Still early for Genting to look at Taiwan, say analysts

KUALA LUMPUR: Taiwan's move to legalise gambling may present an opportunity for Genting Bhd to expand its gaming business to the island, analysts said, but the Genting group would likely focus on its integrated resort (IR) development in Singapore in the short term.

An analyst at Aseambankers Equity Research said it was "still early days" to comment on the viability of the Taiwan market to the Genting group, as details were sketchy. For one, Taiwan has not decided on the number of casino licences to award, although some media reported that there would be "two or three".

"In the short term, Genting would be more concerned with its IR project in Singapore. In addition, Malaysia is still a catalyst market for Genting," he told The Edge Financial Daily .
In a move to spur its economy, Taiwan on Jan 12 passed a bill to allow the construction of casinos on its offshore islands of Penghu, Kinmen and Matsu counties.

An analyst at a local research house said the opening of the Taiwan market was generally positive to the Genting group in view of more expansion opportunities.

However, she said it would take time to build the necessary infrastructure on the remote islands before any casino project could take off.

"They need to improve the accessibility of those islands and build the infrastructure first, and this takes time.

"Unlike Macau, which eyes the VIP market, Taiwan's gaming market will likely tap the masses domestically and in mainland China. There are still a lot of untapped markets in mainland China, so Genting may want to explore Taiwan," she said.

Meanwhile, an analyst at a local bank-backed research house is concerned that China's visa restriction on Macau may also apply to Taiwan when the latter have its own casinos.

If that is the case, any casino to be built in Taiwan would likely see revenue coming mainly from the domestic market.

"If there are three casinos, Taiwan may not be big enough and competition will be stiff," she said. China mainlanders are restricted to one Macau visit every three months beginning June last year, compared with twice a month previously.

"I am not sure if Genting is interested in bidding for a casino licence in Taiwan. But if they were to bid for it, it would be under Resorts (World Bhd), because Resorts has a lot of cash," she added.

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