Melco Resorts Remains Committed to Japan Despite Yokohama Exit

Posted on: September 13, 2021, 10:58h. 

Last updated on: September 13, 2021, 12:35h.

Melco Resorts is closing its Yokohama office after the city’s newly minted mayor announced its withdrawal from being considered for an integrated resort (IR). But the casino firm says it will continue to seek market entry into Japan.

Melco Resorts Remains Committed Japan Despite Yokohama Exit
Melco Resorts CEO Lawrence Ho (left) attends his father’s funeral in July of 2020. The billionaire says his casino company is steadfast in pursuing Japan’s ambitions. (Image: Bloomberg)

Japan will begin fielding IR submissions from interested prefectures and cities on Oct. 1. The submission period runs through April 28, 2022.

Yokohama Mayor Dr. Takeharu Yamanaka has annulled the city’s interest in hosting a casino resort. His surprise victory over incumbent former Yokohama Mayor Fumiko Hayashi and betting favorite Hachiro Okonogi was partially credited to Yamanaka’s strong opposition to casino gambling.

Melco Resorts was one of two qualified bidders in Yokohama, the other being Genting Group. Melco is undeterred by Yokohama’s exit, the company saying it is still focused on Japan.

Melco has been working on the ground in Japan for over a decade. We firmly believe in the country’s long-term potential and remain committed to exploring opportunities to develop the world’s best integrated resort in Japan,” said Lawrence Ho, Melco Resorts’ billionaire founder and CEO.

Melco Resorts is one of six licensed commercial casino operators in Macau. The resort group additionally has an integrated resort in the Philippines and is under construction on its $667 million City of Dreams Mediterranean complex in Cyprus.

Tokyo Consideration

With Yokohama and its Kanagawa Prefecture withdrawal, only three of Japan’s 47 prefectures are actively prepping consortium bids for a casino license. They are Osaka, Wakayama, and Nagasaki.

Tokyo, by far Japan’s most populated city and most prominent business hub, has remained on the IR sidelines since the country first passed its commercial gaming law back in 2018. With Yokohama neighboring the capital city, Tokyo officials opted to stay clear of the casino movement. But in wake of Yokohama’s departure, Tokyo brass could reconsider.

Melco Resorts says it will remain active in Japan with an office in Tokyo.

“We will be closing our Yokohama office while maintaining a representative office in Tokyo,” Ho explained. “The company remains committed to Japan and will continue to explore development opportunities in the country.”

Ho memorably said in 2018 that Melco would not set a budget on an IR development in Japan on grounds that the firm “prefers not to constrain our dreams with price tags.”

Future Development

Though Japan’s 2018 IR bill authorizes as many as three casino destinations, there’s no guarantee that all three gaming privileges will be issued next year. Gaming analysts believe Tokyo lawmakers will more seriously consider an IR bid with its hosting of the Summer Olympics now in the past, and Yokohama folding on a casino.

Casinos are being pushed in the central government by members of the Liberal Democratic Party (LDP). Unlike in Yokohama where the mayor has much political power, in Tokyo, the 127-member Tokyo Metropolitan Assembly has an authoritative rule.

The LDP failed to gain majority control in the Tokyo Assembly during its July elections. The poor showing was cited for Prime Minister Yoshihide Suga’s decision not to seek reelection this fall.

Even if Tokyo’s Metropolitan Assembly decides to seek a casino license, there might not be enough time for the city-prefecture to review casino consortium development schemes before the central government’s April 28, 2022, submission deadline.