integrated resorts in Japan and Thailand, but they were shelved.

At GENS’s recent annual general meeting (AGM), questions were raised about whether the company would declare higher dividends to improve returns on equity and embark on better capital management since it no longer plans to expand to Japan and Thailand.

In reply, the management led by Tan Sri Lim Kok Thay said that by the time RWS 2.0 is completed, GENS could be carrying a small amount of debt instead of being in a net cash situation.

RWS 2.0 is estimated to cost S$6.8 billion. Work, which started a year ago, is designed to enhance the non-gaming revenue of the integrated resort. At the moment, it has several family-themed attractions such as Universal Studios and S.E.A. Aquarium to complement the casino.

GENS has completed a few new attractions since February this year under RWS 2.0. Among them are Minion Land in Universal Studios and The Weave, a new addition with concept stores and high-end restaurants. A major attraction in RWS 2.0 is the Singapore Oceanarium, which is three times the size of the current S.E.A. Aquarium.

In addition to the new attractions, RWS 2.0 will incorporate an improved transport system to ease connectivity to RWS, which is located away from the Singapore city centre.

It is obvious why GENS is building new attractions and high-end hotels to increase its non-gaming revenue.

RWS is being watched closely by the Gambling Regulatory Authority (GRA) of Singapore, which renewed its licence for two years instead of three in February this year. RWS’s competitor, Marina Bay Sands Pte Ltd (MBS), received a three-year renewal.

The two-year renewal followed the assessment by an Evaluation Panel that RWS’s performance as a tourist destination was unsatisfactory. The panel, which includes the Ministry of Trade and Industry and the Singapore Tourism Board, concluded the assessment last November.

The Evaluation Panel has recommended that the next assessment of RWS be done next year.

During the AGM, management was asked if the company has an alternative plan should the licence not be renewed, considering the infrastructure, especially the casino and massive car park, at the site.

In reply, Lim said the company’s business model is based on its gaming and non-gaming business, and both are designed to operate independently. He alluded to the fact that even if the casino licence is not renewed, the non-gaming business will remain profitable.

He added that RWS 2.0 is designed to ensure the sustainability of the non-gaming business, citing the examples of S.E.A. Aquarium, Universal Studios Singapore and hotels in RWS that would remain profitable and have long-term potential.

“With the broader experiences that RWS will be offering to its visitors upon completion of RWS 2.0, RWS would be better positioned long term as a more resilient investment,” he told shareholders.

Apart from the attractions, GENS would be sitting on a large land bank in the south of land-scarce Singapore that can be used for other commercial purposes if approvals are granted.

Until 2030, the only source of cash flow from GENS to Genting will be dividends. Genting’s portion comes up to an estimated S$240 million a year. Apart from cash dividends, Genting can also consolidate GENS’s balance sheet into the group accounts.

For the first six months of 2025, GENS delivered an adjusted Ebitda of S$423.7 million, on revenue of S$1.2 billion.

On a group basis, GENS is the largest contributor to Genting in terms of revenue and also adjusted Ebitda, which is why it is crucial to Genting in terms of improving overall group balance sheet strength.

However, apart from the financials, tapping the full potential of GENS, such as leveraging its cash flow or disposing of a minority stake to monetise its investments, is difficult.

Under the GRA’s watch, the Singapore gaming industry is highly regulated. And the compliance standards are stringent, something that not many gaming companies will be comfortable with.

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