KUALA LUMPUR: The Genting group, which has been eyeing the growing influx of Chinese and other Asian tourists to Las Vegas, yesterday announced a US$350 million (RM1.08 billion) acquisition of an 87-acre site on the Strip in Las Vegas where it plans to build a US$2 billion casino called Resorts World Las Vegas.
The site, identified as Echelon, was bought from two wholly-owned subsidiaries of Boyd Gaming Corp and is described as one of the last areas for setting up a large casino along the Strip.
In a filing with Bursa Malaysia, the Malaysian casino giant said the 87-acre freehold land came together with a partially completed central energy facility and other structures bought from Echelon Resorts LLC (Echelon) and Coast Hotels and Casinos Inc (Coast) — both wholly-owned subsidiaries of Boyd Gaming Corp — for a total consideration of US$350 million (US$4 million an acre).
The Echelon site, with a considerable frontage along South Las Vegas Boulevard, comes with a full entitlement to apply for a non-restricted gaming licence.
The initial phase of Resorts World Las Vegas will include 3,500 rooms and 175,000 sq ft of total gaming space across several floors plus convention centres and several luxury dining and retail amenities.
The resort, with a unique Chinese impression, is expected to open in 2016.
In its filing, Genting said the acquisition of the Echelon site, at a significant discount to the independently appraised value, represents a good opportunity for the Genting group to enter the Las Vegas market which is in the midst of a recovering US economy.
“We are incredibly grateful to the leaders of the State of Nevada, Clark County and the City of Las Vegas for joining us in announcing what will be a fantastic addition to the top resort destination in the United States,” said Genting chairman and CEO Tan Sri Lim Kok Thay in a statement yesterday.
Originally, Boyd Gaming Corp had a project to develop a US$4.8 billion resort on the same site. But construction was halted in August 2008.
The expansion into Las Vegas marks Genting’s further diversification of its gaming business away from Malaysia.
It owns about 52% of Genting Singapore Ltd and 18% of Genting Hong Kong Ltd which houses Resorts World Manila.
Resorts World Sentosa alone produced RM7.2 billion in gaming revenues in 2012, which is about a third of what the Strip in Las Vegas collected in gaming revenues last year.
Resorts World New York opened in October 2011. In 2012, Resorts World New York reported gaming revenue of more than RM852.9 million, while its US$3.8 billion Resorts World Miami project was downsized last year due to Florida’s gaming legislation.
Genting sold its Kuala Langat power plant to 1Malaysia Development Bhd for RM2.3 billion cash last year. The group’s cash balance stood at RM21.2 billion as at Dec 31, 2012. It is clear that it has the resources to fund the project in Las Vegas.
This article first appeared in The Edge Financial Daily, on March 5, 2013.