Will government allow multiple regional IRs?
Among the newest sites proposed for one of Japan’s first integrated resorts is the tiny village of Rusutsu (population: less than 2,000) in Hokkaido Prefecture. But a casino complex there may never come to pass, according to experts who spoke to the Macau News Agency.
The Rusutsu resort is the brainchild of Japanese tourism company Kamori Kanko and developer Niseko Alpine Developments. The all-Japanese partnership is willing to invest at least US$700 million into the ski resort community, according to Inside Asian Gaming.
“Unlike the structure of other Hokkaido resorts, we own Rusutsu in its entirety, including the resort, ski lifts, golf courses and theme park,” said Kamori Kanko President Kimihito Kamori. “Subsequently, Rusutsu’s redevelopment requires a highly strategic approach and we found the perfect partner in NISADE, who have been instrumental in identifying the path to executing Rusutsu’s long-term growth plan.”
But Takayoshi Koike, president and CEO of Capital & Innovation Inc. said it’s likely that another location in Hokkaido would be the “most probable” choice, according to the Asia Gaming Brief.
“Hokkaido Prefecture has a policy to choose only one city as an IR candidate from three: Tomakomai city, Kushiro city and Rusutsu village,” said Takayoshi. “I do not think that Rusutsu is the one to be selected.”
U.S.-based Caesars Entertainment has already disclosed concept images for a regional IR in Tomakomai. It includes “futuristic, angular buildings with a prominently placed large fountain, said to be inspired by the local caldera Lake Shikotsu and Mt. Tarumae,” reported AGB.
“We spent several months researching the market to create an initial proposal that we hope is sensitive to the local context and responsive to the specific objectives and concerns of the local government, such as ensuring the development is in ‘harmony with nature,’ brings back high-quality jobs to the city, promotes regional tourism and spreads the economic benefits throughout Hokkaido,” a Caesars spokesperson told the news outlet.
Tokyo political commentator Yasuhiro Idei said he believes the government would most likely choose a major city “rather than a small town in Hokkaido.” Osaka, Yokohama and Tokyo are most often mentioned as candidates for the country’s first IR licenses, and FocusGamingNews.com reports that Nagasaki will conduct a request for information in December.
Valuations of the market have ranged from $7 billion to $25 billion to more than $40 billion. Koike pegged the number at about $20 billion per year, and did not rule out Hokkaido. A panelist at the 2017 MGS Entertainment Show in Macau, he said Japan will allow up to nine IRs eventually, with Hokkaido, Miyagi, Chiba, Tokyo, Kanagawa, Osaka, Tokushima and Nagasaki all in the running.
A recent note from Deutsche Bank said, “We believe Japan could be a US$20 billion to US$30 billion market, driven primarily by local play,” stirring widespread concerns about compulsive gambling.
The firm added, “Junkets are not expected to have a presence in Japan, thus play from Mainland China is expected to be relatively limited and as such, Japan is unlikely to have a material/discernible impact on Macau gross gaming revenue.”
Hiroaki Yoshida, president of Japanese gaming machine investor Pixel Company Inc. and also a speaker at MGS, said, “The factor to consider is the business performance. The regions that are more likely to have integrated resorts are Sasebo in the Nagasaki Prefecture, Wakayama, Hokkaido, Tokyo and Osaka.”
According to GGRAsia, he said he expects the government to OK one or two licenses at first, and then double down over the years, for a total of five or six IRs approved within three to four years of the initial round.
Meanwhile, Japan’s governing Liberal Democratic Party and its ally Komeito are pushing to submit a gambling addiction bill in the current parliamentary session, due to end December 9.
