“Laying foundation” for resort business
Japanese pachinko firm Sega Sammy Holdings says it can hold its own in the race to win one of Japan’s first three integrated resorts licenses. In a recently released study, “Integrated Report 2018,” company President and COO Haruki Satomi said, “As the only domestic corporate group on an equal footing with world-famous IR operators, the group will express a strong determination to participate in the IR industry and steadily move forward with preparations.”
Chairman and CEO Hajime Satomi, Haruki’s father, added, “Many companies have announced their intention to participate (in the IR race). However, I want the group to hold the majority of projects and develop businesses in a broad range of fields with casino operations as the central focus.”
Presently, he said, “We are laying the foundations for participation by accumulating know-how through Paradise City and other resorts, establishing financial resources and conducting multifaceted investigation and analysis. If we can realize participation and build successful businesses, it will open up a wide range of possibilities for the group going forward, including the expansion of businesses in the global market using the know-how gained from such successes.”
The younger Satomi said Sega Sammy’s acquisition of licenses for the manufacture and sale of gaming machines in Nevada, awarded in December 2017, along with “sales channels in Macau and the Philippines, where we already have licenses” collectively have “great strategic significance.
“In acquiring the license,” he continued, “the group underwent multifaceted inspections of information relating to governance, compliance, financials and taxes. Further, individual group executives were scrutinized. Official recognition of conformity with the world’s most exacting gaming-related standards will be advantageous not only when seeking IR licenses in Japan but also when collaborating with overseas partners.”
Sega Sammy is a joint venture partner in Korea’s first integrated resort, Paradise City in Incheon, with local company Paradise Co., and has made it clear that it made the deal to gain operational experience. “At present, we are laying the foundations for participation (in Japan) by accumulating know-how through Paradise City and other resorts, establishing financial resources and conducting multifaceted investigation and analysis,” said Hajime Satomi. “Through such ambitious initiatives, the future vision of the Sega Sammy Group is to become a corporate group that has a unique presence among global entertainment companies with respect to both revenue scale and business lines.”
The company also operates a non-gaming resort, Phoenix Seagaia, in Miyazaki, Japan.
Sega Sammy plans to fund its long-term resort business via its pachislot, pachinko, packaged games and amusement machines businesses, and “invest the cash that these core businesses generate in our growth businesses in a prioritized manner,” Satomi said. “We have positioned the digital game area as a medium-term growth driver, while we are developing the resort business as a third pillar from a long-term perspective.
According to CalvinAyre.com, in its report for the quarter ending June 30, Sega Sammy posted a profit of ¥300 million (US$2.7 million), compared to ¥11.5 billion (US$102.7 million) for the same period in 2017. It has projected a profit of ¥12 billion (US$107.2 million) for the entire year ending March 31, 2019.
