Sheldon Adelson, chairman and chief executive of casino group Las Vegas Sands Corp, says the company would be “open” to rethinking its position on Japan’s nascent casino industry, if the country’s legal framework becomes what the firm would regard as more investor-friendly.
Las Vegas Sands, the parent of Macau casino operator Sands China Ltd, said in a May press announcement that the “framework” for development in Japan of a gaming complex, or integrated resort (IR) as they are known there, had made the firm’s goals there “unreachable”.
Speaking on Wednesday on the second-quarter earnings call of the group, Mr Adelson (pictured in a file photo), said the casino-related regulations that were “promulgated by the Japanese government” and the country’s parliament “were not conducive to attracting the kind of investment” that is required for such a project in Japan.
The executive mentioned the high costs likely to be associated with developing a casino scheme in Japan, as well as regulations related with taxes. Capital expenditure of US$10 billion for building a resort has been widely touted within the industry.
“The cost of construction and the cost of land in Japan are very high,” said the CEO in his Wednesday comments, adding that it wouldn’t “have made much of a difference” if the costs were lower “because of some of the rules” that have been suggested. He specifically mentioned the plan to withhold taxes on winnings by non-resident foreigners, which had been proposed last year by the country’s Ministry of Finance.
“There were just too many negative regulations that we couldn’t live with,” stated Mr Adelson. “If they change it, our mind is open to go back.”
Las Vegas Sands had said in August last year it would focus on Tokyo and Yokohama in its effort to be allowed to build a casino resort in Japan.
Also commenting on the topic, Robert Goldstein, president and chief operating officer of Las Vegas Sands, said the regulatory environment in Japan “just wasn’t suitable to make the kind of investment that this company demands in terms of returns.”
He added: “We couldn’t make it work. We sure tried … We wish the construct was more welcoming to the investor, but it wasn’t.”
Commentators told GGRAsia in May that Las Vegas Sands’ decision to pull out of the Japan race was in likelihood because there were too many unknowns in the Japan regulatory and business environment. They included that the national basic policy on IR business had not yet been published, which could lead to further delays in the process.
Bay City Ventures Ltd, a Japan-based marketing consultancy, said in a report earlier this month that it was unlikely that Las Vegas Sands would forever rule out an investment in Japan. “If it makes business sense, [Las Vegas] Sands will for sure be back. They did not leave Japan… forever,” it noted.
