Foxwoods' Malaysian investors gamble on New York casino
By David Collins
Publication: The Day
Published 11/07/2010 12:00
Who would have imagined, for instance, that the South Africans who helped the Mohegans get into the gambling business would have allied with the Mashpee Wampanoag Indians in nearby Massachusetts, set to compete with Mohegan Sun?
And then last year, the wealthy Malaysians who first backed the Mashantucket Pequots pushed aside the South Africans the Wampanoag partners, ready to compete with their own stepchild, Foxwoods.
And now the Malaysians, under the name Genting New York LLC, have moved into New York City. They broke ground last month on a new casino at the Aqueduct Race Track in Queens, preparing to soon open a Resorts World Casino there with 4,525 slot machines.
Both Connecticut casinos will certainly suffer when a casino with that many slot machines opens alongside the New York City subway system.
Curiously, the new president of Genting New York is none other than Michael Speller, the last president of Foxwoods, who resigned here in June.
It is indeed a small gaming world.
It is also interesting to note that while the Mashantucket Pequots may soon lose some of their gambling business to Genting New York, they are still paying the Malaysians some 9.9 percent of gross Foxwoods income, part of the deal in which they borrowed $58million to build the first casino here. The payments are meant to continue until 2016
The Mohegans, on the other hand, may be through paying their original partners, the South Africans, 5 percent of gross revenues in 2014.
Genting Chairman K.T. Lim, appearing at the Aqueduct casino groundbreaking last month, called the event one of the company's "proudest days."
Genting paid out $380 million for the right to develop the casino in Queens, which is expected to contribute another $300 million annually in tax revenues.
Presumably it was prouder than the day the Genting-backed Foxwoods debuted, or the openings of Genting-backed casinos in Niagara Falls and in Monticello, N.Y.
Foxwoods was the first foray into the U.S. gambling market for the wealthy Lim family, which made its gambling fortune on a casino monopoly in Malaysia, a giant resort called Genting Highlands.
More recently, in addition to the New York projects, Genting has built one of only two huge casinos in Singapore, sharing a $6-billion-a-year market there.
In addition to the big casinos in Malaysia and Singapore, the company also controls large plantations and the Norwegian Cruise lines.
"It's real important for us to make (Aqueduct) a showcase event for the company," Speller told the Wall Street Journal, in a story that ran in late August.
Genting officials have said they eventually intend to spend $1.3 billion on the casino resort in Queens.
The initial phase, in addition to the slot machines, is scheduled to have several restaurants, a parking garage and an outdoor terrace that will connect the casino and racetrack.
There are plans to build three hotels, shops, a spa and other resort facilities.
One might presume that the New York City gambling resort, surely to become a formidable competitor to Mohegan Sun and Foxwoods, will be fully operational by the time the Malaysians finish collecting all those many millions on their smart startup investment on the Mashantucket Pequots.
It's a small gambling world after all, and it seems that everyone here in the Northeast will soon be chasing the same player dollars.
This is the opinion of David Collins.