(Aug 23): Las Vegas Sands Corp will focus on the Tokyo and Yokohama areas as potential locations to build a casino resort, as Japan moves forward with plans to open facilities that allow gambling.
Sands said in a statement Thursday that it’s no longer interested in Osaka, long seen as the place where the country’s first casino resort may open. A maximum of three locations will be allowed under a law passed last year.
The US casino operator’s announcement came hours after Yokohama, located about 30 minutes south of Tokyo, formally announced it wants to take proposals for an integrated resort to be built on its Yamashita Pier. Hong Kong-based Galaxy Entertainment Group also issued a statement Thursday saying it was pleased with the progress in the Japanese market.
The back-to-back announcements mark the latest steps in a delicate dance between cities seeking to host casino resorts and operators looking to bid on the locations. CLSA predicts Japan’s gross gaming revenue could reach US$20 billion ($27.7 billion) annually.
Casino operators from around the world have descended on the island nation in recent years, trying to win over the public, as well as national and local politicians, after Japan passed laws that legalized casino gambling and set forth conditions allowing resorts to be built. The draw is the potential to have a foothold in what could become Asia’s second-biggest gaming market after Macau.
By pulling back from Osaka, Sands leaves the field open for other integrated resort companies targeting the bustling city in central Japan. Osaka has long been viewed as the most probable location for Japan’s first casino resort, thanks to local political support and the high number of tourists it draws.
Partners MGM Resorts International and Orix Corp. have declared an Osaka-first strategy -- and its prospects improve now that Sands is dropping out of contention for that city. Other operators such as Melco Resorts & Entertainment Ltd., Wynn Resorts Ltd. and Galaxy have also expressed interest in building a resort there.
MGM Resorts said in a statement Thursday it was “deeply committed” to Osaka. Wynn said separately that while there are numerous areas in Japan that are attractive, the demographics of the Tokyo Bay area, which includes Yokohama, “make that market particularly appealing.”
It will be years until the first resorts open in Japan, because the regulation around selection of the sites is still a work in progress.
Osaka officials aim to have a casino built on Yumeshima island in time for a World Expo to be held there in 2025. The island is somewhat more remote than locations being considered in Tokyo and Yokohama, Japan’s two largest cities, and would involve extensive construction of hotels and other non-casino amenities.
Focusing on a potential site near Tokyo would help Sands maintain its returns to investors, Chairman Sheldon Adelson said in a statement Thursday. “We think an investment in Tokyo or Yokohama gives us the best opportunity to do exactly that.”
