Genting Singapore leaps ahead of Marina Bay Sands in junket race

High rollers will soon be filling up its casinos while its high-profile rival tries to play catch-up.

The Casino Regularity Authority has approved junket licenses for two operators who will work with Genting's Resorts World Sentosa casino to attract big-spending gamblers.

Its credit risk also receives a positive buffer since these operators can extend credit to the invited high rollers, shielding the company from losses, said OCBC. Both positives will be exclusively enjoyed by Genting until its rivals, including Marina Bay Sands, manage to secure their own junket operators.

Here's more from OCBC:

Two IMA licenses issued. The Casino Regulatory Authority (CRA) has approved junket licenses for two operators to work with Resorts World Sentosa (RWS). The CRA has rejected 12 other applications. The one-year licenses were issued to two Malaysian IMAs (international market agents) – Huang Yu Kiung and Low Chong Aun; and they can only bring in international high rollers. Meanwhile, the licenses can be revoked if the two fail to remain suitable. CRA also has the power to suspend the IMA license at any time.

Big hurdle cleared. While the CRA has only issued two licenses, we note that the move should lay rest to earlier concerns that the regulator is not keen to have junket operators in the Singapore gaming market. Indeed, Business Times reported that the CRA is currently evaluating other applications and conducting the necessary probity checks. We also understand that Marina Bays Sands (MBS) has not endorsed any junket license applications, suggesting that if the other junket operators are approved, GS could continue to maintain a significant lead-time over its rival.

Positive for GS. We believe that the move is generally positive for Genting Singapore (GS), as it will bring a new source of high net-worth players into its casino here. Secondly, the move should also lead to an improvement in GS’ credit risk as the two IMAs can also extend credit to their own high rollers. On the flipside, ongoing amendments to the Casino Control Act could mean more extensive financial reporting and credit assessments by IMAs and the new rules would mean RWS would need to exercise greater diligence over the IMAs.