GGRAsia – Melco nods US$248mln fund for Japan non-gaming projects

Melco nods US$248mln fund for Japan non-gaming projects

Oct 30, 2019 Newsdesk Japan, Latest News, Top of the deck

Asian casino operator and developer Melco Resorts and Entertainment Ltd said on Tuesday it was launching a JPY27-billion (US$248.0 million) fund to invest in non-gaming tourism and hospitality projects in Japan.

Melco Resorts is one of several international operators vying for one of Japan’s initial casino resort licences: a maximum of three resorts will be permitted in a first phase of liberalisation. In mid-September, the firm said it would adopt a “Yokohama First” policy in its pursuit of a Japan casino licence. It added at the time it was ending its interest in Osaka as a site for a resort project.

Price tags of US$10-billion per resort have been mentioned by several suitors for a Japan casino licence. In September, Fitch Ratings Inc, a credit rating agency, said in a report on the outlook for Japan’s newly-liberalising casino market that each project could cost as much as US$15 billion to develop.

Melco Resorts said the newly-created Melco Creative Exchange fund was a scheme separate from its aspirations to become a casino operator in Japan. The firm already unveiled on Tuesday the fund’s first two investments: an “onsen” or hot spring resort in Hakone, near Tokyo, and a ski resort in Nagano. Both projects are expected to open around the year 2025, according to media reports.

Also on Tuesday, Melco Resorts announced that Japanese tennis star Naomi Osaka would serve as the firm’s brand ambassador and sports group director for the company’s projects in Japan.

“Melco Creative Exchange is focused on bringing people to the… countryside” of Japan, Melco Resorts’ chairman and chief executive Lawrence Ho Yau Lung (pictured in a file photo) said on the sidelines of a business forum on Tuesday. “People really want that, rather than just going to another U.S. or European city,” he added, quoted by media outlet Nikkei Asian Review.

In his comments, Mr Ho reiterated Yokohama was Melco Resorts’ priority for a casino resort in Japan. “The benefit of Yokohama is its proximity to Tokyo, but it’s very much a day-trip market. We are looking to build the world’s biggest integrated resort to make Yokohama a primary city for people to go and stay for two or three days.”

Those Japanese local governments qualified to apply to the national government for permission to host an integrated resort – namely prefectures and ordinance-level cities – need to team with private-sector partners prior making their bid to the national government. But they can only do so after Japan’s central government announces the details of the integrated resort basic policy.

Yokohama city is one of eight places in Japan that are definitely considering seeking national government permission to host casino resorts, according to comments in September by Kazuyoshi Akaba, Japan’s Minister of Land, Infrastructure, Transport and Tourism. The others were: Hokkaido prefecture, Chiba, Tokyo, Wakayama, Nagoya, Osaka city and prefecture, and Nagasaki prefecture.