MGM Resorts International said it’s ready to spend US billion to billion in Japan after Sheldon Adelson, chairman of rival Las Vegas Sands, said his company will spend “whatever it takes” to develop a casino in the country.
Speaking last week at an investment forum in Tokyo sponsored by CLSA Asia-Pacific Markets, MGM Chief Executive James Murren said, “We will over-invest early on to ensure, as we have done everywhere else, that we have properties that are built to last and that would stand additional competition.”
He also said the company is open to Japanese partners but would want to own at least 51 percent of any venture.
Adelson has thrown out $10 billion as doable, as far as his company is concerned.
“We will spend whatever it takes,” he said on the first day of the forum. “We could pay all cash. We don’t have to, but we will borrow money in a typical mortgage-to-value ratio.”
LVS, considered among the front-runners for a Tokyo license, would also consider working with a local partner that could make more than a financial contribution, Adelson said, without elaborating or naming any companies. He added that LVS is opening offices and hiring in the country.
Las Vegas-based Caesars Entertainment is in informal talks with at least 30 Japanese companies to discuss potential partnerships, said Steven Tight, president for international development. Caesars wants to build casinos in Tokyo and Osaka and sees the possibility of developing projects in Okinawa, Hokkaido and Yokohama, he said.
A fourth U.S. casino giant, Wynn Resorts, whose Chairman Steve Wynn is talking about $4 billion in Japan, also is open to a joint venture, said President Matt Maddox.
“Clearly, it would be an expensive project,” he said.
Wynn, MGM, Caesars, Genting Singapore and Macau’s Melco Crown Entertainment also were pitching in Tokyo this week in separate presentations before the Japan Academy of Integrated Resort & Gaming Studies, which was holding its annual meeting.
Speaking at the meeting, Hiroyuki Hosoda, chairman of a cross-party group of pro-casino lawmakers led by the governing Liberal Democratic Party, said he expects an initial casino authorization bill will win parliamentary approval by June.
Analysts believe it’s possible that a licensing and regulatory framework could be in place by next year and at least one of two resort-scale casinos destined for Tokyo and Osaka could be up and running ahead of the 2020 Summer Olympics in Tokyo. Their research projects a national market worth US$7 billion to $15 billion in gaming revenue in the early going, based on the Tokyo and Osaka super-resorts and three to four smaller resorts in provincial markets. This would position the country ahead of Las Vegas and Singapore as the second-largest casino market in the world behind only Macau. CLSA estimates Japanese casinos could eventually generate $40 billion a year. Macau last year generated $45 billion.
