Genting Not Rethinking Decision to Scrap Japan Plans

Posted on: April 16, 2023, 06:44h. 

Last updated on: April 17, 2023, 05:21h.

Todd Shriber @etfgodfather Read More
Expertise: Financial, Gaming Business, Mergers and Acquisitions.

Japan signed off on Osaka as the country’s first casino resort. But that’s not enough to prompt Genting Singapore to revisit its scuttled plans to bid for a gaming license in the country.

Yokohama casino
Yokohama skyline and Mt. Fuji. Genting once wanted to build a casino resort there, but it remains cool about Japan. (Image: The Japan Times)

Amid news that the Osaka scheme is moving forward — paving the way for MGM Resorts International and Orix to open Japan’s first gaming venue there — Genting Singapore told investors, “The company is not currently pursuing a bid to develop an integrated resort project in Osaka or in Japan.”

(We) previously pursued a bid to develop an integrated resort in Yokohama City, but this was discontinued when Yokohama City decided to cancel the […] integrated resort bid process,” according to a statement issued by the Resorts World Sentosa owner.

Genting shuttered its Japan operations in late 2021 after it became increasingly clear Yokohama policymakers and residents wanted no part of a casino hotel.

Genting Continued Coolness Not Surprising

With MGM on track to secure Japan’s first gaming permit, it wouldn’t be surprising to see other casino operators reconsider Japan’s plans. For now, that scenario isn’t playing out.

Genting was among a slew of gaming giants that eventually abandoned plans for Japan, citing a lack of clarity on what was already a frustratingly sluggish process. Other group members included Caesars Entertainment, Hard Rock International, Las Vegas Sands, Melco Resorts & Entertainment, and Wynn Resorts.

In May 2020, Sands pulled out of the Japan race, with the late Chairman and CEO Sheldon Adelson criticizing the costs and procedures of opening a high-end gaming property in Japan. Several months later, Wynn Resorts said it was closing its Yokohama office, citing the coronavirus pandemic and a desire to focus on its Macau operations.

It now appears as though Osaka will be the only city in Japan to be home to an integrated resort for an extended period of time. A plan by Casinos Austria to open a comparable venue in Nagasaki has yet to be approved by regulators.

Domestic Demand Could Prop Up Osaka Casino

While the Osaka integrated resort is expected to contribute to the city’s efforts to lure more international visitors, analysts believe locals and visitors tourists from other parts of Japan will initially support it.

At this stage, we … conjecture that the majority of demand is likely to come from local Japanese demand (like any other major gaming jurisdictions globally), and this is likely to be created incrementally – ‘supply drives demand,’ as the decade-old mantra in the industry goes,” noted JP Morgan analysts DS Kim and Mufan Shi in a recent report. “Hence, we do not foresee any material impact on existing jurisdictions in Asia. Time will tell, and we shall find out in 7 to 8 years.”

That jibes with speculation that at least to start, the Osaka venue will not pose a threat to Macau.