After making a big splash in the American gaming market at Aqueduct with Resorts World New York, the good ship Genting has hit choppy waters in Florida and New York, earning itself some criticism along the way.
It has become fashionable to say that casino expansion in Florida has been put on hold in no small part because Genting scared everyone with its detailed and now dramatically scaled back $3.8 billion resort plan and high-flown promises. Up north, Genting’s plans for a privately funded $4 billion convention center that would be the America’s largest and stand alongside Aqueduct has earned it more head scratching.
There are grounds for both sets of observations. While other potential developers in south Florida such as Las Vegas Sands held back, Genting went full speed ahead with resort renderings and hard sell tactics, whereas Florida’s tortured history with state-level gaming legislation certainly suggested a more restrained approach. In New York City, Aqueduct is only 12 miles from midtown Manhattan, but, more often than not, the distance feels, shall we say, much longer. And the surrounding area doesn’t begin to measure up to what conventioneers in world class destinations expect to find in proximity when they exit their hotel at the end of a busy day.
But while it may be tempting to titter at Genting’s political struggles, they really shed more light America’s often sluggish democracy than anything else. Things are set up to be difficult, vested interests and mistrustful voters wouldn’t have it any other way. Big changes need to be fully vetted, and those who would impose them need to jump through public hoops, where huge contributions are no guarantee against humiliation and failure. It’s what the Tea Party might call the opposite of freedom, until, of course, some monied interest comes along and wants to change their world. It’s a change of scenery indeed for Genting, where southeast Asia is dominated by 50 or so families with a broad range of economic interests, including gaming, which is prized for the reliability of its massive cash flows, cushioning the blow of volatility in their more speculative investments. Big things in all sectors are typically worked out in a tight circle privately, not publicly, and representative democracy is more of a stated goal than a reality.
In all fairness, Genting has gone where many firms and institutions have tried and failed. Bringing gaming supply and regulatory rationality to Florida carries an extremely high degree of difficulty. The state has grown into a virtual grab bag of gaming with no central authority. Gray market segments like slot arcades and Internet cafes have sprung up. The pari-mutuel industry is divided, often along emotional lines. What they do agree on is the need for parity of product and tax rates, but that raises the question of why gaming tribes should pay the state an annual tribute if they don’t have some form of meaningful exclusivity. Individual counties continue to hold slot option votes, even though state courts and the attorney general say they are illegal. (Such counties hold that they have that right because the legislature allowed Hialeah, which was not listed in the 2004 Miami-Dade slots referendum, to add slots.)
Meantime, Florida’s cultural conservatives and their Reverend Grey-style anti-gaming rhetoric have leverage over the Republican governor, who would, yes, probably like to be re-elected in 2014. As John Maxwell of Jeffries pointed out at the Florida Gaming Summit, gaming legislation doesn’t tend to happen without explicit support from governors. In light of all of the above, Genting deserves some slack for its role in the demise of this year’s gaming bill in Florida.
Having left that frying pan for the time being, Genting jumped into the fire that is public works in New York City, which really hasn’t been good at public works since the days of Robert Moses who, even at his peak, had some real stinkers on his to-do list such as the Canal Street Expressway (picture the economic value of modern day Soho reduced to nothing more than 10 lanes of elevated highway and elevated levels of air pollution). In this instance, the governor is at least fully on board. New York City’s Javits Center is the 12th largest in the nation and, as such, a drag on tourism revenues. Whether something four times larger at Aqueduct makes sense is clearly up for debate, but at the very least, it seems clear that New York could use a modernized Rosemont to Manhattan’s aging mini-McCormick.
What’s also clear is that Genting, to its credit, has helped move conversations in Florida, which needs a gaming legislation overhaul and better quality gaming resorts, and New York, whose existing convention center product is inadequate, closer to where they should be.