- Wall Street Journal reported that a team of former Las Vegas Sands Corp (LVS) executives with experience in Macau have been chosen to manage the gambling operations of a US$3.5bil resort in the Bahamas.
- According to the report, Sarkis Izmirlian selected former LVS President William Weidner to manage the gambling resort as he understands China better than anyone else. Sarkis is the chief executive of the resort company, Baha Mar Ltd.
- The Baha Mar resort is being built by China State Construction Engineering Corp and is primarily financed by the EXIM Bank of China.
- The Baha Mar project in Nassau will have a 100,000 sq ft casino with more than 150 gambling tables and 1,500 slot machines. There will also be luxury hotels, dining and shopping outlets, a golf course and a convention centre. The resort is set to open in December 2014.
- We reckon that the new casino resort will compete with Genting Malaysia Bhd’s (GenM) “Resorts World Bimini”, which is located on the Bimini Islands. Bimini Islands is near the Bahamas.
- However, we believe that GenM has a head start as “Resorts World Bimini” is expected to be completed in 4QFY13. In comparison, the Baha Mar casino resort will only open in 4QFY14.
- Also, the Bimini Islands is closer to Miami compared to Nassau. According to news reports, “Resorts World Bimini” had already acquired a luxury high-speed cruise vessel to transport visitors between South Florida and Bimini.
- When it commences operations, “Resorts World Bimini” would have 20 to 30 gaming tables and 100 slot machines. We do not expect significant earnings contribution from “Resorts World Bimini”. The casino resort including the marina and jetty is expected to cost about US$100mil (RM300mil).
- Maintain BUY on GenM for its undemanding valuations and resilient casino operations.