Genting Singapore Plc (GENS) dropped for the first time in five days after its Resorts World Sentosa Pte.’s casino was fined S$600,000 ($488,599) by the Singapore regulator for breaching laws against reimbursing entry fees.
Staff at Resorts World, operated by the subsidiary of Kuala Lumpur-based Genting Bhd. (GENT), provided hotel accommodations, concert tickets and free admission to its Universal Studios theme park to about 3,400 people when they purchased or renewed the S$2,000 annual entry levies, the Casino Regulatory Authority said in a press release yesterday.
The fine yesterday “reinforces the view of the government tightening up regulations that would discourage local patronage,” UOB Kay Hian Research Pte analysts Vincent Khoo and Moey Su-En said in a report today, adding that “we would underweight Singapore within our regional gaming coverage as the market not only continues to struggle to produce growth, but could contract year-on-year in certain quarters.”
The fine exceeds those imposed on Singapore’s casinos that the regulator announced less than a month ago. Las Vegas Sands Corp. (LVS), which operates the city state’s other gaming resort, and Resorts World were fined S$357,500 and S$140,000, respectively for “breaching social safeguard requirements” from May to October last year, the authority said Aug. 22.
Genting Singapore dropped 1.1 percent to S$1.37 as of 9:49 a.m. in Singapore trading, the first decline in five days.
UOB Kay Hian also maintained its hold recommendation for Genting Singapore, and said the shares may slide “ without near-term visibility for much growth and expansion strategy.” The stock has slumped 9.3 percent this year, the second-worst performer on the Singapore benchmark Straits Times Index (FSSTI), which advanced 14 percent.
Singapore citizens and permanent residents are required to pay a daily S$100 levy or the S$2,000 yearly fees to enter each of the city-state’s two casinos.
“Casino operators are prohibited from refunding or reimbursing the entry levy, whether directly or indirectly,” the regulator said in its release.
Resorts World said it set up an independent investigation when it became aware of the breaches.
“Measures put forth by the board of inquiry have since been implemented, including staff training on compliance policies, and the setting up of a compliance committee,” Resorts World said in a statement yesterday. “The company is fully committed to uphold Singapore’s social safeguards to protect locals from problem gambling.”
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