KUALA LUMPUR: The Gambling Regulatory Authority (GRA) has renewed Genting Singapore's casino operating licence for two years instead of the typical three years due to "unsatisfactory" tourism performance by the integrated resort.
The new term will commence on Feb 6, 2025, according to a statement released by the GRA on its website on Monday.
Genting Singapore, an indirect subsidiary of Genting Berhad, operates Resorts World Sentosa Pte Ltd (RWS), one of Singapore's two integrated resorts.
Both Genting Singapore and Genting Berhad were unavailable for comment.
The GRA said that it evaluated RWS's efforts to develop, maintain, and promote its integrated resort as an attractive tourist destination in line with market demand and industry standards.
"The evaluation panel (EP) has assessed that RWS's tourism performance for the period of evaluation from January 1, 2021, to Dec 31, 2023, was unsatisfactory, with a number of areas that require rectification and substantial improvement.
"The EP (appointed by the Minister for Trade and Industry) has recommended that the next evaluation be carried out in two years, in 2026," GRA said.
Tradeview Capital fund manager Neoh Jia Man told Business Times they foresee limited short-term impact on RSW's revenue and market position from the reduced casino licence renewal period.
However, he said the move introduces some uncertainty regarding RWS's long-term capital expenditure planning for its casino operations.
"On the positive side, the shorter renewal period could incentivise RWS to intensify its efforts in maintaining and enhancing the appeal of its integrated resorts.
"By doing so, the company can better position itself for a smoother license renewal process in the future," he added.
Neoh said the shorter licence renewal primarily reflects delay in investments during 2021 to 2023, which is understandable in view of the lingering impact arising from the pandemic.
"We note that Genting Singapore has recently announced a major expansion at RWS with SG$6.8 billion of investments, which could help it to catch up with its peer, Marina Bay Sands, which is also undertaking a massive expansion project.
"Additionally, regulatory considerations may have played a role. RWS has faced several enforcement actions from 2021 to 2023 for lapses in customer due diligence measures, unlike Marina Bay Sands, which suffered no such penalties.
"These compliance shortfalls may have influenced the GRA's decision," Neoh said.