Genting gives hotel in upstate New York a high-end gambling makeover – Business News

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IF A billionaire from Malaysia has his way, Asian tourists will soon be flocking to the Borscht Belt region in the Catskills Mountains that was once the summer home for generations of Jewish New Yorkers.

Empire Resorts Inc., controlled by Tan Sri Lim Kok Thay, chairman of Genting Bhd ., on Feb. 8 will open Resorts World Catskills, a $1.2 billion casino, hotel and entertainment complex at the site of the old Concord Resort Hotel, the largest of the upstate New York resorts that helped launch the careers of Rodney Dangerfield, Jerry Lewis, Sid Caesar, Joan Rivers and other Jewish comedians.

In a bid to revive the upstate economy, New York awarded licenses in 2015 to Empire Resorts and two other casino operators for Las Vegas-style resorts. That gave Lim’s companies a new opening.

For the Genting group, which runs casinos from Singapore to England to the Bahamas, the Catskills project is the latest effort to gain a bigger foothold in the U.S. Genting operates a casino at New York City’s Aqueduct race track and Empire Resorts runs a small race track casino in the Catskills.

While Genting has much bigger ambitions, several of Lim’s other American projects have stalled because of local opposition and construction delays.

With the Catskills project, Genting is taking a big step toward overcoming those difficulties. Unlike the two race-track casinos, limited by the state to slots and other electronic games, the Empire resort will have a 100,000 square-foot casino with more than 150 game tables as well as 2,150 slot machines.

The resort will include a 332-room hotel and 2,500-seat theater, with plans for an 18-hole golf course and a water park.

Empire Resorts is counting on those features, along with Genting’s customer base from casinos in Malaysia, Singapore and other countries, to help build business from the other side of the Pacific. “We can offer international players known to Genting an opportunity here in North America that they otherwise would not have,” Empire Resorts Chief Executive Officer Ryan Eller said. “It gives us the opportunity to reach across not only North America but potentially internationally.” 

Most of the classic Borscht Belt hotels, which inspired the 1987 movie “Dirty Dancing,” closed as travel to Florida and other destinations far from New York became easier. Convincing visitors to New York City to shlep upstate may still be a hard sell.

“It’s not an easy drive,” said H. Steven Norton, chief executive officer of Norton Management, a casino consultant in Alton, Illinois. Moreover, the region doesn’t have many other attractions to lure gamblers to the countryside. “In the winter there’s a little skiing and in the summer a little golf,” he says. “

The Catskills have been going down since air service to Florida.”

To boost its appeal among Asian gamblers, Empire has hired Chinese-speaking staff, recruited a chef from Taiwan and used feng shui principles in its design. Casino games like pai gow that are popular with Asian customers will take up approximately one-third of the gaming floor.

Empire moved forward the launch date, originally scheduled for March, to take advantage of the Lunar New Year in mid-February, with plans for a traditional dragon dance to welcome the Year of the Dog.

“People from Asia want to come to New York,” said Charles Degliomini, executive vice president of governmental affairs and corporate communications, who points out that the Catskills resort is only 90 miles from New York City.

The two upstate New York resorts that have already opened, the Del Lago Resort & Casino in the Finger Lakes region and Rivers Casino & Resort in Schenectady, haven’t generated the revenue originally forecast, according to Clyde Barrow, a professor at the University of Texas Rio Grande Valley who worked with Caesars Entertainment Corp. on its unsuccessful bid for a license in New York. “They haven’t come close to their original forecast or projections,” he said.

Del Lago and Rivers Casino didn’t comment on gaming revenues.

During the 12 months ended November, casinos in seven Northeastern states produced $10 billion in gaming revenue, according to Bloomberg Intelligence, matching the annual in Las Vegas and the rest of Clark County, Nevada. Capacity in the Northeast could grow as much as 24 percent this year.

 “There are way too many casinos in much of the Northeast,” said Richard McGowan, a professor of finance at Boston College who studies the casino industry.

At Genting’s Resorts World New York City casino in Queens, where the company began a $400 million expansion last year, gambling revenue was down slightly to $850 million even after adding 1,000 slot machines.

Targeting Asian gamblers is far from a sure thing. Many casinos in the Northeast and other parts of the U.S. have already retooled their casino floors to target those customers, according to Barrow. Lucky Dragon Hotel & Casino, a Chinese-themed resort, became Las Vegas’s first new casino in years when it opened in 2016. It temporarily closed its gaming and restaurant operations in early January for what the company called a “repositioning.”

Empire Resorts is not technically part of the Genting group, a conglomerate that operates cruise ships, manufactures paper and runs palm oil plantations in addition to its hotel and casino businesses.

Instead, a private investment company controlled by Lim owns more than 90 percent of Empire shares. Last year, Empire reached an agreement to use Genting’s Resorts World brand and participate in its Genting Rewards Alliance loyalty program in exchange for a single-digit percentage of net revenue, according to an Empire filing with the Securities and Exchange Commission.

If successful, the Catskills project will promote the global reach of Genting, a sprawling empire with a complicated web of affiliates in Asia, Africa and Europe that has faced challenges expanding in North America.

Genting in 2013 announced it would spend as much as $4 billion on a resort in Las Vegas. However, construction didn’t begin until last year as the company redesigned the project, now scheduled to open in 2020.

A proposed casino in Miami appears stalled because Florida lawmakers haven’t approved the expansion of casino gambling to the city. Genting declined to comment on the Miami property.

In New England, a partnership with the Mashpee Wampanoag Tribe to build a casino near Boston is on hold following a challenge to the government’s decision to set aside land to the tribe.

“We continue to support the Mashpee Wampanoag tribe in their efforts to protect their land base and achieve their economic development goals,” Michael Levoff, a Genting Americas spokesman, said in an emailed statement. Genting declined to comment on its Miami property.

Resorts World Catskills may have an edge because of its scale and its Asia roots, says Brian Egger, an analyst with Bloomberg Intelligence. “They do have an opportunity to attract Asian players,” he said. “Any place where Resorts World builds, they do have some advantage.” – Bloomberg

 



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