Operator News

Malaysia – Genting Malaysia’s shares tumble following announcement of tax increase

Genting Malaysia has seen its stock suffer its worst one-day fall following a government announcement that casinos’ annual fees and duties on gross income will be increased.

Genting, operator of the Resorts World Casino in Malaysia, fell by as 30 per cent with its parent company Genting Bhd. Plummeting by 12 per cent.

Malaysian Finance Minister Lim Guan Eng revealed that annual fees for casino licenses will be increased to 150m ringgit ($36m) up from 120m ringgit. He also said taxation on Gross Gaming Revenue will increase to 35 per cent from 25 per cent previously.

Analysts had predicted a five per cent tax increase.

CIMB Research analyst Nigel said: “Genting Malaysia’s casino operations were hit with a 10 per cent hike in casino duties in Budget 2019, the first rate hike in 20 years. Duties are 35 per cent now. This was a negative surprise as we had expected a smaller casino duty rate hike. The rate was previously around 25 per cent. The stock remains a Hold. We cut TP (target price) from RM5.25 to RM4.85.”