GamblingCompliance: Casino Giants Cheer Japan IR Approval

14TH DEC 2016 | WRITTEN BY: CHRIS SIEROTY

Leading international casino companies have cheered the approval of integrated resorts legalisation in Japan, a market that brokerage firm CLSA estimates could be worth more than $30bn a year.

Japan, the world’s third-largest economy, is set to become home to casinos in the form of integrated resorts (IR) after enabling legislation passed a final vote in parliament Wednesday.

Although Japanese corporations are expected to form a significant part of a future casino market, international companies such as Las Vegas Sands, MGM Resorts, Caesars Entertainment, Genting, Hard Rock International, Melco Crown and Wynn Resorts have all declared their interest as well.

“Our company has long been interested in the possibility of developing an integrated resort in Japan, so we are excited and encouraged by the recent progress,” Sheldon Adelson, CEO of Las Vegas Sands, said in a statement emailed on Tuesday to GamblingCompliance.

Adelson said that if given the opportunity, “Las Vegas Sands is prepared to make an unmatched investment in Japan”.

Adelson has previously said he is willing to spend as much as $10bn to build a resort in Japan.

“And we have the track record of success in Asia and financial capability to do exactly that,” Adelson said.

“A Las Vegas Sands integrated resort in Japan would embrace and emphasize the important customs and cultural history of the nation, while being so unique and remarkable in its design and offerings that it would attract leisure and business tourists from around the world and change the future of the tourism industry in the country,” Sheldon Adelson of Las Vegas Sands said.

Steve Wynn, chairman and CEO of Wynn Resorts, has also said he would be willing to spend $10bn on an integrated resort in Japan. MGM Resorts CEO Jim Murren recently put the figure at $4.8bn to $9.5bn.

Meanwhile, Caesars Entertainment has had Japan on its radar for more than a decade.

“We are extremely interested in Japan,” Jan Jones Blackhurst, vice president government relations and corporate responsibility at Caesars, told GamblingCompliance on Tuesday.

“This time they will get over the final hurdle,” Jones Blackhurst said. “We think this is an extraordinary opportunity and are very interested in partnering to build a world class (integrated resort) in the Japan market.”

Jones said partnerships would be crucial because it would allow Caesars to “fully understand the market … and culture”.

Still, foreign gaming corporations will encounter a raft of cash-rich Japanese corporations, from railroad companies to theme park operators, all eager to themselves participate in the new market.

According to credit agency Moody’s, the total amount of cash held on the balance sheets of Japanese non-financial companies at the beginning of last year was about JPY30.5trn (US$255bn), up 15 percent from a year before.

Casinos are currently banned in Japan, but the government permits gambling in other forms, including lotteries and wagering on horseracing. Pachinko, a Japanese version of pinball, can be played at shops nationwide with winners exchanging prizes for cash.

In a research report, CLSA valued Japan’s existing gaming market at more than $30bn.

However, CLSA analyst Jay Defibaugh noted the IR market itself could “exceed $30bn after completion of regional roll-outs,” which are expected to follow a more limited number of signature casinos in major Japanese cities.

Exactly how many IR licences will be available is set to be clarified via follow-up legislation considered next year that will also map out such other critical factors as investment criteria and tax rates.

It is currently unclear where casinos will be allowed.

“We continue to believe that the two major metropolitan areas of Tokyo and Osaka will each be awarded at least one licence, with the possibility of multiple licences issued for smaller-scale IRs outside of these two major metros,” said Grant Govertsen, an analyst with Union Gaming in Macau.

The imminent approval of IRs in Japan even resonated yesterday as far away as Brazil, where another major casino expansion is under consideration.

Testifying during a marathon hearing on expanded gambling in Brazil’s Congress, a senior executive with Las Vegas’ Station Casinos urged policymakers to look no further than Japan’s decision to restrict its gaming market to casino-resorts and reject any accompanying approval of bingo halls, online gambling or other offerings.

Japan has zeroed in on IRs because of their proven record in boosting tourism and creating significant employment, said Tobin Prior, Station Casinos’ executive vice president of international development.

“I’m not sure why Brazil would want anything different,” Prior said.

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s