Bloomberg News

Billionaire Packer Seeks Japan Casino Partners, May Mull Listing

April 09, 2014

Australian billionaire James Packer said Melco Crown Entertainment Ltd. (6883) is looking for partners to build casinos in Japan should the country legalize gambling resorts and would consider listing the venture.

“Our expectation would be to have a strong set of Japanese partners,” Packer, co-chairman of Melco Crown, said at a media briefing in Tokyo. “We have had very preliminary talks,” he said, without naming companies or elaborating on a possible listing plan.

International casino operators such as Wynn Resorts Ltd. (WYNN:US) and MGM Resorts International (MGM:US) are looking for Japanese partners in anticipation that the government will open up the market. CLSA Asia-Pacific Markets’ estimates Japan’s casino market could eventually generate $40 billion in annual revenue, trailing the southern Chinese city of Macau.

The project will be executed through Hong Kong-based Melco Crown, a venture he has with Lawrence Ho, the company’s co-chairman and the son of Macau gambling mogul Stanley Ho.

Japanese lawmakers from the ruling Liberal Democratic Party, the Japan Restoration Party and other groups submitted a bill to legalize casinos to parliament in December. Some lawmakers who support the bill have said they will push for passage of the bill this year. A subsequent bill detailing the rules of casino operation would also need to be approved.

Melco Crown will be flexible about partnership and has talked to various companies including real estate developers and infrastructure companies over the past several years, Lawrence Ho said in an interview last year. He would also be interested in tie-ups with Japanese trading houses, said Ho, who is also the chief executive officer of Melco Crown.

The casino operator would invest more than $5 billion on the Japan casino project, Ho said at that time.

Minimum $5 Billion

“I do not envisage an integrated resort in either Tokyo or Osaka would be successful at anything under $5 billion,” Packer said on the outlook for investment in Japan. “The cost for the successful applicant would probably be more than $5 billion.”

Packer, 46, has a net worth of $6.6 billion, making him the second-richest person in Australia, according to Bloomberg Billionaires Index. Packer is also the chairman of Melbourne-based Crown Resorts Ltd.

Melco Crown rose 1.9 percent to HK$96.50 as of 2:39 p.m. in Hong Kong trading. The benchmark Hang Seng Index climbed 0.7 percent.

Las Vegas Sands Corp. (LVS:US)’s CEO Sheldon Adelson said in February the company is ready to invest $10 billion for its casino project in Japan. MGM CEO James Murren also revealed a similar plan in the same month.

Potential Partners

Among the potential partners for casino operators are trading companies such as Mitsui & Co., Mitsubishi Corp. and Itochu Corp. as well as 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.

Pachinko company Dynam Japan Holdings Co. and gaming equipment maker Japan Cash Machine Co. and Oizumi Corp., a pachinko equipment maker, may also benefit.

“Melco Crown is a company that is formed on the basis of partnership,” said Packer. “Some companies are more attuned to partnership mentality than others and I think it’s one of the strengths of Melco Crown.”

To contact the reporter on this story: Yuki Yamaguchi in Tokyo at yyamaguchi10@bloomberg.net

To contact the editors responsible for this story: Stephanie Wong at swong139@bloomberg.net Subramaniam Sharma


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Companies Mentioned

  • WYNN
    (Wynn Resorts Ltd)
    • $182.42 USD
    • -2.17
    • -1.19%
  • MGM
    (MGM Resorts International)
    • $22.12 USD
    • -0.33
    • -1.49%
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