As Japan prepares to launch its long-awaited integrated resort industry, signed into law in 2016, several potential IR locations have predominated: Tokyo, Yokohama and Osaka have appeared on most lists, along with Wakayama and Nagasaki.
Yokohama, Osaka, Wakayama and Nagasaki have confirmed their intention to bid for an IR. Hokkaido, Tokyo, Chiba City and Nagoya City are still in the “maybe” column.
Kitakyushu City, in Fukuoka Prefecture, may soon join the list. According to the Asahi Shimbun, Kitakyushu Mayor Kenji Kitahashi has said he will “properly consider and study (the possibility) as much as is possible,” indicating an IR bid is likely. Two sites in the city in have been suggested. No. 1 is the JR Sanyo Shinkansen Kokura Station; a second potential site is the Kitaku area in Moji Ward.
According to Inside Asian Gaming, the investment in a Kitakyushu IR could reach more than JPY600 billion (US$5.527 billion), excluding the cost of the land. A casino in the region is projected to generate around JPY250 billion in annual revenue, contributing JPY75 billion in tax revenue to the city.
Kitakyushu is located at the northernmost tip of Kyushu, facing the Sea of Japan and the Seto Inland Sea. It’s connected to Yamaguchi Prefecture by tunnels and bridges with forests occupying about 40 percent of the region’s land mass. Attractions include Ogura Castle and Katsuyama Park, famous for its springtime cherry blossoms. An estimated 10 million tourists visit each year—a plus for potential IR operators, though the figure pales in comparison to tourism in Tokyo (28.7 million visitors) and Yokohama (37.6 million).
Osaka draws 11 million tourists a year, but that number will jump appreciably during the 2025 World Expo; the Japan Times cites projections saying 25 million people will descend on Osaka during the expo, which will be held for six months on Yumeshima Island in the city. That event has spurred MGM Resorts to state it can get a resort up and running in Osaka in time for the expo; most analysts say the fast-tracked development plan is unrealistic. And if an IR is under way but unfinished by the expo’s opening, construction would have to be suspended for the duration of the event.
Osaka Governor Hirofumi Yoshimura has announced that the prefecture and city will start its formal recruitment process for an IR operator in December, with the winning operator to be named next spring.
Although there were originally seven international casino operators interested in Osaka, four of those have now withdrawn; MGM is seen as the candidate to beat.
Yokohama remains a leading IR candidate, with seven IR operators participating in its request for concept (RFC) process, all aiming to develop Yamashita Pier into a major urban IR. The names of interested bidders have not been released, but six—Galaxy, Genting, Melco, Las Vegas Sands, Sega Sammy, and Wynn Resorts—are known to be interested in making Yokohama bids. The identity of a seventh firm is unknown.
Yokohama has asked bidding operators to submit their proposals by December 23; it’s expected to select its operator partner in 2021 and, if approved by the central government, open a resort sometime in the late 2020s. The total investment costs will likely exceed US$10 billion, IAG reported, adding that four local developers and 15 technology firms are also participating in the Yokohama RFC.
The Japanese government will accept IR certification applications between January and July 2021. A total of three locations will be approved; speculation has it that two IRs will be sited in major metropolitan areas, with one regional location selected. After seven years, the government will assess the success of the first three and possibly expand the industry.
In recent weeks, the Las Vegas Sands Corp has hinted it could be stepping back from the opportunity in Japan, which it has pursued for years. On a third-quarter earnings call in October, Sands President Rob Goldstein said the investment—$10 billion to $12 billion—simply may not be worth the potential return, even in a market that some analysts have valued at $25 billion per year.
“No matter how good you are at this business, that figure must give you pause to stop and think, ‘Is that prudent?’” Goldstein said. “Can you really deploy? Can you get the return? We’ve had those discussions, and we’ve had them with the Japanese government.”
Both the Sands Corp. and Wynn Resorts recently announced they would no longer seek to development an IR in Osaka. And in August, Caesars Entertainment withdrew completely from the Japan race to complete its $17.3 billion merger with Eldorado Resorts.
While the Sands Corp. has not exited Japan, it is clearly acting with caution. “I think there is some time to ponder how Japan plays out in the end,” Goldstein said. “We hopefully are right in the middle of it and will make the best decision for our company and our shareholders.”
Meanwhile, Las Vegas Sands Managing Director – Global Development, George Tanasijevich, who is also president and CEO of Marina Bay Sands, sounds like he’s still all in. Outlining the Sands’ Japan vision, the veteran executive recently said, “I want to create entertainment not yet seen before. I want to make a Yokohama a place I want to visit over and over again.
“I want to build an iconic building like MBS. However, it should be a building completely different from MBS and other IRs. I want it to be unique, complementing and integrating with existing infrastructure.
“For that purpose, I want a Japanese partner and develop a business understanding of what is needed in the area. I hope to be a welcome presence and enjoy growth along with Japanese business.”
As for Kitakyushu City, Mayor Kitahashi says, “I am frankly very happy that Kitakyushu City has been considered from so many cities, and we will consider the specific concept. I want to study it properly.”
Meanwhile, in the truth-is-stranger-than-fiction category, boxer Floyd Mayweather says he wants to build a casino empire in Japan, and could launch it by staging a rematch in the country against Manny Pacquiao.
Mayweather launched TMT Japan (The Money Team) in Tokyo, after announcing a partnership between management company Libera and Kyoei boxing gym. According to the UK Sun, Mayweather wants to build a casino hotel in Okinawa and stage fights in Japan.
“It’s natural that I come up with this idea,” he said at a press conference last June, “because I’m buying a house in Tokyo so I don’t have to repeat the long trips between the United States and Japan.”
According to the Canadian Gaming Post, it would require that Mayweather “pull nothing short of a miracle from his boxing trunks (to) secure development rights vied for by everyone from MGM to Wynn Resorts Ltd.”
