In the latest setback, its subsidiary Genting Malaysia Bhd’s (GENM) indirect unit Genting Americas Inc (GAI) was sued for RM2.6 billion by its joint venture partner RAV Bahamas Ltd for alleged fraud.
The complaint was filed by RAV Bahamas in a Florida court and served on GAI on Oct 11. The complaint involves the operations of Resorts World Bimini in the Bahamas. GENM has refuted the claim and said the complaint was “baseless”.
This comes on the heels of the Nevada Gaming Control Board filing a slew of complaints in August against Genting’s indirect subsidiary, Resorts World Las Vegas (RWLV), alleging it failed to ban individuals with ties to organised crime and illegal bookmaking from its casino in Las Vegas.
The regulator is seeking fines for violations under the Nevada Gaming Control Act and mulling appointing a supervisor to determine if RWLV’s gaming licence should be revoked or suspended.
In a note, CGS International warned that the complaint against GAI “could affect GENM’s bid for a casino licence in New York”.
However, the research house said the complaints filed in Florida and Nevada had not affected its valuation, as it had not taken into account the potential upside from a successful bid by GENM’s subsidiary in New York.
GENM’s share price is near its three-year low after dropping 16% year-to-date (YTD). At the time of writing, it was up 2 sen or 0.9% at RM2.25, valuing the company at RM13.4 billion.
Meanwhile, Genting’s shares were 4 sen or 1% higher at RM4.01, giving the group a market capitalisation of RM15.6 billion.
CIMB Securities had previously warned that the complaints filed by the Nevada gaming regulator against RWLV could adversely affect Genting’s bid for a New York casino licence.
Genting operates the New York gaming operations, primarily slot machines, through GENM.
CIMB had said a negative review by the regulator in Nevada could jeopardise GENM’s unit Resorts World New York City’s bid for the casino licences, which are open for application in mid-2025.
Another setback GENM faced in the US was the collapse of a deal to sell a plot of land in Miami, Florida, for US$1.2 billion (RM5.15 billion) in June last year.
It had purchased the 15.5-acre land in 2011 for US$259 million (RM1.11 billion) with plans to develop an integrated resort, Resorts World Miami.
However, it was unable to sway the state authorities for new gambling legislation and eventually abandoned the project. Funds from the Miami land sale had been expected to be used for the group’s bid for a full casino licence in New York.