Hard Rock eyes majority stake in Japanese casino: CEO
Hard Rock International Inc chairman James Allen says the U.S.-based casino and hospitality firm is interested in developing a joint venture casino resort project in Japan in collaboration with local partners.
On Tuesday Mr Allen told Reuters that Hard Rock International would seek a majority stake of 60 percent in a Japan scheme, with the remaining 40 percent to be held by Japanese firms.
“It’s important to make sure our local partners are involved in the relationship, not just as blind investors,” Mr Allen told Reuters. He added that Hard Rock International had already identified 20 to 30 potential Japanese partners for a casino project in Japan, including financial firms, manufacturers and landholders.
Several investment analysts covering the gaming sector have suggested that foreign casino operators will have to find local partners in order to be able to bid for a casino licence in Japan.
Japanese brokerage Nomura said in a December note it expected “Japanese industrial/entertainment conglomerates to compete aggressively for the two to three expected [casino] licences” in Japan. It stated it was likely for any casino project in Japan “to be majority owned by Japanese companies, but there is an important role to be played by experienced international casino companies with design and operating expertise”.
Hard Rock International – a business linked to the native American entity the Seminole Tribe of Florida – announced in January the appointment of Edward Tracy as chief executive of its newly-announced Japan division. Mr Tracy retired as president and chief executive of Macau casino operator Sands China Ltd in March 2015. He led that firm during a key point in its Cotai construction phase, including the opening of Sands Cotai Central in April 2012 and the development of the Parisian Macao, which subsequently opened in September 2016.
The Hard Rock brand already has a presence in casino resorts in Asia via the Hard Rock Hotel in Macau, which features a gaming venue operated by Melco Crown Entertainment Ltd. The branded gaming area is at Melco Crown’s City of Dreams Macau casino resort on Cotai.
In November it was confirmed that a consortium involving Hard Rock International and Hong Kong-listed Melco International Development Ltd – the latter the majority investor in Melco Crown – was the preferred bidder for a casino licence in the Republic of Cyprus.
Sheldon Adelson – chairman and chief executive of casino operator Las Vegas Sands Corp – the parent of Sands China – said on Tuesday that a casino resort in Japan could cost up to US$10 billion to build.
Legislation making casino gambling legal in Japan came officially into effect on December 26, although investment analysts have said that it could be beyond the year 2021 before the first Japanese casino resort opens.
That is because after approval of the enabling bill legalising casino resorts at the conceptual level, a second piece of legislation has now to be passed, detailing the specifics with respect to licensing, investment, location and taxation. No schedule has been proposed by the Japanese government for the passage of the second bill.
Most major global casino operators have expressed an interest in developing an integrated resort – including a casino – in Japan, including MGM Resorts International, Wynn Resorts Ltd, Genting Singapore Plc and Melco Crown. Brokerage CLSA has estimated that a Japanese casino industry – with just two resorts in major cities – could generate US$10 billion in annual revenue, growing to US$25 billion were more locations added, Reuters reported.
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