Japanese entertainment conglomerate Sega Sammy Holdings Inc says that amid the Covid-19 pandemic it intends to exercise “sound cash management” regarding any involvement in a domestic casino resort complex or integrated resort (IR) as they are known in that country.
“It is believed that both the government and corporates are working to avoid the worst-case scenario in the spread of Covid-19, and we also intend to carry out sound cash management,” on any IR project said Sega Sammy.
The group’s management gave the commentary during a recent briefing for analysts and institutional investors on its results for fiscal year ending March 31. The firm has previously announced a line-up of partners in order to present an IR pitch to the city of Yokohama.
Those offering commentary during the briefing were the company’s president and group chief operating officer Haruki Satomi, and executive vice president and group chief financial officer Koichi Fukazawa.
For resort business, Sega Sammy had assumed a “worst-case scenario” involving the Covid-19 infection spreading via a “second wave” worldwide in the “winter of this year”, and “a third wave” next year.
Various overseas casino operators overseas had “suffered enormous damage,” business-wise from the pandemic, and there was the “possibility” that their efforts to get into the Japan IR market might be “suspended in the future,” the Sega Sammy management noted to analysts and investors.
United States-based casino firm Las Vegas Sands Corp (LVS) had announced last month that it would drop its pursuit of casino resort development in Japan. A number of commentators told us there were presently too many unknowns – including issues around licence security – to make feasible for Las Vegas Sands the scale of infrastructure expected by the host nation.
The impact of the Covid-19 pandemic has added to the timetable pressure faced by international casino operators interested in Japan, a number of Japan-based experts has remarked to GGRAsia. The capital cost of an IR is also likely to be high in that nation, casino operators and commentators have said.
Sega Sammy’s management noted in its briefing it would look at how to utilise “commitment lines…we currently have secured” in relation to resort business, and how to “expand” them as a “safety net in the future”. That was understood to a reference to funding routes. The group was also considering a review of “non-urgent assets” the firm added.
Sega Sammy already has a non-gaming resort in Japan, and is a partner in Paradise City, a foreigner-only casino resort near Incheon International Airport in South Korea. There a unit of Sega Sammy is working alongside South Korean foreigner-only casino operator Paradise Co.
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