Several major global gaming operators have reaffirmed this week their respective interest in developing a casino resort in Japan, stating they were closely monitoring the latest developments related to that nascent industry.
The comments were made days after Japan’s parliament passed on Friday the long-awaited Integrated Resort (IR) Implementation Bill, a second of two pieces of legislation that will lead to the establishment of a domestic casino industry.
“Japan continues to be a core focus for us,” said Lawrence Ho Yau Lung, chairman and chief executive of Melco Resorts and Entertainment Ltd. He was speaking on a call with investment analysts on Tuesday, following the company’s second quarter results announcement.
“We expect development of the next generation of integrated resorts to soon commence in this incredibly exciting, yet currently under-penetrated, tourism destination,” he added.
The Melco Resorts CEO said the company was “devoting a huge amount of resources” to Japan. “We believe we are well placed in Japan with a strong local team actively working on the ground, engaging with the relevant stakeholders,” he added.
Mr Ho said he expected a bidding process for a casino licence in Japan to likely start “late next year” at the earliest.
Key points in the IR Implementation Bill include an initial cap of three casino resorts nationwide; a 30 percent tax on casino gross gaming revenue (GGR); and an entry levy of JPY6,000 (US$54) for Japanese citizens and residents wishing to enter such venues.
The passage of the bill still leaves plenty of work to be done before a Japanese casino industry can be created. Not the least of it is the pitches to be made to central government by local authorities – in tandem with their respective private-sector partners – for the right to one of the first licences.
Sheldon Adelson, chairman and chief executive of Las Vegas Sands Corp, said his company was “looking forward” to pursuing what would be “a unique opportunity” in Japan.
“We hope to be able to bring our track record, expertise, and development vision together with our industry-leading financial strength to deliver a large-scale MICE-based integrated resort that would be uniquely tailored to the Japanese market,” Mr Adelson said on a conference call with analysts on Wednesday following his firm’s results announcement.
Robert Goldstein, Las Vegas Sands’ president and chief operating officer, said on the same conference call that the company has had a presence in Japan “for over a decade”, and it was well aware of the “reference points” sought by the Japanese authorities to set up the country’s nascent casino industry.
“I think our plan is simple: we have the balance sheet; we have the reference point integrated resorts in both Macau and Singapore; we have the defining MICE space in Macau and Singapore; we have the defining entertainment activity in those places,” said Mr Goldstein.
He added: “We’re hoping the [Japanese] government can move forward. We’ll wait for their direction and adhere to their advices.”
Several casino operators have declared themselves a contender for a gaming licence in Japan, and a number of them have established branches or subsidiaries in that country.
Genting Singapore Ltd announced on Tuesday that it had set up an additional five new indirect wholly-owned subsidiaries in Japan, eyeing the eventual operation of integrated resorts in that country.
Timothy McNally, chairman of Cambodia casino operator NagaCorp Ltd, said on Wednesday that Japan is “undoubtedly an attractive market”. He was speaking during a press conference following the company’s announcement of its first-half results.
Mr McNally said however that the company would need further guidance relating to taxation and land acquisition, before considering bidding for a licence in Japan, reported the Chinese-language newspaper Ming Pao.
A number of industry executives and investment analysts expect the first casino resorts to open for operation in circa 2025. Investment bank Morgan Stanley said in a note issued last week that Japan’s casino market size “could peg at a range of US$11 billion and U$20 billion gaming revenue”.
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Adjusted EBITDA reported by Asian casino operator Melco Resorts and Entertainment for the fourth quarter of 2020