Aug27
LV Sands And MGM Lead The Race For Japan License
October 30, 2018 Jim Murphy
The race for Japan’s first-ever casino resort license is hotting up and after the first series of applications, two mega-brands have separated themselves from the rest of the candidates as clear favorites: MGM Resorts.
This was issued in a note by a leading iGaming analyst, citing sources closest to Japan’s regulatory body that is deciding on this matter.
Place Under The Rising Sun
This claim stems from Dan Wasiolek, Morningstar senior equity analyst, who is a firm believer that two Las Vegas-based gaming conglomerates are certain to win over the Japanese commission, and lawmakers, who are faced with a crucial decision over the coming months…
Wasiolek boils down his reasoning to one key factor: historical success in this region of Asia.
“We see Las Vegas Sands as most likely to win one of the two urban gaming licenses, due to its strong resort experience in Singapore and Las Vegas, where we believe regulation is more stringent than in Macau and the Philippines, and where problem gambling and crime issues have been controlled.”
He goes on to elaborate and expresses another potential winning reason: Las Vegas Sands has made a $13 billion investment in Macau since 1999, which clearly makes them a reliable long-term partner – something the pedantic and persevering Japanese casino workers will surely know how to appreciate.
Sands spokesman Ron Reese, having become aware of Morningstar’s note, said he is pleased with this recognition, but will ultimately hold off until Japan’s officials make the final decision.
Persuasive Business
Still, Sands does have a reason to be prematurely optimistic, as company’s business venture in Singapore, besides Macau, yields rarely anything but financial success…
…which is why they are a favorite for obtaining a license. MGM Resorts, on the other hand, also has properties in Macau (they opened the $3.4 billion MGM Cotai) and Wasiolek says that they are “well situated to receive a concession based on its leading position in Las Vegas, a market where gambling issues and crime have been well-controlled … while also displaying a strengthening balance sheet.”
Beside MGM and LV Sands, the hopeful for becoming licensed for construction of Japan’s first casino resort are also some of the industry’s behemoths such as Caesars Entertainment, and Hard Rock, with Melco and Galaxy Entertainment about to apply.
One Step At a Time
Japanese Parliament and country’s Prime Minister have green-lighted the casino gambling in July by declaring land-based resorts legal, which officially started the battle for the three spots reserved for the future venue.
According to the Integrated Resorts Implementation Bill, Japan will tax casinos’ gross gambling revenues with 30%. While it was not yet decided which cities will provide grounds for the first of three future resorts, it is highly likely that this will either be Osaka or Yokohama.
Wasiolek is also of the opinion that one of the contributing factors that will lead the officials’ to the decision of who gets the license will be – understanding and appreciation of Japanese culture and customs. More to follow…
Source:
“Las Vegas Sands, MGM front runners for Japan resorts, Morningstar finds”, Richard N. Velotta, reviewjournal.com, 23rd, 2018.
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Japan opening up for the casino resort game is huge news – maybe even bigger than sports betting taking off in the US. It’s a hugely prosperous country who could amass a phenomenal amount of money this way.