Tokyo Expected to Enter Integrated Resort Bidding, Alter Casino Operators’ Proposal Strategies
Posted on: April 27, 2020, 09:09h.
Last updated on: April 27, 2020, 12:08h.
Tokyo is expected to soon announce its candidacy to land one of Japan’s three forthcoming integrated resorts (IR), and analysts say that will overhaul the bidding strategies for casino operators.
Osaka and Yokohama are presently two of the leading prefectures that have formally announced their intentions to win casino privileges. Two other prefectures – Nagasaki and Wakayama – have also announced plans to bid.
MGM Resorts, one of the six gaming companies in Macau, is pursuing Osaka. Former CEO Jim Murren stated last year that he believes Osaka will be the first prefecture and city to receive IR approval from the federal government.
Las Vegas Sands, the consensus favorite to be awarded one of the casino rights, hasn’t committed to one specific locale. The experienced casino giant has properties in Las Vegas, Macau, and Singapore, and says it’s targeting Tokyo and Yokohama.
Additional casino operators readying bids include the four other Macau concession holders: Melco Resorts, Wynn Resorts, Galaxy Entertainment, and SJM Holdings. Hard Rock International, Genting Group, and Bloomberry Resorts are also mulling proposals.
Japan’s most populated city, with approximately 38 million people in the greater metro area, Tokyo is the holy grail of what’s considered the most lucrative gaming opportunity since Macau ended SJM’s monopoly in 2001.
The Japanese capital is the economic engine of the Land of the Rising Sun, and is one of the world’s major business hubs. It has the largest metropolitan economy in the world, with GDP totaling nearly $2 trillion annually.
Management consultancy firm A.T. Kearney ranked Tokyo No. 4 on its Global Cities Report list of the world’s most influential cities. It trailed only Paris, London, and New York.
Each of the interested casino operators would presumably choose Tokyo if given the opportunity. But Japan’s National Diet legalized three commercial casino resorts to not only grow tourism, but also benefit economically troubled areas – something Tokyo is not.
In Global Market Advisors (GMA) latest research brief on the Japan IR opportunity, the consultancy says the Tokyo government will indeed make a play for a casino.
Regarding the perceived crown prize of Tokyo, GMA has long stated that it is not a matter of if, but when, they will announce that they will participate in the process. Such an announcement could occur by the end of this summer following the Governor’s reelection,” the brief opined.
“The addition of Tokyo could cause several operators and prefectures to potentially rethink their strategy.”
GMA believes the timeline for Japan’s casino tender will not be severely impacted by the COVID-19 pandemic.
“Japan’s opportunity is worth weathering the storm and potentially allowing some slight modifications in the timeline to, at a minimum, allow for the Fundamental Policy to be released, commented on, and finalized by operators to put forward their bids with all of the necessary information in hand,” GMA stated.
Casinos are forming consortiums with local businesses, and then will bid their prefecture/city. If selected, the prefecture/city and casino consortium will then petition the federal government for approval.
As Casino.org reported earlier this month, Japan is expected to field bids beginning January 4, 2021, and run through July 30 of that year.