GGRAsia – Early 2019 partner selection for Osaka’s casino bid

Early 2019 partner selection for Osaka’s casino bid

Dec 12, 2018 Newsdesk Japan, Latest News, Top of the deck

Officials in Osaka plan to start “early next year” the selection process for potential private-sector partners jointly to present a casino bid to Japan’s central authorities. So said Osaka governor Ichiro Matsui on Wednesday, reported Japanese news agency Kyodo.

“We will shortlist candidates by starting to assess their plans and willingness to invest early next year,” the news agency quoted Mr Matsui saying.

The comments by the Osaka governor were reportedly made following a meeting with the president and chief operating officer of U.S.-based casino operator Las Vegas Sands Corp, Robert Goldstein. The mayor of Osaka, Hirofumi Yoshimura, is also said to have attended the meeting.

Osaka has consistently voiced support for hosting a so-called integrated resort (IR). Up to three such venues will be permitted at yet-to-be determined locations across the country under a first wave of casino liberalisation.

The locations are set to be selected via a process including pitches to be made to central government by local authorities, in tandem with their respective private-sector partners. The national government wants by July next year to announce the policy framework under which those local governments can make such pitches to the national authorities.

Reuters news agency reported in August that “at least” eight casino firms were courting Osaka as a site for a casino resort. Executives from 11 casino companies met Mr Matsui for “courtesy calls” 25 times between 2012 and May 2018, reported Reuters, citing prefectural records.

In Osaka, the government has identified casino business as a way to boost the local economy via taxation, job and infrastructure creation and increased inbound tourism. Such a venue would probably be located on an artificial island called Yumeshima, translated in English as “Dream Island”.

Yumeshima is already earmarked to welcome the World Expo 2025. Osaka was confirmed last month as the host of the international fair, beating respective rival bids from Russia’s Yekaterinburg and Azerbaijan’s Baku.

Osaka’s government reportedly plans to ask private-sector partners involved in the development of a casino resort in Yumeshima to fork out about JPY20 billion (US$176 million) out of the estimated JPY54 billion needed to create a metro line connecting the artificial island to the rest of the city.

Japanese brokerage Nomura has said that if Osaka were successful in its respective bids to hold the World Expo 2025 and to host one of Japan’s first casino resorts, that would have a “positive impact” on the economy of the Japanese city.

An Osaka casino would need to generate US$4 billion a year in order to produce a 14-percent annual return on a US$8-billion investment, banking group Morgan Stanley suggested in a July report, mentioning some concerns about how much regulation and red tape might be imposed on the industry at national and local level.

Las Vegas Sands is seen by several analysts as a leading candidate to get one of the initial casino licences in Japan. Sheldon Adelson, the firm’s chairman and chief executive, said in July 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 at the time.

Las Vegas Sands already operates a number of casino properties in Asian jurisdictions, namely Macau and in Singapore.