KUALA LUMPUR – Malaysia is looking at allowing a casino to operate in the RM450 billion (S$128.5 billion) Forest City project in Johor, which would revitalise the troubled reclaimed islands.
Sources with knowledge of the discussions told The Straits Times that such a development is among proposals for the Johor-Singapore Special Economic Zone (SEZ), an integrated commercial and investment hub to ease movement of goods and people between the two countries.
Bloomberg had reported that Prime Minister Anwar Ibrahim met Berjaya Corporation founder Vincent Tan as well as Genting Group chairman and chief executive Lim Kok Thay in Forest City in mid-April, with Johor Sultan Ibrahim Iskandar, who began his five-year term as Malaysia’s King in January, also represented.
Genting controls Malaysia’s only casino and operates Resorts World Sentosa (RWS), one of two integrated resorts (IRs) in Singapore.
The other IR is Marina Bay Sands, operated by Las Vegas Sands Corporation.
Two sources, who asked not to be named, confirmed the meeting at the development during Datuk Seri Anwar’s April 18 visit to Johor, during which the Premier proclaimed the southern state would be Malaysia’s most developed with economic growth outpacing the rest of the country.
“They talked, but nothing has been formalised,” one of the sources told ST.
Mr Anwar’s remarks were made after a series of meetings focused on the SEZ as well as a Special Financial Zone – offering special tax rates and visas – in Forest City.
However, opening a second casino in Malaysia could prompt political backlash from the Malay-Muslim majority, which the Anwar government is already struggling to win over.
About two-thirds of these voters backed the opposition in the 2023 polls to elect new administrations in six states.
The Prime Minister said later on April 25 that “the casino… not true, it is a lie”, when quizzed by reporters.
An official source said those involved wanted to “float the balloon to see what the reaction is” first.
“Interestingly, gaming is one of the key sectors to be promoted under the SEZ for Forest City,” he added.
Proponents of a casino see such a development as a boon for the 2,000ha Forest City township, off Singapore’s western coast and about four times the size of Sentosa, as well as for the wider Johor economy.
Several Johor-based businessmen also told ST that proposals for a casino in Johor have been mooted for more than a decade, as south Johor’s Iskandar region, conceived as a development corridor in 2006, has failed to live up to expectations.
“There has not been a strong pull factor. A casino would have major spillover effects as high-value individuals would make footfall here and boost other commercial sectors,” one tycoon with wide business interests in the state told ST.
Although Johor’s state government claimed on April 22 that 70 per cent of the properties in Forest City have been sold, it has repeatedly been dubbed a “ghost town” due to low occupancy.
Forest City is being built by a joint-venture company led by Chinese developer Country Garden Holdings. Sultan Ibrahim himself controls about a fifth of the joint-venture firm.
Although building a casino is politically sensitive as Islam prohibits gambling, those who support the idea note that the existing casino in Genting Highlands has operated for more than half a century without any issue, as regulations bar Muslims from entering the gaming halls.
Many Muslims visit Genting Highlands to enjoy other attractions such as theme parks, restaurants and retail shops in the cool mountain air.
According to its annual reports, Genting Malaysia – which mainly runs the highland resort, a couple of beach resorts in Malaysia and small operations overseas – contributed nearly RM5 billion to government coffers annually before the Covid-19 pandemic hit in 2020.
A similar boost from a new gaming-centred attraction would help ease the Anwar administration’s struggles to rein in the fiscal deficit, having inherited over RM1.5 trillion in debt and liabilities.
In a note to clients, UOB Kay Hian said that if the new casino materialises, it would likely not impact Genting Highlands, which is largely frequented by Klang Valley visitors, while “Genting Singapore has a different landscape and customer profile” and “cannibalisation from a potential Forest City casino will eventually be digested”.
Given the ongoing expansion to RWS, the research house expects that it will remain more attractive to international and premium visitors compared with a Johor-based rival.
Businesses in Johor will nonetheless hope to see an increase in the number of customers wielding the much stronger Singapore dollar – now worth over RM3.51 – given that residents of the Republic must pay a levy to enter the two IRs there.
