Genting considered a frontrunner
On July 20, lawmakers in Japan passed the controversial Integrated Resorts Implementation Bill, opening the door to legal casinos in the country. Now global gaming operators will begin in earnest to prepare their bids for three IR licenses to be awarded in the first round.
The hallelujah chorus from gaming execs included ingratiating nods to the lawmakers who will choose the first licensees. Wynn Resorts CEO Matt Maddox spoke the language of Japan hospitality, saying the country “is known worldwide for a unique culture of customer-focused hospitality known as ‘omotenashi.’ This important Japanese tradition of creating a unique guest experience makes it clear to us that Japan will develop extraordinary integrated resorts that are not found in any other country.”
Mark Frissora, CEO of Caesars Entertainment, said, “As we prepare to bid, we are seeking the most creative and respected Japanese partners to help us bring to life an unparalleled integrated resort experience.” Caesars, which missed its chance to develop in Macau, hopes to make up for it in Japan.
This humble brag came from George Tanasijevich, managing director of global development for the Las Vegas Sands Corp.: “Given the opportunity to participate, Las Vegas Sands is confident that we can make a significant contribution together with the Japanese people.”
Tanasijevich also offered “congratulations to the people of Japan” for the enactment of the bill. “This development will allow Japan to build the world’s most successful integrated resorts. The bill would not have been possible without the conviction and contributions of Prime Minister Shinzo Abe, the Japanese government, regional governments, businesses and various stakeholders.”
Later, Sheldon Adelson declared LVS a favorite for a license.
“Everybody says we have the leading position to win a Japanese gaming license because of my background,” said Adelson in a call with analysts. He suggested that the LVS experience in the MICE business would be the key differentiator.
Jim Murren, chairman of MGM Resorts said the long fight to introduce legal gaming “has been very deliberate and transparent. We appreciate the high level of social responsibility reflected throughout the process by creating one of the most comprehensive bills of its kind anywhere in the world.” He said passage of the legislation “allows us to advance our relationships with key stakeholders and together create a coalition of Japanese business partners who will collectively define a vision for a uniquely Japanese, world-class integrated resort.”
Genting Singapore Ltd., considered a frontrunner in the bidding field, has set up five new indirect wholly-owned subsidiaries in Japan, signaling its intention to lobby hard for a license. The Malaysian firm’s Resorts World Sentosa in Singapore is seen as a model of the kind of integrated resort sought by Japan. Brokerage Maybank Kim Eng said Genting “stands a good chance to win a license thanks to its responsible gaming experience and solid net cash position.” Other operators including Hard Rock International, Mohegan Gaming and Melco Resorts & Entertainment have already set up offices in the country.
The public is not nearly as enthusiastic. According to the Mainichi, citizen groups, opposition legislators and lawyers staged a demonstration in front of the Diet building on July 20 to protest the bill.
Attorney and casino opponent Koji Niisato said, “Any growth strategy that is predicated on people’s misfortune is unacceptable. Questions remain among many members of the public about lifting the ban on casinos.” And the Japan Times reports that nearly two-thirds of residents polled oppose the bill due to concerns about gambling addiction and crime.
Concerns about organized crime may not be unfounded, according to the Asahi Shimbun, which reported that yakuza groups are “plotting to infiltrate casinos in nefarious ways.” The publication managed to get a yakuza member on record who reportedly said, “Once rules are decided on how to place restrictions on organized crime, we can begin thinking about ways to get around those legal barriers.”
Astonishingly, the loquacious lawbreaker revealed some of the nefarious ways in question, saying that there are ways to conceal the identities of the bad actors and join major construction projects as subcontractors. He said the yakuza would also welcome loan-sharking opportunities.
“By providing hotel accommodations and airline tickets for VIPs, we can then lend them money at exorbitant interest rates,” the member said. “There is no way we would lose money.”
The member also said his gang may populate casinos with crooked dealers to throw the games.
But American Gaming Association President and CEO Geoff Freeman issued a saying Japan has taken “a giant step toward strengthening its economy, attracting international travelers and implementing stringent gaming regulation that protects consumers and eliminates criminal activity.”
An analysis from Asia Gaming Brief said opposition parties “are not wrong in their complaints that most of the specifics are being left to the discretion of government bureaucrats.” According to AGB, “no less than 331 items regarding the operation of the new system have been left for the future decisions of the cabinet and the bureaucracy,” outside the control of parliament.
It will take about a year for the country’s casino management board to be established. After the Ministry of Land, Infrastructure, Transport and Tourism issues its own guidelines, local governments will undertake formal RFP processes and select their business partners of choice.
In a note to investors, bank Morgan Stanley said it expects the first casino to open by 2025, and estimated the eventual market value of Japan gaming at between US$11 billion and U$20 billion.
