Japan should not be viewed as an easy–to-tap “gold mine” for gaming, Michael Leven, president and chief operating officer of Las Vegas Sands Corp told GGRAsia today on the sidelines of Clarion Events Ltd’s Japan Gaming Congress in Tokyo.
“There’s no free lunch,” stated Mr Leven. “People look at Japan like it’s a gold mine,” he told us.
Though he added: “While the entry price is going to be high, the market is very significant.”
Some foreign gaming operators have said they would be willing to spend up to US$10 billion – either with partners or individually – on casino resorts in Japan.
Mr Leven earlier told a conference session that his employer Las Vegas Sands was “fortunate” not to need equity from outside but would be happy to have a local partner.
“A minority stake would be very, very important, if that stake represents some level of knowledge, some level of relationship,” he told the conference. “A minority stake in these kinds of buildings is a lot of money. But I don’t think anybody’s going to object to that [a minority partner] if they can get the help they need. This is a complex culture, and the more help you can get, the better you can do.”
Jim Murren, chairman and chief executive of MGM Resorts International, speaking in the same session, counselled against the risk of letting the decision on integrated resorts in Japan drift for too long.
“I’ve found in my company that it’s always a good idea to set a deadline, as it creates a focus,” he stated.
“So having a goal of opening a Japan [casino] resort by 2020 is a worthy ambitious and achievable goal if there’s a proper focus.”
But he added: So we’re running out of time to make the 2020 Olympics. It takes three-plus years to build something of this scale…1.5 milion square metres of development plus or minus. “
Mr Murren said Japan was currently hugely underserved for meetings and conference space – the type of facilities that drive inbound foreign tourism. Japan currently receives around 10 million foreign tourists per year, but aims to boost that to 20 million by 2020 and 30 million by 2030.
“Japan is number 79 in the world in terms of MICE infrastructure,” said Mr Murren, adding there were only around 80,000 square metres of such facilities currently in Tokyo.
He stated: ”If we’re delayed for another couple of years, who knows? It would be a tremendous missed opportunity.”
Keeping momentum on the opportunity would “create energy and excitement in the capital markets,” said Mr Murren.
GGRAsia understands from industry sources however that at the moment, without an initial enabling bill to legalise casinos, it is technically illegal for would-be Japanese partners to speak in detail about plans for casino resorts.
Mr Leven said Japan had “great infrastructure and wonderful people” but to “jolt the economy, to move numbers, something special has to be done…you have to do something that’s lasting and significant to drive international visitors and domestic visitors,” suggesting any integrated resort should be “an iconic building and symbol” of Japan’s economic development.
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”Assuming that our [Tigre de Cristal] phase two project and the other future operators’ development plans remain on track, we may see the benefits of a ‘cluster’ effect [in the Primorye Integrated Entertainment Zone] as early as 2021”
Summit Ascent, lead developer of Tigre de Cristal