Now that Japan has successfully completed a multi-year effort to legalize casinos, the U.S. gaming industry’s largest resort operators want a piece of the action.
MGM Resorts International, Las Vegas Sands Corp., Wynn Resorts, Caesars Entertainment, and other casino operators have spent years lobbying and building relationships and connections throughout Japan in hopes of landing one of the potentially lucrative gaming licenses.
Friday’s approval by Japan’s legislature begins the effort anew.
“Today’s passage allows us to advance our relationships with key stakeholders and together create a coalition of Japanese business partners who will collectively define a vision for a uniquely Japanese, world-class integrated resort,” MGM Chairman and CEO Jim Murren said in a statement released shortly after news of the positive vote by Japan’s legislative body became public.
Japan’s parliament approved legislation that will bring three casino resorts to the country by the middle of the next decade. Many analysts believe the market will challenge Macau and Las Vegas for world dominance.
The measure, long-sought by Japan Prime Minister Shinzo Abe, is part of plan to grow tourism and stimulate economic growth.
Caesars Entertainment CEO Mark Frissora said in a statement the legislation’s passage “propels the race for licenses in Japan into the next phase.” More than 15 years ago, Caesars missed out on the Macau gaming market, which produced $33 billion in gaming revenue last year.
Frissora said Caesars will seek “the most creative and respected Japanese partners to help us bring to life an unparalleled integrated resort experience.”
MGM Resorts has a full-time development team in Japan and for the past four years has been engaged in discussions in Japan’s cultural and business communities.
Wynn Resorts CEO Matt Maddox used the Japanese term of “omotenashi” in a statement to describe the country’s “unique culture of customer-focused hospitality.”
Maddox added, “This important Japanese tradition of creating a unique guest experience makes it clear to us that Japan will develop extraordinary integrated resorts that are not found in any other country.”
Las Vegas Sands Chairman Sheldon Adelson has said he would pay $10 billion toward creating a Japan integrated resort operation.
Las Vegas Sands – one of the largest casino operators in Macau – wants to locate its property in an urban area such as Tokyo, Osaka or the port city of Yokohama. George Tanasijevich, the company’s managing director of global development, told The Wall Street Journal a project in one of those markets would fit better with the company’s conventions-focused business model.
In a statement Friday, Tanasijevich said in the bill allows Japan to build “world-class entertainment and top-level (meetings, incentives, conferences and exhibitions)” opportunities.
“These offerings will attract more visitors from overseas, offer many opportunities for the local people, and lead to sustainable development of the Japanese economy, culture and society,” Tanasijevich said. “Given the opportunity to participate, Las Vegas Sands is confident that we can make a significant contribution together with the Japanese people.”
The Japan legislation allows construction of three casino resorts but delays the decision on the specific locations. Analysts don’t expect the casinos to open until the mid-2020s.
The American Gaming Association offered advice to Japanese lawmakers and business leaders over the years about implementing casinos in the country. AGA CEO Geoff Freeman said Friday the casino industry wants to help Japan achieve its economic goals and to offer assistance in building a regulatory system.
“Today, Japan took a giant step toward strengthening its economy, attracting international travelers and implementing stringent gaming regulation that protects consumers and eliminates criminal activity,” Freeman said in a statement.
The resorts would also feature hotels, restaurants, shopping malls and theaters. According to The Wall Street Journal, Daiwa Institute of Research estimated that investment in the three casinos, if the locations included Japan’s two biggest urban areas, could approach $50 billion. Visitors could spend nearly $20 billion each year on entertainment, retail and lodging at the resorts once they open, Daiwa estimated.
Japan originally believed taxes associated with casino development would help the country pay for billions of dollars in infrastructure improvement needs associated with Tokyo hosting the 2020 Summer Olympic Games.
The Japanese casino bill was added to a law on casino promotion that passed in 2016. The enactment of the “integrated resorts” law means casinos can operate at resorts that include hotels, conference rooms and shopping malls.
Supporters say casinos can attract more and wealthier tourists. Media surveys have showed a majority of Japanese oppose the plan. Projections by experts show casino visitors would be predominantly Japanese, rather than foreign tourists. The law limits local residents to three casino visits per week and 10 per month. Admission will be free for foreigners but a set price for residents in Japan.
The stock market had little reaction to the news from Japan. Shares of MGM Resorts rose 37 cents or 1.20 percent to close at $31.20, while shares of Las Vegas Sands were down 21 cents or 0.28 percent to close at $73.84. Both companies are traded on the New York Stock Exchange.
Wynn Resorts was up 35 cents or 0.21 percent to close at $163.92 while Caesars was up 15 cents or 1.30 percent to close at $11.70. Both companies are listed on the Nasdaq National Market.
CDC Gaming Reports news services contributed to this report
Howard Stutz is the executive editor of CDC Gaming Reports. He can be reached at firstname.lastname@example.org. Follow @howardstutz on Twitter.