Average per-table gross gaming revenue (GGR) in the first six days of Resorts World New York City’s (RWNYC’s) new era as the first full-service casino in New York City “underwhelmed”, said Maybank Investment Bank Bhd.
Analyst Samuel Yin Shao Yang suggested in a Sunday memo that the outlook for the property remained strong, and that it could be “potentially eclipsing… in the long term”, the Malaysian parent Genting group’s pioneering property in its home country, Resorts World Genting.
Nonetheless, RWNYC’s average per table per day GGR in the six days after its April 28 launch as a full-service casino, was nearly 37 percent below the institution’s estimate.
“RWNYC’s 242 new tables yielded US$4.9 million of GGR or an average of US$3,400 per table per day, when we had expected US$7,500 per table per day,” wrote Mr Yin.
He added: “We gather part of the underperformance was due to a low win rate of 14 percent. Adjusted for a normal win rate of 20 percent, we estimate that the 242 new tables would have yielded US$6.9 million of GGR or an average of US$4,759 per table per day.”
The New York State Gaming Commission voted in December to award full casino licences to three sets of investors for downstate New York, including to Genting New York LLC, a subsidiary of Genting Malaysia.
Genting New York’s proposal entails a US$5.5-billion expansion up to 2030 of the existing venue, and a US$600-million upfront licence fee, in exchange for a 30-year licence.
The institution noted though that while table game GGR “underwhelmed”, slot machine GGR at the property “surged”, while concern that the new facility might significantly hurt the business of Genting group associate Resorts World Catskills in upstate New York, wasn’t realised, as the latter “was more resilient than… expected.”
Maybank estimated that GGR for slots – an existing product at RWNYC before the full-service licence – had actually been circa 20.5 percent higher at the property in the six days from April 28, compared to the prior-year period.
Mr Yin wrote: “Curiously, slot machine GGR hit US$23.5 million when we estimate that it was only circa US$19.5 million in the same comparable week last year.
“We anticipated some cannibalisation. It seems the fanfare surrounding the rolling out of the new table games directed more gamblers to the existing slot machines than tables.”
Maybank estimated that GGR at Resorts World Catskills “eased 11 percent year-on-year… less than… expected.”
The bank added: “With the new tables at RWNYC, we feared there would be little reason for New Yorkers to gamble at Resorts World Catskills.
Maybank thinks RWNYC table game GGR “will ramp up progressively as it taps the Genting client database”.
The Malaysian group has a worldwide portfolio of casinos including Resorts World Las Vegas in the U.S. gaming hub; Resorts World Sentosa in Singapore; and properties in the Bahamas, the United Kingdom, and Egypt.
Maybank suggested the April 28 launch of RWNYC “could be described as a soft opening”. Mr Yin noted: “RWNYC will be adding more tables, slot machines, hotel rooms, convention space, food and beverage, and arenas by 2030.”
Maybank estimates the expanded RWNYC will contribute up to US$455 million in net profit by full-year 2030, “potentially eclipsing Resorts World Genting in the long term”.
Fitch Ratings Inc said in late April that Genting New York entity could be insulated from “air travel woes” linked to the global oil crisis, as its customer base is “mostly” domestic.
RWNYC proposed the highest gaming tax rate of the three approved bidders, at 56 percent on slots and 30 percent on gaming tables.
