Genting Group is Having Hard Time
Genting Berhad (GENTING 3182) and Genting Malaysia Berhad (GENM 4715) are facing probably one of the biggest challenges since incorporation of the conglomerate.
Ever since the beginning of the global pandemic – Covid19, number of tourists visiting Genting has reduced significantly, while the group had also recorded net losses for consecutive few quarters in 2020 financial year.
Given the fact that Genting Group mainly focuses on gambling business, it’s quite uncommon to see this kind of situation. Gambling is always regarded as a extremely profitable business compared to other businesses.
As a result, the share prices of both GENTING and GENM drop dramatically since the commencement of the first Movement Control Order (MCO) in March 2020. The sharp drop in share prices has largely reflected the severe damages that Covid19 has caused to the group’s business.
With the number of Covid19 cases continues to rise in Malaysia, Genting group is expected to face even bigger challenges ahead in 2021. There is no sign of retreat for Covid19 from what we observed.
How Exactly Does Covid19 Affect Genting Businesses?
I would like to take a deep dive into the causes that trouble Genting’s businesses recently. We are really curious how it brings such huge damages to an international conglomerate.
First of all, the restriction on cross-border travelling has completely stopped foreign tourists from visiting Genting Highlands. This is considered a huge damage to the group as Chinese tourists used to contribute a big chunk of the group’s revenue.
Gambling has long been a traditional leisure activity amongst Chinese. Without Chinese tourists with strong spending power, Genting has lost a really important stream of revenue to sustain its business.
Secondly, the local tourists drop severely ever since the beginning of MCO 1.0. Nonetheless, during the Conditional Movement Control Order (CMCO) in the second half of 2020, the local tourists all flooded back to Genting Highlands. They can’t travel overseas. During year-end holiday, they can only bring their families to local tourists attraction, while Genting Highlands would be one of the best options.
However, good times don’t last long. Following the MCO 2.0 announced by our government in January 2021, things went worse again. Most Malaysians are not allowed to travel between states, which has again caused damages to Genting’s business. As for now, our government is still giving unclear direction on what would be their next steps.
Most Casino Players Switching to Black Market
As we all know, Genting is the sole licensed casino operator in Malaysia. Of course, there are still a number of slot machine operators in the country, with license issued by Ministry of Finance (MOF). However, these slot machine operator can only operate up to a small number of machine in their premises. At the same time, their slot machines are usually old and outdated.
While the land-based casino is completely shut down during MCO, illegal online casino operators is out of the reach of government. They continue to operate 24 hours a day. As a result, many of casino players in Malaysia have slowly switched to gamble with these illegal online casino operators.
How do we actually play with these online casino companies? It’s pretty easy. All transactions are made via online banking. Once you’ve made deposits into the company’s bank account, just inform their customer service, and game credits would then be credited into your online casino account. If you wanna withdraw winnings from your account, customer service would then transfer the funds into your personal bank account.
It’s really really convenient as compared to gambling at Genting Highlands. You can basically play anywhere anytime you want. The only drawback of playing with online casino, is the fact that many of them can’t be trusted. They might refuse to pay you if you hit millions jackpot. After all, it’s really difficult to track them down.
This is why we can see the number of online casino operators in Malaysia proliferated in 2020 and 2021. Many of the fresh graduates choose to work in this line of business as it’s very hard for them to get hired during these difficult years.
Notwithstanding the above, it’s considered a positive development for the Malaysian economy. People continue to gamble, it’s just that it’s different from how they gamble last time. Everything is through online now. It’s just like how Zoom is booming given the rising demand for video meeting software.
MEGA888 – The Biggest Winner from the Crisis
You might be asking: who the hell is MEGA888? I would presume you never gamble if you say so. No casino player in Malaysia doesn’t know the existence of MEGA888. It’s a household online gambling product.
So, how does MEGA888 benefits from the global pandemic? As a matter of fact, it is now the first option of nearly all casino players in the country. It has gained a significant number of casino players ever since the temporary ban on Genting’s operations.
They are rumours saying that MEGA888 is also partly owned by the Lim’s family. We would take this opportunity to deny these rumours. MEGA888 is jointly owned by Michael Tan and Andy Lim (the founder of 918KISS, another prominent online casino brand in Malaysia). Having benefited from Covid19, the duo has also become the most recent made billionaires in Malaysia for the year of 2020.
As for 2021, we reckon it will continue to mark another incredible year for MEGA888, as we see the whole Covid19 event is not turning any better anytime soon. In other words, the number of active players playing MEGA888 will continue to grow since all land-based casinos are not allowed to open.
More and more players will get used to the new mode where people can gamble anywhere anytime they want. Even after Covid19 is over, we believe Genting will lose many casino players to MEGA888 as people have already got used to it.