Galaxy Entertainment Ups Ante for Japanese Casino License, Partners With Monaco’s Monte-Carlo
Posted on: March 29, 2017, 01:00h.
Last updated on: March 29, 2017, 11:06h.
Hong Kong-based Galaxy Entertainment and Societe des Bains de Mer (SBM) in Monaco are teaming up in hopes of winning one of the two coveted integrated casino licenses Japan is expected to issue in the coming years.
Japan drastically changed its decades-long opposition to gambling last fall when the National Diet passed a bill that paves the way for full-scale casino resorts in the country. The government has been given 12 months to prepare a framework for gambling regulation and determining licensing requirements and procedures.
Seen as a sleeping giant of gaming, nearly every major casino company in the world is interested. Japan is expected to begin with just two integrated resorts, meaning the competition for landing one of the permits will be fierce.
Galaxy, the gaming company of billionaire Lui Che Woo, hopes partnering with SBM, owners of the famed Monte-Carlo Casino in Monaco, will make their joint venture’s proposal simply too hard to resist.
“We intend to capitalize on the Monte-Carlo brand,” Galaxy Entertainment President Michael Mecca told Reuters. “All of the entities of Monaco . . . are very enthusiastic about joining us and doing business in Japan.”
The Government of Monaco owns nearly 60 percent of SBM, a publicly traded conglomerate. The company is the largest employer in the small sovereign city-state.
Galaxy is currently readying to expand its flagship property in Macau at a cost of over $5 billion. The company is moving forward with phases three and four at Galaxy Macau.
Two Better Than One
Galaxy is predominantly invested in Macau and the Philippines, while SBM is focused on Monaco. But the latter also owns properties in Abu Dhabi, as Qatar Diar, a state-owned real estate investment firm, owns a six percent stake in SBM.
The two companies hope joining units will make their pitch to Japan more attractive than those going at it alone.
Las Vegas Sands, MGM Resorts, and Melco Crown have all said they’d be willing to spend up to $10 billion in Japan to convince the Diet of their commitment to the country. Melco CEO Lawrence Ho went as far as to say, “There currently is no predetermined cap on our intended investment. I prefer not to constrain our dreams with price tags.”
Wynn Resorts, Genting Group, and Hard Rock have also expressed interest in bidding for the licenses.
Slow and Steady
While the casino companies are in a full sprint to get their proposals and teams in order, the reality is that Japan isn’t expected to field pitches until 2019. That’s also when the government will decide where the two casinos will be permitted to be built.
Financial gaming analysts believe the casino market in Japan could generate $40 billion annually once the two integrated resorts are fully up and running.
Over the next two years, Japan, as well as real estate, construction, and transportation companies, will have the upper hand in being wooed by international casino companies looking to make friends in the country. Should Japan’s casino effort stay on course, the first resorts would be expected to open sometime around 2023.