A high-profile money laundering case which has seen Singapore authorities seize more than SG$2.8 billion (US$2.1 billion) in cash, crypto and other assets has had no tangible impact on the sovereign state’s casinos, according to Maybank.
Singapore authorities announced in mid-August that they had arrested 10 people for alleged involvement in forgery, money laundering and resistance to lawful apprehension. The group, comprising members from China, Cambodia, Cyprus, Turkey and Vanuatu, has since been found to have links with illegal online gaming sites catering primarily to customers in mainland China.
Despite Genting Singapore, operator of Resorts World Sentosa (RWS), seeing its share price fall by 13% since the case broke on fears that VIPs may lay low and avoid casinos, Maybank analyst Samuel Yin Shao Yang said in a Wednesday note that this has not been the case.
Instead, “Our conversations with Genting Singapore reveal that … it is business as usual for the VIP market and the mass market continues to grow,” Yin wrote.
“Genting Singapore … did not notice any discernible decline in its engagement with VIPs whether they be via its private jet programme that was introduced earlier this year or ‘meet and greet’ celebrity events.”
The Maybank analyst has maintained his “BUY” call on Genting Singapore shares, adding that the recent price decline fails to take into account the company’s rising revenues – buoyed by the ongoing return of Chinese play.
“Even without meaningful Chinese visitation, RWS’ 1H23 mass market GGR hit 100% of 1H19 levels,” Yin said. “We understand slot machine GGR (40%-50% of mass market GGR) is still trending higher on new migrants to Singapore while the mass tables GGR (50%-60% of mass market GGR) is seeing a lot more meaningful Chinese play relative to 1H23.
“OAG data indicates that September 2023 flight seat capacity from China to Singapore has recovered to 80% of September 2019 levels.”
Maybank estimates that Genting Singapore’s VIP volume will stabilize at 87% of 2019 levels this year, with mass market GGR reaching 105% before growing to 120% in 2024.
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