The Japan casino race is intensifying after reports surfaced this week that Yokohama will soon formally announce its intentions to win one of the three integrated resort (IR) properties.
The federal government of the world’s third-largest economy is currently finalizing the regulatory conditions that will oversee the three multi-billion-dollar casino complexes.
In the interim, local prefecture and city officials are mulling whether they believe bidding for one of the licenses is in the best interests of their areas. Yokohama Mayor Fumiko Hayashi apparently believes it is.
The Japan Times reports that Hayashi has already revealed to her residents that the city will indeed make a play to become a casino host. A recent survey of area residents found that their main concerns regarding a casino property are potential problem gambling and associated crime.
However, the trepidations apparently weren’t enough to sway local leaders from moving forward with their casino efforts.
Yokohama is home to 3.75 million people, the second-largest city by population in Japan. It’s part of the Kanagawa Prefecture.
Should Hayashi confirm that Yokohama is indeed interested in a Japan casino, the city would become just the second to formally declare such intentions. The other is Osaka, which is the main focus of Las Vegas Sands and MGM Resorts.
Yokohama sent out request-for-information (RFI) schemes to 12 casino operators earlier this year. The city specifically wanted to know what sort of investment interested casino companies might submit. The average proposal was JPY 1.3 trillion ($12 billion).
The city is focused on the 116-acre Yamashita Wharf for the casino development, which sits on the Tokyo Bay and is a popular tourist sightseeing destination. Yokohama leaders have submitted a draft to add supplemental funds to cover costs associated with attracting casino bids.
Yokohama didn’t publicly reveal the names of the 12 casino operators that made preliminary proposals for a resort, but reports surfaced that MGM, Caesars Entertainment, and Wynn Resorts were three of the companies.
While MGM and Sands are considered the heavy favorites for two of the three Japan casino licenses, an intense bidding war is expected from other major gaming companies, including Wynn, Caesars, Melco Resorts, Galaxy Entertainment, Hard Rock, Genting, and SJM Holdings.
Financial services firm Morgan Stanley expressed concerns earlier this year that the fierce bidding will lead to elevated overall investment costs for the eventual winners, and therefore extend the years it will take for the casino operators to simply break even on their IRs.
Casino operators will partner with local Japanese companies to form consortiums. To win licensure, it will be a two-step process where a company like MGM must first be chosen by an interested host city like Yokohama, and then also be approved on the federal level.
Osaka Mayor Ichiro Matsui said his city received seven early request-for-concept proposals, but also didn’t name names.