• Malaysia could build a casino in Forest City, a mega-development project that has turned into a ghost town.

• The casino, which would be the second in the country, could give new impetus to the crisis-ridden company.

• The move could attract tourists from Singapore who pay a daily tax to play at home.

Malaysia’s Forest City mega-project began with big ambitions and a lot of money.

Announced in 2006, the luxury residential project in the south – easily accessible from Singapore – is designed to house 700,000 people and include a water park and hotels. The entire project cost its developers $100 billion.

But eight years after construction began, only a few thousand people live there. The project has become a ghost town – and a major burden for the developer, who is facing significant financial problems elsewhere.

Malaysia is currently in talks with several major investors about opening a casino in Forest City, people familiar with the matter told Bloomberg on Wednesday.

The southeastern country’s prime minister, Anwar Ibrahim, met with the heads of a Malaysian property development firm and a resort company in Forest City last week. A representative of Malaysian billionaire king Ibrahim Iskandar also attended, the people told Bloomberg.

King Ibrahim owns more than 20% of Forest City as part of a joint venture with Chinese real estate developer Country Garden, Bloomberg reported. The king ascended to the throne in January for his five-year term and said last month he was ready to “start my true way of ruling.” The other partner, Country Garden, has been struggling with significant financial problems due to the faltering Chinese real estate market and had nearly 200 billion dollars in liabilities End of last June.

The two tycoons who met with the prime minister last week own some of Malaysia’s best-known companies. One of the companies is the Genting Group, a resort and theme park operator that owns Malaysia’s only casino in a hill town in central Malaysia. Genting operates other casinos in Singapore, the US and the UK. The other company, Berjaya Corp., operates hotels and develops real estate, among other businesses.

The casino talks are still at an early stage and it is unclear whether Prime Minister Anwar will allow such a deal to go ahead. Malaysia has a Muslim majority population and followers of Islam are prohibited from gambling.

Forest City did not immediately respond to BI’s request for comment.

Expensive, empty apartments

A casino – it would be only the second in Malaysia – could help the crisis-ridden Forest City.

Although the complex, which includes apartments, hotels, a water park and a shopping mall, is advertised as a “popular short-haul tourist destination,” only a few dozen visitors arrive each day, Business Insider reported in April. Those who come tend to be on a budget and don’t spend much.

By last year, only around 15 percent of the planned properties had been completed, local media reported.

Most of the apartments look as if they had never been lived in, noted a BI reporter who was on site earlier this year. They are almost twice as expensive as other apartments in the city, and wealthy people prefer to buy single-family homes, BI reported in April.

A new casino could attract tourists from Singapore. The Singapore government discourages residents from gambling by imposing a tax of 150 Singapore dollars (US$110) on them when they enter the casino. Singapore is connected to the state of Johor, where Forest City is located, by a one-kilometer bridge.

Cities around the world are also looking to open casinos to boost tourism.

The United Arab Emirates, a predominantly Muslim country, also relies heavily on gambling. A federal gambling authority was established earlier this year and there are plans to create an “Arabian Strip,” an Emirati version of the Las Vegas Strip with its hotels and casinos on Al Marjan Island.

New York City also wants to benefit from the success. In April last year, the state government granted up to three casino licenses to the southern state of New York, which includes the city and the surrounding counties.

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