Genting to Support Resorts World Las Vegas Under Almost All Circumstances, Says S&P

Posted on: August 21, 2024, 03:33h. 

Last updated on: August 21, 2024, 03:33h.

Todd Shriber @etfgodfather Read More
Expertise: Financial, Gaming Business, Mergers and Acquisitions.

With Resorts World Las Vegas (RWLV) staring at what could be a hefty fine from Nevada regulators, owner Genting Bhd is likely to continue its financial support of its lone Strip property even in the face of mounting controversies.

Resorts World Las Vegas
Resorts World Las Vegas on the Strip. Parent Genting will support the venue financially, says S&P. (Image: Ken Ritter/AP)

Last week, the Nevada Gaming Control Board (NGCB) said it wants to pursue financial penalties against Resorts World Las Vegas because the casino hotel allegedly permitted known black market bookmakers to wager there without declaring from where their funds were sourced. One of those bookies was Mathew Bowyer — the man believed to have taken millions of dollars in bets from Los Angeles Dodgers star ?Shohei Ohtani’s interpreter Ippei Mizuhara.

The extent of RWLV’s financial punishment isn’t yet known, but S&P Global Ratings believe Genting will support the integrated resort while it deals with the regulatory pressure.

We believe it will receive extraordinary support from its parent, Genting Bhd., under almost all foreseeable circumstances,” observed the research firm.

S&P rates RWLV BB+ with a “stable” outlook.

Possible Template for RWLV Fine

Former Resorts World Las Vegas President Scott Sibella is at the center of the scandal and it’s possible that the manner in which the NGCB dealt with MGM Resorts International — his employer prior to RWLV — could prove instructive in terms of what financial penalties the Genting venue could face.

In January, the Cosmopolitan and MGM Grand paid $7.45 million to settle charges pertaining to alleged violations of anti-money laundering laws and the Bank Secrecy Act. Sibella previously worked at MGM Grand where he served as president until 2010. He joined RWLV after that.

“Genting group has a track record of gaming operations in different jurisdictions for over five decades. The group also has the strategic significance of expanding its foothold into the U.S. gaming market. We expect RWLV to work with regulators to resolve and address the issues raised,” added S&P.

It remains to be seen, but if the levies faced by RWLV stemming from the Sibella imbroglio are on par with those incurred by the MGM properties, parent Genting can easily absorb those expenditures.

RWLV Vital Part of Genting Portfolio

RWLV is one of the three crown jewels of the Genting gaming empire, along with a flagship property in its home country of Malaysia and Resorts World Sentosa in Singapore. As such, the parent company is incentivized to provide financial support to the Las Vegas venue.

While the BB+ corporate credit rating on Genting’s Strip casino resort is one notch into junk territory, it doesn’t appear to be in near-term danger of a downgrade and the conglomerate has the resources to support that rating.

“The stable outlook on RWLV mirrors that on the parent, which in turn reflects our expectation that the company’s market position across its operations will translate into a stable operating performance, such that its ratio of funds from operations to debt remains above 30% over the next two years,” concludes S&P.