Genting Malaysia closes full acquisition of Empire Resorts and eyes expansion in the USA
Genting Malaysia Berhad, a giant in the casino and entertainment sector, recently announced that it will acquire the remaining 10% of Empire Resorts Limited, based in New York, for around US$80.7 million. This move draws attention not only for the amount involved, but also because of the challenges and opportunities it represents for the company.
The deal includes a cash payment of US$41 million and the assumption of an intercompany loan of US$39.7 million, which Empire had with Kien Huat Realty III Ltd., the investment vehicle of the Lim family, which controls the Genting group. Currently, Kien Huat holds 51% of Empire’s common shares, while Genting Malaysia holds the other 49%, as well as 100% of the convertible preferred shares. In other words, after the conclusion of the deal, which still depends on regulatory approvals, scheduled for the second quarter of fiscal year 2025, Genting will have full control over Empire Resorts.
Empire Resorts is not just any company in the US casino scene. It manages Resorts World Catskills, one of the largest casino resorts in the state of New York; Resorts World Hudson Valley, inaugurated at the end of 2022; and the online sports betting platform Resorts World Bet. On paper, this is a strategic acquisition: it guarantees Genting a solid presence in New York, one of the most coveted gaming markets in the country, and strengthens the Resorts World brand in the USA.
A high-stakes investment with uncertain returns
However, Empire Resorts has been a real financial challenge. Since Genting bought its initial stake in 2019 for US$128 million, it has already poured over US$720 million into the business — without yet seeing a profit. The company has seen losses year after year, even after several capital injections and restructuring efforts.
Some market analysts have not hidden their scepticism about the new acquisition. Nomura, for example, classified the transaction as negative, justifying it with the lack of a clear recovery plan for Empire and warning that, now, Genting Malaysia will have to consolidate Empire’s financial results, which should further increase the weight of losses on its balance sheets. As a consequence, Nomura downgraded Genting’s stock recommendation from “Buy” to “Reduce”.
Maybank Investment Bank also raised the alarm, calling the deal another case of a “related party transaction” that destroys shareholder value. Meanwhile, Hong Leong Investment Bank calculated that Empire is being valued at an EV/EBITDA multiple of 72.7 — a stratospheric number, considering that the average in the US casino sector revolves around 10 times.
Another worrying point for investors is the financial impact of the deal on Genting Malaysia’s balance sheet. With the acquisition, the group’s total debt should jump to RM13.5 billion (around US$3.1 billion), increasing leverage to 1.13 times and generating annual interest costs of up to RM70 million (US$16.5 million) in fiscal years 2026 and 2027. PublicInvest Research estimates that Genting will continue absorbing between RM160 million and RM280 million (US$37.8 to US$66.1 million) in annual Empire-related losses, which could dent profits by up to 3.5% over the next three years.
Genting’s long game: betting on New York’s growth
But why, then, does Genting Malaysia insist on this acquisition? The answer lies in New York’s strategic potential. The state is already the fourth-largest online sports betting market in the USA and is expected to gain even more strength in the coming years, as gambling legislation evolves and new casino licences are released. By having full control of Empire, Genting hopes to better integrate operations, gain synergies, reduce costs and, perhaps, turn Empire into a profitable asset in the long term.
Resorts World Catskills, for example, has an impressive structure, with over 1,600 slot machines, 150 gaming tables and a luxury hotel with 332 rooms. Resorts World Hudson Valley, in turn, opened its doors amid high expectations to attract a clientele closer to New York City. And, of course, the Resorts World Bet platform puts the company in the digital game, a segment that is growing rapidly in the North American market.
It’s worth remembering that Genting is no newcomer to the global casino market. Founded in Malaysia, the company operates resorts and casinos in several countries, including the United Kingdom, the Bahamas, and the Philippines. It also owns the gigantic Resorts World Sentosa in Singapore. The bet on the USA, therefore, is part of an international expansion strategy.
The challenge now will be to turn a portfolio full of potential into concrete results. The success of the deal will depend on more efficient management, cost-cutting, and, possibly, a recovery of the local market, which is still suffering from the effects of the pandemic and facing tough competition.
This article was first published in Portuguese on 7 May 2025.
