Tokyo 2020 Olympics Unlikely to See New Casino Projects
Posted on: October 5, 2014, 10:00h.
Last updated on: October 3, 2014, 01:49h.
The Tokyo 2020 Olympics have required the same detailed planning and foresight as any other Olympic Games, but it now looks like the likelihood of a casino being built in time is not going to happen.
A Tokyo casino, once seen as the crown jewel in plans to develop a resort in Japan, now seems unlikely to open in time for the 2020 Olympics. With the Tokyo city government pushing casino development on the backburner, as well as the high cost of building in the city, the plan to have a resort up and running there in time to take advantage of the visitors arriving for the Summer Olympics in 2020 is starting to look like a long shot.
Casino development still has support in the Japanese parliament, and supporters hope that a bill to allow for resorts will be passed either later this year or in 2015. But that support is softer at the local level in Tokyo, meaning that developers may be forced to focus on Osaka or other locations instead.
Support from Governor Tepid at Best
While Tokyo governor Yoichi Masuzoe hasn’t reversed the trend of recent governors who were in favor of a casino for the city, his support has been much more tepid. He has said that securing a casino is not a major part of his agenda, and has focused more resources on preparing for the 2020 Olympics at the expense of a team that works on casino preparations.
The Olympics are also at least part of the cause behind higher construction costs in Tokyo, a city where it was already much more expensive to build than in other Japanese locations. Rebuilding efforts in the wake of the 2011 earthquake and tsunami have also made the task of building a major resort project in the city more difficult.
Those costs are becoming so excessive that they may cause a cutback in preparations for the Olympics, let alone any casino developments.
“The reality is that preparations for the Olympics are going to be pretty challenging. Casinos are secondary,” said Satoshi Okabe, a senior manager for a resort project being developed by Japanese advertising agency Dentsu. “Building costs are going to spike and foreign casino operators are going to find investment returns inefficient.”
Sands Willing to Spend $10 Billion in Tokyo
If Tokyo ultimately decides that it doesn’t want a casino, or if developers simply can’t make the economics work, the biggest loser could be Las Vegas Sands. The firm was hoping to earn approval to build a massive resort in the city, with Sheldon Adelson saying he would spend $10 billion or “whatever it takes” to build in Tokyo.
On the other hand, Osaka still seems to be on board with casino development, should legislation allowing such resorts pass. While perhaps not as lucrative as Tokyo, Osaka would still be a very desirable location for a casino, and the building costs are expected to be far lower than in Tokyo.
Caesars Entertainment is among the companies that have expressed interest in building an Osaka resort.
“We are actively in talks with potential Japanese partners about an Osaka project,” said Steve Tight, president for international development at Caesars.
Japan is a nation with a strong gambling culture, and games like pachinko are wildly popular throughout the country. However, casinos have never been allowed on the Asian island nation, leading some to call Japan the last great untapped market in casino gambling.
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