Asian gaming and hospitality giant Genting Malaysia Berhad - who operate a plethora of land-based casinos - is to inject up to $100 million into its Empire Resorts Incorporated subsidiary via a fresh preferred stock subscription agreement.

The Kuala Lumpur-listed firm used an official Tuesday filing to disclose the coming investment, which will be handled by its wholly-owned Genting ER II LLC subordinate, and state that approximately $58 million of the new outlay is to be utilized to ‘fully repay an existing bank facility’ with the remainder held back for working capital. 

American Adventure

Genting Malaysia Berhad currently holds a 49% stake in Empire Resorts Incorporated, which runs New York’s 332-room Resorts World Catskills development as well as the nearby Resorts World Hudson Valley venue, while the remaining share is controlled by its largest shareholder, Lim Kok Thay, via his Kien Huat Realty III Limited family trust.

However, Genting Malaysia Berhad noted its effective interest in Delaware-registered Empire Resorts Incorporated, which additionally began offering mobile sports betting in New York from March of 2022, could increase to as high as 89.6% by 2030 should it decide to convert all of the stocks it will now hold.

Prominent Parent

For its part, Genting Malaysia Berhad is responsible for a worldwide estate of casinos also including the 1,800-room Resorts World Sentosa property in Singapore alongside its home nation’s even larger Resorts World Genting development. The 44-year-old company moreover controls Genting UK, which operates 34 gambling-friendly venues across the United Kingdom, in addition to the Resorts World Bimini and Newport World Resorts enterprises in the Bahamas and the Philippines respectively.

This latest move is destined to take Genting Malaysia Berhad’s total investment in Empire Resorts Incorporated up to approximately $700 million following analogous outlays in each of the last five years. The Malaysian firm took control of the beleaguered operator in 2019 and subsequently folded it into an American portfolio featuring the slots-only Resorts World Casino New York City facility.

Reward Reasoning

In its filing, Genting Malaysia Berhad announced its latest investment in Empire Resorts Incorporated will enable the New York firm ‘to further optimize its capital structure’ via reductions in ‘financial leverage’ and ‘interest expense’. It added the move is to furthermore allow for a ‘quicker ramp up’ at Resorts World Hudson Valley, which opened eleven months ago complete with over 1,200 slots and 82 electronic casino games, while permitting the American operator ‘to continue its focus on strengthening Resorts World Catskills’ operating performance to realize its full potential’.

“The proposed equity injection will also allow Genting Malaysia Berhad to reinforce its position and grow its market presence in the expanding New York state gaming market to compete effectively in the northeastern United States region,” read the filing from Genting Malaysia Berhad. “Resorts World Catskills will also be able to continue benefitting from the operating synergies with Resorts World Casino New York City.”