Resorts World Las Vegas (RWLV) is facing potential hefty fines from Nevada regulators, but its owner, Genting Bhd, is expected to continue its financial support of its lone Strip property despite mounting controversies.
The Nevada Gaming Control Board (NGCB) announced last week its intention to pursue financial penalties against Resorts World Las Vegas. The casino hotel allegedly allowed known black market bookmakers to place bets without disclosing the sources of their funds. Among them was Mathew Bowyer, who reportedly accepted millions of dollars in wagers from Ippei Mizuhara, the interpreter for Los Angeles Dodgers star Shohei Ohtani.
While the exact financial repercussions for RWLV remain unknown, S&P Global Ratings believes that Genting will back the integrated resort as it confronts regulatory challenges. “We believe it will receive extraordinary support from its parent, Genting Bhd., under almost all foreseeable circumstances,” noted the research firm. S&P rates RWLV BB+ with a “stable” outlook.
Former RWLV President Scott Sibella is central to the controversy, and the manner in which the NGCB previously handled MGM Resorts International, his former employer, could offer clues about potential financial penalties for Genting’s venue.
In January, the Cosmopolitan and MGM Grand settled charges of alleged violations of anti-money laundering laws and the Bank Secrecy Act for $7.45 million. Sibella, who served as president at MGM Grand until 2010, joined RWLV thereafter.
“Genting group has a track record of gaming operations in different jurisdictions for over five decades. The group also has the strategic significance of expanding its foothold into the U.S. gaming market. We expect RWLV to work with regulators to resolve and address the issues raised,” added S&P.
Should RWLV face fines similar to those incurred by MGM properties, Genting is well-positioned to cover these costs. RWLV holds a crucial position in Genting’s portfolio, alongside a flagship property in Malaysia and Resorts World Sentosa in Singapore. This strategic significance encourages the parent company’s financial support for the Las Vegas venue.
Despite the BB+ corporate credit rating being one notch into junk territory, there seems to be no imminent threat of a downgrade. The conglomerate’s resources are sufficient to maintain that rating. “The stable outlook on RWLV mirrors that on the parent, which in turn reflects our expectation that the company’s market position across its operations will translate into a stable operating performance, such that its ratio of funds from operations to debt remains above 30% over the next two years,” concludes S&P.
