Osaka Casino Candidacy Endures Despite Yokohama Integrated Resort Fallout
Posted on: August 25, 2021, 12:04h.
Last updated on: August 25, 2021, 10:33h.
Osaka remains steadfast in its commitment to bid Japan’s central government for one of the country’s three integrated resort (IR) licenses.
Osaka’s announcement comes less than 48 hours after anti-IR candidate Dr. Takeharu Yamanaka won Yokohama’s mayoral election. Yokohama’s mayor-elect has pledged to withdrawal Japan’s second-largest city from the IR race.
Yokohama Mayor Fumiko Hayashi was seeking a fourth term. She ran in support of a multibillion-dollar commercial casino resort, but voters soundly rejected that plan.
“It appears that we have been living through a storm of opposition since the IR bid was announced two years ago,” Hayashi acknowledged during her concession speech. “During the election campaign, many residents I spoke to were in favor of an IR.”
Hayashi added that COVID-19 prevented her from meeting with residents to better understand their views on bringing a casino to the region.
Osaka Still a Go
Yokohama and Osaka are respectively Japan’s second and third-most populated cities. Officials in Osaka believe there is adequate public support to move forward with an IR.
I do not believe that the Yokohama mayoral election will have a major impact on Osaka’s IR project,” Osaka Prefecture Governor Hirofumi Yoshimura said during a press briefing.
Yoshimura isn’t convinced that it was the casino issue that resulted in Dr. Yamanaka’s upset victory. Instead, Osaka’s top lawmaker cited ongoing pandemic concerns.
“It may be that the city’s elections were dominated by the coronavirus pandemic. COVID-19 is increasing rapidly in the greater Tokyo metropolitan area, and Mr. Yamanaka, who is an expert on the coronavirus, may have gained the confidence of its residents,” Yoshimura opined.
Osaka’s IR development partner is a consortium led by MGM Resorts. Last month, MGM and Japanese financial services group Orix unveiled a $9.1 billion IR plan.
The IR is set for Osaka’s “Dream Island,” a nearly 1,000-acre, man-made patch of land in Osaka Bay. Dream Island — Yumeshima in Japanese — is set to host Expo 2025. The world fair’s theme is “Designing Future Society for Our Lives.”
Genting Group, a global casino operator with IRs in the United States, United Kingdom, Singapore, Malaysia, Philippines, and the Caribbean, was the front-runner to be selected in Yokohama. Melco Resorts was the city’s other qualifying bidder.
Genting’s consortium included Japanese-based Sega Sammy Holdings, an amusement and entertainment company focused on pachinko and video games.
With Yokohama almost certainly out of the IR pool, Genting Group has been downgraded by Maybank Kim Eng. The Malaysia-based investment advisory firm adjusted Genting stock from a “buy” to a “hold” rating.
Though we still opine that the Genting-Sega Sammy joint venture was in the strongest position to win a Yokohama IR license, it is likely all academic now,” the Maybank note read Monday. “With the Yokohama mayoral election having come and gone, we downgrade Genting to ‘hold.'”
Not all analysts, however, are on the same page regarding Genting. A note from brokerage Nomura maintained its “buy” rating. The firm said in its explanation that a forecast tourism recovery in Singapore and in other markets where Genting operates was the reason for its rating.
Along with Osaka, Nagasaki and Wakayama are prepping IR bids. Nagasaki is running with a casino development from Casinos Austria. Wakayama has picked Clairvest as its IR partner. Clairvest is a Toronto-based private equity firm that owns several casinos and gaming industry businesses.
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