January 10, 2014 / 7:00 AM / in 4 years

UPDATE 1-Malaysia's Genting makes new bet on Miami with slots resort

KUALA LUMPUR, Jan 10 (Reuters) - A unit of Malaysia’s Genting Bhd, Southeast Asia’s biggest gaming group, is making a renewed play for operations in Miami, Florida, after previous plans for a $3.1 billion resort two years ago failed to pan out.

Genting Malaysia Bhd, a 47.1 percent subsidiary of Genting Bhd, on Thursday formalized an agreement with three U.S. horse-racing associations to build a Miami resort offering slot machines and off-track betting.

Miami is an important gaming market with dog racing and horse racing well established and Genting’s slot machine-focused facility would fit well with the older demographic of gamblers in the city. Genting’s previous bigger plans were criticised by local leaders as out of scale with the neighbourhood.

Genting’s original plan for a $3.1 billion resort envisioned several skyscrapers and two condominium towers and would have been one of the largest developments in Florida’s history. The revised plans call for a casino with 2,000 slot machines as part of a smaller leisure and entertainment resort.

“We’ve been optimistic about Miami, but they’ve put a lot of money in there. This is a last ditch attempt to make things work, they’re trying every avenue they can,” said an analyst who did not want to be named.

Officials with Genting could not be reached for comment on Friday.

Plans for the resort will depend on Genting receiving the appropriate licences from authorities in Florida, which analysts say could prove to be a challenge.

Florida legislators have twice rejected proposals from developers of so-called “destination resorts” that would allow the creation of two to three sizeable casino resorts so “the regulatory approval remains a key hurdle,” said Kuala Lumpur-based Kenanga Research in a report.

Opposition came from Christian groups and companies like Walt Disney that said the casinos would ruin the “family-friendly” nature of tourism in Florida.

Shares of Genting Bhd gained 1 percent on Friday. It has seen only a 1.9 percent increase over the past three months, data from Thomson Reuters showed. The stock has 10 ”buy“ recommendations, nine ”hold“ and two ”sell’.

“This agreement suggests that the original plan has gone down the drain, although we believe the market has prepared for it after Florida lawmakers rejected the plan to bring three major casinos to Miami,” said Kuala Lumpur-based TA Research in a report.

TA Research said the new proposal is “one of the workable solutions” because the focus on slot machines and off-track betting to support Genting’s nearby development of a 14-acre (5.7 hectare) parcel of land it acquired for $236 million in 2011.

The three associations Genting signed the deal with are Gulfstream Park Racing Association Inc, the Florida Horsemen’s Benevolent & Protective Association Inc and the Florida Thoroughbred Breeders’ Association Inc.

In addition to the Florida proposal, Genting last month said it would spend up to $4 billion to develop an unfinished resort on the Las Vegas strip. Earnings from the United States made up 5.4 percent of the company’s third-quarter revenue .

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