Japan in Talks With Harrah’s, Sands for Casinos After 2010
(source: Bloomberg July 25, 2006)
Japan in Talks With Harrah’s, Sands for Casinos After 2010
July 25 (Bloomberg) — Japan is in talks with global casino operators including Las Vegas Sands Corp. and Harrah’s Entertainment Inc. to operate the nation’s first casino expected after 2010, the country’s gaming adviser said.
The government may initially issue two to three casino licenses for gaming resorts that would each cost “slightly less’ than Las Vegas Sands’ $3 billion investment in Singapore, said Toru Mihara, adviser to the governing Liberal Democratic Party’s casino study group.
“They are definitely interested and serious about coming to Japan,’ Mihara said in an interview in Singapore yesterday. “They all agree that Japan will be one of the most lucrative casino locations in the world, with so many ordinary people spending lots of money.’
The nation of 128 million is looking to lift its ban on casinos to increase tourist arrivals and revive its gaming industry as the more traditional horse-racing and lotteries are suffering declines in revenue, and its pachinko industry is stagnating, he said.
Japan’s gross domestic product per capita of $39,195 is the highest in Asia and exceeds the $36,790 in the U.S, according to Bloomberg data. This may make it the next target of global casino operators after Macau and Singapore as they increase their bets on Asia’s growing gaming market, fueled by low-cost airlines and rising incomes.
`Terrific Market’
“We believe that if and when legalized, casino gaming in Japan would be very successful,’ Michael Chen, president of Asia Pacific for Harrah’s, said in an e-mailed statement. “It has all the characteristics necessary for a terrific market — responsible government, large population, and broad wealth.’
Harrah’s, the world’s biggest casino operator by sales, was one of the four bidders for Singapore’s first casino license.
Potential operators had Tokyo as their first choice, Mihara said. Possible locations include harbor areas in Tokyo, and vacant land near Osaka’s Universal Studios. Resort areas such as Hokkaido and Okinawa may be considered as well, he said.
Japan’s legislative process may be an obstacle as detailed debates take at least a year, and the country has to come up with ways to cope with possible increases in crime linked to the casinos, he said.
“We have achieved a certain level of consensus,’ said Mihara, who will present a draft to lawmakers in 2008 after ironing out the legal framework. “By end-2007, the market will move, including potential investors.’
The Singapore government had asked for concept proposals from casino operators at the end of 2004 before lifting its ban in April last year. Two months ago, it awarded the first of its two casino licenses to Las Vegas Sands, the world’s biggest gaming operator by market value. The second concession will be given out later this year.
Local Companies
“Our company will continue to evaluate and pursue any opportunity, including Japan, which is in line with our business objectives and allows us to implement our successful business model,’ said Ron Reese, a spokesman for Las Vegas Sands.
Mihara said tie-ups with local companies are possible, although he does not rule out 100 percent foreign operators. He expects tourists from within Japan to make up 80 percent of visitors to the casinos.
“Forget about the competition with Singapore and Macau. With Japan alone, it is a big market,’ he said. “Add some VIPs from Asia, that alone makes sense.’
The ruling LDP in January created a subcommittee to study a legal structure and policy for casino entertainment. Six prefectures, including Tokyo and Osaka, petitioned the central government to lift a ban on casino gambling, said the Asahi newspaper in February.
Date Posted: 25-Jul-2006
