KUALA LUMPUR: CIMB Securities Sdn Bhd said disciplinary action against Genting Bhd's Resorts World Las Vegas (RWLV) could jeopardise Resorts World New York City's (RWNYC) bid for a downstate New York full casino licence.
The research firm said the bid for the casino licence is scheduled to receive applications in mid-2025, with final award by end-2025 or first quarter of 2026.
"In our view, RWNYC's existing slots business could suffer if other casino operators successfully secure Downstate New York full casino licences and it does not," it said in a research note today.
In a note today, the firm said the Nevada Gaming Control Board (NGCB) filed a complaint with the Nevada Gaming Commission for disciplinary action against RWLV for allegedly failing to bar suspected illegal bookmakers and convicted operator of an illegal gambling business from gambling at its casino.
The NGCB has sought for the commission to fine Genting/RWLV a monetary sum for each of the separate violations of the Nevada Gaming Control Act or the Regulations of the commission; take action against Genting/RWLV's license registrations and/or findings of suitability; and take other measures as the commission may deem just and proper.
Genting said it has sought legal advice and RWLV has been actively working to communicate with the NGCB.
According to the firm, in the event the NGCB finds that RWLV has violated state laws or regulations, it may recommend that RWLV take certain measures to tighten its Anti-Money Laundering compliance programme and change certain key executives.
It might also imposed fines range between US$25,000 to US$250,000 for each violation.
"Based on NGCB's complaint, we note there are allegedly about 300 separate violations, which may potentially result in a fine of US$7.5 million to US$75 million (RM33 million to RM332 million," said CIMB Securities.
The firm noted that RWLV's non-restricted gaming license could be limited, suspended or revoked.
"Some industry experts say that this is rare and the NGCB is unlikely to go that far, due to the uncertain long-term impact from taking such a drastic measure," it added.
CIMB Securities maintained its buy call on Genting with a target price of RM6.90, based on a sum-of-the-parts valuation, of which RWLV accounts for zero equity value.
Meanwhile, RWNYC makes up 80 sen of Genting Malaysia's target price of RM3.60 and 28 sen of Genting's target price given its 49.3 per cent stake in Genting Malaysia.