Malaysia, a pre-dominantly Islamic country, has extremely strict gambling laws and only one casino is permitted to operate in the country. The Resorts World Genting casino resort is a popular tourist destination for people to hang out, have fun and try their luck as the casino of the area.

Malaysia has decided to tighten its public smoking laws and by default that should also cover the Resorts World Casino. Maybank IB Research states when Malaysia rolled out smoking bans in Sep 2004 and July 2010 there were exceptions made to the rule for pubs, nightclubs and the casino. The new smoking ban which is yet to be fully integrated could be a lot stricter, however, Maybank believes that the Genting casino will most likely continue to get immunity from the ban.

Macau, the biggest gambling hub in the world recently approved a blanket smoking ban and it is expected to have an impact on gambling revenues.  Patrons feel that their freedom is being restricted and prefer to go to new locations where there are less restrictions. New Orleans also created a smoking ban and casinos immediately felt a negative impact. Hong Kong investment analysts believe that if Malaysia imposes a smoking ban on the casino it could result in a 10% decline on mass-market revenue and a 15% decline in VIP gambling revenue generated from Macau’s gamblers.

In April 2015, Malaysia’s government imposed a 6% goods and services tax (GST) on consumers and the Genting casino decided to bear those costs instead of imposing them on the customer in an effort of good-will. In a statement, Samuel Yin Shao Yang of Maybank said “We were wary that the 6 percent GST will not only serve as an additional tax… but reduce gaming budgets as well.” The absorbed GST costs is expected to cost the casino anywhere between $52 to $78 million per annum and a smoking ban definitely hurt the casino’s bottom line.

The casino also plans to reopen its theme park at Resorts World Genting which it initially closed in Feb 2014 with the objective of upgrading the theme park. That casino will re-open the theme park towards the end of 2016 and it will now feature a 423 room hotel that is expected to bring in a lot more business for the casino and Sky Plaza, a new VIP casino that is expected to attract high stake gamblers from neighbouring countries.

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