On August 10, Oshidori International, Mohegan Gaming’s partner in the Nagasaki, Japan integrated resort (IR) bid, announced it would pull out of the race due to concerns about the integrity of the RFP process.
Oshidori made the decision independent of Mohegan Gaming, and at the time did not elaborate on its concerns, saying only that it had “encountered several incidents that make it question whether there have been serious ethical irregularities in the RFP process, and… is only interested in participating in a process that has the highest integrity, and that is professional, transparent and based on merit.” See details on their partnership here.
Last week, details emerged. According to Inside Asian Gaming, the RFP may have been “a charade,” with three groups participating, but one pegged ahead of time as the winner.
“Multiple sources” told IAG the fix was in for European operator Casinos Austria International (CAI), which was subsequently chosen to develop an IR at Huis Ten Bosch Park in Sasebo City.
The sources said the prefecture “engaged in numerous machinations behind the scenes” to see that Casinos Austria was the only candidate in a “one-horse race,” similar to the situations in Osaka and Wakayama, which ended with single candidates in U.S. operator MGM Resorts and Canadian firm Clairvest, respectively.
In addition to Casinos Austria and the Oshidori-MGE consortium, a third group, the Niki Chyau Fwu (Parkview) Group, vied for the opportunity to develop Nagasaki’s IR. Both Oshidori and Niki were reportedly pressured by Nagasaki officials to bow out, and Oshidori told IAG it was ordered several times in May and June to suspend its marketing activities, though there was “no ground under Japanese law or the RFP rules for the prefecture to ask for this.”
According to sources, Oshidori was the subject an alleged smear campaign in political and business circles in Nagasaki ahead of the IR decision. IAG said it was contacted by sources “clearly trying to damage Oshidori’s reputation.”
In the end, because it did not formally withdraw, Oshidori’s proposal with MGE and Niki’s proposal were considered during the final selection process on August 4. Casinos Austria was chosen on August 10. Since then, the eliminated consortiums have slammed the RFP process.
The prefecture insists its RFP to select a private-sector partner was conducted in a “fair manner.” In reply to an inquiry from GGRAsia, Nagasaki’s Integrated Resort Promotion Division said it would continue to “prepare to create our national IR development plan application,” and added, “Casinos Austria International Japan was chosen as the priority rights holder after an overall evaluation of five different evaluation sections. The background checks have been applied equally to all of the applicants.”
Certainly the scoring was close. Casinos Austria received a score of 697.0 points, with Oshidori a close second at 682.8 points. Niki was third with 667.1 points. The MGE-Oshidori team had planned a “soaring architectural landmark” to be named the Sails at Omura Bay.
Asked if complaints about integrity could undo the selection, Nagasaki officials would not comment, saying “the tender is not yet completed.”
Meanwhile, Casinos Austria disclosed that its IR will include a casino with 2,200 slot machines and 220 table games along with eight hotels, conference and exhibition halls and entertainment venues on 74 acres adjacent to Huis Ten Bosch, a Dutch-themed entertainment area.
Casinos Austria CEO Bettina Glatz-Kremsner said, “By passing this milestone in the award process in Japan, Casinos Austria International has once again demonstrated the kind of excellent reputation that the company enjoys abroad.” She added that after years of restructuring, “CAI is back on track. Its know-how and expertise in the development and operation of such complex projects continue to be impressive.”
CAI’s proposal must be submitted to the central government by the end of April 2022.
The central government will also consider proposals from other markets including Osaka, Wakayama and possibly Yokohama. Osaka has partnered with a consortium of MGM and Orix Corp. Wakayama has chosen a subsidiary of Clairvest. Only Yokohama hangs in the balance, due to strong anti-casino sentiment there led by six of eight mayoral candidates as well as civic leaders; the fate of a Yokohama IR could be determined by the election, which took place Sunday, August 22.
Yokohama has two bidders: Genting Singapore and Melco Resorts & Entertainment. Asia Gaming Brief cited the research firm Maybank as saying Genting is likely to be the preferred bidder should the project continue.
