Wakayama Governor Yoshinobu Nisaka Says IR Withdrawal Has ‘Severe’ Consequences
Posted on: May 13, 2022, 12:05h.
Last updated on: May 13, 2022, 10:03h.
Wakayama Governor Yoshinobu Nisaka today expressed his disappointment with the Prefecture Assembly rejecting the region’s integrated casino resort plan.
His remarks come less than a month after prefecture lawmakers voted 22-18 against a $3.6 billion IR development. The original concept came from a Canadian private equity firm that planned to bring in Caesars Entertainment to run the resort, Nisaka is speaking publicly about his hostility towards those who opposed the plan. The 71-year-old, who has been the governor of Wakayama since 2006, says the prefecture’s withdrawal from Japan’s casino race will be costly to residents and the area’s economy.
Losing out on this massive project of JPY 470 billion (US$3.6 billion) in investment and increasing local residents’ annual income by 10% each year is a severe hit to the prefecture,” Nisaka declared in a letter posted to the prefecture’s official government website.
Clairvest Neem Ventures (CNV), a subsidiary of Canadian-based firm Clairvest Group, was the sole bidder for Wakayama’s IR undertaking. That’s after Hong Kong-based Suncity Group withdrew amid a high-stakes scandal in China involving its founder, Alvin Chau. Wakayama had initially preferred the Suncity casino proposal but later adopted the CNV scheme.
Governor Rebukes Opposition
The 22 Wakayama assemblypersons who voted against the Clairvest-Caesars IR voiced concerns regarding the consortium’s ability to secure financing. Though the Clairvest Group has ownership positions in three casino/racino properties in North America — the Meadowlands in New Jersey, Casino Delaware Park, and Grey Eagle Resort & Casino in Alberta, Canada — Clairvest has never developed and built such a large-scale integrated resort, one that was expected to run into the billions of dollars.
Nisaka, however, wrote in his IR response that Clairvest secured appropriate funding through Credit Suisse, a global investment bank that has long financed such major casinos. Those in opposition contended that Credit Suisse had only agreed to the project in a nonbinding letter that provided the bank with an escape clause.
Along with the claimed 10% increase in annual income for Wakayama residents by way of thousands of better-paying jobs, the governor says the IR not coming to reality will wash away the projected $2.7 billion annual economic impact the destination would have created.
Potential IR Redo
Mario Ho, 27, one of the many sons of the late “King of Gambling” Stanley Ho, had agreed in principle with CNV to invest in the Wakayama IR. His late father held a monopoly on casino gambling in Macau for decades, until the early 2000s. When he died in 2020, he’s thought to have left a multibillion-dollar fortune to his many heirs, which include numerous wives and at least 17 children.
Nisaka said that Wakayama should reconsider another IR development, as Mario Ho has expressed his continued interest in developing such a casino.
Mario Ho still hopes to pursue investment in an IR in Wakayama,” the governor continued. “I hope to put this failure behind us and continue investment bids in order to keep Mario and other investors from giving up on Wakayama.”
Japan’s 2018 commercial gaming bill authorized as many as three IR licenses. The central government fielded only two qualifying casino proposals during its bidding period that concluded on April 28. The submitted projects come from the prefectures of Osaka and Nagasaki.
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