The number of potential bidders for Japan’s first round of gaming licenses is growing.
Along with global operators such as MGM Resorts International, the Las Vegas Sands Corp., Genting, Hard Rock, Melco Resorts & Entertainment and others, the list now includes the Mohegan Tribal Gaming Authority, which is making its first foray outside the United States with the Inspire resort in Incheon, South Korea. Phase I of that project, due to open in 2021, will cost $1.6 billion, but that’s just the start. The tribal operator has pledged a total investment of $5 billion over 20 years.
According to a GGRAsia, MTGA Chief Executive Officer Mario Kontomerkos made the pitch at the Japan Gaming Congress in Tokyo earlier this month.
“We see many similarities between Mohegan Sun and the Japanese regional resort concept,” he said. “Like Connecticut, the regional markets of Japan are four-season markets, meaning that a special kind of expertise is required to drive visitation both in the winter snows, and the summer heat.” He said a Japan venture would “create ‘tourism synergy’ between South Korea and Japan “that will be unmatched in all of Asia.”
Caesars Entertainment, meanwhile, is talking up its MICE and entertainment experience to win a casino license in Japan, says William Shen, the company’s managing director for Japan and South Korea.
Speaking at G2E Asia, Shen said Caesars is “the most trusted, transparent partner and can offer transformative capabilities that can have a lasting impact on Japan and that can be proven.
“At the end of the day, there are very few IR operators that have the true depth of experience in the two areas that Japan cares about most, which are MICE and entertainment,” said Shen. “And if anyone really pushes to understand exactly how strong we are in those two dimensions it will make us stand out.” The company’s MICE team supports approximately 16,000 meetings and conferences and hosts two million attendees annually, reported Asia Gaming Brief.
Galaxy Entertainment Group and the Société des Bains de Mer et du Cercle des Étrangers à Monaco have also paired up in hopes of pushing into Japan, according to CalvinAyre.com. Last March Galaxy bought a 5 percent stake in SBM to facilitate the partnership.
Jim Murren, chairman and CEO of U.S. casino operator MGM Resorts International, says the firm does not necessarily want to defer to a Japanese partner if it wins one of three IR licenses.
“I’m not sure if we’ll have a majority stake or not, but we’re going to have a very significant equity investment. We’re going to be in a consortium that values MGM’s development and management and compliance expertise in the gaming sector.” MGM Resorts had previously indicated that any consortium in Japan was likely to be “Japanese-led.”
As the field of play expands, a Japanese lawmaker is warning that a proposed law requiring IR operators to renew their gaming licenses every three years could discourage big investors. Independent MP Mito Kakizawa, a member of the House of Representatives and former member of the Party of Hope, told Inside Asian Gaming that the plan “could hurt investment in IRs from operators because of the lack of certainty it presents.
“If you look at how long it takes to build an integrated resort of the size we are talking about, then under this law the operator’s license will have to be renewed before they have even had time to finish and open their IR. How can operators invest the money being discussed with so much uncertainty?”
Gaming bigwigs like Sheldon Adelson of the Las Vegas Sands Corp. and Lawrence Ho of Melco Resorts & Entertainment have said they’re willing to invest $10 billion in a Japanese IR. Their ardor may cool if they know they have to jump through licensing hoops every few years.
No host cities will be announced for some time, but Governor Yoshinobu Nisaka of Wakayama told GGRAsia it still has a chance, although it’s close to Osaka, which many analysts think is a shoo-in. “We asked the central government, and it stated, clearly, it would not say ‘no’ to Wakayama because of Osaka’s proximity,” Nisaka said.
Last week Yasutoshi Nishimura, Japan’s deputy cabinet secretary, said it’s the “strong wish” of the Japanese government to pass the Integrated Resorts Implementation Bill in the current parliamentary session, which ends June 20.
“We hope that not only will the ruling party members support this but also the opposition,” he said.
In other Japan news, the Mainichi reports that the government has decided to lift the ban on poker in the IR bill. The legislation currently states that operators offer only games of chance, which could exclude poker as well as mahjong or shogi. But the popularity of poker may be sufficient to persuade lawmakers it should be allowed in Japan IRs.
