An ongoing investigation by the Nevada Gaming Control Board (NGCB) into alleged anti-money laundering breaches by Resorts World Las Vegas could cost the company hundreds of millions in fines and compliance costs, according to financial research group CreditSights.
However, such a scenario should have little impact on the credit metrics of parent company Genting Bhd nor on Genting’s bid to win one of three full casino licenses in downstate New York. License suspension or revocation is also seen as unlikely, CreditSights said as part of a deep dive financial analysis of Genting and Genting Malaysia published Thursday.
The Nevada complaint, legal action against the group by their partners in Resorts World Bahamas and refinancing difficulties at Genting Malaysia’s US subsidiary Empire Resorts are all seen as short-term headwinds for the Genting Group, but CreditSights maintains a positive long-term outlook overall – particularly for the future of RWLV, opened on the North Las Vegas Strip in 2021.
That’s despite pointing out that there remains no clear date for resolution of the Nevada investigation, not any clarity on potential action.
“The Nevada Gaming Commission (NGC) has the final authority over disciplinary action that could include fines and, in the worst-case scenario, suspension or revocation of RWLV’s gaming license,” CreditSights said.
“Our base case scenario is for RWLV to be imposed monetary fines that could range from the single-digit to hundreds of millions, based on precedent penalties.”
Noting that recent penalties for AML breaches have included a US$130 million fine levied against Wynn Las Vegas in September, the analysts added, “This would weigh on RWLV’s already-weak free cash flows and credit metrics, though we take comfort in RWLV’s strong earnings ramp-up, lack of material debt maturities till FY27, and continued strong backing by Genting and Genting Malaysia.
“We expect a limited overall credit impact on Genting and Genting Malaysia, though reputational damage is inevitable.”
Gaming license suspension or revocation is described as “very unlikely” due to RWLV’s meaningful contribution to tourism and revenue collection for the Nevada state and the fact that it represents the newest meaningful addition on the Las Vegas Strip and first in over a decade.
On the possible impact on the Genting Group’s New York bid, CreditSights said, “We view the issues as idiosyncratic and expect the New York gaming regulator to be more focused on other tangible aspects of the bid instead [such as] economic viability, track record, contribution to NY state. We also note a handful of the other license bidders, namely the larger US casino operators (Wynn, MGM, Las Vegas Sands), have faced AML violations in Las Vegas in the past. If the [New York regulator] were to exclude Resorts World New York from the bid due to AML issues, it would technically have to do so for these other bidders as well, which seems unfathomable.”
More broadly, CreditSights said in Thursday’s note that it was gradually improving credit outlooks for Genting and Genting Malaysia in FY25 before worsening in FY26.
The research house – part of the Fitch Group – is expecting revenue and EBITDA to grow by between 3% and 7% for both entities this year, driven by a sustained recovery of international tourist arrivals to Singapore and Malaysia, the progressive rollout of enhanced attraction offerings at Genting Singapore’s Resorts World Sentosa, incremental contribution from Resorts World Genting’s 10-year master development that was completed in 2023, and cost control.
It also sees RWLV gradually improving its performance to achieve full ramp by FY26.
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