KUALA LUMPUR (Nov 8): Genting Malaysia Bhd (GenM)’s wholly-owned subsidiary Resorts World New York City (RWNYC) is in a good position to win a New York casino licence, which may allow the firm to accrete an estimated net profit of US$145 million (about RM610 million) per year, said Maybank Investment Bank Research on Monday (Nov 8).

According to research house analyst Yin Shao Yang, after a four-month delay, the New York State Gaming Commission (NYSGC) launched a request for information (RFI) for three downstate commercial casino licences.

He noted that the RFI seeks information from interested parties to determine the following regarding the downstate commercial casinos: i) the appropriate size and scope of development; (ii) value of the gaming facility licence; and iii) the process that should be used in award consideration.

The deadline for submissions of questions is Nov 10 and the deadline for RFI response submissions is Dec 10, he added. 

The report noted that the NYSGC will prepare and distribute a report with the results of the RFI to the New York governor and state legislature no later than six months after Dec 10.

Yin said a downstate commercial casino would be the “ultimate prize” for RWNYC as it would be allowed to deploy table games and be located in or near New York City.

“What excites us is the prospect of converting GenM’s RWNYC into a downstate commercial casino,” he said, adding that RWNYC currently offers only slot machines and lacks table games.

If the NYSGC proceeds to launch an RFP, he opined that RWNYC will have an edge as it can deploy table games and generate additional tax revenue for the New York state quickly as opposed to a greenfield casino.

“Our calculations indicate that RWNYC can accrete about RM610 million in net profit and 53 sen to our discounted cash flow-based target price (TP) for GenM should it be allowed to be converted into a downstate commercial casino. That would bring our ‘blue-sky’ GenM TP to RM3.93,” said Yin, who maintained "buy" on GenM.

At the time of writing on Monday, Genting Bhd had gained two sen to RM5.14. It earlier rose to an intraday high of RM5.18. Year to date (YTD), the counter had risen 15.63%.

Meanwhile, GenM stood at RM3.15 after climbing as much as five sen to RM3.18. YTD, the counter had increased 17.98%.