Genting Casino Competition

GentingGroup, is one of the few Malaysian conglomerate. Genting Berhad isthe parent company to a few subsidiaries engaged in differentindustries. One of the most commonly known is the casino industry.When the word casino is in mind, the only place in Malaysia one couldthink of is Casino de Genting.

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Why people only think of Genting?

Thisis because Genting is monopolizing the casino market of the country.

The high barrier of entry into this industry awarded Genting such aprestigious status.

One of the reasons is government directive. Newfirms have a very minimal chance of entry because the government is strict andconservative in awarding another casino licence.

Currently, Genting Malaysia Berhad is holding the sole legal casinolicencing.

Evenif there are no government interventions, another reason that mightdiscourage other firms from entering the market is that other firmsare aware that Genting is a large firm.

They currently holds a marketcapitalization of US $6.8 billion in the leisure and hospitalitybusiness, in which casino is the major business activity. They have amassive 200000 sq ft gaming space at Genting Highlands.

Besides, thenumerous awards they received added the prestige of Genting.

Therefore, if new firms would like to enter this industry; they needa huge initial investment to stay competitive in the market, besidesfinding massive difficulty to match Genting’s branding.

For thesereasons, new firms are also discouraged from entering this industry.

SinceGenting is a monopoly, they are price-setters.

In this case, they canfix the minimum bet for each type of gaming. Even if they increasethe minimum bet, it will not deter people from visiting and gamblingin the casino.
This further exemplifies the characteristics of amonopoly.

Thismonopoly makes it possible for Genting to earn supernormal profits. This is mainly due to the high barriers of entry mentioned earlier.

From the graph, the area in green shows the supernormal profitsearned by monopolistic firms, which in this case indicates Genting.

Thereare two sides to a coin. A monopoly also brings disadvantages such ascomplacency. However, Genting is not in such position. Though beingthe sole firm in the industry, they still strive to improvethemselves. Just recently, Genting revealed they are planning awhopping RM3 billion facelift for their casino resort in GentingHighlands. This is planned in an effort to double their earnings.This massive plan proves that not all monopolists are complacent.

Genting Casino Competition 2020

ShouldGenting continue to monopolize the Malaysian casino market?

Oneof the major setbacks by the monopolization of Genting is thecreation of a black market. Black market causes the shrinkage of theformal economy and causes tax losses for the government. Black marketwill also increase borrowings from loan sharks, fighting and othercrimes.

Inmy opinion, the government should approve more casinos licensing inthe country to combat the black market. This would allow a muchhigher tax collection for our debt-ridden country.

Besides, itcreates job opportunities.

Newfirms will need employees to operate the casinos, hence, reducing theunemployment rate of the country.

A better use of police resource

The police force can reduce their budget on tackling illegal casinos, since more legal casinos can shrink the black market. Instead, they could focus their resources on more serious crimes such as murder, kidnapping and rape.

With competition, firms are more prone to improve themselves in terms of consumer benefits and welfare in the face of competition. Though a firm may not be able to be a strong competitor for Genting, but they can at least reduce Genting’s market share. Hence, firms will try to innovate to give casino in Malaysia new perspective.

Asa conclusion, Casino de Genting is an example of a monopoly in thecountry. If the barriers of entry remain high, the chances ofmonopolization of Genting in the casino industry will be high.

Listof reference:
http://www.gentingcasino.com/about-us/genting-malaysia/

Written by:

Michael Yeo (0314238)

Genting Casino Competition Atlantic City

Lim Foong Kien (0315622)

Like many places around the world, Malaysia is beginning to see an unwanted resurgence of COVID-19 cases. As a result, and much to the frustration of the people, lockdown orders are being extended. They don’t prevent everyone from being able to enjoy freedom completely, but they severely limit what activities are available. As a result, Resorts World Genting (RWG) is preparing for another revenue blow, but the casino doesn’t expect to have to shut down completely.

Malaysia’s Conditional Movement Control Order (CMCO) has been extended until November 9 for Kuala Lumpur, Putrajaya and Selangor and a few others. The initial goal was to be able to lift the order today, October 27, following a two-week run, but new COVID-19 cases are forcing the government’s hand. Yesterday, Malaysia set a record for the most single-day cases in the country since the outbreak began when it reported 1,240 new positive COVID-19 tests.

Genting Casino Competitors

Most of those, 927, were on the island of Borneo, but the three cities that have been given the CMCO extension also saw some. Kuala Lumpur reported 17 cases, Penang had 61 and Selangor had 127. However, short of a government decree, RWG doesn’t feel that a complete closure is warranted, and says that it will continue normal operations as long as allowed. It emphasized, however, that individuals from hard-hit areas who had made reservations to visit the property should cancel or delay their trips, and added that it is willing to offer refunds in the event a guest decides to cancel. The casino explains in a statement, “We will continue to monitor the situation and provide necessary updates as more information becomes available. Resorts World Genting (RWG) remains open… RWG has been continuously conducting deep cleaning and thorough sanitization throughout the resort as well as adhering to the strict SOPs issued by the government. This includes observing physical distancing, wearing face masks and adopting good personal hygiene practices. We will continue to do so to ensure the health and safety of all our guests and employees.”

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RWG first closed down on March 18 due to the COVID-19 outbreak in Malaysia. It had planned on staying closed until April 14, but was then forced to extend the closure indefinitely. As a result, when the casino was finally opened on June 19, the damage had already been done, and revenue in the first half of the year slipped. As the country continues to battle COVID-19, even though the casino will be open, recovery is going to continue to be an uphill battle well into the future.