Genting Malaysia buys US$100m stake in US casino operator Empire Resorts

With this investment, Genting Malaysia boosted its ownership stake in the U.S.-based casino operator to 90 per cent.

Malaysia.- Genting Malaysia has announced that it will be subscribing for up to US$100m of “Series M” preferred stock in Empire Resorts, a US-based casino operator. 

According to a company filing, the proposed equity injection will be funded through internally generated funds. 

Genting Malaysia also reported the “Series M” preferred stock, comprising 1,000 shares, can be converted at any time on or after December 31, 2030, into 100 million common shares of Empire, before the maturity date of December 31, 2038.

Genting Malaysia bought shares in Empire Resort for the first time in 2019. At that time, the casino operator acquired 13.2 million shares. The US-based company operates several gaming businesses, including a mobile sports betting operation in New York state.

The proceeds from the “Series M” subscription will be used by Empire for working capital purposes and to fully repay an existing bank facility of approximately US$58m held by Empire’s holding company, Genting Empire Resorts (GERL), Genting Malaysia said. 

Genting Malaysia further stated: “The proposed equity injection will enable Empire to further optimise its capital structure by reducing financial leverage and correspondingly interest expense at Empire and/or GERL. 

“The proposed equity Injection will also allow Genting Malaysia to reinforce its position and grow its market presence in the expanding New York State gaming market to compete effectively in the northeastern US region.” 

Following the latest equity injection, Genting Malaysia’s effective shareholding in Empire “will rise to 90 per cent from 76 per cent and bring its total investment in Empire to US$724.4m”. 

Fitch expects Malaysia gaming market to grow by 9% in 2024

In its Global Gaming Outlook 2024 report, Fitch says it expects Malaysian gaming revenue to grow by 9 per cent in 2024. However, the rating agency considers that the recovery in Malaysia will “continue to lag.”

“Revenue remains well below pre-pandemic levels, mainly due to weather-related events since 2022,” said the report. Malaysia, home to Genting Malaysia’s flagship Resorts World Genting, will see a “steady increase in domestic traffic and foreign tourists” supported by the expected repair of an access road by first-half 2024.