Market valued at up to billion
Global gaming operators including MGM Resorts International, Wynn Resorts Ltd., the Las Vegas Sands Corp., Galaxy Entertainment Corp., Melco Crown and Hard Rock are among the many that have expressed interest in applying for a casino license in Japan. Reuters reports that Japan is likely to pick casino operators and locations by 2019 with the first casinos opening by 2023.
Casino kingpins including Sands Chairman and CEO Sheldon Adelson are preparing to invest billions in a market that could reap from $20 billion to $40 billion per year and become the world’s second largest casino market after Macau, according to many estimates.
CNBC.com reports that Adelson is willing to open his wallet to be one of two likely operators to open the market. “It would be at least what we paid in Singapore—$6 billion including the land—but it could be as much as $10 billion,” said Adelson at an investor conference in Tokyo, referring to Sands’ Marina Bay Sands property in Singapore.
Adelson went on to call Japan “the holy grail. It’s the ultimate of business opportunities. Singapore was a warm-up to this.”
Melco Crown Entertainment Ltd. CEO Lawrence Ho agrees. According to Bloomberg News, at a recent conference in Tokyo Ho said, “This opportunity is priceless and we’ll spend whatever it takes to win.”
At the same event, MGM Resorts International CEO James Murren said the U.S.-based company would also be in the running. “We are going to have a larger office here in Tokyo,” Murren announced, with 15 new staff members on board to conduct market research and build connections with local companies. In October, MGM said it was ready to spend up to $10 billion on a casino development in Japan, reported the Asia Gaming Brief.
Another U.S.-based company, Hard Rock Cafe International, Inc. says it hopes to claim a majority stake in a Japanese casino resort.
Chairman Jim Allen told Reuters, “We are looking at 40-60 percent equity participation. It’s important to make sure our local partners are involved in the relationship, not just as blind investors.”
Hard Rock has identified between 20 and 30 potential partners including landholders, financial firms and manufacturers, said Allen.
The Japanese parliament legalized casinos with an enabling bill last year. The government under Prime Minister Shinzo Abe is now drafting a second bill that will lay out the rules, regulations and tax structure for the integrated resorts and also choose the operators and locations.
Experts tell GGB News that the second bill will not be written, debated and passed until at least mid-2018. And the cost, partnerships and focus cannot be completed until that bill becomes law.
In the early consideration of the second bill, it’s clear that the issue of responsible gaming is going to play a large role in the decision that will select the winning bids. Melco Crown recognizes this fact.
“The operation of integrated resorts is a highly regulated industry. With integrated resorts in multiple jurisdictions, Melco Crown Entertainment has consistently demonstrated its industry leadership in respect of social safeguards and has upheld the highest standards of corporate governance and social responsibility,” said Ho. “The company has widely-recognized responsible gaming programs that proactively educate the public and its employees, protect against problem gambling, and guard communities against criminal elements.”
At this time, the most likely contenders as casino hosts are said to be the cities of Yokohama and Osaka.
