Malaysia-Based Genting Target New York License
Author:
Muhammad Gregory
There is a lobbying frenzy currently ongoing for the expansion of the casino and leisure industry in New York USA. At the front of the pack is Malaysia-based Genting Group, a firm that has solidified itself as the main player within the Asian casino business. Over the past 14 months several gaming conglomerates from all around the world have pitched their cases to win one of the three licenses due to be issued in Q2 of 2023.
New York is the destination on the minds of Asia’s biggest casino companies, as a license application window reaches its final stages, offering a lucrative foothold to the US casino market for Genting, MGM, Wynn, and several others.
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The lobbying firms hired by the gambling operators have invested over $7m in total hoping to win the influence of lawmakers and key decision makers within the state. If one questioned the way US politics and public policy functions – with its undeniable ties to lobbying cash – then this bidding process for the Queens casino licenses couldn’t be a clearer example of the system. The truth is, the sum invested with lobbyists is just a fraction of the total expenditure, and fails to capture the additional fees being paid to consultants, PR experts, and local political strategists.
Genting holds a strong position in the race, partly due to the enormous resources they have allocated to the bid, but most notably due to already having operated the Aqueduct Race Track in Queens. With such a strong portfolio of political support, and the fact that the firm has already been running a successful sports betting facility in the region – Genting are the best positioned applicants to take the license.
As for the other applicants, not much is known publicly. But what has been confirmed by Politico is that MGM Resorts and Las Vegas Sands are also involved in the application process.
Lucrative License Worth $2b Annually
The motivation to win one of the operating licenses up for grabs in New York couldn’t be more obvious, with over $2b in annual revenues estimated to bestow the company who takes control of the business. This comes with an estimate of annualized operating profits in excess of $600m. And to reiterate, there are three licenses up for grabs. These enormous forecasts just go to show how strong a market for gambling the state of New York is expected to be.
As is the problem with any venture steeped on such high wealth-generating expectations there is a risk element of corruption. As the race gets more intense to win the lucrative casino licenses, US regulators will need to ensure that they can restrict the lobbying interest from corrupting the legitimate awarding process. There are an abundance of methods that could be employed nefariously to corrupt this process, and the incentive is huge, so this defense needs to be water-tight.
Interest Coming From All Quarters
Whilst the enormous half-yard upfront fee of $500m to obtain a license is filtering out the small to medium enterprises, there is still a great deal of interest coming from all quarters. Private equity firms, gaming corporations, and wealthy billionaire entrepreneurs throughout New York are all vying for control over the process. On top of the hefty license fee, it’s estimated that the license winners will need to invest a similar amount over the first 10 years in start-up development costs.
The awarding committee tipped to be at the helm of the decision-making process is already formed in principle. Containing individuals; the mayor, the borough president, governor, local state senator, local city council member. To be successful in the process, the applicants will need to win the support of at least four out of six of the voting committee, otherwise their applications will be dead in the water.
Ultimately, this project represents an enormous opportunity for whomever is able to demonstrate their capability. With revenue projections in the billions, it’s an incredibly lucrative license that has the potential to re-shape the casino business in the United States.
