Genting Experiences A Slump as Singapore Tightens Casino Rules

Published Tuesday, July 10, 2012 -

In just days after Singapore announced plans to toughen up its casino laws Genting Singapore PLC shares have been downgraded from “Buy” to “Hold”. The target price is also cut, from S$2.00 to S$1.40. As a result of new sanctions, Maybank Kim Eng Securities Pte Ltd has predicted Genting could lose further market traction. Share value has already decreased by 1.1% at S$1.39.

The Shares are listed on the Main Board of the Singapore Exchange Securities Trading Limited. Besides initiating and managing large-scale integrated resorts, Genting Singapore PLC main activities include IT application and international sales and marketing services. It also manages casino operations. According to the Straits Times, Minister Iswaran from the Prime Minister’s Office said of these announcements that the proposed revisions will ensure that Singapore's two multi-billion-dollar casino-resorts will, "remain full-fledged tourist destinations, not just casinos with frills." Also, the plans to firm up its casino laws will allow the regulator to impose a fine of up to 10 percent of annual revenues generated by operators Las Vegas Sands and Genting Singapore.

The most that operators can now be penalized by the Casino Regulatory Authority is S$1 million. However after amendments to the law are passed, the fines could potentially exceed $200 million. The two casinos now in Singapore, Resorts World Sentosa and Marina Bay Sands must abide by a variety of regulations for example, keeping strict records and preventing money laundering. The significant increase in fines is a result of infractions. There have been numerous incidents involving both casinos for example where they have admitted minors. Genting Singapore PLC has been at the forefront of gaming and integrated resort development in for over 20 years, best known for its flagship project Resorts World Sentosa a S$6.6 billion development in Singapore that has changed the tourism landscape of Southeast Asia.

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