MGM Resorts Chairman and CEO Jim Murren spent the week in Tokyo lobbying Japanese legislators and officials on the merits of legalizing casino gaming in the nation. But he said that if it were to happen, it needs to happen now because momentum will be lost and the advantage the government wants to gain with the introduction of casinos by the 2020 Olympics will disappear.
“Time is of the essence,” Murren said. “There seems to be a very strong political will to move this forward and who knows what that environment will be a year or two from now.”
Grant Govertson of Union Gaming Group believes that the Olympics are the catalyst behind the current bill.
“The powers-that-be in Japan have decided that the one-two punch of the Olympics and the opening of integrated resorts in 2020 would provide a boost to the country’s profile and we would agree,” said Govertsen.
But casino supporters in the Japanese legislature, the Diet, seem to be backing away from confidently predicting success.
Sakihito Ozawa, member of the Japan Restoration Party, told the Japan Gaming Congress in Tokyo that there are many things to accomplish before the bill can even be considered.
“I’d say the chances are 50-50,” Ozawa told reporters.
Takeshi Iwaya of the ruling Liberal Democratic Party (LDP) has been a casino supporter for more than a decade, but even he is downplaying prospects for a bill. Iwaya wanted to open up debate on the bill this month, but admits that the Diet is running behind schedule due to demands from other issues. But Murren said a long debate would not be desirable.
“To have a goal of opening a Japan resort by 2020 is a worthy, ambitious and achievable goal if there is proper focus,” he said.
Meanwhile, the glittering prospects of casinos in Japan has lured yet another deep-pocketed American.
Chicago real estate magnate Neil Bluhm, who owns casinos in the Chicago area and in the US states of Pennsylvania and New York through a company called Rush Gaming, says he’s eager o partner up on a US$4 billion-$5 billion resort in Osaka.
Bluhm says he likes the pro-gaming stance of Osaka’s government and the fact that Japan’s second city is “shovel ready” for casino development, while Tokyo, though larger, is more consumed with preparations for the 2020 Summer Olympics and less committed.
He told Reuters he’s already in talks with Osaka-based companies across a range of industries, which touches on an edge the 76-year-old, whose net worth is estimated by Forbes at US$2.6 billion, believes he has over his larger industry rivals. “In reality, they are going to want to totally run the project. They are probably not used to having partnership relationships like we are,” he said.
He also shrugs off their bigger bank accounts. “Sometimes people like to throw big numbers around in order to get picked. We have been more for Osaka in the $4 billion-$5 billion range,” he said.
Kansai Keizai Doyukai, a leading Osaka business lobby, reckons land costs in the southern city will be one-tenth of those in Tokyo and says the city can offer a development area three times bigger than that occupied by Singapore’s two megaresorts, Marina Bay Sands and Resorts World Sentosa. Local authorities already have designated a 170-acre plot of reclaimed land, known as Yumeshima, as the preferred site.
In the meantime, 56 percent of Osaka residents polled in April said they favor the city of 2.8 million having a resort-scale casino.
“Osaka city is flexible,” said Masayuki Inoue, who heads economic strategy for the city. “We’re ready to discuss anything.”
Most analysts believe a government-backed bill legalizing casinos will be passed in the national parliament, the Diet, this year, paving the way for a licensing and regulatory regime to be crafted and approved in 2015, with the first resorts opening in time for the Olympics. Consensus is that two resorts will be authorized on a Singapore scale, one each for Tokyo and Osaka, with two or three smaller resorts granted to outlying areas to boost local tourism.
An A-list of global operators—Las Vegas Sands, MGM Resorts International, Wynn Resorts, Melco Crown Entertainment, Genting and SJM among them—are primping for a shot at a market some analysts believe could quickly emerge as the second- or third-largest in the world. As many as 12 casinos could be up and running over the next decade, according to analysis by CLSA Asia-Pacific Markets, generating combined gaming revenues in the neighborhood of US$40 billion.
Tokyo, the country’s commercial and tourism hub with its highly affluent population of 13 million, naturally is seen as the big prize, and Sands and MGM have said they’re prepared to spend as much as $10 billion to open there.
Privately, however, observers are concerned about the Tokyo government’s muted response to date. Gov. Yoichi Masuzoe, a former health minister, has yet to say whether he will seek a casino license for the capital.
“We’re not like Osaka and Yokohama. We haven’t stepped on the accelerator and said let’s go,” a spokesman for his office told Reuters.
Securing enough land could also prove a challenge. A waterfront area called Odaiba in Tokyo Bay has been touted as a preferred location for a resort-scale casino. Reuters estimates that around 14 hectares (34.6 acres) are available in Odaiba for sale by the city. These are located behind the headquarters of TV broadcaster Fuji Media Holdings. Doubling it would require re-zoning parks and buying land currently owned by a real estate developer and Toyota Motor Corp. The city’s waterfront development division sparked concern among some casino watchers last month when it said it would auction a 2.7-hectare plot in Odaiba for a 10-year lease, effectively taking the land out of the gaming equation.