GGRAsia – Yokohama IR process likely shelved very soon: analysts

Yokohama IR process likely shelved very soon: analysts

Aug 23, 2021 Newsdesk Japan, Latest News, Top of the deck

A request-for-proposal (RFP) process regarding commercial partners for Yokohama’s tilt at getting a casino complex will likely “be shelved very soon,” suggests Samuel Yin Shao Yang, an analyst at Maybank Investment Bank Bhd. That was after opposition-backed Takeharu Yamanaka won the city’s mayoral election on Sunday, campaigning on an anti-integrated resort (IR) agenda.

“The Yokohama mayoral election resulted in the election of a resolutely anti-IR mayor,” wrote Mr Yin on a Sunday memo. “Thus, we gather that the Yokohama IR RFP process will be shelved very soon,” he added.

The Kyodo news agency quoted Mr Yamanaka as saying on Sunday evening: “We will issue a formal statement soon making it clear that Yokohama will not make a hosting bid” for an IR.

Yokohama (pictured) concluded in June its RFP submission period. Genting Singapore Ltd, operator of Singapore casino venue Resorts World Sentosa, and casino operator Melco Resorts and Entertainment Ltd, operating venues in Macau and the Philippines, have been identified as the two contenders in the race. A decision on the winning proposal was expected to take place in the coming months.

Brokerage Nomura said also in a Monday note that the result of the mayoral election was “negative for the chances of development of an IR in Yokohama.”

“News reports suggest Mr Yamanaka will abandon the IR RFP process in the coming days,” wrote Nomura analysts Tushar Mohata and Alpa Aggarwal.

They added: “Investors who were positioning for positive news out of Yokohama for Genting Singapore, as well as for parent company Genting Bhd … might take the news negatively in the near term.”

Maybank had suggested in a recent note that Genting Singapore was better positioned in the race to be Yokohama’s partner on a casino complex. The casino firm had partnered with Japan-based entertainment and gaming conglomerate Sega Sammy Holdings Inc for the Yokohama project.

Sega Sammy said in June it planned to spend “approximately” JPY120.0 billion (US$1.09 billion) towards the cost of a casino resort in Yokohama.

Earlier this month, Sega Sammy’s management had acknowledged that if an anti-IR mayor were elected in Yokohama, the company “would face the reality of losing one” of its “strategic investment options”.

“In this case, we will not consider immediately withdrawing from the IR business … We believe that we are the leading company in the IR business in Japan, and we will not give up the opportunity soon,” stated the firm’s management in a question-and-answer session.

The firm’s management added: “We will need to consider other options such as whether opportunities can be found in other municipalities in Japan.”