Posted on: October 17, 2024, 04:31h.
Last updated on: October 17, 2024, 04:31h.
A lawsuit filed against Genting by its joint-venture partner in Resorts World Bimini, RAV Bahamas, could impact the Malaysian casino giant’s bid for a New York casino license.
That’s according to analyst CGS International Research, which also expressed concerns about a disciplinary complaint against the operator from the Nevada Gaming Control Board (NGCB). The Nevada filing relates to allegations that individuals with links to illegal sports betting were permitted to gamble and possibly launder money at Resorts World Las Vegas.
Genting has for years operated the closest thing New York City has to a full-fledged casino. Resorts World New York City in Queens is permitted to operate slot-like video lottery terminals (VLTs) and electronic table games.
The Malaysian company has pledged to pay $1 billion in taxes if it can capture one of three casino licenses for the downstate New York region that would permit it to offer full-scale Las Vegas-style gaming.
Extraordinary Claims
But the RAV lawsuit, filed last week in the Southern District of Florida, accuses Genting of employing “fraudulent accounting” practices that have saddled Resorts World Bimini with $885 million worth of debt. The suit claims these debts were incurred by other Genting properties and subsidiaries.
RAV claims it has never received a penny in profits from the venture because its joint partner employs a vast and “deliberately tangled” web of subsidiaries that “provide or purport to provide” services to its resorts.
Genting Group’s opaque corporate structure, comprised of layer-upon-layer of subsidiaries, helps Genting Americas to conceal its financial improprieties and obfuscate its fraud,” claims the lawsuit.
This is to promote “the artificial inflation of the profits and valuations of Genting subsidiaries and other affiliates, and the manipulation of the debt-to-equity ratios of its projects in the US and abroad,” according to RAV’s extraordinary claim, which seeks damages in excess of US$600 million.
On Monday, Genting called the allegations “baseless and without merit,” adding that it would vigorously defend itself against the complaint.
Compliance Failures
Nevertheless, it’s bad timing for Genting, coming just two months after the NGCB filing, which accuses the company of compliance failures.
“Resorts World … allowed a culture that welcomed certain individuals with suspected or actual ties to illegal bookmaking, histories of federal felony convictions related to illegal gambling businesses, and ties to organized crime,” according to an NGCB statement.
The regulator is likely to impose hefty financial penalties on Genting for breaching the Nevada Gaming Control Act.
