Japan legislators plan to present a bill to legalize casinos as early as this year as companies including Wynn Resorts Ltd. mull billions of dollars in investment in what could be the world’s second-biggest gaming market.
Hiroyuki Hosoda, the chairman of a cross-party group of lawmakers promoting casino development in Japan, said yesterday that the group aims to submit a casino bill to the next diet session that is expected to start next month. It aims to pass the bill next year in the following session of parliament, he said.
Wynn Resorts (WYNN:US) yesterday said it will consider investing more than $4 billion in Japan casino resorts, while MGM Resorts International President Bill Hornbuckle said it would spend “several” billion dollars. International casino companies have begun studying expansion opportunities in the country as Tokyo’s selection to host the 2020 Olympics Games boosts confidence that the law legalizing gambling resorts will pass.
“Japan could benefit from both its proximity to China and their appetite for VIP and mass-market gaming and luxury shopping, and being a business center with huge convention possibilities,” said Tim Craighead, a Bloomberg Industries analyst. “All of it now relies on the legislation process and Japan pursuing the benefit of the integrated resort concept.”
Casinos are currently banned in Japan and Union Gaming Group estimates the country could turn into the world’s second-largest gambling hub with $10 billion in revenue a year if it opens up.
“A lot of Japanese gamble at casinos overseas, so the ban doesn’t make sense any more,” Hosoda said. “It just means tax revenues go elsewhere.” It could take five years for the first casino to be operational after the law is passed, he said.
Japan’s capital beat Madrid and Istanbul to host the Summer Games, its second following the 1964 Olympics. Plans to revitalize Tokyo’s infrastructure and ensure adequate accommodations for visitors add impetus for approving gambling resorts, which include hotels and entertainment facilities. Hosoda is a senior official in the Liberal Democratic Party, appointed to his position by Prime Minister Shinzo Abe.
Abe is the supreme adviser to the cross-party lawmakers’ group that is working on the bill.
Wynn Resorts investment in a Japan casino “is going to be way bigger” than the $4 billion it is spending on its current project in Macau’s Cotai area, Wynn Resorts Development President and Chief Operating Officer Gamal Aziz said in an interview. Wynn and MGM said that they plan to partner with local consortium to develop casino projects.
Las Vegas Sands is also “open minded” about having local partners, George Tanasijevich, managing director of global development for Las Vegas Sands, said yesterday in an interview at a gambling conference in Tokyo. “We are very confident that this would be a successful project” as there is a lot of unmet demand, the executive said. The three companies, which are all interested in developing resorts in Tokyo and Osaka, didn’t say which Japanese group they might each consider.
Among the potential local partners are trading companies such as Mitsui & Co., Mitsubishi Corp. and Itochu Corp. and gaming machine makers Sega Sammy Holdings Inc. and Konami Corp. The trading companies have project-finance experience and real estate development connections, while the game makers have helped develop casino projects and technology outside of Japan.
The specific details about sites and operators will probably come after legalization. That would set the stage for gambling resorts to open by 2019 or 2020, CLSA said in a report earlier this year.
Tokyo’s potential as a gambling market is also drawing the interest of Caesars Entertainment Corp (CZR:US)., SJM Holdings Ltd., Asia’s biggest casino operator, and Melco Crown Entertainment Ltd.
Macau, the world’s biggest gambling hub, raked in $38 billion gambling revenue last year, six times that of Las Vegas Strip.
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