U.S.-based gaming operator Wynn Resorts Ltd. recently confirmed that it’s no longer in the race for an integrated resort license in the Japanese city and prefecture of Osaka. The company is “currently focused” on the Kanto region, including Tokyo.
That leaves just three contenders for what was once one of the most hotly contested markets, with seven major operators reportedly going for an IR license as recently as June. In August, U.S.-based Las Vegas Sands Corp bowed out of the Osaka bidding to concentrate on Tokyo and Yokohama. In mid-September, Asian casino operator and developer Melco Resorts and Entertainment said it would adopt a “Yokohama First” policy in its pursuit of a Japan casino license.
In an email to GGRAsia last week, Wynn stated that it’s “grateful for the many months of positive dialogue we have enjoyed with the city of Osaka and its citizens, and we appreciate the gracious hospitality we have received from them.
“Although we have decided not to pursue an integrated city resort in Osaka at this time, we wish the city the very best and look forward to following its continued success. Wynn Resorts is currently focused on the Kanto area.” Kanto is part of Honshu, the largest island of Japan, and includes seven prefectures: Gunma, Tochigi, Ibaraki, Saitama, Tokyo, Chiba, and Kanagawa.
U.S.-based MGM Resorts International, parent of MGM China Holdings in Macau, continues to woo Osaka only, and hopes to build an IR on Yumeshima Island, which will host the World Expo in 2025.
Casino operators hoping to break into the Japan market must first be selected as local-government partner; then that partner area must be chosen by Japan’s national government. A maximum of three IRs will be approved in Phase I of the nascent industry here; after seven years, the government may consider a second phase of development.
According to according to analysts at Bernstein, MGM’s decision to divest two major assets in the United States—Bellagio and Circus Circus on the Las Vegas Strip—will raise $4.3 billion in net proceeds, which could serve as funds for a development in Japan.
MGM is widely viewed as a frontrunner in Osaka. “MGM Resorts remains deeply committed to pursuing an integrated resort in Osaka, Japan. We announced our ‘Osaka First’ strategy and have not wavered from that plan,” the company said. “We have always had confidence in our position, as what we will bring to Osaka is something only MGM Resorts can deliver.”
The Osaka City Council has approved a 9 million yen (US$83,300) special budget to carry out the environmental impact assessment for the anticipated Yumeshima IR. Later this month, the Osaka Prefectural Assembly is expected to enact its share of the budget for the assessment. One specific concern, raised by the local environmental group Nature Osaka, is that an endangered seabird species called a Little Tern may be using Yumeshima as its breeding grounds.
Elsewhere in Japan, according to AGP Nippon, political and business groups in favor of building an IR in Tomakomai City are pushing Hokkaido Governor Naomichi Suzuki to join the campaign for an IR.
In the latest action, four leading business groups—the Hokkaido Economic Federation, the Hokkaido Chamber of Commerce & Industry, the Hokkaido Association of Corporate Executives, and the Hokkaido Tourism Organization—indicated that they will issue a “joint emergency declaration” calling for an IR bid. Suzuki has said he will use this joint declaration as a “reference” as he makes his final decision.
Mohegan Gaming & Entertainment has announced the opening of its office in Tomakomai, Hokkaido, where it is one of several international IR operators hoping to build a regional IR.
The facility, dubbed the “Inspire Hokkaido Tomakomai Office,” is located in the Asahimachi district of the city, and it will serve at the forefront of the company’s efforts to build relationships with the local community.
Several other U.S. operators have offices in Tomakomai, including Hard Rock and Rush Street.
Fitch Ratings says it has “increased confidence” in the ability of Las Vegas Sands to develop a large-scale integrated resort in Japan without any significant impact on its leverage ratio. According to Inside Asian Gaming, Fitch’s confidence in LVS comes despite the company already embarking on US$5.5 billion in capex at its current Asian IRs, including US$2.2 billion to transform Sands Cotai Central into The Londoner Macao and US$3.3 billion for the expansion of Marina Bay Sands in Singapore.
“LVS is in a good position to bid on an IR license in Japan, but Fitch does not expect heavy capex spending in Japan to occur until 2022 at the earliest,” Fitch stated.
