Japan Casino Resorts Could Cost Nearly $12B, as Gaming Companies Up Bid Antes
Posted on: May 27, 2019, 08:50h.
Last updated on: May 27, 2019, 08:50h.
The three Japan casino resorts expected to be authorized in the coming months by the federal government will come with lofty price tags, as the world’s largest gaming operators up their antes to win one of the coveted licenses.
Osaka and Yokohama are the two leading candidate cities for two of the integrated resorts (IR). In a recent note, financial services firm Morgan Stanley expressed concerns that the intense bidding will elevate each property’s total investment, and therefore extend the time required for the companies to simply break even.
Yokohama city officials report that their request for information (RFI) phase revealed several casino operators are ready to invest nearly $12 billion (JPY1.3 trillion) in a resort complex.
Casino Operators All-In
Yokohama – the second largest city in Japan – says 12 companies submitted draft proposals. A few of the gaming operators that presented schemes include MGM Resorts, Wynn Resorts, Melco Resorts, Caesars Entertainment, Genting Group, and Galaxy Entertainment.
Yokohama is a preferred destination, as the large city is near the Tokyo capital. But Osaka is the frontrunner for MGM and Las Vegas Sands, the two casino operators considered the favorites for licensure by gaming industry analysts.
Sands was not one of the 12 companies that submitted plans for Yokohama. Last week, the casino operator’s director of global development said the company isn’t interested in investing in an area not located near a major metropolis.
“We need to be in a major urban metropolitan area to be able to build a strong and substantial MICE business … and for the scale and the diversity of the entertainment that we bring in,” Sands executive George Tanasijevich told online media outlet GGRAsia.
The world’s major gaming industry players have assembled teams in Japan to best make their proposals for licensure. And the strategies are quite different.
MGM has taken a loud and brazen approach, making no secret about its desires for Osaka. “MGM Resorts International is focused on finding the right mix of Osaka companies aligned in their vision and culture that we are trying to create,” MGM CEO Jim Murren said recently.
Galaxy Entertainment is taking a different path. The company’s COO for Japan development Ted Chan told Asia Gaming Brief this week that the group doesn’t intend to be the loudest operator in the bidding process.
We’ve got to be more patient. Licensing here is a bit complicated,” Chan stated.
While MGM has sponsored various events including March’s MLB Opening Series at the Tokyo Dome, Sands has largely hung in the background. That isn’t to say the planet’s richest gaming operator by revenue isn’t actively planning its Japan proposal.
Sands billionaire founder Sheldon Adelson has long ties to Japan. He operated the computer expo Comdex trade show. He sold the company to Japanese bank Softbank Corp for $800 million in 1995.
“We have the leading position in Japan because of my background,” Adelson said last year. The 85-year-old is currently battling non-Hodgkin’s lymphoma.